x | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 20-2056195 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer x | Accelerated filer ¨ |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Page | ||
Item 1. | ||
Condensed Consolidated Balance Sheets as of September 30, 2016 (Unaudited) and December 31, 2015 | ||
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited) | ||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (Unaudited) | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Short-term investments | |||||||
Accounts receivable, net | |||||||
Current portion of deferred commissions | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Deferred commissions, less current portion | |||||||
Long-term investments | |||||||
Property and equipment, net | |||||||
Intangible assets, net | |||||||
Goodwill | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued expenses and other current liabilities | |||||||
Current portion of deferred revenue | |||||||
Total current liabilities | |||||||
Deferred revenue, less current portion | |||||||
Convertible senior notes, net | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Stockholders’ equity: | |||||||
Common stock | |||||||
Additional paid-in capital | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Accumulated deficit | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Subscription | $ | $ | $ | $ | |||||||||||
Professional services and other | |||||||||||||||
Total revenues | |||||||||||||||
Cost of revenues(1): | |||||||||||||||
Subscription | |||||||||||||||
Professional services and other | |||||||||||||||
Total cost of revenues | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses(1): | |||||||||||||||
Sales and marketing | |||||||||||||||
Research and development | |||||||||||||||
General and administrative | |||||||||||||||
Legal settlements | |||||||||||||||
Total operating expenses | |||||||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest and other income (expense), net | ( | ) | |||||||||||||
Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Provision for income taxes | |||||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net loss per share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Weighted-average shares used to compute net loss per share - basic and diluted | |||||||||||||||
Other comprehensive gain (loss): | |||||||||||||||
Foreign currency translation adjustments | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Unrealized gain (loss) on investments, net of tax | ( | ) | ( | ) | |||||||||||
Other comprehensive gain (loss), net of tax | ( | ) | ( | ) | ( | ) | |||||||||
Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(1) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of revenues: | |||||||||||||||
Subscription | $ | $ | $ | $ | |||||||||||
Professional services and other | |||||||||||||||
Sales and marketing | |||||||||||||||
Research and development | |||||||||||||||
General and administrative | |||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Amortization of premiums on investments | |||||||
Amortization of deferred commissions | |||||||
Amortization of debt discount and issuance costs | |||||||
Stock-based compensation | |||||||
Deferred income tax | ( | ) | |||||
Other | ( | ) | ( | ) | |||
Changes in operating assets and liabilities, net of effect of business combinations: | |||||||
Accounts receivable | ( | ) | ( | ) | |||
Deferred commissions | ( | ) | ( | ) | |||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Accounts payable | ( | ) | |||||
Deferred revenue | |||||||
Accrued expenses and other liabilities | |||||||
Net cash provided by operating activities(1) | |||||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | ( | ) | ( | ) | |||
Business combinations, net of cash acquired | ( | ) | ( | ) | |||
Purchases of other intangibles | ( | ) | |||||
Purchases of investments | ( | ) | ( | ) | |||
Purchases of strategic investments | ( | ) | |||||
Sales of investments | |||||||
Maturities of investments | |||||||
Restricted cash | ( | ) | ( | ) | |||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Proceeds related to deferred payments on purchase of other intangibles | |||||||
Payments related to deferred payments on purchase of other intangibles | ( | ) | |||||
Proceeds from employee stock plans | |||||||
Taxes paid related to net share settlement of equity awards | ( | ) | ( | ) | |||
Payments on financing obligation | ( | ) | ( | ) | |||
Net cash (used in) provided by financing activities(1) | ( | ) | |||||
Foreign currency effect on cash and cash equivalents | ( | ) | ( | ) | |||
Net (decrease) increase in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Supplemental disclosures of non-cash investing activities: | |||||||
Property and equipment included in accounts payable and accrued expenses | $ | $ |
• | The standard eliminates additional paid in capital (APIC) pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement as a discrete item when the awards vest or are settled. The adoption of this guidance on a prospective basis resulted in the recognition of excess tax benefits in our provision for income taxes of $ |
• | The standard requires excess tax benefits to be recognized regardless of whether the benefit reduces taxes payable. The adoption of this guidance on a modified retrospective basis resulted in the recognition of a cumulative-effect adjustment of $ |
• | We have elected to continue to estimate forfeitures expected to occur to determine the amount of stock-based compensation cost to be recognized in each period. As such, the guidance relating to forfeitures did not have an impact on our accumulated deficit as of January 1, 2016. |
• | We elected to apply the statement of cash flows guidance that cash flows related to excess tax benefits be presented as an operating activity retrospectively, which resulted in a $ |
• | The statement of cash flows guidance that cash flows related to employee taxes paid for withheld shares be presented as a financing activity had no impact on our condensed consolidated financial statements as we have historically presented such cash flows as a financing activity. |
September 30, 2016 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Available-for-sale securities: | |||||||||||||||
Commercial paper | $ | $ | $ | $ | |||||||||||
Corporate notes and bonds | ( | ) | |||||||||||||
Certificates of deposit | |||||||||||||||
U.S. government agency securities | ( | ) | |||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | ) | $ |
December 31, 2015 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Available-for-sale securities: | |||||||||||||||
Commercial paper | $ | $ | $ | ( | ) | $ | |||||||||
Corporate notes and bonds | ( | ) | |||||||||||||
Certificates of deposit | ( | ) | |||||||||||||
U.S. government agency securities | ( | ) | |||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | ) | $ |
September 30, 2016 | |||
Due in 1 year or less | $ | ||
Due in 1 year through 2 years | |||
Total | $ |
September 30, 2016 | |||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Corporate notes and bonds | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||
U.S. government agency securities | ( | ) | ( | ) | |||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) |
December 31, 2015 | |||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Commercial paper | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||
Corporate notes and bonds | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Certificates of deposit | ( | ) | ( | ) | |||||||||||||||||||
U.S. government agency securities | ( | ) | ( | ) | |||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
Level 1 | Level 2 | Total | |||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | $ | $ | ||||||||
Short-term investments: | |||||||||||
Commercial paper | |||||||||||
Corporate notes and bonds | |||||||||||
Certificates of deposit | |||||||||||
U.S. government agency securities | |||||||||||
Long-term investments: | |||||||||||
Corporate notes and bonds | |||||||||||
Certificates of deposit | |||||||||||
U.S. government agency securities | |||||||||||
Total | $ | $ | $ |
Level 1 | Level 2 | Total | |||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | $ | $ | ||||||||
Commercial paper | |||||||||||
Corporate notes and bonds | |||||||||||
Short-term investments: | |||||||||||
Commercial paper | |||||||||||
Corporate notes and bonds | |||||||||||
Certificates of deposit | |||||||||||
U.S. government agency securities | |||||||||||
Long-term investments: | |||||||||||
Corporate notes and bonds | |||||||||||
Certificates of deposit | |||||||||||
U.S. government agency securities | |||||||||||
Total | $ | $ | $ |
Purchase Price Allocation (in thousands) | Useful Life (in years) | ||||
Intangible assets: | |||||
Developed technology | $ | ||||
Customer contracts and related relationships | |||||
Goodwill | |||||
Net tangible liabilities acquired | ( | ) | |||
Net deferred tax liabilities(1) | ( | ) | |||
Total purchase price | $ |
Purchase Price Allocation (in thousands) | Useful Life (in years) | ||||
Net tangible assets acquired | $ | ||||
Intangible assets: | |||||
Developed technology | |||||
Customer contracts and related relationships | |||||
Goodwill | |||||
Net deferred tax liabilities | ( | ) | |||
Total purchase price | $ |
Carrying Amount | |||
Balance as of December 31, 2015 | $ | ||
Goodwill acquired | |||
Foreign currency translation adjustments | |||
Balance as of September 30, 2016 | $ |
September 30, 2016 | |||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||
Developed technology | $ | $ | ( | ) | $ | ||||||
Other | ( | ) | |||||||||
Total intangible assets | $ | $ | ( | ) | $ |
December 31, 2015 | |||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||
Developed technology | $ | $ | ( | ) | $ | ||||||
Other | ( | ) | |||||||||
Total intangible assets | $ | $ | ( | ) | $ |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
Computer equipment and software | $ | $ | |||||
Leasehold improvements | |||||||
Furniture and fixtures | |||||||
Building | |||||||
Construction in progress | |||||||
Less: Accumulated depreciation | ( | ) | ( | ) | |||
Total property and equipment, net | $ | $ |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
Taxes payable | $ | $ | |||||
Bonuses and commissions | |||||||
Accrued compensation | |||||||
Other employee related liabilities | |||||||
Other | |||||||
Total accrued expenses and other current liabilities | $ | $ |
• | during any calendar quarter commencing after the calendar quarter ending on March 31, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least |
• | during the five business day period after any five consecutive trading day period, or the measurement period, in which the trading price per $ |
• | upon the occurrence of specified corporate events. |
September 30, 2016 | December 31, 2015 | ||||||
Liability: | |||||||
Principal | $ | $ | |||||
Less: debt issuance cost and debt discount, net of amortization | ( | ) | ( | ) | |||
Net carrying amount | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Amortization of debt issuance cost | $ | $ | $ | $ | |||||||||||
Amortization of debt discount | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Effective interest rate of the liability component |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
Foreign currency translation adjustment | $ | ( | ) | $ | ( | ) | |
Net unrealized loss on investments, net of tax | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | $ | ( | ) | $ | ( | ) |
September 30, 2016 | ||
Stock option plans: | ||
Options outstanding | ||
RSUs | ||
Stock awards available for future grants: | ||
2012 Equity Incentive Plan(1) | ||
2012 Employee Stock Purchase Plan(1) | ||
Total reserved shares of common stock for future issuance |
(1) |
Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Outstanding at December 31, 2015 | $ | |||||||||||
Granted | ||||||||||||
Exercised | ( | ) | $ | |||||||||
Canceled | ( | ) | ||||||||||
Outstanding at March 31, 2016 | ||||||||||||
Granted | ||||||||||||
Exercised | ( | ) | $ | |||||||||
Canceled | ( | ) | ||||||||||
Outstanding at June 30, 2016 | ||||||||||||
Granted | ||||||||||||
Exercised | ( | ) | $ | |||||||||
Canceled | ( | ) | ||||||||||
Outstanding at September 30, 2016 | $ | $ | ||||||||||
Vested and expected to vest as of September 30, 2016 | $ | $ | ||||||||||
Vested and exercisable as of September 30, 2016 | $ | $ |
Number of Shares | Weighted Average Grant Date Fair Value (Per Share) | Aggregate Intrinsic Value (in thousands) | ||||||||
Outstanding at December 31, 2015 | $ | |||||||||
Granted | ||||||||||
Vested | ( | ) | $ | |||||||
Forfeited | ( | ) | ||||||||
Outstanding at March 31, 2016 | ||||||||||
Granted | ||||||||||
Vested | ( | ) | $ | |||||||
Forfeited | ( | ) | ||||||||
Outstanding at June 30, 2016 | ||||||||||
Granted | ||||||||||
Vested | ( | ) | $ | |||||||
Forfeited | ( | ) | ||||||||
Non-vested and outstanding at September 30, 2016 | $ | $ | ||||||||
Expected to vest as of September 30, 2016 | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Numerator: | |||||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Denominator: | |||||||||||||||
Weighted-average shares outstanding—basic and diluted | |||||||||||||||
Net loss per share—basic and diluted: | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
September 30, | |||||
2016 | 2015 | ||||
Common stock options | |||||
Restricted stock units | |||||
ESPP obligations | |||||
Convertible senior notes | |||||
Warrants related to the issuance of convertible senior notes | |||||
Total potentially dilutive securities |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
North America (1) | $ | $ | $ | $ | |||||||||||
EMEA (2) | |||||||||||||||
Asia Pacific and other | |||||||||||||||
Total revenues | $ | $ | $ | $ |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
North America(3) | $ | $ | |||||
EMEA(2) | |||||||
Asia Pacific and other | |||||||
Total property and equipment, net | $ | $ |
(1) |
(3) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Enterprise Service Management solutions | $ | $ | $ | $ | |||||||||||
IT Operations Management solutions | |||||||||||||||
Total subscription revenues | $ | $ | $ | $ |
Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | ||||||||||||||||||||
Billings: | |||||||||||||||||||||
Total revenues | $ | 357,656 | $ | 261,150 | 37 | % | $ | 1,004,847 | $ | 719,830 | 40 | % | |||||||||
Change in deferred revenue from the condensed consolidated statements of cash flows | 46,620 | 25,255 | 85 | % | 151,019 | 115,812 | 30 | % | |||||||||||||
Total billings | $ | 404,276 | $ | 286,405 | 41 | % | $ | 1,155,866 | $ | 835,642 | 38 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Free cash flow: | ||||||||||
Net cash provided by operating activities | $ | 27,234 | $ | 211,200 | (87 | )% | ||||
Purchases of property and equipment | (84,112 | ) | (62,588 | ) | 34 | % | ||||
Free cash flow (1) | $ | (56,878 | ) | $ | 148,612 | (138 | )% |
• | The standard eliminates additional paid in capital (APIC) pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement as a discrete item when the awards vest or are settled. The adoption of this guidance on a prospective basis resulted in the recognition of excess tax benefits in our provision for income taxes of $0.3 million and $2.0 million for the three and nine months ended September 30, 2016, respectively. |
• | The standard requires excess tax benefits be recognized regardless of whether the benefit reduces taxes payable. The adoption of this guidance on a modified retrospective basis resulted in the recognition of a cumulative-effect adjustment of $11.4 million that reduced our accumulated deficit and increased our foreign long-term deferred income tax as of January 1, 2016. The previously unrecognized domestic excess tax effects were recorded as a deferred tax asset net of a valuation allowance. |
• | We have elected to continue to estimate forfeitures expected to occur to determine the amount of stock-based compensation cost to be recognized in each period. As such, the guidance relating to forfeitures did not have an impact on our accumulated deficit as of January 1, 2016. |
• | We elected to apply the statement of cash flows guidance that cash flows related to excess tax benefits be presented as an operating activity retrospectively, which resulted in a $1.2 million increase to net cash provided by operating activities and a corresponding decrease to net cash provided by financing activities in the accompanying condensed consolidated statement of cash flows for the nine months ended September 30, 2015, as compared to the amounts previously reported. |
• | The statement of cash flows guidance that cash flows related to employee taxes paid for withheld shares be presented as a financing activity had no impact on our condensed consolidated financial statements as we have historically presented such cash flows as a financing activity. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Revenues: | |||||||||||||||
Subscription | $ | 318,934 | $ | 223,208 | $ | 877,035 | $ | 603,576 | |||||||
Professional services and other | 38,722 | 37,942 | 127,812 | 116,254 | |||||||||||
Total revenues | 357,656 | 261,150 | 1,004,847 | 719,830 | |||||||||||
Cost of revenues(1): | |||||||||||||||
Subscription | 61,566 | 46,053 | 170,707 | 133,889 | |||||||||||
Professional services and other | 41,271 | 35,835 | 123,039 | 104,615 | |||||||||||
Total cost of revenues | 102,837 | 81,888 | 293,746 | 238,504 | |||||||||||
Gross profit | 254,819 | 179,262 | 711,101 | 481,326 | |||||||||||
Operating expenses(1): | |||||||||||||||
Sales and marketing | 166,491 | 117,899 | 511,607 | 364,530 | |||||||||||
Research and development | 75,018 | 55,822 | 211,306 | 158,946 | |||||||||||
General and administrative | 40,085 | 33,581 | 117,393 | 93,357 | |||||||||||
Legal settlements | — | — | 270,000 | — | |||||||||||
Total operating expenses | 281,594 | 207,302 | 1,110,306 | 616,833 | |||||||||||
Loss from operations | (26,775 | ) | (28,040 | ) | (399,205 | ) | (135,507 | ) | |||||||
Interest expense | (8,389 | ) | (7,839 | ) | (24,746 | ) | (23,124 | ) | |||||||
Interest income and other income (expense), net | 1,783 | (3,952 | ) | 4,745 | 1,273 | ||||||||||
Loss before income taxes | (33,381 | ) | (39,831 | ) | (419,206 | ) | (157,358 | ) | |||||||
Provision for income taxes | 2,877 | 1,199 | 9 | 3,690 | |||||||||||
Net loss | $ | (36,258 | ) | $ | (41,030 | ) | $ | (419,215 | ) | $ | (161,048 | ) |
(1) | Stock-based compensation included in the statements of operations above was as follows: |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Cost of revenues: | |||||||||||||||
Subscription | $ | 7,140 | $ | 5,951 | $ | 20,698 | $ | 17,183 | |||||||
Professional services and other | 7,150 | 5,804 | 20,045 | 16,788 | |||||||||||
Sales and marketing | 31,898 | 26,011 | 95,757 | 74,690 | |||||||||||
Research and development | 21,376 | 18,130 | 62,956 | 51,703 | |||||||||||
General and administrative | 13,523 | 9,215 | 35,004 | 29,167 | |||||||||||
Total stock-based compensation | $ | 81,087 | $ | 65,111 | $ | 234,460 | $ | 189,531 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Revenues: | |||||||||||
Subscription | 89 | % | 85 | % | 87 | % | 84 | % | |||
Professional services and other | 11 | 15 | 13 | 16 | |||||||
Total revenues | 100 | 100 | 100 | 100 | |||||||
Cost of revenues(1): | |||||||||||
Subscription | 17 | 18 | 17 | 19 | |||||||
Professional services and other | 12 | 14 | 12 | 15 | |||||||
Total cost of revenues | 29 | 32 | 29 | 34 | |||||||
Gross profit | 71 | 68 | 71 | 66 | |||||||
Operating expenses(1): | |||||||||||
Sales and marketing | 47 | 45 | 51 | 51 | |||||||
Research and development | 21 | 21 | 21 | 22 | |||||||
General and administrative | 11 | 13 | 12 | 13 | |||||||
Legal settlements | — | — | 27 | — | |||||||
Total operating expenses | 79 | 79 | 111 | 86 | |||||||
Loss from operations | (8 | ) | (11 | ) | (40 | ) | (19 | ) | |||
Interest expense | (2 | ) | (3 | ) | (2 | ) | (2 | ) | |||
Interest income and other income (expense), net | 1 | (2 | ) | — | — | ||||||
Loss before income taxes | (9 | ) | (16 | ) | (42 | ) | (21 | ) | |||
Provision for income taxes | 1 | — | — | 1 | |||||||
Net loss | (10 | )% | (16 | )% | (42 | )% | (22 | )% |
(1) | Stock-based compensation included in the statements of operations above as a percentage of revenues was as follows: |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Cost of revenues: | |||||||||||
Subscription | 2 | % | 2 | % | 2 | % | 2 | % | |||
Professional services and other | 2 | 2 | 2 | 2 | |||||||
Sales and marketing | 9 | 10 | 10 | 10 | |||||||
Research and development | 6 | 7 | 6 | 7 | |||||||
General and administrative | 4 | 4 | 3 | 5 | |||||||
Total stock-based compensation | 23 | % | 25 | % | 23 | % | 26 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Revenues: | ||||||||||
Subscription | $ | 318,934 | $ | 223,208 | 43 | % | ||||
Professional services and other | 38,722 | 37,942 | 2 | % | ||||||
Total revenues | $ | 357,656 | $ | 261,150 | 37 | % | ||||
Percentage of revenues: | ||||||||||
Subscription | 89 | % | 85 | % | ||||||
Professional services and other | 11 | % | 15 | % | ||||||
Total | 100 | % | 100 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Enterprise Service Management solutions | $ | 290,005 | $ | 205,795 | 41 | % | ||||
IT Operations Management solutions | 28,929 | 17,413 | 66 | % | ||||||
Total subscription revenues | $ | 318,934 | $ | 223,208 | 43 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Cost of revenues: | ||||||||||
Subscription | $ | 61,566 | $ | 46,053 | 34 | % | ||||
Professional services and other | 41,271 | 35,835 | 15 | % | ||||||
Total cost of revenues | $ | 102,837 | $ | 81,888 | 26 | % | ||||
Gross profit percentage: | ||||||||||
Subscription | 81 | % | 79 | % | ||||||
Professional services and other | (7 | )% | 6 | % | ||||||
Total gross profit percentage | 71 | % | 68 | % | ||||||
Gross Profit | $ | 254,819 | $ | 179,262 | ||||||
Headcount (at period end) | ||||||||||
Subscription | 691 | 543 | 27 | % | ||||||
Professional services and other | 504 | 453 | 11 | % | ||||||
Total headcount | 1,195 | 996 | 20 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Sales and marketing | $ | 166,491 | $ | 117,899 | 41 | % | ||||
Percentage of revenues | 47 | % | 45 | % | ||||||
Headcount (at period end) | 1,740 | 1,254 | 39 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Research and development | $ | 75,018 | $ | 55,822 | 34 | % | ||||
Percentage of revenues | 21 | % | 21 | % | ||||||
Headcount (at period end) | 970 | 731 | 33 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
General and administrative | $ | 40,085 | $ | 33,581 | 19 | % | ||||
Percentage of revenues | 11 | % | 13 | % | ||||||
Headcount (at period end) | 596 | 421 | 42 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Cost of revenues: | ||||||||||
Subscription | $ | 7,140 | $ | 5,951 | 20 | % | ||||
Professional services and other | 7,150 | 5,804 | 23 | % | ||||||
Sales and marketing | 31,898 | 26,011 | 23 | % | ||||||
Research and development | 21,376 | 18,130 | 18 | % | ||||||
General and administrative | 13,523 | 9,215 | 47 | % | ||||||
Total stock-based compensation | $ | 81,087 | $ | 65,111 | 25 | % | ||||
Percentage of revenues | 23 | % | 25 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Interest expense | $ | 8,389 | $ | 7,839 | 7 | % | ||||
Percentage of revenues | 2 | % | 3 | % |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Interest income | $ | 2,049 | $ | 1,252 | 64 | % | ||||
Foreign currency exchange loss | (303 | ) | (5,063 | ) | (94 | )% | ||||
