10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

Or

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-38498

PLURALSIGHT, INC.

(Exact name of registrant as specified in its charter)

Delaware	82-3605465
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

182 North Union Avenue

Farmington, Utah 84025

(Address of principle executive offices, including zip code)

(801) 784-9007

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per share	PS	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	ý	Smaller reporting company	☐
		Emerging growth company	ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of October 28, 2019, the registrant had 140,628,827 shares of common stock outstanding, consisting of 101,791,676 shares of Class A common stock, 24,442,952 shares of Class B common stock, and 14,394,199 shares of Class C common stock.

PLURALSIGHT, INC.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity for the Three and Nine Months Ended September 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	10
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	54
Item 4.	Controls and Procedures	55
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 6.	Exhibits	59
Signatures		60

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

As used in this Quarterly Report on Form 10-Q, unless expressly indicated or the context otherwise requires, references to “Pluralsight,” “we,” “us,” “our,” “the Company,” and similar references refer to Pluralsight, Inc. and its consolidated subsidiaries, including Pluralsight Holdings, LLC, or Pluralsight Holdings.

This Quarterly Report on Form 10-Q, including the section titled “Management's Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions, generally relate to future events or our future financial or operating performance. In some cases, you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “target,” “project,” “contemplate,” or the negative version of these words and other comparable terminology that concern our expectations, strategy, plans, intentions, or projections. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

• our ability to attract new customers and retain and expand our relationships with existing customers;

• our ability to expand our course library and develop new platform features;

• our future financial performance, including trends in billings, revenue, costs of revenue, gross margin, operating expenses, and free cash flow;

• the demand for, and market acceptance of, our platform or for cloud-based technology learning solutions in general;

• our ability to compete successfully in competitive markets;

• our ability to respond to rapid technological changes;

• our expectations and management of future growth;

• our ability to enter new markets and manage our expansion efforts, particularly internationally;

• our ability to attract and retain key employees and qualified technical and sales personnel;

• our ability to improve sales management and execution;

• our ability to effectively and efficiently protect our brand;

• our ability to timely scale and adapt our infrastructure;

• our ability to maintain, protect, and enhance our intellectual property and not infringe upon others’ intellectual property;

• our ability to successfully identify, acquire, and integrate companies and assets;

• our ability to successfully defend ourselves in legal proceedings;

• the amount and timing of any payments we make under the fourth amended and restated limited liability company agreement of Pluralsight Holdings, or the Fourth LLC Agreement, and our Tax Receivable Agreement, or TRA, with the members of Pluralsight Holdings;

• our use of net proceeds from our convertible note offering in March 2019;

• our ability to satisfy our obligations under the convertible senior notes;

• our ability to successfully integrate GitPrime, Inc.'s ("GitPrime") operations;

• our ability to implement our plans, forecasts and other expectations with respect to GitPrime's business; and

• our ability to realize the anticipated benefits of the acquisition of GitPrime, including the possibility that the expected benefits from the acquisition will not be realized within the expected time period.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K/A as filed with the Securities and Exchange Commission, or the SEC, under the Exchange Act. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements and you should not place undue reliance on our forward-looking statements.

1

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

You should read this Quarterly Report on Form 10-Q in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018 included in our Annual Report on Form 10-K/A.

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

PLURALSIGHT, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)

	September 30, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	120,871		$	194,306
Short-term investments	328,602			—
Accounts receivable, net of allowances of $2,909 and $2,501 as of September 30, 2019 and December 31, 2018, respectively	63,001			63,436
Deferred contract acquisition costs, net	17,128			—
Prepaid expenses and other current assets	12,664			8,323
Total current assets	542,266			266,065
Restricted cash	27,748			16,765
Long-term investments	84,210			—
Property and equipment, net	56,471			31,641
Content library, net	8,207			7,050
Intangible assets, net	24,057			1,759
Goodwill	261,622			123,119
Deferred contract acquisition costs, noncurrent, net	4,435			—
Other assets	1,530			1,064
Total assets	$	1,010,546		$	447,463
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	4,664		$	7,160
Accrued expenses	37,635			32,047
Accrued author fees	11,294			10,002
Deferred revenue	177,523			157,695
Total current liabilities	231,116			206,904
Deferred revenue, noncurrent	17,586			14,886
Convertible senior notes, net	463,656			—
Facility financing obligations	38,225			15,777
Other liabilities	2,157			1,303
Total liabilities	752,740			238,870
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $0.0001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding as of September 30, 2019 and December 31, 2018	—			—
Class A common stock, $0.0001 par value per share, 1,000,000,000 shares authorized, 101,638,179 shares issued and outstanding as of September 30, 2019; 65,191,907 shares issued and outstanding as of December 31, 2018	10			7
Class B common stock, $0.0001 par value per share, 200,000,000 shares authorized, 24,442,952 shares issued and outstanding as of September 30, 2019; 57,490,881 shares issued and outstanding as of December 31, 2018	2			6
Class C common stock, $0.0001 par value per share, 50,000,000 shares authorized, 14,289,762 shares issued and outstanding as of September 30, 2019; 14,586,173 shares issued and outstanding as of December 31, 2018	1			1
Additional paid-in capital	615,713			456,899
Accumulated other comprehensive income (loss)	185			(41		)
Accumulated deficit	(426,777		)	(355,446		)
Total stockholders’ equity attributable to Pluralsight, Inc.	189,134			101,426
Non-controlling interests	68,672			107,167
Total stockholders’ equity	257,806			208,593
Total liabilities and stockholders' equity	$	1,010,546		$	447,463

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

PLURALSIGHT, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
				(Restated)						(Restated)
Revenue	$	82,620		$	61,553		$	228,099		$	164,769
Cost of revenue	17,825			15,347			52,336			46,166
Gross profit	64,795			46,206			175,763			118,603
Operating expenses:
Sales and marketing	55,727			42,632			149,852			113,956
Technology and content	27,799			18,137			72,829			49,858
General and administrative	20,817			19,818			63,591			57,112
Total operating expenses	104,343			80,587			286,272			220,926
Loss from operations	(39,548		)	(34,381		)	(110,509		)	(102,323		)
Other (expense) income:
Interest expense	(7,778		)	(342		)	(17,499		)	(6,476		)
Loss on debt extinguishment	(950		)	—			(950		)	(4,085		)
Other income, net	2,878			654			8,532			689
Loss before income taxes	(45,398		)	(34,069		)	(120,426		)	(112,195		)
Provision for income taxes	(404		)	(254		)	(701		)	(506		)
Net loss	$	(45,802	)	$	(34,323	)	$	(121,127	)	$	(112,701	)
Less: Net loss attributable to non-controlling interests	(13,073		)	(17,980		)	(39,763		)	(31,890		)
Net loss attributable to Pluralsight, Inc.	$	(32,729	)	$	(16,343	)	$	(81,364	)	$	(80,811	)
Less: Accretion of Series A redeemable convertible preferred units	—			—			—			(176,275		)
Net loss attributable to shares of Class A common stock	$	(32,729	)	$	(16,343	)	$	(81,364	)	$	(257,086	)
Net loss per share, basic and diluted(1)	$	(0.32	)	$	(0.26	)	$	(0.89	)	$	(0.47	)
Weighted-average shares of Class A common stock used in computing basic and diluted net loss per share(1)	101,407			62,472			91,741			62,400

________________________

(1) Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

PLURALSIGHT, INC.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
				(Restated)						(Restated)
Net loss	$	(45,802	)	$	(34,323	)	$	(121,127	)	$	(112,701	)
Other comprehensive income (loss):
Unrealized gains on investments	19			—			398			—
Foreign currency translation losses, net	(90		)	(39		)	(79		)	(97		)
Comprehensive loss	$	(45,873	)	$	(34,362	)	$	(120,808	)	$	(112,798	)
Less: Comprehensive loss attributable to non-controlling interests	(13,092		)	(18,001		)	(39,670		)	(31,932		)
Comprehensive loss attributable to Pluralsight, Inc.	$	(32,781	)	$	(16,361	)	$	(81,138	)	$	(80,866	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity

(in thousands, except share/unit amounts)

(unaudited)

Three Months Ended September 30, 2019

	Redeemable Convertible Preferred Units			Members’ Capital			Class A Common Stock			Class B Common Stock				Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount		Shares	Amount		Shares		Amount		Shares	Amount
Balance at June 30, 2019	—	$	—	—	$	—	101,096,472	$	10	24,664,113		$	2	14,186,856	$	1	$	599,558		$	237		$	(394,048	)	$	74,346		$	280,106
Effect of exchanges of LLC Units	—	—		—	—		116,709	—		(116,709	)	—		—	—		238			—			—			(238		)	—
Vesting of restricted stock units	—	—		—	—		399,052	—		—		—		102,906	—		—			—			—			—			—
Exercise of common stock options	—	—		—	—		25,946	—		—		—		—	—		245			—			—			—			245
Forfeiture of unvested LLC Units	—	—		—	—		—	—		(104,452	)	—		—	—		—			—			—			—			—
Repurchases of equity component of convertible senior notes	—	—		—	—		—	—		—		—		—	—		(2,965		)	—			—			—			(2,965		)
Settlement of capped calls related to repurchases of convertible senior notes	—	—		—	—		—	—		—		—		—	—		1,284			—			—			—			1,284
Equity-based compensation	—	—		—	—		—	—		—		—		—	—		25,009			—			—			—			25,009
Adjustments to non-controlling interests	—	—		—	—		—	—		—		—		—	—		(7,656		)	—			—			7,656			—
Other comprehensive loss	—	—		—	—		—	—		—		—		—	—		—			(52		)	—			(19		)	(71		)
Net loss	—	—		—	—		—	—		—		—		—	—		—			—			(32,729		)	(13,073		)	(45,802		)
Balance at September 30, 2019	—	$	—	—	$	—	101,638,179	$	10	24,442,952		$	2	14,289,762	$	1	$	615,713		$	185		$	(426,777	)	$	68,672		$	257,806

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)

(in thousands, except share/unit amounts)

(unaudited)

Three Months Ended September 30, 2018

	Redeemable Convertible Preferred Units			Members’ Capital			Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount		Shares		Amount		Shares	Amount		Shares	Amount
Balance at June 30, 2018	—	$	—	—	$	—	62,915,660		$	6	58,111,572	$	6	14,048,138	$	1	$	437,274		$	(16	)	$	(322,801	)	$	125,395		$	239,865
Effect of the Rescission Transactions	—	—		—	—		(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Equity-based compensation, as restated	—	—		—	—		—		—		—	—		—	—		20,744			—			—			—			20,744
Adjustments to non-controlling interests, as restated	—	—		—	—		—		—		—	—		—	—		(11,582		)	—			—			11,582			—
Foreign currency translation losses	—	—		—	—		—		—		—	—		—	—		—			(18		)	—			(21		)	(39		)
Other	—	—		—	—		—		—		—	—		—	—		27			—			—			—			27
Net loss, as restated	—	—		—	—		—		—		—	—		—	—		—			—			(16,343		)	(17,980		)	(34,323		)
Balance at September 30, 2018, as restated	—	$	—	—	$	—	62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	446,463		$	(34	)	$	(339,144	)	$	118,976		$	226,274

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)

(in thousands, except share/unit amounts)

(unaudited)

Nine Months Ended September 30, 2019

	Redeemable Convertible Preferred Units			Members’ Capital			Class A Common Stock			Class B Common Stock					Class C Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount		Shares	Amount		Shares		Amount			Shares		Amount
Balance at December 31, 2018	—	$	—	—	$	—	65,191,907	$	7	57,490,881		$	6		14,586,173		$	1	$	456,899		$	(41	)	$	(355,446	)	$	107,167		$	208,593
Impact of the adoption of ASC 606	—	—		—	—		—	—		—		—			—		—		—			—			10,033			10,601			20,634
Effect of exchanges of LLC Units	—	—		—	—		33,536,262	3		(32,926,084	)	(4		)	(610,178	)	—		59,158			—			—			(59,157		)	—
Issuance of common stock under employee stock purchase plans	—	—		—	—		621,463	—		—		—			—		—		8,257			—			—			—			8,257
Vesting of restricted stock units	—	—		—	—		1,835,633	—		—		—			313,767		—		—			—			—			—			—
Exercise of common stock options	—	—		—	—		452,914	—		—		—			—		—		6,619			—			—			—			6,619
Forfeiture of unvested LLC Units	—	—		—	—		—	—		(121,845	)	—			—		—		—			—			—			—			—
Equity component of convertible senior notes, net of issuance costs	—	—		—	—		—	—		—		—			—		—		137,033			—			—			—			137,033
Purchase of capped calls related to issuance of convertible senior notes	—	—		—	—		—	—		—		—			—		—		(69,432		)	—			—			—			(69,432		)
Repurchases of equity component of convertible senior notes	—	—		—	—		—	—		—		—			—		—		(2,965		)	—			—			—			(2,965		)
Settlement of capped calls related to repurchases of convertible senior notes	—	—		—	—		—	—		—		—			—		—		1,284			—			—			—			1,284
Equity-based compensation	—	—		—	—		—	—		—		—			—		—		68,591			—			—			—			68,591
Adjustments to non-controlling interests	—	—		—	—		—	—		—		—			—		—		(49,731		)	—			—			49,731			—
Other comprehensive income	—	—		—	—		—	—		—		—			—		—		—			226			—			93			319
Net loss	—	—		—	—		—	—		—		—			—		—		—			—			(81,364		)	(39,763		)	(121,127		)
Balance at September 30, 2019	—	$	—	—	$	—	101,638,179	$	10	24,442,952		$	2		14,289,762		$	1	$	615,713		$	185		$	(426,777	)	$	68,672		$	257,806

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)

(in thousands, except share/unit amounts)

(unaudited)

Nine Months Ended September 30, 2018

	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares		Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—		$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—		—		—	—		—	—		—			—			—			—			984
Equity-based compensation, as restated	—		—			—		22,278			—		—		—	—		—	—		—			—			—			—			22,278
Accretion of Series A redeemable convertible preferred units, as restated	—		176,275			—		(23,262		)	—		—		—	—		—	—		—			—			(153,013		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(51,783		)	—			(51,783		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the Reorganization Transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660		4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000		2		—	—		—	—		324,704			—			—			—			324,706
Allocation of equity to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—		—			—		—			(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Settlement of equity appreciation rights	—		—			—		—			—		—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation, as restated	—		—			—		—			—		—		—	—		—	—		30,818			—			—			—			30,818
Adjustments to non-controlling interests, as restated	—		—			—		—			—		—		—	—		—	—		(16,679		)	—			—			16,679			—
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(37		)	—			(42		)	(79		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(29,028		)	(31,890		)	(60,918		)
Balance at September 30, 2018, as restated	—		$	—		—		$	—		62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	446,463		$	(34	)	$	(339,144	)	$	118,976		$	226,274

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

PLURALSIGHT, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2019			2018
				(Restated)
Operating activities
Net loss	$	(121,127	)	$	(112,701	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	6,471			6,331
Amortization of acquired intangible assets	3,044			7,721
Amortization of course creation costs	1,841			1,437
Equity-based compensation	67,657			52,982
Amortization of deferred contract acquisition costs	17,317			—
Amortization of debt discount and issuance costs	15,120			1,215
Investment discount and premium amortization, net	(1,771		)	—
Loss on debt extinguishment	950			4,085
Other	(178		)	507
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	1,858			(10,352		)
Deferred contract acquisition costs	(18,668		)	—
Prepaid expenses and other assets	(3,660		)	(2,990		)
Accounts payable	(2,486		)	928
Accrued expenses and other liabilities	6,067			6,912
Accrued author fees	1,292			1,452
Deferred revenue	22,461			28,190
Net cash used in operating activities	(3,812		)	(14,283		)
Investing activities
Purchases of property and equipment	(7,619		)	(6,576		)
Purchases of content library	(3,822		)	(2,345		)
Cash paid for acquisition, net of cash acquired	(163,771		)	—
Purchases of investments	(529,653		)	—
Proceeds from sales of investments	4,967			—
Proceeds from maturities of short-term investments	112,995			—
Net cash used in investing activities	(586,903		)	(8,921		)
Financing activities
Proceeds from issuance of convertible senior notes, net of discount and issuance costs	616,654			—
Purchase of capped calls related to issuance of convertible senior notes	(69,432		)	—
Repurchases of convertible senior notes	(35,000		)	—
Proceeds from terminations of capped calls related to repurchases of convertible senior notes	1,284			—
Proceeds from issuance of common stock from employee equity plans	14,876			—
Proceeds from initial public offering, net of underwriting discounts and commissions	—			332,080
Payments of costs related to initial public offering	—			(7,083		)
Borrowings of long-term debt	—			20,000
Repayments of long-term debt	—			(137,710		)
Payments of debt extinguishment costs	—			(2,179		)
Payments of debt issuance costs	—			(450		)
Payments to settle equity appreciation rights	—			(325		)
Taxes paid related to net share settlement	—			(78		)
Other	(10		)	(13		)
Net cash provided by financing activities	528,372			204,242
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(109		)	(136		)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(62,452		)	180,902
Cash, cash equivalents, and restricted cash, beginning of period	211,071			28,477
Cash, cash equivalents, and restricted cash, end of period	$	148,619		$	209,379

The accompanying notes are an integral part of these condensed consolidated financial statements.

10

PLURALSIGHT, INC.

Condensed Consolidated Statements of Cash Flows (Continued)

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2019		2018
			(Restated)
Supplemental cash flow disclosure:
Cash paid for interest	$	1,126	$	4,271
Cash paid for income taxes, net	$	539	$	338
Supplemental disclosure of non-cash investing and financing activities:
Property acquired under build-to-suit agreements	$	22,461	$	—
Unpaid capital expenditures	$	752	$	252
Equity-based compensation capitalized as internal-use software	$	934	$	114
Unrealized gains on investments	$	398	$	—
Conversion of redeemable convertible preferred units	$	—	$	582,041
Redeemable convertible preferred unit accretion	$	—	$	176,275
Costs related to initial public offering, accrued but not yet paid	$	—	$	607
Issuance of warrants to purchase shares of Class A common stock	$	—	$	984
Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows:
Cash and cash equivalents	$	120,871	$	208,626
Restricted cash	27,748		753
Total cash, cash equivalents, and restricted cash	$	148,619	$	209,379

The accompanying notes are an integral part of these condensed consolidated financial statements.

11

PLURALSIGHT, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1. Organization and Description of Business

Pluralsight, Inc. was incorporated as a Delaware corporation on December 4, 2017 as a holding company for the purpose of facilitating an initial public offering (“IPO”) and other related transactions in order to carry on the business of Pluralsight Holdings, LLC (“Pluralsight Holdings”) and its subsidiaries (together with Pluralsight, Inc., the “Company” or “Pluralsight”). Pluralsight Holdings is a limited liability company (“LLC”) and was organized on August 29, 2014 in the state of Delaware and is the parent company of Pluralsight, LLC, and its directly and indirectly wholly-owned subsidiaries. Pluralsight, LLC was organized on June 17, 2004 in the state of Nevada. Pluralsight operates a cloud-based technology skills platform that provides a broad range of tools for businesses and individuals, including skill assessments, a curated library of courses, learning paths, developer productivity metrics, and business analytics. As the sole managing member of Pluralsight Holdings, Pluralsight, Inc. operates and controls all of the business operations and affairs of Pluralsight.

Initial Public Offering

In May 2018, Pluralsight, Inc. completed its IPO, in which it sold 23,805,000 shares of Class A common stock at a public offering price of $15.00 per share for net proceeds of $332.1 million, after deducting underwriters' discounts and commissions, which Pluralsight, Inc. used to purchase newly issued common limited liability company units (“LLC Units") from Pluralsight Holdings. In connection with the IPO, the Company reclassified $7.4 million of offering costs into stockholders’ equity as a reduction of the net proceeds received from the IPO.

Reorganization Transactions

In connection with the IPO, the Company completed the following transactions (“Reorganization Transactions”):

• The limited liability company agreement of Pluralsight Holdings (“LLC Agreement”) was amended and restated to, among other things: (i) appoint Pluralsight, Inc. as its sole managing member and (ii) effectuate the conversion of all outstanding redeemable convertible preferred limited liability company units, incentive units, and Class B incentive units of Pluralsight Holdings into a single class of common units. See Note 13—Stockholders' Equity for additional details.

• Certain members of Pluralsight Holdings that were corporations merged with and into Pluralsight, Inc. and certain members of Pluralsight Holdings contributed certain of their LLC Units to Pluralsight, Inc., in each case in exchange for shares of Class A common stock.

• The certificate of incorporation of Pluralsight, Inc. was amended and restated to authorize three classes of common stock, Class A common stock, Class B common stock, Class C common stock, and one class of preferred stock. Class B and Class C common stock were issued on a one-for-one basis to the members of Pluralsight Holdings who retained LLC Units (“Continuing Members”). Class B and Class C common stock have voting rights but no economic rights. See Note 13—Stockholders' Equity for additional details.

As the sole managing member of Pluralsight Holdings, Pluralsight, Inc. has the sole voting interest in Pluralsight Holdings and controls all of the business operations, affairs, and management of Pluralsight Holdings. Accordingly, Pluralsight, Inc. consolidates the financial results of Pluralsight Holdings and reports the non-controlling interests of the Continuing Members' LLC Units on its consolidated financial statements. As of September 30, 2019, Pluralsight, Inc. owned 73.4% of Pluralsight Holdings and the Continuing Members owned the remaining 26.6% of Pluralsight Holdings.

As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Prior to the Reorganization Transactions, Pluralsight, Inc. had no operations.

Secondary Offering

In March 2019, the Company completed a secondary offering, in which certain stockholders sold 15,592,234 shares of Class A common stock at a public offering price of $29.25 per share. Pluralsight did not receive any proceeds from the sale of shares by selling stockholders. A total of $0.9 million in costs were incurred by Pluralsight in connection with this offering. In connection with the secondary offering, the Company issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 in a private placement to qualified institutional buyers exempt from registration under the Securities Act. See Note 11—Convertible Senior Notes and Other Long-Term Debt for additional details.

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Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018 included in Pluralsight, Inc.'s Annual Report on Form 10-K/A, as filed with the SEC on June 27, 2019 ("Annual Report").

These unaudited condensed consolidated financial statements include the accounts of Pluralsight, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

As discussed in Note 1—Organization and Description of Business, Pluralsight, Inc. consolidates the financial results of Pluralsight Holdings as a Variable Interest Entity (“VIE”). The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than a voting interest, in accordance with the VIE accounting model. A VIE is an entity in which the equity investors as a group, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity's economic performance or the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support.

Interim Unaudited Condensed Consolidated Financial Statements

The accompanying interim condensed consolidated balance sheet as of September 30, 2019, and the interim condensed consolidated statements of operations, comprehensive loss, redeemable convertible preferred units, members' deficit, and stockholders' equity, for the three and nine months ended September 30, 2019 and 2018, and the interim condensed consolidated cash flows for the nine months ended September 30, 2019 and 2018, are unaudited. The condensed consolidated balance sheet as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial condition, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year or any other period.

Reclassifications

Certain reclassifications were made to the nine months ended September 30, 2018 to conform to the current period presentation in the consolidated statements of cash flows.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the determination of the fair value of equity awards, fair value of the liability and equity components of the convertible senior notes, the valuation of build-to-suit leases, the fair value of identified assets and liabilities acquired in business combinations, the useful lives of long-lived assets, the impairment of long-lived and intangible assets, including goodwill, the period of benefit for deferred contract acquisition costs, provisions for doubtful accounts receivable and deferred revenue, and certain accrued expenses, including author fees. These estimates and assumptions are based on the Company’s historical results and management’s future expectations. Actual results could differ from those estimates.

Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 1—Description of Business and Summary of Significant Accounting Policies” in the Annual Report. There have been no significant changes to these policies that have had a material impact on the Company's unaudited condensed consolidated financial statements and related notes during the three and nine months ended September 30, 2019, except as noted below.

Revenue Recognition (ASC 606)

The Company derives substantially all of its revenue from subscription services (which include support services) by providing customers access to its platform.

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The Company implemented the provisions of Accounting Standards Update ("ASU") 2014-09 (referred to collectively as "ASC 606") effective January 1, 2019 using the modified retrospective transition method as discussed below under the section "Recent Accounting Pronouncements".

Following the adoption of ASC 606, the Company recognizes revenue when control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. The Company accounts for revenue contracts with customers by applying the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in a contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, performance obligations are satisfied

The Company’s subscription arrangements generally do not provide customers with the right to take possession of the software supporting the platform and, as a result, are accounted for as service arrangements. Access to the Company's platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is generally recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. The Company's subscription contracts typically vary from one month to three years. The Company’s arrangements are generally noncancellable and nonrefundable.

Subscriptions that allow the customer to take software on-premise without significant penalty are treated as time-based licenses. These arrangements generally include access to the software over the license term, access to unspecified future product updates, maintenance, and support. Revenue for on-premise software subscriptions is recognized at a point in time when the software is made available to the customer. Revenue for access to unspecified future products, maintenance and support included with on-premise software subscriptions is recognized ratably over the contract term beginning on the date that the software is made available to the customer.

The Company also derives revenue from providing professional services, which generally consist of consulting, integration, or other content creation services. These services are distinct from subscription services. Revenue from professional services is generally recognized as services are performed.

Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling prices considering market conditions and based on overall pricing objectives such as observable standalone selling prices, and other factors, including the value of contracts, types of services sold, customer demographics, and the number and types of users within such contracts.

Deferred Revenue

The Company records contract liabilities to deferred revenue when cash payments are received or billings are due in advance of revenue recognition from subscription services described above, including amounts billed to customers in accordance with the terms of the underlying contracts where the service period has not yet commenced but will commence in the near future. Deferred revenue is recognized when, or as, performance obligations are satisfied. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as non-current deferred revenue.

Cash, Cash Equivalents, Restricted Cash and Investments

The Company considers all highly-liquid investments with a maturity at the time of purchase of 90 days or less to be cash and cash equivalents. Cash consists of deposits with financial institutions. Cash equivalents and investments consist of highly liquid investments in money market funds, U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities. Cash and cash equivalents that are restricted as to withdrawal or usage are presented as restricted cash on the condensed consolidated balance sheets.

The Company classifies investments as available-for-sale securities. Investments with original maturities beyond 90 days are classified as short-term or long-term investments based on the nature of the securities and their stated maturities. Investments are carried at fair value, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income within stockholders’ equity.

Investments are reviewed periodically to determine whether a decline in a security’s fair value below the amortized cost basis is other-than-temporary. If the cost of an individual investment exceeds its fair value, the Company considers available quantitative and qualitative factors such as the length of time and extent to which the market value has been less than the cost, the

14

financial condition and near-term prospects of the issuer and the Company's intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. If the Company believes that a decline in fair value is determined to be other-than-temporary, the investments are written down to fair value. There were no impairments recognized on investments during the periods presented.

Interest income, amortization of premiums and discounts, realized gains and losses and declines in fair value judged to be other-than-temporary on available-for-sale securities are included in other income, net in the condensed consolidated statements of operations. The Company uses the specific identification method to determine the cost in calculating realized gains and losses upon the sale of these investments.

Accounts Receivable

Accounts receivable balances are recorded at the invoiced amount and are non-interest-bearing. The Company records a contract asset when revenue is recognized in advance of invoicing. Contract assets that represent a right to consideration that is unconditional are presented within accounts receivable on the condensed consolidated balance sheets.

The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables, by assessing the collectability of the accounts by taking into consideration the aging of trade receivables, historical experience, and management judgment. The Company writes off trade receivables against the allowance when management determines a balance is uncollectible and no longer intends to actively pursue collection of the receivable. 

Deferred Contract Acquisition Costs

The Company capitalizes sales commissions, and associated fringe costs, such as payroll taxes, paid to direct sales personnel and other incremental costs of obtaining contracts with customers, provided the Company expects to recover those costs. These costs are recorded as deferred contract acquisition costs on the condensed consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract.

Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rates between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of four years while commissions paid related to renewal contracts are amortized over an estimated period of benefit of approximately 18 months. Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition.

The period of benefit for commissions paid for the acquisition of initial subscription contracts is determined by taking into consideration the initial estimated customer life and the technological life of the Company's platform and related significant features. The Company determines the period of benefit for renewal subscription contracts by considering the average contractual term for renewal contracts. Amortization of deferred contract acquisition costs is included within sales and marketing expense in the condensed consolidated statements of operations.

The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented.

Advertising Costs

Advertising costs are expensed as incurred. The Company recorded advertising costs of $4.2 million and $3.0 million for the three months ended September 30, 2019 and 2018, respectively, and $12.2 million and $8.7 million for the nine months ended September 30, 2019 and 2018, respectively.

Recent Accounting Pronouncements

Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), the Company meets the definition of an emerging growth company ("EGC"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an EGC or until the Company affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

On the last business day of the second quarter in the Company’s fiscal year 2019, the aggregate worldwide market value of shares of Class A common stock held by the Company’s non-affiliate stockholders exceeded $700 million. As a result, as of December 31, 2019, the Company will be considered a large accelerated filer as defined in Rule 12b-2 under the Exchange Act and will cease to be an EGC as defined in the JOBS Act. The Company will no longer be exempt from the auditor attestation

15

requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and the Company’s independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40), which supersedes nearly all existing revenue recognition guidance. The core principle behind ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering those goods and services. To achieve this core principle, the guidance provides a model, which involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction prices to the performance obligations in the contract, and recognizing revenue when (or as) the entity satisfies the performance obligations. The standard also provides guidance on the recognition of costs related to obtaining customer contracts.

The Company adopted the standard as of January 1, 2019 using the modified retrospective adoption method applied to those contracts that were not completed as of that date. Upon adoption, the Company recognized the cumulative effect of adopting the standard as an adjustment to the opening balance of stockholders' equity. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company updated its accounting policies, processes, internal controls and information systems to conform to the new revenue standard's reporting and disclosure requirements.

Prior to adoption, the Company limited revenue recognition for delivered elements to the amount that is not contingent on the delivery of future services. The adoption of ASC 606 resulted in an acceleration in timing of the Company's revenue for certain sales contracts due to the removal of this limitation. In addition, as a result of the new standard, the Company capitalizes sales commissions and other incremental costs of obtaining contracts with customers. Such costs are amortized over the expected period of benefit, which for initial contracts is an estimated period of four years, while renewal contracts are amortized over an estimated period of benefit of 18 months.

The following table summarizes the adjustments made to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of applying the modified retrospective method to adopt ASC 606 (in thousands):

	As Reported			Adjustments					As Adjusted
	December 31, 2018			Revenue Recognition			Incremental Costs of Obtaining a Contract		January 1, 2019
Accounts receivable, net	$	63,436		$	33		$	—	$	63,469
Deferred contract acquisition costs, net	—			—			16,461		16,461
Deferred contract acquisition costs, noncurrent, net	—			—			3,751		3,751
Deferred revenue	157,695			(389		)	—		157,306
Deferred revenue, noncurrent	14,886			—			—		14,886
Accumulated deficit	(355,446		)	205			9,828		(345,413		)
Non-controlling interests	107,167			217			10,384		117,768

The decrease of deferred revenue and increase to deferred contract acquisition costs as of January 1, 2019 resulted in additional deferred tax liabilities that reduced the Company's net deferred tax asset position. The net deferred tax assets in the jurisdictions impacted by the adoption of ASC 606 were fully reserved and, accordingly, this impact was offset by a corresponding reduction to the valuation allowance with no resulting net impact to net assets or accumulated deficit.

In addition, the adoption of ASC 606 resulted in changes to the Company's accounting estimates and policies for revenue recognition, deferred contract acquisition costs, deferred revenue, and accounts receivable. See the section titled "Significant Accounting Policies" for a discussion of the Company's updated policies.

Refer to Note 4—Revenue for the ongoing impacts of adopting ASC 606 on the condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software(Subtopic 350-40):Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs

16

to capitalize and recognize as an asset. The new guidance is effective for public business entities for annual periods beginning after December 15, 2019, including interim periods within those periods. For all other entities, the ASU is effective for annual periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted for all entities. The Company is currently in the process of evaluating the impact of this standard on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities to require that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The measurement of credit losses for newly recognized financial assets and subsequent changes in the allowance for credit losses are recorded in the statements of operations. For public business entities that meet the definition of an SEC filer, it is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. For public business entities, the ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Due to an expected loss in the Company's EGC as of December 31, 2019, the Company anticipates adopting the standard on December 31, 2019 for the year ended December 31, 2019. The Company is currently evaluating the potential changes to its future financial reporting and disclosures from this ASU. As part of its preliminary assessment, the Company expects to record right-of-use assets and lease liabilities for its operating leases as a result of adopting this standard. While the Company continues to assess all potential impacts under the new standard, including the areas described above, the Company does not know or cannot reasonably estimate quantitative information related to the impact of the adoption of the new standard on its consolidated financial statements at this time.

Note 3. Restatement of Condensed Consolidated Financial Statements

The Company previously restated the financial statements for the year ended December 31, 2018 in its Annual Report on Form 10-K/A as filed on June 27, 2019, and included detailed disclosure of the restatement impact on the consolidated financial statements for the quarterly and year-to-date periods ended June 30, 2018 and September 30, 2018. However, because the Company did not amend its Quarterly Reports on Form 10-Q for the period ended September 30, 2018, the effects of the restatement on the condensed consolidated financial statements for such interim period are reflected in the comparative interim financial statements contained herein.

As described in the Company's Annual Report on Form 10-K/A, the Board of Directors of Pluralsight, Inc., in consultation with the Audit Committee of the Board, reached a determination on June 13, 2019 that the Company's consolidated financial statements and related disclosures for the year ended December 31, 2018, and the condensed consolidated financial statements for each of the quarterly and year-to-date periods ended June 30 and September 30, 2018, contained a material error in recognizing non-cash equity-based compensation resulting in an understatement of net loss. This non-cash equity-based compensation error related to the incorrect timing of recognition of expense for certain RSUs, which expense was initially recognized on a straight-line attribution basis. Upon further review, management determined that the non-cash equity-based compensation expense for such RSUs should have been recognized on a tranche-by-tranche basis ("accelerated attribution method") because the RSUs have a graded-vesting schedule and contain a performance condition. The impact of correcting the attribution shifts the non-cash equity-based compensation expense to earlier reporting periods, while the total cumulative expense expected to be recognized over the service period will remain the same.

The following tables present the effects of the restatement on the Company's unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine-month periods ended September 30, 2018, and on the unaudited condensed consolidated statements of redeemable convertible preferred units, members’ deficit, and stockholders’ equity, and cash flows for the nine months ended September 30, 2018.

