MONDAY.COM LTD., 20-F filed on 3/14/2023
Annual and Transition Report (foreign private issuer)
v3.22.4
Document and Entity Information
 12 Months Ended
Dec. 31, 2022
shares
Entity Addresses [Line Items]  
Entity Registrant Name monday.com Ltd.
Entity Central Index Key 0001845338
Current Fiscal Year End Date --12-31
Document Fiscal Year Focus 2022
Document Fiscal Period Focus FY
Amendment Flag false
Document Period End Date Dec. 31, 2022
Document Type 20-F
Document Registration Statement false
Entity File Number 001-40461
Entity Address, Address Line One 6 Yitzhak Sadeh Street
Entity Address, Postal Zip Code 6777506
Entity Address, Country IL
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Large Accelerated Filer
Entity Emerging Growth Company false
Entity Common Stock, Shares Outstanding 47,737,868
Entity Shell Company false
Auditor Name Brightman Almagor Zohar & Co.
Auditor Location Tel Aviv, Israel
Auditor Firm ID 1197
Document Annual Report true
Document Transition Report false
Document Shell Company Report false
Entity Incorporation, State or Country Code IL
Entity Address, City or Town Tel Aviv
Title of 12(b) Security Ordinary shares
Trading Symbol MNDY
Security Exchange Name NASDAQ
ICFR Auditor Attestation Flag true
Document Accounting Standard U.S. GAAP
Business Contact [Member]  
Entity Addresses [Line Items]  
Entity Address, Address Line One 6 Yitzhak Sadeh Street
Entity Address, Postal Zip Code 6777506
Entity Address, Country IL
Entity Address, City or Town Tel Aviv
Contact Personnel Name Shiran Nawi, Adv.
City Area Code 972
Local Phone Number (55) 939-7720
v3.22.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
CURRENT ASSETS:    
Cash and cash equivalents $ 885,894 $ 886,812
Accounts receivable - net of allowance for doubtful accounts of $408 and $249, as of December 31, 2022, and 2021, respectively 13,226 8,509
Prepaid expenses and other current assets 24,725 18,172
Total current assets 923,845 913,493
Property and equipment, net 34,416 19,599
Operating lease right-of-use assets 80,197 0
Other long-term assets 585 100
Total assets 1,039,043 933,192
CURRENT LIABILITIES:    
Accounts payable 7,335 23,612
Accrued expenses and other current liabilities 73,706 70,135
Deferred revenue 198,099 134,438
Operating lease liabilities, current 19,083 0
Total current liabilities 298,223 228,185
Operating lease liabilities, non-current 58,638 0
Deferred revenue, non-current 2,442 1,612
Total liabilities 359,303 229,797
COMMITMENTS AND CONTINGENCIES (NOTE 10)
SHAREHOLDERS' EQUITY:    
Ordinary shares, no par value – Authorized: 99,999,999 as of December 31, 2022, and 2021; Issued and Outstanding: 47,737,868 and 44,924,039 as of December 31, 2022, and 2021 respectively 0 0
Founders’ shares, no par value: Authorized: 1 share as of December 31, 2022, and 2021; Issued and Outstanding: 1 share as of December 31, 2022, and 2021 0 0
Accumulated other comprehensive income (loss) (3,210) 594
Additional paid-in capital 1,265,477 1,148,461
Accumulated deficit (582,527) (445,660)
Total shareholders’ equity 679,740 703,395
Total liabilities, and shareholders’ equity $ 1,039,043 $ 933,192
v3.22.4
CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Accounts receivable - net of allowance for doubtful accounts $ 408 $ 249
Common Stock, No Par Value $ 0 $ 0
Common Stock, Shares Authorized 99,999,999 99,999,999
Common Stock, Shares, Issued 47,737,868 44,924,039
Common Stock, Shares, Outstanding 47,737,868 44,924,039
Founder Share, No Par Value $ 0 $ 0
Founder Shares, Authorized 1 1
Founder Shares, Issued 1 1
Founder Shares, Outstanding 1 1
v3.22.4
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Statement [Abstract]      
Revenue $ 519,029 $ 308,150 $ 161,123
Cost of revenue 66,528 39,013 22,488
Gross profit 452,501 269,137 138,635
OPERATING EXPENSES      
Research and development 127,047 73,686 43,480
Sales and marketing 392,068 268,083 191,353
General and administrative 85,401 53,493 54,339
Total operating expenses 604,516 395,262 289,172
Operating loss (152,015) (126,125) (150,537)
Financial income (expenses), net 22,554 (838) 526
Loss before income taxes (129,461) (126,963) (150,011)
Taxes on income (7,406) (2,331) (2,192)
Net loss $ (136,867) $ (129,294) $ (152,203)
Net loss per share attributable to ordinary shareholders’, basic $ (2.99) $ (4.53) $ (14.19)
Net loss per share attributable to ordinary shareholders’, diluted $ (2.99) $ (4.53) $ (14.19)
Weighted-average ordinary shares used in calculating net loss per ordinary share, basic 45,804,714 30,332,006 12,048,909
Weighted-average ordinary shares used in calculating net loss per ordinary share, diluted 45,804,714 30,332,006 12,048,909
v3.22.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Comprehensive Income [Abstract]      
Net loss $ (136,867) $ (129,294) $ (152,203)
Other comprehensive income (loss):      
Unrealized gains (losses) arising during the period (11,386) 953 0
Gains (losses) reclassified into earnings, net of tax 7,582 [1] (359) [1] 0
Net current-period other comprehensive income (loss) (3,804) 594 0
Comprehensive loss $ (140,671) $ (128,700) $ (152,203)
[1] Classified in operating expenses in the Consolidated Statement of Operations.
v3.22.4
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY (DEFICIT) - USD ($)
$ in Thousands
Convertible Preferred Shares
Number of Ordinary Shares
Number of Founder Share
Additional Paid-in Capital
Accumulated Other Comprehensive Income (loss)
 [1]
Accumulated Deficit
Total
Preferred Stock, Value, Beginning Balance at Dec. 31, 2019 $ 233,496            
Preferred Stock, Shares, Beginning Balance at Dec. 31, 2019 26,440,239            
Balance at Dec. 31, 2019       $ 33,542 $ 0 $ (164,163) $ (130,621)
Balance, shares at Dec. 31, 2019   11,772,038 0        
Exercise of options $ 0     542 0 0 542
Exercise of options (in shares) 0 582,433 0        
Share-based compensation $ 0     64,725 0 0 64,725
Net loss 0     0 0 (152,203) (152,203)
Balance at Dec. 31, 2020       98,809 0 (316,366) (217,557)
Balance, shares at Dec. 31, 2020   12,354,471 0        
Preferred Stock, Value, Ending Balance at Dec. 31, 2020 $ 233,496            
Preferred Stock, Shares, Ending Balance at Dec. 31, 2020 26,440,239            
Exercise of options $ 0     5,249 0 0 5,249
Exercise of options (in shares) 0 1,090,670 0        
Issuance of ordinary shares upon the vesting and settlement of restricted stock units $ 0            
Issuance of ordinary shares upon the vesting and settlement of restricted stock units       0 0 0 0
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares) 0            
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares)   917 0        
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO) $ (233,496)            
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO) (in shares) (26,440,239)            
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO)       233,496 0 0 233,496
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO) (in shares)   26,440,239 0        
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs [2] $ 0            
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs (in shares) [2] 0            
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs [2]       735,856 0 0 735,856
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs (in shares) [2]   5,037,742 1        
Share-based compensation $ 0     75,051 0 0 75,051
Other comprehensive income 0     0 594 0 594
Net loss 0     0 0 (129,294) (129,294)
Balance at Dec. 31, 2021       1,148,461 594 (445,660) 703,395
Balance, shares at Dec. 31, 2021   44,924,039 1        
Preferred Stock, Value, Ending Balance at Dec. 31, 2021 $ 0            
Preferred Stock, Shares, Ending Balance at Dec. 31, 2021 [2] 0            
Exercise of options $ 0     6,133 0 0 $ 6,133
Exercise of options (in shares) 0 2,693,614 0       2,693,614
Issuance of ordinary shares upon the vesting and settlement of restricted stock units $ 0            
Issuance of ordinary shares upon the vesting and settlement of restricted stock units       0 0 0 $ 0
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares) 0            
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares)   81,976 0        
Issuance of ordinary shares under employee share purchase plan $ 0            
Issuance of ordinary shares under employee share purchase plan (in shares) 0            
Issuance of ordinary shares under employee share purchase plan       3,681 0 0 3,681
Issuance of ordinary shares under employee share purchase plan (in shares)   38,239 0        
Share-based compensation $ 0     107,202 0 0 107,202
Other comprehensive income 0     0 (3,804) 0 (3,804)
Net loss       0 0 (136,867) (136,867)
Balance at Dec. 31, 2022     $ 1 $ 1,265,477 $ (3,210) $ (582,527) $ 679,740
Balance, shares at Dec. 31, 2022   47,737,868          
Preferred Stock, Value, Ending Balance at Dec. 31, 2022 $ 0            
Preferred Stock, Shares, Ending Balance at Dec. 31, 2022 0            
[1] As of December 31, 2022 and 2021 accumulated other comprehensive income (loss) is comprised of unrealized gain (loss) on derivatives of $(3,804) and $594, respectively.
[2] Net of underwriting discounts and issuance costs of $44,995.
v3.22.4
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY (DEFICIT) (Parentheticals)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
Statement of Stockholders' Equity [Abstract]  
Net issuance costs $ 44,995
Other comprehensive income/loss $ 594
v3.22.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $ (136,867) $ (129,294) $ (152,203)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:      
Depreciation and amortization 8,567 2,746 1,888
Capital loss from sale of property and equipment 0 76 0
Share-based compensation 104,920 73,529 64,345
Change in accrued interest on revolving credit facility 0 (16) (14)
Changes in operating assets and liabilities:      
Accounts receivable, net (4,717) (4,598) (472)
Prepaid expenses and other assets 6,490 (13,335) (1,828)
Accounts payable (16,072) (2,040) 6,773
Accrued expenses and other liabilities 326 24,915 14,598
Deferred revenue 64,491 64,372 29,738
Net cash provided by (used in) operating activities 27,138 16,355 (37,175)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchase of property and equipment (16,003) (11,578) (4,362)
Capitalized software development costs (2,998) (2,180) (1,119)
Proceeds from sale of property and equipment 0 129 0
Changes in short-term deposits 0 10,000 (6,000)
Net cash used in investing activities (19,001) (3,629) (11,481)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from exercise of share options and employee share purchase plan 12,181 5,249 542
Proceeds from initial public offering and concurrent private placement, net of underwriting discounts and other issuance costs 0 735,856 0
Receipt (payment) of tax advance relating to exercises of share options and RSUs, net (21,152) 22,258 0
Receipt (repayment) of revolving credit facility, net of payments 0 (21,000) 8,000
Capital lease payments (84) (91) (72)
Net cash provided by (used in) financing activities (9,055) 742,272 8,470
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (918) 754,998 (40,186)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – Beginning of year 886,812 131,814 172,000
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – End of year 885,894 886,812 131,814
SUPPLEMENTAL DISCLOSURE:      
Cash paid for taxes 5,909 3,298 2,487
Cash paid for interest 62 421 685
NON-CASH INVESTING AND FINANCING ACTIVITIES:      
Non-cash purchases of property and equipment 205 92 232
Unpaid deferred offering costs 0 0 174
Share-based compensation included in capitalized software development costs 1,934 1,522 380
Right-of-use asset recognized with corresponding lease liability 97,289 0 0
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEET:      
Cash and cash equivalents 885,894 886,812 129,814
Restricted cash – Included in other long-term assets 0 0 2,000
Total cash, cash equivalents, and restricted cash $ 885,894 $ 886,812 $ 131,814
v3.22.4
ORGANIZATION AND DESCRIPTION OF BUSINESS
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS

 

monday.com Ltd (“monday.com” and together with its subsidiaries collectively, “the Company”) was incorporated under the laws of Israel and commenced operations in 2012. The Company operates a cloud-based visual Work Operating System (‘Work OS’) that consists of modular building blocks that can be easily used and assembled to create software applications and work management tools and serves as a connective layer to integrate with various digital tools across an organization. By using the Company’s Work OS platform, customers can simplify and accelerate their digital transformation, enhance organizational agility, become more productive and increase operational efficiency.

 

monday.com has seven wholly owned subsidiaries: monday.com Inc. (the “U.S. Subsidiary”) incorporated in the United States in 2016, monday.com UK incorporated under the laws of England in 2020, monday.com PTY, incorporated in Australia in 2020, monday.com LTDA. incorporated in Brazil in 2021, monday.com K.K. incorporated in Japan in 2021, Monday.com Sp. z o.o., incorporated in Poland in 2022, and monday.com PTE, incorporated in Singapore in 2022. The subsidiaries primarily engage in providing business development, presale, and customer success services to the Company’s existing and potential customers.
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
SIGNIFICANT ACCOUNTING POLICIES

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), reflect the application of the significant accounting policies described below and elsewhere in the notes to the consolidated financial statements.

 

A. Principles of Consolidation

 

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

 

B.  Use of estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on assumptions that management considers to be reasonable. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates.

 

 

C.      Foreign Currency Translation and Transactions

 

The Company’s management has determined that the United States dollar is the currency in the primary economic environment in which monday.com and its subsidiaries operates. Thus, the Company reports its consolidated results in United States dollars. Transactions and balances that are denominated in other currencies have been remeasured into United States dollars in accordance with principles set forth in Accounting Standards Codification (“ASC”) ASC 830, Foreign currency matters. Monetary assets and liabilities denominated in the local currency are remeasured into United States dollars at the end of each reporting period using the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are measured at historical rates. All exchange gains and losses from the remeasurement measured above are reflected at the consolidated statement of operations as financial expenses or income, as appropriate.

