Correction of Previously Issued Consolidated Financial Statements

12 Months Ended

Dec. 31, 2021

Accounting Changes And Error Corrections [Abstract]

Correction of Previously Issued Consolidated Financial Statements

15. Correction of Previously Issued Consolidated Financial Statements

Subsequent to the issuance of the Company’s consolidated financial statements as of December 31, 2021, and 2020 and for each of the three years in the period ended December 31, 2021 (the “previously issued financial statements”), management identified an error in the Company’s historical recognition of stock-based compensation cost for RSUs. The Company’s accounting policy is to recognize stock-based compensation cost for RSUs on a straight-line basis over the period during which the participant is required to perform services in exchange for the award. Almost all the Company’s RSU grants issued and outstanding through 2021 vest over a four-year period as follows:  20% of the shares vest on each of the one-year, two-year, and three-year anniversaries of the vesting commencement date, and the remaining 40% of the shares vest on the four-year anniversary. While preparing the Company’s financial statements for the first quarter of 2022, management discovered that instead of recognizing expense for these RSUs on straight-line basis, the Company had incorrectly recognized stock-based compensation cost proportional to the vesting provisions of the RSU. Using this incorrect expense calculation resulted in the Company under-recognizing stock-based compensation expense during the first three years of the service period. As a result of the error, the Company under recognized stock-based compensation expense by $10.4 million in 2021, $6.1 million in 2020, and $1.7 million in 2019.

Management evaluated the quantitative and qualitative impact of this accounting error and concluded it was not material to the Company’s previously issued financial statements. Notwithstanding this conclusion, the Company has revised the accompanying consolidated financial statements and related notes included herein to correct this accounting error in all periods presented, as well as the accompanying footnotes affected by the accounting error. These corrections include revisions to Note 12 Equity Incentive Plans and Note 13 Income Taxes. The correction of this accounting error does not impact the Company’s previously reported revenues or cash flows during any financial statement period and does not impact total assets, total liabilities, or total shareholders’ equity.

The following tables present the effect of correcting the accounting error on the Company’s previously issued financial statements:

Consolidated Balance Sheet Information
(In thousands)
	December 31,									December 31,
	2021									2020
	As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised
Additional paid-in capital	$	1,714,483		$	18,259		$	1,732,742		$	1,640,867		$	7,874		$	1,648,741
Accumulated deficit		(684,610	)		(18,259	)		(702,869	)		(559,377	)		(7,874	)		(567,251	)

Consolidated Statement of Operations Information
(In thousands, except per share data)
	For the Year Ended December 31,									For the Year Ended December 31,									For the Year Ended December 31,
	2021									2020									2019
	As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised
Cost of revenue: subscription and returns	$	173,414		$	1,190		$	174,604		$	124,333		$	591		$	124,924		$	97,824		$	183		$	98,007
Cost of revenue: professional services		31,418			322			31,740			18,762			103			18,865			17,475			47			17,522
Total cost of revenue		204,832			1,512			206,344			143,095			694			143,789			115,299			230			115,529
Gross profit		494,145			(1,512	)		492,633			357,474			(694	)		356,780			267,122			(230	)		266,892
Research and development		167,391			3,625			171,016			119,710			1,868			121,578			82,442			547			82,989
Sales and marketing		296,006			2,456			298,462			204,490			1,559			206,049			168,634			484			169,118
General and administrative		137,301			2,792			140,093			95,242			2,016			97,258			71,918			476			72,394
Total operating expenses		600,698			8,873			609,571			419,442			5,443			424,885			322,994			1,507			324,501
Operating loss		(106,553	)		(10,385	)		(116,938	)		(61,968	)		(6,137	)		(68,105	)		(55,872	)		(1,737	)		(57,609	)
Loss before income taxes		(121,925	)		(10,385	)		(132,310	)		(57,492	)		(6,137	)		(63,629	)		(49,259	)		(1,737	)		(50,996	)
Net loss		(125,233	)		(10,385	)		(135,618	)		(49,183	)		(6,137	)		(55,320	)		(50,214	)		(1,737	)		(51,951	)
Net loss per share attributable to common shareholders, basic and diluted		(1.45	)		(0.12	)		(1.57	)		(0.61	)		(0.07	)		(0.68	)		(0.68	)		(0.03	)		(0.71	)

Consolidated Statement of Comprehensive Loss Information
(In thousands)
	For the Year Ended December 31,									For the Year Ended December 31,									For the Year Ended December 31,
	2021									2020									2019
	As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised
Net loss	$	(125,233	)	$	(10,385	)	$	(135,618	)	$	(49,183	)	$	(6,137	)	$	(55,320	)	$	(50,214	)	$	(1,737	)	$	(51,951	)
Total comprehensive loss		(127,322	)		(10,385	)		(137,707	)		(47,803	)		(6,137	)		(53,940	)		(50,588	)		(1,737	)		(52,325	)

Consolidated Statement of Shareholders' Equity Information
(In thousands)
	Additional															Total
	Paid-In						Accumulated									Shareholders’
	Capital						Deficit									Equity
	As Previously Issued		Adjustment		As Revised		As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised
Stock-based compensation expense		34,400		1,737		36,137											34,400			1,737			36,137
Net loss								(50,214	)		(1,737	)		(51,951	)		(50,214	)		(1,737	)		(51,951	)
Balance at December 31, 2019		976,627		1,737		978,364		(510,194	)		(1,737	)		(511,931	)		463,722			—			463,722
Stock-based compensation expense		48,570		6,137		54,707											48,570			6,137			54,707
Net loss								(49,183	)		(6,137	)		(55,320	)		(49,183	)		(6,137	)		(55,320	)
Balance at December 31, 2020		1,640,867		7,874		1,648,741		(559,377	)		(7,874	)		(567,251	)		1,080,160			—			1,080,160
Stock-based compensation expense		89,688		10,385		100,073											89,688			10,385			100,073
Net loss								(125,233	)		(10,385	)		(135,618	)		(125,233	)		(10,385	)		(135,618	)
Balance at December 31, 2021		1,714,483		18,259		1,732,742		(684,610	)		(18,259	)		(702,869	)		1,026,454			—			1,026,454

Consolidated Statement of Cash Flows Information
(In thousands)
	For the Year Ended December 31,									For the Year Ended December 31,									For the Year Ended December 31,
	2021									2020									2019
	As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised			As Previously Issued			Adjustment			As Revised
Net loss	$	(125,233	)	$	(10,385	)	$	(135,618	)	$	(49,183	)	$	(6,137	)	$	(55,320	)	$	(50,214	)	$	(1,737	)	$	(51,951	)
Stock-based compensation		88,097			10,385			98,482			48,170			6,137			54,307			34,349			1,737			36,086