Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Revenue by Services

The following table summarizes revenue from contracts with customers for the year ended December 31, 2019 (in thousands):

	Year Ended December 31, 2019
SaaS subscriptions	$	95,028
Term license subscriptions	40,428
Maintenance and support	15,843
Professional services	109,053
Total revenue	$	260,352

	Quarter Ended March 31, 2019
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)
	(in thousands)
	(unaudited)
SaaS subscriptions	$	21,278	$	667	$	20,611
Term license subscriptions	9,557		(3,417)		12,974
Maintenance and support	3,722		2,398		1,324
Professional services	25,747		1,077		24,670
Total revenue	$	60,304	$	725	$	59,579

	Quarter Ended June 30, 2019
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)
	(in thousands)
	(unaudited)
SaaS subscriptions	$	22,796	$	782	$	22,014
Term license subscriptions	10,103		(5,908)		16,011
Maintenance and support	3,961		2,727		1,234
Professional services	28,415		763		27,652
Total revenue	$	65,275	$	(1,636)	$	66,911

	Quarter Ended September 30, 2019
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)
	(in thousands)
	(unaudited)
SaaS subscriptions	$	24,573	$	914	$	23,659
Term license subscriptions	9,199		(7,577)		16,776
Maintenance and support	4,002		2,838		1,164
Professional services	28,381		593		27,788
Total revenue	$	66,155	$	(3,232)	$	69,387

	Quarter Ended December 31, 2019
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)
	(in thousands)
	(unaudited)
SaaS subscriptions	$	26,381	$	559	$	25,822
Term license subscriptions	11,569		(5,687)		17,256
Maintenance and support	4,158		2,918		1,240
Professional services	26,510		358		26,152
Total revenue	$	68,618	$	(1,852)	$	70,470

Summary of Impacts from the Adoption of ASC 606

The following table summarizes the impacts from the adoption of the new revenue recognition standard on our consolidated balance sheet as of December 31, 2019 (in thousands):

	As of December 31,
	2019						2018
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)		As Reported (ASC 605)
Assets
Current assets
Cash and cash equivalents	$	159,755	$	—	$	159,755	$	94,930
Accounts receivable, net of allowance	70,408		—		70,408		79,383
Deferred commissions, current	14,543		(6,061)		20,604		14,020
Prepaid expenses and other current assets	32,955		16,343		16,612		21,293
Total current assets	277,661		10,282		267,379		209,626
Property and equipment, net	39,554		—		39,554		7,539
Operating right-of-use asset	24,205		—		24,205		—
Deferred commissions, net of current portion	28,979		15,780		13,199		15,088
Deferred tax assets	494		—		494		326
Other assets	592		—		592		601
Total assets	371,485		26,062		345,423		233,180
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	5,222	$	—	$	5,222	$	9,249
Accrued expenses	7,488		—		7,488		7,464
Accrued compensation and related benefits	10,691		—		10,691		13,796
Deferred revenue, current	82,201		(28,985)		111,186		95,523
Operating lease liability, current	3,836		—		3,836		—
Finance lease liability, current	1,447		—		1,447		—
Other current liabilities	1,395		—		1,395		2,369
Total current liabilities	112,280		(28,985)		141,265		128,401
Operating lease liability, net of current portion	44,416		—		44,416		—
Finance lease liability, net of current portion	2,375		—		2,375		—
Deferred revenue, net of current portion	7,139		(4,891)		12,030		16,145
Deferred tax liabilities	38		—		38		42
Deferred rent, net of current portion	—		—		—		15,400
Total liabilities	166,248		(33,876)		200,124		159,988
Stockholders’ equity
Class A common stock	3		—		3		3
Class B common stock	3		—		3		3
Additional paid-in capital	340,929		—		340,929		218,284
Accumulated other comprehensive (loss) income	(285)		320		(605)		542
Accumulated deficit	(135,413)		59,618		(195,031)		(145,640)
Total stockholders’ equity	205,237		59,938		145,299		73,192
Total liabilities and stockholders’ equity	$	371,485	26,062		$	345,423	$	233,180

The following summarizes the significant changes on the consolidated balance sheet as of December 31, 2019 as a result of the adoption of ASC 606 on January 1, 2019 compared to if we had continued to recognize revenue under ASC 605:

•Total deferred commissions increased $9.7 million due to the increase in the amortization period of costs to obtain a contract for a new customer or up-sell from the contract term to the five year estimated economic life.

•Prepaid expenses and other current assets increased $16.3 million and total deferred revenue decreased $33.9 million due to the change in timing of when we recognize revenue under ASC 606.

The following table summarizes the impacts from the adoption of the new revenue recognition standard on our consolidated statement of operations for the year ended December 31, 2019 (in thousands):

	Year Ended December 31,
	2019						2018
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)		As Reported (ASC 605)
Revenue:
Subscriptions	$	151,299	$	(8,786)	$	160,085	$	126,012
Professional services	109,053		2,791		106,262		100,731
Total revenue	260,352		(5,995)		266,347		226,743
Cost of revenue:
Subscriptions	17,098		—		17,098		11,997
Professional services	76,743		—		76,743		72,928
Total cost of revenue	93,841		—		93,841		84,925
Gross profit	166,511		(5,995)		172,506		141,818
Operating expenses:
Sales and marketing	117,440		(4,625)		122,065		105,992
Research and development	58,043		—		58,043		44,724
General and administrative	41,496		—		41,496		37,821
Total operating expenses	216,979		(4,625)		221,604		188,537
Operating loss	(50,468)		(1,370)		(49,098)		(46,719)
Other (income) expense:
Other (income) expense, net	(941)		(47)		(894)		2,295
Interest expense	367		—		367		198
Total other (income) expense	(574)		(47)		(527)		2,493
Loss before income taxes	(49,894)		(1,323)		(48,571)		(49,212)
Income tax expense	820		—		820		239
Net loss	$	(50,714)	$	(1,323)	$	(49,391)	$	(49,451)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.77)	$	(0.02)	$	(0.75)	$	(0.80)