 

D.      Cash and Cash Equivalents

 

The Company classifies all unrestricted highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents. Cash equivalents consist of bank deposits and money market funds.

 

E.      Accounts Receivable

 

Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company maintains an allowance for estimated losses inherent in its accounts receivable including potential uncollectible amounts. The allowance is based on the Company’s periodic assessment of the collectability of the accounts based on a combination of factors including the payment terms of each account, its age, the collection history of each customer, and the customer’s financial condition. Doubtful accounts expense for the years ended December 31, 2022 and 2021 was $1,622 and $594, respectively. The Company wrote off bad debts in the amount of $1,463 and $609 during 2022 and 2021, respectively.

 

F.       Property and Equipment, Net

 

Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets (see Note 2H). Expenditures for maintenance and repairs are expensed as incurred. Disposals are removed at cost less accumulated depreciation and any gain or loss from disposals is reflected in the consolidated statement of operations in the period of disposition.

 

 

G.      Internal Use Software Development Costs

 

The Company capitalizes certain internal software development costs related to its cloud-based platform or to backoffice operating systems. The costs consist of personnel costs incurred during the application development stage. Capitalization begins when the preliminary project stage is completed, and it is probable that the software will be completed and used for its intended function.

 

Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post implementation operating activities are expensed as incurred.

 

Capitalized software development costs are included in property and equipment (see Note 4) and are amortized over the estimated useful life of the software, on a straight-line basis, which represents the manner in which the expected benefit will be derived. Amortization expenses are included in cost of revenue in the consolidated statement of operations. 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.

 

H.       Amortization and Impairment of Long-Lived Assets:

 

Long-lived assets with definite lives consist of property and equipment. Long-lived assets are amortized over their estimated useful lives which are as follows:

 

  Years
   
Computers, software, and electronic equipment 3-5
   
Office furniture and equipment 10-14
   
Capitalized internal software development costs 3
   
Leasehold improvements Shorter of the remaining term
of the underlying lease, or
estimated useful life of the asset

 

The Company reviews its long-lived assets for impairment whenever events or circumstances have occurred that indicate that the estimated useful lives of the long-lived assets may warrant revision or that the carrying value of these assets may be impaired. To compute whether assets have been impaired, the estimated undiscounted future cash flows of the assets or asset group are compared to the carrying value. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized based on the amount in which the carrying amount exceeds the fair value of the asset or asset group, based on discounted cash flows. There were no events or circumstances that required the Company’s long-lived assets to be tested for impairment during any of the periods presented.

 

 

I.       Leases

 

The Company determines if an arrangement is a lease at inception by determining if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances.

 

The Company classifies leases at their inception as either capital or operating leases. A lease that transfers substantially all the risks and rewards incidental to ownership of the leased asset to the Company is classified as a capital lease. For capital leases, at the commencement of the lease term, the leased asset is measured at the lower of fair value or the present value of the minimum lease payments. The leased asset is depreciated over the shorter of its useful life and the lease term. See also note 2X.

 

For operating leases, right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is a hypothetical rate based on the Company’s understanding of what its credit rating would be. The ROU assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

 

The lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations. The Company’s lease agreements generally do not contain any residual value guarantees, restrictions, or covenants.

 

For operating leases that contain renewals, or other lease incentives, the Company recognizes the rent expense on a straight-line basis over the term of the lease. Additionally, incentives received are treated as a reduction of costs over the term of the agreement.

 

Certain lease agreements include rental payments adjusted periodically for the consumer price index (“CPI”). The ROU assets and lease liabilities were calculated using the initial CPI and will not be subsequently adjusted.

 

Payments for variable lease costs are expensed as incurred and are not included in the operating lease ROU assets and lease liabilities.

 

 

The Company utilized the practical expedient in ASC 842 and elected not to record leases with an initial term of 12 months or less on the balance sheet. Therefore, for short-term leases with a term of 12 months or less, operating lease ROU assets and lease liabilities are not recognized, and the Company records such lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term.

 

Rent expenses for the years ended December 31, 2022, 2021 and 2020, were $16,396, $4,326 and $3,287, respectively. See also note 9.

 

J.    Employee Related Obligations

 

According to the Israeli Severance Pay Law, 1963 (“Severance Pay Law”), employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment, or a portion thereof. The Company’s liability for severance pay is covered by the provisions of

 

Section 14 of the Severance Pay Law (“Section 14”). Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, contributed on their behalf to their insurance funds. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. Therefore, the Company does not recognize a liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company’s balance sheet. Severance expenses for the years ended December 31, 2022, 2021 and 2020, amounted to $7,289, $4,608 and $2,721, respectively.

 

The Company’s U.S. Subsidiary has a 401(K) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits. The expenses recorded by the U.S. subsidiary for employer’s contributions were $1,551, $915 and $529 for the years ended December 31, 2022, 2021 and 2020, respectively.

 

K.    Contingent Liabilities

 

The Company accounts for its contingent liabilities in accordance with ASC Topic 450, Contingencies (“ASC 450”). A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter.

 

 

L.       Revenue Recognition

 

The Company generates revenue from the sale of subscriptions to customers to access its cloud-based Work OS platform. The terms of the Company’s subscription agreements are primarily monthly or annual, and a large portion of the arrangements are paid in full up-front at the outset of the arrangement. Customers may not take possession over the software and instead are granted continuous access to the platform over the contractual period and therefore the arrangements are accounted for as service contracts.

 

The Company’s contracts generally include fixed number of users and fixed price per user. Revenue for these arrangements is recognized ratably over the contract term.

 

The Company’s subscription contracts are generally non-cancelable except for contracts with first-time customers whereby the contract terms provide rights to cancel the contract in the first 30 days for pro-rated refund for unutilized days. Historically, refunds have not been material, and therefore no provision for refunds was recorded to date.

 

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services. The Company determines revenue recognition through the following steps:

 

1.       Identification of the contract, or contracts, with the customer

 

The Company considers the terms and conditions of the contracts and the Company’s customary business practices in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract has been approved by both parties, it can identify each party’s rights regarding the services to be transferred and the payment terms for the services, it has determined the customer to have the ability and intent to pay, and the contract has commercial substance.

 

The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s payment history or, in the case of a new customer, credit and financial information pertaining to the customer.

 

2.       Identification of the performance obligations in the contract

 

Performance obligations committed in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract.

 

 

The Company’s performance obligations generally consist of access to the cloud-based platform and related support services which is considered one performance obligation. The customers do not have the ability to take possession of the software, and through access to the platform the Company provides a series of distinct software-based services that are satisfied over the term of the subscription.

 

3.       Determination of the transaction price

 

The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Payment terms are generally upfront at the time of the transaction, except for enterprise customers which are generally net 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts generally do not include a significant financing component. The Company applied the practical expedient in ASC 606 and did not evaluate payment terms of one year or less for the existence of a significant financing component. The Company’s policy is to exclude sales and other indirect taxes when measuring the transaction price.

 

  4. Allocation of the transaction price to the performance obligations in the contract

 

The Company’s contracts contain a single performance obligation. Therefore, the entire transaction price is allocated to the single performance obligation.

 

  5. Recognition of the revenue when, or as, a performance obligation is satisfied

 

Revenue is recognized ratably over the term of the subscription agreement generally beginning on the date that the platform is made available to a customer.

 

The Company records contract liabilities when cash payments are received in advance of performance to deferred revenue or to customer advances in case of refund rights.

 

The Company recognized $134,438 and $70,719 of revenue during the years ended December 31, 2022 and 2021, respectively, from deferred revenue balances as of January 1, 2022 and 2021, respectively.

 

For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. Similarly, the Company does not disclose the value of unsatisfied performance obligations since the original expected duration of most of the contracts is one year or less.

 

 

M. Cost of Revenue

 

Cost of revenue primarily consists of costs related to providing subscription services to paying customers, including hosting costs, personnel-related expenses of customer support including share-based compensation, subcontractors costs, merchant and credit-cards processing fees, amortization of capitalized software development costs and allocated overhead costs.

 

N. Research and Development Costs

 

Research and development costs are expensed as incurred unless these costs qualify for capitalization as internal-use software development costs. Research and development expenses consist primarily of personnel-related expenses, including share-based compensation and allocated overhead costs.

 

O. Sales and Marketing

 

Sales and marketing expenses are primarily comprised of costs of the Company’s marketing personnel including share-based compensation, online marketing expenses and other advertising costs, partners’ commissions and allocated overhead costs. Sales and marketing expenses are expensed as incurred. Advertising costs amounted to $181,447, $143,472 and $129,101, in the years ended December 31, 2022, 2021 and 2020, respectively.

 

P.     General and Administrative

 

General and administrative expenses primarily consist of costs of the Company’s executive, finance, legal and other administrative personnel including share-based compensation, professional service fees, and allocated overhead costs.

 

Q.      Accounting for Share-Based Compensation

 

The Company accounts for share-based compensation under ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees, non-employee consultants and directors, including options, restricted share units (“RSUs”), and shares issued pursuant to the employee share purchase plans (“ESPP”) based on the fair value of the awards on the date of grant as follows: (i) share options – the fair value is based on the Black-Scholes option-pricing model, (ii) RSUs – the fair value is based on the closing trading price of the underlying shares at the date of grant and, (iii) ESPP – the fair value is based on the Monte-Carlo simulation model due to certain limitation on the number of shares per employee.

 

The expense for share-based compensation cost is recognized over the requisite service period of each individual grant using the graded vesting attribution method for both service-based and performance-based awards. Forfeitures are accounted for as they occur.

 

 

The Company granted its Co-CEOs performance-based awards. The number of performance awards earned and eligible to vest are generally determined after a one-year performance period, based on achievement of certain Company financial performance measures and the recipient’s continued service. The Company recognizes share-based compensation expense for the performance awards using the fair value at the date of grant over the requisite service when it is probable that the performance conditions will be achieved and adjusts the number of units expected to vest based on interim estimates of performance against the pre-set objectives.

 

Valuation assumptions:

 

  I. Options:

 

The Black-Scholes option-pricing model requires the Company to make several assumptions, including the value of the Company’s ordinary shares, expected volatility, expected term, risk-free interest rate and expected dividends. The Company evaluates the assumptions used to value option awards upon each grant of share options.

 

Expected volatility was calculated based on the implied volatilities from market comparisons of certain publicly traded companies. The expected option term was calculated based on the simplified method, which uses the midpoint between the vesting date and the contractual term, as the Company does not have sufficient historical data to develop an estimate based on participant behavior. The risk-free interest rate was based on the U.S. treasury bonds yield with an equivalent term. The Company has not paid dividends and has no foreseeable plans to pay dividends. The assumptions used to determine the fair value of the share-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment.

 

Commencing June 10, 2021, the ordinary shares of the Company are publicly traded. Prior to the Initial Public Offering (“IPO”), the fair value of ordinary shares underlying the options has historically been determined by management with the assistance of a third-party valuation firm and approved by the Company’s board of directors.

 

The following table summarizes the Black-Scholes assumptions used at the grant dates:

 

  Year ended December 31,
  2022   2021   2020
Risk-free interest rate 1.89%-4.3% 0.68%-1.15% 0.3%-0.58%
       
Expected dividend yield 0% 0% 0%
       
Expected term (in years) 5-7 5-8 5-8
       
Expected volatility 49%-57% 49%-50% 47%-48%
       

 

 

II. ESPP plan:  
  Year ended December 31,
  2022
Risk-free interest rate 0.46%-2.87%
Expected dividend yield 0%
Expected term (in years) 0.5
Expected volatility 97%-98%

 

R.       Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740 (“ASC 740”), using the liability method whereby deferred tax assets and liability account balances are determined based on the differences between financial reporting and the tax basis for assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amounts that are more likely-than-not to be realized. As of December 31, 2022 and 2021, the Company recorded a full valuation allowance against its deferred tax assets.

 

The Company applies a more-likely-than-not recognition threshold to uncertain tax positions based on the technical merits of the income tax positions taken. The Company does not recognize a tax benefit unless it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of December 31, 2022 and 2021, no liability for unrecognized tax benefits was recorded due to immateriality.

 

S.       Net Loss Per Share Attributable to Ordinary Shareholders

 

The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury shares method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share since the effects of potentially dilutive shares of ordinary shares are

 

 

anti-dilutive in all periods presented. The potentially dilutive options to purchase ordinary shares and RSUs that were excluded from the computation amounted to 4,617,018, 6,302,344 and 5,909,263, for the years ended December 31, 2022 and 2021 and 2020, respectively, because including them would have been anti-dilutive. The Company’s Convertible preferred shares were also excluded from the computation and amounted to 26,440,239 shares for the year ended December 31, 2020.

 

Basic and diluted net loss per share was presented in conformity with the two-class method for participating securities prior to the Company’s IPO for the year ended December 31, 2020. The Founder’s share is not a participating security and therefore excluded from the net loss per share.

 

The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Prior to their conversion, the Company considered its convertible preferred shares to be participating securities as the holders of the convertible preferred shares would be entitled to dividends that would be distributed to the holders of ordinary shares, on a pro-rata basis assuming conversion of all convertible preferred shares into ordinary shares. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the years ended December 31, 2021 and 2020, was not allocated to the Company’s participating securities.

 

T.       Concentration of Credit Risks

 

Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents (including money market funds and bank deposits up to three months) and accounts receivable.

 

For cash and cash equivalents, the Company is exposed to credit risk in the event of default by the financial institutions to the extent of the amounts recorded on the accompanying consolidated balance sheets exceed federally insured limits. The Company places its cash and cash equivalents with financial institutions with high-quality credit ratings in the United States, Israel and Luxemburg and has not experienced any losses in such accounts.