17

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Revenue	$	61,553		$	—		$	61,553		$	164,769		$	—		$	164,769
Cost of revenue	15,331			16			15,347			46,107			59			46,166
Gross profit	46,222			(16		)	46,206			118,662			(59		)	118,603
Operating expenses:
Sales and marketing	41,392			1,240			42,632			109,792			4,164			113,956
Technology and content	17,227			910			18,137			47,045			2,813			49,858
General and administrative	17,398			2,420			19,818			48,138			8,974			57,112
Total operating expenses	76,017			4,570			80,587			204,975			15,951			220,926
Loss from operations	(29,795		)	(4,586		)	(34,381		)	(86,313		)	(16,010		)	(102,323		)
Other (expense) income:
Interest expense	(342		)	—			(342		)	(6,476		)	—			(6,476		)
Loss on debt extinguishment	—			—			—			(4,085		)	—			(4,085		)
Other income, net	654			—			654			689			—			689
Loss before income taxes	(29,483		)	(4,586		)	(34,069		)	(96,185		)	(16,010		)	(112,195		)
Provision for income taxes	(254		)	—			(254		)	(506		)	—			(506		)
Net loss	$	(29,737	)	$	(4,586	)	$	(34,323	)	$	(96,691	)	$	(16,010	)	$	(112,701	)
Less: Net loss attributable to non-controlling interests	(15,578		)	(2,402		)	(17,980		)	(28,284		)	(3,606		)	(31,890		)
Net loss attributable to Pluralsight, Inc.	$	(14,159	)	$	(2,184	)	$	(16,343	)	$	(68,407	)	$	(12,404	)	$	(80,811	)
Less: Accretion of Series A redeemable convertible preferred units	—			—			—			(176,275		)	—			(176,275		)
Net loss attributable to shares of Class A common stock	$	(14,159	)	$	(2,184	)	$	(16,343	)	$	(244,682	)	$	(12,404	)	$	(257,086	)
Net loss per share, basic and diluted(1)	$	(0.23	)	$	(0.03	)	$	(0.26	)	$	(0.41	)	$	(0.06	)	$	(0.47	)
Weighted-average shares of Class A common stock used in computing basic and diluted net loss per share(1)	62,472						62,472			62,400						62,400

________________________

(1) Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

18

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Net loss	$	(29,737	)	$	(4,586	)	$	(34,323	)	$	(96,691	)	$	(16,010	)	$	(112,701	)
Other comprehensive loss:
Foreign currency translation losses, net	(39		)	—			(39		)	(97		)	—			(97		)
Comprehensive loss	$	(29,776	)	$	(4,586	)	$	(34,362	)	$	(96,788	)	$	(16,010	)	$	(112,798	)
Less: Comprehensive loss attributable to non-controlling interests	(15,599		)	(2,402		)	(18,001		)	(28,326		)	(3,606		)	(31,932		)
Comprehensive loss attributable to Pluralsight, Inc.	$	(14,177	)	$	(2,184	)	$	(16,361	)	$	(68,462	)	$	(12,404	)	$	(80,866	)

19

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit

As Previously Reported for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares		Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—		$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—		—		—	—		—	—		—			—			—			—			984
Equity-based compensation	—		—			—		13,155			—		—		—	—		—	—		—			—			—			—			13,155
Accretion of Series A redeemable convertible preferred units	—		176,275			—		(14,139		)	—		—		—	—		—	—		—			—			(162,136		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss	—		—			—		—			—		—		—	—		—	—		—			—			(42,660		)	—			(42,660		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660		4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000		2		—	—		—	—		324,704			—			—			—			324,706
Allocation of equity to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—		—			—		—			(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Settlement of equity appreciation rights	—		—			—		—			—		—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation	—		—			—		—			—		—		—	—		—	—		23,931			—			—			—			23,931
Adjustment to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(13,073		)	—			—			13,073			—
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(37		)	—			(42		)	(79		)
Net loss	—		—			—		—			—		—		—	—		—	—		—			—			(25,747		)	(28,284		)	(54,031		)
Balance at September 30, 2018	—		$	—		—		$	—		62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	443,182		$	(34	)	$	(335,863	)	$	118,976		$	226,274

20

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

Restatement Adjustments for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units			Members’ Capital				Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount			Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	—		$	—	$	—		$	—		$	—
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	9,123			—	—		—	—		—	—		—			—		—			—			9,123
Accretion of Series A redeemable convertible preferred units	—	—		—	(9,123		)	—	—		—	—		—	—		—			—		9,123			—			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(9,123		)	—			(9,123		)
Effect of the Reorganization Transactions and initial public offering:																												—
Effect of the reorganization transactions	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Initial public offering, net of offering costs	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Allocation of equity to non-controlling interests	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Settlement of equity appreciation rights	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	—			—	—		—	—		—	—		6,887			—		—			—			6,887
Adjustment to non-controlling interests	—	—		—	—			—	—		—	—		—	—		(3,606		)	—		—			3,606			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(3,281		)	(3,606		)	(6,887		)
Balance at September 30, 2018	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	3,281		$	—	$	(3,281	)	$	—		$	—

21

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

As Restated for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares		Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—		$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—		—		—	—		—	—		—			—			—			—			984
Equity-based compensation, as restated	—		—			—		22,278			—		—		—	—		—	—		—			—			—			—			22,278
Accretion of Series A redeemable convertible preferred units, as restated	—		176,275			—		(23,262		)	—		—		—	—		—	—		—			—			(153,013		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(51,783		)	—			(51,783		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660		4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000		2		—	—		—	—		324,704			—			—			—			324,706
Allocation of equity to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—		—			—		—			(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Settlement of equity appreciation rights	—		—			—		—			—		—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation, as restated	—		—			—		—			—		—		—	—		—	—		30,818			—			—			—			30,818
Adjustment to non-controlling interests, as restated	—		—			—		—			—		—		—	—		—	—		(16,679		)	—			—			16,679			—
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(37		)	—			(42		)	(79		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(29,028		)	(31,890		)	(60,918		)
Balance at September 30, 2018, as restated	—		$	—		—		$	—		62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	446,463		$	(34	)	$	(339,144	)	$	118,976		$	226,274

22

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated
Operating activities
Net loss	$	(96,691	)	$	(16,010	)	$	(112,701	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	6,331			—			6,331
Amortization of acquired intangible assets	7,721			—			7,721
Amortization of course creation costs	1,437			—			1,437
Equity-based compensation	36,972			16,010			52,982
Amortization of debt discount and debt issuance costs	1,215			—			1,215
Debt extinguishment costs	4,085			—			4,085
Other	507			—			507
Changes in assets and liabilities:
Accounts receivable	(10,352		)	—			(10,352		)
Prepaid expenses and other assets	(2,990		)	—			(2,990		)
Accounts payable	928			—			928
Accrued expenses and other liabilities	6,912			—			6,912
Accrued author fees	1,452			—			1,452
Deferred revenue	28,190			—			28,190
Net cash used in operating activities	(14,283		)	—			(14,283		)
Investing activities
Purchases of property and equipment	(6,576		)	—			(6,576		)
Purchases of content library	(2,345		)	—			(2,345		)
Net cash used in investing activities	(8,921		)	—			(8,921		)
Financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions	332,080			—			332,080
Payments of costs related to initial public offering	(7,083		)	—			(7,083		)
Borrowings of long-term debt	20,000			—			20,000
Repayments of long-term debt	(137,710		)	—			(137,710		)
Payments of debt extinguishment costs	(2,179		)	—			(2,179		)
Payments of debt issuance costs	(450		)	—			(450		)
Payments to settle equity appreciation rights	(325		)	—			(325		)
Taxes paid related to net share settlement	(78		)	—			(78		)
Payments of facility financing obligation	(13		)	—			(13		)
Net cash provided by financing activities	204,242			—			204,242
Effect of exchange rate change on cash, cash equivalents, and restricted cash	(136		)	—			(136		)
Net increase in cash, cash equivalents, and restricted cash	180,902			—			180,902
Cash, cash equivalents, and restricted cash, beginning of period	28,477			—			28,477
Cash, cash equivalents, and restricted cash, end of period	$	209,379		$	—		$	209,379

23

Description of Adjustments

The adjustments in the tables above reflect an increase in equity-based compensation expense due to the correction of an error in attribution of equity-based compensation from the straight-line method to the accelerated attribution method. The following table outlines the classification of the equity-based compensation adjustments in the statements of operations:

	Three Months Ended September 30, 2018						Nine Months Ended September 30, 2018
	As Previously Reported		Adjustments		As Restated		As Previously Reported		Adjustments		As Restated
Cost of revenue	$	40	$	16	$	56	$	86	$	59	$	145
Sales and marketing	4,372		1,240		5,612		9,343		4,164		13,507
Technology and content	2,790		910		3,700		5,839		2,813		8,652
General and administrative	8,842		2,420		11,262		21,704		8,974		30,678
Total equity-based compensation	$	16,044	$	4,586	$	20,630	$	36,972	$	16,010	$	52,982

Note 4. Revenue

Effect of Adopting ASC 606

The adoption of ASC 606 resulted in changes to the Company's condensed consolidated balance sheet as of September 30, 2019 and its statement of operations for the three and nine months ended September 30, 2019 due to the timing of revenue recognition and the capitalization of incremental costs of obtaining contracts. In addition, there were offsetting shifts in the statement of cash flows through net loss and various changes in operating assets and liabilities, which resulted in no impact on the total cash provided by operating activities. Refer to Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements for a description of the primary impacts resulting from the adoption of ASC 606.

The following tables present the amount by which each condensed consolidated financial statement line item is affected as of and for the three and nine months ended September 30, 2019 by ASC 606 (in thousands, except per share data):

Condensed Consolidated Balance Sheet:

	September 30, 2019
	As Reported			Balance without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Accounts receivable, net	$	63,001		$	62,311		$	690
Goodwill(1)	261,622			262,845			(1,223		)
Deferred contract acquisition costs, net	17,128			—			17,128
Deferred contract acquisition costs, noncurrent, net	4,435			—			4,435
Deferred revenue	177,523			179,480			(1,957		)
Deferred revenue, noncurrent	17,586			17,586			—
Accumulated deficit	(426,777		)	(443,649		)	16,872
Non-controlling interest	68,672			62,557			6,115

(1) Reflects the difference in Goodwill from applying ASC 606 to the deferred revenue balance acquired from GitPrime, Inc. See Note 9—Acquisition of GitPrime, Inc. for additional details. The difference in deferred revenue under ASC 606 is primarily due to the timing of recognition for subscriptions that allow the customer to install the software on premise without significant penalty.

24

Condensed Consolidated Statement of Operations:

	Three Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	82,620		$	82,017		$	603
Operating expenses:
Sales and marketing	55,727			56,959			(1,232		)
Loss from operations	(39,548		)	(41,383		)	1,835
Net loss	(45,802		)	(47,637		)	1,835
Less: Net loss attributable to non-controlling interests	(13,073		)	(13,597		)	524
Net loss attributable to Pluralsight, Inc.	(32,729		)	(34,040		)	1,311
Net loss per share, basic and diluted	$	(0.32	)	$	(0.34	)	$	(0.02	)
Weighted-average common shares used in computing basic and diluted net loss per share	101,407			101,407			—

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	228,099		$	227,097		$	1,002
Operating expenses:
Sales and marketing	149,852			151,203			(1,351		)
Loss from operations	(110,509		)	(112,862		)	2,353
Net loss	(121,127		)	(123,480		)	2,353
Less: Net loss attributable to non-controlling interests	(39,763		)	(40,475		)	712
Net loss attributable to Pluralsight, Inc.	(81,364		)	(83,005		)	1,641
Net loss per share, basic and diluted	$	(0.89	)	$	(0.90	)	$	(0.01	)
Weighted-average common shares used in computing basic and diluted net loss per share	91,741			91,741			—

Condensed Consolidated Statement of Cash Flows:

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Net loss	$	(121,127	)	$	(123,480	)	$	2,353
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred contract acquisition costs	17,317			—			17,317
Changes in assets and liabilities:
Accounts receivable	1,858			1,815			43
Deferred contract acquisition costs	(18,668		)	—			(18,668		)
Deferred revenue	22,461			23,506			(1,045		)
Cash used in operating activities	(3,812		)	(3,812		)	—

25

Disaggregation of Revenue

Subscription revenue accounted for approximately 95% and 97% of the Company's revenue for the three and nine months ended September 30, 2019, respectively.

Revenue by geographic region, based on the physical location of the customer, was as follows (dollars in thousands):

	Three Months Ended September 30,								Growth
	2019				2018				Rate
	Amount		%		Amount		%		%
United States	$	51,869	63	%	$	39,368	64	%	32	%
Europe, Middle East and Africa(1)	22,314		27	%	16,182		26	%	38	%
Other foreign locations	8,437		10	%	6,003		10	%	41	%
Total revenue	$	82,620	100	%	$	61,553	100	%

	Nine Months Ended September 30,								Growth
	2019				2018				Rate
	Amount		%		Amount		%		%
United States	$	142,705	63	%	$	104,901	64	%	36	%
Europe, Middle East and Africa(1)	62,204		27	%	44,302		27	%	40	%
Other foreign locations	23,190		10	%	15,566		9	%	49	%
Total revenue	$	228,099	100	%	$	164,769	100	%

(1) Revenue from the United Kingdom represented 11% of revenue for the three and nine months ended September 30, 2019 and the nine months ended September 30, 2018. Revenue from the United Kingdom represented 10% of revenue for the three months ended September 30, 2018.

Revenue by type of customer, was as follows (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Business customers	$	71,278	$	50,423	$	194,373	$	132,160
Individual customers	11,342		11,130		33,726		32,609
Total revenue	$	82,620	$	61,553	$	228,099	$	164,769

Contract Balances

For the three and nine months ended September 30, 2019, the Company recognized revenue of $70.9 million and $137.1 million, respectively, that was included in the corresponding deferred revenue balance at the beginning of the period. In connection with the acquisition of GitPrime, the Company acquired contract assets of $0.7 million, which are presented within accounts receivable, and deferred revenue of $1.4 million.

Remaining Performance Obligations

As of September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $265.8 million. The Company expects to recognize 74% of the transaction price over the next 12 months.

Costs to Obtain a Contract

The following table summarizes the activity of the deferred contract acquisition costs (in thousands):

Balance as of January 1, 2019	$	20,212
Capitalization of contract acquisition costs	18,668
Amortization of deferred contract acquisition costs	(17,317		)
Balance as of September 30, 2019	$	21,563

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Note 5. Cash Equivalents and Investments

Cash equivalents, short-term investments, and long-term investments consisted of the following as of September 30, 2019 (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents
Money market funds	$	64,380	$	—	$	—		$	64,380
Commercial paper	13,995		—		—			13,995
U.S. treasury securities	19,985		1		—			19,986
Total cash equivalents	$	98,360	$	1	$	—		$	98,361
Short-term investments
Commercial paper	$	53,787	$	—	$	—		$	53,787
U.S. treasury securities	129,329		51		—			129,380
Corporate notes and obligations	125,236		234		(5		)	125,465
U.S. agency obligations	19,971		1		(2		)	19,970
Total short-term investments	$	328,323	$	286	$	(7	)	$	328,602
Long-term investments
Corporate notes and obligations	$	60,903	$	127	$	(10	)	$	61,020
U.S. agency obligations	22,740		3		(1		)	22,742
Certificates of deposit	$	448	$	—	$	—		$	448
Total long-term investments	$	84,091	$	130	$	(11	)	$	84,210
Total cash equivalents and investments	$	510,774	$	417	$	(18	)	$	511,173

The amortized cost and fair value of the Company's investments based on their stated maturities consisted of the following as of September 30, 2019 (in thousands): 

	Amortized Cost		Fair Value
Due within one year	$	328,323	$	328,602
Due between one and two years	84,091		84,210
Total investments	$	412,414	$	412,812

The Company reviews the individual securities that have unrealized losses in its investment portfolio on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. The Company evaluates, among others, whether it has the intention to sell any of these investments and whether it is more likely than not that it will be required to sell any of them before recovery of the amortized cost basis. Based on this evaluation, the Company determined that there were no other-than-temporary impairments associated with its investments as of September 30, 2019.

Note 6. Fair Value Measurements

The Company measures and records certain financial assets at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds. The following three levels of inputs are used to measure the fair value of financial instruments:

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

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The fair value of the Company’s financial instruments was as follows (in thousands):

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	As of September 30, 2019
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	64,380	$	—	$	—	$	64,380
Commercial paper	—		13,995		—		13,995
U.S. treasury securities	—		19,986		—		19,986
Total cash equivalents	$	64,380	$	33,981	$	—	$	98,361
Short-term investments
Commercial paper	$	—	$	53,787	$	—	$	53,787
U.S. treasury securities	—		129,380		—		129,380
Corporate notes and obligations	—		125,465		—		125,465
U.S. agency obligations	—		19,970		—		19,970
Total short-term investments	$	—	$	328,602	$	—	$	328,602
Long-term investments
Corporate notes and obligations	$	—	$	61,020	$	—	$	61,020
U.S. agency obligations	—		22,742		—		22,742
Certificates of deposit	—		448		—		448
Total long-term investments	$	—	$	84,210	$	—	$	84,210

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	185,405	$	—	$	—	$	185,405

Convertible Senior Notes

As of September 30, 2019, the estimated fair value of the Company's convertible senior notes, with aggregate principal totaling $593.5 million, was $510.4 million. The Company estimates the fair value based on quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). These convertible senior notes are recorded at face value less unamortized debt discount and transaction costs on the Company's condensed consolidated balance sheet. Refer to Note 11—Convertible Senior Notes and Other Long-Term Debt for further information.

Fair Value of Other Financial Instruments

The carrying amounts of the Company’s accounts receivable, accounts payable, accrued expenses, and other liabilities approximate their fair values due to the short maturities of these assets and liabilities.

Note 7. Balance Sheet Components

Prepaid Expenses and Other Current Assets

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

	September 30, 2019		December 31, 2018
Prepaid expenses	$	10,788	$	7,931
Other current assets	1,876		392
Prepaid expenses and other current assets	$	12,664	$	8,323

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Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	September 30, 2019		December 31, 2018
Accrued compensation	$	21,462	$	22,285
Accrued income and other taxes payable	6,534		5,408
Accrued other current liabilities	9,639		4,354
Accrued expenses	$	37,635	$	32,047

Note 8. Property and Equipment

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

	September 30, 2019			December 31, 2018
Computer equipment	$	11,221		$	9,369
Software	2,034			2,031
Capitalized internal-use software costs	20,705			13,880
Furniture and fixtures	5,737			5,478
Buildings	11,251			11,251
Leasehold improvements	1,606			1,490
Construction in progress	1,456			1,671
Build-to-suit lease asset under construction	30,742			8,281
Total property and equipment	84,752			53,451
Less: Accumulated depreciation	(28,281		)	(21,810		)
Property and equipment, net	$	56,471		$	31,641

Depreciation expense totaled $2.3 million and $2.0 million for the three months ended September 30, 2019 and 2018, respectively, and $6.5 million and $6.3 million for the nine months ended September 30, 2019 and 2018, respectively.

Note 9. Acquisition of GitPrime, Inc.

On May 9, 2019, the Company completed the acquisition of GitPrime, Inc. ("GitPrime"), a leading provider of developer productivity software. Under the terms of the agreement, the Company acquired all of the outstanding stock of GitPrime for approximately $163.8 million in cash, excluding cash acquired and including working capital adjustments.

The Company accounted for the transaction as a business combination using the acquisition method of accounting. The Company allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date. The excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The goodwill is attributable to GitPrime's assembled workforce and synergies acquired, and is not deductible for income tax purposes. The preliminary amount of consideration transferred is subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuation of certain tangible and intangible assets acquired and liabilities assumed in connection with the acquisition. The Company expects the allocation of the consideration transferred to be final within the measurement period.

During the three months ended September 30, 2019, the Company recorded a $0.1 million reduction in consideration transferred, with a corresponding decrease to goodwill due to working capital adjustments agreed upon, and paid by, the selling stockholders.

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The following table summarizes the acquisition date fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):

	Fair Value
Cash and cash equivalents	$	5,290
Accounts receivable	1,798
Other assets acquired	207
Property and equipment	223
Goodwill	138,503
Intangible assets	24,800
Other liabilities assumed	(393		)
Deferred revenue	(1,367		)
Total fair value of net assets acquired	$	169,061

The useful lives, primarily based on the period of benefit to the Company, and fair values of the identifiable intangible assets at acquisition date were as follows:

	Fair Value of Intangible Assets Acquired		Useful Lives
	(in thousands)		(in years)
Technology	$	24,000	5 years
Customer relationships	800		4 years
Total fair value of intangible assets acquired	$	24,800

The fair value of the technology acquired in the acquisition was determined using the excess earnings model and the customer relationships acquired was determined using a distributor model. These models utilize certain unobservable inputs, including discounted cash flows, historical and projected financial information, customer attrition rates, and technology obsolescence rates, classified as Level 3 measurements as defined by ASC 820. The Company engaged third-party valuation specialists to assist in management's analysis of the fair value of the acquired intangibles. All estimates, key assumptions, and forecasts were reviewed by the Company. While the Company chose to utilize a third-party valuation specialist for assistance, the fair value analysis and related valuations reflect the conclusions of management and not those of any third party.

During the three and nine months ended September 30, 2019, the Company incurred acquisition costs of $0.8 million. These costs include legal, accounting fees and other costs directly related to the acquisition and are classified within general and administrative expenses in the Company's condensed consolidated statements of operations.

Unaudited Pro Forma Information

The condensed consolidated statements of operations include the results of GitPrime from the acquisition date. During the three and nine months ended September 30, 2019, the condensed consolidated statements of operations includes revenue from GitPrime of approximately $2.0 million and $2.4 million, respectively. Due to the continued integration of the combined businesses, the information needed to determine earnings of GitPrime included in the condensed consolidated statements of operations was unavailable.

The following unaudited pro forma information has been prepared for illustrative purposes only and assumes the acquisition occurred on January 1, 2018. It includes pro forma adjustments related to the amortization of acquired intangible assets, equity-based compensation expense, adjustments for ASC 606, and fair value adjustments for deferred revenue. The unaudited pro forma results have been prepared based on estimates and assumptions, which management believes are reasonable, however, the results are not necessarily indicative of the consolidated results of operations had the acquisition occurred on January 1, 2018, or of future results of operations (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue	$	82,620		$	62,421		$	231,989		$	166,773
Net loss	(45,802		)	(37,558		)	(126,535		)	(123,145		)
Net loss per share, basic and diluted	$	(0.32	)	$	(0.29	)	$	(0.92	)	$	(0.51	)

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Note 10. Intangible Assets

Intangible assets, net are summarized as follows (in thousands):

	As of September 30, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,771	$	64
Course creation costs	16,380		8,237		8,143
Total	$	49,215	$	41,008	$	8,207
Intangible assets:
Technology	$	28,500	$	5,209	$	23,291
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	3,550		2,829		721
Database	40		40		—
Domain names	45		—		45
Total	$	32,687	$	8,630	$	24,057

	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,229	$	606
Course creation costs	13,552		7,108		6,444
Total	$	46,387	$	39,337	$	7,050
Intangible assets:
Technology	$	4,500	$	2,786	$	1,714
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	2,750		2,750		—
Database	40		40		—
Domain names	45		—		45
Total	$	7,887	$	6,128	$	1,759

Intangible assets are amortized using the straight-line method over the estimated useful lives. Amortization expense of acquired intangible assets was $1.4 million and $1.1 million for the three months ended September 30, 2019 and 2018, respectively, and $3.0 million and $7.7 million for the nine months ended September 30, 2019 and 2018, respectively. Amortization expense of course creation costs was $0.7 million and $0.5 million for the three months ended September 30, 2019 and 2018, respectively, and $1.8 million and $1.4 million for the nine months ended September 30, 2019 and 2018, respectively.

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Based on the recorded intangible assets at September 30, 2019, estimated amortization expense is expected to be as follows (in thousands):

Year Ended December 31,	Amortization
2019 (remaining three months)	$	2,106
2020	8,057
2021	7,494
2022	6,611
2023	5,946
2024	2,005
Total	$	32,219

The change in the carrying amount of goodwill for the nine months ended September 30, 2019 was as follows (in thousands):

Goodwill at December 31, 2018	$	123,119
Goodwill recorded in connection with acquisition	138,603
Reduction in goodwill due to working capital adjustments	(100		)
Goodwill as of September 30, 2019	$	261,622

Note 11. Convertible Senior Notes and Other Long-Term Debt

Convertible Senior Notes

In March 2019, Pluralsight, Inc. issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 (the "Notes"), which includes the initial purchasers’ exercise in full of their option to purchase an additional $83.5 million principal amount of the Notes, in a private placement to qualified institutional buyers exempt from registration under the Securities Act. The net proceeds from the issuance of the Notes were $616.7 million after deducting the initial purchasers’ discounts and estimated issuance costs.

The Notes are governed by an indenture (the “Indenture”) between the Company, as the issuer, and U.S. Bank National Association, as trustee. The Notes are Pluralsight, Inc.'s senior unsecured obligations and rank senior in right of payment to any of its indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company's unsecured indebtedness then existing and future liabilities that are not so subordinated; effectively junior in right of payment to any of the Company's secured indebtedness, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of its subsidiaries. The Indenture does not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by the Company or any of its subsidiaries. The Notes mature on March 1, 2024 unless earlier repurchased or converted. Interest is payable semi-annually in arrears on March 1 and September 1 of each year.

The Notes have an initial conversion rate of 25.8023 shares of the Company's Class A common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $38.76 per share of its Class A common stock and is subject to adjustment if certain events occur. Following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event. Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” per the Indenture, holders of the Notes may require the Company to repurchase for cash all or a portion of their Notes at a purchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest.

Holders of the Notes may convert all or any portion of their Notes at any time prior to the close of business on December 1, 2023, in integral multiples of $1,000 principal amount, only under the following circumstances:

• During any calendar quarter commencing after the calendar quarter ended on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

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• During the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price as defined in the Indenture per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; or

• Upon the occurrence of specified corporate events described in the Indenture.

On or after December 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing conditions. Upon conversion, holders will receive cash, shares of the Company's Class A common stock or a combination of cash and shares of Class A common stock, at the Company's election.

During the nine months ended September 30, 2019, the conditions allowing holders of the Notes to convert were not met. The Notes are therefore not currently convertible and are classified as long-term debt.

The Company accounts for the Notes as separate liability and equity components. The Company determined the carrying amount of the liability component as the present value of its cash flows using a discount rate of approximately 5.5% based on comparable debt transactions for similar companies. The estimated interest rate was applied to the Notes, which resulted in a fair value of the liability component of $492.7 million upon issuance, calculated as the present value of future contractual payments based on the $633.5 million aggregate principal amount. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense over the term of the Notes using the effective interest method. The $140.8 million difference between the gross proceeds received from issuance of the Notes of $633.5 million and the estimated fair value of the liability component represents the equity component, or the conversion option, of the Notes and was recorded in additional paid-in capital. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

The Company allocates issuance costs related to the issuance of the Notes to the liability and equity components using the same proportions as the initial carrying value of the Notes. Issuance costs attributable to the liability component were $13.1 million and are being amortized to interest expense using the effective interest method over the term of the Notes. Issuance costs attributable to the equity components were $3.7 million and are netted with the equity component of the Notes in stockholders’ equity on the condensed consolidated balance sheets.

Repurchases of Convertible Senior Notes

In September 2019, Pluralsight, Inc. repurchased a total of $40.0 million in aggregate principal of its Notes for approximately $35.0 million in cash (the "Repurchase"). The Company first allocated the cash paid to repurchase the Notes to the liability component based on the estimated fair value of that component immediately prior to the extinguishment. The Company estimated the fair value of the liability component to be $32.0 million, using an estimated discount rate of approximately 5.5% based on comparable debt transactions for similar companies. The remaining consideration of approximately $3.0 million was allocated to the reacquisition of the equity component and recognized as a reduction of stockholders' equity.

The net carrying value of the liability component of the Notes was as follows (in thousands):

	September 30, 2019
Principal	$	593,500
Less: Unamortized debt discount	(118,788		)
Less: Unamortized issuance costs	(11,056		)
Net carrying amount	$	463,656

The net carrying value of the equity component of the Notes was as follows (in thousands):

	September 30, 2019
Proceeds allocated to the conversion option (debt discount)	$	140,776
Less: Issuance costs	(3,743		)
Less: Reacquisition of conversion option related to the repurchases of convertible senior notes	(2,965		)
Net carrying amount	$	134,068

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The interest expense recognized related to the Notes was as follows (in thousands):

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Contractual interest expense	$	585	$	1,311
Amortization of debt issuance costs and discount	6,826		15,120
Total	$	7,411	$	16,431

Capped Calls

In connection with the offering of the Notes, the Company entered into privately-negotiated capped call transactions ("Capped Calls") with certain counterparties. The Capped Calls each have an initial strike price of approximately $38.76 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have initial cap prices of $58.50 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, 16,345,757 shares of the Company's Class A common stock. The Capped Calls are generally intended to reduce or offset the potential dilution from shares of Class A common stock issued upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. As the Capped Call transactions are considered indexed to the Company's own stock and are considered equity classified, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $69.4 million incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets.

In connection with the repurchase of the convertible senior notes, the Company terminated a portion of its existing Capped Calls that cover 1,032,092 shares of the Company's Class A common stock, which corresponds to the number of shares underlying the principal amount of Notes that were repurchased. The Company received proceeds of $1.3 million in connection with the portion of the Capped Calls that were terminated.

Intercompany Convertible Promissory Note with Pluralsight Holdings

In connection with the issuance of the Notes, Pluralsight, Inc. entered into an intercompany convertible promissory note with Pluralsight Holdings, whereby Pluralsight, Inc. provided the net proceeds from the issuance of the Notes to Pluralsight Holdings. The terms of the convertible promissory note mirror the terms of the Notes issued by Pluralsight, Inc. The intent of the convertible promissory note is to maintain the parity of shares of Class A common stock with LLC Units as required by the LLC Agreement in order to preserve the Company's legal structure. This note was amended in September 2019 in connection with the Repurchase. All effects of the convertible promissory note on the condensed consolidated financial statements have been eliminated in consolidation.

Note 12. Commitments and Contingencies

Letters of Credit

As of September 30, 2019, and December 31, 2018, the Company had a total of $0.7 million in letters of credit outstanding with a financial institution. These outstanding letters of credit were issued for purposes of securing certain of the Company’s obligations under facility leases. The letters of credit were collateralized by $0.7 million of the Company’s cash, which is reflected as restricted cash on the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively.

Lease Commitments

The Company is committed under certain operating leases with third parties for office space. These leases expire at various times through 2035. The Company recognizes rent expense on a straight-line basis over the lease period.

In August 2018, the Company entered into a non-cancellable lease agreement to rent office space for the Company's future headquarters to be constructed in Draper, Utah. Based on the Company's involvement in the design and construction of the building, the Company is deemed the owner of the construction project for accounting purposes during the construction period. As a result, the Company recorded a construction in progress asset of $30.7 million and a corresponding facility financing obligation as of September 30, 2019.

In connection with the lease agreement, the Company is required to maintain a deposit of $16.0 million with a financial institution for the benefit of the landlord to secure the Company’s obligations under the lease. The deposit is recorded within restricted cash on the condensed consolidated balance sheet. The lease agreement provides for both a partial and full release of the deposit funds to the Company, provided the Company meets certain liquidity and other financial conditions. Additionally, as

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of September 30, 2019, the Company has recorded a deposit into restricted cash on the condensed consolidated balance sheet of $11.0 million for use in constructing tenant improvements in connection with the Draper headquarters.

Future Minimum Lease Payments

At September 30, 2019, future minimum lease payments, including lease payments for the Company’s facilities in Farmington, Utah, and lease payments for the Company’s future headquarters in Draper, Utah were as follows (in thousands):

Year Ended December 31,
2019 (remaining three months)	1,995
2020	9,026
2021	10,032
2022	10,025
2023	9,926
Thereafter	99,324
Less: Sublease rental income	(763		)
Total future minimum lease payments	$	139,565

Rent expense under operating leases was $1.8 million and $1.3 million for the three months ended September 30, 2019 and 2018, respectively, and $5.0 million and $3.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Other Commitments

The Company has also entered into certain non-cancellable agreements primarily related to cloud infrastructure and software subscriptions in the ordinary course of business. There have been no material changes in the Company's commitments and contingencies, as disclosed in the Annual Report.

Legal Proceedings

In August 2019, a class action complaint was filed by certain stockholders of the Company in the U.S. District Court for the Southern District of New York against the Company, and certain of the Company's officers alleging violation of securities laws and seeking unspecified damages. In October 2019, the action was transferred to the U.S. District Court for the District of Utah. The Company believes this lawsuit is without merit and intends to defend the case vigorously. The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision. If an unfavorable outcome were to occur in this case, it is possible that the impact could be material to the Company's results of operations in the period(s) in which any such outcome becomes probable and estimable.

The Company is involved in other legal proceedings from time to time arising in the normal course of business. Management believes that the outcome of these proceedings will not have a material impact on the Company’s financial condition, results of operations, or liquidity.

Warranties and Indemnification

The performance of the Company’s cloud-based technology learning platform is typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable. The Company’s contractual arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying consolidated condensed financial statements.

The Company has also agreed to indemnify its 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 the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

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Note 13. Stockholders' Equity

Amendment and Restatement of Certificate of Incorporation

In connection with the Reorganization Transactions, the certificate of incorporation of Pluralsight, Inc. was amended and restated to, among other things, provide for the (i) authorization of 1,000,000,000 shares of Class A common stock with a par value of $0.0001 per share; (ii) authorization of 200,000,000 shares of Class B common stock with a par value of $0.0001 per share; (iii) authorization of 50,000,000 shares of Class C common stock with a par value of $0.0001 per share; (iv) authorization of 100,000,000 shares of undesignated preferred stock that may be issued from time to time; and (v) establishment of a classified board of directors, divided into three classes, each of whose members will serve for staggered three-year terms.

Holders of Class A and Class B common stock are entitled to one vote per share and holders of Class C common stock are entitled to ten votes per share. Except as otherwise required by applicable law, holders of Class A common stock, Class B common stock, and Class C common stock vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of Class B and Class C common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B and Class C common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the number of LLC Units held by the Continuing Members and the number of Class B or Class C common shares held by the Continuing Members. Shares of Class B and Class C common stock are transferable only together with an equal number of LLC Units. Subject to certain limitations and exceptions, Continuing Members may exchange or redeem LLC Units and shares of Class B or Class C common stock, as applicable, for, at the option of Pluralsight, Inc., cash or shares of Class A common stock, on a one-for-one basis.

Pluralsight, Inc. must at all times maintain a ratio of one LLC Unit for each share of Class A common stock issued, and Pluralsight Holdings must at all times maintain a one-to-one ratio between the number of shares of Class B or Class C common stock owned by the Continuing Members and the number of LLC Units owned by the Continuing Members.

Recapitalization of Pluralsight Holdings

In connection with the Reorganization Transactions and the amendment and restatement of the LLC Agreement, all membership interests in Pluralsight Holdings were converted into a single-class of common LLC Units and certain holders of LLC Units elected to exchange LLC Units for Class A common stock of Pluralsight, Inc. The following is a summary of the shares converted or exchanged in connection with the Reorganization Transactions:

• 48,407,645 common units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted on a one-for-one basis into LLC Units.

• 48,447,880 redeemable convertible preferred units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted on a one-for-one basis into LLC Units.

• 15,783,689 incentive units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted into 12,667,778 LLC Units after giving effect to the threshold price and catch-up price per unit.

• 3,000,000 Class B incentive units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted into 1,747,067 LLC Units after giving effect to the threshold price and catch-up price per unit.

In connection with the recapitalization, a total of 39,110,660 LLC Units were exchanged for shares of Class A common stock of Pluralsight, Inc. In addition, the Company issued 58,111,572 shares of Class B common stock and 14,048,138 shares of Class C common stock to the Continuing Members on a one-for-one basis to the corresponding LLC Units held by the Continuing Members.

The amended and restated LLC Agreement requires that Pluralsight Holdings at all times maintain (i) a one-to-one ratio between the number of outstanding shares of Class A common stock of Pluralsight, Inc. and the number of LLC Units and (ii) a one-to-one ratio between the number of shares of Class B or Class C common stock owned by the Continuing Members and the number of LLC Units held by the Continuing Members.

Initial Public Offering

As described in Note 1—Organization and Description of Business, in May 2018, Pluralsight, Inc. completed an IPO of 23,805,000 shares of Class A common stock at a public offering price of $15.00 per share. Pluralsight, Inc. received proceeds of $332.1 million, net of underwriting discounts and commissions, which Pluralsight, Inc. used to purchase newly-issued LLC Units of Pluralsight Holdings at a price per unit equal to the IPO price per share.

Secondary Offering

In March 2019, the Company completed a secondary offering, in which certain stockholders sold 15,592,234 shares of Class A common stock at a public offering price of $29.25 per share. Pluralsight did not receive any proceeds from the sale of shares by selling stockholders. A total of $0.9 million in costs were incurred by Pluralsight in connection with this offering. In connection

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with the secondary offering, the Company issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 in a private placement to qualified institutional buyers exempt from registration under the Securities Act. See Note 11-Convertible Senior Notes and Other Long-Term Debt for additional details.

Exchanges of LLC Units

During the nine months ended September 30, 2019, certain Continuing Members exchanged 33,536,262 LLC Units of Pluralsight Holdings along with their corresponding shares of Class B and Class C common stock, as applicable, for an equal number of shares of Class A common stock. Simultaneously, and in connection with these exchanges, the Company cancelled the exchanged shares of Class B and Class C common stock.

Note 14. Non-Controlling Interests

In connection with the Reorganization Transactions, Pluralsight, Inc. became the sole managing member of Pluralsight Holdings and as a result consolidates the results of operations of Pluralsight Holdings. The non-controlling interests balance represents the LLC Units held by Continuing Members, based on the portion of LLC Units owned by Continuing Members. During the three and nine months ended September 30, 2019, the adjustments to the non-controlling interests were primarily related to equity-based compensation, the settlement of equity-based awards, and the issuance of the convertible promissory note with Pluralsight Holdings in connection with the convertible senior notes as discussed in Note 11—Convertible Senior Notes and Other Long-Term Debt. Income or loss is attributed to the non-controlling interests based on the weighted-average ownership percentages of LLC Units outstanding during the period, excluding LLC Units that are subject to time-based vesting requirements. As of September 30, 2019, the non-controlling interests of Pluralsight Holdings owned 26.6% of the outstanding LLC Units, with the remaining 73.4% owned by Pluralsight, Inc. The ownership of the LLC Units is summarized as follows:

	As of September 30, 2019			As of December 31, 2018
	Units	Ownership %		Units	Ownership %
Pluralsight, Inc.'s ownership of LLC Units	101,638,179	73.4	%	65,191,907	48.6	%
LLC Units owned by the Continuing Members(1)	36,904,870	26.6	%	68,881,732	51.4	%
	138,543,049	100.0	%	134,073,639	100.0	%

(1) Excludes 1,827,844 and 3,195,322 LLC Units still subject to time-based vesting requirements as of September 30, 2019 and December 31, 2018, respectively

Note 15. Equity-Based Compensation

Incentive Unit Plan

Certain employees and directors were granted incentive units in Pluralsight Holdings, pursuant to the Incentive Unit Plan (“2013 Plan”). In connection with the Reorganization Transactions, all outstanding incentive units were converted into LLC Units of Pluralsight Holdings and certain holders of incentive units elected to exchange LLC Units for shares of Class A common stock of Pluralsight, Inc. Shares of Class A common stock and LLC Units issued as a result of the exchange or conversion of unvested incentive units remain subject to the same time-based vesting requirements that existed prior to the Reorganization Transactions. In connection with the IPO, the 2013 Plan was terminated.

The unvested LLC Units following the conversion of unvested incentive units are summarized as follows:

	Unvested Units		Weighted- Average Grant Date Fair Value
Unvested LLC Units outstanding—December 31, 2018	3,195,322		$	7.63
Forfeited or cancelled	(121,845	)	5.73
Vested	(1,245,633	)	7.58
Unvested LLC Units outstanding—September 30, 2019	1,827,844		$	8.58

As of September 30, 2019, total unrecognized equity-based compensation related to unvested LLC Units was $12.9 million, which is expected to be recognized over a weighted-average period of 1.6 years. The total fair value of Class A common shares and LLC Units vested during the nine months ended September 30, 2019, was $35.4 million. If a forfeiture of an unvested LLC Unit occurs, the associated shares of Class B common stock or Class C common stock, as applicable, are also forfeited.