Other | 37 | (141 | ) | NM | ||||||
Interest and other income (expense), net | $ | 1,783 | $ | (3,952 | ) | NM | ||||
Percentage of revenues | 1 | % | (2 | )% |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Loss before income taxes | $ | (33,381 | ) | $ | (39,831 | ) | (16 | )% | ||
Provision for income taxes | 2,877 | 1,199 | 140 | % | ||||||
Effective tax rate | (9 | )% | (3 | )% |
Three Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Net loss | $ | (36,258 | ) | $ | (41,030 | ) | (12 | )% | ||
Percentage of revenues | (10 | )% | (16 | )% |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Revenues: | ||||||||||
Subscription | $ | 877,035 | $ | 603,576 | 45 | % | ||||
Professional services and other | 127,812 | 116,254 | 10 | % | ||||||
Total revenues | $ | 1,004,847 | $ | 719,830 | 40 | % | ||||
Percentage of revenues: | ||||||||||
Subscription | 87 | % | 84 | % | ||||||
Professional services and other | 13 | % | 16 | % | ||||||
Total | 100 | % | 100 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Enterprise Service Management solutions | $ | 800,534 | $ | 559,080 | 43 | % | ||||
IT Operations Management solutions | 76,501 | 44,496 | 72 | % | ||||||
Total subscription revenues | $ | 877,035 | $ | 603,576 | 45 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Cost of revenues: | ||||||||||
Subscription | $ | 170,707 | $ | 133,889 | 27 | % | ||||
Professional services and other | 123,039 | 104,615 | 18 | % | ||||||
Total cost of revenues | $ | 293,746 | $ | 238,504 | 23 | % | ||||
Gross profit percentage: | ||||||||||
Subscription | 81 | % | 78 | % | ||||||
Professional services and other | 4 | % | 10 | % | ||||||
Total gross profit percentage | 71 | % | 66 | % | ||||||
Gross Profit | $ | 711,101 | $ | 481,326 | ||||||
Headcount (at period end) | ||||||||||
Subscription | 691 | 543 | 27 | % | ||||||
Professional services and other | 504 | 453 | 11 | % | ||||||
Total headcount | 1,195 | 996 | 20 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Sales and marketing | $ | 511,607 | $ | 364,530 | 40 | % | ||||
Percentage of revenues | 51 | % | 51 | % | ||||||
Headcount (at period end) | 1,740 | 1,254 | 39 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Research and development | $ | 211,306 | $ | 158,946 | 33 | % | ||||
Percentage of revenues | 21 | % | 22 | % | ||||||
Headcount (at period end) | 970 | 731 | 33 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
General and administrative | $ | 117,393 | $ | 93,357 | 26 | % | ||||
Percentage of revenues | 12 | % | 13 | % | ||||||
Headcount (at period end) | 596 | 421 | 42 | % |
Nine Months Ended September 30, | % Change | ||||||||
2016 | 2015 | ||||||||
(dollars in thousands) | |||||||||
Legal settlements | $ | 270,000 | $ | — | NM | ||||
Percentage of revenues | 27 | % | — | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Cost of revenues: | ||||||||||
Subscription | $ | 20,698 | $ | 17,183 | 20 | % | ||||
Professional services and other | 20,045 | 16,788 | 19 | % | ||||||
Sales and marketing | 95,757 | 74,690 | 28 | % | ||||||
Research and development | 62,956 | 51,703 | 22 | % | ||||||
General and administrative | 35,004 | 29,167 | 20 | % | ||||||
Total stock-based compensation | $ | 234,460 | $ | 189,531 | 24 | % | ||||
Percentage of revenues | 23 | % | 26 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Interest expense | $ | 24,746 | $ | 23,124 | 7 | % | ||||
Percentage of revenues | 2 | % | 2 | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Interest income | $ | 5,838 | $ | 3,274 | 78 | % | ||||
Foreign currency exchange loss | (1,262 | ) | (1,771 | ) | (29 | )% | ||||
Other | 169 | (230 | ) | NM | ||||||
Interest and other income (expense), net | $ | 4,745 | $ | 1,273 | 273 | % | ||||
Percentage of revenues | — | % | — | % |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Loss before income taxes | $ | (419,206 | ) | $ | (157,358 | ) | 166 | % | ||
Provision for income taxes | 9 | 3,690 | (100 | )% | ||||||
Effective tax rate | — | % | (2 | )% |
Nine Months Ended September 30, | % Change | |||||||||
2016 | 2015 | |||||||||
(dollars in thousands) | ||||||||||
Net loss | $ | (419,215 | ) | $ | (161,048 | ) | 160 | % | ||
Percentage of revenues | (42 | )% | (22 | )% |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
(dollars in thousands) | |||||||
Net cash provided by operating activities | $ | 27,234 | $ | 211,200 | |||
Net cash used in investing activities | (83,238 | ) | (171,000 | ) | |||
Net cash (used in) provided by financing activities | (30,765 | ) | 60,632 | ||||
Net (decrease) increase in cash and cash equivalents, net of foreign currency effect on cash and cash equivalents | (87,238 | ) | 96,618 |
• | our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers’ requirements; |
• | changes in foreign currency exchange rates; |
• | the rate of expansion and productivity of our sales force; |
• | the number of new employees added; |
• | the cost, timing and management effort for our development of new services; |
• | general economic conditions that may adversely affect either our customers’ ability or willingness to purchase additional subscriptions, delay a prospective customer’s purchasing decision, reduce the value of new subscription contracts or affect renewal rates; |
• | the amount and timing of operating costs and capital expenditures related to the operation and expansion of our business; |
• | seasonality in terms of when we enter into customer agreements for our services; |
• | the length of the sales cycle for our services; |
• | changes in our pricing policies, whether initiated by us or as a result of competition; |
• | significant security breaches, technical difficulties or interruptions of our services; |
• | new solutions, products or changes in pricing policies introduced by our competitors; |
• | changes in effective tax rates; |
• | changes in the average duration of our customer agreements and changes in billing cycle; |
• | changes in our renewal and upsell rates; |
• | the timing of customer payments and payment defaults by customers; |
• | extraordinary expenses such as litigation costs or damages, including settlement payments; |
• | the costs associated with acquiring new businesses and technologies and the follow-on costs of integration, including the tax effects of acquisitions; |
• | the impact of new accounting pronouncements, including the new revenue recognition standards that are effective for us beginning January 1, 2018; |
• | changes in laws or regulations impacting the delivery of our services; |
• | the amount and timing of stock awards and the related financial statement expenses; and |
• | our ability to accurately estimate the total addressable market for our products and services. |
• | issue additional equity securities that would dilute our stockholders; |
• | use cash that we may need in the future to operate our business; |
• | incur debt on terms unfavorable to us or that we are unable to repay; |
• | incur large charges or substantial liabilities; |
• | encounter difficulties retaining key employees of the acquired company or integrating diverse technologies, software or business cultures; and |
• | become subject to adverse tax consequences, substantial depreciation or deferred compensation charges. |
• | foreign currency fluctuations which may cause exchange and translation losses; |
• | compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, competition, privacy and data protection laws and regulations; |
• | compliance by us and our business partners with international bribery and corruption laws, including the UK Bribery Act and the Foreign Corrupt Practices Act; |
• | the risk that illegal or unethical activities of our business partners will be attributed to or result in liability to us; |
• | compliance with regional data privacy laws that apply to the transmission of our customers’ data across international borders, many of which are stricter than the equivalent U.S. laws; |
• | difficulties in staffing and managing foreign operations; |
• | different or lesser protection of our intellectual property; |
• | longer and potentially more complex sales cycles; |
• | longer accounts receivable payment cycles and other collection difficulties; |
• | treatment of revenues from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions; |
• | different pricing and distribution environments; |
• | local business practices and cultural norms that may favor local competitors; |
• | localization of our services, including translation into foreign languages and associated expenses; and |
• | regional economic and political conditions. |
• | variations in our growth rate, operating results, earnings per share, cash flows from operating activities, deferred revenue, and other financial metrics and non-financial metrics, and how those results compare to analyst expectations; |
• | forward-looking statements related to future revenues and earnings per share; |
• | the net increases in the number of customers, either independently or as compared with published expectations of industry, financial or other analysts that cover our company; |
• | changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock; |
• | announcements of technological innovations, new solutions or enhancements to services, strategic alliances or significant agreements by us or by our competitors; |
• | our ability to expand our IT operations management, customer service and security incident management product offerings and the use of our platform for service management outside of enterprise IT; |
• | announcements by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors; |
• | announcements of customer additions and customer cancellations or delays in customer purchases; |
• | recruitment or departure of key personnel; |
• | disruptions in our services due to computer hardware, software or network problems, security breaches, or other man-made or natural disasters; |
• | the economy as a whole, and market conditions in our industry and the industries of our customers; |
• | trading activity by a limited number of stockholders who together beneficially own a majority of our outstanding common stock; |
• | the size of our market float and the volume of trading in our common stock, including sales upon exercise of outstanding options or vesting of equity awards or sales and purchases of any common stock issued upon conversion of the Notes or in connection with the Note Hedge and Warrant transactions relating to the Notes; and |
• | any other factors discussed herein. |
• | establish a classified board of directors so that not all members of our board are elected at one time; |
• | permit the board of directors to establish the number of directors; |
• | provide that directors may only be removed “for cause” and only with the approval of 66 2/3% of our stockholders; |
• | require super-majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws; |
• | authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan; |
• | eliminate the ability of our stockholders to call special meetings of stockholders; |
• | prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; |
• | provide that the board of directors is expressly authorized to make, alter or repeal our restated bylaws; and |
• | establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings. |
Exhibit Number | Description of Document | Incorporated by Reference | Filed | |||||||
Form | File No. | Exhibit | Herewith | |||||||
31.1 | Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
31.2 | Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
32.1* | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
32.2* | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
101.INS** | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X | ||||||||
101.SCH** | XBRL Taxonomy Extension Schema Document. | X | ||||||||
