Financial Statement Components

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Financial Statement Components

Note 3. Financial Statement Components

Cash and cash equivalents consisted of the following (in thousands):

	September 30, 2024		December 31, 2023
Cash	$	99,471	$	113,733
Money market funds	113,181		108,462
Total cash and cash equivalents	$	212,652	$	222,195

As of September 30, 2024 and December 31, 2023, $7.4 million and $1.1 million in the cash balance above, respectively, represents restricted cash, which is held in the form of a bank deposit for issuance of a foreign bank guarantee.

Accounts receivable, net consisted of the following (in thousands):

	September 30, 2024		December 31, 2023
Accounts receivable	$	305,893	$	280,544
Unbilled accounts receivable	105,343		96,366
Allowance for doubtful accounts	(15,431)		(12,472)
Accounts receivable, net	$	395,805	$	364,438

Prepaid expenses and other current assets consisted of the following (in thousands):

	September 30, 2024		December 31, 2023
Prepaid expenses	$	39,798	$	32,440
Inventory	2,059		1,492
Other current assets	22,755		43,464
Total prepaid expenses and other current assets	$	64,612	$	77,396

Property and equipment, net consisted of the following (in thousands):

	September 30, 2024		December 31, 2023
Computer hardware and software	$	253,757	$	238,802
Internal-use software development costs	301,620		255,649
Furniture and fixtures	10,004		8,964
Leasehold improvements	14,365		14,369
Total property and equipment, gross	579,746		517,784
Less: accumulated depreciation and amortization	(394,586)		(333,394)
Property and equipment, net	$	185,160	$	184,390

Total depreciation and amortization expense related to property and equipment was $21.1 million and $21.0 million for the three months ended September 30, 2024 and 2023, respectively, and $64.5 million and $61.8 million for the nine months ended September 30, 2024 and 2023, respectively.

A summary of activity of the Company’s carrying value of goodwill during the nine months ended September 30, 2024 is presented in the following table (in thousands):

Balance as of December 31, 2023	$	67,370
Acquisitions (Note 8)	7,662
Foreign currency translation adjustments	290
Balance as of September 30, 2024	$	75,322

The carrying values of intangible assets are as follows (in thousands):

		September 30, 2024						December 31, 2023
	Weighted-Average Remaining Useful Life	Cost		Accumulated Amortization		Acquired Intangibles, Net		Cost		Accumulated Amortization		Acquired Intangibles, Net
Customer relationships	4.3 years	$	51,925	$	24,731	$	27,194	$	26,506	$	21,834	$	4,672
Developed technology	2.1 years	778,270		515,230		263,040		826,077		436,982		389,095
Total acquired intangible assets		$	830,195	$	539,961	$	290,234	$	852,583	$	458,816	$	393,767

For the nine months ended September 30, 2024, the Company recognized a gross reduction of $50.6 million related to its developed technology assets. This reduction included $28.5 million due to an amended agreement with a strategic partner and $22.1 million attributed to the retirement of fully amortized developed technology. See Note 5 - Strategic Partnerships, for additional information regarding our amended agreement with a strategic partner. During the three months ended September 30, 2024, the Company purchased certain intangible assets including trademarks and domain names amounting to $0.8 million.

Amortization expense from acquired intangible assets for the three months ended September 30, 2024 and 2023 was $33.5 million and $38.2 million, respectively, and $103.1 million and $112.9 million for the nine months ended September 30, 2024 and 2023, respectively. Amortization of developed technology is included in cost of revenues and amortization of customer relationships is included in sales and marketing expenses in the Condensed Consolidated Statements of Operations.

Estimated amortization expense for acquired intangible assets for the following fiscal years is as follows (in thousands):

2024 (remaining)	$	33,384
2025	133,202
2026	110,735
2027	5,147
2028 onwards	7,766
Total estimated amortization expense	$	290,234

Accrued liabilities consisted of the following (in thousands):

	September 30, 2024		December 31, 2023
Accrued compensation and benefits	$	48,899	$	63,009
Accrued sales, use, and telecom related taxes	58,668		43,796
Accrued marketing and sales commissions	33,205		60,528
Operating lease liabilities, short-term	18,708		16,707
Other accrued expenses	128,340		141,592
Total accrued liabilities	$	287,820	$	325,632

Deferred and Prepaid Sales Commission Costs

Amortization expense for the deferred and prepaid sales commission costs was $41.6 million and $35.5 million for the three months ended September 30, 2024 and 2023, respectively, and $120.7 million and $100.6 million for the nine months ended September 30, 2024 and 2023, respectively. There was no asset write-off or impairment loss in relation to the deferred commissions costs capitalized for the periods presented.

Supplier Financing Obligations

The Company has established financing arrangements with certain third-party financial institutions and participating suppliers to be repaid over different terms ranging up to five years. Some of these financing arrangements are collateralized against property and equipment. As of September 30, 2024 and December 31, 2023, the Company’s outstanding financing obligations related to such arrangements included in accrued liabilities and other long-term liabilities were $2.0 million and $4.2 million respectively.