In August 2019, the Company entered into a Separation Agreement with its Chief Revenue Officer. Under the agreement, the Company accelerated the vesting of 130,924 LLC Units. The acceleration was deemed a modification, which resulted in an increase to equity-based compensation expense of $2.1 million during the three months ended September 30, 2019.

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Equity Incentive Plans

In June 2017, Pluralsight Holdings adopted the 2017 Equity Incentive Plan (“2017 Plan”) and issued restricted stock units ("RSUs") to employees. In May 2018, Pluralsight, Inc. adopted the 2018 Equity Incentive Plan (“2018 Plan”), as amended in April 2019. The 2018 Plan provides for the grant of nonstatutory stock options, restricted stock, RSUs, stock appreciation rights, performance units, and performance shares to employees, directors, and consultants of the Company.

In connection with the IPO and the adoption of the 2018 Plan, the 2017 Plan was terminated. With the establishment of the 2018 Plan, the Company no longer grants equity-based awards under the 2017 Plan and any shares that expire, terminate, are forfeited or repurchased by the Company, or are withheld by the Company to cover tax withholding obligations, under the 2017 Plan, will automatically be transferred to the 2018 Plan.

In connection with the acquisition of GitPrime, Inc. the Company assumed all existing equity awards under the 2015 and 2018 Equity Incentive Plans of GitPrime.

Stock Options

In connection with the IPO, the Company granted to employees stock options under the 2018 Plan to purchase shares of Class A common stock at an exercise price equal to the IPO price of $15.00 per share. The stock options will vest ratably in equal six-month periods over a period of two years from the IPO date.

In connection with the GitPrime acquisition, the stock options granted to GitPrime employees under the 2015 and 2018 Equity Incentive Plans were automatically converted into options to purchase shares of the Company's Class A common stock, subject to appropriate adjustments to the number of shares issuable pursuant to such options and the exercise price of such options as provided in the Merger Agreement. The options are subject to time-based vesting conditions and continue to vest over the remaining vesting period of the original award ranging from two to four years.

The following table summarizes the stock option activity for the nine months ended September 30, 2019:

	Stock Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Balance as of December 31, 2018	5,143,712		$	15.00
Granted	169,762		1.47
Exercised	(452,914	)	14.62
Forfeited or cancelled	(414,476	)	14.87
Outstanding as of September 30, 2019	4,446,084		$	14.53	8.6	$	10.0
Vested and exercisable—September 30, 2019	2,099,314		$	14.86	8.6	$	4.1

During the nine months ended September 30, 2019, the total intrinsic value of options exercised was $7.6 million. The total unrecognized equity-based compensation related to the stock options was $14.9 million, which is expected to be recognized over a weighted-average period of 1.1 years.

RSUs

RSUs represent the right to receive shares of Pluralsight, Inc.’s Class A common stock at a specified future date. Restricted share units of Pluralsight Holdings under the 2017 Plan are generally subject to both a service condition and a liquidity condition. RSUs under the 2018 Plan are generally subject to a service condition. The service condition is generally satisfied over four years, whereby 25% of the share units satisfy this condition on the first anniversary of the vesting start date and then ratably on a quarterly basis thereafter through the end of the vesting period. The liquidity condition under the 2017 plan is satisfied upon the occurrence of a qualifying event, which was satisfied upon expiration of the lock-up period following the IPO.

Under the 2017 Plan, all restricted share units granted were initially restricted share units of Pluralsight Holdings. In connection with the IPO, all restricted share units were converted into RSUs of Pluralsight, Inc., except for Class B restricted share units of Pluralsight Holdings, which remain restricted share units of Pluralsight Holdings, and represent the right to receive LLC Units and corresponding shares of Class C common stock of Pluralsight, Inc. upon vesting.

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The activity for RSUs for the nine months ended September 30, 2019 was as follows:

	Number of RSUs or Units		Weighted-Average Grant Date Fair Value
RSUs of Pluralsight, Inc.
Balance at December 31, 2018	4,801,536		$	11.11
Granted	5,279,646		30.60
Forfeited or cancelled	(913,189	)	20.06
Vested	(1,621,773	)	11.85
Balance at September 30, 2019	7,546,220		$	23.51
Restricted Share Units of Pluralsight Holdings:
Balance at December 31, 2018	2,062,500		$	8.24
Vested	(562,500	)	8.24
Balance at September 30, 2019	1,500,000		$	8.24

As of September 30, 2019, unrecognized compensation cost related to RSUs, including restricted share units of Pluralsight Holdings, was $136.1 million, which is expected to be recognized over a weighted-average period of 3.1 years.

Employee Stock Purchase Plan

In May 2018, Pluralsight, Inc.'s board of directors adopted the Employee Stock Purchase Plan ("ESPP"). The ESPP generally provides for consecutive overlapping 24-month offering periods comprised of foursix-month purchase periods. The offering periods start on the first trading day on or after May 31 and November 30 of each year.

The ESPP permits participants to elect to purchase shares of Class A common stock through fixed contributions from eligible compensation paid during each purchase period during an offering period, provided that this fixed contribution amount will not exceed 75.0% of the eligible compensation a participant receives during a purchase period, or $12,500 (increased to $25,000 for purposes of the first purchase period under the ESPP). A participant may purchase a maximum of 5,000 shares during each purchase period. Amounts deducted and accumulated by the participant will be used to purchase shares of Class A common stock at the end of each purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of Class A common stock on the first trading day of each offering period or on the purchase date. If the fair market value of the common stock on any purchase date within an offering period is lower than the stock price as of the beginning of the offering period, the offering period will immediately reset after the purchase of shares on such purchase date and participants will automatically be re-enrolled in a new offering period. Participants may end their participation at any time during an offering period and will be paid their accrued contributions that have not yet been used to purchase shares of common stock. Participation ends automatically upon termination of employment.

ESPP employee payroll contributions accrued at September 30, 2019 and December 31, 2018, totaled $6.2 million and $1.5 million, and are included within accrued expenses in the condensed consolidated balance sheets. Employee payroll contributions ultimately used to purchase shares under the ESPP will be reclassified to stockholders' equity at the end of the purchase period. As of September 30, 2019, total unrecognized equity-based compensation for purchase rights committed under the ESPP was $9.3 million, which is expected to be recognized over a weighted-average period of 1.0 years.

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Equity-Based Compensation

Equity-based compensation was classified as follows in the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
			(Restated)				(Restated)
Cost of revenue	$	138	$	56	$	355	$	145
Sales and marketing	8,739		5,612		22,967		13,507
Technology and content	6,666		3,700		15,513		8,652
General and administrative	9,114		11,262		28,822		30,678
Total equity-based compensation	$	24,657	$	20,630	$	67,657	$	52,982

Equity-based compensation capitalized as internal-use software was $0.4 million and $0.1 million for the three months ended September 30, 2019 and 2018, respectively, and $0.9 million and $0.1 million for the nine months ended September 30, 2019 and 2018, respectively.

Note 16. Income Taxes

As a result of the Reorganization Transactions, Pluralsight, Inc. became the sole managing member of Pluralsight Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pluralsight Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pluralsight Holdings is passed through to and included in the taxable income or loss of its members, including Pluralsight, Inc. following the Reorganization Transactions, on a pro rata basis. Pluralsight, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of Pluralsight Holdings following the Reorganization Transactions. The Company is also subject to taxes in foreign jurisdictions.

The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision and estimate of the Company's annual effective tax rate are subject to variation due to several factors including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments.

For the three months ended September 30, 2019 and 2018 the Company's estimated effective tax rate was (0.9)% and (0.7)%, respectively. For the nine months ended September 30, 2019 and 2018 the Company's estimated effective tax rate was (0.6)% and (0.5)%, respectively. The variations between the Company's estimated effective tax rate and the U.S. statutory rate are primarily due to the portion of the Company's earnings (or loss) attributable to non-controlling interests following the Reorganization Transactions and the full domestic valuation allowance.

The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which the Company operates. The provision for income taxes consists primarily of income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business. The Company's U.S. operations have resulted in losses, and as such, the Company maintains a full valuation allowance against its U.S. deferred tax assets. While the Company believes its current valuation allowance is appropriate, the Company assesses the need for an adjustment to the valuation allowance on a quarterly basis. The assessment is based on estimates of future sources of taxable income for the jurisdictions in which the Company operates and the periods over which deferred tax assets will be realizable. In the event the Company determines that it will be able to realize all or part of its net deferred tax assets in the future, all or part of the valuation allowance will be released in the period in which the Company makes such determination. The release of all or part of the valuation allowance against deferred tax assets may cause greater volatility in the effective tax rate in the periods in which it is released.

Tax Receivable Agreement

On the date of the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) with Continuing Members that provides for a payment to the Continuing Members of 85% of the amount of tax benefits, if any, that Pluralsight, Inc. realizes, or is deemed to realize as a result of redemptions or exchanges of LLC Units.

During the nine months ended September 30, 2019, certain Continuing Members exchanged 33,536,262 LLC Units for shares of Class A common stock. The Company has concluded that, based on applicable accounting standards, it is more-likely-than-not that its deferred tax assets subject to the TRA will not be realized; therefore, the Company has not recorded a TRA liability

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related to the tax savings it may realize from the utilization of deferred tax assets arising from the exchanges that have occurred through September 30, 2019. The total unrecorded TRA liability as of September 30, 2019 is approximately $252.8 million.

Note 17. Net Loss Per Share

The following table presents the calculation of basic and diluted net loss per share for the periods following the Reorganization Transactions (in thousands, except per share amounts):

	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018			Nine Months Ended September 30, 2019			May 16, 2018 through September 30, 2018
Numerator:
Net loss	$	(45,802	)	$	(34,323	)	$	(121,127	)	$	(60,918	)
Less: Net loss attributable to non-controlling interests	(13,073		)	(17,980		)	(39,763		)	(31,890		)
Net loss attributable to Pluralsight, Inc.	$	(32,729	)	$	(16,343	)	$	(81,364	)	$	(29,028	)
Denominator:
Weighted-average shares of Class A common stock outstanding, basic and diluted	101,407			62,876			91,741			62,867
Less: Weighted-average shares of Class A common stock subject to time-based vesting	—			(404		)	—			(467		)
Weighted-average shares of Class A common stock outstanding, basic and diluted	101,407			62,472			91,741			62,400
Net loss per share:
Net loss per share, basic and diluted	$	(0.32	)	$	(0.26	)	$	(0.89	)	$	(0.47	)

Shares of Class B and Class C common stock do not share in the earnings or losses of Pluralsight and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B and Class C common stock under the two-class method has not been presented.

During the three months ended September 30, 2019, the Company incurred net losses and, therefore, the effect of the Company’s potentially dilutive securities were not included in the calculation of diluted loss per share as the effect would be anti-dilutive.

The following table contains share/unit totals with a potentially dilutive impact (in thousands):

	As of September 30, 2019
LLC Units held by Continuing Members	38,733
Stock options	4,446
RSUs of Pluralsight, Inc.	7,546
Restricted Share Units of Pluralsight Holdings	1,500
Purchase rights committed under the ESPP	1,493
Total	53,718

The Notes will not have an impact on the Company's diluted earnings per share until the average market share price of Class A common stock exceeds the conversion price of $58.50 per share, as the Company intends and has the ability to settle the principal amount of the Notes in cash upon conversion. The Company is required under the treasury stock method to compute the potentially dilutive shares of common stock related to the Notes for periods it reports net income. However, upon conversion, until the average market price of the Company's common stock exceeds the cap price of $58.50 per share, exercise of the Capped Calls will mitigate dilution from the Notes from the conversion price up to the cap price. Capped Calls are excluded from the calculation of diluted earnings per share, as they would be antidilutive under the treasury stock method.

Note 18. Related Party Transactions

The Company utilizes an aircraft owned by the Company’s Chief Executive Officer on an as-needed basis. The Company has agreed to reimburse the Chief Executive Officer for use of the private aircraft for business purposes at an hourly rate per flight hour. The reimbursement rate was approved by the Company's Board of Directors based upon a review of comparable chartered aircraft rates. The Company accrued approximately $0.4 million as of September 30, 2019 included within accrued expenses on

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the condensed consolidated balance sheets. A total of $0.7 million has been paid under the arrangement during the nine months ended September 30, 2019.

Tax Receivable Agreement

On the date of the IPO, the Company entered into a TRA with Continuing Members that provides for a payment to the Continuing Members of 85% of the amount of tax benefits, if any, that Pluralsight, Inc. realizes, or is deemed to realize as a result of redemptions or exchanges of LLC Units. As discussed in Note 16—Income Taxes, no amounts were paid or payable to Continuing Members under the TRA as it is more-likely-than-not that the Company’s tax benefits obtained from exchanges subject to the TRA will not be realized.

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Note 19. Subsequent Events

In October 2019, the Company entered into a new non-cancellable operating lease agreement to rent office space in Sydney, Australia for a period of 38 months. The total minimum lease payments under the lease agreement are $1.5 million, with lease payments of $0.5 million per year from 2019 to 2022. In connection with the lease agreement, the Company entered into a bank guarantee with a financial institution for $0.3 million, which is collateralized by the Company’s cash and cash equivalents.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management's Discussion and Analysis of Financial Condition and Results of Operations and financial statements included in our Annual Report. As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” in our Annual Report.

Overview

We are a leading provider of technology skill development solutions for businesses and individuals. We enable businesses to innovate in an era of rapid technological change and digital transformation by equipping their employees with the latest technology skills. We provide businesses with visibility into the technical strengths of their workforce, including developer productivity, allowing them to better align resources, provide targeted skill development in line with company goals, and advance the skills of individuals and teams.

We started operations in 2004 and focused initially on in-person instructor-led training. Anticipating the increasing demand for online solutions, we began offering online courses in 2008 and shifted entirely to an online delivery model in 2011. Since 2011, we have extended our offering to include new content areas and additional features that have enabled us to expand our addressable market, attract new users, and deepen our foothold within businesses. 

We have expanded our platform both organically through internal initiatives and through acquisitions, which have all been focused on adding capabilities to our offerings. In May 2019, we completed the acquisition of GitPrime, Inc., or GitPrime, a leading provider of developer productivity software for approximately $163.8 million in cash, excluding cash acquired and including working capital adjustments. We believe the acquisition will enhance our platform to measure developer productivity, which will enable technology leaders to identify talent and areas of improvement within their teams, in order to enhance skills and drive productivity.

Our additions and improvements to our product offering have enabled us to strengthen our relationships with our business customers and increase our revenue over time. We derive substantially all of our revenue from the sale of subscriptions to our platform. We sell subscriptions to our platform primarily to business customers through our direct sales team, as well as through our website. We also sell subscriptions to our platform to individual customers directly through our website. In addition, small teams often represent the “top of the funnel” for larger deployments, bringing our technology into their workplaces and proliferating usage of our platform within their companies.

We are focused on attracting businesses, particularly large enterprises, to our platform and expanding their use of our platform over time. We believe there exists a significant opportunity to drive sales to large enterprises, including expanding relationships with existing customers and attracting new customers. Our ability to attract large enterprises to our platform and to expand their use of our platform will be important for the success of our business and our results of operations.

Key Business Metrics

We monitor billings and certain related key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(dollars in thousands)
Billings	$	92,123		$	72,243		$	250,603		$	192,959
Billings from business customers	$	80,707		$	61,143		$	216,967		$	161,018
% of billings from business customers	88		%	85		%	87		%	83		%

Billings

We use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers and our ability to sell subscriptions to our platform to both new and existing customers. Billings represent our total revenue plus the change in deferred revenue in the period, as presented in our condensed consolidated statements of cash flows, less the change in contract assets and unbilled accounts receivable in the period. Billings in any particular period represent amounts invoiced to our customers and reflect subscription renewals and upsells to existing customers plus sales to new customers. Our pricing and subscription periods vary for business customers and individual customers. Subscription periods for our business customers generally range from one to three years, with a majority being one year. We typically invoice our business

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customers in advance in annual installments. Subscription periods for our individual customers range from one month to one year and we typically invoice them in advance in monthly or annual installments.

We use billings from business customers and our percentage of billings from business customers to measure and monitor our ability to sell subscriptions to our platform to business customers. We believe that billings from business customers will be a significant source of future revenue growth and a key factor affecting our long-term performance. We expect our billings from business customers to continue to increase as a percentage of billings over the long term.

As our billings continue to grow in absolute terms, we expect our billings growth rate to decline over the long term as we achieve scale in our business. During the second quarter of 2019, our billings growth rate declined compared to prior results, primarily due to sales execution challenges, including (i) a lower net retention rate, (ii) being slower in hiring additional sales representatives than planned for in 2019, and (iii) an increase in the length of the sales cycle as a greater portion of our billings are generated from larger enterprise customers. As a result of our second quarter performance, we reorganized our senior leadership within our sales organization, including hiring a new Chief Revenue Officer effective as of October 28, 2019. In addition, we are implementing ongoing changes to improve sales execution. While these changes have contributed to an improvement in the billings growth rate during the third quarter of 2019 compared to the second quarter, we expect that these changes will take time to produce recurring improvements in our growth rates over the long term. As we recognize revenue from subscription fees ratably over the term of the contract, due to the difference in timing of billings received and when we recognize revenue, changes to our billings and billings growth rates are not immediately reflected in our revenue and revenue growth rates. As a result, we expect that the decline in our billings growth rate during the nine months ended September 30, 2019 will reduce the growth rate of our revenue in future periods.

Components of Results of Operations

Revenue

We derive substantially all of our revenue from the sale of subscriptions to our platform. We also derive revenue from providing professional services, which generally consist of consulting, integration, or other content creation services. Amounts that have been invoiced are initially recorded as deferred revenue and are recognized ratably as revenue over the subscription period. Subscription terms generally range from one year to three years for business customers and one month to one year for individual customers, and begin on the date access to our platform is made available to the customer. Most of our subscriptions to business customers are billed in annual installments even if customers are contractually committed to multi-year agreements. Subscriptions that allow the customer to take software on-premise without significant penalty are recognized at a point in time when the software is made available to the customer.

Cost of Revenue, Gross Profit and Gross Margin

Cost of revenue includes certain direct costs associated with delivering our platform and includes costs for author fees, amortization of our content library, hosting and delivery fees, merchant processing fees, depreciation of capitalized software development costs for internal-use software, employee-related costs, including equity-based compensation associated with our customer support and professional services organizations, and third-party transcription costs.

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by various factors, including the mix of subscriptions we sell, the cost of author fees, the costs associated with third-party hosting services, and the extent to which we expand our customer support and professional services organizations. We expect our gross margin to increase over the long term primarily due to a decrease in author fees as a percentage of revenue, although our gross margin may fluctuate from period to period depending on the interplay of the factors described above.

Operating Expenses

Our operating expenses are classified as sales and marketing, technology and content, and general and administrative. For each of these categories, the largest component is employee-related costs, which include salaries and bonuses, equity-based compensation, and employee benefit costs. We allocate shared overhead costs such as information technology infrastructure and facility-related costs based on headcount in that category.

Sales and Marketing

Sales and marketing expenses consist primarily of employee compensation costs of our sales and marketing employees, including salaries, benefits, bonuses, commissions, equity-based compensation, and allocated overhead costs. Other sales and marketing costs include user events, search engine and email marketing, content syndication, lead generation, and online banner and video advertising. We expect that our sales and marketing expenses will increase in absolute dollars for the foreseeable future and, in the near term, may increase as a percentage of our revenue as we hire additional sales and marketing personnel, increase our marketing activities, and grow our domestic and international operations. Additionally, our sales and marketing expenses may fluctuate as a percentage of our revenue from period to period depending on the timing of expenditures. However, we expect sales and marketing expenses to decrease as a percentage of revenue over the long term.

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Technology and Content

Technology costs consist principally of research and development activities including personnel costs, consulting services, other costs associated with platform development efforts, and allocated overhead costs. Content costs consist principally of personnel costs and other activities associated with content development, course production, curriculum direction, and allocated overhead costs. Technology and content costs are expensed as incurred, except for certain costs relating to the development of internal-use software, including software used to upgrade and enhance our platform and applications supporting our business, which are capitalized and amortized over the estimated useful lives of one to three years. We expect that our technology and content expenses will increase in absolute dollars for the foreseeable future and, in the near term, may increase as a percentage of our revenue as we continue to increase the functionality of and enhance our platform and develop new content and features, including the integration of the GitPrime platform into our existing product offerings. Additionally, our technology and content expense may fluctuate as a percentage of our revenue from period to period depending on the timing of expenditures. However, we expect technology and content expenses to decrease as a percentage of revenue over the long term.

General and Administrative

General and administrative expenses consist of personnel costs and related expenses for executive, finance, legal, people operations, and administrative personnel, including salaries, benefits, bonuses, and equity-based compensation; professional fees for external legal, accounting, recruiting, and other consulting services; and allocated overhead costs. We are incurring additional general and administrative expenses as a result of operating as a public company and our UP-C structure, including additional expenses related to compliance with the rules and regulations of the SEC, additional insurance expenses, investor relations activities, and professional services. In addition, we expect to increase the size of our general and administrative function to support our increased compliance requirements, including as we transition from being an EGC in the future, and the growth of our business. As a result, we expect that our general and administrative expenses will increase in absolute dollars for the foreseeable future and, in the near term, may increase as a percentage of our revenue. Additionally, our general and administrative expenses may fluctuate as a percentage of our revenue from period to period depending on the timing of expenditures. However, we expect general and administrative expenses to decrease as a percentage of revenue over the long term.

Other (Expense) Income

Other (expense) income consists primarily of interest expense on the Notes and other long-term debt, gains or losses on foreign currency transactions, and interest income earned on our cash, cash equivalents, and investments.

Results of Operations

The following tables set forth selected unaudited condensed consolidated statements of operations data and such data as a percentage of revenue for each of the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
				(Restated)						(Restated)
	(in thousands)
Revenue	$	82,620		$	61,553		$	228,099		$	164,769
Cost of revenue(1)(2)	17,825			15,347			52,336			46,166
Gross profit	64,795			46,206			175,763			118,603
Operating expenses(1)(2):
Sales and marketing	55,727			42,632			149,852			113,956
Technology and content	27,799			18,137			72,829			49,858
General and administrative	20,817			19,818			63,591			57,112
Total operating expenses	104,343			80,587			286,272			220,926
Loss from operations	(39,548		)	(34,381		)	(110,509		)	(102,323		)
Other (expense) income:
Interest expense	(7,778		)	(342		)	(17,499		)	(6,476		)
Loss on debt extinguishment	(950		)	—			(950		)	(4,085		)
Other income, net	2,878			654			8,532			689
Loss before income taxes	(45,398		)	(34,069		)	(120,426		)	(112,195		)
Provision for income taxes	(404		)	(254		)	(701		)	(506		)
Net loss	$	(45,802	)	$	(34,323	)	$	(121,127	)	$	(112,701	)

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(1) Includes equity-based compensation as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
			(Restated)				(Restated)
	(in thousands)
Cost of revenue	$	138	$	56	$	355	$	145
Sales and marketing	8,739		5,612		22,967		13,507
Technology and content	6,666		3,700		15,513		8,652
General and administrative	9,114		11,262		28,822		30,678
Total equity-based compensation	$	24,657	$	20,630	$	67,657	$	52,982

(2) Includes amortization of acquired intangible assets as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(in thousands)
Cost of revenue	$	1,209	$	880	$	2,436	$	6,803
Sales and marketing	50		—		79		389
Technology and content	176		176		529		529
Total amortization of acquired intangible assets	$	1,435	$	1,056	$	3,044	$	7,721

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
			(Restated)				(Restated)
Revenue	100	%	100	%	100	%	100	%
Cost of revenue	22		25		23		28
Gross profit	78		75		77		72
Operating expenses:
Sales and marketing	67		69		66		69
Technology and content	34		29		32		30
General and administrative	25		32		28		35
Total operating expenses	126		130		126		134
Loss from operations	(48	)	(55	)	(49	)	(62	)
Other (expense) income:
Interest expense	(9	)	(1	)	(8	)	(4	)
Loss on debt extinguishment	(1	)	—		—		(2	)
Other income (expense), net	3		1		4		—
Loss before income taxes	(55	)	(55	)	(53	)	(68	)
Provision for income taxes	—		—		—		—
Net loss	(55	)%	(55	)%	(53	)%	(68	)%

Comparison of the Three Months Ended September 30, 2019 and 2018

Revenue

	Three Months Ended September 30,				Change
	2019		2018		Amount		%
	(dollars in thousands)
Revenue	$	82,620	$	61,553	$	21,067	34	%

Revenue was $82.6 million for the three months ended September 30, 2019, compared to $61.6 million for the three months ended September 30, 2018, anincrease of $21.1 million, or 34%. The increase in revenue was primarily due to a $20.9 million, or 41%, increase in revenue from business customers, driven by a net increase of 1,562 business customers from 16,185 business

47

customers as of September 30, 2018 to 17,747 business customers as of September 30, 2019, as well as increased sales to our existing business customers. In addition, there was an increase of $0.2 million in revenue from individual customers.

Cost of Revenue and Gross Profit

	Three Months Ended September 30,				Change
	2019		2018		Amount		%
			(Restated)
	(dollars in thousands)
Cost of revenue	$	17,825	$	15,347	$	2,478	16	%
Gross profit	64,795		46,206		18,589		40	%

Cost of revenue was $17.8 million for the three months ended September 30, 2019, compared to $15.3 million for the three months ended September 30, 2018, anincrease of $2.5 million, or 16%. The increase in cost of revenue was primarily due to an increase of $2.0 million in author fees and an increase of $0.5 million in depreciation of capitalized software development costs.

Gross profit was $64.8 million for the three months ended September 30, 2019, compared to $46.2 million for the three months ended September 30, 2018, anincrease of $18.6 million, or 40%. The increase in gross profit was the result of the increase in our revenue during the three months ended September 30, 2019. Gross margin increased from 75% for the three months ended September 30, 2018 to 78% for the three months ended September 30, 2019 due to a decrease in amortization of acquired intangible assets and a decrease in author fees as a percentage of revenue.

Operating Expenses

	Three Months Ended September 30,				Change
	2019		2018		Amount		%
			(Restated)
	(dollars in thousands)
Sales and marketing	$	55,727	$	42,632	$	13,095	31	%
Technology and content	27,799		18,137		9,662		53	%
General and administrative	20,817		19,818		999		5	%
Total operating expenses	$	104,343	$	80,587	$	23,756	29	%

Sales and Marketing

Sales and marketing expenses were $55.7 million for the three months ended September 30, 2019, compared to $42.6 million for the three months ended September 30, 2018, anincrease of $13.1 million, or 31%. The increase was primarily due to an increase of $8.0 million in employee compensation costs, including $3.1 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $3.4 million related to allocated overhead costs primarily driven by our headcount growth.

Technology and Content

Technology and content expenses were $27.8 million for the three months ended September 30, 2019, compared to $18.1 million for the three months ended September 30, 2018, anincrease of $9.7 million, or 53%. The increase was primarily due to an increase of $8.8 million in employee compensation costs, including $3.0 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $1.1 million related to allocated overhead costs primarily driven by our headcount growth. These increases were partially offset by a $0.4 million increase in capitalized software development costs.

General and Administrative

General and administrative expenses were $20.8 million for the three months ended September 30, 2019, compared to $19.8 million for the three months ended September 30, 2018, anincrease of $1.0 million, or 5%. The increase was primarily due to an increase of $0.7 million related to professional services driven largely by the additional costs of operating as a public company, an increase of $0.4 million due to travel expenses related to additional headcount, and an increase of $0.3 million related to allocated overhead costs primarily driven by our headcount growth.

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Other (Expense) Income

	Three Months Ended September 30,						Change
	2019			2018			Amount			%
	(dollars in thousands)
Interest expense	$	(7,778	)	$	(342	)	$	(7,436	)	2,174	%
Loss on debt extinguishment	(950		)	—			(950		)	NM
Other income, net	2,878			654			2,224			340	%

Interest expense increased primarily as a result of the increase in contractual interest expense and amortization of debt discount and issuance costs related to the Notes issued in March 2019. We repurchased $40.0 million in aggregate principal of the Notes in September 2019, resulting in the loss on debt extinguishment.

Other income, net increased primarily as a result of the additional interest income earned from our increased cash, cash equivalents, and investments as a result of net proceeds from our IPO and the issuance of the Notes.

Comparison of the Nine Months Ended September 30, 2019 and 2018

Revenue

	Nine Months Ended September 30,				Change
	2019		2018		Amount		%
	(dollars in thousands)
Revenue	$	228,099	$	164,769	$	63,330	38	%

Revenue was $228.1 million for the nine months ended September 30, 2019, compared to $164.8 million for the nine months ended September 30, 2018, anincrease of $63.3 million, or 38%. The increase in revenue was primarily due to a $62.2 million, or 47%, increase in revenue from business customers, driven by a net increase of 1,562 business customers from 16,185 business customers as of September 30, 2018 to 17,747 business customers as of September 30, 2019, as well as increased sales to our existing business customers. In addition, there was an increase of $1.1 million in revenue from individual customers.

Cost of Revenue and Gross Profit

	Nine Months Ended September 30,				Change
	2019		2018		Amount		%
			(Restated)
	(dollars in thousands)
Cost of revenue	$	52,336	$	46,166	$	6,170	13	%
Gross profit	175,763		118,603		57,160		48	%

Cost of revenue was $52.3 million for the nine months ended September 30, 2019, compared to $46.2 million for the nine months ended September 30, 2018, anincrease of $6.2 million, or 13%. The increase in cost of revenue was primarily due to an increase of $7.8 million in author fees, an increase of $1.1 million in depreciation of capitalized software development costs, and an increase of $1.0 million in employee compensation costs, including $0.2 million of equity-based compensation, as we added headcount to support our growth. These increases were partially offset by a decrease of $4.0 million in amortization of acquired intangible assets and course creation costs.

Gross profit was $175.8 million for the nine months ended September 30, 2019, compared to $118.6 million for the nine months ended September 30, 2018, anincrease of $57.2 million, or 48%. The increase in gross profit was the result of the increase in our revenue during the nine months ended September 30, 2019. Gross margin increased from 72% for the nine months ended September 30, 2018 to 77% for the nine months ended September 30, 2019 due to a decrease in amortization of acquired intangible assets and a decrease in author fees as a percentage of revenue.

49

Operating Expenses

	Nine Months Ended September 30,				Change
	2019		2018		Amount		%
			(Restated)
	(dollars in thousands)
Sales and marketing	$	149,852	$	113,956	$	35,896	31	%
Technology and content	72,829		49,858		22,971		46	%
General and administrative	63,591		57,112		6,479		11	%
Total operating expenses	$	286,272	$	220,926	$	65,346	30	%

Sales and Marketing

Sales and marketing expenses were $149.9 million for the nine months ended September 30, 2019, compared to $114.0 million for the nine months ended September 30, 2018, anincrease of $35.9 million, or 31%. The increase was primarily due to an increase of $28.1 million in employee compensation costs, including $9.5 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $5.4 million related to allocated overhead costs primarily driven by our headcount growth, and an increase of $2.4 million due to additional travel expenses related to additional headcount.

Technology and Content

Technology and content expenses were $72.8 million for nine months ended September 30, 2019, compared to $49.9 million for the nine months ended September 30, 2018, anincrease of $23.0 million, or 46%. The increase was primarily due to an increase of $21.8 million in employee compensation costs, including $6.9 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $1.9 million related to allocated overhead costs primarily driven by our headcount growth. These increases were partially offset by a $1.5 million increase in capitalized software development costs.

General and Administrative

General and administrative expenses were $63.6 million for the nine months ended September 30, 2019, compared to $57.1 million for the nine months ended September 30, 2018, anincrease of $6.5 million, or 11%. The increase was primarily due to an increase of $3.1 million in employee compensation costs, as we added headcount to support our growth. In addition, there was an increase of $1.5 million related to professional services primarily driven by the additional costs of operating as a public company, an increase of $0.9 million related to costs associated with a secondary offering, an increase of $0.8 million related to allocated overhead costs primarily driven by our headcount growth, an increase of $0.8 million related to costs associated with our acquisition of GitPrime, and an increase of $0.8 million due to additional travel expenses related to additional headcount. These increases were partially offset by a decrease of $1.9 million in equity-based compensation related to a cumulative catch-up adjustment recorded upon completion of the IPO as the vesting condition for certain RSUs satisfied by the expiration of the lock-up period following the IPO became probable.

Other (Expense) Income

	Nine Months Ended September 30,						Change
	2019			2018			Amount			%
	(dollars in thousands)
Interest expense	$	(17,499	)	$	(6,476	)	$	(11,023	)	170	%
Loss on debt extinguishment	(950		)	(4,085		)	3,135			(77	)%
Other income, net	8,532			689			7,843			1,138	%

Interest expense increased primarily as a result of the increase in contractual interest expense and amortization of debt discount and issuance costs related to the Notes issued in March 2019. We repurchased $40.0 million in aggregate principal of the Notes in September 2019, resulting in the loss on debt extinguishment. The interest expense and loss on debt extinguishment during the nine months ended September 30, 2018 was the result of our long-term debt, which we repaid in full in May 2018 with the IPO proceeds.

Other income, net increased primarily as a result of the additional interest income earned from our increased cash, cash equivalents and investments as a result of net proceeds from our IPO and the issuance of the Notes.

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Non-GAAP Financial Measures

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(dollars in thousands)
Non-GAAP gross profit	$	66,144		$	47,142		$	178,572		$	125,551
Non-GAAP gross margin	80		%	77		%	78		%	76		%
Non-GAAP operating loss	$	(13,123	)	$	(12,695	)	$	(34,949	)	$	(41,620	)
Free cash flow	$	(6,581	)	$	(909	)	$	(15,253	)	$	(23,204	)

Non-GAAP Gross Profit and Non-GAAP Gross Margin

Non-GAAP gross profit is a non-GAAP financial measure that we define as gross profit plus equity-based compensation, amortization of acquired intangible assets, and employer payroll taxes on employee stock transactions. We define non-GAAP gross margin as our non-GAAP gross profit divided by our revenue. We believe non-GAAP gross profit and non-GAAP gross margin are useful to investors as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall profitability or operating performance.

See the section below titled “—Reconciliation of Non-GAAP Financial Measures” for information regarding the limitations of using our non-GAAP gross profit and non-GAAP gross margin as financial measures and for a reconciliation of our non-GAAP gross profit to gross profit, the most directly comparable financial measure calculated in accordance with GAAP.

Non-GAAP Operating Loss

Non-GAAP operating loss is a non-GAAP financial measure that we define as loss from operations plus equity-based compensation, amortization of acquired intangible assets, employer payroll taxes on employee stock transactions, secondary offering costs, and acquisition-related costs. We believe non-GAAP operating loss provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance. We believe non-GAAP operating loss is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.

See the section below titled “—Reconciliation of Non-GAAP Financial Measures” for information regarding the limitations of using our non-GAAP operating loss as a financial measure and for a reconciliation of our non-GAAP operating loss to loss from operations, the most directly comparable financial measure calculated in accordance with GAAP.

Free Cash Flow

We define free cash flow as net cash used in operating activities less purchases of property and equipment and purchases of our content library and other intangible assets. We consider free cash flow to be an important measure because it measures the amount of cash we spend or generate and reflects changes in our working capital.

See the section below titled “—Reconciliation of Non-GAAP Financial Measures” for information regarding the limitations of using free cash flow as a financial measure and for a reconciliation of free cash flow to net cash used in operations, the most directly comparable financial measure calculated in accordance with GAAP.

Reconciliation of Non-GAAP Financial Measures

We use non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, and free cash flow in conjunction with traditional GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, and free cash flow should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of non-GAAP gross profit, non-GAAP operating loss, and free cash flow to the related GAAP financial measures, gross profit, loss from operations, and net cash used in operating activities, respectively. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, and free cash flow in conjunction with their respective related GAAP financial measures.

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The following table provides a reconciliation of gross profit to non-GAAP gross profit:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(dollars in thousands)
Gross profit, as restated (2018)	$	64,795		$	46,206		$	175,763		$	118,603
Equity-based compensation, as restated (2018)	138			56			355			145
Amortization of acquired intangible assets	1,209			880			2,436			6,803
Employer payroll taxes on employee stock transactions	2			—			18			—
Non-GAAP gross profit	$	66,144		$	47,142		$	178,572		$	125,551
Gross margin	78		%	75		%	77		%	72		%
Non-GAAP gross margin	80		%	77		%	78		%	76		%

The following table provides a reconciliation of loss from operations to non-GAAP operating loss:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(in thousands)
Loss from operations, as restated (2018)	$	(39,548	)	$	(34,381	)	$	(110,509	)	$	(102,323	)
Equity-based compensation, as restated (2018)	24,657			20,630			67,657			52,982
Amortization of acquired intangible assets	1,435			1,056			3,044			7,721
Employer payroll taxes on employee stock transactions	333			—			3,106			—
Secondary offering costs	—			—			918			—
Acquisition-related costs	—			—			835			—
Non-GAAP operating loss	$	(13,123	)	$	(12,695	)	$	(34,949	)	$	(41,620	)

The following table provides a reconciliation of net cash provided by (used in) operating activities to free cash flow:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(in thousands)
Net cash (used in) provided by operating activities	$	(2,171	)	$	1,934		$	(3,812	)	$	(14,283	)
Less: Purchases of property and equipment	(3,029		)	(2,002		)	(7,619		)	(6,576		)
Less: Purchases of content library	(1,381		)	(841		)	(3,822		)	(2,345		)
Free cash flow	$	(6,581	)	$	(909	)	$	(15,253	)	$	(23,204	)

Liquidity and Capital Resources

As of September 30, 2019, our principal sources of liquidity were cash, cash equivalents, restricted cash, and investments totaling $561.4 million, which were held for working capital purposes. Our cash equivalents and investments are comprised primarily of highly liquid investments in money market funds, U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities. Since our inception, we have financed our operations primarily through sales of equity securities, long-term debt facilities, and our net cash provided by operating activities. On May 9, 2019, we completed the acquisition of GitPrime, a leading provider of developer productivity software for approximately $163.8 million in cash, excluding cash acquired, working capital and transactions cost adjustments. In September 2019, we repurchased $40.0 million in aggregate principal of our Notes for approximately $35.0 million in cash.