 

For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets. For each of the years ended December 31, 2022, and 2021, there were no individual customers that accounted for 10% or more of the Company’s revenues. The Company’s accounts recieveable are geographically diversified and derived primarily from sales in the United States, EMEA, and APAC. To manage its accounts receivable risk, the Company evaluates the credit worthiness of its customers and maintains allowances for potential credit losses.

 

 

The Company has not historically experienced any material credit losses related to individual customers or groups of customers in any specific area or industry.

 

U.    Segment Information

 

The Company has a single operating and reportable segment. The Company’s chief operating decision makers are its two Co-Chief Executive Officers (“Co-CEO”), who review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. For information regarding the Company’s long-lived assets and revenue by geographic area, see Note 16.

 

V.     Fair Value measurements

 

Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 

A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

 

Level 1 –    Quoted prices in active markets for identical assets or liabilities.

 

Level 2 –    Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 –    Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The carrying amount of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, and accrued expenses, are stated at their carrying value, which approximates fair value due to the short maturities of these instruments.

 

Assets measured at fair value on a recurring basis as of December 31, 2022, are comprised of money market funds and derivative instruments (see Note 7). Assets measured at fair value on a recurring basis as of December 31, 2021, are comprised of derivative instruments.

 

 

W. Derivative Financial Instruments

 

Derivatives are recognized at fair value as either assets or liabilities in the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging.” The gain or loss of derivatives which are designated and qualify as hedging instruments in a cash flow hedge, is recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Derivatives are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

 

The Company’s primary objective for holding derivative instruments is to reduce its exposure to foreign currency rate changes. The Company reduces its exposure by entering into forward foreign exchange contracts and option contracts with respect to operating expenses that are forecasted to be incurred in currencies other than the U.S. dollar. A majority of the Company’s revenues and operating expenditures are transacted in U.S. dollars. However, certain operating expenditures are incurred in or exposed to other currencies, primarily the New Israeli Shekel (“NIS”).

 

The Company has established forecasted transaction currency risk management programs to protect against fluctuations in fair value and the volatility of future cash flows caused by changes in exchange rates. The Company’s currency risk management program includes foreign exchange contracts designated as cash flow hedges. These foreign exchange contracts generally mature within 12 months. See Note 6.

 

In addition, occasionally the Company enters into swaps, options and forward contracts to hedge a portion of its monetary items in the balance sheet, such as cash and cash equivalents balances, denominated in British Pound, Australian Dollar and Euro for short-term periods, as well as operating lease liabilities balances denominated in NIS. The purpose of these contracts is to protect the fair value of the monetary assets from foreign exchange rate fluctuations. Gains and losses from derivatives related to these contracts are not designated as hedging instruments. The Company does not enter into derivative financial instruments for trading or speculative purposes.

 

 

X. Recently Adopted Accounting Pronouncements:

 

On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (ASC 842) using a modified retrospective transition approach. It applied Topic 842 to all leases as of January 1, 2022 without adjusting the comparative periods presented which requires lessees to include all leases on their balance sheets, whether operating or financing. Upon adoption, the Company recognized total ROU asset of $58,084, with corresponding liability in the same amount on the consolidated balance sheets. The adoption did not impact the beginning retained earnings, or prior year consolidated statements of operations and statements of cash flows.

 

On January 1, 2022, the Company adopted ASU No. 2016-13, “Financial Instruments – Credit Losses” (ASC 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected, include accounts receivable. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements.

 

In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (ASU 2019-12). The ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company prospectively adopted this ASU effective January 1, 2022. As of the date of the adoption there was no material impact on the Company’s consolidated financial statements.
v3.22.4
PREPAID EXPENSES AND OTHER CURRENT ASSETS
 12 Months Ended
Dec. 31, 2022
Prepaid Expense and Other Assets, Current [Abstract]  
PREPAID EXPENSES AND OTHER CURRENT ASSETS

NOTE 3: PREPAID EXPENSES AND OTHER CURRENT ASSETS

 

Prepaid expenses and other current assets consisted of the following:

 

    December 31,  
    2022     2021  
Prepaid expenses   $ 13,610     $ 12,733  
Government institutions     2,268       3,520  
Derivative instruments     -       656  
Interest to receive     3,872       240  
Short-term vendor deposits     3,924       282  
Other current assets     1,051       741  
                 
Total prepaid expenses and other current assets   $ 24,725     $ 18,172  
v3.22.4
PROPERTY AND EQUIPMENT, NET
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT, NET

NOTE 4: PROPERTY AND EQUIPMENT, NET

 

    December 31,  
    2022     2021  
Computer, software, and electronic equipment   $ 12,569     $ 8,095  
Office furniture and equipment     6,926       4,458  
Leasehold improvements     13,289       6,700  
Capitalized internal software development costs     10,597       5,666  
Capital leases     254       254  
Property and equipment, gross     43,635       25,173  
Less accumulated depreciation and amortization   $ (9,219 )   $ (5,574 )
Property and equipment, net   $ 34,416     $ 19,599  

 

Depreciation and amortization expense was $5,913, $2,746 and $1,888, for the years ended December 31, 2022, 2021 and 2020, respectively.

 

During the years ended December 31, 2022, 2021 and 2020 no material capital losses were recorded.

 

The Company capitalized costs related to the development of internal-use software of $4,931, $3,702 and $1,499, for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization of capitalized software development costs was $1,492, $547 and $232 for the years ended December 31, 2022, 2021 and 2020, respectively. The net carrying value of capitalized internal-use software was $8,233, $4,793 and $1,638 as of December 31, 2022, 2021 and 2020, respectively.
v3.22.4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
 12 Months Ended
Dec. 31, 2022
Accrued Liabilities, Current [Abstract]  
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

NOTE 5: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

    December 31,  
    2022     2021  
Accrued employee compensation and benefits   $ 44,639     $ 51,953  
Accrued expenses     18,983       13,149  
Capital lease – short-term     -       84  
Derivative instruments     3,208       -  
Advances from customers     2,805       2,134  
Income and indirect taxes payable     4,071       2,815  
Total   $ 73,706     $ 70,135  
v3.22.4
DERIVATIVES AND HEDGING
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES AND HEDGING

NOTE 6: DERIVATIVES AND HEDGING

 

The Company uses derivative instruments primarily to manage exposures to foreign currency exchange rate and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates.

 

The fair values of derivative instruments and the line items to which they were recorded are summarized as follows:

 

Balance sheet line item December 31,  
  2022     2021  
Derivatives designated as hedging instruments:              
Foreign exchange contracts Other current liabilities   (3,208 )     —  
  Prepaid expenses
and other current assets		   —       705  
               
  $ (3,208 )   $ 705  
Derivatives not designated as hedging instruments:              
  Prepaid expenses and   —       (49 )
Foreign exchange contracts other current assets              
    —       (49 )
               
Total $ (3,208 )   $ 656  

 

 

The effect of derivative instruments on cash flow hedging, as well as the effect of instruments not designated as hedge and the relationship between income and other comprehensive income for the years ended December 31, 2022 and December 31, 2021, are summarized below:

 

    Gain (Loss) Recognized in Other Comprehensive Income on Effective-Portion of Derivative, net     Realized Gain (Loss) on Derivative Reclassified from Accumulated Other Comprehensive Income (*)     Amount Excluded from Effectiveness Testing Recognized in Income (Loss)(**)  
    Year ended December 31     Year ended December 31     Year ended December 31  
    2022     2021     2022     2021     2022     2021  
Derivatives designated as hedging instruments:                                                
                                                 
Foreign exchange contracts   $ (11,386 )   $ 953     $ 7,582     $ (359 )   $ —     $ —  
                                                 
      (11,386 )     953       7,582       (359 )     —       —  
                                                 
Derivatives not designated as hedging instruments:                                                
                                                 
Foreign exchange contracts     —       —       —       —       (1,801 )     49  
                                                 
      —       —       —       —       (1,801 )     49  
Total   $ (11,386 )   $ 953     $ 7,582     $ (359 )   $ (1,801 )   $ 49  

 

(*) Classified in operating expenses in the Consolidated Statement of Operations.

 

(**) Includes derivatives not designated as accounting hedge. Classified in financial income (expense), net, in the Consolidated Statement of Operations.

 

The notional amounts of the outstanding derivatives are summarized as follows:

 

    As of December 31,  
    2022     2021  
Derivatives designated as hedging instruments:            
Foreign exchange contracts:                
NIS   $ 81,557     $ 36,013  
    $ 81,557     $ 36,013  
Derivatives not designated as hedging instruments:                
Foreign exchange contracts:                
GBP     —       4,054  
Euro     —       2,830  
AUD     —       581  
      —       7,465  
Total   $ 81,557     $ 43,478  
v3.22.4
FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 7: FAIR VALUE MEASUREMENTS

 

In accordance with ASC No. 820, the Company measures its money market funds, bank deposits, and foreign currency derivative contracts at fair value. Money market funds are classified within Level 1. This is because these assets are valued using quoted market prices. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company’s financial assets (liabilities) measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of the following dates:

 

    As of December 31,  
    2022     2021  
    Level 1     Level 2     Total     Level 1     Level 2     Total  
Cash equivalents:                                                
Bank deposits   $ 625,000     $ —     $ 625,000     $ 604,000     $ —     $ 604,000  
Money market funds     80,888       —       80,888       —       —       —  
Foreign currency                                                
derivative contracts:                                                
Foreign exchange contracts     —       (3,208 )     (3,208 )     —       656       656  
                                                 
Total   $ 705,888     $ (3,208 )   $ 702,680     $ 604,000     $ 656     $ 604,656  
v3.22.4
REVOLVING CREDIT FACILITY
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
REVOLVING CREDIT FACILITY

NOTE 8: REVOLVING CREDIT FACILITY

 

On December 30, 2020, the Company secured a revolving credit facility (“the facility”), with the following terms: The Company can borrow up to an aggregated principal amount of $80,000 against a certain Monthly Recurring Revenues (“MRR”) formula until December 2022. Amounts borrowed under the facility accrue interest at the rate equal to one month Libor + 2.6% for amounts of up to $8,000, which will increase to one-month LIBOR plus 2.85% per annum on September 1, 2022, and one-month Libor + 2.85 % per annum for amounts above $8,000, with accrued interest payable monthly. The Company shall pay a fee of 0.2% per annum on unutilized amounts eligible for drawdown, calculated daily and payable on a quarterly basis. In conjunction with the facility, the Company paid upfront issuance fees of $180 in January 2021, which will be amortized over the two-year term of the agreement. As of December 31, 2022, the Revolving Credit Facility has expired.

 

The credit facility was secured by a floating charge on substantially all the assets of the Company, excluding its intellectual property, a first degree fixed charge over the Company’s goodwill, and contains customary conditions to borrowing, events of defaults and covenants, including covenants that restrict the Company’s ability to incur indebtedness, grant liens, make distributions to holders of the Company or its subsidiaries’ equity interests, make investments, or engage in transactions with its affiliates.

 

Borrowings under the credit facility were available based on a certain ratio of the Company’s MRR (defined in the agreement as the monthly value of services, software licenses, rentals and subscription revenue on a consolidated basis excluding non-recurring sales of services or other transaction revenue not in the ordinary course of business, and churn) and subject to certain other financial covenants, including maintaining a minimum liquidity balance (defined as cash and cash equivalents plus short-term deposits) of $30,000 as of December 31, 2021, and certain minimal quarterly growth in MRR, all of which were met as of December 31, 2021. In July 2021 the Company repaid all the outstanding balance under the credit facility.

 

The Company had total unutilized credit facilities available for borrowing of $80,000 as of December 31, 2022 and 2021. During the years ended December 31, 2022, 2021 and 2020, the Company recorded interest expenses in the amount of $62, $316 and $671, respectively, in connection with the credit facility.
v3.22.4
LEASES
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
LEASES

NOTE 9: LEASES

  A. Operating leases

 

The Company has entered into various non-cancelable operating leases for its offices expiring between fiscal 2022 and 2031. Certain lease agreements contain an option for the Company to extend the lease term or an option to terminate a lease early. The Company considers these options, which may be elected at the Company’s sole discretion, in determining the lease term on a lease-by-lease basis. Additionally, the Company entered into certain cancelable monthly lease agreements for short-term periods of up to one year.

 

  B. Capital Lease

 

On November 13, 2019, the Company entered into a capital lease agreement with a supplier, according to which, the Company leased software equipment in the total amount of $254 for the period from December 7, 2019, throughout December 7, 2022 in monthly installments.

 

The Company has the option to purchase the software equipment at the end of the lease period for a payment of 1% of the initial price. The lease liability was $0 and $84 as of December 31, 2022 and 2021, respectively.

 

  C. The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2022:

 

Years Ending December 31,     Amount  
           
2023     $ 19,782  
2024       17,843  
2025       18,176  
2026       12,697  
2027       8,708  
Thereafter       6,282  
Total undiscounted cash flows     $ 83,488  
           
Less: Imputed interest     $ (5,767 )
Present value of lease liabilities     $ 77,721  

 

As of December 31, 2022, the Company has an additional operating lease that has not yet commenced, which is excluded from the table above. The operating lease will commence in fiscal year 2023 with a total of $2,207 of undiscounted future payments with a lease term of three years.

 

Supplemental balance sheet information related to leases is as follows:

 

  Year ended December 31, 2022
   
Weighted-average remaining lease term 4.5 years
Weighted-average discount rate 3.6%
v3.22.4
COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 10: COMMITMENTS AND CONTINGENCIES

  A. Guarantees:

 

As of December 31, 2022 and 2021, the Company has provided a bank guarantee in the amount of $6,871 and $2,186, respectively, to secure its lease agreement.