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document. | X | ||||||||
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document. | X |
SERVICENOW, INC. | |||
Date: November 4, 2016 | By: | /s/ Frank Slootman | |
Frank Slootman | |||
President and Chief Executive Officer | |||
(On behalf of the Registrant) | |||
Date: November 4, 2016 | By: | /s/ Michael P. Scarpelli | |
Michael P. Scarpelli | |||
Chief Financial Officer | |||
(As Principal Financial and Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of ServiceNow, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 4, 2016 | |
/s/ Frank Slootman | |
Frank Slootman Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of ServiceNow, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 4, 2016 | |
/s/ Michael P. Scarpelli | |
Michael P. Scarpelli Chief Financial Officer (Principal Financial and Accounting Officer) |
• | the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
• | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: November 4, 2016 | |
/s/ Frank Slootman | |
Frank Slootman Chief Executive Officer (Principal Executive Officer) |
• | the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
• | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: November 4, 2016 | |
/s/ Michael P. Scarpelli | |
Michael P. Scarpelli Chief Financial Officer (Principal Financial and Accounting Officer) |
Document and Entity Information shares in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | SERVICENOW, INC. |
Trading Symbol | NOW |
Entity Central Index Key | 0001373715 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2016 |
Amendment Flag | false |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q3 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 166.0 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Revenues: | |||||||
Subscription | $ 318,934 | $ 223,208 | $ 877,035 | $ 603,576 | |||
Professional services and other | 38,722 | 37,942 | 127,812 | 116,254 | |||
Total revenues | 357,656 | 261,150 | 1,004,847 | 719,830 | |||
Cost of revenues(1): | |||||||
Subscription | [1] | 61,566 | 46,053 | 170,707 | 133,889 | ||
Professional services and other | [1] | 41,271 | 35,835 | 123,039 | 104,615 | ||
Total cost of revenues | [1] | 102,837 | 81,888 | 293,746 | 238,504 | ||
Gross profit | 254,819 | 179,262 | 711,101 | 481,326 | |||
Operating expenses(1): | |||||||
Sales and marketing | [1] | 166,491 | 117,899 | 511,607 | 364,530 | ||
Research and development | [1] | 75,018 | 55,822 | 211,306 | 158,946 | ||
General and administrative | [1] | 40,085 | 33,581 | 117,393 | 93,357 | ||
Legal settlements | [1] | 0 | 0 | 270,000 | 0 | ||
Total operating expenses | [1] | 281,594 | 207,302 | 1,110,306 | 616,833 | ||
Loss from operations | (26,775) | (28,040) | (399,205) | (135,507) | |||
Interest expense | (8,389) | (7,839) | (24,746) | (23,124) | |||
Interest and other income (expense), net | 1,783 | (3,952) | 4,745 | 1,273 | |||
Loss before provision for income taxes | (33,381) | (39,831) | (419,206) | (157,358) | |||
Provision for income taxes | 2,877 | 1,199 | 9 | 3,690 | |||
Net loss | $ (36,258) | $ (41,030) | $ (419,215) | $ (161,048) | |||
Net loss per share, basic and diluted (in USD per share) | $ (0.22) | $ (0.26) | $ (2.56) | $ (1.04) | |||
Weighted-average shares used to compute net loss per share - basic and diluted | 165,378,836 | 156,930,506 | 163,767,329 | 154,352,037 | |||
Other comprehensive gain (loss): | |||||||
Foreign currency translation adjustments | $ 203 | $ (2,689) | $ (1,106) | $ (3,028) | |||
Unrealized gain (loss) on investments, net of tax | (615) | (111) | 1,523 | 69 | |||
Other comprehensive gain (loss), net of tax | (412) | (2,800) | 417 | (2,959) | |||
Comprehensive loss | (36,670) | (43,830) | (418,798) | (164,007) | |||
Stock-based compensation | 81,087 | 65,111 | 234,460 | 189,531 | |||
Cost of revenues - subscription | |||||||
Stock-based compensation | 7,140 | 5,951 | 20,698 | 17,183 | |||
Cost of revenues - professional services and other | |||||||
Stock-based compensation | 7,150 | 5,804 | 20,045 | 16,788 | |||
Sales and Marketing | |||||||
Stock-based compensation | 31,898 | 26,011 | 95,757 | 74,690 | |||
Research And Development | |||||||
Stock-based compensation | 21,376 | 18,130 | 62,956 | 51,703 | |||
General and Administrative Expense | |||||||
Stock-based compensation | $ 13,523 | $ 9,215 | $ 35,004 | $ 29,167 | |||
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Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Stock-based compensation | $ 81,087 | $ 65,111 | $ 234,460 | $ 189,531 |
Cost of revenues - subscription | ||||
Stock-based compensation | 7,140 | 5,951 | 20,698 | 17,183 |
Cost of revenues - professional services and other | ||||
Stock-based compensation | 7,150 | 5,804 | 20,045 | 16,788 |
Sales and Marketing | ||||
Stock-based compensation | 31,898 | 26,011 | 95,757 | 74,690 |
Research And Development | ||||
Stock-based compensation | 21,376 | 18,130 | 62,956 | 51,703 |
General and Administrative Expense | ||||
Stock-based compensation | $ 13,523 | $ 9,215 | $ 35,004 | $ 29,167 |
Description of the Business |
9 Months Ended |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business |
Summary of Significant Accounting Policies |
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Sep. 30, 2016 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the year ended December 31, 2016 or for other interim periods or for future years. The condensed consolidated balance sheet as of December 31, 2015 is derived from audited financial statements as of that date, however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 25, 2016. Principles of Consolidation The condensed consolidated financial statements have been prepared in conformity with GAAP and include our accounts and the accounts of our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. Prior Period Reclassification Certain reclassifications of prior period amounts have been made to conform to the current period presentation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Warranties and Indemnification Our cloud computing solutions are typically warranted to perform in material conformance with their specifications. We include service level commitments to our customers that permit those customers to receive credits in the event we fail to meet those service levels. We establish an accrual based on an evaluation of the known service disruptions. Service level credit accrual charges are recorded against revenue and were not material for all periods presented. We have also agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as a director or officer of our company or that person’s services provided to any other company or enterprise at our request. We maintain director and officer insurance coverage that may enable us to recover a portion of any future amounts paid. The fair values of these obligations are not material as of each balance sheet date. Our agreements include provisions indemnifying customers against intellectual property and other third-party claims. We have not incurred any costs as a result of such indemnification obligations and have not recorded any liabilities related to such obligations in the condensed consolidated financial statements. New Accounting Pronouncements Adopted in 2016 In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This standard is effective for our interim and annual reporting periods beginning January 1, 2017, and early adoption is permitted. We elected to early adopt this standard in the quarter ended June 30, 2016. The impact of the early adoption was as follows:
In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments (Topic 805),” which eliminates the requirement to restate prior period financial statements for measurement period adjustments in business combinations. This new standard requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes software. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. Pending Accounting Pronouncements In October 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which includes a revision of the accounting for the income tax consequences of intra-entity transfers of assets other than inventory to reduce the complexity in accounting standards. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which provides guidance on eight specific cash flow issues. Among these issues, this standard requires, at the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowings, the portion of the cash payment attributable to the accreted interest related to the debt discount to be classified as cash flows for operating activities, and the portion of the cash payments attributable to the principal to be classified as cash outflows for financing activities. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This standard is effective for our interim and annual reporting periods beginning after December 15, 2019. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets, and to recognize on the income statement the expenses in a manner similar to current practice. This new standard is effective for our interim and annual periods beginning January 1, 2019 and early adoption is permitted. While we are currently evaluating the impact of this standard on our condensed consolidated financial statements, we anticipate this standard will have a material impact on our condensed consolidated balance sheets given that we have operating lease commitments of approximately $300 million as of September 30, 2016. However, we do not anticipate this standard will have a material impact on our condensed consolidated statements of comprehensive loss since the expense recognition under this new standard will be similar to current practice. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This new standard is effective for our interim and annual periods beginning January 1, 2018 and early adoption is not permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. |
Investments |
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Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Marketable Securities The following is a summary of our available-for-sale investment securities, excluding those securities classified within cash and cash equivalents on the consolidated balance sheets (in thousands):
As of September 30, 2016, the contractual maturities of our investments did not exceed 24 months. The fair values of available-for-sale investments, by remaining contractual maturity, are as follows (in thousands):
We had certain available-for-sale securities in a gross unrealized loss position, substantially all of which had been in such position for less than 12 months. There were no impairments considered "other-than-temporary" as it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. The following table shows the fair values and the gross unrealized losses of these securities, classified by the length of time that the securities have been in a continuous unrealized loss position, and aggregated by investment types (in thousands):
Strategic Investments |
Fair Value Measurements |
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Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at September 30, 2016 (in thousands):
The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2015 (in thousands):
We determine the fair value of our security holdings based on pricing from our service provider and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. |
Business Combinations |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations BrightPoint Security On June 3, 2016, we completed the acquisition of a privately-held company, BrightPoint Security, Inc. (BrightPoint), by acquiring all issued and outstanding common shares of BrightPoint for approximately $19.6 million in an all-cash transaction to expand our security operations solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