We believe our existing cash, cash equivalents, restricted cash, and investments, as well as our projected cash flows from operations, will be sufficient to meet our projected operating requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our pace of growth, subscription renewal activity, the timing and extent of spend to support the expansion of sales and marketing activities, technology and content efforts, the continuing market acceptance of our platform, and future acquisitions. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected.

52

In connection with the IPO and our UP-C structure, we entered into the TRA with members of Pluralsight Holdings who did not exchange their LLC Units of Pluralsight Holdings in the Reorganization Transactions, or the TRA Members. As a result of the TRA, we will be obligated to pass along certain tax benefits and cash flows by making future payments to the TRA Members. Although the actual timing and amount of any payments we make to the TRA Members under the TRA will vary, such payments may be significant. Any payments we make to TRA Members under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us and, to the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid by us.

The following table shows cash flows for the nine months ended September 30, 2019 and 2018:

	Nine Months Ended September 30,
	2019			2018
				(Restated)
	(in thousands)
Net cash used in operating activities	$	(3,812	)	$	(14,283	)
Net cash used in investing activities	(586,903		)	(8,921		)
Net cash provided by financing activities	528,372			204,242
Effect of exchange rate change on cash, cash equivalents, and restricted cash	(109		)	(136		)
Net (decrease) increase in cash, cash equivalents, and restricted cash	$	(62,452	)	$	180,902

Operating Activities

Cash used in operating activities for the nine months ended September 30, 2019 of $3.8 million was primarily due to a net loss of $121.1 million, partially offset by equity-based compensation of $67.7 million, amortization of deferred contract acquisition costs of $17.3 million amortization of debt discount and issuance costs of $15.1 million, a favorable change in operating assets and liabilities of $6.9 million, depreciation of property and equipment of $6.5 million, and amortization of acquired intangible assets of $3.0 million. The net change in operating assets and liabilities was primarily due to an increase in the deferred revenue balance of $22.5 million and an increase in accrued expenses and other liabilities of $6.1 million, partially offset by an increase in deferred contract acquisition costs of $18.7 million and an increase in prepaid expenses and other assets of $3.7 million.

Cash used in operating activities for the nine months ended September 30, 2018 of $14.3 million was primarily due to a net loss of $112.7 million, partially offset by equity-based compensation of $53.0 million, a favorable change in operating assets and liabilities of $24.1 million, amortization of acquired intangible assets of $7.7 million, amortization of course creation costs of $1.4 million, and depreciation of property and equipment of $6.3 million. The net change in operating assets and liabilities was primarily due to an increase in the deferred revenue balance of $28.2 million and an increase in accrued expenses and other liabilities of $6.9 million, partially offset by an increase in accounts receivable of $10.4 million and an increase in prepaid expenses of $3.0 million.

Investing Activities

Cash used in investing activities for the nine months ended September 30, 2019 of $586.9 million was primarily due to purchases of investments of $529.7 million, the purchase of a business of $163.8 million, purchases of property and equipment of $7.6 million, and purchases of our content library of $3.8 million, partially offset by proceeds from maturities of short-term investments of $113.0 million and proceeds from sales of investments of $5.0 million.

Cash used in investing activities for the nine months ended September 30, 2018 of $8.9 million related to purchases of property and equipment of $6.6 million and purchases of our content library of $2.3 million.

Financing Activities

Cash provided by financing activities for the nine months ended September 30, 2019 of $528.4 million was due to net proceeds from the issuance of the Notes of $616.7 million, the proceeds from the issuance of common stock from employee equity plans of $14.9 million and the proceeds from terminations of Capped Calls related to repurchases of convertible senior notes of $1.3 million, partially offset by the purchase of the Capped Calls of $69.4 million and the repurchases of the Notes of $35.0 million.

Cash provided by financing activities for the nine months ended September 30, 2018 of $204.2 million was due to net proceeds from the IPO of $332.1 million and borrowings of long-term debt of $20.0 million, partially offset by repayments of long-term debt of $137.7 million, payments of offering costs related to the IPO of $7.1 million, and payments of debt extinguishment costs of $2.2 million.

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Commitments and Contractual Obligations

Outside of our 0.375% convertible senior notes due in 2024, and routine transactions made in the ordinary course of business, there have been no material changes to the contractual obligations as disclosed in our Annual Report on Form 10-K/A. Refer to "Note 11—Convertible Senior Notes and Other Long-Term Debt" and "Note 12—Commitments and Contingencies" of our unaudited condensed consolidating financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information regarding our commitments and contractual obligations.

Off-Balance Sheet Arrangements

As of September 30, 2019, and December 31, 2019, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Critical accounting policies and estimates are those that we consider critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

The Company's significant accounting policies are discussed in "Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements" in our Annual Report on Form 10-K/A. There have been no significant changes to these policies for the three months ended September 30, 2019, except as noted in "Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements" of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

JOBS Act Accounting Election

We currently meet the definition of an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, which permits us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies.

On the last business day of our second quarter in fiscal year 2019, the aggregate worldwide market value of shares of common stock held by our non-affiliate stockholders exceeded $700 million. As a result, as of December 31, 2019, we will be considered a large accelerated filer as defined in Rule 12b-2 under the Exchange Act, and we will cease to be an emerging growth company as defined in the JOBS Act. We will no longer be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and our independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting.

Recent Accounting Pronouncements

See "Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements" of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding recently issued accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We have operations in the United States and internationally, and we are exposed to market risk in the ordinary course of business. Our market risk is primarily a result of fluctuations in foreign currency exchange rates and variable interest rates.

Foreign Currency Exchange Risk

Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British Pound Sterling and the Euro. Due to the relative size of our international operations to date, our foreign currency exposure has been fairly limited and thus we have not instituted a hedging program. We expect our international operations to continue to grow in the near term and we are continually monitoring our foreign currency exposure to determine when we should begin a hedging program. Today, our international contracts are mostly denominated in U.S. dollars, while our international operating expenses are often denominated in local currencies. In the future, we plan to begin denominating certain

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of our international contracts in local currencies, and over time, an increasing portion of our international contracts may be denominated in local currencies. Additionally, as we expand our international operations a larger portion of our operating expenses will be denominated in local currencies. Therefore, fluctuations in the value of the U.S. dollar and foreign currencies may affect our results of operations when translated into U.S. dollars. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical condensed consolidated financial statements for any of the periods presented.

Interest Rate Sensitivity

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. As of September 30, 2019, we had cash, cash equivalents, restricted cash, and investments of $561.4 million, which consisted primarily of bank deposits and money market funds. Such interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations of interest income have not been significant.

In March 2019, we offered and issued $633.5 million aggregate principal amount of Notes, and as of September 30, 2019, we had $593.5 million outstanding. The Notes have a fixed annual interest rate of 0.375%, and, therefore, we do not have economic interest rate exposure on the Notes. However, the values of the Notes are exposed to interest rate risk. Generally, the fair value of our fixed interest rate Notes will increase as interest rates fall and decrease as interest rates rise. We carry the Notes as face value less unamortized discount on our balance, and we present the fair value for required disclosure purposes only.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a–15(e) and Rule 15d–15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2019. Based on the evaluation of our disclosure controls and procedures as of September 30, 2019, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, due to the material weakness described below, our disclosure controls and procedures were not effective.

Previously Reported Material Weakness in Internal Control Over Financial Reporting

As reported in our 2018 Form 10-K/A we did not maintain effective internal control over financial reporting as of December 31, 2018, as a result of a material weakness related to accounting for non-standard equity-based compensation awards which continues to exist as of September 30, 2019. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material weakness of our annual or interim financial statements will not be prevented or detected in a timely manner.

Status of Remediation Plan

During the quarter ended September 30, 2019, we continued to operate additional control procedures designed and implemented in prior quarters to ensure equity-based compensation awards are accounted for in accordance with GAAP. Although we have designed and implemented these additional control procedures since the second quarter of 2019, the controls have not been in place and operated for a sufficient period to demonstrate the material weakness has been remediated.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation

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of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are, from time to time, subject to legal proceedings and claims arising from the normal course of business activities, and an unfavorable resolution of any of these matters could materially affect our future business, results of operations, financial condition, and cash flows.

The information required by this item is provided in Note 12 to our financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Future litigation may be necessary, among other things, to defend ourselves or our users by determining the scope, enforceability, and validity of third-party proprietary rights or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 1A. Risk Factors

For a discussion of potential risks and uncertainties, see the information in the section titled "Risk Factors" in Amendment No. 1 to our Annual Report on Form 10-K/A filed with the SEC on June 27, 2019, as supplemented by the section title "Risk Factors" in our Quarterly Reports on Form 10-Q filed with the SEC on May 1, 2019 and July 31, 2019. The following risk factors supplement and should be read in conjunction with those risk factors referenced above.

We are engaged, in legal proceedings that could cause us to incur unforeseen expenses and could occupy a significant amount of our management's time and attention.

From time to time, we are subject to litigation or claims that could negatively affect our business operations and financial condition, including securities class actions, which are typically expensive to defend. Litigation disputes could cause us to incur unforeseen expenses and otherwise occupy a significant amount of management’s time and attention, which could negatively affect our business operations and financial condition.

Our stock price has been volatile and may continue to be volatile, and it may decline regardless of our operating performance.

Prior to our IPO, there was no public market for shares of our Class A common stock. On May 17, 2018, we sold shares of our Class A common stock to the public at $15.00 per share. From May 17, 2018, the date that shares of our Class A common stock began trading on Nasdaq, through September 30, 2019, the market price for our Class A common stock has ranged from $14.84 per share to $38.37 per share. The market price of our Class A common stock may continue to fluctuate significantly in response to numerous factors, many of which are beyond our control, including, among others:

• actual or anticipated fluctuations in our revenue and other results of operations, including as a result of the addition or loss of any number of customers;

• announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

• the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;

• failure of securities analysts to initiate or maintain coverage of us, changes in ratings and financial estimates and the publication of other news by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

• changes in operating performance and stock market valuations of SaaS-based software or other technology companies, or those in our industry in particular;

• the size of our public float;

• price and volume fluctuations in the trading of our Class A common stock and in the overall stock market, including as a result of trends in the economy as a whole;

• new laws or regulations or new interpretations of existing laws or regulations applicable to our business or industry, including data privacy, data protection, and information security;

• lawsuits threatened or filed against us for claims relating to intellectual property, employment issues, or otherwise;

• changes in our board of directors or management;

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• short sales, hedging, and other derivative transactions involving our Class A common stock;

• sales of large blocks of our Class A common stock including sales by our executive officers, directors, and significant stockholders; and

• other events or factors, including changes in general economic, industry, and market conditions, and trends, as well as any natural disasters, which may affect our operations.

Following a period of volatility in the market price of our securities, we became the subject of securities litigation. We may experience more such litigation following future periods of volatility. This type of litigation may result in substantial costs and a diversion of management’s attention and resources, which could adversely affect our business and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Use of Proceeds from Convertible Senior Notes

In March 2019, we completed our private placement of $633.5 million aggregate principal of Notes, including the exercise in full by the initial purchasers of the Notes of their option to purchase up to an additional $83.5 million principal amount of Notes. The Notes are our senior unsecured obligations. The Notes were issued pursuant to an Indenture, dated March 11, 2019, between us and U.S. Bank National Association as trustee.

We received net proceeds of $616.7 million, after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $69.4 million of the net proceeds to pay the cost of the capped call transactions related thereto. We intend to use the remainder of the net proceeds for working capital and other general corporate purposes. We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business. On May 9, 2019, we completed the acquisition of GitPrime, a leading provider of developer productivity software for approximately $163.8 million in cash, excluding cash acquired, working capital and transactions cost adjustments. On September 6 and 9, 2019, we repurchased a total of $40.0 million in aggregate principal amount of our Notes for approximately $35.0 million in cash.

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Item 6. Exhibits

		Incorporated by Reference				Filed or Furnished Herewith
Exhibit Number	Description	Form	File No.	Exhibit Number	Filing Date with SEC
10.1	Separation Agreement, dated August 1, 2019, between Pluralsight, Inc. and Joseph DiBartolomeo.					X
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1*	Certifications of the 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*	Certifications of the 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					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

*The certifications attached as Exhibit 32.1 and 32.2 accompanying this Quarterly Report on Form 10-Q, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Pluralsight, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PLURALSIGHT,INC.
	By:	/s/ Aaron Skonnard
October 30, 2019		Aaron Skonnard Chief Executive Officer

	PLURALSIGHT,INC.
	By:	/s/ James Budge
October 30, 2019		James Budge Chief Financial Officer

EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (the “Agreement”) is made and entered into by and between Pluralsight, LLC, a Nevada limited liability company (the “Company”), and Joseph DiBartolomeo, an individual, residing in New Jersey (“Employee”).

RECITALS

A.Employee is Chief Revenue Officer for the Company and is employed as an at-will employee.

B.Employee executed the Confidentiality, Intellectual Property Assignment, and Non-Solicitation Agreement on or about June 9, 2016 and an Addendum to the Confidentiality, Intellectual Property Assignment, and Non-Solicitation Agreement on September 15, 2017 (collectively, the “CINSA”), which are attached as Exhibit A to this Agreement.

C.Employee executed the Executive Employment Agreement on or about September 15, 2017 (the “Employment Agreement”), which is attached as Exhibit B to this Agreement.

D.The CRO Compensation Plan for 2019 (the “Compensation Plan”) sets forth Employee’s compensation package.

E.Employee executed an Incentive Unit Offer Letter on or about September 30, 2016 and an Amendment No. 1 to that Incentive Unit Offer Letter on or about September 30, 2016 both of which are subject to the Pluralsight Holdings, LLC 2013 Incentive Unit Plan (the “RCU Agreements”); two Restricted Stock Unit Agreements on or about April 20, 2018, which is subject to the 2017 Equity Incentive Plan (the “RSU Agreements”), and an option agreement on or about May 17, 2018, which is subject to 2018 Equity Incentive Plan (collectively, the “Equity Agreements”).

F.The parties have determined to terminate their employment relationship.

G.Employee and the Company desire to document the termination of Employee’s employment relationship and fully resolve all employment and other related matters between them, as well as all claims and potential claims or disputes.

AGREEMENT

NOW, THEREFORE, in consideration of the covenants and agreements set forth herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto covenant and agree as follows, effective as of the Effective Date:

1. Employment Relationship.

a. Compensation. Employee shall be entitled to continued payment of the Base Salary, as that term is defined in the Employment Agreement and Compensation Plan, through the first day of Garden Leave, as that term is defined in Section 1(b), and any commissions earned through July 31, 2019, as commissions are defined in the 2019 Incentive Compensation Plan, the Employment Agreement, and/or the Compensation Plan. Employee agrees that he shall not be eligible for any (i) incentive compensation pursuant to the 2019 Incentive Compensation Plan or the Compensation Plan after July 31, 2019 or (ii) bonuses or accelerators pursuant to the Employment Agreement or the Compensation Plan after July 31, 2019.

b. Garden Leave. Contingent upon Employee signing this Agreement and not timely revoking, and subject to Sections 9.2 and 9.2.4 of the Employment Agreement, the Company agrees:

i. Beginning on August 2, 2019, Employee shall be placed on paid administrative leave (“Garden Leave”) until the Separation Date, as defined in Section 1(c). During Garden Leave, Employee shall perform such employment duties as may be required by the Company from time to time, which may also include, but not be limited to, altering and/or removing Employee from his current active duties and responsibilities; excluding him from the Company’s workplaces; limiting and/or prohibiting Employee’s contact and communications with the Company’s customers, suppliers, vendors, officers, board members, other employees or representatives; and limiting or terminating Employee’s access to the Company’s computer systems, programs, and email. At all times during Garden Leave, Employee shall make himself available to and shall assist the Company (as the Company may require) in transitioning his role and responsibilities to others and to otherwise answer questions from the Company.

ii. During Garden Leave, the Company will continue to pay Employee’s Base Salary (the “Payment”) less applicable withholdings, in accordance with the Company’s regular payroll practices, and Employee will continue to be eligible to participate in the Company’s employee benefit plans in accordance with their terms. The Company will deposit the Payment into to the bank account where the Company has been transmitting Employee’s pay immediately prior to Garden Leave. It shall be the responsibility of Employee to notify the Company of any changes to Employee’s direct deposit banking institution in accordance with Company policy. Employee will not be eligible for or accrue rights to any commissions, bonuses, and/or accelerators during Garden Leave except as provided in Section 1(a).

iii. Employee agrees and acknowledges that, except as provided in Section 2, he shall forfeit all right, title, and interest in any unvested equity, including the equity granted in the Equity Agreements. All vesting of such equity awards shall terminate at the end of the day immediately preceding the first day of Garden Leave. Furthermore, Employee agrees and acknowledges that he shall no longer be eligible to participate in the Company’s Employee Stock Purchase Plan (“ESPP”). Any amounts contributed by Employee to ESPP during the purchase period that was open immediately prior to the start of Garden Leave will be returned to Employee. Employee understands that no shares will be purchased by the Company on his behalf at the end of the purchase period.

iv. While on Garden Leave, Employee must continue to adhere to the Company’s policies and procedures, including without limitation the Insider Trading Policy, and the terms and conditions of the Employment Agreement and the CINSA that are designed to survive termination of the employment relationship. The parties acknowledge and agree that all restrictive covenants contained in the Employment Agreement or the CINSA intended by their terms to begin upon termination of employment, shall begin to run on the Separation Date.

v. The Company reserves the right, in its sole discretion, to terminate Employee’s employment during Garden Leave for any reason not prohibited by law and without prior notice. Notwithstanding and subject to Section 2 of this Agreement, Employee shall continue to receive the Payment through July 31, 2020.

vi. The parties intend that the exceptions to 29 U.S.C. § 409A for severance pay and the short-term deferral rule apply, provided however that, in the event the Severance Payment must be deferred under § 409A, Section 9.2.2 of the Employment Agreement shall control the timing of the Severance Payment.

c. Separation Date.

i. Employee’s employment with the Company and any of its affiliates shall terminate effective the earlier of (1) July 31, 2020 or (2) the date Employee’s employment with the Company terminates (the “Separation Date”). For the purposes of this Agreement, and during Garden Leave, Employee shall be permitted to act in an advisory or consulting role for another company and/or to serve on the board of directors of another company without triggering a termination of employment from the Company so long as such advisory, consulting, or board role: (1) does not violate (a) Sections 7, 8, or 9 of this Agreement, (b) any of Employee’s restrictive covenants or (c) other duties to the Company imposed by law; (2) does not materially interfere with his ability to perform any of the job duties the Company may require of him during Garden Leave; and (3) requires less than 20 hours per week.

ii. Subject to the reductions provided for in this Section 1(c)(ii), after the Separation Date, Employee shall continue to receive the Payment through July 31, 2020. In the event Employee secures employment or becomes an independent contractor and works 21 or more hours per week, then the Payment made to Employee shall be reduced in accordance with Section 9.2.4 of the Employment Agreement. Furthermore, after the Separation Date, and in accordance with federal law and the applicable benefit plan, the Company shall timely provide Employee with all necessary and required documents and information to allow Employee to elect continuation coverage as provided for in the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Should Employee elect and qualify for continuation coverage pursuant to COBRA, the Company shall make an additional payment to Employee of $1,395.64 per month to assist with Employee’s transition to a new benefits provider (the “Benefits Payment”). The Company shall pay the Benefits Payment until the earliest of (1) July 31, 2020, (2) the applicable Company plan terminates or discontinues, or (3) Employee obtains other employment and thereby meets the requirements for ceasing coverage under 29 U.S.C. § 1162(2)(D).

iii. Employee shall resign from all positions with the Company, including any of its parent, subsidiary, or affiliate companies, effective as of the date Garden Leave commences.

d.Adequate Consideration. The Parties agree that this Agreement is supported by adequate consideration based on the mutual covenants and promises set forth herein. Moreover, Employee acknowledges that the Severance Payment provided pursuant to this Agreement is provided solely as consideration for the mutual promises set forth in this Agreement, and does not constitute payments or benefits to which Employee would otherwise be entitled under applicable law or Company policies.

e.No Other Payments. Except as provided herein, Employee acknowledges that no other compensation, wages, payment, bonus, accelerator, reimbursement, equity awards, vesting or benefit of any nature whatsoever is due and owing by the Company to Employee. Employee represents that he has previously reported all hours worked for the Company in strict accordance with Company policy and that he is not owed any salary, reimbursement, or compensation for any hours worked. Employee further represents that, as of the Effective Date, he has previously been reimbursed for all expenses and costs for which the company is or may be responsible.

f.Reporting.Employee acknowledges and agrees that as a public company, the Company, including its parent company, may have certain reporting or disclosure obligations relating to the parties, Employee’s title or status, or the fulfillment of the parties’ respective rights and obligations as provided for in this Agreement or pursuant to Employee’s employment with the Company. Employee acknowledges and agrees that the Company shall make whatever report or disclosure it believes is required by law or is reasonably prudent. Employee further acknowledges and agrees that the Company makes no representation or warranty regarding the form, substance, or timing of any such report or disclosure, or the number of reports or disclosures it may decide to make.

2. Restricted Equity. Contingent upon Employee signing this Agreement and not timely revoking, the Company agrees to permit 171 Restricted Stock Units to vest on August 21, 2019 and to accelerate the vesting of certain awards of the Employee’s Equity according to this section 2:

a. On the Effective Date, 65,462 Restricted Common Units - Class B shall vest;

b. Subject to Employee’s ongoing obligations under this Agreement, the CINSA, and the Employment Agreement, six (6) months after the Effective Date, 32,731 Restricted Common Units - Class B shall vest; and

c. Subject to Employee’s ongoing obligations under this Agreement, the CINSA, and the Employment Agreement, on July 31, 2020, 32,731 Restricted Common Units - Class B shall vest.

Upon the Effective Date, Employee’s rights to the Equity described in Section 2(a) shall not be restricted except as set forth in the Company’s Insider Trading Policy and according to applicable law and regulations. Employee acknowledges and agrees that, in the event he breaches this Agreement, the CINSA, or the Employment Agreement, he shall forfeit any Equity that has yet to vest in accordance with the timetables set forth in this Section 2. Furthermore, Employee acknowledges and agrees that, except as provided in this Section 2, he shall forfeit all right, title, and interest in any and all unvested equity, including Restricted Common Units, Options, and/or Restricted Stock Units. Except as amended hereby, Employee’s equity awards shall continue to be subject to the Equity Agreements.

3. Release of Claims by Employee.

a.In exchange for the consideration provided in this Agreement, including without limitation the Severance Payment, Employee, for himself and his heirs, executors, representatives, agents, assigns, and all persons and entities claiming by, through, or under him, hereby irrevocably and unconditionally fully and forever waives, releases, and discharges the Company, including the Company’s parents, subsidiaries, affiliates, predecessors, successors, and assigns, and each of its and their respective officers, directors, employees, shareholders, and partners, in their corporate and individual capacities (both individually and collectively, the “Released Parties”), from any and all claims, liabilities, charges, obligations, demands, grievances, lawsuits, causes of action, attorney fees, costs, and liabilities of any kind or nature whatsoever, including without limitation claims for contribution, subrogation, or indemnification, whether known or unknown (collectively, “Claims”), which Employee may have or has ever had as of the Effective Date against the Released Parties in any way related to any way related to the Employee’s hire, benefits, employment, termination, or separation from employment with the Company by reason of any actual or alleged act, omission, transaction, practice, conduct, occurrence, or other matter (the “Released Claims”).

The Released Claims include, but are not limited to, any matters, causes, or things whatsoever that were, have been, or in any way could have been alleged as of the Effective Date including but not limited to, any and all claims arising under federal, state, or local employment, civil rights, labor, wage and hour, wage payment, back pay or similar laws, including, without limitation, claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, whistle-blowing or liability in tort, common law claims, claims of any kind that may be brought in any court or administrative agency, any claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981-1988, the Civil Rights Act of 1991, the Equal Pay Act, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act of 1973, the Fair Labor Standards Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the Genetic Information Nondiscrimination Act, the National Labor Relations Act, the Fair Credit Reporting Act, Executive Order I 1246, the Immigration Reform and Control Act of 1986, the Utah Anti-Discrimination Act, the Utah Minimum Wage Act, and the Utah Payment of Wages Act, the New Jersey Law Against Discrimination, the New Jersey Family Medical

Leave Act, the New Jersey Conscientious Employee Protection Act, the New Jersey Wage Payment Law, the New Jersey Wage and Hour Law, retaliation claims under the New Jersey Workers’ Compensation Act, the New Jersey Equal Pay Act, the New Jersey Civil Union Act, the New Jersey Smoking Law, and all other federal, state or local statutes, ordinances, and regulations. Employee understands that the Released Claims include a release of claims arising under the Age Discrimination in Employment Act.

b.Provided, however, notwithstanding anything to the contrary set forth herein, this Section 4 shall not (i) extend to any obligations of the Company under this Agreement or any claims that cannot be waived under applicable law; (ii) prohibit any claims by Employee for unemployment insurance benefits or worker’s compensation benefits under the New Jersey Unemployment Insurance Law and New Jersey Workers’ Compensation Act; (iii) prohibit Employee from filing charges with the Equal Employment Opportunity Commission or state anti-discrimination agencies for violation of state or federal employment laws within the jurisdiction of those agencies, except that Employee does specifically waive Employee’s right to personal monetary recovery in connection with such charges; (iv) eliminate any vested rights that Employee may have under any employee pension or welfare benefit plan in which he participated as an employee of the Company; and/or (v) prohibit Employee’s participation in the Company’s employee health benefit plan, as allowed by COBRA and the terms, conditions, and limitations of the plan. In addition, notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Employee from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21 F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies).

c.Employee acknowledges that he may hereafter discover facts different from or in addition to those he now knows or believes to be true with respect to the Released Claims, and Employee expressly agrees to assume the risk of the possible discovery of additional or different facts, and agrees that this Agreement shall remain effective in all respects, regardless of such additional or different facts.

4. Twenty-One Day Consideration Period. The Company provided this Agreement to Employee on July 30, 2019. Employee may elect to take up to twenty-one (21) days to consider whether to accept this Agreement, although Employee may sign this Agreement before then. Changes to this Agreement, whether material or immaterial, do not restart the running of the 21-day period. If Employee fails to execute this Agreement within the twenty-one (21) day period, then the terms and conditions contained in this Agreement are automatically withdrawn without further action or notice by the Company.

5. Seven Day Revocation Period. Following execution of this Agreement, Employee shall have seven (7) days to revoke this Agreement. To be effective, the revocation must be in writing, signed by Employee, and delivered to , 182 North Union Avenue, Farmington, Utah 84025, email: , on or before 5 p.m. MDT of the 7^th day. This Agreement shall become effective on the eighth (8^th) day following execution of this Agreement (the “Effective Date”). If Employee revokes this Agreement, Employee shall not be eligible to receive any compensation or benefits under this Agreement and the Company shall have no obligations hereunder.

6. Employee Representations.Employee warrants and represents that he has not filed any claims, complaints, or actions of any kind against the Company with any court or local, state or federal government agency; that he has been properly paid for all hours worked for the Company; that he has received all salary, wages, commissions, bonuses, and other compensation due to the Employee; and that he has not engaged in any unlawful conduct relating to the business of the Company.

Nothing in this Agreement prohibits or restricts Employee from filing a charge or complaint with the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, or any other federal or state regulatory authority (collectively, “Agencies”). Employee further understands that this Agreement does not limit Employee’s ability to communicate with any of the Agencies or otherwise participate in

any investigation or proceeding that may be conducted by any of the Agencies in connection with reporting a possible securities law violation without notice to the Employer. This Agreement does not limit the Employee’s right to receive an award for information provided to any securities regulatory agency or authority.

7. Return of Company Property.In accordance with Employee’s obligations under Sections 1 and 2 of the CINSA, Employee covenants and represents that he has returned to the Company all Confidential Information, including without limitation: (i) all documents, whether in print or electronic form, or other information about the Company, including without limitation confidential, proprietary or trade secret information, whether developed by Employee or any other employee of the Company; (ii) all electronic equipment and electronic storage devices (e.g., computers, cellular phones, thumb drives, etc.); and (iii) all company property, credit cards, office keys, and other property that Employee obtained or that were made available to him as a consequence of his employment with the Company. Employee further affirmatively acknowledges that he has removed all Confidential Information belonging to the Company from Employee’s personal electronic devices, including without limitation his mobile phone. Employee acknowledges and agrees that Employee’s obligations pursuant to Sections 1 and 2 of the CINSA regarding Confidential Information expressly survive the termination of Employee’s employment with the Company.

8. Confidential Agreement. Employee agrees that the terms of this Agreement shall be and remain confidential, and Employee promises and covenants not to disclose, publicize, or cause to be publicized any of the terms and conditions of this Agreement except to (i) Employee’s spouse, legal counsel, and financial or tax advisor, upon condition that each such person be advised by Employee of Employee’s confidentiality obligations hereunder and that any disclosure by such person will be deemed a disclosure by Employee; (ii) as required by validly issued subpoena, court order, or federal or state law or regulation; or (iii) in legal proceedings for breach of or to enforce the terms of this Agreement.

9. Non-disparagement.

a. Employee’s Obligations. Employee agrees that he shall not do or say anything that a reasonable person would expect at the time would have the effect of diminishing or constraining the goodwill, good reputation, and/or business opportunities of the Released Parties or their business, products, services, or personal lives. This obligation shall include, but shall not be limited to, refraining from making negative statements about the Released Parties or their methods of doing business, the effectiveness of their business policies, or the quality of any of their products, services or personnel. This section also expressly includes the making or publication of such statements on Facebook, LinkedIn, Twitter, Instagram, Glassdoor or other social media, regardless of whether the statements are accessible to the general public or limited to “friends” or others to whom Employee has expressly granted access. This is a continuing obligation that shall survive this Agreement.

Nothing in this Section 9 shall restrict Employee’s right to file any charge with or cooperate in any investigation conducted by the Agencies, as set forth more fully in Section 6 above, or is intended to preclude or dissuade Employee from engaging in legally protected activities protected by state and federal law, including the National Labor Relations Act or federal securities laws, including the Dodd-Frank Act, to the extent such rights cannot be waived by agreement.

b. The Company’s Obligations. The Company agrees that it shall not do or say anything that would be slanderous, libelous or defamatory in nature regarding the Employee. For the purposes of this section 9(b) only, the term “the Company” shall be limited to its executives reporting directly to Aaron Skonnard as of the Effective Date of this Agreement.

10. Forfeiture of Consideration. Employee acknowledges and understands that (a) the provisions of Sections 8 and 9; (b) the provisions of Sections 1, 2 and 3 of the CINSA and the terms of the Addendum; and (c) Sections 10 and 14 of the Employment Agreement are each material terms of this Agreement and that the Company would not be willing to enter into this Agreement, the CINSA or the Employment Agreement without such provisions. Therefore, if Employee breaches the terms of Sections 8 or 9 of this Agreement; Sections 1 or 3 of the

CINSA and the terms of the Addendum; or Sections 10 or 14 of the Employment Agreement, then Employee acknowledges and agrees that the Company, in its sole discretion, (x) may require that Employee repay to the Company within seven (7) business days some or all of the Payment paid by the Company to Employee under Section 1 above and/or (y) may require that Employee forfeit any Equity that has not yet vested pursuant to Section 2 above. In addition, Employee acknowledges that he will remain liable for any actual damages suffered by any of the Released Parties arising from or relating to Employee’s breach of the aforementioned sections.

11. Remedies. In the event of a breach or threatened breach by the Employee of any of the provisions of this Agreement, the Employee hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. Any equitable relief shall be in addition to, not instead of, legal remedies, monetary damages, or other available relief.

12. Confirmation of Prior Agreements. Notwithstanding anything in this Agreement to the contrary, Employee understands and agrees that nothing in this Agreement shall alter, limit, or void the respective rights and obligations of the parties under the CINSA; the Equity Agreements (except as amended herein); Sections 10, 13, and 14 of the Employment Agreement; or any other agreement entered into between Employee and the Company prior to the date hereof. Any covenants in those prior agreements that were designed to restrict Employee’s actions during employment and/or Garden Leave or that were intended to survive separation of employment shall continue in full force and effect, including without limitation the non-compete, non-solicitation, and confidentiality provisions of any of those prior agreements.

13. Not an Admission. This Agreement is not an admission by any party hereto that either has violated any contract, law, or regulation or that the Company or Employee has discriminated against the other or otherwise infringed on the other’s rights and privileges or done any other wrongful act. Rather, the Parties have entered into this Agreement with the intention to avoid disputes and any attendant inconvenience and expense.

14. Entire Document. With the exception of the CINSA, the Equity Agreements (except as amended herein), and those provisions that survive Employee’s termination pursuant to Section 12 above, this Agreement is the entire, integrated agreement between the parties regarding the subject matter of this Agreement. No other promises or agreements regarding the subject matter of this Agreement have been made to either Employee or the Company other than those contained in this Agreement. In electing to sign this Agreement, neither the Employee nor the Company has relied on any representation or promise, whether oral or written, not specifically set forth in this Agreement.

15. No Assignment of Claims. Employee represents that he has not made, and will not make, any assignment of Claim(s) released by this Agreement and that no other person or entity had or has any interest in any Claim(s) released by Employee under this Agreement. Employee agrees to indemnify and hold harmless the Company from any and all claims, demands, expenses, costs, attorneys’ fees, and causes of action asserted by any person or entity due to a violation of this non-assignment provision.

16. Miscellaneous. This Agreement shall be governed by the laws of the State of Utah. Notwithstanding any Utah statutory or case law to the contrary, this Agreement may not be modified except by a document signed by a duly authorized representative of the Company and the Employee, whether or not such claimed modification is supported by separate consideration. Any waiver by any party hereto of any breach of any kind or character whatsoever by any other party, whether such waiver be direct or implied, shall not be construed as a continuing waiver of, or consent to, any subsequent breach of this Agreement on the part of the other party. In addition, no course of dealing between the parties, nor any delay in exercising any rights or remedies hereunder or otherwise, shall operate as a waiver of any of the rights or remedies of the parties. This Agreement shall inure to and bind the heirs, devisees, executors, administrators, personal representatives, successors, and assigns, as

applicable, of the respective parties hereto. The parties agree that any dispute between them, whether arising under this Agreement or relating to the enforceability or interpretation thereof, shall be subject to the exclusive jurisdiction of the federal or state courts situated in the State of Utah, and each party hereby submits itself to the personal jurisdiction of the courts situated in the State of Utah.

17. Severability. The provisions of the Agreement are severable. If any part of this Agreement is found to be unenforceable by a court of competent jurisdiction, the other provisions shall remain fully valid and enforceable. Such a finding shall not affect the validity of the remainder of this Agreement, which shall remain in full force and effect and continue to be binding on the Parties. Notwithstanding the foregoing, if any portion of Section 3 of this Agreement is found to be unenforceable, then the Company, in its sole discretion, may require that Employee repay to the Company the full amount of the Payment paid by the Company to Employee during Garden Leave, as set forth in Section 1 hereof, to the fullest extent allowed by law.

18. Attorneys’ Fees. If a civil action or other proceeding is brought to enforce this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs, and expenses incurred, in addition to any other relief to which such party may be entitled, whether incurred before or after the filing of a civil action or the entry of judgment.

19. Knowing and Voluntary Execution. Employee specifically represents that he has carefully read and fully understands all of the provisions of this Agreement, and that he is voluntarily and knowingly entering into it. Employee also specifically represents that prior to signing this Agreement, he was provided a reasonable period of time within which to consider whether to accept this Agreement. Employee has been advised that this is an important legal document and that he should consult with an attorney of his choosing prior to entering into this Agreement. Employee specifically represents that he has been given an opportunity to consult with counsel and that, to the extent desired, he has done so.

20. Authority to Enter Agreement. The Company warrants and represents that it has full authority to enter into this Agreement, including without limitation the authority to accelerate the equity discussed in Section 2, and to consummate the transactions contemplated hereby. The Company further warrants and represents that this Agreement is not in conflict with any other agreement to which the Company is a party or by which it may be bound. In addition, the Company warrants and represents that the individuals executing this Agreement on behalf of the Company have the full power and authority to bind the Company to the terms hereof and have been authorized to do so in accordance with the Company’s corporate structure and organization.

21. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. Facsimile or other electronically delivered copies of signature pages to this Agreement shall be treated between the parties as original signatures for all purposes.