 

  B. Indemnifications

 

The Company enters into standard indemnification provisions in the ordinary course of business, including certain customers, business partners, the Company’s officers, and directors. Pursuant to these provisions, the Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claims because of the Company’s activities or non-compliance with certain representations and warranties made by the Company.

 

It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the Company’s consolidated statements of operations in connection with the indemnification provisions have not been material. There are no claims pending as of December 31, 2022 and 2021, related to indemnification agreements.

 

The Company has entered into service-level agreements with some of its enterprise customers defining levels of uptime reliability and performance and permitting those customers to receive credits for prepaid amounts related to unused subscription services if the Company fails to meet the defined levels of uptime in a certain calendar month. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance. In addition, since the calculation is monthly for each calendar month there is no uncertainty at the end of the reporting period. Therefore, the Company has not accrued any liabilities related to these agreements in the consolidated financial statements.

  C. Legal Contingencies:

 

The Company is currently not involved in any material claims or legal proceedings. The Company reviews the status of each legal matter it is involved in, from time to time, in the ordinary course of business and assesses its potential financial exposure.

 

  D. Other Commitments:

 

Other commitments include payments to third-party vendors for services related mainly to hosting-related services, software licenses and services.

 

Future minimum payments under the Company’s other commitments, as of December 31, 2022, are as follows:

 

Years Ending December 31,     Amount  
2023     $ 15,185  
2024       7,211  
2025       820  
Total contractual obligations     $ 23,216  
v3.22.4
FINANCIAL INCOME (EXPENSES), NET
 12 Months Ended
Dec. 31, 2022
Other Income and Expenses [Abstract]  
FINANCIAL INCOME (EXPENSES) , NET

NOTE 11: FINANCIAL INCOME (EXPENSES), NET

    Year ended December 31,  
    2022     2021     2020  
Financial expenses:                        
Bank charges and other   $ 730     $ 566     $ 340  
Interest on credit facility and amortization of debt issuance fees     62       405       671  
Exchange rate expense, net     —       742       —  
Total financial expenses     792       1,713       1,011  
Financial income:                        
Exchange rate income, net     4,687       —       492  
Interest income on deposits     18,659       875       1,045  
Total financial income     23,346       875       1,537  
Financial income (expenses), net   $ 22,554     $ (838 )   $ 526  
v3.22.4
RELATED PARTIES
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
RELATED PARTIES

NOTE 12: RELATED PARTIES

There were no material related party transactions in each of the years ended December 31, 2022, 2021 and 2020 other than the secondary transactions (refer to Note 13E).
v3.22.4
SHAREHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
SHAREHOLDERS' EQUITY

NOTE 13: SHAREHOLDERS’ EQUITY

  A. Ordinary shares:

 

The holders of ordinary shares are entitled to one vote per share, to dividends as decided by the Board, and in the event of the Company’s liquidation, to the surplus assets of the Company. The Company has the following ordinary shares reserved for future issuance:

 

    As of December 31,  
    2022     2021  
Ordinary shares     47,737,868       44,924,039  
Outstanding share options and RSUs     4,617,018       6,302,344  
Shares available for future grants under the 2021 plan     6,243,273       5,087,335  
Shares subject to the employee share purchase plan     721,469       194,625  
Total     59,319,628       56,508,343  

 

  B. Initial Public Offering and concurrent Private Placement:

 

On June 10, 2021, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 3,700,000 shares of its ordinary shares at an offering price of $155.00 per share, and additional 370,000 ordinary shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company received net proceeds of $591,856 after deducting underwriting discounts and commissions of $34,697, and other issuance costs of $4,298. Immediately prior to the closing of the IPO, all convertible preferred shares then outstanding automatically converted into 26,440,239 ordinary shares.

 

Additionally, immediately subsequent to the closing of the IPO, the Company entered into concurrent private placement with two investors to purchase 967,742 of its ordinary shares in consideration for gross proceeds of $150,000 at a price per ordinary share equal to the initial public offering price. Related underwriting discounts and commissions amounted to $6,000.

 

Prior to the IPO, deferred offering costs, which consist primarily of accounting, legal and other fees related to the Company’s IPO, were capitalized within other assets, noncurrent in the Consolidated Balance Sheets. Upon the consummation of the IPO and concurrent Private Placement $44,995 of deferred offering costs

 

were reclassified into shareholders’ equity as an offset against IPO proceeds.

 

  C. Founder’s share:

 

Upon the consummation of the IPO, the Company issued one of its Co-Founders and Co-CEO (“the Co-CEO”) one founder share. The founder share will provide the Co-CEO with certain veto rights over the approval of certain transactions such as merger, consolidation, acquisition, issuance of equity securities or debt securities convertible into equity securities or other similar transactions, that would result in any person becoming the owner of 25% or more of the ordinary shares immediately following the consummation of such transaction, (ii) sale, assignment, conveyance, transfer, lease or other disposition, in one transaction or a series of related transactions, of all or substantially all of the Company’s assets to any person and (iii) change to the Company’s strategy, policies and/or business plan in connection with its Equal Impact Initiative.

 

The founder share is not tradable and have no rights other than those described above, including no dividends rights or voting rights. The founder share will automatically convert to a deferred share with no rights, upon the earlier of (i) a transfer, pledge or other disposition of the founder share, (ii) the termination of the Co-CEO’s employment with the Company, (iii) the death of the Co-CEO, (iv) Upon the dilution of the shares and options held by him below a certain percentage.

 

  D. Cancelation of par value:

 

On December 28, 2020, the Company’s shareholders approved the amendment and restatement of the Company’s Articles of Association to cancel the par value of the Company’s authorized and issued share capital, such that following such cancelation all shares have no par value. All share capital and additional paid in capital amounts have been adjusted retroactively within these consolidated financial statements to reflect the cancelation of the par value.

 

  E. Secondary transactions:

 

During 2020, certain ordinary shareholders, including employees, and consultants (herein: “the Shareholders”) sold the Company’s Ordinary shares in secondary market transactions to new and existing investors of the Company. The Shareholders sold an aggregate amount of 639,739 ordinary shares for an aggregate consideration of $37,718 at a price of $58.96 per share. The incremental value between the sale price and the fair value of the Ordinary shares at the date of sale resulted in aggregate share-based compensation cost of $10,487, recorded in operating expenses. There were no secondary transactions in 2022 and 2021.

 

  F. Share based compensation:

 

In 2021, the board of directors adopted the 2021 equity incentive plan for employees, officers, directors, and consultants (the “2021 Plan”). Following the IPO, the Company ceased granting awards under its old plans and all shares that remained available for issuance under these plans were transferred to the 2021 Plan. The 2021 Plan provides for the grant of options to purchase Ordinary Shares and RSUs. Each option granted under the 2021 Plan expires no later than ten years from the date of grant. The vesting period of the options and RSUs is generally four years. As of December 31, 2022, the number of Ordinary shares reserved and available for grant and issuance pursuant to the 2021 Plan (the “Share Reserve”) were 6,243,273.

 

The Share Reserve will automatically increase on January 1st of each year during the term of the 2021 Plan, commencing on January 1st of the year following the year in which the 2021 Plan became effective, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year. Since January 1, 2022, the share reserve under the 2021 Plan has been automatically increased by an aggregate of 2,246,202 shares. Awards granted under the 2021 Plan generally vest over four years. Any award that is forfeited or canceled before expiration becomes available for future grants under the 2021 Plan.

 

Share option activity for the year ended December 31, 2022 is as follows:

 

    Number of Options     Weighted- Average Exercise Price     Weighted Average Remaining Contractual life     Aggregate Intrinsic Value  
                                 
Outstanding — January 1, 2022     6,204,605     $ 13.53       7.21     $ 1,831,568  
Granted (*)     406,575     $ 192.91                  
Exercised     (2,693,614 )   $ 2.28                  
Expired and forfeited     (117,542 )   $ 48.88                  
Outstanding — December 31, 2022     3,800,024     $ 39.6       7.46     $ 347,627  
Exercisable — December 31, 2022 (*)     2,126,460     $ 19.4       6.86     $ 223,393  

 

The aggregate intrinsic value was calculated as the difference between the exercise price of the share options and the fair value of the underlying common shares as of December 31, 2022 and 2021. The intrinsic value of options exercised in the years ended 2022, 2021, and 2020 was approximately $346,600, $321,891 and $18,868, respectively. The weighted-average grant-date fair value of options granted during the years ended December 31, 2022, 2021 and 2020 was $69.3, $77.0 and $38.3, respectively.

 

(*) Includes 91,344 performance options granted to the Company’s Co-CEOs.

 

The following table summarizes the activity for the Company’s RSUs for the year ended December 31, 2022:

 

 

      Number of Units     Weighted-Average Fair Value  
Balance at January 1, 2022       97,739     $ 278.46  
Granted       865,528     $ 116.16  
Vested       (81,976 )   $ 182.21  
Canceled       (64,297 )   $ 149.96  
Balance at December 31, 2022       816,994     $ 126.29  

 

As of December 31, 2022 and 2021 there was $64,458, and $22,821 of total unrecognized compensation cost related to unvested restricted share units which is expected to be recognized over a weighted-average period of 1.85 and 1.98 years, respectively. As of December 31, 2020, there was no unrecognized compensation costs related to unvested restricted share units.

 

Share-based compensation expense, including secondary transactions related expenses, for the years ended December 31, 2022, 2021 and 2020, is as follows:

 

    Year ended December 31,  
    2022     2021     2020  
Cost of revenues   $ 10,406     $ 7,681     $ 2,720  
Research and development     32,957       21,779       12,142  
Sales and marketing     33,457       23,135       10,068  
General and administrative *)     28,100       20,934       39,415  
Share-based compensation, net of amounts capitalized   $ 104,920     $ 73,529     $ 64,345  
Capitalized share-based compensation expense     2,282       1,522       380  
Total share-based compensation   $ 107,202     $ 75,051     $ 64,725  

 

*) Share-based compensation expenses in 2020 includes costs related to the fair value of fully vested options granted to the Company’s Co-CEO in December 2020 in the amount of $30,424.

 

As of December 31, 2022, 2021, and 2020, unamortized share-based compensation expense was $107,411, $101,027 and $31,018, respectively, which is expected to be recognized over weighted average periods of 1.79, 1.97 and 1.78 years, respectively.

 

  G. Employee Share Purchase Plan

 

Immediately prior to the IPO, the Company adopted the 2021 Employee Share Purchase Plan (the “ESPP”). As of December 31, 2021, a total of 194,625 shares were reserved for issuance under the ESPP. In addition, on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, the number of shares available for issuance under the ESPP will be increased by the lesser of 1% of the shares outstanding on the final day of the immediately preceding calendar year, as determined on a fully diluted basis, and such smaller number of shares as determined by the Company’s board of directors. According to the ESPP, eligible employees may use up to 15% of their salaries to purchase ordinary shares. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the beginning of each offering period or on the purchase date. As of December 31, 2022, 38,239 ordinary shares had been purchased under the ESPP. The ESPP is compensatory and, as such, results in recognition of compensation cost.
v3.22.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 14: INCOME TAXES 

  A. Loss before income taxes:

 

The following are the domestic and foreign components of the Company’s loss before income taxes:

 

    Year ended December 31,  
    2022     2021     2020  
                   
Domestic (Israel)   $ (142,527 )   $ (132,203 )   $ (152,335 )
Foreign     13,066       5,240       2,324  
                         
Total   $ (129,461 )   $ (126,963 )   $ (150,011 )

 

  B. Income taxes:

 

The following are the domestic and foreign components of the Company’s income taxes:

 

    Year ended December 31,  
    2022     2021     2020  
Domestic (Israel)   $ 649     $ 180     $ 243  
Foreign     6,757       2,151       1,949  
Total   $ 7,406     $ 2,331     $ 2,192  

 

  C. Tax rate reconciliation:

 

The reconciliation of the tax benefit at the Israeli statutory tax rate to the Company’s income taxes is as follows:

 

    Year ended December 31,  
    2022     2021     2020  
    Tax     Rate     Tax     Rate     Tax     Rate  
Theoretical tax benefit   $ (29,776 )     23 %   $ (29,201 )     23 %   $ (34,503 )     23 %
                                                 
Increase (decrease) in tax rate due to:                                                
Change in valuation allowance     8,489       (7 )%     14,968       (12 )%     14,622       (10 )%
Share-based compensation     14,806       (11 )%     10,184       (8 )%     8,324       (5 )%
Tax benefit relating to exercise of disqualified ISO     (1,394 )     1 %     (3,069 )     2 %     —       0 %
                                                 
Initial public offering costs     (1,800 )     1 %     (5,399 )     4 %     —       0 %
                                                 
Preferred technological enterprise     15,523       (12 )%     14,460       (11 )%     16,757       (11 )%
                                                 
Currency differences     768       1 %     18       0 %     (2,998 )     2 %
Other     790       1 %     370       0 %     (10 )     0 %
Effective tax   $ 7,406       (2 )%   $ 2,331       (2 )%   $ 2,192       (1 )%

 

  D. Deferred taxes:

 

The principal components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 are as follows:

 

    As of December 31,  
    2022     2021  
Net operating loss carry forwards   $ 39,942     $ 35,093  
Research and development     9,663       5,538  
Initial public offering costs     1,800       3,600  
Other temporary differences     3,855       2,577  
Carryforward tax credits     1,428       867  
Gross deferred tax assets     56,688       47,675  
Valuation allowance     (55,561 )     (47,072 )
Total deferred tax assets     1,127       603  
Deferred tax liabilities:                
Depreciation and amortization     (1,127 )     (603 )
Deferred tax liabilities   $ (1,127 )   $ (603 )
Net deferred taxes   $ —     $ —  

 

In assessing the ability to realize deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on the available evidence, management believes that it is more likely than not that its deferred tax assets will not be realized and accordingly, a full valuation allowance has been provided. As of December 31, 2022, the Company has net operating loss carryforwards in Israel of $332,850 which may be carried forward indefinitely.