The following summarizes the significant changes on the consolidated statement of operations for the year ended December 31, 2019 as a result of the adoption of ASC 606 on January 1, 2019 compared to if we had continued to recognize revenue under ASC 605:

•Subscriptions revenue decreased $8.8 million for the year ended December 31, 2019 under ASC 606 primarily due to the change in timing of when we recognize term license subscription revenue. Additionally, a significant amount of our

unrecognized term license subscriptions revenue was recorded as an adjustment to accumulated deficit under ASC 606. Under ASC 606, our term license subscription revenue is recognized at the time of delivery, as opposed to ratably over the contract term under ASC 605.

•Professional services revenue increased $2.8 million for the year ended December 31, 2019 under ASC 606 primarily due to the fact that our professional services are sold together with SaaS or term licenses. Under ASC 606, the professional services represent distinct performance obligations and therefore are recognized as services are performed. Under ASC 605, professional services sold together with term licenses were recognized ratably over the contract period of maintenance and support.

•Sales and marketing expense decreased $4.6 million for the year ended December 31, 2019 under ASC 606 primarily due to the increase in the period over which we amortize our deferred sales commissions.

The following table summarizes the impacts from the adoption of the new revenue recognition standard on our consolidated statement of comprehensive loss for the year ended December 31, 2019 (in thousands):

	Year Ended December 31,
	2019						2018
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)		As Reported (ASC 605)
Net loss	$	(50,714)	$	(1,323)	$	(49,391)	$	(49,451)
Comprehensive loss, net of income taxes:
Foreign currency translation adjustment	(827)		115		(942)		103
Total other comprehensive loss, net of income taxes	$	(51,541)	$	(1,208)	$	(50,333)	$	(49,348)

The following table summarizes the impacts from the adoption of the new revenue recognition standard on our consolidated statement of cash flows for the year ended December 31, 2019 (in thousands):

	Year Ended December 31,
	2019						2018
	As Reported (ASC 606)		Impacts from Adoption		Without Adoption (ASC 605)		As Reported (ASC 605)
Net loss	$	(50,714)	$	(1,323)	$	(49,391)	$	(49,451)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	4,742		—		4,742		2,021
Loss (gain) on disposal of equipment	146		—		146		(4)
Bad debt expense	99		—		99		211
Deferred income taxes	(334)		—		(334)		(218)
Stock-based compensation	16,443		—		16,443		16,054
Changes in assets and liabilities:
Accounts receivable	7,432		—		7,432		(23,332)
Prepaid expenses and other assets	8,972		4,313		4,659		(1,025)
Deferred commissions	(9,319)		(4,625)		(4,694)		(7,615)
Accounts payable and accrued expenses	(4,039)		—		(4,039)		7,461
Accrued compensation and related benefits	(3,072)		—		(3,072)		(3)
Other current liabilities	1,318		—		1,318		1,823
Deferred revenue	12,573		1,717		10,856		23,023
Operating lease liabilities	6,827		—		6,827		—
Deferred rent, non-current	—		—		—		(266)
Net cash used in operating activities	(8,926)		82		(9,008)		(31,321)
Cash flows from investing activities:
Purchases of property and equipment	(32,421)		—		(32,421)		(7,014)
Proceeds from sale of equipment	—		—		—		4
Net cash used in investing activities	(32,421)		—		(32,421)		(7,010)
Cash flows from financing activities:
Proceeds from public offering, net of underwriting discounts	101,653		—		101,653		58,258
Payment of costs related to public offerings	(350)		—		(350)		(429)
Proceeds from exercise of common stock options	4,899		—		4,899		3,133
Principal payments on finance lease obligations	(653)		—		(653)		—
Net cash provided by financing activities	105,549		—		105,549		60,962
Effect of foreign exchange rate changes on cash and cash equivalents	623		(82)		705		(1,459)
Net increase in cash and cash equivalents	64,825		—		64,825		21,172
Cash and cash equivalents, beginning of period	94,930		—		94,930		73,758
Cash and cash equivalents, end of period	$	159,755	—		$	159,755	$	94,930

Schedule of Allowance for Doubtful Accounts

Activity within the allowance for doubtful accounts was as follows (in thousands):

	Year Ended December 31,
	2019		2018		2017
Balance as of January 1	$	600	$	400	$	400
Additions	99		211		62
Less write-offs, net of recoveries	(99)		(11)		(62)
Balance as of December 31	$	600	$	600	$	400

Summary of Capitalized Contract Costs

The following table summarizes the activity of costs to obtain a contract with a customer for the year ended December 31, 2019 (in thousands):

	Year Ended December 31, 2019
Balance as of January 1	$	29,108
Adoption of ASC 606	5,094
Additional contract costs deferred	25,004
Amortization of deferred contract costs	(15,684)
Balance as of December 31	$	43,522

Property and Equipment, Useful Life

Asset Category	Useful Life (in years)
Computer software	3
Computer hardware	3
Equipment	5
Office furniture and fixtures	10
Leasehold improvements	Shorter of useful life of assets or lease term