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement knowingly and voluntarily intending to be legally bound by its terms.

DATED: 7/31/2019	/s/ Joseph DiBartolomeo
	Joseph DiBartolomeo
DATED: 8/1/2019	/s/ Aaron Skonnard
	Name: Aaron Skonnard
	Its: Chief Executive Officer

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Aaron Skonnard, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pluralsight, 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)) 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. 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

c. 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;

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: October 30, 2019	/s/ Aaron Skonnard
	Aaron Skonnard
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James Budge, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pluralsight, 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)) 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. 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

c. 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;

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: October 30, 2019	/s/ James Budge
	James Budge
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Aaron Skonnard, Chief Executive Officer of Pluralsight, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 30, 2019	/s/ Aaron Skonnard
	Aaron Skonnard
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, James Budge, Chief Financial Officer of Pluralsight, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 30, 2019	/s/ James Budge
	James Budge
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Restatement of Condensed Consolidated Financial Statements - Description of Adjustments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation	$ 24,657	$ 20,630	$ 67,657	$ 52,982
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		16,044		36,972
Non-Cash Equity-Based Compensation Adjustment | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		4,586		16,010
Cost of revenue
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation	138	56	355	145
Cost of revenue | As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		40		86
Cost of revenue | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		16		59
Sales and marketing
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation	8,739	5,612	22,967	13,507
Sales and marketing | As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		4,372		9,343
Sales and marketing | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		1,240		4,164
Technology and content
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation	6,666	3,700	15,513	8,652
Technology and content | As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		2,790		5,839
Technology and content | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		910		2,813
General and administrative
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation	$ 9,114	11,262	$ 28,822	30,678
General and administrative | As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		8,842		21,704
General and administrative | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Equity-based compensation		$ 2,420		$ 8,974

XML

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents the calculation of basic and diluted net loss per share for the periods following the Reorganization Transactions (in thousands, except per share amounts):

	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018			Nine Months Ended September 30, 2019			May 16, 2018 through September 30, 2018
Numerator:
Net loss	$	(45,802	)	$	(34,323	)	$	(121,127	)	$	(60,918	)
Less: Net loss attributable to non-controlling interests	(13,073		)	(17,980		)	(39,763		)	(31,890		)
Net loss attributable to Pluralsight, Inc.	$	(32,729	)	$	(16,343	)	$	(81,364	)	$	(29,028	)
Denominator:
Weighted-average shares of Class A common stock outstanding, basic and diluted	101,407			62,876			91,741			62,867
Less: Weighted-average shares of Class A common stock subject to time-based vesting	—			(404		)	—			(467		)
Weighted-average shares of Class A common stock outstanding, basic and diluted	101,407			62,472			91,741			62,400
Net loss per share:
Net loss per share, basic and diluted	$	(0.32	)	$	(0.26	)	$	(0.89	)	$	(0.47	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table contains share/unit totals with a potentially dilutive impact (in thousands):

	As of September 30, 2019
LLC Units held by Continuing Members	38,733
Stock options	4,446
RSUs of Pluralsight, Inc.	7,546
Restricted Share Units of Pluralsight Holdings	1,500
Purchase rights committed under the ESPP	1,493
Total	53,718

XML

Restatement of Condensed Consolidated Financial Statements - Condensed Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				5 Months Ended	9 Months Ended
	Sep. 30, 2019		Sep. 30, 2018		Sep. 30, 2018	Sep. 30, 2019		Sep. 30, 2018
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue	$ 82,620		$ 61,553			$ 228,099		$ 164,769
Cost of revenue	17,825		15,347			52,336		46,166
Gross profit	64,795		46,206			175,763		118,603
Operating expenses:
Sales and marketing	55,727		42,632			149,852		113,956
Technology and content	27,799		18,137			72,829		49,858
General and administrative	20,817		19,818			63,591		57,112
Total operating expenses	104,343		80,587			286,272		220,926
Loss from operations	(39,548)		(34,381)			(110,509)		(102,323)
Other (expense) income:
Interest expense	(7,778)		(342)			(17,499)		(6,476)
Loss on debt extinguishment	(950)		0			(950)		(4,085)
Other income, net	2,878		654			8,532		689
Loss before income taxes	(45,398)		(34,069)			(120,426)		(112,195)
Provision for income taxes	(404)		(254)			(701)		(506)
Net loss	(45,802)		(34,323)		$ (60,918)	(121,127)		(112,701)
Less: Net loss attributable to non-controlling interests	(13,073)		(17,980)		(31,890)	(39,763)		(31,890)
Net loss attributable to Pluralsight, Inc.	(32,729)		(16,343)		$ (29,028)	(81,364)		(80,811)
Less: Accretion of Series A redeemable convertible preferred units	0		0			0		(176,275)
Net loss attributable to shares of Class A common stock	$ (32,729)		$ (16,343)			$ (81,364)		$ (257,086)
Net loss per unit, basic and diluted (in dollars per share)	$ (0.32)	[1]	$ (0.26)	[1]	$ (0.47)	$ (0.89)	[1]	$ (0.47)	[1]
Weighted average shares of Class A common stock used in computing basic and diluted net loss per unit (in shares)	101,407	[1]	62,472	[1]	62,400	91,741	[1]	62,400	[1]
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue			$ 61,553					$ 164,769
Cost of revenue			15,331					46,107
Gross profit			46,222					118,662
Operating expenses:
Sales and marketing			41,392					109,792
Technology and content			17,227					47,045
General and administrative			17,398					48,138
Total operating expenses			76,017					204,975
Loss from operations			(29,795)					(86,313)
Other (expense) income:
Interest expense			(342)					(6,476)
Loss on debt extinguishment			0					(4,085)
Other income, net			654					689
Loss before income taxes			(29,483)					(96,185)
Provision for income taxes			(254)					(506)
Net loss			(29,737)					(96,691)
Less: Net loss attributable to non-controlling interests			(15,578)					(28,284)
Net loss attributable to Pluralsight, Inc.			(14,159)					(68,407)
Less: Accretion of Series A redeemable convertible preferred units			0					(176,275)
Net loss attributable to shares of Class A common stock			$ (14,159)					$ (244,682)
Net loss per unit, basic and diluted (in dollars per share)			$ (0.23)					$ (0.41)
Weighted average shares of Class A common stock used in computing basic and diluted net loss per unit (in shares)			62,472					62,400
Non-Cash Equity-Based Compensation Adjustment | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue			$ 0					$ 0
Cost of revenue			16					59
Gross profit			(16)					(59)
Operating expenses:
Sales and marketing			1,240					4,164
Technology and content			910					2,813
General and administrative			2,420					8,974
Total operating expenses			4,570					15,951
Loss from operations			(4,586)					(16,010)
Other (expense) income:
Interest expense			0					0
Loss on debt extinguishment			0					0
Other income, net			0					0
Loss before income taxes			(4,586)					(16,010)
Provision for income taxes			0					0
Net loss			(4,586)					(16,010)
Less: Net loss attributable to non-controlling interests			(2,402)					(3,606)
Net loss attributable to Pluralsight, Inc.			(2,184)					(12,404)
Less: Accretion of Series A redeemable convertible preferred units			0					0
Net loss attributable to shares of Class A common stock			$ (2,184)					$ (12,404)
Net loss per unit, basic and diluted (in dollars per share)			$ (0.03)					$ (0.06)

[1] Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

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Acquisition of GitPrime, Inc. - Schedule of Intangible Assets Acquired (Details) - GitPrime, Inc. $ in Thousands	May 09, 2019 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value of Intangible Assets Acquired	$ 24,800
Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value of Intangible Assets Acquired	$ 24,000
Useful Lives	5 years
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value of Intangible Assets Acquired	$ 800
Useful Lives	4 years

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 84,752	$ 53,451
Less: Accumulated depreciation	(28,281)	(21,810)
Property and equipment, net	56,471	31,641
Computer equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	11,221	9,369
Software
Property, Plant and Equipment [Line Items]
Total property and equipment	2,034	2,031
Capitalized internal-use software costs
Property, Plant and Equipment [Line Items]
Total property and equipment	20,705	13,880
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	5,737	5,478
Buildings
Property, Plant and Equipment [Line Items]
Total property and equipment	11,251	11,251
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	1,606	1,490
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	1,456	1,671
Build-to-suit lease asset under construction
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 30,742	$ 8,281

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Net Loss Per Share

9 Months Ended

Sep. 30, 2019

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 for the periods following the Reorganization Transactions (in thousands, except per share amounts):

	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018			Nine Months Ended September 30, 2019			May 16, 2018 through September 30, 2018
Numerator:
Net loss	$	(45,802	)	$	(34,323	)	$	(121,127	)	$	(60,918	)
Less: Net loss attributable to non-controlling interests	(13,073		)	(17,980		)	(39,763		)	(31,890		)
Net loss attributable to Pluralsight, Inc.	$	(32,729	)	$	(16,343	)	$	(81,364	)	$	(29,028	)
Denominator:
Weighted-average shares of Class A common stock outstanding, basic and diluted	101,407			62,876			91,741			62,867
Less: Weighted-average shares of Class A common stock subject to time-based vesting	—			(404		)	—			(467		)
Weighted-average shares of Class A common stock outstanding, basic and diluted	101,407			62,472			91,741			62,400
Net loss per share:
Net loss per share, basic and diluted	$	(0.32	)	$	(0.26	)	$	(0.89	)	$	(0.47	)

Shares of Class B and Class C common stock do not share in the earnings or losses of Pluralsight and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B and Class C common stock under the two-class method has not been presented.

During the three months ended September 30, 2019, the Company incurred net losses and, therefore, the effect of the Company’s potentially dilutive securities were not included in the calculation of diluted loss per share as the effect would be anti-dilutive.

The following table contains share/unit totals with a potentially dilutive impact (in thousands):

	As of September 30, 2019
LLC Units held by Continuing Members	38,733
Stock options	4,446
RSUs of Pluralsight, Inc.	7,546
Restricted Share Units of Pluralsight Holdings	1,500
Purchase rights committed under the ESPP	1,493
Total	53,718

The Notes will not have an impact on the Company's diluted earnings per share until the average market share price of Class A common stock exceeds the conversion price of $58.50 per share, as the Company intends and has the ability to settle the principal amount of the Notes in cash upon conversion. The Company is required under the treasury stock method to compute the potentially dilutive shares of common stock related to the Notes for periods it reports net income. However, upon conversion, until the average market price of the Company's common stock exceeds the cap price of $58.50 per share, exercise of the Capped Calls will mitigate dilution from the Notes from the conversion price up to the cap price. Capped Calls are excluded from the calculation of diluted earnings per share, as they would be antidilutive under the treasury stock method.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Amendment and Restatement of Certificate of Incorporation

In connection with the Reorganization Transactions, the certificate of incorporation of Pluralsight, Inc. was amended and restated to, among other things, provide for the (i) authorization of 1,000,000,000 shares of Class A common stock with a par value of $0.0001 per share; (ii) authorization of 200,000,000 shares of Class B common stock with a par value of $0.0001 per share; (iii) authorization of 50,000,000 shares of Class C common stock with a par value of $0.0001 per share; (iv) authorization of 100,000,000 shares of undesignated preferred stock that may be issued from time to time; and (v) establishment of a classified board of directors, divided into three classes, each of whose members will serve for staggered three-year terms.

Holders of Class A and Class B common stock are entitled to one vote per share and holders of Class C common stock are entitled to ten votes per share. Except as otherwise required by applicable law, holders of Class A common stock, Class B common stock, and Class C common stock vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of Class B and Class C common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B and Class C common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the number of LLC Units held by the Continuing Members and the number of Class B or Class C common shares held by the Continuing Members. Shares of Class B and Class C common stock are transferable only together with an equal number of LLC Units. Subject to certain limitations and exceptions, Continuing Members may exchange or redeem LLC Units and shares of Class B or Class C common stock, as applicable, for, at the option of Pluralsight, Inc., cash or shares of Class A common stock, on a one-for-one basis.

Pluralsight, Inc. must at all times maintain a ratio of one LLC Unit for each share of Class A common stock issued, and Pluralsight Holdings must at all times maintain a one-to-one ratio between the number of shares of Class B or Class C common stock owned by the Continuing Members and the number of LLC Units owned by the Continuing Members.

Recapitalization of Pluralsight Holdings

In connection with the Reorganization Transactions and the amendment and restatement of the LLC Agreement, all membership interests in Pluralsight Holdings were converted into a single-class of common LLC Units and certain holders of LLC Units elected to exchange LLC Units for Class A common stock of Pluralsight, Inc. The following is a summary of the shares converted or exchanged in connection with the Reorganization Transactions:

• 48,407,645 common units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted on a one-for-one basis into LLC Units.

• 48,447,880 redeemable convertible preferred units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted on a one-for-one basis into LLC Units.

• 15,783,689 incentive units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted into 12,667,778 LLC Units after giving effect to the threshold price and catch-up price per unit.

• 3,000,000 Class B incentive units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted into 1,747,067 LLC Units after giving effect to the threshold price and catch-up price per unit.

In connection with the recapitalization, a total of 39,110,660 LLC Units were exchanged for shares of Class A common stock of Pluralsight, Inc. In addition, the Company issued 58,111,572 shares of Class B common stock and 14,048,138 shares of Class C common stock to the Continuing Members on a one-for-one basis to the corresponding LLC Units held by the Continuing Members.

The amended and restated LLC Agreement requires that Pluralsight Holdings at all times maintain (i) a one-to-one ratio between the number of outstanding shares of Class A common stock of Pluralsight, Inc. and the number of LLC Units and (ii) a one-to-one ratio between the number of shares of Class B or Class C common stock owned by the Continuing Members and the number of LLC Units held by the Continuing Members.

Initial Public Offering

As described in Note 1—Organization and Description of Business, in May 2018, Pluralsight, Inc. completed an IPO of 23,805,000 shares of Class A common stock at a public offering price of $15.00 per share. Pluralsight, Inc. received proceeds of $332.1 million, net of underwriting discounts and commissions, which Pluralsight, Inc. used to purchase newly-issued LLC Units of Pluralsight Holdings at a price per unit equal to the IPO price per share.

Secondary Offering

In March 2019, the Company completed a secondary offering, in which certain stockholders sold 15,592,234 shares of Class A common stock at a public offering price of $29.25 per share. Pluralsight did not receive any proceeds from the sale of shares by selling stockholders. A total of $0.9 million in costs were incurred by Pluralsight in connection with this offering. In connection with the secondary offering, the Company issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 in a private placement to qualified institutional buyers exempt from registration under the Securities Act. See Note 11-Convertible Senior Notes and Other Long-Term Debt for additional details.

Exchanges of LLC Units

During the nine months ended September 30, 2019, certain Continuing Members exchanged 33,536,262 LLC Units of Pluralsight Holdings along with their corresponding shares of Class B and Class C common stock, as applicable, for an equal number of shares of Class A common stock. Simultaneously, and in connection with these exchanges, the Company cancelled the exchanged shares of Class B and Class C common stock.

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Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following table summarizes the adjustments made to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of applying the modified retrospective method to adopt ASC 606 (in thousands):

	As Reported			Adjustments					As Adjusted
	December 31, 2018			Revenue Recognition			Incremental Costs of Obtaining a Contract		January 1, 2019
Accounts receivable, net	$	63,436		$	33		$	—	$	63,469
Deferred contract acquisition costs, net	—			—			16,461		16,461
Deferred contract acquisition costs, noncurrent, net	—			—			3,751		3,751
Deferred revenue	157,695			(389		)	—		157,306
Deferred revenue, noncurrent	14,886			—			—		14,886
Accumulated deficit	(355,446		)	205			9,828		(345,413		)
Non-controlling interests	107,167			217			10,384		117,768

The following tables present the amount by which each condensed consolidated financial statement line item is affected as of and for the three and nine months ended September 30, 2019 by ASC 606 (in thousands, except per share data):

Condensed Consolidated Balance Sheet:

	September 30, 2019
	As Reported			Balance without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Accounts receivable, net	$	63,001		$	62,311		$	690
Goodwill(1)	261,622			262,845			(1,223		)
Deferred contract acquisition costs, net	17,128			—			17,128
Deferred contract acquisition costs, noncurrent, net	4,435			—			4,435
Deferred revenue	177,523			179,480			(1,957		)
Deferred revenue, noncurrent	17,586			17,586			—
Accumulated deficit	(426,777		)	(443,649		)	16,872
Non-controlling interest	68,672			62,557			6,115

(1) Reflects the difference in Goodwill from applying ASC 606 to the deferred revenue balance acquired from GitPrime, Inc. See Note 9—Acquisition of GitPrime, Inc. for additional details. The difference in deferred revenue under ASC 606 is primarily due to the timing of recognition for subscriptions that allow the customer to install the software on premise without significant penalty.

Condensed Consolidated Statement of Operations:

	Three Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	82,620		$	82,017		$	603
Operating expenses:
Sales and marketing	55,727			56,959			(1,232		)
Loss from operations	(39,548		)	(41,383		)	1,835
Net loss	(45,802		)	(47,637		)	1,835
Less: Net loss attributable to non-controlling interests	(13,073		)	(13,597		)	524
Net loss attributable to Pluralsight, Inc.	(32,729		)	(34,040		)	1,311
Net loss per share, basic and diluted	$	(0.32	)	$	(0.34	)	$	(0.02	)
Weighted-average common shares used in computing basic and diluted net loss per share	101,407			101,407			—

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	228,099		$	227,097		$	1,002
Operating expenses:
Sales and marketing	149,852			151,203			(1,351		)
Loss from operations	(110,509		)	(112,862		)	2,353
Net loss	(121,127		)	(123,480		)	2,353
Less: Net loss attributable to non-controlling interests	(39,763		)	(40,475		)	712
Net loss attributable to Pluralsight, Inc.	(81,364		)	(83,005		)	1,641
Net loss per share, basic and diluted	$	(0.89	)	$	(0.90	)	$	(0.01	)
Weighted-average common shares used in computing basic and diluted net loss per share	91,741			91,741			—

Condensed Consolidated Statement of Cash Flows:

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Net loss	$	(121,127	)	$	(123,480	)	$	2,353
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred contract acquisition costs	17,317			—			17,317
Changes in assets and liabilities:
Accounts receivable	1,858			1,815			43
Deferred contract acquisition costs	(18,668		)	—			(18,668		)
Deferred revenue	22,461			23,506			(1,045		)
Cash used in operating activities	(3,812		)	(3,812		)	—

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 120,871	$ 194,306
Short-term investments	328,602	0
Accounts receivable, net of allowances of $2,909 and $2,501 as of September 30, 2019 and December 31, 2018, respectively	63,001	63,436
Deferred contract acquisition costs, net	17,128	0
Prepaid expenses and other current assets	12,664	8,323
Total current assets	542,266	266,065
Restricted cash	27,748	16,765
Long-term investments	84,210	0
Property and equipment, net	56,471	31,641
Content library, net	8,207	7,050
Intangible assets, net	24,057	1,759
Goodwill	261,622	123,119
Deferred contract acquisition costs, noncurrent, net	4,435	0
Other assets	1,530	1,064
Total assets	1,010,546	447,463
Current liabilities:
Accounts payable	4,664	7,160
Accrued expenses	37,635	32,047
Accrued author fees	11,294	10,002
Deferred revenue	177,523	157,695
Total current liabilities	231,116	206,904
Deferred revenue, noncurrent	17,586	14,886
Convertible senior notes, net	463,656	0
Facility financing obligations	38,225	15,777
Other liabilities	2,157	1,303
Total liabilities	752,740	238,870
Commitments and contingencies (Note 12)
Stockholders' equity:
Stockholders' equity:	0	0
Additional paid-in capital	615,713	456,899
Accumulated other comprehensive income (loss)	185	(41)
Accumulated deficit	(426,777)	(355,446)
Total stockholders’ equity attributable to Pluralsight, Inc.	189,134	101,426
Non-controlling interests	68,672	107,167
Total stockholders’ equity	257,806	208,593
Total liabilities and stockholders' equity	1,010,546	447,463
Class A Common Stock
Stockholders' equity:
Common stock	10	7
Class B Common Stock
Stockholders' equity:
Common stock	2	6
Class C Common Stock
Stockholders' equity:
Common stock	$ 1	$ 1

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Acquisition of GitPrime, Inc.

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Acquisition of GitPrime, Inc.

Acquisition of GitPrime, Inc.

On May 9, 2019, the Company completed the acquisition of GitPrime, Inc. ("GitPrime"), a leading provider of developer productivity software. Under the terms of the agreement, the Company acquired all of the outstanding stock of GitPrime for approximately $163.8 million in cash, excluding cash acquired and including working capital adjustments.

The Company accounted for the transaction as a business combination using the acquisition method of accounting. The Company allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date. The excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The goodwill is attributable to GitPrime's assembled workforce and synergies acquired, and is not deductible for income tax purposes. The preliminary amount of consideration transferred is subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuation of certain tangible and intangible assets acquired and liabilities assumed in connection with the acquisition. The Company expects the allocation of the consideration transferred to be final within the measurement period.

During the three months ended September 30, 2019, the Company recorded a $0.1 million reduction in consideration transferred, with a corresponding decrease to goodwill due to working capital adjustments agreed upon, and paid by, the selling stockholders.

The following table summarizes the acquisition date fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):

	Fair Value
Cash and cash equivalents	$	5,290
Accounts receivable	1,798
Other assets acquired	207
Property and equipment	223
Goodwill	138,503
Intangible assets	24,800
Other liabilities assumed	(393		)
Deferred revenue	(1,367		)
Total fair value of net assets acquired	$	169,061

The useful lives, primarily based on the period of benefit to the Company, and fair values of the identifiable intangible assets at acquisition date were as follows:

	Fair Value of Intangible Assets Acquired		Useful Lives
	(in thousands)		(in years)
Technology	$	24,000	5 years
Customer relationships	800		4 years
Total fair value of intangible assets acquired	$	24,800

The fair value of the technology acquired in the acquisition was determined using the excess earnings model and the customer relationships acquired was determined using a distributor model. These models utilize certain unobservable inputs, including discounted cash flows, historical and projected financial information, customer attrition rates, and technology obsolescence rates, classified as Level 3 measurements as defined by ASC 820. The Company engaged third-party valuation specialists to assist in management's analysis of the fair value of the acquired intangibles. All estimates, key assumptions, and forecasts were reviewed by the Company. While the Company chose to utilize a third-party valuation specialist for assistance, the fair value analysis and related valuations reflect the conclusions of management and not those of any third party.

During the three and nine months ended September 30, 2019, the Company incurred acquisition costs of $0.8 million. These costs include legal, accounting fees and other costs directly related to the acquisition and are classified within general and administrative expenses in the Company's condensed consolidated statements of operations.

Unaudited Pro Forma Information

The condensed consolidated statements of operations include the results of GitPrime from the acquisition date. During the three and nine months ended September 30, 2019, the condensed consolidated statements of operations includes revenue from GitPrime of approximately $2.0 million and $2.4 million, respectively. Due to the continued integration of the combined businesses, the information needed to determine earnings of GitPrime included in the condensed consolidated statements of operations was unavailable.

The following unaudited pro forma information has been prepared for illustrative purposes only and assumes the acquisition occurred on January 1, 2018. It includes pro forma adjustments related to the amortization of acquired intangible assets, equity-based compensation expense, adjustments for ASC 606, and fair value adjustments for deferred revenue. The unaudited pro forma results have been prepared based on estimates and assumptions, which management believes are reasonable, however, the results are not necessarily indicative of the consolidated results of operations had the acquisition occurred on January 1, 2018, or of future results of operations (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue	$	82,620		$	62,421		$	231,989		$	166,773
Net loss	(45,802		)	(37,558		)	(126,535		)	(123,145		)
Net loss per share, basic and diluted	$	(0.32	)	$	(0.29	)	$	(0.92	)	$	(0.51	)

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Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity - USD ($) $ in Thousands	Total	Members’ Capital	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Common Stock Class C Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Non-Controlling Interests
Beginning balance (in shares) at Dec. 31, 2017	48,447,880
Beginning balance at Dec. 31, 2017	$ 405,766
Increase (Decrease) in Temporary Equity [Roll Forward]
Accretion of Series A redeemable convertible preferred units	176,275
Effect of the Reorganization Transactions	$ (582,041)
Ending balance (in shares) at Sep. 30, 2018	0
Ending balance at Sep. 30, 2018	$ 0
Beginning balance (in shares) at Dec. 31, 2017		48,407,645	0	0	0
Beginning balance at Dec. 31, 2017	(445,077)	$ 0	$ 0	$ 0	$ 0	$ 0	$ 25	$ (445,102)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation losses	(97)
Ending balance (in shares) at Sep. 30, 2018		0	62,310,270	58,566,789	14,198,311
Ending balance at Sep. 30, 2018	$ 226,274	$ 0	$ 6	$ 6	$ 1	446,463	(34)	(339,144)	118,976
Beginning balance (in shares) at Jun. 30, 2018	0
Beginning balance at Jun. 30, 2018	$ 0
Ending balance (in shares) at Sep. 30, 2018	0
Ending balance at Sep. 30, 2018	$ 0
Beginning balance (in shares) at Jun. 30, 2018		0	62,915,660	58,111,572	14,048,138
Beginning balance at Jun. 30, 2018	239,865	$ 0	$ 6	$ 6	$ 1	437,274	(16)	(322,801)	125,395
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Effect of the Rescission Transactions (in shares)			(605,390)	455,217	150,173
Equity-based compensation	20,744					20,744
Adjustments to non-controlling interests	0					(11,582)			11,582
Foreign currency translation losses	(39)						(18)		(21)
Other	27					27
Net loss	(34,323)							(16,343)	(17,980)
Ending balance (in shares) at Sep. 30, 2018		0	62,310,270	58,566,789	14,198,311
Ending balance at Sep. 30, 2018	$ 226,274	$ 0	$ 6	$ 6	$ 1	446,463	(34)	(339,144)	118,976
Beginning balance (in shares) at Dec. 31, 2018	0
Beginning balance at Dec. 31, 2018	$ 0
Increase (Decrease) in Temporary Equity [Roll Forward]
Accretion of Series A redeemable convertible preferred units	0
Effect of the Reorganization Transactions	$ 0
Ending balance (in shares) at Sep. 30, 2019	0
Ending balance at Sep. 30, 2019	$ 0
Beginning balance (in shares) at Dec. 31, 2018		0	65,191,907	57,490,881	14,586,173
Beginning balance at Dec. 31, 2018	208,593	$ 0	$ 7	$ 6	$ 1	456,899	(41)	(355,446)	107,167
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Effect of exchanges of LLC Units (in shares)			33,536,262	(32,926,084)	(610,178)
Effect of exchanges of LLC Units	0		$ 3	$ (4)		59,158			(59,157)
Issuance of common stock under employee stock purchase plans (in shares)			621,463
Issuance of common stock under employee stock purchase plans	8,257					8,257
Vesting of restricted stock units (in shares)			1,835,633		313,767
Vesting of restricted stock units	$ 0
Exercise of common stock options (in shares)	452,914		452,914
Exercise of common stock options	$ 6,619					6,619
Forfeiture of unvested LLC Units (in shares)				(121,845)
Forfeiture of unvested LLC Units	0
Equity component of convertible senior notes, net of issuance costs	137,033					137,033
Purchase of capped calls related to issuance of convertible senior notes	(69,432)					(69,432)
Repurchases of equity component of convertible senior notes	(2,965)					(2,965)
Settlement of capped calls related to repurchases of convertible senior notes	1,284					1,284
Equity-based compensation	68,591					68,591
Adjustments to non-controlling interests	0					(49,731)			49,731
Foreign currency translation losses	(79)
Other comprehensive income (loss)	319						226		93
Net loss	(121,127)							(81,364)	(39,763)
Ending balance (in shares) at Sep. 30, 2019		0	101,638,179	24,442,952	14,289,762
Ending balance at Sep. 30, 2019	$ 257,806	$ 0	$ 10	$ 2	$ 1	615,713	185	(426,777)	68,672
Beginning balance (in shares) at Jun. 30, 2019	0
Beginning balance at Jun. 30, 2019	$ 0
Ending balance (in shares) at Sep. 30, 2019	0
Ending balance at Sep. 30, 2019	$ 0
Beginning balance (in shares) at Jun. 30, 2019		0	101,096,472	24,664,113	14,186,856
Beginning balance at Jun. 30, 2019	280,106	$ 0	$ 10	$ 2	$ 1	599,558	237	(394,048)	74,346
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Effect of exchanges of LLC Units (in shares)			116,709	(116,709)	0
Effect of exchanges of LLC Units	0		$ 0	$ 0		238			(238)
Vesting of restricted stock units (in shares)			399,052		102,906
Vesting of restricted stock units	0
Exercise of common stock options (in shares)			25,946
Exercise of common stock options	245					245
Forfeiture of unvested LLC Units (in shares)				(104,452)
Forfeiture of unvested LLC Units	0
Repurchases of equity component of convertible senior notes	(2,965)					(2,965)
Settlement of capped calls related to repurchases of convertible senior notes	1,284					1,284
Equity-based compensation	25,009					25,009
Adjustments to non-controlling interests	0					(7,656)			7,656
Foreign currency translation losses	(90)
Other comprehensive income (loss)	(71)						(52)		(19)
Net loss	(45,802)							(32,729)	(13,073)
Ending balance (in shares) at Sep. 30, 2019		0	101,638,179	24,442,952	14,289,762
Ending balance at Sep. 30, 2019	$ 257,806	$ 0	$ 10	$ 2	$ 1	$ 615,713	$ 185	$ (426,777)	$ 68,672

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Cash Equivalents and Investments

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Cash Equivalents and Investments

Cash Equivalents and Investments

Cash equivalents, short-term investments, and long-term investments consisted of the following as of September 30, 2019 (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents
Money market funds	$	64,380	$	—	$	—		$	64,380
Commercial paper	13,995		—		—			13,995
U.S. treasury securities	19,985		1		—			19,986
Total cash equivalents	$	98,360	$	1	$	—		$	98,361
Short-term investments
Commercial paper	$	53,787	$	—	$	—		$	53,787
U.S. treasury securities	129,329		51		—			129,380
Corporate notes and obligations	125,236		234		(5		)	125,465
U.S. agency obligations	19,971		1		(2		)	19,970
Total short-term investments	$	328,323	$	286	$	(7	)	$	328,602
Long-term investments
Corporate notes and obligations	$	60,903	$	127	$	(10	)	$	61,020
U.S. agency obligations	22,740		3		(1		)	22,742
Certificates of deposit	$	448	$	—	$	—		$	448
Total long-term investments	$	84,091	$	130	$	(11	)	$	84,210
Total cash equivalents and investments	$	510,774	$	417	$	(18	)	$	511,173

The amortized cost and fair value of the Company's investments based on their stated maturities consisted of the following as of September 30, 2019 (in thousands): 

	Amortized Cost		Fair Value
Due within one year	$	328,323	$	328,602
Due between one and two years	84,091		84,210
Total investments	$	412,414	$	412,812

The Company reviews the individual securities that have unrealized losses in its investment portfolio on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. The Company evaluates, among others, whether it has the intention to sell any of these investments and whether it is more likely than not that it will be required to sell any of them before recovery of the amortized cost basis. Based on this evaluation, the Company determined that there were no other-than-temporary impairments associated with its investments as of September 30, 2019.

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Non-Controlling Interests (Tables)

9 Months Ended

Sep. 30, 2019

Noncontrolling Interest [Abstract]

Ownership of the LLC Units

The ownership of the LLC Units is summarized as follows:

	As of September 30, 2019			As of December 31, 2018
	Units	Ownership %		Units	Ownership %
Pluralsight, Inc.'s ownership of LLC Units	101,638,179	73.4	%	65,191,907	48.6	%
LLC Units owned by the Continuing Members(1)	36,904,870	26.6	%	68,881,732	51.4	%
	138,543,049	100.0	%	134,073,639	100.0	%

(1) Excludes 1,827,844 and 3,195,322 LLC Units still subject to time-based vesting requirements as of September 30, 2019 and December 31, 2018, respectively

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Cash Equivalents and Investments (Tables)

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Schedule of Cash Equivalents, Short-term and Long-term Investments

Cash equivalents, short-term investments, and long-term investments consisted of the following as of September 30, 2019 (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents
Money market funds	$	64,380	$	—	$	—		$	64,380
Commercial paper	13,995		—		—			13,995
U.S. treasury securities	19,985		1		—			19,986
Total cash equivalents	$	98,360	$	1	$	—		$	98,361
Short-term investments
Commercial paper	$	53,787	$	—	$	—		$	53,787
U.S. treasury securities	129,329		51		—			129,380
Corporate notes and obligations	125,236		234		(5		)	125,465
U.S. agency obligations	19,971		1		(2		)	19,970
Total short-term investments	$	328,323	$	286	$	(7	)	$	328,602
Long-term investments
Corporate notes and obligations	$	60,903	$	127	$	(10	)	$	61,020
U.S. agency obligations	22,740		3		(1		)	22,742
Certificates of deposit	$	448	$	—	$	—		$	448
Total long-term investments	$	84,091	$	130	$	(11	)	$	84,210
Total cash equivalents and investments	$	510,774	$	417	$	(18	)	$	511,173

Summary of Investments Based on Stated Maturities

The amortized cost and fair value of the Company's investments based on their stated maturities consisted of the following as of September 30, 2019 (in thousands): 

	Amortized Cost		Fair Value
Due within one year	$	328,323	$	328,602
Due between one and two years	84,091		84,210
Total investments	$	412,414	$	412,812

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Acquisition of GitPrime, Inc. (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Summary of Acquisition Date Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the acquisition date fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):

	Fair Value
Cash and cash equivalents	$	5,290
Accounts receivable	1,798
Other assets acquired	207
Property and equipment	223
Goodwill	138,503
Intangible assets	24,800
Other liabilities assumed	(393		)
Deferred revenue	(1,367		)
Total fair value of net assets acquired	$	169,061

Schedule of Identifiable Intangible Assets Fair Value and Useful Lives

The useful lives, primarily based on the period of benefit to the Company, and fair values of the identifiable intangible assets at acquisition date were as follows:

	Fair Value of Intangible Assets Acquired		Useful Lives
	(in thousands)		(in years)
Technology	$	24,000	5 years
Customer relationships	800		4 years
Total fair value of intangible assets acquired	$	24,800

Summary of Unaudited Pro Forma Information

The following unaudited pro forma information has been prepared for illustrative purposes only and assumes the acquisition occurred on January 1, 2018. It includes pro forma adjustments related to the amortization of acquired intangible assets, equity-based compensation expense, adjustments for ASC 606, and fair value adjustments for deferred revenue. The unaudited pro forma results have been prepared based on estimates and assumptions, which management believes are reasonable, however, the results are not necessarily indicative of the consolidated results of operations had the acquisition occurred on January 1, 2018, or of future results of operations (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue	$	82,620		$	62,421		$	231,989		$	166,773
Net loss	(45,802		)	(37,558		)	(126,535		)	(123,145		)
Net loss per share, basic and diluted	$	(0.32	)	$	(0.29	)	$	(0.92	)	$	(0.51	)

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Revenue - Summary of Deferred Contract Acquisition Costs Activity (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Contract with Customer, Asset and Liability [Roll Forward]
Beginning balance	$ 20,212
Capitalization of contract acquisition costs	18,668
Amortization of deferred contract acquisition costs	(17,317)	$ 0
Ending balance	$ 21,563