 

As of December 31, 2022, and 2021, the Company has not provided a deferred tax liability in respect of cumulative undistributed earnings relating to the Company’s foreign subsidiaries, as the Company intends to keep these earnings permanently invested.

 

  E. Tax assessments:

 

As of December 31, 2022, the Company had open tax years for the periods between 2018 and 2022 in Israel and for the periods between 2019 and 2022 for the U.S. subsidiary.

 

  F. Basis of taxation:

 

Ordinary taxable income in Israel is subject to a corporate tax rate of 23% in 2022 and 2021. However, the effective tax rate payable by a company may be considerably lower (as discussed below). Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. Primarily, in 2022 and 2021, the Company’s U.S. subsidiary is subject to tax rate of approximately 21%.

 

  G. The New Technological Enterprise Incentives Regime (Amendment 73 to the Investment Law)

 

In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments (“the 2017 Amendment”) was published and was pending the publication of regulations, in May 2017 regulations were promulgated by the Finance Ministry to implement the “Nexus Principles” based on OECD guidelines published as part of the Base Erosion and Profit Shifting (BEPS) project. Following the publication of the regulations the 2017 Amendment became fully effective. According to the 2017 Amendment, a Preferred Technological Enterprise, as defined in the 2017 Amendment, with total consolidated revenues of less than NIS 10 billion, will be subject to 12% tax rate on income derived from intellectual property (in development area A—a tax rate of 7.5%). In order to qualify as a Preferred technological enterprise certain criterion must be met, such as a minimum ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual revenues derived from exports. Any dividends distributed from income from the preferred technological enterprises will be subject to tax at a rate of 20%. The 2017 Amendment further provides that, in certain circumstances, a dividend distributed to a foreign corporate shareholder, would be subject to a 4% tax rate (if the percentage of foreign investors exceeds 90%).

 

The Company assessed the criteria for qualifying as a “Preferred Technological Enterprise,” status and concluded that the Company is eligible to the above-mentioned benefits. The Company is entitled to Preferred Technological Enterprise benefits starting 2019. The Company did not utilize any benefits associated with the Preferred Technological Enterprise in 2022 and 2021.
v3.22.4
LOSS PER SHARE
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
LOSS PER SHARE

NOTE 15: LOSS PER SHARE

The following table presents the calculation of basic and diluted net loss per share:

 

    Year ended December 31,  
    2022     2021     2020  
Numerator:                  
Net loss   $ 136,867     $ 129,294     $ 152,203  
Undistributed earnings attributable to preferred shareholders     —       8,203       18,713  
Net loss attributable to ordinary shareholders, basic and diluted   $ 136,867     $ 137,497     $ 170,916  
                         
Denominator:                        
Weighted-average ordinary shares outstanding     45,804,714       30,332,006       12,048,909  
Basic and diluted net loss per share   $ (2.99 )   $ (4.53 )   $ (14.19 )
v3.22.4
GEOGRAPHICAL INFORMATION
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
GEOGRAPHICAL INFORMATION

NOTE 16: GEOGRAPHICAL INFORMATION

Revenues are attributed to geographic areas based on location of the end customers as follows:

 

    Year ended December 31,  
    2022     2021     2020  
United States   $ 255,495     $ 148,291     $ 77,933  
EMEA     162,479       97,292       49,747  
Rest of world     101,055       62,567       33,443  
    $ 519,029     $ 308,150     $ 161,123  

 

Property and equipment, net by geographical areas were as follows:

 

    As of December 31,  
    2022     2021  
Israel   $ 30,260     $ 18,583  
United States     3,171       748  
Rest of the world     985       268  
    $ 34,416     $ 19,599  
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Principles of Consolidation

A. Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of monday. com and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of estimates

B.  Use of estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on assumptions that management considers to be reasonable. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates.
Foreign Currency Translation and Transactions

C.      Foreign Currency Translation and Transactions

 

The Company’s management has determined that the United States dollar is the currency in the primary economic environment in which monday.com and its subsidiaries operates. Thus, the Company reports its consolidated results in United States dollars. Transactions and balances that are denominated in other currencies have been remeasured into United States dollars in accordance with principles set forth in Accounting Standards Codification (“ASC”) ASC 830, Foreign currency matters. Monetary assets and liabilities denominated in the local currency are remeasured into United States dollars at the end of each reporting period using the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are measured at historical rates. All exchange gains and losses from the remeasurement measured above are reflected at the consolidated statement of operations as financial expenses or income, as appropriate.
Cash and Cash Equivalents

D.      Cash and Cash Equivalents

 

The Company classifies all unrestricted highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents. Cash equivalents consist of bank deposits and money market funds.
Accounts Receivable

E.      Accounts Receivable

 

Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company maintains an allowance for estimated losses inherent in its accounts receivable including potential uncollectible amounts. The allowance is based on the Company’s periodic assessment of the collectability of the accounts based on a combination of factors including the payment terms of each account, its age, the collection history of each customer, and the customer’s financial condition. Doubtful accounts expense for the years ended December 31, 2022 and 2021 was $1,622 and $594, respectively. The Company wrote off bad debts in the amount of $1,463 and $609 during 2022 and 2021, respectively.
Property and Equipment, Net

F.       Property and Equipment, Net

 

Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets (see Note 2H). Expenditures for maintenance and repairs are expensed as incurred. Disposals are removed at cost less accumulated depreciation and any gain or loss from disposals is reflected in the consolidated statement of operations in the period of disposition.
Internal Use Software Development Costs

G.      Internal Use Software Development Costs

 

The Company capitalizes certain internal software development costs related to its cloud-based platform or to backoffice operating systems. The costs consist of personnel costs incurred during the application development stage. Capitalization begins when the preliminary project stage is completed, and it is probable that the software will be completed and used for its intended function.

 

Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post implementation operating activities are expensed as incurred.

 

Capitalized software development costs are included in property and equipment (see Note 4) and are amortized over the estimated useful life of the software, on a straight-line basis, which represents the manner in which the expected benefit will be derived. Amortization expenses are included in cost of revenue in the consolidated statement of operations. 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.
Amortization and Impairment of Long-Lived Assets

H.       Amortization and Impairment of Long-Lived Assets:

 

Long-lived assets with definite lives consist of property and equipment. Long-lived assets are amortized over their estimated useful lives which are as follows:

 

  Years
   
Computers, software, and electronic equipment 3-5
   
Office furniture and equipment 10-14
   
Capitalized internal software development costs 3
   
Leasehold improvements Shorter of the remaining term
of the underlying lease, or
estimated useful life of the asset

 

The Company reviews its long-lived assets for impairment whenever events or circumstances have occurred that indicate that the estimated useful lives of the long-lived assets may warrant revision or that the carrying value of these assets may be impaired. To compute whether assets have been impaired, the estimated undiscounted future cash flows of the assets or asset group are compared to the carrying value. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized based on the amount in which the carrying amount exceeds the fair value of the asset or asset group, based on discounted cash flows. There were no events or circumstances that required the Company’s long-lived assets to be tested for impairment during any of the periods presented.
Leases

I.       Leases

 

The Company determines if an arrangement is a lease at inception by determining if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances.

 

The Company classifies leases at their inception as either capital or operating leases. A lease that transfers substantially all the risks and rewards incidental to ownership of the leased asset to the Company is classified as a capital lease. For capital leases, at the commencement of the lease term, the leased asset is measured at the lower of fair value or the present value of the minimum lease payments. The leased asset is depreciated over the shorter of its useful life and the lease term. See also note 2X.

 

For operating leases, right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is a hypothetical rate based on the Company’s understanding of what its credit rating would be. The ROU assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

 

The lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations. The Company’s lease agreements generally do not contain any residual value guarantees, restrictions, or covenants.

 

For operating leases that contain renewals, or other lease incentives, the Company recognizes the rent expense on a straight-line basis over the term of the lease. Additionally, incentives received are treated as a reduction of costs over the term of the agreement.

 

Certain lease agreements include rental payments adjusted periodically for the consumer price index (“CPI”). The ROU assets and lease liabilities were calculated using the initial CPI and will not be subsequently adjusted.

 

Payments for variable lease costs are expensed as incurred and are not included in the operating lease ROU assets and lease liabilities.

 

 

The Company utilized the practical expedient in ASC 842 and elected not to record leases with an initial term of 12 months or less on the balance sheet. Therefore, for short-term leases with a term of 12 months or less, operating lease ROU assets and lease liabilities are not recognized, and the Company records such lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term.

 

Rent expenses for the years ended December 31, 2022, 2021 and 2020, were $16,396, $4,326 and $3,287, respectively. See also note 9.
Employee Related Obligations

J.    Employee Related Obligations

 

According to the Israeli Severance Pay Law, 1963 (“Severance Pay Law”), employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment, or a portion thereof. The Company’s liability for severance pay is covered by the provisions of

 

Section 14 of the Severance Pay Law (“Section 14”). Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, contributed on their behalf to their insurance funds. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. Therefore, the Company does not recognize a liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company’s balance sheet. Severance expenses for the years ended December 31, 2022, 2021 and 2020, amounted to $7,289, $4,608 and $2,721, respectively.

 

The Company’s U.S. Subsidiary has a 401(K) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits. The expenses recorded by the U.S. subsidiary for employer’s contributions were $1,551, $915 and $529 for the years ended December 31, 2022, 2021 and 2020, respectively.
Contingent Liabilities

K.    Contingent Liabilities

 

The Company accounts for its contingent liabilities in accordance with ASC Topic 450, Contingencies (“ASC 450”). A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter.
Revenue Recognition

L.       Revenue Recognition

 

The Company generates revenue from the sale of subscriptions to customers to access its cloud-based Work OS platform. The terms of the Company’s subscription agreements are primarily monthly or annual, and a large portion of the arrangements are paid in full up-front at the outset of the arrangement. Customers may not take possession over the software and instead are granted continuous access to the platform over the contractual period and therefore the arrangements are accounted for as service contracts.

 

The Company’s contracts generally include fixed number of users and fixed price per user. Revenue for these arrangements is recognized ratably over the contract term.

 

The Company’s subscription contracts are generally non-cancelable except for contracts with first-time customers whereby the contract terms provide rights to cancel the contract in the first 30 days for pro-rated refund for unutilized days. Historically, refunds have not been material, and therefore no provision for refunds was recorded to date.

 

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services. The Company determines revenue recognition through the following steps:

 

1.       Identification of the contract, or contracts, with the customer

 

The Company considers the terms and conditions of the contracts and the Company’s customary business practices in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract has been approved by both parties, it can identify each party’s rights regarding the services to be transferred and the payment terms for the services, it has determined the customer to have the ability and intent to pay, and the contract has commercial substance.

 

The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s payment history or, in the case of a new customer, credit and financial information pertaining to the customer.

 

2.       Identification of the performance obligations in the contract

 

Performance obligations committed in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract.

 

 

The Company’s performance obligations generally consist of access to the cloud-based platform and related support services which is considered one performance obligation. The customers do not have the ability to take possession of the software, and through access to the platform the Company provides a series of distinct software-based services that are satisfied over the term of the subscription.

 

3.       Determination of the transaction price

 

The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Payment terms are generally upfront at the time of the transaction, except for enterprise customers which are generally net 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts generally do not include a significant financing component. The Company applied the practical expedient in ASC 606 and did not evaluate payment terms of one year or less for the existence of a significant financing component. The Company’s policy is to exclude sales and other indirect taxes when measuring the transaction price.

 

  4. Allocation of the transaction price to the performance obligations in the contract

 

The Company’s contracts contain a single performance obligation. Therefore, the entire transaction price is allocated to the single performance obligation.

 

  5. Recognition of the revenue when, or as, a performance obligation is satisfied

 

Revenue is recognized ratably over the term of the subscription agreement generally beginning on the date that the platform is made available to a customer.

 

The Company records contract liabilities when cash payments are received in advance of performance to deferred revenue or to customer advances in case of refund rights.

 

The Company recognized $134,438 and $70,719 of revenue during the years ended December 31, 2022 and 2021, respectively, from deferred revenue balances as of January 1, 2022 and 2021, respectively.

 

For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. Similarly, the Company does not disclose the value of unsatisfied performance obligations since the original expected duration of most of the contracts is one year or less.
Cost of Revenue

M. Cost of Revenue

 

Cost of revenue primarily consists of costs related to providing subscription services to paying customers, including hosting costs, personnel-related expenses of customer support including share-based compensation, subcontractors costs, merchant and credit-cards processing fees, amortization of capitalized software development costs and allocated overhead costs.
Research and Development Costs

N. Research and Development Costs

 

Research and development costs are expensed as incurred unless these costs qualify for capitalization as internal-use software development costs. Research and development expenses consist primarily of personnel-related expenses, including share-based compensation and allocated overhead costs.
Sales and Marketing

O. Sales and Marketing

 

Sales and marketing expenses are primarily comprised of costs of the Company’s marketing personnel including share-based compensation, online marketing expenses and other advertising costs, partners’ commissions and allocated overhead costs. Sales and marketing expenses are expensed as incurred. Advertising costs amounted to $181,447, $143,472 and $129,101, in the years ended December 31, 2022, 2021 and 2020, respectively.
General and Administrative

P.     General and Administrative

 

General and administrative expenses primarily consist of costs of the Company’s executive, finance, legal and other administrative personnel including share-based compensation, professional service fees, and allocated overhead costs.
Accounting for Share-Based Compensation

Q.      Accounting for Share-Based Compensation

 

The Company accounts for share-based compensation under ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees, non-employee consultants and directors, including options, restricted share units (“RSUs”), and shares issued pursuant to the employee share purchase plans (“ESPP”) based on the fair value of the awards on the date of grant as follows: (i) share options – the fair value is based on the Black-Scholes option-pricing model, (ii) RSUs – the fair value is based on the closing trading price of the underlying shares at the date of grant and, (iii) ESPP – the fair value is based on the Monte-Carlo simulation model due to certain limitation on the number of shares per employee.