ITapp On April 8, 2016, we completed the acquisition of a privately-held company, ITapp Inc. (ITapp), by acquiring all issued and outstanding common shares of ITapp for approximately $14.5 million in an all-cash transaction to expand our IT operations management solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
For both business combinations, the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. We believe the goodwill represents the synergies expected from expanded market opportunities when integrating the acquired technologies with our offerings. The goodwill balance for both business combinations is not deductible for income tax purposes. Acquisition-related costs of $1.0 million are included in general and administrative expenses in our consolidated statements of comprehensive loss. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill balances are presented below (in thousands):
Intangible assets consist of the following (in thousands):
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Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, net consists of the following (in thousands):
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Accrued Expenses and Other Current Liabilities |
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Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands):
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Convertible Senior Notes |
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Convertible Notes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes | Convertible Senior Notes In November 2013, we issued 0% convertible senior notes due November 1, 2018 with an aggregate principal amount of $575 million, or the Notes. The Notes will not bear interest. The Notes mature on November 1, 2018 unless converted or repurchased in accordance with their terms prior to such date. We cannot redeem the Notes prior to maturity. The Notes are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries. Upon conversion, we may choose to pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock. We intend to settle the principal amount of the Notes with cash. The Notes are convertible up to 7.8 million shares of our common stock at an initial conversion rate of approximately 13.54 shares of common stock per $1,000 principal amount, which is equal to an initial conversion price of approximately $73.88 per share of common stock, subject to adjustment. Holders of the Notes may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding July 1, 2018, only under the following circumstances:
On or after July 1, 2018, a holder may convert all or any portion of its notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The conversion price will be subject to adjustment in some events. Holders of the Notes who convert their notes in connection with certain corporate events that constitute a “make-whole fundamental change” are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a corporate event that constitutes a “fundamental change,” holders of the Notes may require us to purchase with cash all or a portion of the Notes upon the occurrence of a fundamental change, at a purchase price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest. In accounting for the issuance of the Notes, we separated the Notes into liability and equity components. The carrying cost of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the proceeds allocated to the liability component, or the debt discount, is amortized to interest expense using the effective interest method over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the Notes, we allocated the total amount incurred to the liability and equity components based on their relative fair values. Transaction costs attributable to the liability component are being amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component of the Notes in stockholders’ equity. The Notes consisted of the following (in thousands):
We consider the fair value of the Notes at September 30, 2016 and December 31, 2015 to be a Level 2 measurement. The estimated fair values of the Notes were $701.8 million and $741.8 million at September 30, 2016 and December 31, 2015, respectively (based on the closing trading price per $100 of the Notes on September 30, 2016 and December 31, 2015, respectively). The Notes were not convertible as of September 30, 2016 and December 31, 2015. As of September 30, 2016, the remaining life of the Notes is 25 months. The following table sets forth total interest expense recognized related to the Notes (in thousands):
Note Hedge To minimize the impact of potential economic dilution upon conversion of the Notes, we entered into convertible note hedge transactions, or the Note Hedge, with respect to our common stock concurrent with the issuance of the Notes. The Note Hedge covers approximately 7.8 million shares of our common stock at a strike price per share that corresponds to the initial conversion price of the Notes, subject to adjustment, and is exercisable upon conversion of the Notes. We paid an aggregate amount of $135.8 million for the Note Hedge. The Note Hedge will expire upon maturity of the Notes. The Note Hedge is intended to reduce the potential economic dilution upon conversion of the Notes in the event that the fair value per share of our common stock at the time of exercise is greater than the conversion price of the Notes. The Note Hedge is a separate transaction and is not part of the terms of the Notes. The Note Hedge does not impact earnings per share, as it was entered into to offset any dilution from the Notes. Warrants |
Accumulated Other Comprehensive Loss |
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Statement of Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, consist of the following (in thousands):
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Stockholders' Equity |
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Disclosure Common Stock Outstanding And Reserved Shares Of Common Stock For Future Issuance [Abstract] | |||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Common Stock We were authorized to issue 600,000,000 shares of common stock as of September 30, 2016. Holders of our common stock are not entitled to receive dividends unless declared by our board of directors. As of September 30, 2016, we had 166,011,100 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows:
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Stock Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Awards | Stock Awards We have a 2005 Stock Option Plan, or 2005 Plan, which provides for grants of stock awards, including options to purchase shares of common stock, stock purchase rights and RSUs to certain employees, officers, directors and consultants. Our 2012 Equity Incentive Plan, or 2012 Plan, provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, performance-based stock awards and other forms of equity compensation, or collectively, stock awards. In addition, the 2012 Plan provides for the grant of performance cash awards. Incentive stock options may be granted only to employees. All other awards may be granted to employees, including officers, as well as directors and consultants. The share reserve may increase to the extent outstanding stock options under the 2005 Plan expire or terminate unexercised. The share reserve also automatically increases on January 1 of each year until January 1, 2022, by up to 5% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. On January 1, 2016, 8,039,288 shares of common stock were automatically added to the 2012 Plan pursuant to the provision described in the preceding sentence. Our 2012 Employee Stock Purchase Plan, or 2012 ESPP, authorizes the issuance of shares of common stock pursuant to purchase rights granted to our employees. The price at which common stock is purchased under the 2012 ESPP is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Offering periods are six months long and begin on February 1 and August 1 of each year. The number of shares of common stock reserved for issuance automatically increases on January 1 of each year until January 1, 2022, by up to 1% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. On January 1, 2016, 1,607,858 shares of common stock were automatically added to the 2012 ESPP pursuant to the provision described in the preceding sentence. Stock Options A summary of the stock option activity for the nine months ended September 30, 2016 is as follows:
Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options. The weighted-average grant date fair value per share of options granted was $27.90 for the nine months ended September 30, 2016. The total fair value of stock options vested during the nine months ended September 30, 2016 was $14.2 million. As of September 30, 2016, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was approximately $20.7 million. The weighted-average remaining vesting period of unvested stock options at September 30, 2016 was 2.83 years. RSUs A summary of RSU activity for the nine months ended September 30, 2016 is as follows:
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data):
Potentially dilutive securities that are not included in the calculation of diluted net loss per share because doing so would be antidilutive are as follows:
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Income Taxes |
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Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We compute our provision for income taxes by applying the estimated annual effective tax rate to year-to-date income (loss) from recurring operations and adjust the provision for discrete tax items recorded in the period. Our effective tax rate was (9)% and 0% for the three and nine months ended September 30, 2016, respectively, which was lower than the U.S. federal statutory tax rate of 34%. The lower tax rate was primarily attributable to our loss from operations, the foreign tax rate differential, a release of the valuation allowance in connection with acquisitions, and tax effects of stock option excess tax benefits from the early adoption of ASU 2016-09. Our effective tax rate was (3)% and (2)% for the three and nine months ended September 30, 2015, respectively, which was lower than the U.S. federal statutory tax rate of 34%. The lower tax rate was primarily attributable to our loss from operations, the foreign tax rate differential, non-deductible expenses arising from stock-based compensation, and the tax effects of unrealized gains in investment securities. As described in Note 2 "Summary of Significant Accounting Policies," we adopted ASU 2016-09 in the quarter ended June 30, 2016. See Note 2 for further discussion. We are subject to taxation in the United States and foreign jurisdictions. As of September 30, 2016, our tax years 2005 to 2015 remain subject to examination in most jurisdictions. |