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Revenue - Effect of Adopting Topic 606 (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				5 Months Ended	9 Months Ended
	Sep. 30, 2019		Sep. 30, 2018		Sep. 30, 2018	Sep. 30, 2019		Sep. 30, 2018		Jan. 01, 2019	Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Accounts receivable, net	$ 63,001					$ 63,001				$ 63,469	$ 63,436
Goodwill	261,622					261,622					123,119
Deferred contract acquisition costs, net	17,128					17,128				16,461	0
Deferred contract acquisition costs, noncurrent, net	4,435					4,435				3,751	0
Deferred revenue	177,523					177,523				157,306	157,695
Deferred revenue, noncurrent	17,586					17,586				14,886	14,886
Accumulated deficit	(426,777)					(426,777)				(345,413)	(355,446)
Non-controlling interests	68,672					68,672				$ 117,768	107,167
Income Statement Related Disclosures [Abstract]
Revenue	82,620		$ 61,553			228,099		$ 164,769
Sales and marketing	55,727		42,632			149,852		113,956
Loss from operations	(39,548)		(34,381)			(110,509)		(102,323)
Net loss	(45,802)		(34,323)		$ (60,918)	(121,127)		(112,701)
Less: Net loss attributable to non-controlling interests	(13,073)		(17,980)		(31,890)	(39,763)		(31,890)
Net loss attributable to Pluralsight, Inc.	$ (32,729)		$ (16,343)		$ (29,028)	$ (81,364)		$ (80,811)
Net loss per unit, basic and diluted (in dollars per share)	$ (0.32)	[1]	$ (0.26)	[1]	$ (0.47)	$ (0.89)	[1]	$ (0.47)	[1]
Weighted average common units used in computing basic and diluted net loss per unit (in shares)	101,407	[1]	62,472	[1]	62,400	91,741	[1]	62,400	[1]
Cash Flow Statement Related Disclosures [Abstract]
Net loss	$ (45,802)		$ (34,323)		$ (60,918)	$ (121,127)		$ (112,701)
Amortization of deferred contract acquisition costs						17,317		0
Accounts receivable						1,858		(10,352)
Deferred contract acquisition costs						(18,668)		0
Deferred revenue						22,461		28,190
Cash used in operating activities						(3,812)		$ (14,283)
Balance without Adoption of ASC 606
Balance Sheet Related Disclosures [Abstract]
Accounts receivable, net	62,311					62,311					63,436
Goodwill	262,845					262,845
Deferred contract acquisition costs, net	0					0					0
Deferred contract acquisition costs, noncurrent, net	0					0					0
Deferred revenue	179,480					179,480					157,695
Deferred revenue, noncurrent	17,586					17,586					14,886
Accumulated deficit	(443,649)					(443,649)					(355,446)
Non-controlling interests	62,557					62,557					$ 107,167
Income Statement Related Disclosures [Abstract]
Revenue	82,017					227,097
Sales and marketing	56,959					151,203
Loss from operations	(41,383)					(112,862)
Net loss	(47,637)					(123,480)
Less: Net loss attributable to non-controlling interests	(13,597)					(40,475)
Net loss attributable to Pluralsight, Inc.	$ (34,040)					$ (83,005)
Net loss per unit, basic and diluted (in dollars per share)	$ (0.34)					$ (0.90)
Weighted average common units used in computing basic and diluted net loss per unit (in shares)	101,407					91,741
Cash Flow Statement Related Disclosures [Abstract]
Net loss	$ (47,637)					$ (123,480)
Amortization of deferred contract acquisition costs						0
Accounts receivable						1,815
Deferred contract acquisition costs						0
Deferred revenue						23,506
Cash used in operating activities						(3,812)
Effect of Adoption Increase/(Decrease) | Accounting Standards Update 2014-09
Balance Sheet Related Disclosures [Abstract]
Accounts receivable, net	690					690
Goodwill	(1,223)					(1,223)
Deferred contract acquisition costs, net	17,128					17,128
Deferred contract acquisition costs, noncurrent, net	4,435					4,435
Deferred revenue	(1,957)					(1,957)
Deferred revenue, noncurrent	0					0
Accumulated deficit	16,872					16,872
Non-controlling interests	6,115					6,115
Income Statement Related Disclosures [Abstract]
Revenue	603					1,002
Sales and marketing	(1,232)					(1,351)
Loss from operations	1,835					2,353
Net loss	1,835					2,353
Less: Net loss attributable to non-controlling interests	524					712
Net loss attributable to Pluralsight, Inc.	$ 1,311					$ 1,641
Net loss per unit, basic and diluted (in dollars per share)	$ (0.02)					$ (0.01)
Weighted average common units used in computing basic and diluted net loss per unit (in shares)	0					0
Cash Flow Statement Related Disclosures [Abstract]
Net loss	$ 1,835					$ 2,353
Amortization of deferred contract acquisition costs						17,317
Accounts receivable						43
Deferred contract acquisition costs						(18,668)
Deferred revenue						(1,045)
Cash used in operating activities						$ 0

[1] Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

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Fair Value Measurements - Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 98,361
Short-term investments	328,602
Long-term investments	84,210
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	53,787
U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	129,380
Corporate notes and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	125,465
Long-term investments	61,020
U.S. agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	19,970
Long-term investments	22,742
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term investments	448
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	64,380	$ 185,405
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	13,995
U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	19,986
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	64,380
Short-term investments	0
Long-term investments	0
Level 1 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Level 1 | U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Level 1 | Corporate notes and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Long-term investments	0
Level 1 | U.S. agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Long-term investments	0
Level 1 | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term investments	0
Level 1 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	64,380	185,405
Level 1 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0
Level 1 | U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	33,981
Short-term investments	328,602
Long-term investments	84,210
Level 2 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	53,787
Level 2 | U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	129,380
Level 2 | Corporate notes and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	125,465
Long-term investments	61,020
Level 2 | U.S. agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	19,970
Long-term investments	22,742
Level 2 | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term investments	448
Level 2 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Level 2 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	13,995
Level 2 | U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	19,986
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0
Short-term investments	0
Long-term investments	0
Level 3 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Level 3 | U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Level 3 | Corporate notes and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Long-term investments	0
Level 3 | U.S. agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Long-term investments	0
Level 3 | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term investments	0
Level 3 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	$ 0
Level 3 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0
Level 3 | U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 0

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Convertible Senior Notes and Other Long-Term Debt - Schedules of Convertible Debt (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Convertible Debt, Interest Expense
Amortization of debt discount and issuance costs		$ 15,120	$ 1,215
Senior Notes Due In 2024 | Convertible Senior Notes
Convertible Debt, Liability Component
Principal	$ 593,500	593,500
Less: Unamortized debt discount	(118,788)	(118,788)
Less: Debt issuance costs, net of amortization	(11,056)	(11,056)
Net carrying amount	463,656	463,656
Convertible Debt, Equity Component
Proceeds allocated to the conversion option (debt discount)	140,776	140,776
Less: Reacquisition of conversion option related to the repurchases of convertible senior notes	(3,743)	(3,743)
Less: Reacquisition of conversion option related to the repurchases of convertible senior notes	(2,965)	(2,965)
Net carrying amount	134,068	134,068
Convertible Debt, Interest Expense
Contractual interest expense	585	1,311
Amortization of debt discount and issuance costs	6,826	15,120
Total	$ 7,411	$ 16,431

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Equity-Based Compensation - Schedule of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2019
Stock Options Outstanding
Beginning balance (in shares)	5,143,712
Granted (in shares)	169,762
Exercised (in shares)	(452,914)
Forfeited or cancelled (in shares)	(414,476)
Ending balance (in shares)	4,446,084
Vested and exercisable (in shares)	2,099,314
Weighted- Average Exercise Price
Beginning balance (in dollars per share)	$ 15.00
Granted (in dollars per share)	1.47
Exercised (in dollars per share)	14.62
Forfeited or cancelled (in dollars per share)	14.87
Ending balance (in dollars per share)	14.53
Vested and exercisable (in dollars per share)	$ 14.86
Stock Option Activity, Additional Disclosures
Weighted-average remaining contractual term, outstanding (in years)	8 years 7 months 6 days
Weighted-average remaining contractual term, vested and exercisable (in years)	8 years 7 months 6 days
Aggregate intrinsic value, outstanding (in millions)	$ 10.0
Aggregate intrinsic value, vested and exercisable (in millions)	$ 4.1

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Net Loss Per Share - Schedule of Securities with a Potentially Dilutive Impact (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2019 shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	53,718
LLC Units held by Continuing Members
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	38,733
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,446
Purchase rights committed under the ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,493
Pluralsight Holdings | Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,500
Parent Company | Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	7,546

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Stockholders' Equity - Recapitalization of Pluralsight Holdings (Details)		9 Months Ended
	May 16, 2018 shares	Sep. 30, 2019
Class of Stock [Line Items]
Required ratio to be maintained	1
Common Units Of Pluralsight Holdings Converted Into LLC Units
Class of Stock [Line Items]
Conversion ratio	1
Shares converted (in shares)	48,407,645
Redeemable Convertible Preferred Units Converted Into LLC Units
Class of Stock [Line Items]
Conversion ratio	1
Shares converted (in shares)	48,447,880
Incentive Units Of Pluralsight Holdings Converted Into LLC Units
Class of Stock [Line Items]
Shares converted (in shares)	15,783,689
Shares issued from conversion (in shares)	12,667,778
Class B Incentive Units Of Pluralsight Holdings Converted Into LLC Units
Class of Stock [Line Items]
Shares converted (in shares)	3,000,000
Shares issued from conversion (in shares)	1,747,067
LLC Units Exchanged For Shares Of Class A Common Stock
Class of Stock [Line Items]
Shares converted (in shares)	39,110,660
LLC Units Converted Into Class B And Class C Common Stock
Class of Stock [Line Items]
Conversion ratio	1	1
LLC Units Converted Into Class B And Class C Common Stock | Class B Common Stock
Class of Stock [Line Items]
Common stock, shares issued (in shares)	58,111,572
LLC Units Converted Into Class B And Class C Common Stock | Class C Common Stock
Class of Stock [Line Items]
Common stock, shares issued (in shares)	14,048,138
Required LLC Unit Ratio For Each Share Of Class A Common Stock Issued
Class of Stock [Line Items]
Conversion ratio	1

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Allowance for doubtful accounts	$ 2,909	$ 2,501
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	101,638,179	65,191,907
Common stock, shares outstanding (in shares)	101,638,179	65,191,907
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	24,442,952	57,490,881
Common stock, shares outstanding (in shares)	24,442,952	57,490,881
Class C Common Stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	14,289,762	14,586,173
Common stock, shares outstanding (in shares)	14,289,762	14,586,173

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Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Intangible assets, net are summarized as follows (in thousands):

	As of September 30, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,771	$	64
Course creation costs	16,380		8,237		8,143
Total	$	49,215	$	41,008	$	8,207
Intangible assets:
Technology	$	28,500	$	5,209	$	23,291
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	3,550		2,829		721
Database	40		40		—
Domain names	45		—		45
Total	$	32,687	$	8,630	$	24,057

	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,229	$	606
Course creation costs	13,552		7,108		6,444
Total	$	46,387	$	39,337	$	7,050
Intangible assets:
Technology	$	4,500	$	2,786	$	1,714
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	2,750		2,750		—
Database	40		40		—
Domain names	45		—		45
Total	$	7,887	$	6,128	$	1,759

Intangible assets are amortized using the straight-line method over the estimated useful lives. Amortization expense of acquired intangible assets was $1.4 million and $1.1 million for the three months ended September 30, 2019 and 2018, respectively, and $3.0 million and $7.7 million for the nine months ended September 30, 2019 and 2018, respectively. Amortization expense of course creation costs was $0.7 million and $0.5 million for the three months ended September 30, 2019 and 2018, respectively, and $1.8 million and $1.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Based on the recorded intangible assets at September 30, 2019, estimated amortization expense is expected to be as follows (in thousands):

Year Ended December 31,	Amortization
2019 (remaining three months)	$	2,106
2020	8,057
2021	7,494
2022	6,611
2023	5,946
2024	2,005
Total	$	32,219

The change in the carrying amount of goodwill for the nine months ended September 30, 2019 was as follows (in thousands):

Goodwill at December 31, 2018	$	123,119
Goodwill recorded in connection with acquisition	138,603
Reduction in goodwill due to working capital adjustments	(100		)
Goodwill as of September 30, 2019	$	261,622

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities
Net loss	$ (121,127)	$ (112,701)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	6,471	6,331
Amortization of acquired intangible assets	3,044	7,721
Amortization of course creation costs	1,841	1,437
Equity-based compensation	67,657	52,982
Amortization of deferred contract acquisition costs	17,317	0
Amortization of debt discount and issuance costs	15,120	1,215
Investment discount and premium amortization, net	(1,771)	0
Loss on debt extinguishment	950	4,085
Other	(178)	507
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	1,858	(10,352)
Deferred contract acquisition costs	(18,668)	0
Prepaid expenses and other assets	(3,660)	(2,990)
Accounts payable	(2,486)	928
Accrued expenses and other liabilities	6,067	6,912
Accrued author fees	1,292	1,452
Deferred revenue	22,461	28,190
Net cash used in operating activities	(3,812)	(14,283)
Investing activities
Purchases of property and equipment	(7,619)	(6,576)
Purchases of content library	(3,822)	(2,345)
Cash paid for acquisition, net of cash acquired	(163,771)	0
Purchases of investments	(529,653)	0
Proceeds from sales of investments	4,967	0
Proceeds from maturities of short-term investments	112,995	0
Net cash used in investing activities	(586,903)	(8,921)
Financing activities
Proceeds from issuance of convertible senior notes, net of discount and issuance costs	616,654	0
Purchase of capped calls related to issuance of convertible senior notes	(69,432)	0
Repurchases of convertible senior notes	(35,000)	0
Proceeds from terminations of capped calls related to repurchases of convertible senior notes	1,284	0
Proceeds from issuance of common stock from employee equity plans	14,876	0
Proceeds from initial public offering, net of underwriting discounts and commissions	0	332,080
Payments of costs related to initial public offering	0	(7,083)
Borrowings of long-term debt	0	20,000
Repayments of long-term debt	0	(137,710)
Payments of debt extinguishment costs	0	(2,179)
Payments of debt issuance costs	0	(450)
Payments to settle equity appreciation rights	0	(325)
Taxes paid related to net share settlement	0	(78)
Other	(10)	(13)
Net cash provided by financing activities	528,372	204,242
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(109)	(136)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(62,452)	180,902
Cash, cash equivalents, and restricted cash, beginning of period	211,071	28,477
Cash, cash equivalents, and restricted cash, end of period	148,619	209,379
Supplemental cash flow disclosure:
Cash paid for interest	1,126	4,271
Cash paid for income taxes, net	539	338
Supplemental disclosure of non-cash investing and financing activities:
Property acquired under build-to-suit agreements	22,461	0
Unpaid capital expenditures	752	252
Equity-based compensation capitalized as internal-use software	934	114
Unrealized gains on investments	398	0
Conversion of redeemable convertible preferred units	0	582,041
Redeemable convertible preferred unit accretion	0	176,275
Costs related to initial public offering, accrued but not yet paid	0	607
Issuance of warrants to purchase shares of Class A common stock	0	984
Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows:
Restricted cash	27,748	753
Total cash, cash equivalents, and restricted cash	$ 211,071	$ 28,477

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Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company measures and records certain financial assets at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds. The following three levels of inputs are used to measure the fair value of financial instruments:

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

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The fair value of the Company’s financial instruments was as follows (in thousands):

	As of September 30, 2019
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	64,380	$	—	$	—	$	64,380
Commercial paper	—		13,995		—		13,995
U.S. treasury securities	—		19,986		—		19,986
Total cash equivalents	$	64,380	$	33,981	$	—	$	98,361
Short-term investments
Commercial paper	$	—	$	53,787	$	—	$	53,787
U.S. treasury securities	—		129,380		—		129,380
Corporate notes and obligations	—		125,465		—		125,465
U.S. agency obligations	—		19,970		—		19,970
Total short-term investments	$	—	$	328,602	$	—	$	328,602
Long-term investments
Corporate notes and obligations	$	—	$	61,020	$	—	$	61,020
U.S. agency obligations	—		22,742		—		22,742
Certificates of deposit	—		448		—		448
Total long-term investments	$	—	$	84,210	$	—	$	84,210

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	185,405	$	—	$	—	$	185,405

Convertible Senior Notes

As of September 30, 2019, the estimated fair value of the Company's convertible senior notes, with aggregate principal totaling $593.5 million, was $510.4 million. The Company estimates the fair value based on quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). These convertible senior notes are recorded at face value less unamortized debt discount and transaction costs on the Company's condensed consolidated balance sheet. Refer to Note 11—Convertible Senior Notes and Other Long-Term Debt for further information.

Fair Value of Other Financial Instruments

The carrying amounts of the Company’s accounts receivable, accounts payable, accrued expenses, and other liabilities approximate their fair values due to the short maturities of these assets and liabilities.

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Revenue (Tables)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following table summarizes the adjustments made to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of applying the modified retrospective method to adopt ASC 606 (in thousands):

	As Reported			Adjustments					As Adjusted
	December 31, 2018			Revenue Recognition			Incremental Costs of Obtaining a Contract		January 1, 2019
Accounts receivable, net	$	63,436		$	33		$	—	$	63,469
Deferred contract acquisition costs, net	—			—			16,461		16,461
Deferred contract acquisition costs, noncurrent, net	—			—			3,751		3,751
Deferred revenue	157,695			(389		)	—		157,306
Deferred revenue, noncurrent	14,886			—			—		14,886
Accumulated deficit	(355,446		)	205			9,828		(345,413		)
Non-controlling interests	107,167			217			10,384		117,768

The following tables present the amount by which each condensed consolidated financial statement line item is affected as of and for the three and nine months ended September 30, 2019 by ASC 606 (in thousands, except per share data):

Condensed Consolidated Balance Sheet:

	September 30, 2019
	As Reported			Balance without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Accounts receivable, net	$	63,001		$	62,311		$	690
Goodwill(1)	261,622			262,845			(1,223		)
Deferred contract acquisition costs, net	17,128			—			17,128
Deferred contract acquisition costs, noncurrent, net	4,435			—			4,435
Deferred revenue	177,523			179,480			(1,957		)
Deferred revenue, noncurrent	17,586			17,586			—
Accumulated deficit	(426,777		)	(443,649		)	16,872
Non-controlling interest	68,672			62,557			6,115

(1) Reflects the difference in Goodwill from applying ASC 606 to the deferred revenue balance acquired from GitPrime, Inc. See Note 9—Acquisition of GitPrime, Inc. for additional details. The difference in deferred revenue under ASC 606 is primarily due to the timing of recognition for subscriptions that allow the customer to install the software on premise without significant penalty.

Condensed Consolidated Statement of Operations:

	Three Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	82,620		$	82,017		$	603
Operating expenses:
Sales and marketing	55,727			56,959			(1,232		)
Loss from operations	(39,548		)	(41,383		)	1,835
Net loss	(45,802		)	(47,637		)	1,835
Less: Net loss attributable to non-controlling interests	(13,073		)	(13,597		)	524
Net loss attributable to Pluralsight, Inc.	(32,729		)	(34,040		)	1,311
Net loss per share, basic and diluted	$	(0.32	)	$	(0.34	)	$	(0.02	)
Weighted-average common shares used in computing basic and diluted net loss per share	101,407			101,407			—

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	228,099		$	227,097		$	1,002
Operating expenses:
Sales and marketing	149,852			151,203			(1,351		)
Loss from operations	(110,509		)	(112,862		)	2,353
Net loss	(121,127		)	(123,480		)	2,353
Less: Net loss attributable to non-controlling interests	(39,763		)	(40,475		)	712
Net loss attributable to Pluralsight, Inc.	(81,364		)	(83,005		)	1,641
Net loss per share, basic and diluted	$	(0.89	)	$	(0.90	)	$	(0.01	)
Weighted-average common shares used in computing basic and diluted net loss per share	91,741			91,741			—

Condensed Consolidated Statement of Cash Flows:

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Net loss	$	(121,127	)	$	(123,480	)	$	2,353
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred contract acquisition costs	17,317			—			17,317
Changes in assets and liabilities:
Accounts receivable	1,858			1,815			43
Deferred contract acquisition costs	(18,668		)	—			(18,668		)
Deferred revenue	22,461			23,506			(1,045		)
Cash used in operating activities	(3,812		)	(3,812		)	—

Disaggregation of Revenue

Revenue by geographic region, based on the physical location of the customer, was as follows (dollars in thousands):

	Three Months Ended September 30,								Growth
	2019				2018				Rate
	Amount		%		Amount		%		%
United States	$	51,869	63	%	$	39,368	64	%	32	%
Europe, Middle East and Africa(1)	22,314		27	%	16,182		26	%	38	%
Other foreign locations	8,437		10	%	6,003		10	%	41	%
Total revenue	$	82,620	100	%	$	61,553	100	%

	Nine Months Ended September 30,								Growth
	2019				2018				Rate
	Amount		%		Amount		%		%
United States	$	142,705	63	%	$	104,901	64	%	36	%
Europe, Middle East and Africa(1)	62,204		27	%	44,302		27	%	40	%
Other foreign locations	23,190		10	%	15,566		9	%	49	%
Total revenue	$	228,099	100	%	$	164,769	100	%

(1) Revenue from the United Kingdom represented 11% of revenue for the three and nine months ended September 30, 2019 and the nine months ended September 30, 2018. Revenue from the United Kingdom represented 10% of revenue for the three months ended September 30, 2018.

Revenue by type of customer, was as follows (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Business customers	$	71,278	$	50,423	$	194,373	$	132,160
Individual customers	11,342		11,130		33,726		32,609
Total revenue	$	82,620	$	61,553	$	228,099	$	164,769

Summary of Deferred Contract Acquisition Costs Activity

The following table summarizes the activity of the deferred contract acquisition costs (in thousands):

Balance as of January 1, 2019	$	20,212
Capitalization of contract acquisition costs	18,668
Amortization of deferred contract acquisition costs	(17,317		)
Balance as of September 30, 2019	$	21,563

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

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

	September 30, 2019			December 31, 2018
Computer equipment	$	11,221		$	9,369
Software	2,034			2,031
Capitalized internal-use software costs	20,705			13,880
Furniture and fixtures	5,737			5,478
Buildings	11,251			11,251
Leasehold improvements	1,606			1,490
Construction in progress	1,456			1,671
Build-to-suit lease asset under construction	30,742			8,281
Total property and equipment	84,752			53,451
Less: Accumulated depreciation	(28,281		)	(21,810		)
Property and equipment, net	$	56,471		$	31,641

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

At September 30, 2019, future minimum lease payments, including lease payments for the Company’s facilities in Farmington, Utah, and lease payments for the Company’s future headquarters in Draper, Utah were as follows (in thousands):

Year Ended December 31,
2019 (remaining three months)	1,995
2020	9,026
2021	10,032
2022	10,025
2023	9,926
Thereafter	99,324
Less: Sublease rental income	(763		)
Total future minimum lease payments	$	139,565

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Fair Value Measurements - Narrative (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of convertible senior notes	$ 510,400,000
Senior Notes Due In 2024 | Convertible Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate principal	$ 593,500,000.0	$ 633,500,000.0

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Cash Equivalents and Investments - Schedule of Cash Equivalents, Short-term and Long-term Investments (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 510,774
Unrealized Gains	417
Unrealized Losses	(18)
Fair Value	511,173
Cash equivalents
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	98,360
Unrealized Gains	1
Unrealized Losses	0
Fair Value	98,361
Cash equivalents | Money market funds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	64,380
Unrealized Gains	0
Unrealized Losses	0
Fair Value	64,380
Cash equivalents | Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	13,995
Unrealized Gains	0
Unrealized Losses	0
Fair Value	13,995
Cash equivalents | U.S. treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	19,985
Unrealized Gains	1
Unrealized Losses	0
Fair Value	19,986
Short-term investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	328,323
Unrealized Gains	286
Unrealized Losses	(7)
Fair Value	328,602
Short-term investments | Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	53,787
Unrealized Gains	0
Unrealized Losses	0
Fair Value	53,787
Short-term investments | U.S. treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	129,329
Unrealized Gains	51
Unrealized Losses	0
Fair Value	129,380
Short-term investments | Corporate notes and obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	125,236
Unrealized Gains	234
Unrealized Losses	(5)
Fair Value	125,465
Short-term investments | U.S. agency obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	19,971
Unrealized Gains	1
Unrealized Losses	(2)
Fair Value	19,970
Long-term investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	84,091
Unrealized Gains	130
Unrealized Losses	(11)
Fair Value	84,210
Long-term investments | Corporate notes and obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	60,903
Unrealized Gains	127
Unrealized Losses	(10)
Fair Value	61,020
Long-term investments | U.S. agency obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	22,740
Unrealized Gains	3
Unrealized Losses	(1)
Fair Value	22,742
Long-term investments | Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	448
Unrealized Gains	0
Unrealized Losses	0
Fair Value	$ 448

XML

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 82,620	$ 61,553	$ 228,099	$ 164,769
Business customers
Disaggregation of Revenue [Line Items]
Revenue	71,278	50,423	194,373	132,160
Individual customers
Disaggregation of Revenue [Line Items]
Revenue	11,342	11,130	33,726	32,609
United States
Disaggregation of Revenue [Line Items]
Revenue	$ 51,869	39,368	$ 142,705	104,901
Growth Rate, Percentage	32.00%		36.00%
Europe, Middle East and Africa
Disaggregation of Revenue [Line Items]
Revenue	$ 22,314	16,182	$ 62,204	44,302
Growth Rate, Percentage	38.00%		40.00%
Other foreign locations
Disaggregation of Revenue [Line Items]
Revenue	$ 8,437	$ 6,003	$ 23,190	$ 15,566
Growth Rate, Percentage	41.00%		49.00%
United Kingdom
Disaggregation of Revenue [Line Items]
Revenue, percent	11.00%	10.00%	11.00%	11.00%
Revenue | Geographic Concentration Risk
Disaggregation of Revenue [Line Items]
Revenue, percent	100.00%	100.00%	100.00%	100.00%
Revenue | Geographic Concentration Risk | United States
Disaggregation of Revenue [Line Items]
Revenue, percent	63.00%	64.00%	63.00%	64.00%
Revenue | Geographic Concentration Risk | Europe, Middle East and Africa
Disaggregation of Revenue [Line Items]
Revenue, percent	27.00%	26.00%	27.00%	27.00%
Revenue | Geographic Concentration Risk | Other foreign locations
Disaggregation of Revenue [Line Items]
Revenue, percent	10.00%	10.00%	10.00%	9.00%

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Convertible Senior Notes and Other Long-Term Debt - Narrative (Details)	1 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) shares	Mar. 31, 2019 USD ($) day $ / shares shares	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
Proceeds from issuance of convertible senior notes, net of discount and issuance costs			$ 616,654,000	$ 0
Equity component of convertible senior notes, net of issuance costs			137,033,000
Repurchases of convertible senior notes			35,000,000	0
Purchase of capped calls related to issuance of Convertible Senior Notes			69,432,000
Number of shares covered by cap call, terminated (in shares) | shares	1,032,092
Proceeds from terminations of capped calls related to repurchases of convertible senior notes			1,284,000	$ 0
Senior Notes Due In 2024
Debt Instrument [Line Items]
Shares covered by cap call (in shares) | shares		16,345,757
Purchase of capped calls related to issuance of Convertible Senior Notes		$ 69,400,000
Senior Notes Due In 2024 | Convertible Senior Notes
Debt Instrument [Line Items]
Face amount	$ 593,500,000.0	$ 633,500,000.0	$ 593,500,000.0
Stated rate		0.375%
Option to purchase, additional principal amount		$ 83,500,000
Proceeds from issuance of convertible senior notes, net of discount and issuance costs		$ 616,700,000
Discount rate	5.50%	5.50%	5.50%
Fair value of convertible senior notes		$ 492,700,000
Equity component of convertible senior notes, net of issuance costs			$ 140,800,000
Issuance costs attributable to liability component	$ 13,100,000		13,100,000
Issuance costs attributable to equity component	3,700,000		3,700,000
Aggregate principal repurchased	40,000,000.0		40,000,000.0
Repurchases of convertible senior notes	35,000,000
Fair value of convertible senior notes, repurchased	32,000,000		32,000,000
Reacquisition of conversion option related to the repurchases of convertible senior notes	$ 2,965,000		$ 2,965,000
Initial strike price (in dollars per share) | $ / shares		$ 38.76
Initial capped call price (in dollars per share) | $ / shares		$ 58.5
Senior Notes Due In 2024 | Conversion Instance, 130% | Convertible Senior Notes
Debt Instrument [Line Items]
Number of consecutive trading days | day		30
Senior Notes Due In 2024 | Conversion Instance, 130% | Minimum | Convertible Senior Notes
Debt Instrument [Line Items]
Number of trading days | day		20
Conversion ratio, conversion due to qualifying event		130.00%
Senior Notes Due In 2024 | Conversion Instance, 98% | Minimum | Convertible Senior Notes
Debt Instrument [Line Items]
Number of trading days | day		5
Number of consecutive trading days | day		5
Senior Notes Due In 2024 | Conversion Instance, 98% | Maximum | Convertible Senior Notes
Debt Instrument [Line Items]
Conversion ratio, conversion due to qualifying event		98.00%
Fundamental Change | Senior Notes Due In 2024 | Convertible Senior Notes
Debt Instrument [Line Items]
Percentage of principal amount redeemed		100.00%
Common Stock | Class A Common Stock | Senior Notes Due In 2024 | Convertible Senior Notes
Debt Instrument [Line Items]
Initial conversion rate (in $1,000 per share)		0.0258023000
Initial conversion price (in dollars per share) | $ / shares		$ 38.76

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Equity-Based Compensation - Narrative (Details)	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2019 shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) period shares	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) shares	May 16, 2018 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of options exercised				$ 7,600,000
Total unrecognized equity-based compensation of options		$ 14,900,000		14,900,000
Equity-based compensation capitalized as internal-use software		400,000	$ 100,000	934,000	$ 114,000
LLC Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized equity-based compensation		12,900,000		$ 12,900,000
Recognition period				1 year 7 months 6 days
Total fair value				$ 35,400,000
Number of shares with accelerated vesting (in shares) | shares	130,924
Equity-based compensation from accelerated vesting		$ 2,100,000
Units outstanding (in shares) | shares		1,827,844		1,827,844		3,195,322
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized equity-based compensation		$ 136,100,000		$ 136,100,000
Recognition period				3 years 1 month 6 days
Requisite service period				4 years
Restricted Stock Units (RSUs) | First Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of awards vested				25.00%
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognition period				1 year 1 month 6 days
Ratable vesting period				6 months
Vesting period				2 years
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized equity-based compensation		$ 9,300,000		$ 9,300,000
Recognition period				1 year
Consecutive offering period				24 months
Number of purchase periods | period				4
Purchase period				6 months
Fixed contribution amount percentage		75.00%		75.00%
Maximum fixed contribution amount				$ 12,500
Maximum employee contribution				$ 25,000
Maximum number of shares able to be purchased (in shares) | shares				5,000
Purchase price, percent				85.00%
Employee payroll contributions accrued		$ 6,200,000		$ 6,200,000		$ 1,500,000
IPO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price (in dollars per share) | $ / shares							$ 15
GitPrime, Inc. | Minimum | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period				2 years
GitPrime, Inc. | Maximum | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period				4 years

XML

Net Loss Per Share - Calculation of Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				5 Months Ended	9 Months Ended
	Sep. 30, 2019		Sep. 30, 2018		Sep. 30, 2018	Sep. 30, 2019		Sep. 30, 2018
Numerator:
Net loss	$ (45,802)		$ (34,323)		$ (60,918)	$ (121,127)		$ (112,701)
Less: Net loss attributable to non-controlling interests	(13,073)		(17,980)		(31,890)	(39,763)		(31,890)
Net loss attributable to Pluralsight, Inc.	$ (32,729)		$ (16,343)		$ (29,028)	$ (81,364)		$ (80,811)
Denominator:
Weighted-average shares of Class A common stock outstanding, basic and diluted (in shares)	101,407		62,876		62,867	91,741
Less: Weighted-average shares of Class A common stock subject to time-based vesting (in shares)	0		(404)		(467)	0
Weighted average shares of Class A common stock used in computing basic and diluted net loss per unit (in shares)	101,407	[1]	62,472	[1]	62,400	91,741	[1]	62,400	[1]
Net loss per unit, basic and diluted (in dollars per share)	$ (0.32)	[1]	$ (0.26)	[1]	$ (0.47)	$ (0.89)	[1]	$ (0.47)	[1]

[1] Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

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Stockholders' Equity - Amendment and Restatement of Certificate of Incorporation (Details)		9 Months Ended
	May 16, 2018 class vote $ / shares shares	Sep. 30, 2019 class vote $ / shares shares	Dec. 31, 2018 $ / shares shares
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)	100,000,000	100,000,000	100,000,000
Number of classes of stock | class	3	3
Board of director, term	3 years
Class A Common Stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000	1,000,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Votes per share | vote	1
Class B Common Stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	200,000,000	200,000,000	200,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Votes per share | vote		1
Class C Common Stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	50,000,000	50,000,000	50,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Votes per share | vote	10
LLC Units Converted Into Class B And Class C Common Stock
Class of Stock [Line Items]
Conversion ratio	1	1
LLC Units, Class A Or Class B Common Stock Converted Into Class A Common Stock
Class of Stock [Line Items]
Conversion ratio	1
Required LLC Unit Ratio For Each Share Of Class A Common Stock Issued
Class of Stock [Line Items]
Conversion ratio	1

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Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Performance Shares Award Activity

The unvested LLC Units following the conversion of unvested incentive units are summarized as follows:

	Unvested Units		Weighted- Average Grant Date Fair Value
Unvested LLC Units outstanding—December 31, 2018	3,195,322		$	7.63
Forfeited or cancelled	(121,845	)	5.73
Vested	(1,245,633	)	7.58
Unvested LLC Units outstanding—September 30, 2019	1,827,844		$	8.58

Share-based Compensation, Stock Options, Activity

The following table summarizes the stock option activity for the nine months ended September 30, 2019:

	Stock Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Balance as of December 31, 2018	5,143,712		$	15.00
Granted	169,762		1.47
Exercised	(452,914	)	14.62
Forfeited or cancelled	(414,476	)	14.87
Outstanding as of September 30, 2019	4,446,084		$	14.53	8.6	$	10.0
Vested and exercisable—September 30, 2019	2,099,314		$	14.86	8.6	$	4.1

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

The activity for RSUs for the nine months ended September 30, 2019 was as follows:

	Number of RSUs or Units		Weighted-Average Grant Date Fair Value
RSUs of Pluralsight, Inc.
Balance at December 31, 2018	4,801,536		$	11.11
Granted	5,279,646		30.60
Forfeited or cancelled	(913,189	)	20.06
Vested	(1,621,773	)	11.85
Balance at September 30, 2019	7,546,220		$	23.51
Restricted Share Units of Pluralsight Holdings:
Balance at December 31, 2018	2,062,500		$	8.24
Vested	(562,500	)	8.24
Balance at September 30, 2019	1,500,000		$	8.24

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Equity-based compensation was classified as follows in the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
			(Restated)				(Restated)
Cost of revenue	$	138	$	56	$	355	$	145
Sales and marketing	8,739		5,612		22,967		13,507
Technology and content	6,666		3,700		15,513		8,652
General and administrative	9,114		11,262		28,822		30,678
Total equity-based compensation	$	24,657	$	20,630	$	67,657	$	52,982

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Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Schedule of Adjustments from Revenue Recognition (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net	$ 63,001	$ 63,469	$ 63,436
Deferred contract acquisition costs, net	17,128	16,461	0
Deferred contract acquisition costs, noncurrent, net	4,435	3,751	0
Deferred revenue	177,523	157,306	157,695
Deferred revenue, noncurrent	17,586	14,886	14,886
Accumulated deficit	(426,777)	(345,413)	(355,446)
Non-controlling interests	68,672	117,768	107,167
Balance without Adoption of ASC 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net	62,311		63,436
Deferred contract acquisition costs, net	0		0
Deferred contract acquisition costs, noncurrent, net	0		0
Deferred revenue	179,480		157,695
Deferred revenue, noncurrent	17,586		14,886
Accumulated deficit	(443,649)		(355,446)
Non-controlling interests	$ 62,557		$ 107,167
Revenue Recognition | Effect of Adoption Increase/(Decrease)
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net		33
Deferred contract acquisition costs, net		0
Deferred contract acquisition costs, noncurrent, net		0
Deferred revenue		(389)
Deferred revenue, noncurrent		0
Accumulated deficit		205
Non-controlling interests		217
Incremental Costs of Obtaining a Contract | Effect of Adoption Increase/(Decrease)
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net		0
Deferred contract acquisition costs, net		16,461
Deferred contract acquisition costs, noncurrent, net		3,751
Deferred revenue		0
Deferred revenue, noncurrent		0
Accumulated deficit		9,828
Non-controlling interests		$ 10,384

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Restatement of Condensed Consolidated Financial Statements - Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		5 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Operating activities
Net loss	$ (45,802)	$ (34,323)	$ (60,918)	$ (121,127)	$ (112,701)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	2,300	2,000		6,471	6,331
Amortization of acquired intangible assets				3,044	7,721
Amortization of course creation costs				1,841	1,437
Equity-based compensation				67,657	52,982
Amortization of debt discount and issuance costs				15,120	1,215
Loss on debt extinguishment				950	4,085
Other				(178)	507
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable				1,858	(10,352)
Prepaid expenses and other assets				(3,660)	(2,990)
Accounts payable				(2,486)	928
Accrued expenses and other liabilities				6,067	6,912
Accrued author fees				1,292	1,452
Deferred revenue				22,461	28,190
Net cash used in operating activities				(3,812)	(14,283)
Investing activities
Purchases of property and equipment				(7,619)	(6,576)
Purchases of content library				(3,822)	(2,345)
Net cash used in investing activities				(586,903)	(8,921)
Financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions				0	332,080
Payments of costs related to initial public offering				0	(7,083)
Borrowings of long-term debt				0	20,000
Repayments of long-term debt				0	(137,710)
Payments of debt extinguishment costs				0	(2,179)
Payments of debt issuance costs				0	(450)
Payments to settle equity appreciation rights				0	(325)
Taxes paid related to net share settlement				0	(78)
Payments of facility financing obligation					(13)
Net cash provided by financing activities				528,372	204,242
Effect of exchange rate changes on cash, cash equivalents, and restricted cash				(109)	(136)
Net (decrease) increase in cash, cash equivalents, and restricted cash				(62,452)	180,902
Cash, cash equivalents, and restricted cash, beginning of period				211,071	28,477
Cash, cash equivalents, and restricted cash, end of period	$ 148,619	209,379	209,379	$ 148,619	209,379
As Previously Reported
Operating activities
Net loss		(29,737)			(96,691)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment					6,331
Amortization of acquired intangible assets					7,721
Amortization of course creation costs					1,437
Equity-based compensation					36,972
Amortization of debt discount and issuance costs					1,215
Loss on debt extinguishment					4,085
Other					507
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable					(10,352)
Prepaid expenses and other assets					(2,990)
Accounts payable					928
Accrued expenses and other liabilities					6,912
Accrued author fees					1,452
Deferred revenue					28,190
Net cash used in operating activities					(14,283)
Investing activities
Purchases of property and equipment					(6,576)
Purchases of content library					(2,345)
Net cash used in investing activities					(8,921)
Financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions					332,080
Payments of costs related to initial public offering					(7,083)
Borrowings of long-term debt					20,000
Repayments of long-term debt					(137,710)
Payments of debt extinguishment costs					(2,179)
Payments of debt issuance costs					(450)
Payments to settle equity appreciation rights					(325)
Taxes paid related to net share settlement					(78)
Payments of facility financing obligation					(13)
Net cash provided by financing activities					204,242
Effect of exchange rate changes on cash, cash equivalents, and restricted cash					(136)
Net (decrease) increase in cash, cash equivalents, and restricted cash					180,902
Cash, cash equivalents, and restricted cash, beginning of period					28,477
Cash, cash equivalents, and restricted cash, end of period		209,379	209,379		209,379
Non-Cash Equity-Based Compensation Adjustment | Adjustments
Operating activities
Net loss		(4,586)			(16,010)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment					0
Amortization of acquired intangible assets					0
Amortization of course creation costs					0
Equity-based compensation					16,010
Amortization of debt discount and issuance costs					0
Loss on debt extinguishment					0
Other					0
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable					0
Prepaid expenses and other assets					0
Accounts payable					0
Accrued expenses and other liabilities					0
Accrued author fees					0
Deferred revenue					0
Net cash used in operating activities					0
Investing activities
Purchases of property and equipment					0
Purchases of content library					0
Net cash used in investing activities					0
Financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions					0
Payments of costs related to initial public offering					0
Borrowings of long-term debt					0
Repayments of long-term debt					0
Payments of debt extinguishment costs					0
Payments of debt issuance costs					0
Payments to settle equity appreciation rights					0
Taxes paid related to net share settlement					0
Payments of facility financing obligation					0
Net cash provided by financing activities					0
Effect of exchange rate changes on cash, cash equivalents, and restricted cash					0
Net (decrease) increase in cash, cash equivalents, and restricted cash					0
Cash, cash equivalents, and restricted cash, beginning of period					0
Cash, cash equivalents, and restricted cash, end of period		$ 0	$ 0		$ 0