 

The expense for share-based compensation cost is recognized over the requisite service period of each individual grant using the graded vesting attribution method for both service-based and performance-based awards. Forfeitures are accounted for as they occur.

 

 

The Company granted its Co-CEOs performance-based awards. The number of performance awards earned and eligible to vest are generally determined after a one-year performance period, based on achievement of certain Company financial performance measures and the recipient’s continued service. The Company recognizes share-based compensation expense for the performance awards using the fair value at the date of grant over the requisite service when it is probable that the performance conditions will be achieved and adjusts the number of units expected to vest based on interim estimates of performance against the pre-set objectives.

 

Valuation assumptions:

 

  I. Options:

 

The Black-Scholes option-pricing model requires the Company to make several assumptions, including the value of the Company’s ordinary shares, expected volatility, expected term, risk-free interest rate and expected dividends. The Company evaluates the assumptions used to value option awards upon each grant of share options.

 

Expected volatility was calculated based on the implied volatilities from market comparisons of certain publicly traded companies. The expected option term was calculated based on the simplified method, which uses the midpoint between the vesting date and the contractual term, as the Company does not have sufficient historical data to develop an estimate based on participant behavior. The risk-free interest rate was based on the U.S. treasury bonds yield with an equivalent term. The Company has not paid dividends and has no foreseeable plans to pay dividends. The assumptions used to determine the fair value of the share-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment.

 

Commencing June 10, 2021, the ordinary shares of the Company are publicly traded. Prior to the Initial Public Offering (“IPO”), the fair value of ordinary shares underlying the options has historically been determined by management with the assistance of a third-party valuation firm and approved by the Company’s board of directors.

 

The following table summarizes the Black-Scholes assumptions used at the grant dates:

 

  Year ended December 31,
  2022   2021   2020
Risk-free interest rate 1.89%-4.3% 0.68%-1.15% 0.3%-0.58%
       
Expected dividend yield 0% 0% 0%
       
Expected term (in years) 5-7 5-8 5-8
       
Expected volatility 49%-57% 49%-50% 47%-48%
       

 

 

II. ESPP plan:  
  Year ended December 31,
  2022
Risk-free interest rate 0.46%-2.87%
Expected dividend yield 0%
Expected term (in years) 0.5
Expected volatility 97%-98%

 
Income Taxes

R.       Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740 (“ASC 740”), using the liability method whereby deferred tax assets and liability account balances are determined based on the differences between financial reporting and the tax basis for assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amounts that are more likely-than-not to be realized. As of December 31, 2022 and 2021, the Company recorded a full valuation allowance against its deferred tax assets.

 

The Company applies a more-likely-than-not recognition threshold to uncertain tax positions based on the technical merits of the income tax positions taken. The Company does not recognize a tax benefit unless it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of December 31, 2022 and 2021, no liability for unrecognized tax benefits was recorded due to immateriality.
Net Loss Per Share Attributable to Ordinary Shareholders

 

S.       Net Loss Per Share Attributable to Ordinary Shareholders

 

The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury shares method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share since the effects of potentially dilutive shares of ordinary shares are

 

 

anti-dilutive in all periods presented. The potentially dilutive options to purchase ordinary shares and RSUs that were excluded from the computation amounted to 4,617,018, 6,302,344 and 5,909,263, for the years ended December 31, 2022 and 2021 and 2020, respectively, because including them would have been anti-dilutive. The Company’s Convertible preferred shares were also excluded from the computation and amounted to 26,440,239 shares for the year ended December 31, 2020.

 

Basic and diluted net loss per share was presented in conformity with the two-class method for participating securities prior to the Company’s IPO for the year ended December 31, 2020. The Founder’s share is not a participating security and therefore excluded from the net loss per share.

 

The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Prior to their conversion, the Company considered its convertible preferred shares to be participating securities as the holders of the convertible preferred shares would be entitled to dividends that would be distributed to the holders of ordinary shares, on a pro-rata basis assuming conversion of all convertible preferred shares into ordinary shares. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the years ended December 31, 2021 and 2020, was not allocated to the Company’s participating securities.
Concentration of Credit Risks

T.       Concentration of Credit Risks

 

Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents (including money market funds and bank deposits up to three months) and accounts receivable.

 

For cash and cash equivalents, the Company is exposed to credit risk in the event of default by the financial institutions to the extent of the amounts recorded on the accompanying consolidated balance sheets exceed federally insured limits. The Company places its cash and cash equivalents with financial institutions with high-quality credit ratings in the United States, Israel and Luxemburg and has not experienced any losses in such accounts.

 

For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets. For each of the years ended December 31, 2022, and 2021, there were no individual customers that accounted for 10% or more of the Company’s revenues. The Company’s accounts recieveable are geographically diversified and derived primarily from sales in the United States, EMEA, and APAC. To manage its accounts receivable risk, the Company evaluates the credit worthiness of its customers and maintains allowances for potential credit losses.

 

 

The Company has not historically experienced any material credit losses related to individual customers or groups of customers in any specific area or industry.
Segment Information

U.    Segment Information

 

The Company has a single operating and reportable segment. The Company’s chief operating decision makers are its two Co-Chief Executive Officers (“Co-CEO”), who review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. For information regarding the Company’s long-lived assets and revenue by geographic area, see Note 16.
Fair Value measurements

V.     Fair Value measurements

 

Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 

A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

 

Level 1 –    Quoted prices in active markets for identical assets or liabilities.

 

Level 2 –    Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 –    Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The carrying amount of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, and accrued expenses, are stated at their carrying value, which approximates fair value due to the short maturities of these instruments.

 

Assets measured at fair value on a recurring basis as of December 31, 2022, are comprised of money market funds and derivative instruments (see Note 7). Assets measured at fair value on a recurring basis as of December 31, 2021, are comprised of derivative instruments.
Derivative Financial Instruments

W. Derivative Financial Instruments

 

Derivatives are recognized at fair value as either assets or liabilities in the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging.” The gain or loss of derivatives which are designated and qualify as hedging instruments in a cash flow hedge, is recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Derivatives are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

 

The Company’s primary objective for holding derivative instruments is to reduce its exposure to foreign currency rate changes. The Company reduces its exposure by entering into forward foreign exchange contracts and option contracts with respect to operating expenses that are forecasted to be incurred in currencies other than the U.S. dollar. A majority of the Company’s revenues and operating expenditures are transacted in U.S. dollars. However, certain operating expenditures are incurred in or exposed to other currencies, primarily the New Israeli Shekel (“NIS”).

 

The Company has established forecasted transaction currency risk management programs to protect against fluctuations in fair value and the volatility of future cash flows caused by changes in exchange rates. The Company’s currency risk management program includes foreign exchange contracts designated as cash flow hedges. These foreign exchange contracts generally mature within 12 months. See Note 6.

 

In addition, occasionally the Company enters into swaps, options and forward contracts to hedge a portion of its monetary items in the balance sheet, such as cash and cash equivalents balances, denominated in British Pound, Australian Dollar and Euro for short-term periods, as well as operating lease liabilities balances denominated in NIS. The purpose of these contracts is to protect the fair value of the monetary assets from foreign exchange rate fluctuations. Gains and losses from derivatives related to these contracts are not designated as hedging instruments. The Company does not enter into derivative financial instruments for trading or speculative purposes.
Recently Adopted Accounting Pronouncements

 

X. Recently Adopted Accounting Pronouncements:

 

On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (ASC 842) using a modified retrospective transition approach. It applied Topic 842 to all leases as of January 1, 2022 without adjusting the comparative periods presented which requires lessees to include all leases on their balance sheets, whether operating or financing. Upon adoption, the Company recognized total ROU asset of $58,084, with corresponding liability in the same amount on the consolidated balance sheets. The adoption did not impact the beginning retained earnings, or prior year consolidated statements of operations and statements of cash flows.

 

On January 1, 2022, the Company adopted ASU No. 2016-13, “Financial Instruments – Credit Losses” (ASC 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected, include accounts receivable. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements.

 

In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (ASU 2019-12). The ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company prospectively adopted this ASU effective January 1, 2022. As of the date of the adoption there was no material impact on the Company’s consolidated financial statements.
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Schedule of useful lives of long-lived assets
  Years
   
Computers, software, and electronic equipment 3-5
   
Office furniture and equipment 10-14
   
Capitalized internal software development costs 3
   
Leasehold improvements Shorter of the remaining term
of the underlying lease, or
estimated useful life of the asset
Schedule of black-scholes stock option assumptions used at the grant dates
  Year ended December 31,
  2022   2021   2020
Risk-free interest rate 1.89%-4.3% 0.68%-1.15% 0.3%-0.58%
       
Expected dividend yield 0% 0% 0%
       
Expected term (in years) 5-7 5-8 5-8
       
Expected volatility 49%-57% 49%-50% 47%-48%
       
Schedule of black-scholes ESPP assumptions used at the grant dates
II. ESPP plan:  
  Year ended December 31,
  2022
Risk-free interest rate 0.46%-2.87%
Expected dividend yield 0%
Expected term (in years) 0.5
Expected volatility 97%-98%
v3.22.4
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)
 12 Months Ended
Dec. 31, 2022
Prepaid Expense and Other Assets, Current [Abstract]  
Schedule of prepaid expenses and other current assets
    December 31,  
    2022     2021  
Prepaid expenses   $ 13,610     $ 12,733  
Government institutions     2,268       3,520  
Derivative instruments     -       656  
Interest to receive     3,872       240  
Short-term vendor deposits     3,924       282  
Other current assets     1,051       741  
                 
Total prepaid expenses and other current assets   $ 24,725     $ 18,172  
v3.22.4
PROPERTY AND EQUIPMENT, NET (Tables)
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment, net
    December 31,  
    2022     2021  
Computer, software, and electronic equipment   $ 12,569     $ 8,095  
Office furniture and equipment     6,926       4,458  
Leasehold improvements     13,289       6,700  
Capitalized internal software development costs     10,597       5,666  
Capital leases     254       254  
Property and equipment, gross     43,635       25,173  
Less accumulated depreciation and amortization   $ (9,219 )   $ (5,574 )
Property and equipment, net   $ 34,416     $ 19,599  
v3.22.4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)
 12 Months Ended
Dec. 31, 2022
Accrued Liabilities, Current [Abstract]  
Schedule of accrued expenses and other current liabilities
    December 31,  
    2022     2021  
Accrued employee compensation and benefits   $ 44,639     $ 51,953  
Accrued expenses     18,983       13,149  
Capital lease – short-term     -       84  
Derivative instruments     3,208       -  
Advances from customers     2,805       2,134  
Income and indirect taxes payable     4,071       2,815  
Total   $ 73,706     $ 70,135  
v3.22.4
DERIVATIVES AND HEDGING (Tables)
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of fair values of derivative instruments

 

Balance sheet line item December 31,  
  2022     2021  
Derivatives designated as hedging instruments:              
Foreign exchange contracts Other current liabilities   (3,208 )     —  
  Prepaid expenses
and other current assets		   —       705  
               
  $ (3,208 )   $ 705  
Derivatives not designated as hedging instruments:              
  Prepaid expenses and   —       (49 )
Foreign exchange contracts other current assets              
    —       (49 )
               
Total $ (3,208 )   $ 656  
Schedule of income and other comprehensive income

 

    Gain (Loss) Recognized in Other Comprehensive Income on Effective-Portion of Derivative, net     Realized Gain (Loss) on Derivative Reclassified from Accumulated Other Comprehensive Income (*)     Amount Excluded from Effectiveness Testing Recognized in Income (Loss)(**)  
    Year ended December 31     Year ended December 31     Year ended December 31  
    2022     2021     2022     2021     2022     2021  
Derivatives designated as hedging instruments:                                                
                                                 
Foreign exchange contracts   $ (11,386 )   $ 953     $ 7,582     $ (359 )   $ —     $ —  
                                                 
      (11,386 )     953       7,582       (359 )     —       —  
                                                 
Derivatives not designated as hedging instruments:                                                
                                                 
Foreign exchange contracts     —       —       —       —       (1,801 )     49  
                                                 
      —       —       —       —       (1,801 )     49  
Total   $ (11,386 )   $ 953     $ 7,582     $ (359 )   $ (1,801 )   $ 49  

 

(*) Classified in operating expenses in the Consolidated Statement of Operations.