Commitments and Contingencies |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We lease facilities for data center capacity and office space under non-cancelable operating lease agreements with various expiration dates. Legal Proceedings From time to time, we are party to litigation and other legal proceedings in the ordinary course of business. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except as discussed below and for those matters for which we have recorded a loss contingency. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss. Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims. Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations. On February 6, 2014, Hewlett-Packard Company (Hewlett-Packard) filed a lawsuit against us in the U.S. District Court for the Northern District of California. The lawsuit alleged patent infringement and sought damages and an injunction. On or about November 1, 2015, Hewlett Packard Enterprise Company (HPE) separated from Hewlett-Packard as an independent company, and Hewlett-Packard assigned to HPE all right, title, and interest in the eight Hewlett-Packard patents in the lawsuit and HPE was substituted as plaintiff in the litigation. On March 4, 2016, we entered into a confidential settlement agreement resolving the lawsuit with HPE (HPE Settlement). As a result, on March 9, 2016, the lawsuit was dismissed. BMC Software, Inc. (BMC) filed lawsuits against us in the U.S. District Court for the Eastern District of Texas on September 23, 2014 and February 12, 2016, and in the Dusseldorf (Germany) Regional Court, Patent Division, on March 2, 2016. Each of the lawsuits alleged patent infringement and sought damages and an injunction. On April 8, 2016, we entered into a confidential settlement agreement resolving all the lawsuits with BMC (BMC Settlement). As a result, the second Texas lawsuit was dismissed on April 14, 2016, and each of the initial Texas lawsuit and the German lawsuit was dismissed on April 25, 2016. These settlements are considered multiple element arrangements for accounting purposes. We evaluated the accounting treatment of these settlements by identifying each element of the arrangements, which included amongst other elements, a release of past infringement claims and a covenant not to sue for a specified term of years. The primary benefit we received from the arrangements was the settlement and termination of all existing litigation, the avoidance of future litigation expenses and the avoidance of future management and customer disruptions. We determined that none of the elements of the settlement agreements have identifiable future benefits that would be capitalized as an asset. Accordingly, we recorded charges for aggregate legal settlements of $270.0 million in our condensed consolidated statement of comprehensive loss for the nine months ended September 30, 2016. The charge covers the fulfillment by us of all financial obligations under both the BMC Settlement and HPE Settlement with no remaining financial obligations under either settlement. |
Information about Geographic Areas and Products |
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Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about Geographic Areas and Products | Information about Geographic Areas and Products Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in thousands):
Property and equipment, net by geographic area were as follows (in thousands):
Subscription revenues consist of the following (in thousands):
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||
Basis of Presentation | Basis of PresentationThe accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the year ended December 31, 2016 or for other interim periods or for future years. The condensed consolidated balance sheet as of December 31, 2015 is derived from audited financial statements as of that date, however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 25, 2016. | ||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation |
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Prior Period Reclassification | Prior Period Reclassification |
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Use of Estimates | Use of Estimates |
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Warranties and Indemnification | Warranties and Indemnification Our cloud computing solutions are typically warranted to perform in material conformance with their specifications. We include service level commitments to our customers that permit those customers to receive credits in the event we fail to meet those service levels. We establish an accrual based on an evaluation of the known service disruptions. Service level credit accrual charges are recorded against revenue and were not material for all periods presented. We have also agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as a director or officer of our company or that person’s services provided to any other company or enterprise at our request. We maintain director and officer insurance coverage that may enable us to recover a portion of any future amounts paid. The fair values of these obligations are not material as of each balance sheet date. Our agreements include provisions indemnifying customers against intellectual property and other third-party claims. We have not incurred any costs as a result of such indemnification obligations and have not recorded any liabilities related to such obligations in the condensed consolidated financial statements. |
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Recent Accounting Pronouncements | In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This standard is effective for our interim and annual reporting periods beginning January 1, 2017, and early adoption is permitted. We elected to early adopt this standard in the quarter ended June 30, 2016. The impact of the early adoption was as follows:
In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments (Topic 805),” which eliminates the requirement to restate prior period financial statements for measurement period adjustments in business combinations. This new standard requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes software. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. Pending Accounting Pronouncements In October 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which includes a revision of the accounting for the income tax consequences of intra-entity transfers of assets other than inventory to reduce the complexity in accounting standards. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which provides guidance on eight specific cash flow issues. Among these issues, this standard requires, at the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowings, the portion of the cash payment attributable to the accreted interest related to the debt discount to be classified as cash flows for operating activities, and the portion of the cash payments attributable to the principal to be classified as cash outflows for financing activities. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This standard is effective for our interim and annual reporting periods beginning after December 15, 2019. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets, and to recognize on the income statement the expenses in a manner similar to current practice. This new standard is effective for our interim and annual periods beginning January 1, 2019 and early adoption is permitted. While we are currently evaluating the impact of this standard on our condensed consolidated financial statements, we anticipate this standard will have a material impact on our condensed consolidated balance sheets given that we have operating lease commitments of approximately $300 million as of September 30, 2016. However, we do not anticipate this standard will have a material impact on our condensed consolidated statements of comprehensive loss since the expense recognition under this new standard will be similar to current practice. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This new standard is effective for our interim and annual periods beginning January 1, 2018 and early adoption is not permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. |
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Legal Proceedings | Legal Proceedings |
Investments (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments | The following is a summary of our available-for-sale investment securities, excluding those securities classified within cash and cash equivalents on the consolidated balance sheets (in thousands):
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Investments Classified by Contractual Maturity Date | The fair values of available-for-sale investments, by remaining contractual maturity, are as follows (in thousands):
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Fair Values and Gross Unrealized Losses of Available-for-Sale Securities Aggregated by Investment Category | The following table shows the fair values and the gross unrealized losses of these securities, classified by the length of time that the securities have been in a continuous unrealized loss position, and aggregated by investment types (in thousands):
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Fair Value Measurements (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at September 30, 2016 (in thousands):
The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2015 (in thousands):
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Business Combinations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
(1) Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.
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Goodwill and Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill balances are presented below (in thousands):
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Schedule of Intangible Assets | Intangible assets consist of the following (in thousands):
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Property and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands):
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Accrued Expenses and Other Current Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands):
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Convertible Senior Notes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Convertible Notes | The Notes consisted of the following (in thousands):
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Interest Expense Recognized Related to the Notes | The following table sets forth total interest expense recognized related to the Notes (in thousands):
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Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss, net of tax, consist of the following (in thousands):
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Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||
Disclosure Common Stock Outstanding And Reserved Shares Of Common Stock For Future Issuance [Abstract] | |||||||||||||||||||||||||||||||||||
Common Stock Outstanding and Reserved Shares of Common Stock for Future Issuance | As of September 30, 2016, we had 166,011,100 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows:
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Stock Awards (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | A summary of the stock option activity for the nine months ended September 30, 2016 is as follows:
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Schedule of Restricted Stock Unit Activity | A summary of RSU activity for the nine months ended September 30, 2016 is as follows:
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Net Loss Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data):
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Summary of Potentially Dilutive Securities | Potentially dilutive securities that are not included in the calculation of diluted net loss per share because doing so would be antidilutive are as follows:
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Information about Geographic Areas and Products (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues by Geographic Area, Based on Billing Location of Customer | Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in thousands):
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Schedule of Property and Equipment, Net by Geographic Area | Property and equipment, net by geographic area were as follows (in thousands):
(3) Property and equipment, net attributed to the United States were approximately 92% and 98% of property and equipment, net attributable to North America as of September 30, 2016 and December 31, 2015, respectively.