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Acquisition of GitPrime, Inc. - Summary of Unaudited Pro Forma Information (Details) - GitPrime, Inc. - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Business Acquisition [Line Items]
Revenue	$ 82,620	$ 62,421	$ 231,989	$ 166,773
Net loss	$ (45,802)	$ (37,558)	$ (126,535)	$ (123,145)
Net loss per share, basic and diluted (in dollars per share)	$ (0.32)	$ (0.29)	$ (0.92)	$ (0.51)

XML

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2,300	$ 2,000	$ 6,471	$ 6,331

XML

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 20,634,000
Noncontrolling Interest [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	10,601,000
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 10,033,000

XML

Restatement of Condensed Consolidated Financial Statements (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Schedule of Restatement of Consolidated Financial Statements

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Revenue	$	61,553		$	—		$	61,553		$	164,769		$	—		$	164,769
Cost of revenue	15,331			16			15,347			46,107			59			46,166
Gross profit	46,222			(16		)	46,206			118,662			(59		)	118,603
Operating expenses:
Sales and marketing	41,392			1,240			42,632			109,792			4,164			113,956
Technology and content	17,227			910			18,137			47,045			2,813			49,858
General and administrative	17,398			2,420			19,818			48,138			8,974			57,112
Total operating expenses	76,017			4,570			80,587			204,975			15,951			220,926
Loss from operations	(29,795		)	(4,586		)	(34,381		)	(86,313		)	(16,010		)	(102,323		)
Other (expense) income:
Interest expense	(342		)	—			(342		)	(6,476		)	—			(6,476		)
Loss on debt extinguishment	—			—			—			(4,085		)	—			(4,085		)
Other income, net	654			—			654			689			—			689
Loss before income taxes	(29,483		)	(4,586		)	(34,069		)	(96,185		)	(16,010		)	(112,195		)
Provision for income taxes	(254		)	—			(254		)	(506		)	—			(506		)
Net loss	$	(29,737	)	$	(4,586	)	$	(34,323	)	$	(96,691	)	$	(16,010	)	$	(112,701	)
Less: Net loss attributable to non-controlling interests	(15,578		)	(2,402		)	(17,980		)	(28,284		)	(3,606		)	(31,890		)
Net loss attributable to Pluralsight, Inc.	$	(14,159	)	$	(2,184	)	$	(16,343	)	$	(68,407	)	$	(12,404	)	$	(80,811	)
Less: Accretion of Series A redeemable convertible preferred units	—			—			—			(176,275		)	—			(176,275		)
Net loss attributable to shares of Class A common stock	$	(14,159	)	$	(2,184	)	$	(16,343	)	$	(244,682	)	$	(12,404	)	$	(257,086	)
Net loss per share, basic and diluted(1)	$	(0.23	)	$	(0.03	)	$	(0.26	)	$	(0.41	)	$	(0.06	)	$	(0.47	)
Weighted-average shares of Class A common stock used in computing basic and diluted net loss per share(1)	62,472						62,472			62,400						62,400

________________________

(1) Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Net loss	$	(29,737	)	$	(4,586	)	$	(34,323	)	$	(96,691	)	$	(16,010	)	$	(112,701	)
Other comprehensive loss:
Foreign currency translation losses, net	(39		)	—			(39		)	(97		)	—			(97		)
Comprehensive loss	$	(29,776	)	$	(4,586	)	$	(34,362	)	$	(96,788	)	$	(16,010	)	$	(112,798	)
Less: Comprehensive loss attributable to non-controlling interests	(15,599		)	(2,402		)	(18,001		)	(28,326		)	(3,606		)	(31,932		)
Comprehensive loss attributable to Pluralsight, Inc.	$	(14,177	)	$	(2,184	)	$	(16,361	)	$	(68,462	)	$	(12,404	)	$	(80,866	)

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit

As Previously Reported for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares		Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—		$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—		—		—	—		—	—		—			—			—			—			984
Equity-based compensation	—		—			—		13,155			—		—		—	—		—	—		—			—			—			—			13,155
Accretion of Series A redeemable convertible preferred units	—		176,275			—		(14,139		)	—		—		—	—		—	—		—			—			(162,136		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss	—		—			—		—			—		—		—	—		—	—		—			—			(42,660		)	—			(42,660		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660		4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000		2		—	—		—	—		324,704			—			—			—			324,706
Allocation of equity to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—		—			—		—			(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Settlement of equity appreciation rights	—		—			—		—			—		—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation	—		—			—		—			—		—		—	—		—	—		23,931			—			—			—			23,931
Adjustment to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(13,073		)	—			—			13,073			—
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(37		)	—			(42		)	(79		)
Net loss	—		—			—		—			—		—		—	—		—	—		—			—			(25,747		)	(28,284		)	(54,031		)
Balance at September 30, 2018	—		$	—		—		$	—		62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	443,182		$	(34	)	$	(335,863	)	$	118,976		$	226,274

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

Restatement Adjustments for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units			Members’ Capital				Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount			Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	—		$	—	$	—		$	—		$	—
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	9,123			—	—		—	—		—	—		—			—		—			—			9,123
Accretion of Series A redeemable convertible preferred units	—	—		—	(9,123		)	—	—		—	—		—	—		—			—		9,123			—			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(9,123		)	—			(9,123		)
Effect of the Reorganization Transactions and initial public offering:																												—
Effect of the reorganization transactions	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Initial public offering, net of offering costs	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Allocation of equity to non-controlling interests	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Settlement of equity appreciation rights	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	—			—	—		—	—		—	—		6,887			—		—			—			6,887
Adjustment to non-controlling interests	—	—		—	—			—	—		—	—		—	—		(3,606		)	—		—			3,606			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(3,281		)	(3,606		)	(6,887		)
Balance at September 30, 2018	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	3,281		$	—	$	(3,281	)	$	—		$	—

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

As Restated for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares		Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—		$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—		—		—	—		—	—		—			—			—			—			984
Equity-based compensation, as restated	—		—			—		22,278			—		—		—	—		—	—		—			—			—			—			22,278
Accretion of Series A redeemable convertible preferred units, as restated	—		176,275			—		(23,262		)	—		—		—	—		—	—		—			—			(153,013		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(51,783		)	—			(51,783		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660		4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000		2		—	—		—	—		324,704			—			—			—			324,706
Allocation of equity to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—		—			—		—			(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Settlement of equity appreciation rights	—		—			—		—			—		—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation, as restated	—		—			—		—			—		—		—	—		—	—		30,818			—			—			—			30,818
Adjustment to non-controlling interests, as restated	—		—			—		—			—		—		—	—		—	—		(16,679		)	—			—			16,679			—
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(37		)	—			(42		)	(79		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(29,028		)	(31,890		)	(60,918		)
Balance at September 30, 2018, as restated	—		$	—		—		$	—		62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	446,463		$	(34	)	$	(339,144	)	$	118,976		$	226,274

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated
Operating activities
Net loss	$	(96,691	)	$	(16,010	)	$	(112,701	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	6,331			—			6,331
Amortization of acquired intangible assets	7,721			—			7,721
Amortization of course creation costs	1,437			—			1,437
Equity-based compensation	36,972			16,010			52,982
Amortization of debt discount and debt issuance costs	1,215			—			1,215
Debt extinguishment costs	4,085			—			4,085
Other	507			—			507
Changes in assets and liabilities:
Accounts receivable	(10,352		)	—			(10,352		)
Prepaid expenses and other assets	(2,990		)	—			(2,990		)
Accounts payable	928			—			928
Accrued expenses and other liabilities	6,912			—			6,912
Accrued author fees	1,452			—			1,452
Deferred revenue	28,190			—			28,190
Net cash used in operating activities	(14,283		)	—			(14,283		)
Investing activities
Purchases of property and equipment	(6,576		)	—			(6,576		)
Purchases of content library	(2,345		)	—			(2,345		)
Net cash used in investing activities	(8,921		)	—			(8,921		)
Financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions	332,080			—			332,080
Payments of costs related to initial public offering	(7,083		)	—			(7,083		)
Borrowings of long-term debt	20,000			—			20,000
Repayments of long-term debt	(137,710		)	—			(137,710		)
Payments of debt extinguishment costs	(2,179		)	—			(2,179		)
Payments of debt issuance costs	(450		)	—			(450		)
Payments to settle equity appreciation rights	(325		)	—			(325		)
Taxes paid related to net share settlement	(78		)	—			(78		)
Payments of facility financing obligation	(13		)	—			(13		)
Net cash provided by financing activities	204,242			—			204,242
Effect of exchange rate change on cash, cash equivalents, and restricted cash	(136		)	—			(136		)
Net increase in cash, cash equivalents, and restricted cash	180,902			—			180,902
Cash, cash equivalents, and restricted cash, beginning of period	28,477			—			28,477
Cash, cash equivalents, and restricted cash, end of period	$	209,379		$	—		$	209,379

Description of Adjustments

The adjustments in the tables above reflect an increase in equity-based compensation expense due to the correction of an error in attribution of equity-based compensation from the straight-line method to the accelerated attribution method. The following table outlines the classification of the equity-based compensation adjustments in the statements of operations:

	Three Months Ended September 30, 2018						Nine Months Ended September 30, 2018
	As Previously Reported		Adjustments		As Restated		As Previously Reported		Adjustments		As Restated
Cost of revenue	$	40	$	16	$	56	$	86	$	59	$	145
Sales and marketing	4,372		1,240		5,612		9,343		4,164		13,507
Technology and content	2,790		910		3,700		5,839		2,813		8,652
General and administrative	8,842		2,420		11,262		21,704		8,974		30,678
Total equity-based compensation	$	16,044	$	4,586	$	20,630	$	36,972	$	16,010	$	52,982

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Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company utilizes an aircraft owned by the Company’s Chief Executive Officer on an as-needed basis. The Company has agreed to reimburse the Chief Executive Officer for use of the private aircraft for business purposes at an hourly rate per flight hour. The reimbursement rate was approved by the Company's Board of Directors based upon a review of comparable chartered aircraft rates. The Company accrued approximately $0.4 million as of September 30, 2019 included within accrued expenses on the condensed consolidated balance sheets. A total of $0.7 million has been paid under the arrangement during the nine months ended September 30, 2019.

Tax Receivable Agreement

On the date of the IPO, the Company entered into a TRA with Continuing Members that provides for a payment to the Continuing Members of 85% of the amount of tax benefits, if any, that Pluralsight, Inc. realizes, or is deemed to realize as a result of redemptions or exchanges of LLC Units. As discussed in Note 16—Income Taxes, no amounts were paid or payable to Continuing Members under the TRA as it is more-likely-than-not that the Company’s tax benefits obtained from exchanges subject to the TRA will not be realized.

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Non-Controlling Interests

9 Months Ended

Sep. 30, 2019

Noncontrolling Interest [Abstract]

Non-Controlling Interests

Non-Controlling Interests

In connection with the Reorganization Transactions, Pluralsight, Inc. became the sole managing member of Pluralsight Holdings and as a result consolidates the results of operations of Pluralsight Holdings. The non-controlling interests balance represents the LLC Units held by Continuing Members, based on the portion of LLC Units owned by Continuing Members. During the three and nine months ended September 30, 2019, the adjustments to the non-controlling interests were primarily related to equity-based compensation, the settlement of equity-based awards, and the issuance of the convertible promissory note with Pluralsight Holdings in connection with the convertible senior notes as discussed in Note 11—Convertible Senior Notes and Other Long-Term Debt. Income or loss is attributed to the non-controlling interests based on the weighted-average ownership percentages of LLC Units outstanding during the period, excluding LLC Units that are subject to time-based vesting requirements. As of September 30, 2019, the non-controlling interests of Pluralsight Holdings owned 26.6% of the outstanding LLC Units, with the remaining 73.4% owned by Pluralsight, Inc. The ownership of the LLC Units is summarized as follows:

	As of September 30, 2019			As of December 31, 2018
	Units	Ownership %		Units	Ownership %
Pluralsight, Inc.'s ownership of LLC Units	101,638,179	73.4	%	65,191,907	48.6	%
LLC Units owned by the Continuing Members(1)	36,904,870	26.6	%	68,881,732	51.4	%
	138,543,049	100.0	%	134,073,639	100.0	%

(1) Excludes 1,827,844 and 3,195,322 LLC Units still subject to time-based vesting requirements as of September 30, 2019 and December 31, 2018, respectively

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The fair value of the Company’s financial instruments was as follows (in thousands):

	As of September 30, 2019
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	64,380	$	—	$	—	$	64,380
Commercial paper	—		13,995		—		13,995
U.S. treasury securities	—		19,986		—		19,986
Total cash equivalents	$	64,380	$	33,981	$	—	$	98,361
Short-term investments
Commercial paper	$	—	$	53,787	$	—	$	53,787
U.S. treasury securities	—		129,380		—		129,380
Corporate notes and obligations	—		125,465		—		125,465
U.S. agency obligations	—		19,970		—		19,970
Total short-term investments	$	—	$	328,602	$	—	$	328,602
Long-term investments
Corporate notes and obligations	$	—	$	61,020	$	—	$	61,020
U.S. agency obligations	—		22,742		—		22,742
Certificates of deposit	—		448		—		448
Total long-term investments	$	—	$	84,210	$	—	$	84,210

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	185,405	$	—	$	—	$	185,405

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net are summarized as follows (in thousands):

	As of September 30, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,771	$	64
Course creation costs	16,380		8,237		8,143
Total	$	49,215	$	41,008	$	8,207
Intangible assets:
Technology	$	28,500	$	5,209	$	23,291
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	3,550		2,829		721
Database	40		40		—
Domain names	45		—		45
Total	$	32,687	$	8,630	$	24,057

	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,229	$	606
Course creation costs	13,552		7,108		6,444
Total	$	46,387	$	39,337	$	7,050
Intangible assets:
Technology	$	4,500	$	2,786	$	1,714
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	2,750		2,750		—
Database	40		40		—
Domain names	45		—		45
Total	$	7,887	$	6,128	$	1,759

Schedule of Indefinite-Lived Intangible Assets

Intangible assets, net are summarized as follows (in thousands):

	As of September 30, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,771	$	64
Course creation costs	16,380		8,237		8,143
Total	$	49,215	$	41,008	$	8,207
Intangible assets:
Technology	$	28,500	$	5,209	$	23,291
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	3,550		2,829		721
Database	40		40		—
Domain names	45		—		45
Total	$	32,687	$	8,630	$	24,057

	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Content library:
Acquired content library	$	32,835	$	32,229	$	606
Course creation costs	13,552		7,108		6,444
Total	$	46,387	$	39,337	$	7,050
Intangible assets:
Technology	$	4,500	$	2,786	$	1,714
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	2,750		2,750		—
Database	40		40		—
Domain names	45		—		45
Total	$	7,887	$	6,128	$	1,759

Schedule of Estimated Amortization Expense

Based on the recorded intangible assets at September 30, 2019, estimated amortization expense is expected to be as follows (in thousands):

Year Ended December 31,	Amortization
2019 (remaining three months)	$	2,106
2020	8,057
2021	7,494
2022	6,611
2023	5,946
2024	2,005
Total	$	32,219

Schedule of Goodwill

The change in the carrying amount of goodwill for the nine months ended September 30, 2019 was as follows (in thousands):

Goodwill at December 31, 2018	$	123,119
Goodwill recorded in connection with acquisition	138,603
Reduction in goodwill due to working capital adjustments	(100		)
Goodwill as of September 30, 2019	$	261,622

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Property and Equipment

9 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

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

	September 30, 2019			December 31, 2018
Computer equipment	$	11,221		$	9,369
Software	2,034			2,031
Capitalized internal-use software costs	20,705			13,880
Furniture and fixtures	5,737			5,478
Buildings	11,251			11,251
Leasehold improvements	1,606			1,490
Construction in progress	1,456			1,671
Build-to-suit lease asset under construction	30,742			8,281
Total property and equipment	84,752			53,451
Less: Accumulated depreciation	(28,281		)	(21,810		)
Property and equipment, net	$	56,471		$	31,641

Depreciation expense totaled $2.3 million and $2.0 million for the three months ended September 30, 2019 and 2018, respectively, and $6.5 million and $6.3 million for the nine months ended September 30, 2019 and 2018, respectively.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 28, 2019
Document Information [Line Items]
Entity Registrant Name	Pluralsight, Inc.
Entity Central Index Key	0001725579
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		101,791,676
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		24,442,952
Class C Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		14,394,199

XML

Revenue

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Effect of Adopting ASC 606

The adoption of ASC 606 resulted in changes to the Company's condensed consolidated balance sheet as of September 30, 2019 and its statement of operations for the three and nine months ended September 30, 2019 due to the timing of revenue recognition and the capitalization of incremental costs of obtaining contracts. In addition, there were offsetting shifts in the statement of cash flows through net loss and various changes in operating assets and liabilities, which resulted in no impact on the total cash provided by operating activities. Refer to Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements for a description of the primary impacts resulting from the adoption of ASC 606.

The following tables present the amount by which each condensed consolidated financial statement line item is affected as of and for the three and nine months ended September 30, 2019 by ASC 606 (in thousands, except per share data):

Condensed Consolidated Balance Sheet:

	September 30, 2019
	As Reported			Balance without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Accounts receivable, net	$	63,001		$	62,311		$	690
Goodwill(1)	261,622			262,845			(1,223		)
Deferred contract acquisition costs, net	17,128			—			17,128
Deferred contract acquisition costs, noncurrent, net	4,435			—			4,435
Deferred revenue	177,523			179,480			(1,957		)
Deferred revenue, noncurrent	17,586			17,586			—
Accumulated deficit	(426,777		)	(443,649		)	16,872
Non-controlling interest	68,672			62,557			6,115

(1) Reflects the difference in Goodwill from applying ASC 606 to the deferred revenue balance acquired from GitPrime, Inc. See Note 9—Acquisition of GitPrime, Inc. for additional details. The difference in deferred revenue under ASC 606 is primarily due to the timing of recognition for subscriptions that allow the customer to install the software on premise without significant penalty.

Condensed Consolidated Statement of Operations:

	Three Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	82,620		$	82,017		$	603
Operating expenses:
Sales and marketing	55,727			56,959			(1,232		)
Loss from operations	(39,548		)	(41,383		)	1,835
Net loss	(45,802		)	(47,637		)	1,835
Less: Net loss attributable to non-controlling interests	(13,073		)	(13,597		)	524
Net loss attributable to Pluralsight, Inc.	(32,729		)	(34,040		)	1,311
Net loss per share, basic and diluted	$	(0.32	)	$	(0.34	)	$	(0.02	)
Weighted-average common shares used in computing basic and diluted net loss per share	101,407			101,407			—

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Revenue	$	228,099		$	227,097		$	1,002
Operating expenses:
Sales and marketing	149,852			151,203			(1,351		)
Loss from operations	(110,509		)	(112,862		)	2,353
Net loss	(121,127		)	(123,480		)	2,353
Less: Net loss attributable to non-controlling interests	(39,763		)	(40,475		)	712
Net loss attributable to Pluralsight, Inc.	(81,364		)	(83,005		)	1,641
Net loss per share, basic and diluted	$	(0.89	)	$	(0.90	)	$	(0.01	)
Weighted-average common shares used in computing basic and diluted net loss per share	91,741			91,741			—

Condensed Consolidated Statement of Cash Flows:

	Nine Months Ended September 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)
Net loss	$	(121,127	)	$	(123,480	)	$	2,353
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred contract acquisition costs	17,317			—			17,317
Changes in assets and liabilities:
Accounts receivable	1,858			1,815			43
Deferred contract acquisition costs	(18,668		)	—			(18,668		)
Deferred revenue	22,461			23,506			(1,045		)
Cash used in operating activities	(3,812		)	(3,812		)	—

Disaggregation of Revenue

Subscription revenue accounted for approximately 95% and 97% of the Company's revenue for the three and nine months ended September 30, 2019, respectively.

Revenue by geographic region, based on the physical location of the customer, was as follows (dollars in thousands):

	Three Months Ended September 30,								Growth
	2019				2018				Rate
	Amount		%		Amount		%		%
United States	$	51,869	63	%	$	39,368	64	%	32	%
Europe, Middle East and Africa(1)	22,314		27	%	16,182		26	%	38	%
Other foreign locations	8,437		10	%	6,003		10	%	41	%
Total revenue	$	82,620	100	%	$	61,553	100	%

	Nine Months Ended September 30,								Growth
	2019				2018				Rate
	Amount		%		Amount		%		%
United States	$	142,705	63	%	$	104,901	64	%	36	%
Europe, Middle East and Africa(1)	62,204		27	%	44,302		27	%	40	%
Other foreign locations	23,190		10	%	15,566		9	%	49	%
Total revenue	$	228,099	100	%	$	164,769	100	%

(1) Revenue from the United Kingdom represented 11% of revenue for the three and nine months ended September 30, 2019 and the nine months ended September 30, 2018. Revenue from the United Kingdom represented 10% of revenue for the three months ended September 30, 2018.

Revenue by type of customer, was as follows (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Business customers	$	71,278	$	50,423	$	194,373	$	132,160
Individual customers	11,342		11,130		33,726		32,609
Total revenue	$	82,620	$	61,553	$	228,099	$	164,769

Contract Balances

For the three and nine months ended September 30, 2019, the Company recognized revenue of $70.9 million and $137.1 million, respectively, that was included in the corresponding deferred revenue balance at the beginning of the period. In connection with the acquisition of GitPrime, the Company acquired contract assets of $0.7 million, which are presented within accounts receivable, and deferred revenue of $1.4 million.

Remaining Performance Obligations

As of September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $265.8 million. The Company expects to recognize 74% of the transaction price over the next 12 months.

Costs to Obtain a Contract

The following table summarizes the activity of the deferred contract acquisition costs (in thousands):

Balance as of January 1, 2019	$	20,212
Capitalization of contract acquisition costs	18,668
Amortization of deferred contract acquisition costs	(17,317		)
Balance as of September 30, 2019	$	21,563

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Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net loss	$ (45,802)	$ (34,323)	$ (121,127)	$ (112,701)
Other comprehensive income (loss):
Unrealized gains on investments	19	0	398	0
Foreign currency translation losses, net	(90)	(39)	(79)	(97)
Comprehensive loss	(45,873)	(34,362)	(120,808)	(112,798)
Less: Comprehensive loss attributable to non-controlling interests	(13,092)	(18,001)	(39,670)	(31,932)
Comprehensive loss attributable to Pluralsight, Inc.	$ (32,781)	$ (16,361)	$ (81,138)	$ (80,866)

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Letters of Credit

As of September 30, 2019, and December 31, 2018, the Company had a total of $0.7 million in letters of credit outstanding with a financial institution. These outstanding letters of credit were issued for purposes of securing certain of the Company’s obligations under facility leases. The letters of credit were collateralized by $0.7 million of the Company’s cash, which is reflected as restricted cash on the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively.

Lease Commitments

The Company is committed under certain operating leases with third parties for office space. These leases expire at various times through 2035. The Company recognizes rent expense on a straight-line basis over the lease period.

In August 2018, the Company entered into a non-cancellable lease agreement to rent office space for the Company's future headquarters to be constructed in Draper, Utah. Based on the Company's involvement in the design and construction of the building, the Company is deemed the owner of the construction project for accounting purposes during the construction period. As a result, the Company recorded a construction in progress asset of $30.7 million and a corresponding facility financing obligation as of September 30, 2019.

In connection with the lease agreement, the Company is required to maintain a deposit of $16.0 million with a financial institution for the benefit of the landlord to secure the Company’s obligations under the lease. The deposit is recorded within restricted cash on the condensed consolidated balance sheet. The lease agreement provides for both a partial and full release of the deposit funds to the Company, provided the Company meets certain liquidity and other financial conditions. Additionally, as of September 30, 2019, the Company has recorded a deposit into restricted cash on the condensed consolidated balance sheet of $11.0 million for use in constructing tenant improvements in connection with the Draper headquarters.

Future Minimum Lease Payments

At September 30, 2019, future minimum lease payments, including lease payments for the Company’s facilities in Farmington, Utah, and lease payments for the Company’s future headquarters in Draper, Utah were as follows (in thousands):

Year Ended December 31,
2019 (remaining three months)	1,995
2020	9,026
2021	10,032
2022	10,025
2023	9,926
Thereafter	99,324
Less: Sublease rental income	(763		)
Total future minimum lease payments	$	139,565

Rent expense under operating leases was $1.8 million and $1.3 million for the three months ended September 30, 2019 and 2018, respectively, and $5.0 million and $3.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Other Commitments

The Company has also entered into certain non-cancellable agreements primarily related to cloud infrastructure and software subscriptions in the ordinary course of business. There have been no material changes in the Company's commitments and contingencies, as disclosed in the Annual Report.

Legal Proceedings

In August 2019, a class action complaint was filed by certain stockholders of the Company in the U.S. District Court for the Southern District of New York against the Company, and certain of the Company's officers alleging violation of securities laws and seeking unspecified damages. In October 2019, the action was transferred to the U.S. District Court for the District of Utah. The Company believes this lawsuit is without merit and intends to defend the case vigorously. The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision. If an unfavorable outcome were to occur in this case, it is possible that the impact could be material to the Company's results of operations in the period(s) in which any such outcome becomes probable and estimable.

The Company is involved in other legal proceedings from time to time arising in the normal course of business. Management believes that the outcome of these proceedings will not have a material impact on the Company’s financial condition, results of operations, or liquidity.

Warranties and Indemnification

The performance of the Company’s cloud-based technology learning platform is typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable. The Company’s contractual arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying consolidated condensed financial statements.

The Company has also agreed to indemnify its 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 the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

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Summary of Significant Accounting Policies and Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018 included in Pluralsight, Inc.'s Annual Report on Form 10-K/A, as filed with the SEC on June 27, 2019 ("Annual Report").

These unaudited condensed consolidated financial statements include the accounts of Pluralsight, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

As discussed in Note 1—Organization and Description of Business, Pluralsight, Inc. consolidates the financial results of Pluralsight Holdings as a Variable Interest Entity (“VIE”). The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than a voting interest, in accordance with the VIE accounting model. A VIE is an entity in which the equity investors as a group, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity's economic performance or the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support.

Interim Unaudited Condensed Consolidated Financial Statements

The accompanying interim condensed consolidated balance sheet as of September 30, 2019, and the interim condensed consolidated statements of operations, comprehensive loss, redeemable convertible preferred units, members' deficit, and stockholders' equity, for the three and nine months ended September 30, 2019 and 2018, and the interim condensed consolidated cash flows for the nine months ended September 30, 2019 and 2018, are unaudited. The condensed consolidated balance sheet as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial condition, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year or any other period.

Reclassifications

Certain reclassifications were made to the nine months ended September 30, 2018 to conform to the current period presentation in the consolidated statements of cash flows.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the determination of the fair value of equity awards, fair value of the liability and equity components of the convertible senior notes, the valuation of build-to-suit leases, the fair value of identified assets and liabilities acquired in business combinations, the useful lives of long-lived assets, the impairment of long-lived and intangible assets, including goodwill, the period of benefit for deferred contract acquisition costs, provisions for doubtful accounts receivable and deferred revenue, and certain accrued expenses, including author fees. These estimates and assumptions are based on the Company’s historical results and management’s future expectations. Actual results could differ from those estimates.

Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 1—Description of Business and Summary of Significant Accounting Policies” in the Annual Report. There have been no significant changes to these policies that have had a material impact on the Company's unaudited condensed consolidated financial statements and related notes during the three and nine months ended September 30, 2019, except as noted below.

Revenue Recognition (ASC 606)

The Company derives substantially all of its revenue from subscription services (which include support services) by providing customers access to its platform.

The Company implemented the provisions of Accounting Standards Update ("ASU") 2014-09 (referred to collectively as "ASC 606") effective January 1, 2019 using the modified retrospective transition method as discussed below under the section "Recent Accounting Pronouncements".

Following the adoption of ASC 606, the Company recognizes revenue when control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. The Company accounts for revenue contracts with customers by applying the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in a contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, performance obligations are satisfied

The Company’s subscription arrangements generally do not provide customers with the right to take possession of the software supporting the platform and, as a result, are accounted for as service arrangements. Access to the Company's platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is generally recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. The Company's subscription contracts typically vary from one month to three years. The Company’s arrangements are generally noncancellable and nonrefundable.

Subscriptions that allow the customer to take software on-premise without significant penalty are treated as time-based licenses. These arrangements generally include access to the software over the license term, access to unspecified future product updates, maintenance, and support. Revenue for on-premise software subscriptions is recognized at a point in time when the software is made available to the customer. Revenue for access to unspecified future products, maintenance and support included with on-premise software subscriptions is recognized ratably over the contract term beginning on the date that the software is made available to the customer.

The Company also derives revenue from providing professional services, which generally consist of consulting, integration, or other content creation services. These services are distinct from subscription services. Revenue from professional services is generally recognized as services are performed.

Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling prices considering market conditions and based on overall pricing objectives such as observable standalone selling prices, and other factors, including the value of contracts, types of services sold, customer demographics, and the number and types of users within such contracts.

Deferred Revenue

The Company records contract liabilities to deferred revenue when cash payments are received or billings are due in advance of revenue recognition from subscription services described above, including amounts billed to customers in accordance with the terms of the underlying contracts where the service period has not yet commenced but will commence in the near future. Deferred revenue is recognized when, or as, performance obligations are satisfied. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as non-current deferred revenue.

Cash, Cash Equivalents, Restricted Cash and Investments

The Company considers all highly-liquid investments with a maturity at the time of purchase of 90 days or less to be cash and cash equivalents. Cash consists of deposits with financial institutions. Cash equivalents and investments consist of highly liquid investments in money market funds, U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities. Cash and cash equivalents that are restricted as to withdrawal or usage are presented as restricted cash on the condensed consolidated balance sheets.

The Company classifies investments as available-for-sale securities. Investments with original maturities beyond 90 days are classified as short-term or long-term investments based on the nature of the securities and their stated maturities. Investments are carried at fair value, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income within stockholders’ equity.

Investments are reviewed periodically to determine whether a decline in a security’s fair value below the amortized cost basis is other-than-temporary. If the cost of an individual investment exceeds its fair value, the Company considers available quantitative and qualitative factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer and the Company's intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. If the Company believes that a decline in fair value is determined to be other-than-temporary, the investments are written down to fair value. There were no impairments recognized on investments during the periods presented.

Interest income, amortization of premiums and discounts, realized gains and losses and declines in fair value judged to be other-than-temporary on available-for-sale securities are included in other income, net in the condensed consolidated statements of operations. The Company uses the specific identification method to determine the cost in calculating realized gains and losses upon the sale of these investments.

Accounts Receivable

Accounts receivable balances are recorded at the invoiced amount and are non-interest-bearing. The Company records a contract asset when revenue is recognized in advance of invoicing. Contract assets that represent a right to consideration that is unconditional are presented within accounts receivable on the condensed consolidated balance sheets.

The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables, by assessing the collectability of the accounts by taking into consideration the aging of trade receivables, historical experience, and management judgment. The Company writes off trade receivables against the allowance when management determines a balance is uncollectible and no longer intends to actively pursue collection of the receivable. 

Deferred Contract Acquisition Costs

The Company capitalizes sales commissions, and associated fringe costs, such as payroll taxes, paid to direct sales personnel and other incremental costs of obtaining contracts with customers, provided the Company expects to recover those costs. These costs are recorded as deferred contract acquisition costs on the condensed consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract.

Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rates between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of four years while commissions paid related to renewal contracts are amortized over an estimated period of benefit of approximately 18 months. Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition.

The period of benefit for commissions paid for the acquisition of initial subscription contracts is determined by taking into consideration the initial estimated customer life and the technological life of the Company's platform and related significant features. The Company determines the period of benefit for renewal subscription contracts by considering the average contractual term for renewal contracts. Amortization of deferred contract acquisition costs is included within sales and marketing expense in the condensed consolidated statements of operations.

The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented.

Advertising Costs

Advertising costs are expensed as incurred. The Company recorded advertising costs of $4.2 million and $3.0 million for the three months ended September 30, 2019 and 2018, respectively, and $12.2 million and $8.7 million for the nine months ended September 30, 2019 and 2018, respectively.

Recent Accounting Pronouncements

Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), the Company meets the definition of an emerging growth company ("EGC"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an EGC or until the Company affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

On the last business day of the second quarter in the Company’s fiscal year 2019, the aggregate worldwide market value of shares of Class A common stock held by the Company’s non-affiliate stockholders exceeded $700 million. As a result, as of December 31, 2019, the Company will be considered a large accelerated filer as defined in Rule 12b-2 under the Exchange Act and will cease to be an EGC as defined in the JOBS Act. The Company will no longer be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and the Company’s independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40), which supersedes nearly all existing revenue recognition guidance. The core principle behind ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering those goods and services. To achieve this core principle, the guidance provides a model, which involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction prices to the performance obligations in the contract, and recognizing revenue when (or as) the entity satisfies the performance obligations. The standard also provides guidance on the recognition of costs related to obtaining customer contracts.

The Company adopted the standard as of January 1, 2019 using the modified retrospective adoption method applied to those contracts that were not completed as of that date. Upon adoption, the Company recognized the cumulative effect of adopting the standard as an adjustment to the opening balance of stockholders' equity. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company updated its accounting policies, processes, internal controls and information systems to conform to the new revenue standard's reporting and disclosure requirements.

Prior to adoption, the Company limited revenue recognition for delivered elements to the amount that is not contingent on the delivery of future services. The adoption of ASC 606 resulted in an acceleration in timing of the Company's revenue for certain sales contracts due to the removal of this limitation. In addition, as a result of the new standard, the Company capitalizes sales commissions and other incremental costs of obtaining contracts with customers. Such costs are amortized over the expected period of benefit, which for initial contracts is an estimated period of four years, while renewal contracts are amortized over an estimated period of benefit of 18 months.

The following table summarizes the adjustments made to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of applying the modified retrospective method to adopt ASC 606 (in thousands):

	As Reported			Adjustments					As Adjusted
	December 31, 2018			Revenue Recognition			Incremental Costs of Obtaining a Contract		January 1, 2019
Accounts receivable, net	$	63,436		$	33		$	—	$	63,469
Deferred contract acquisition costs, net	—			—			16,461		16,461
Deferred contract acquisition costs, noncurrent, net	—			—			3,751		3,751
Deferred revenue	157,695			(389		)	—		157,306
Deferred revenue, noncurrent	14,886			—			—		14,886
Accumulated deficit	(355,446		)	205			9,828		(345,413		)
Non-controlling interests	107,167			217			10,384		117,768

The decrease of deferred revenue and increase to deferred contract acquisition costs as of January 1, 2019 resulted in additional deferred tax liabilities that reduced the Company's net deferred tax asset position. The net deferred tax assets in the jurisdictions impacted by the adoption of ASC 606 were fully reserved and, accordingly, this impact was offset by a corresponding reduction to the valuation allowance with no resulting net impact to net assets or accumulated deficit.

In addition, the adoption of ASC 606 resulted in changes to the Company's accounting estimates and policies for revenue recognition, deferred contract acquisition costs, deferred revenue, and accounts receivable. See the section titled "Significant Accounting Policies" for a discussion of the Company's updated policies.