 

(**) Includes derivatives not designated as accounting hedge. Classified in financial income (expense), net, in the Consolidated Statement of Operations.
Schedule of notional amounts of outstanding derivative
    As of December 31,  
    2022     2021  
Derivatives designated as hedging instruments:            
Foreign exchange contracts:                
NIS   $ 81,557     $ 36,013  
    $ 81,557     $ 36,013  
Derivatives not designated as hedging instruments:                
Foreign exchange contracts:                
GBP     —       4,054  
Euro     —       2,830  
AUD     —       581  
      —       7,465  
Total   $ 81,557     $ 43,478  
v3.22.4
FAIR VALUE MEASUREMENTS (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Schedule of fair value of financial assets and liabilities

 

    As of December 31,  
    2022     2021  
    Level 1     Level 2     Total     Level 1     Level 2     Total  
Cash equivalents:                                                
Bank deposits   $ 625,000     $ —     $ 625,000     $ 604,000     $ —     $ 604,000  
Money market funds     80,888       —       80,888       —       —       —  
Foreign currency                                                
derivative contracts:                                                
Foreign exchange contracts     —       (3,208 )     (3,208 )     —       656       656  
                                                 
Total   $ 705,888     $ (3,208 )   $ 702,680     $ 604,000     $ 656     $ 604,656  
v3.22.4
LEASES (Tables)
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Schedule of operating leases future minimum lease payments

 

Years Ending December 31,     Amount  
           
2023     $ 19,782  
2024       17,843  
2025       18,176  
2026       12,697  
2027       8,708  
Thereafter       6,282  
Total undiscounted cash flows     $ 83,488  
           
Less: Imputed interest     $ (5,767 )
Present value of lease liabilities     $ 77,721  
Schedule of supplemental balance sheet information

 

  Year ended December 31, 2022
   
Weighted-average remaining lease term 4.5 years
Weighted-average discount rate 3.6%
v3.22.4
COMMITMENTS AND CONTINGENCIES (Tables)
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Schedule of future minimum payments, other commitments, liability, fiscal year maturity

 

Years Ending December 31,     Amount  
2023     $ 15,185  
2024       7,211  
2025       820  
Total contractual obligations     $ 23,216  
v3.22.4
FINANCIAL INCOME (EXPENSES), NET (Tables)
 12 Months Ended
Dec. 31, 2022
Other Income and Expenses [Abstract]  
Schedule of financial income (expenses)
    Year ended December 31,  
    2022     2021     2020  
Financial expenses:                        
Bank charges and other   $ 730     $ 566     $ 340  
Interest on credit facility and amortization of debt issuance fees     62       405       671  
Exchange rate expense, net     —       742       —  
Total financial expenses     792       1,713       1,011  
Financial income:                        
Exchange rate income, net     4,687       —       492  
Interest income on deposits     18,659       875       1,045  
Total financial income     23,346       875       1,537  
Financial income (expenses), net   $ 22,554     $ (838 )   $ 526  
v3.22.4
SHAREHOLDERS' EQUITY (Tables)
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
Schedule of ordinary shares reserved for future issuance

 

    As of December 31,  
    2022     2021  
Ordinary shares     47,737,868       44,924,039  
Outstanding share options and RSUs     4,617,018       6,302,344  
Shares available for future grants under the 2021 plan     6,243,273       5,087,335  
Shares subject to the employee share purchase plan     721,469       194,625  
Total     59,319,628       56,508,343  
Schedule of share option activity

 

    Number of Options     Weighted- Average Exercise Price     Weighted Average Remaining Contractual life     Aggregate Intrinsic Value  
                                 
Outstanding — January 1, 2022     6,204,605     $ 13.53       7.21     $ 1,831,568  
Granted (*)     406,575     $ 192.91                  
Exercised     (2,693,614 )   $ 2.28                  
Expired and forfeited     (117,542 )   $ 48.88                  
Outstanding — December 31, 2022     3,800,024     $ 39.6       7.46     $ 347,627  
Exercisable — December 31, 2022 (*)     2,126,460     $ 19.4       6.86     $ 223,393  

 

(*) Includes 91,344 performance options granted to the Company’s Co-CEOs.
Schedule of unvested restricted stock units

 

 

      Number of Units     Weighted-Average Fair Value  
Balance at January 1, 2022       97,739     $ 278.46  
Granted       865,528     $ 116.16  
Vested       (81,976 )   $ 182.21  
Canceled       (64,297 )   $ 149.96  
Balance at December 31, 2022       816,994     $ 126.29  
Schedule of share-based compensation expense

 

    Year ended December 31,  
    2022     2021     2020  
Cost of revenues   $ 10,406     $ 7,681     $ 2,720  
Research and development     32,957       21,779       12,142  
Sales and marketing     33,457       23,135       10,068  
General and administrative *)     28,100       20,934       39,415  
Share-based compensation, net of amounts capitalized   $ 104,920     $ 73,529     $ 64,345  
Capitalized share-based compensation expense     2,282       1,522       380  
Total share-based compensation   $ 107,202     $ 75,051     $ 64,725  

 

*) Share-based compensation expenses in 2020 includes costs related to the fair value of fully vested options granted to the Company’s Co-CEO in December 2020 in the amount of $30,424.
v3.22.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of domestic and foreign components of loss before income taxes

 

    Year ended December 31,  
    2022     2021     2020  
                   
Domestic (Israel)   $ (142,527 )   $ (132,203 )   $ (152,335 )
Foreign     13,066       5,240       2,324  
                         
Total   $ (129,461 )   $ (126,963 )   $ (150,011 )
Schedule of domestic and foreign components of income taxes

 

    Year ended December 31,  
    2022     2021     2020  
Domestic (Israel)   $ 649     $ 180     $ 243  
Foreign     6,757       2,151       1,949  
Total   $ 7,406     $ 2,331     $ 2,192  
Schedule of effective tax rate reconciliation

 

    Year ended December 31,  
    2022     2021     2020  
    Tax     Rate     Tax     Rate     Tax     Rate  
Theoretical tax benefit   $ (29,776 )     23 %   $ (29,201 )     23 %   $ (34,503 )     23 %
                                                 
Increase (decrease) in tax rate due to:                                                
Change in valuation allowance     8,489       (7 )%     14,968       (12 )%     14,622       (10 )%
Share-based compensation     14,806       (11 )%     10,184       (8 )%     8,324       (5 )%
Tax benefit relating to exercise of disqualified ISO     (1,394 )     1 %     (3,069 )     2 %     —       0 %
                                                 
Initial public offering costs     (1,800 )     1 %     (5,399 )     4 %     —       0 %
                                                 
Preferred technological enterprise     15,523       (12 )%     14,460       (11 )%     16,757       (11 )%
                                                 
Currency differences     768       1 %     18       0 %     (2,998 )     2 %
Other     790       1 %     370       0 %     (10 )     0 %
Effective tax   $ 7,406       (2 )%   $ 2,331       (2 )%   $ 2,192       (1 )%
Schedule of deferred tax assets and liabilities

 

    As of December 31,  
    2022     2021  
Net operating loss carry forwards   $ 39,942     $ 35,093  
Research and development     9,663       5,538  
Initial public offering costs     1,800       3,600  
Other temporary differences     3,855       2,577  
Carryforward tax credits     1,428       867  
Gross deferred tax assets     56,688       47,675  
Valuation allowance     (55,561 )     (47,072 )
Total deferred tax assets     1,127       603  
Deferred tax liabilities:                
Depreciation and amortization     (1,127 )     (603 )
Deferred tax liabilities   $ (1,127 )   $ (603 )
Net deferred taxes   $ —     $ —  
v3.22.4
LOSS PER SHARE (Tables)
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Schedule of calculation of basic and diluted net loss per share
    Year ended December 31,  
    2022     2021     2020  
Numerator:                  
Net loss   $ 136,867     $ 129,294     $ 152,203  
Undistributed earnings attributable to preferred shareholders     —       8,203       18,713  
Net loss attributable to ordinary shareholders, basic and diluted   $ 136,867     $ 137,497     $ 170,916  
                         
Denominator:                        
Weighted-average ordinary shares outstanding     45,804,714       30,332,006       12,048,909  
Basic and diluted net loss per share   $ (2.99 )   $ (4.53 )   $ (14.19 )
v3.22.4
GEOGRAPHICAL INFORMATION (Tables)
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Schedule of revenues attributed to geographic areas based on location of end customers

 

    Year ended December 31,  
    2022     2021     2020  
United States   $ 255,495     $ 148,291     $ 77,933  
EMEA     162,479       97,292       49,747  
Rest of world     101,055       62,567       33,443  
    $ 519,029     $ 308,150     $ 161,123  
Schedule of property and equipment, net by geographical areas

 