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Schedule Of Subscription Revenue By Product | Subscription revenues consist of the following (in thousands):
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Summary of Significant Accounting Policies New Accounting Pronouncements (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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New Accounting Pronouncement, Early Adoption [Line Items] | |||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit | $ 0.3 | $ 2.0 | |
Operating leases, future minimum payments due | 300.0 | 300.0 | |
New Accounting Pronouncement, Early Adoption, Effect [Member] | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Cumulative effect of change on equity | $ 11.4 | $ 11.4 | |
Net cash provided by operating activities(1) | $ 1.2 | ||
Net cash (used in) provided by financing activities(1) | $ (1.2) |
Investments - Summary of Investments (Detail) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
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Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 763,194 | $ 814,056 |
Available-for-sale securities, accumulated gross unrealized gain, before tax | 539 | 12 |
Available-for-sale securities, accumulated gross unrealized loss, before tax | (567) | (2,456) |
Estimated fair value | 763,166 | 811,612 |
Short-term investments | 481,813 | 388,945 |
Long-term investments | 281,353 | 422,667 |
Commercial paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 61,726 | 32,430 |
Available-for-sale securities, accumulated gross unrealized gain, before tax | 0 | 2 |
Available-for-sale securities, accumulated gross unrealized loss, before tax | 0 | (38) |
Estimated fair value | 61,726 | 32,394 |
Corporate notes and bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 629,143 | 617,054 |
Available-for-sale securities, accumulated gross unrealized gain, before tax | 513 | 7 |
Available-for-sale securities, accumulated gross unrealized loss, before tax | (553) | (2,027) |
Estimated fair value | 629,103 | 615,034 |
Certificates of deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 33,417 | 29,610 |
Available-for-sale securities, accumulated gross unrealized gain, before tax | 0 | 2 |
Available-for-sale securities, accumulated gross unrealized loss, before tax | 0 | (17) |
Estimated fair value | 33,417 | 29,595 |
US government agency securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 38,908 | 134,962 |
Available-for-sale securities, accumulated gross unrealized gain, before tax | 26 | 1 |
Available-for-sale securities, accumulated gross unrealized loss, before tax | (14) | (374) |
Estimated fair value | $ 38,920 | $ 134,589 |
Investments - Fair Values and Gross Unrealized Losses of Available-for-Sale Securities Aggregated by Investment Category (Detail) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | $ 388,494 | $ 716,830 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (567) | (2,326) |
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value | 600 | 60,099 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | (130) |
Fair value | 389,094 | 776,929 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (567) | (2,456) |
Commercial paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 24,913 | |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (38) | |
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value | 0 | |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | |
Fair value | 24,913 | |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (38) | |
Corporate notes and bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 367,093 | 539,586 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (553) | (1,897) |
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value | 600 | 60,099 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | (130) |
Fair value | 367,693 | 599,685 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (553) | (2,027) |
Certificates of deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 19,750 | |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (17) | |
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value | 0 | |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | |
Fair value | 19,750 | |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (17) | |
US government agency securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 21,401 | 132,581 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (14) | (374) |
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value | 0 | 0 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | 0 |
Fair value | 21,401 | 132,581 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | $ (14) | $ (374) |
Investments - Additional Information (Detail) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Available-for-sale Securities [Abstract] | ||
Available for sale securities maturities term maximum | 24 months | |
Available for sale, gross unrealized term held | 12 months | |
Other than temporary impairment losses, investments, available-for-sale securities | $ 0 | |
Cost method investments | $ 10,500,000 | $ 10,500,000 |
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 763,166 | $ 811,612 |
Total | 878,016 | 1,078,246 |
Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 61,726 | 32,394 |
Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 629,103 | 615,034 |
Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 33,417 | 29,595 |
US government agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 38,920 | 134,589 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 114,850 | 263,515 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 763,166 | 814,731 |
Cash Equivalents [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 114,850 | 263,515 |
Cash Equivalents [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,000 | |
Cash Equivalents [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,119 | |
Cash Equivalents [Member] | Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 114,850 | 263,515 |
Cash Equivalents [Member] | Level 1 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Cash Equivalents [Member] | Level 1 [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Cash Equivalents [Member] | Level 2 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Cash Equivalents [Member] | Level 2 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,000 | |
Cash Equivalents [Member] | Level 2 [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,119 | |
Short-term Investments [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 61,726 | 32,394 |
Short-term Investments [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 376,862 | 303,567 |
Short-term Investments [Member] | Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 32,712 | 23,736 |
Short-term Investments [Member] | US government agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 10,513 | 29,248 |
Short-term Investments [Member] | Level 1 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Short-term Investments [Member] | Level 1 [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Short-term Investments [Member] | Level 1 [Member] | Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Short-term Investments [Member] | Level 1 [Member] | US government agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Short-term Investments [Member] | Level 2 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 61,726 | 32,394 |
Short-term Investments [Member] | Level 2 [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 376,862 | 303,567 |
Short-term Investments [Member] | Level 2 [Member] | Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 32,712 | 23,736 |
Short-term Investments [Member] | Level 2 [Member] | US government agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 10,513 | 29,248 |
Other Long-term Investments [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 252,240 | 311,467 |
Other Long-term Investments [Member] | Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 705 | 5,859 |
Other Long-term Investments [Member] | US government agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 28,408 | 105,341 |
Other Long-term Investments [Member] | Level 1 [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Other Long-term Investments [Member] | Level 1 [Member] | Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Other Long-term Investments [Member] | Level 1 [Member] | US government agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Other Long-term Investments [Member] | Level 2 [Member] | Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 252,240 | 311,467 |
Other Long-term Investments [Member] | Level 2 [Member] | Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 705 | 5,859 |
Other Long-term Investments [Member] | Level 2 [Member] | US government agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 28,408 | $ 105,341 |
Business Combinations BrightPoint Security (Details) - USD ($) $ in Thousands |
Jun. 03, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
||
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Goodwill | $ 84,425 | $ 55,669 | |||
BrightPoint Security [Member] | |||||
Business Acquisition [Line Items] | |||||
Business combination, consideration transferred | $ 19,629 | ||||
Goodwill | 15,258 | ||||
Net tangible liabilities acquired | (1,339) | ||||
Net deferred tax liabilities(1) | [1] | (2,890) | |||
Developed technology [Member] | BrightPoint Security [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 8,100 | ||||
Finite-lived intangible asset, useful life | 6 years | ||||
Customer contracts and related relationships [Member] | BrightPoint Security [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 500 | ||||
Finite-lived intangible asset, useful life | 1 year 6 months | ||||
|
Business Combinations ITapp (Details) - USD ($) $ in Thousands |
Apr. 08, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 84,425 | $ 55,669 | |
General and Administrative Expense | |||
Business Acquisition [Line Items] | |||
Business acquisition, transaction costs | $ 1,000 | ||
ITapp [Member] | |||
Business Acquisition [Line Items] | |||
Net tangible assets acquired | $ 140 | ||
Goodwill | 11,437 | ||
Net deferred tax liabilities(1) | (2,015) | ||
Business combination, consideration transferred | 14,462 | ||
Developed technology [Member] | ITapp [Member] | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | $ 4,700 | ||
Finite-lived intangible asset, useful life | 5 years | ||
Customer contracts and related relationships [Member] | ITapp [Member] | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | $ 200 | ||
Finite-lived intangible asset, useful life | 1 year 6 months |
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 55,669 |
Goodwill acquired | 26,695 |
Foreign currency translation adjustments | 2,061 |
Goodwill, end of period | $ 84,425 |
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 89,728 | $ 89,728 | $ 61,839 | ||
Accumulated Amortization | (29,002) | (29,002) | (18,834) | ||
Net Carrying Amount | 60,726 | 60,726 | 43,005 | ||
Amortization expense | 4,300 | $ 2,900 | 10,900 | $ 8,800 | |
Developed technology [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 80,453 | 80,453 | 58,144 | ||
Accumulated Amortization | (27,580) | (27,580) | (17,463) | ||
Net Carrying Amount | 52,873 | 52,873 | 40,681 | ||
Other acquisition-related intangible assets [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 9,275 | 9,275 | 3,695 | ||
Accumulated Amortization | (1,422) | (1,422) | (1,371) | ||
Net Carrying Amount | $ 7,853 | $ 7,853 | $ 2,324 |
Property and Equipment (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 315,718 | $ 315,718 | $ 246,077 | ||
Less: accumulated depreciation | (139,612) | (139,612) | (101,363) | ||
Total property and equipment, net | 176,106 | 176,106 | 144,714 | ||
Depreciation | 17,900 | $ 12,200 | 48,700 | $ 35,100 | |
Computer Equipment And Software [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 238,661 | 238,661 | 180,197 | ||
Leasehold Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 35,418 | 35,418 | 31,659 | ||
Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 29,981 | 29,981 | 26,017 | ||
Building [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 6,570 | 6,570 | 6,318 | ||
Construction in Progress [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 5,088 | $ 5,088 | $ 1,886 |
Accrued Expenses and Other Current Liabilities - (Detail) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | ||
Taxes payable | $ 11,452 | $ 9,080 |
Bonuses and commissions | 46,253 | 33,124 |
Accrued compensation | 25,724 | 17,089 |
Other employee related liabilities | 18,602 | 21,529 |
Other | 22,639 | 20,442 |
Total accrued expenses and other current liabilities | $ 124,670 | $ 101,264 |
Convertible Senior Notes (Details) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Nov. 30, 2013
USD ($)
shares
$ / shares