    As of December 31,  
    2022     2021  
Israel   $ 30,260     $ 18,583  
United States     3,171       748  
Rest of the world     985       268  
    $ 34,416     $ 19,599  
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Jan. 01, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Doubtful accounts expense $ 1,622 $ 594    
Bad debts written off 1,463 609    
Rent expenses 16,396 4,326 $ 3,287  
Severance Costs 7,289 4,608 2,721  
Maximum annual contributions 1,551 915 529  
Deferred revenue, revenue recognized 134,438 70,719    
Advertising Expense 181,447 143,472 $ 129,101  
Operating lease right-of-use assets 80,197 $ 0   $ 58,084
Present value of lease liabilities $ 77,721      
Outstanding share options and RSUs        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive securities excluded from computation of earnings per share 4,617,018 6,302,344 5,909,263  
Convertible preferred share        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive securities excluded from computation of earnings per share     26,440,239  
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Details)
 12 Months Ended
Dec. 31, 2022
Computers, software and electronic equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Computers, software and electronic equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Useful life 5 years
Office furniture and equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Useful life 10 years
Office furniture and equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Useful life 14 years
Capitalized internal software development costs  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Leasehold improvements  
Property, Plant and Equipment [Line Items]  
Estimated useful life Shorter of the remaining termof the underlying lease, orestimated useful life of the asset
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Details 1)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected dividend yield 0.00% 0.00% 0.00%
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 1.89% 0.68% 0.30%
Expected term (in years) 5 years 5 years 5 years
Expected volatility 49.00% 49.00% 47.00%
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 4.30% 1.15% 0.58%
Expected term (in years) 7 years 8 years 8 years
Expected volatility 57.00% 50.00% 48.00%
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Details 2)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected dividend yield 0.00% 0.00% 0.00%
Employee stock purchase plan [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected dividend yield 0.00%    
Expected term (in years) 6 months    
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 1.89% 0.68% 0.30%
Expected term (in years) 5 years 5 years 5 years
Expected volatility 49.00% 49.00% 47.00%
Minimum | Employee stock purchase plan [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 0.46%    
Expected volatility 97.00%    
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 4.30% 1.15% 0.58%
Expected term (in years) 7 years 8 years 8 years
Expected volatility 57.00% 50.00% 48.00%
Maximum | Employee stock purchase plan [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 2.87%    
Expected volatility 98.00%    
v3.22.4
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Prepaid Expense and Other Assets, Current [Abstract]    
Prepaid expenses $ 13,610 $ 12,733
Government institutions 2,268 3,520
Derivative instruments 0 656
Interest to receive 3,872 240
Short-term vendor deposits 3,924 282
Other current assets 1,051 741
Total prepaid expenses and other current assets $ 24,725 $ 18,172
v3.22.4
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Abstract]      
Depreciation and amortization expense $ 5,913 $ 2,746 $ 1,888
Capitalized costs related to the development of internal-use software 4,931 3,702 1,499
Amortization of capitalized software development costs 1,492 547 232
Net carrying value of capitalized internal-use software $ 8,233 $ 4,793 $ 1,638
v3.22.4
PROPERTY AND EQUIPMENT, NET (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 43,635 $ 25,173
Less accumulated depreciation and amortization (9,219) (5,574)
Property and equipment, net 34,416 19,599
Computer, software, and electronic equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 12,569 8,095
Office furniture and equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 6,926 4,458
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 13,289 6,700
Capitalized internal software development costs    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 10,597 5,666
Capital leases    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 254 $ 254
v3.22.4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Accrued Liabilities, Current [Abstract]    
Accrued employee compensation and benefits $ 44,639 $ 51,953
Accrued expenses 18,983 13,149
Capital lease – short-term 0 84
Derivative instruments 3,208 0
Advances from customers 2,805 2,134
Income and indirect taxes payable 4,071 2,815
Total $ 73,706 $ 70,135
v3.22.4
DERIVATIVES AND HEDGING (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Derivative [Line Items]    
Derivative instruments $ (3,208) $ 656
Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Derivative instruments (3,208) 705
Not Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Derivative instruments 0 (49)
Foreign exchange contracts | Other current liabilities | Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Derivative instruments (3,208) 0
Foreign exchange contracts | Prepaid expenses and other current assets | Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Derivative instruments 0 705
Foreign exchange contracts | Prepaid expenses and other current assets | Not Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Derivative instruments $ 0 $ (49)
v3.22.4
DERIVATIVES AND HEDGING (Details 1) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Derivative [Line Items]      
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net $ (11,386) $ 953 $ 0
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) 7,582 [1] (359) [1] $ 0
Amount Excluded from Effectiveness Testing Recognized in Income [2] (1,801) 49  
Designated as hedging Instrument      
Derivative [Line Items]      
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net (11,386) 953  
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) [1] 7,582 (359)  
Amount Excluded from Effectiveness Testing Recognized in Income [2] 0 0  
Not designated as hedging instrument      
Derivative [Line Items]      
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net 0 0  
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) [1] 0 0  
Amount Excluded from Effectiveness Testing Recognized in Income [2] (1,801) 49  
Foreign exchange contracts | Designated as hedging Instrument      
Derivative [Line Items]      
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net (11,386) 953  
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) [1] 7,582 (359)  
Amount Excluded from Effectiveness Testing Recognized in Income [2] 0 0  
Foreign exchange contracts | Not designated as hedging instrument      
Derivative [Line Items]      
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net 0 0  
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) [1] 0 0  
Amount Excluded from Effectiveness Testing Recognized in Income [2] $ (1,801) $ 49  
[1] Classified in operating expenses in the Consolidated Statement of Operations.
[2] Includes derivatives not designated as accounting hedge. Classified in financial income (expense), net, in the Consolidated Statement of Operations.
v3.22.4
DERIVATIVES AND HEDGING (Details 2) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Derivative [Line Items]    
Notional amounts of outstanding derivatives $ 81,557 $ 43,478
Foreign exchange contracts    
Derivative [Line Items]    
Derivatives designated as hedging instruments 81,557 36,013
Derivatives not designated as hedging instruments: 0 7,465
Foreign exchange contracts | NIS    
Derivative [Line Items]    
Derivatives designated as hedging instruments 81,557 36,013
Foreign exchange contracts | GBP    
Derivative [Line Items]    
Derivatives not designated as hedging instruments: 0 4,054
Foreign exchange contracts | Euro    
Derivative [Line Items]    
Derivatives not designated as hedging instruments: 0 2,830
Foreign exchange contracts | AUD    
Derivative [Line Items]    
Derivatives not designated as hedging instruments: $ 0 $ 581
v3.22.4
FAIR VALUE MEASUREMENTS (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total $ 702,680 $ 604,656
Bank Deposits [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 625,000 604,000
Money Market Funds [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 80,888 0
Foreign exchange contracts    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency derivative contracts (3,208) 656
Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total 705,888 604,000
Level 1 [Member] | Bank Deposits [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 625,000 604,000
Level 1 [Member] | Money Market Funds [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 80,888 0
Level 1 [Member] | Foreign exchange contracts    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency derivative contracts 0 0
Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total (3,208) 656
Level 2 [Member] | Bank Deposits [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 0 0
Level 2 [Member] | Money Market Funds [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 0 0
Level 2 [Member] | Foreign exchange contracts    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency derivative contracts $ (3,208) $ 656
v3.22.4
REVOLVING CREDIT FACILITY (Narrative) (Details) - USD ($)
$ in Thousands
 1 Months Ended 12 Months Ended
Dec. 30, 2020
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Line of Credit Facility [Line Items]        
Minimum Liquidity Balance     $ 30,000  
Revolving Credit Facility        
Line of Credit Facility [Line Items]        
Aggregated principal amount $ 80,000      
Line of credit facility, interest rate description Amounts borrowed under the facility accrue interest at the rate equal to one month Libor + 2.6% for amounts of up to $8,000, which will increase to one-month LIBOR plus 2.85% per annum on September 1, 2022, and one-month Libor + 2.85 % per annum for amounts above $8,000, with accrued interest payable monthly      
Fee paid per annum on unutilized amounts eligible for drawdown 0.20%      
Paid upfront issuance fees $ 180      
Unutilized credit facilities available for borrowing   $ 80,000 80,000  
Interest expenses   $ 62 $ 316 $ 671
v3.22.4
LEASES (Narrative) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Nov. 13, 2019
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]      
Monthly installments $ 254    
lease liability   $ 0 $ 84
Undiscounted future payments   $ 2,207  
Term of lease   3 years  
v3.22.4
LEASES (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Leases [Abstract]  
2023 $ 19,782
2024 17,843
2025 18,176
2026 12,697
2027 8,708
Thereafter 6,282
Total undiscounted cash flows 83,488
Less: Imputed interest (5,767)
Present value of lease liabilities $ 77,721
v3.22.4
LEASES (Details 1)
Dec. 31, 2022
Leases [Abstract]  
Weighted-average remaining lease term 4 years 6 months
Weighted-average discount rate 3.60%
v3.22.4
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]    
Bank guarantee to secure lease agreements $ 6,871 $ 2,186,000
v3.22.4
COMMITMENTS AND CONTINGENCIES (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2023 $ 15,185
2024 7,211
2025 820
Total contractual obligations $ 23,216
v3.22.4
FINANCIAL INCOME (EXPENSES), NET (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Financial expenses:      
Bank charges and other $ 730 $ 566 $ 340
Interest on credit facility and amortization of debt issuance fees 62 405 671
Exchange rate expense, net 0 742 0
Total financial expenses 792 1,713 1,011
Financial income:      
Exchange rate income, net 4,687 0 492
Interest income on deposits 18,659 875 1,045
Total financial income 23,346 875 1,537
Nonoperating Income (Expense), Total $ 22,554 $ (838) $ 526
v3.22.4
SHAREHOLDERS' EQUITY (Narrative) (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Jun. 10, 2021
USD ($)
$ / shares
shares
Dec. 31, 2022
USD ($)
Investors
$ / shares
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2020
USD ($)
$ / shares
shares
Stockholders Equity Note [Line Items]        
Share-based compensation cost   $ 104,920 $ 73,529 $ 64,345
Options granted | shares   406,575    
Number of ordinary shares reserved and available for grant and issuance | shares   6,243,273 5,087,335  
Share-based compensation   $ 107,202 $ 75,051 $ 64,725
Equity method investment, ownership percentage   25.00%    
Shares reserved for issuance under ESPP | shares   721,469 194,625  
Ordinary shares repurchased under ESPP | shares   38,239    
Secondary market transaction        
Stockholders Equity Note [Line Items]        
Sale of ordinary shares | shares       639,739
Consideration received on sale of ordinary shares       $ 37,718
Sale of stock, price per share | $ / shares       $ 58.96
Share-based compensation cost       $ 10,487
Initial public offering and concurrent private placement        
Stockholders Equity Note [Line Items]        
Net proceeds of deducting underwriting discounts and commissions $ 591,856 $ 6,000    
Additional ordinary shares pursuant to underwriters option to purchase | shares 370,000      
Sale of stock, price per share | $ / shares $ 155      
Number of share issued | shares 3,700,000      
Net proceeds after deducting underwriting discounts and commissions. $ 34,697      
Other issuance costs $ 4,298      
Outstanding convertible preferred shares converted | shares 26,440,239      
Number of investors | Investors   2    
Number of ordinary shares purchased | shares   967,742    
Gross proceeds of consideration per transaction   $ 150,000    
Deferred offering costs   $ 44,995    
Co-CEO        
Stockholders Equity Note [Line Items]        
Options granted | shares   91,344    
Share-based compensation   $ 30,424    
2017 share option plan        
Stockholders Equity Note [Line Items]        
Weighted-average grant-date fair value of options granted | $ / shares   $ 69.3 $ 77 $ 38.3
Intrinsic value of options exercised   $ 346,600 $ 321,891 $ 18,868
Unamortized share-based compensation expense   $ 107,411 $ 101,027 $ 31,018
Weighted average period for cost expected to be recognized   1 year 9 months 14 days 1 year 11 months 19 days 1 year 9 months 10 days
2021 plan        
Stockholders Equity Note [Line Items]        
Number of ordinary shares reserved and available for grant and issuance | shares   6,243,273    
Share reserve increased | shares   2,246,202    
Unrecognized compensation cost related to unvested restricted share units   $ 64,458 $ 22,821  
Weighted average period for cost expected to be recognized   1 year 10 months 6 days 1 year 11 months 23 days  
v3.22.4
SHAREHOLDERS' EQUITY (Details) - shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Class of Stock [Line Items]    
Shares available for future grants under the 2021 plan 6,243,273 5,087,335
Shares subject to the employee share purchase plan 721,469 194,625
Total 59,319,628 56,508,343
Ordinary shares    
Class of Stock [Line Items]    
Ordinary shares reserved for future issuance 47,737,868 44,924,039
Outstanding share options and RSUs    
Class of Stock [Line Items]    
Ordinary shares reserved for future issuance 4,617,018 6,302,344
v3.22.4
SHAREHOLDERS' EQUITY (Details 1) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Number of Options outstanding    
Beginning balance 6,204,605  
Granted 406,575  
Exercised (2,693,614)  
Expired and forfeited (117,542)  
Ending balance 3,800,024 6,204,605
Exercisable 2,126,460  
Weighted-Average Exercise Price    
Beginning balance $ 13.53  
Granted 192.91  
Exercised 2.28  
Expired and forfeited 48.88  
Ending balance 39.6 $ 13.53
Exercisable $ 19.4  
Weighted Average Remaining Contractual life, Outstanding 7 years 5 months 15 days 7 years 2 months 15 days
Weighted Average Remaining Contractual life, Exercisable 6 years 10 months 9 days  
Aggregate Intrinsic Value, outstanding $ 347,627 $ 1,831,568
Aggregate Intrinsic Value, exercisable $ 223,393  
v3.22.4
SHAREHOLDERS' EQUITY (Details 2)
 12 Months Ended
Dec. 31, 2022
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]  
Granted 406,575
Restricted Stock Units (RSUs) [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]  
Balance 97,739
Granted 865,528
Vested (81,976)
Canceled (64,297)
Balance 816,994
Weighted-Average Fair Value  
Balance | $ / shares $ 278.46
Weighted-average fair value granted | $ / shares 116.16
Weighted-average fair value vested | $ / shares 182.21
Weighted-average fair value canceled | $ / shares 149.96
Balance | $ / shares $ 126.29
v3.22.4
SHAREHOLDERS' EQUITY (Details 3) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Share-based compensation, net of amounts capitalized $ 104,920 $ 73,529 $ 64,345
Capitalized share-based compensation expense 2,282 1,522 380
Total share-based compensation 107,202 75,051 64,725
Cost of revenues      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Share-based compensation, net of amounts capitalized 10,406 7,681 2,720
Research and development      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Share-based compensation, net of amounts capitalized 32,957 21,779 12,142
Sales and marketing      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Share-based compensation, net of amounts capitalized 33,457 23,135 10,068
General and administrative      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Share-based compensation, net of amounts capitalized [1] $ 28,100 $ 20,934 $ 39,415
[1] Share-based compensation expenses in 2020 includes costs related to the fair value of fully vested options granted to the Company’s Co-CEO in December 2020 in the amount of $30,424.
v3.22.4
INCOME TAXES (Narrative) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Operating Loss Carryforwards $ 332,850    
Corporate tax rate 23.00% 23.00% 23.00%
Tax rate 21.00%    
Tax rate of development area 7.50%    
Tax rate on dividends distributed from income from preferred technological enterprises 20.00%    
Tax rate on dividend distributed to foreign corporate shareholder 4.00%    
v3.22.4
INCOME TAXES (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Domestic (Israel) $ (142,527) $ (132,203) $ (152,335)
Foreign 13,066 5,240 2,324
Loss before income taxes $ (129,461) $ (126,963) $ (150,011)
v3.22.4
INCOME TAXES (Details 1) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Domestic (Israel) $ 649 $ 180 $ 243
Foreign 6,757 2,151 1,949
Total $ 7,406 $ 2,331 $ 2,192
v3.22.4
INCOME TAXES (Details 2) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Tax      
Theoretical tax benefit $ (29,776) $ (29,201) $ (34,503)
Increase (decrease) in tax rate due to:      
Change in valuation allowance 8,489 14,968 14,622
Share-based compensation 14,806 10,184 8,324
Tax benefit relating to exercise of disqualified ISO (1,394) (3,069) 0
Initial public offering costs (1,800) (5,399) 0
Preferred technological enterprise 15,523 14,460 16,757
Currency differences 768 18 (2,998)
Other 790 370 (10)
Effective tax $ 7,406 $ 2,331 $ 2,192
Rate      
Theoretical tax benefit 23.00% 23.00% 23.00%
Change in valuation allowance (7.00%) (12.00%) (10.00%)
Share-based compensation (11.00%) (8.00%) (5.00%)
Tax benefit relating to exercise of disqualified ISO 1.00% 2.00% 0.00%
Initial public offering costs 1.00% 4.00% 0.00%
Preferred technological enterprise (12.00%) (11.00%) (11.00%)
Currency differences 1.00% 0.00% 2.00%
Other 1.00% 0.00% 0.00%
Effective tax (2.00%) (2.00%) (1.00%)
v3.22.4
INCOME TAXES (Details 3) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Deferred tax assets:    
Net operating loss carry forwards $ 39,942 $ 35,093
Research and development 9,663 5,538
Initial public offering costs 1,800 3,600
Other temporary differences 3,855 2,577
Carryforward tax credits 1,428 867
Gross deferred tax assets 56,688 47,675
Valuation allowance (55,561) (47,072)
Total deferred tax assets 1,127 603
Deferred tax liabilities:    
Depreciation and amortization (1,127) (603)
Deferred tax liabilities (1,127) (603)
Net deferred taxes $ 0 $ 0
v3.22.4
LOSS PER SHARE (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Numerator:      
Net loss $ 136,867 $ 129,294 $ 152,203
Undistributed earnings attributable to preferred shareholders 0 8,203 18,713
Net loss attributable to ordinary shareholders, basic and diluted $ 136,867 $ 137,497 $ 170,916
Denominator:      
Weighted-average ordinary shares outstanding, basic 45,804,714 30,332,006 12,048,909
Weighted Average Number of Shares Outstanding, Diluted 45,804,714 30,332,006 12,048,909
Basic net loss per share $ (2.99) $ (4.53) $ (14.19)
Diluted net loss per share $ (2.99) $ (4.53) $ (14.19)
v3.22.4
GEOGRAPHICAL INFORMATION (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenue, Major Customer [Line Items]      
Revenues $ 519,029 $ 308,150 $ 161,123
Segment revenue benchmark | Geographic concentration risk      
Revenue, Major Customer [Line Items]      
Revenues 519,029 308,150 161,123
United States | Segment revenue benchmark | Geographic concentration risk      
Revenue, Major Customer [Line Items]      
Revenues 255,495 148,291 77,933
EMEA | Segment revenue benchmark | Geographic concentration risk      
Revenue, Major Customer [Line Items]      
Revenues 162,479 97,292 49,747
Rest of the world | Segment revenue benchmark | Geographic concentration risk      
Revenue, Major Customer [Line Items]      
Revenues $ 101,055 $ 62,567 $ 33,443
v3.22.4
GEOGRAPHICAL INFORMATION (Details 1) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Revenue, Major Customer [Line Items]    
Property and equipment, net $ 34,416 $ 19,599
Property and equipment | Geographic concentration risk    
Revenue, Major Customer [Line Items]    
Property and equipment, net 34,416 19,599
Israel | Property and equipment | Geographic concentration risk    
Revenue, Major Customer [Line Items]    
Property and equipment, net 30,260 18,583
United States | Property and equipment | Geographic concentration risk    
Revenue, Major Customer [Line Items]    
Property and equipment, net 3,171 748
Rest of the world | Property and equipment | Geographic concentration risk    
Revenue, Major Customer [Line Items]    
Property and equipment, net $ 985 $ 268