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Debt Conversion [Line Items] | ||||||
Convertible debt, fair value disclosures | $ 701,800,000 | $ 701,800,000 | $ 741,800,000 | |||
Amortization of debt discount | 7,939,000 | $ 7,419,000 | 23,419,000 | $ 21,884,000 | ||
Notes face amount | $ 1,000 | |||||
Contractual interest rate - Notes | 0.00% | |||||
Principal | $ 575,000,000 | 575,000,000 | $ 575,000,000 | $ 575,000,000 | ||
Converted number of shares | shares | 7,800,000 | |||||
Conversion rate | 13.54 | |||||
Initial conversion price, per share, (in USD per share) | $ / shares | $ 73.88 | |||||
Terms of conversion feature | July 1, 2018 | |||||
Percentage of purchase price of Notes which should be paid upon fundamental change | 100.00% | |||||
Remaining life of the Notes | 25 months | |||||
Amortization of debt discount and issuance costs | $ 8,389,000 | $ 7,839,000 | $ 24,746,000 | $ 23,124,000 | ||
Noted hedged shares of common stock covered | shares | 7,800,000 | |||||
Purchase of convertible note hedge | $ 135,800,000 | |||||
Issuance of warrants (in shares) | shares | 7,800,000 | |||||
Exercise price of warrants issued (USD per share) | $ / shares | $ 107.46 | |||||
Proceeds from issuance of warrants | $ 84,500,000 | |||||
Calendar Quarter End [Member] | ||||||
Debt Conversion [Line Items] | ||||||
Number of days out of 30 that common stock price exceeded conversion price, days | 20 days | |||||
Number of consecutive trading days in a period | 30 days | |||||
Calendar Quarter End [Member] | Minimum [Member] | ||||||
Debt Conversion [Line Items] | ||||||
Threshold percentage of stock price trigger | 130.00% | |||||
Measurement Period [Member] | ||||||
Debt Conversion [Line Items] | ||||||
Number of days out of 30 that common stock price exceeded conversion price, days | 5 years | |||||
Number of consecutive trading days in a period | 5 years | |||||
Notes face amount | $ 1,000 | |||||
Measurement Period [Member] | Maximum [Member] | ||||||
Debt Conversion [Line Items] | ||||||
Threshold percentage of stock price trigger | 98.00% |
Convertible Senior Notes - Schedule of Notes Payable (Details) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
Nov. 30, 2013 |
---|---|---|---|
Convertible Notes Payable [Abstract] | |||
Principal | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 |
Less: debt issuance cost and debt discount, net of amortization | (75,720,000) | (100,466,000) | |
Net carrying amount | $ 499,280,000 | $ 474,534,000 |
Convertible Senior Notes - Schedule of Interest Expense Recognized (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Convertible Notes Payable [Abstract] | ||||
Amortization of debt issuance cost | $ 450 | $ 420 | $ 1,327 | $ 1,240 |
Amortization of debt discount | 7,939 | 7,419 | 23,419 | 21,884 |
Amortization of debt discount and issuance costs | $ 8,389 | $ 7,839 | $ 24,746 | $ 23,124 |
Interest rate, effective percentage | 6.50% | 6.50% | 6.50% | 6.50% |
Accumulated Other Comprehensive Loss - (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment | $ (15,544) | $ (14,438) |
Net unrealized loss on investments, net of tax | (921) | (2,444) |
Accumulated other comprehensive loss | $ (16,465) | $ (16,882) |
Stockholders' Equity - Additional Information (Detail) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Stockholders' Equity Note [Abstract] | ||
Shares of common stock, authorized (shares) | 600,000,000 | |
Shares of common stock, issued and sold (shares) | 166,011,100 | |
Stock issued during period, shares, new issues | 5,225,336 | 8,586,233 |
Stockholders' Equity - Outstanding and Reserved Shares of Common Stock for Future Issuance (Detail) - shares |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
|||
---|---|---|---|---|---|---|---|
Common stock outstanding and reserved shares of common stock for future issuance | |||||||
Options outstanding (in shares) | 6,475,548 | 6,902,902 | 7,718,715 | 8,255,554 | |||
Total reserved shares of common stock for future issuance | 48,928,588 | ||||||
2012 Equity Incentive Plan [Member] | |||||||
Common stock outstanding and reserved shares of common stock for future issuance | |||||||
Total reserved shares of common stock for future issuance | [1] | 21,051,913 | |||||
2012 Employee Stock Purchase Plan [Member] | |||||||
Common stock outstanding and reserved shares of common stock for future issuance | |||||||
Total reserved shares of common stock for future issuance | [1] | 8,566,803 | |||||
Stock Options [Member] | |||||||
Common stock outstanding and reserved shares of common stock for future issuance | |||||||
Options outstanding (in shares) | 6,475,548 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Common stock outstanding and reserved shares of common stock for future issuance | |||||||
RSUs (in shares) | 12,834,324 | 13,274,438 | 14,161,913 | 12,417,805 | |||
|
Stock Awards - Additional Information (Detail) $ / shares in Units, $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant date fair value of options granted (usd per share) | $ / shares | $ 27.90 |
Fair value of stock options vested | $ 14.2 |
Total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options | $ 20.7 |
Remaining weighted-average period (in years) | 2 years 9 months 29 days |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense expected to be recognized | $ 603.8 |
Remaining weighted-average period (in years) | 2 years 10 months 2 days |
2012 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares of common stock outstanding, increase, percentage | 5.00% |
Number of additional shares authorized | shares | 8,039,288 |
2012 Employee Stock Purchase Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares of common stock outstanding, increase, percentage | 1.00% |
Number of additional shares authorized | shares | 1,607,858 |
Common stock purchase price percentage | 85.00% |
Award offering period (in months) | 6 months |
2005 Restricted Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation expense recognized, vesting term (in years) | 4 years |
Stock Awards - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Sep. 30, 2016 |
|
Summary of stock option activity | ||||
Number of Shares, Outstanding, Beginning Balance | 6,902,902 | 7,718,715 | 8,255,554 | 8,255,554 |
Number of Shares, Granted | 232,750 | 131,835 | 169,400 | |
Number of Shares, Exercised | (477,802) | (828,327) | (579,504) | |
Number of shares, Cancelled | (182,302) | (119,321) | (126,735) | |
Number of Shares, Outstanding, Ending Balance | 6,475,548 | 6,902,902 | 7,718,715 | 6,475,548 |
Number of Shares, Vested and expected to vest | 6,370,923 | 6,370,923 | ||
Number of Shares, Vested and exercisable | 5,548,381 | 5,548,381 | ||
Weighted-Average Exercise Price | ||||
Weighted-Average Exercise Price, Outstanding, Beginning Balance, usd per share | $ 18.36 | $ 17.90 | $ 16.65 | $ 16.65 |
Weighted-Average Exercise Price, Granted, usd per share | 74.47 | 68.36 | 65.92 | |
Weighted-Average Exercise Price, Exercised, usd per share | 15.69 | 17.18 | 5.28 | |
Weighted-Average Exercise Price Cancelled, usd per share | 58.41 | 52.26 | 58.05 | |
Weighted-Average Exercise Price, Outstanding, Ending Balance, usd per share | 19.44 | $ 18.36 | $ 17.90 | 19.44 |
Weighted-Average Exercise Price, Vested and expected to vest, usd per share | 18.62 | 18.62 | ||
Weighted-Average Exercise Price, Vested and exercisable, usd per share | $ 11.91 | $ 11.91 | ||
Weighted-Average Remaining Contractual Life (in years) | 5 years 6 months 14 days | |||
Weighted-Average Remaining Contractual Term, Vested and expected to vest (in years) | 5 years 5 months 23 days | |||
Weighted-Average Remaining Contractual Term, Vested and exercisable (in years) | 5 years 3 days | |||
Aggregate Intrinsic Value, Exercised | $ 28,345 | $ 43,757 | $ 35,876 | |
Aggregate Intrinsic Value, Outstanding | 386,791 | $ 386,791 | ||
Aggregate Intrinsic Value, Vested and expected to vest | 385,785 | 385,785 | ||
Aggregate Intrinsic Value, Vested and exercisable | $ 373,084 | $ 373,084 |
Stock Awards Stock Awards - Restricted Stock Unit Table (Details) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Shares Outstanding | |||||
Number of shares, granted | 1,423,601 | 805,680 | 3,822,832 | ||
Number of shares, vested | (1,132,142) | (1,285,704) | (1,708,179) | ||
Number of shares, forfeited | (731,573) | (407,451) | (370,545) | ||
Number of shares, non-vested and outstanding | 12,834,324 | 13,274,438 | 14,161,913 | 12,834,324 | 12,417,805 |
Number of shares, expected to vest | 10,843,628 | 10,843,628 | |||
Weighted-Average Grant Date Fair Value | |||||
Weighted-average grant date fair value, outstanding, beginning balance, usd per share | $ 61.66 | $ 60.64 | $ 63.38 | $ 63.38 | |
Weighted average grant date fair value, granted, usd per share | 74.62 | 67.75 | 51.11 | ||
Weighted-average grant date fair value, vested, usd per share | 63.56 | 53.70 | 58.42 | ||
Weighted-average grant date fair value, forfeited, usd per share | 61.29 | 63.31 | 64.43 | ||
Weighted-average grant date fair value, outstanding, ending balance, usd per share | $ 62.95 | $ 61.66 | $ 60.64 | $ 62.95 | |
Aggregate intrinsic value, vested | $ 85,816 | $ 86,693 | $ 89,516 | ||
Aggregate intrinsic value, non-vested | 1,015,837 | $ 1,015,837 | |||
Aggregate intrinsic value, expected to vest | $ 858,273 | $ 858,273 | |||
2005 Restricted Stock Plan [Member] | |||||
Class of Stock [Line Items] | |||||
Compensation expense recognized, vesting term (in years) | 4 years | ||||
2012 Restricted Stock Plan [Member] | |||||
Class of Stock [Line Items] | |||||
Compensation expense recognized, vesting term (in years) | 4 years |
Net Loss Per Share - Calculation of Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Numerator: | ||||
Net loss | $ (36,258) | $ (41,030) | $ (419,215) | $ (161,048) |
Denominator: | ||||
Weighted-average shares used to compute net loss per share - basic and diluted | 165,378,836 | 156,930,506 | 163,767,329 | 154,352,037 |
Net loss per share attributable to common stockholders: | ||||
Net loss per share, basic and diluted (in USD per share) | $ (0.22) | $ (0.26) | $ (2.56) | $ (1.04) |
Net Loss Per Share- Summary of Potentially Dilutive Securities (Detail) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 35,236,454 | 38,788,269 |
Common stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 6,475,548 | 10,235,318 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 12,834,324 | 12,716,479 |
ESPP obligations [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 360,536 | 270,426 |
Convertible senior notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 7,783,023 | 7,783,023 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 7,783,023 | 7,783,023 |
Income Taxes (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (9.00%) | (3.00%) | 0.00% | (2.00%) |
Federal statutory rate | 34.00% | 34.00% | 34.00% | 34.00% |
Commitments and Contingencies - (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Legal settlements | $ 270.0 |
Payments for legal settlements | $ 267.5 |
Information about Geographic Areas and Products - Revenues by Geographic Area, Based on Billing Location of Customer (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||
Revenues by geography | |||||||||
Revenues | $ 357,656 | $ 261,150 | $ 1,004,847 | $ 719,830 | |||||
Percentage of U.S. Revenues in North America | 95.00% | 95.00% | 95.00% | 95.00% | |||||
North America [Member] | |||||||||
Revenues by geography | |||||||||
Revenues | [1] | $ 239,585 | $ 181,293 | $ 684,111 | $ 504,326 | ||||
EMEA [Member] | |||||||||
Revenues by geography | |||||||||
Revenues | [2] | 90,399 | 61,663 | 246,745 | 165,996 | ||||
Asia Pacific and other [Member] | |||||||||
Revenues by geography | |||||||||
Revenues | $ 27,672 | $ 18,194 | $ 73,991 | $ 49,508 | |||||
|
Information about Geographic Areas and Products - Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
|||||
---|---|---|---|---|---|---|---|
Segment Reporting Information [Line Items] | |||||||
Property and equipment, net | $ 176,106 | $ 144,714 | |||||
Percentage of U.S. net property and equipment in North America | 92.00% | 98.00% | |||||
North America [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Property and equipment, net | [1] | $ 128,649 | $ 104,085 | ||||
EMEA [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Property and equipment, net | [2] | 35,618 | 32,027 | ||||
Asia Pacific and other [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Property and equipment, net | $ 11,839 | $ 8,602 | |||||
|
Information about Geographic Areas and Products - Subscription Revenues (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Enterprise Service Management solutions | $ 290,005 | $ 205,795 | $ 800,534 | $ 559,080 |
IT Operations Management solutions | 28,929 | 17,413 | 76,501 | 44,496 |
Subscription | $ 318,934 | $ 223,208 | $ 877,035 | $ 603,576 |
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