Refer to Note 4—Revenue for the ongoing impacts of adopting ASC 606 on the condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software(Subtopic 350-40):Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. The new guidance is effective for public business entities for annual periods beginning after December 15, 2019, including interim periods within those periods. For all other entities, the ASU is effective for annual periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted for all entities. The Company is currently in the process of evaluating the impact of this standard on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities to require that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The measurement of credit losses for newly recognized financial assets and subsequent changes in the allowance for credit losses are recorded in the statements of operations. For public business entities that meet the definition of an SEC filer, it is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. For public business entities, the ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Due to an expected loss in the Company's EGC as of December 31, 2019, the Company anticipates adopting the standard on December 31, 2019 for the year ended December 31, 2019. The Company is currently evaluating the potential changes to its future financial reporting and disclosures from this ASU. As part of its preliminary assessment, the Company expects to record right-of-use assets and lease liabilities for its operating leases as a result of adopting this standard. While the Company continues to assess all potential impacts under the new standard, including the areas described above, the Company does not know or cannot reasonably estimate quantitative information related to the impact of the adoption of the new standard on its consolidated financial statements at this time.

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Stockholders' Equity - Initial Public Offering and Secondary Offering (Details) - USD ($)		1 Months Ended	9 Months Ended
	May 16, 2018	Mar. 31, 2019	Sep. 30, 2019	Sep. 30, 2018
Subsidiary, Sale of Stock [Line Items]
Payment for stock offering costs			$ 0	$ 7,083,000
IPO
Subsidiary, Sale of Stock [Line Items]
Stock price (in dollars per share)	$ 15
Number of shares sold (in shares)	23,805,000
Proceeds from sale of stock, net	$ 332,100,000
Secondary Offering
Subsidiary, Sale of Stock [Line Items]
Stock price (in dollars per share)		$ 29.25
Number of shares sold (in shares)		15,592,234
Payment for stock offering costs		$ 900,000
Senior Notes Due In 2024 | Convertible Senior Notes
Subsidiary, Sale of Stock [Line Items]
Face amount		$ 633,500,000.0	$ 593,500,000.0
Stated rate		0.375%

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Net Loss Per Share - Narrative (Details)	Mar. 31, 2019 $ / shares
Senior Notes Due In 2024 | Convertible Senior Notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Initial capped call price (in dollars per share)	$ 58.5

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Intangible Assets - Schedule of Estimated Amortization Expense (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2019 (remaining three months)	$ 2,106
2020	8,057
2021	7,494
2022	6,611
2023	5,946
2024	2,005
Net Book Value	$ 32,219

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Non-Controlling Interests (Details) - USD ($) $ in Thousands	3 Months Ended		5 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2019	Dec. 31, 2018
Noncontrolling Interest [Line Items]
Adjustments to non-controlling interests	$ 0	$ 0	$ 0	$ 0
Pluralsight Holdings
Noncontrolling Interest [Line Items]
Ownership interest				100.00%	100.00%
Units outstanding (in shares)	138,543,049			138,543,049	134,073,639
Pluralsight Holdings | Pluralsight, Inc.
Noncontrolling Interest [Line Items]
Ownership interest				73.40%	48.60%
Units outstanding (in shares)	101,638,179			101,638,179	65,191,907
Continuing Members | Pluralsight Holdings
Noncontrolling Interest [Line Items]
Ownership interest				26.60%	51.40%
Units outstanding (in shares)	36,904,870			36,904,870	68,881,732
LLC Units
Noncontrolling Interest [Line Items]
Units still subject to time-based vesting requirements (in shares)	1,827,844			1,827,844	3,195,322
Non-Controlling Interests
Noncontrolling Interest [Line Items]
Adjustments to non-controlling interests	$ 7,656	$ 11,582	$ 16,679	$ 49,731

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Equity-Based Compensation - Schedule of Equity-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Equity-based compensation	$ 24,657	$ 20,630	$ 67,657	$ 52,982
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Equity-based compensation	138	56	355	145
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Equity-based compensation	8,739	5,612	22,967	13,507
Technology and content
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Equity-based compensation	6,666	3,700	15,513	8,652
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Equity-based compensation	$ 9,114	$ 11,262	$ 28,822	$ 30,678

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Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Aug. 31, 2018
Loss Contingencies [Line Items]
Total property and equipment	$ 84,752		$ 84,752		$ 53,451
Restricted cash	27,748		27,748		16,765
Rent expense under operating leases	1,800	$ 1,300	5,000	$ 3,400
Draper, Utah Office Space, 2018
Loss Contingencies [Line Items]
Security deposit						$ 16,000
Build-to-suit lease asset under construction
Loss Contingencies [Line Items]
Total property and equipment	30,742		30,742		8,281
Build-to-suit lease asset under construction | Draper, Utah Office Space, 2018
Loss Contingencies [Line Items]
Total property and equipment	30,700		30,700
Tenant Improvements | Draper, Utah Office Space, 2018
Loss Contingencies [Line Items]
Restricted cash	11,000		11,000
Letter of credit
Loss Contingencies [Line Items]
Letters of credit outstanding	700		700		700
Restricted cash	$ 700		$ 700		$ 700

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Cash Equivalents and Investments - Narrative (Details)	9 Months Ended
	Sep. 30, 2019 USD ($)
Investments, Debt and Equity Securities [Abstract]
Other-than temporary impairments	$ 0

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Revenue - Remaining Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01	Sep. 30, 2019
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Percent of remaining performance obligations to be recognized	74.00%
Period for satisfaction of remaining performance obligation	12 months

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Acquisition of GitPrime, Inc. - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2019	May 09, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill	$ 261,622		$ 123,119
GitPrime, Inc.
Business Acquisition [Line Items]
Cash and cash equivalents		$ 5,290
Accounts receivable		1,798
Other assets acquired		207
Property and equipment		223
Goodwill		138,503
Intangible assets		24,800
Other liabilities assumed		(393)
Deferred revenue		(1,367)
Total fair value of net assets acquired		$ 169,061

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Balance Sheet Components - Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued compensation	$ 21,462	$ 22,285
Accrued income and other taxes payable	6,534	5,408
Accrued other current liabilities	9,639	4,354
Accrued expenses	$ 37,635	$ 32,047

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Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired intangible assets	$ 1.4	$ 1.1	$ 3.0	$ 7.7
Course creation costs
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired intangible assets	$ 0.7	$ 0.5	$ 1.8	$ 1.4

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Organization and Description of Business (Details)		1 Months Ended	9 Months Ended		12 Months Ended
	May 16, 2018 USD ($) class $ / shares shares	Mar. 31, 2019 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) class	Sep. 30, 2018 USD ($)	Dec. 31, 2018
Subsidiary, Sale of Stock [Line Items]
Number of classes of stock | class	3		3
Payment for stock offering costs			$ 0	$ 7,083,000
IPO
Subsidiary, Sale of Stock [Line Items]
Number of shares sold (in shares) | shares	23,805,000
Stock price (in dollars per share) | $ / shares	$ 15
Proceeds from sale of stock, net	$ 332,100,000
Payments of costs related to initial public offering	$ 7,400,000
Secondary Offering
Subsidiary, Sale of Stock [Line Items]
Number of shares sold (in shares) | shares		15,592,234
Stock price (in dollars per share) | $ / shares		$ 29.25
Payment for stock offering costs		$ 900,000
LLC Units Converted Into Class B And Class C Common Stock
Subsidiary, Sale of Stock [Line Items]
Conversion ratio	1		1
Pluralsight Holdings
Subsidiary, Sale of Stock [Line Items]
Ownership interest			100.00%		100.00%
Pluralsight Holdings | Continuing Members
Subsidiary, Sale of Stock [Line Items]
Ownership interest			26.60%		51.40%
Pluralsight Holdings | Pluralsight, Inc.
Subsidiary, Sale of Stock [Line Items]
Ownership interest			73.40%		48.60%
Senior Notes Due In 2024 | Convertible Senior Notes
Subsidiary, Sale of Stock [Line Items]
Face amount		$ 633,500,000.0	$ 593,500,000.0
Stated rate		0.375%

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Restatement of Condensed Consolidated Financial Statements - Condensed Consolidated Statements of Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		4 Months Ended	5 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	May 15, 2018	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss	$ (45,802)	$ (34,323)		$ (60,918)	$ (121,127)	$ (112,701)
Other comprehensive income (loss):
Foreign currency translation losses, net	(90)	(39)	$ (18)	(79)	(79)	(97)
Comprehensive loss	(45,873)	(34,362)			(120,808)	(112,798)
Less: Comprehensive loss attributable to non-controlling interests	(13,092)	(18,001)			(39,670)	(31,932)
Comprehensive loss attributable to Pluralsight, Inc.	$ (32,781)	(16,361)			$ (81,138)	(80,866)
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss		(29,737)				(96,691)
Other comprehensive income (loss):
Foreign currency translation losses, net		(39)	$ (18)	$ (79)		(97)
Comprehensive loss		(29,776)				(96,788)
Less: Comprehensive loss attributable to non-controlling interests		(15,599)				(28,326)
Comprehensive loss attributable to Pluralsight, Inc.		(14,177)				(68,462)
Non-Cash Equity-Based Compensation Adjustment | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss		(4,586)				(16,010)
Other comprehensive income (loss):
Foreign currency translation losses, net		0				0
Comprehensive loss		(4,586)				(16,010)
Less: Comprehensive loss attributable to non-controlling interests		(2,402)				(3,606)
Comprehensive loss attributable to Pluralsight, Inc.		$ (2,184)				$ (12,404)

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Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018 included in Pluralsight, Inc.'s Annual Report on Form 10-K/A, as filed with the SEC on June 27, 2019 ("Annual Report").

Consolidation

These unaudited condensed consolidated financial statements include the accounts of Pluralsight, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

As discussed in Note 1—Organization and Description of Business, Pluralsight, Inc. consolidates the financial results of Pluralsight Holdings as a Variable Interest Entity (“VIE”). The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than a voting interest, in accordance with the VIE accounting model. A VIE is an entity in which the equity investors as a group, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity's economic performance or the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support.

Reclassifications

Certain reclassifications were made to the nine months ended September 30, 2018 to conform to the current period presentation in the consolidated statements of cash flows.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the determination of the fair value of equity awards, fair value of the liability and equity components of the convertible senior notes, the valuation of build-to-suit leases, the fair value of identified assets and liabilities acquired in business combinations, the useful lives of long-lived assets, the impairment of long-lived and intangible assets, including goodwill, the period of benefit for deferred contract acquisition costs, provisions for doubtful accounts receivable and deferred revenue, and certain accrued expenses, including author fees. These estimates and assumptions are based on the Company’s historical results and management’s future expectations. Actual results could differ from those estimates.

Revenue Recognition (ASC 606), Deferred Revenue, Accounts Receivable, and Deferred Contract Acquisition Costs

Accounts Receivable

Accounts receivable balances are recorded at the invoiced amount and are non-interest-bearing. The Company records a contract asset when revenue is recognized in advance of invoicing. Contract assets that represent a right to consideration that is unconditional are presented within accounts receivable on the condensed consolidated balance sheets.

The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables, by assessing the collectability of the accounts by taking into consideration the aging of trade receivables, historical experience, and management judgment. The Company writes off trade receivables against the allowance when management determines a balance is uncollectible and no longer intends to actively pursue collection of the receivable. 

Deferred Contract Acquisition Costs

The Company capitalizes sales commissions, and associated fringe costs, such as payroll taxes, paid to direct sales personnel and other incremental costs of obtaining contracts with customers, provided the Company expects to recover those costs. These costs are recorded as deferred contract acquisition costs on the condensed consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract.

Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rates between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of four years while commissions paid related to renewal contracts are amortized over an estimated period of benefit of approximately 18 months. Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition.

The period of benefit for commissions paid for the acquisition of initial subscription contracts is determined by taking into consideration the initial estimated customer life and the technological life of the Company's platform and related significant features. The Company determines the period of benefit for renewal subscription contracts by considering the average contractual term for renewal contracts. Amortization of deferred contract acquisition costs is included within sales and marketing expense in the condensed consolidated statements of operations.

The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented.

The Company derives substantially all of its revenue from subscription services (which include support services) by providing customers access to its platform.

The Company implemented the provisions of Accounting Standards Update ("ASU") 2014-09 (referred to collectively as "ASC 606") effective January 1, 2019 using the modified retrospective transition method as discussed below under the section "Recent Accounting Pronouncements".

Following the adoption of ASC 606, the Company recognizes revenue when control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. The Company accounts for revenue contracts with customers by applying the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in a contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, performance obligations are satisfied

The Company’s subscription arrangements generally do not provide customers with the right to take possession of the software supporting the platform and, as a result, are accounted for as service arrangements. Access to the Company's platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is generally recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. The Company's subscription contracts typically vary from one month to three years. The Company’s arrangements are generally noncancellable and nonrefundable.

Subscriptions that allow the customer to take software on-premise without significant penalty are treated as time-based licenses. These arrangements generally include access to the software over the license term, access to unspecified future product updates, maintenance, and support. Revenue for on-premise software subscriptions is recognized at a point in time when the software is made available to the customer. Revenue for access to unspecified future products, maintenance and support included with on-premise software subscriptions is recognized ratably over the contract term beginning on the date that the software is made available to the customer.

The Company also derives revenue from providing professional services, which generally consist of consulting, integration, or other content creation services. These services are distinct from subscription services. Revenue from professional services is generally recognized as services are performed.

Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling prices considering market conditions and based on overall pricing objectives such as observable standalone selling prices, and other factors, including the value of contracts, types of services sold, customer demographics, and the number and types of users within such contracts.

Deferred Revenue

The Company records contract liabilities to deferred revenue when cash payments are received or billings are due in advance of revenue recognition from subscription services described above, including amounts billed to customers in accordance with the terms of the underlying contracts where the service period has not yet commenced but will commence in the near future. Deferred revenue is recognized when, or as, performance obligations are satisfied. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as non-current deferred revenue.

Cash, Cash Equivalents, Restricted Cash

The Company considers all highly-liquid investments with a maturity at the time of purchase of 90 days or less to be cash and cash equivalents. Cash consists of deposits with financial institutions. Cash equivalents and investments consist of highly liquid investments in money market funds, U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities. Cash and cash equivalents that are restricted as to withdrawal or usage are presented as restricted cash on the condensed consolidated balance sheets.

Investments

The Company classifies investments as available-for-sale securities. Investments with original maturities beyond 90 days are classified as short-term or long-term investments based on the nature of the securities and their stated maturities. Investments are carried at fair value, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income within stockholders’ equity.

Investments are reviewed periodically to determine whether a decline in a security’s fair value below the amortized cost basis is other-than-temporary. If the cost of an individual investment exceeds its fair value, the Company considers available quantitative and qualitative factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer and the Company's intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. If the Company believes that a decline in fair value is determined to be other-than-temporary, the investments are written down to fair value. There were no impairments recognized on investments during the periods presented.

Interest income, amortization of premiums and discounts, realized gains and losses and declines in fair value judged to be other-than-temporary on available-for-sale securities are included in other income, net in the condensed consolidated statements of operations. The Company uses the specific identification method to determine the cost in calculating realized gains and losses upon the sale of these investments.

Advertising Costs

Advertising costs are expensed as incurred.

Recent Accounting Pronouncements

Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), the Company meets the definition of an emerging growth company ("EGC"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an EGC or until the Company affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

On the last business day of the second quarter in the Company’s fiscal year 2019, the aggregate worldwide market value of shares of Class A common stock held by the Company’s non-affiliate stockholders exceeded $700 million. As a result, as of December 31, 2019, the Company will be considered a large accelerated filer as defined in Rule 12b-2 under the Exchange Act and will cease to be an EGC as defined in the JOBS Act. The Company will no longer be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and the Company’s independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40), which supersedes nearly all existing revenue recognition guidance. The core principle behind ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering those goods and services. To achieve this core principle, the guidance provides a model, which involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction prices to the performance obligations in the contract, and recognizing revenue when (or as) the entity satisfies the performance obligations. The standard also provides guidance on the recognition of costs related to obtaining customer contracts.

The Company adopted the standard as of January 1, 2019 using the modified retrospective adoption method applied to those contracts that were not completed as of that date. Upon adoption, the Company recognized the cumulative effect of adopting the standard as an adjustment to the opening balance of stockholders' equity. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company updated its accounting policies, processes, internal controls and information systems to conform to the new revenue standard's reporting and disclosure requirements.

Prior to adoption, the Company limited revenue recognition for delivered elements to the amount that is not contingent on the delivery of future services. The adoption of ASC 606 resulted in an acceleration in timing of the Company's revenue for certain sales contracts due to the removal of this limitation. In addition, as a result of the new standard, the Company capitalizes sales commissions and other incremental costs of obtaining contracts with customers. Such costs are amortized over the expected period of benefit, which for initial contracts is an estimated period of four years, while renewal contracts are amortized over an estimated period of benefit of 18 months.

The following table summarizes the adjustments made to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of applying the modified retrospective method to adopt ASC 606 (in thousands):

	As Reported			Adjustments					As Adjusted
	December 31, 2018			Revenue Recognition			Incremental Costs of Obtaining a Contract		January 1, 2019
Accounts receivable, net	$	63,436		$	33		$	—	$	63,469
Deferred contract acquisition costs, net	—			—			16,461		16,461
Deferred contract acquisition costs, noncurrent, net	—			—			3,751		3,751
Deferred revenue	157,695			(389		)	—		157,306
Deferred revenue, noncurrent	14,886			—			—		14,886
Accumulated deficit	(355,446		)	205			9,828		(345,413		)
Non-controlling interests	107,167			217			10,384		117,768

The decrease of deferred revenue and increase to deferred contract acquisition costs as of January 1, 2019 resulted in additional deferred tax liabilities that reduced the Company's net deferred tax asset position. The net deferred tax assets in the jurisdictions impacted by the adoption of ASC 606 were fully reserved and, accordingly, this impact was offset by a corresponding reduction to the valuation allowance with no resulting net impact to net assets or accumulated deficit.

In addition, the adoption of ASC 606 resulted in changes to the Company's accounting estimates and policies for revenue recognition, deferred contract acquisition costs, deferred revenue, and accounts receivable. See the section titled "Significant Accounting Policies" for a discussion of the Company's updated policies.

Refer to Note 4—Revenue for the ongoing impacts of adopting ASC 606 on the condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software(Subtopic 350-40):Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. The new guidance is effective for public business entities for annual periods beginning after December 15, 2019, including interim periods within those periods. For all other entities, the ASU is effective for annual periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted for all entities. The Company is currently in the process of evaluating the impact of this standard on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities to require that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The measurement of credit losses for newly recognized financial assets and subsequent changes in the allowance for credit losses are recorded in the statements of operations. For public business entities that meet the definition of an SEC filer, it is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. For public business entities, the ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Due to an expected loss in the Company's EGC as of December 31, 2019, the Company anticipates adopting the standard on December 31, 2019 for the year ended December 31, 2019. The Company is currently evaluating the potential changes to its future financial reporting and disclosures from this ASU. As part of its preliminary assessment, the Company expects to record right-of-use assets and lease liabilities for its operating leases as a result of adopting this standard. While the Company continues to assess all potential impacts under the new standard, including the areas described above, the Company does not know or cannot reasonably estimate quantitative information related to the impact of the adoption of the new standard on its consolidated financial statements at this time.

Fair Value Measurements

The Company measures and records certain financial assets at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

As a result of the Reorganization Transactions, Pluralsight, Inc. became the sole managing member of Pluralsight Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pluralsight Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pluralsight Holdings is passed through to and included in the taxable income or loss of its members, including Pluralsight, Inc. following the Reorganization Transactions, on a pro rata basis. Pluralsight, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of Pluralsight Holdings following the Reorganization Transactions. The Company is also subject to taxes in foreign jurisdictions.

The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision and estimate of the Company's annual effective tax rate are subject to variation due to several factors including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments.

For the three months ended September 30, 2019 and 2018 the Company's estimated effective tax rate was (0.9)% and (0.7)%, respectively. For the nine months ended September 30, 2019 and 2018 the Company's estimated effective tax rate was (0.6)% and (0.5)%, respectively. The variations between the Company's estimated effective tax rate and the U.S. statutory rate are primarily due to the portion of the Company's earnings (or loss) attributable to non-controlling interests following the Reorganization Transactions and the full domestic valuation allowance.

The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which the Company operates. The provision for income taxes consists primarily of income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business. The Company's U.S. operations have resulted in losses, and as such, the Company maintains a full valuation allowance against its U.S. deferred tax assets. While the Company believes its current valuation allowance is appropriate, the Company assesses the need for an adjustment to the valuation allowance on a quarterly basis. The assessment is based on estimates of future sources of taxable income for the jurisdictions in which the Company operates and the periods over which deferred tax assets will be realizable. In the event the Company determines that it will be able to realize all or part of its net deferred tax assets in the future, all or part of the valuation allowance will be released in the period in which the Company makes such determination. The release of all or part of the valuation allowance against deferred tax assets may cause greater volatility in the effective tax rate in the periods in which it is released.

Tax Receivable Agreement

On the date of the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) with Continuing Members that provides for a payment to the Continuing Members of 85% of the amount of tax benefits, if any, that Pluralsight, Inc. realizes, or is deemed to realize as a result of redemptions or exchanges of LLC Units.

During the nine months ended September 30, 2019, certain Continuing Members exchanged 33,536,262 LLC Units for shares of Class A common stock. The Company has concluded that, based on applicable accounting standards, it is more-likely-than-not that its deferred tax assets subject to the TRA will not be realized; therefore, the Company has not recorded a TRA liability related to the tax savings it may realize from the utilization of deferred tax assets arising from the exchanges that have occurred through September 30, 2019. The total unrecorded TRA liability as of September 30, 2019 is approximately $252.8 million.

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Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Net Book Value	$ 32,219
Content library:
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	49,215	$ 46,387
Accumulated Amortization	41,008	39,337
Net Book Value	8,207	7,050
Acquired content library
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	32,835	32,835
Accumulated Amortization	32,771	32,229
Net Book Value	64	606
Course creation costs
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	16,380	13,552
Accumulated Amortization	8,237	7,108
Net Book Value	8,143	6,444
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	28,500	4,500
Accumulated Amortization	5,209	2,786
Net Book Value	23,291	1,714
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	162	162
Accumulated Amortization	162	162
Net Book Value	0	0
Noncompetition agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	390	390
Accumulated Amortization	390	390
Net Book Value	0	0
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,550	2,750
Accumulated Amortization	2,829	2,750
Net Book Value	721	0
Database
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	40	40
Accumulated Amortization	40	40
Net Book Value	0	0
Domain names
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	45	45
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Accumulated Amortization	8,630	6,128
Intangible assets, gross	32,687	7,887
Intangible assets, net	$ 24,057	$ 1,759

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Acquisition of GitPrime, Inc. - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	May 09, 2019	Sep. 30, 2019	Sep. 30, 2019
Business Acquisition [Line Items]
Decrease to goodwill			$ 100
GitPrime, Inc.
Business Acquisition [Line Items]
Cash consideration	$ 163,800
Reduction in consideration transferred		$ 100
Decrease to goodwill		100
Acquisition costs		800	800
Revenue included in operations from acquisition date		$ 2,000	$ 2,400

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Subsequent Events (Details) - USD ($) $ in Thousands	Oct. 30, 2019	Sep. 30, 2019
Subsequent Event [Line Items]
Total future minimum lease payments		$ 139,565
Sydney, Australia Office Space, 2019 | Subsequent Event
Subsequent Event [Line Items]
Term of lease	38 months
Oct 2019- Oct 2020	$ 500
Oct 2020 - Oct 2021	500
Oct 2021- Oct 2022	500
Total future minimum lease payments	1,500
Security deposit	$ 300

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Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid expenses	$ 10,788	$ 7,931
Other current assets	1,876	392
Prepaid expenses and other current assets	$ 12,664	$ 8,323

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Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Jan. 01, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected period of benefit from sales commissions, initial contracts				4 years
Expected period of benefit from sales commissions, renewal contract				18 months
Advertising costs		$ 4.2	$ 3.0	$ 12.2	$ 8.7
Incremental Costs of Obtaining a Contract
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected period of benefit from sales commissions, initial contracts	4 years
Expected period of benefit from sales commissions, renewal contract	18 months
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue, subscription term				1 month
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue, subscription term				3 years

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Restatement of Condensed Consolidated Financial Statements - Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		4 Months Ended	5 Months Ended	9 Months Ended
	Jun. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	May 15, 2018	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance (in shares)		0	0	48,447,880		0	48,447,880
Beginning balance		$ 0	$ 0	$ 405,766		$ 0	$ 405,766
Accretion of Series A redeemable convertible preferred units				176,275		0	176,275
Effect of the reorganization transactions (in shares)					(48,447,880)
Effect of the reorganization transactions					$ (582,041)	$ 0	$ (582,041)
Ending balance (in shares)	0	0	0		0	0	0
Ending balance	$ 0	$ 0	$ 0		$ 0	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		280,106	239,865	(445,077)		208,593	(445,077)
Issuance of warrants to purchase Class A common units				984
Equity-based compensation		25,009	20,744	22,278	30,818	68,591
Accretion of Series A redeemable convertible preferred units				(176,275)
Effect of the reorganization transactions					581,963
Initial public offering, net of offering costs					324,706
Allocation of equity to non-controlling interests					0
Settlement of equity appreciation rights					(325)
Adjustments to non-controlling interests		0	0		0	0
Foreign currency translation losses		(90)	(39)	(18)	(79)	(79)	(97)
Net loss		(45,802)	(34,323)	$ (51,783)	(60,918)	(121,127)
Ending balance	239,865	$ 257,806	$ 226,274		$ 226,274	$ 257,806	$ 226,274
As Previously Reported
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance (in shares)				48,447,880			48,447,880
Beginning balance				$ 405,766			$ 405,766
Accretion of Series A redeemable convertible preferred units				176,275
Effect of the reorganization transactions (in shares)					(48,447,880)
Effect of the reorganization transactions					$ (582,041)
Ending balance (in shares)			0		0		0
Ending balance			$ 0		$ 0		$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				(445,077)			(445,077)
Issuance of warrants to purchase Class A common units				984
Equity-based compensation				13,155	23,931
Accretion of Series A redeemable convertible preferred units				(176,275)
Effect of the reorganization transactions					581,963
Initial public offering, net of offering costs					324,706
Allocation of equity to non-controlling interests					0
Settlement of equity appreciation rights					(325)
Adjustments to non-controlling interests					0
Foreign currency translation losses			(39)	(18)	(79)		(97)
Net loss				$ (42,660)	(54,031)
Ending balance			$ 226,274		$ 226,274		$ 226,274
Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Ending balance (in shares)			0		0		0
Ending balance			$ 0		$ 0		$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				0			0
Equity-based compensation	6,887			9,123
Accretion of Series A redeemable convertible preferred units				0
Adjustments to non-controlling interests	0
Foreign currency translation losses			0				0
Net loss	$ (6,887)			$ (9,123)
Ending balance			$ 0		$ 0		$ 0
Members’ Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)		0	0	48,407,645		0	48,407,645
Beginning balance		$ 0	$ 0	$ 0		$ 0	$ 0
Issuance of warrants to purchase Class A common units				984
Equity-based compensation				22,278
Accretion of Series A redeemable convertible preferred units				$ (23,262)
Effect of reorganization transactions (in shares)					(48,407,645)
Ending balance (in shares)	0	0	0		0	0	0
Ending balance	$ 0	$ 0	$ 0		$ 0	$ 0	$ 0
Members’ Capital | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				48,407,645			48,407,645
Beginning balance				$ 0			$ 0
Issuance of warrants to purchase Class A common units				984
Equity-based compensation				13,155
Accretion of Series A redeemable convertible preferred units				$ (14,139)
Effect of reorganization transactions (in shares)					(48,407,645)
Ending balance (in shares)			0		0		0
Ending balance			$ 0		$ 0		$ 0
Members’ Capital | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Equity-based compensation				9,123
Accretion of Series A redeemable convertible preferred units				$ (9,123)
Ending balance (in shares)			0		0		0
Ending balance			$ 0		$ 0		$ 0
Common Stock | Class A Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)		101,096,472	62,915,660	0		65,191,907	0
Beginning balance		$ 10	$ 6	$ 0		$ 7	$ 0
Effect of reorganization transactions (in shares)					39,110,660
Effect of the reorganization transactions					$ 4
Common stock, shares issued (in shares)					23,805,000
Initial public offering, net of offering costs					$ 2
Effect of the Rescission Transactions (in shares)			(605,390)		(605,390)
Ending balance (in shares)	62,915,660	101,638,179	62,310,270		62,310,270	101,638,179	62,310,270
Ending balance	$ 6	$ 10	$ 6		$ 6	$ 10	$ 6
Common Stock | Class A Common Stock | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Effect of reorganization transactions (in shares)					39,110,660
Effect of the reorganization transactions					$ 4
Common stock, shares issued (in shares)					23,805,000
Initial public offering, net of offering costs					$ 2
Ending balance (in shares)			62,310,270		62,310,270		62,310,270
Ending balance			$ 6		$ 6		$ 6
Common Stock | Class A Common Stock | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Ending balance (in shares)			0		0		0
Ending balance			$ 0		$ 0		$ 0
Common Stock | Class B Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)		24,664,113	58,111,572	0		57,490,881	0
Beginning balance		$ 2	$ 6	$ 0		$ 6	$ 0
Effect of reorganization transactions (in shares)					58,111,572
Effect of the reorganization transactions					$ 6
Effect of the Rescission Transactions (in shares)			455,217		455,217
Ending balance (in shares)	58,111,572	24,442,952	58,566,789		58,566,789	24,442,952	58,566,789
Ending balance	$ 6	$ 2	$ 6		$ 6	$ 2	$ 6
Common Stock | Class B Common Stock | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Effect of reorganization transactions (in shares)					58,111,572
Effect of the reorganization transactions					$ 6
Ending balance (in shares)			58,566,789		58,566,789		58,566,789
Ending balance			$ 6		$ 6		$ 6
Common Stock | Class B Common Stock | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Ending balance (in shares)			0		0		0
Ending balance			$ 0		$ 0		$ 0
Common Stock | Class C Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)		14,186,856	14,048,138	0		14,586,173	0
Beginning balance		$ 1	$ 1	$ 0		$ 1	$ 0
Effect of reorganization transactions (in shares)					14,048,138
Effect of the reorganization transactions					$ 1
Effect of the Rescission Transactions (in shares)			150,173		150,173
Ending balance (in shares)	14,048,138	14,289,762	14,198,311		14,198,311	14,289,762	14,198,311
Ending balance	$ 1	$ 1	$ 1		$ 1	$ 1	$ 1
Common Stock | Class C Common Stock | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Effect of reorganization transactions (in shares)					14,048,138
Effect of the reorganization transactions					$ 1
Ending balance (in shares)			14,198,311		14,198,311		14,198,311
Ending balance			$ 1		$ 1		$ 1
Common Stock | Class C Common Stock | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0			0
Beginning balance				$ 0			$ 0
Ending balance (in shares)			0		0		0
Ending balance			$ 0		$ 0		$ 0
Additional Paid-In Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		599,558	437,274	0		456,899	0
Equity-based compensation		25,009	20,744		30,818	68,591
Effect of the reorganization transactions					581,952
Initial public offering, net of offering costs					324,704
Allocation of equity to non-controlling interests					(474,007)
Settlement of equity appreciation rights					(325)
Adjustments to non-controlling interests		(7,656)	(11,582)		(16,679)	(49,731)
Ending balance	437,274	615,713	446,463		446,463	615,713	446,463
Additional Paid-In Capital | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				0			0
Equity-based compensation					23,931
Effect of the reorganization transactions					581,952
Initial public offering, net of offering costs					324,704
Allocation of equity to non-controlling interests					(474,007)
Settlement of equity appreciation rights					(325)
Adjustments to non-controlling interests					(13,073)
Ending balance			443,182		443,182		443,182
Additional Paid-In Capital | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				0			0
Equity-based compensation	6,887
Adjustments to non-controlling interests	(3,606)
Ending balance			3,281		3,281		3,281
Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		237	(16)	25		(41)	25
Allocation of equity to non-controlling interests					(4)
Foreign currency translation losses			(18)	(18)	(37)
Ending balance	(16)	185	(34)		(34)	185	(34)
Accumulated Other Comprehensive Income (Loss) | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				25			25
Allocation of equity to non-controlling interests					(4)
Foreign currency translation losses				(18)	(37)
Ending balance			(34)		(34)		(34)
Accumulated Other Comprehensive Income (Loss) | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				0			0
Ending balance			0		0		0
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		(394,048)	(322,801)	(445,102)		(355,446)	(445,102)
Accretion of Series A redeemable convertible preferred units				(153,013)
Allocation of equity to non-controlling interests					339,782
Net loss		(32,729)	(16,343)	(51,783)	(29,028)	(81,364)
Ending balance	(322,801)	(426,777)	(339,144)		(339,144)	(426,777)	(339,144)
Accumulated Deficit | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				(445,102)			(445,102)
Accretion of Series A redeemable convertible preferred units				(162,136)
Allocation of equity to non-controlling interests					339,782
Net loss				(42,660)	(25,747)
Ending balance			(335,863)		(335,863)		(335,863)
Accumulated Deficit | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				0			0
Accretion of Series A redeemable convertible preferred units				9,123
Net loss	(3,281)			(9,123)
Ending balance			(3,281)		(3,281)		(3,281)
Non-Controlling Interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		74,346	125,395	0		107,167	0
Allocation of equity to non-controlling interests					134,229
Adjustments to non-controlling interests		7,656	11,582		16,679	49,731
Foreign currency translation losses			(21)		(42)
Net loss		(13,073)	(17,980)		(31,890)	(39,763)
Ending balance	125,395	$ 68,672	118,976		118,976	$ 68,672	118,976
Non-Controlling Interests | As Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				0			0
Allocation of equity to non-controlling interests					134,229
Adjustments to non-controlling interests					13,073
Foreign currency translation losses					(42)
Net loss					(28,284)
Ending balance			118,976		118,976		118,976
Non-Controlling Interests | Non-Cash Equity-Based Compensation Adjustment | Adjustments
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance				$ 0			0
Adjustments to non-controlling interests	3,606
Net loss	$ (3,606)
Ending balance			$ 0		$ 0		$ 0

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Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In October 2019, the Company entered into a new non-cancellable operating lease agreement to rent office space in Sydney, Australia for a period of 38 months. The total minimum lease payments under the lease agreement are $1.5 million, with lease payments of $0.5 million per year from 2019 to 2022. In connection with the lease agreement, the Company entered into a bank guarantee with a financial institution for $0.3 million, which is collateralized by the Company’s cash and cash equivalents.

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Equity-Based Compensation

9 Months Ended

Sep. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

Equity-Based Compensation

Incentive Unit Plan

Certain employees and directors were granted incentive units in Pluralsight Holdings, pursuant to the Incentive Unit Plan (“2013 Plan”). In connection with the Reorganization Transactions, all outstanding incentive units were converted into LLC Units of Pluralsight Holdings and certain holders of incentive units elected to exchange LLC Units for shares of Class A common stock of Pluralsight, Inc. Shares of Class A common stock and LLC Units issued as a result of the exchange or conversion of unvested incentive units remain subject to the same time-based vesting requirements that existed prior to the Reorganization Transactions. In connection with the IPO, the 2013 Plan was terminated.

The unvested LLC Units following the conversion of unvested incentive units are summarized as follows:

	Unvested Units		Weighted- Average Grant Date Fair Value
Unvested LLC Units outstanding—December 31, 2018	3,195,322		$	7.63
Forfeited or cancelled	(121,845	)	5.73
Vested	(1,245,633	)	7.58
Unvested LLC Units outstanding—September 30, 2019	1,827,844		$	8.58

As of September 30, 2019, total unrecognized equity-based compensation related to unvested LLC Units was $12.9 million, which is expected to be recognized over a weighted-average period of 1.6 years. The total fair value of Class A common shares and LLC Units vested during the nine months ended September 30, 2019, was $35.4 million. If a forfeiture of an unvested LLC Unit occurs, the associated shares of Class B common stock or Class C common stock, as applicable, are also forfeited.

In August 2019, the Company entered into a Separation Agreement with its Chief Revenue Officer. Under the agreement, the Company accelerated the vesting of 130,924 LLC Units. The acceleration was deemed a modification, which resulted in an increase to equity-based compensation expense of $2.1 million during the three months ended September 30, 2019.

Equity Incentive Plans

In June 2017, Pluralsight Holdings adopted the 2017 Equity Incentive Plan (“2017 Plan”) and issued restricted stock units ("RSUs") to employees. In May 2018, Pluralsight, Inc. adopted the 2018 Equity Incentive Plan (“2018 Plan”), as amended in April 2019. The 2018 Plan provides for the grant of nonstatutory stock options, restricted stock, RSUs, stock appreciation rights, performance units, and performance shares to employees, directors, and consultants of the Company.

In connection with the IPO and the adoption of the 2018 Plan, the 2017 Plan was terminated. With the establishment of the 2018 Plan, the Company no longer grants equity-based awards under the 2017 Plan and any shares that expire, terminate, are forfeited or repurchased by the Company, or are withheld by the Company to cover tax withholding obligations, under the 2017 Plan, will automatically be transferred to the 2018 Plan.

In connection with the acquisition of GitPrime, Inc. the Company assumed all existing equity awards under the 2015 and 2018 Equity Incentive Plans of GitPrime.

Stock Options

In connection with the IPO, the Company granted to employees stock options under the 2018 Plan to purchase shares of Class A common stock at an exercise price equal to the IPO price of $15.00 per share. The stock options will vest ratably in equal six-month periods over a period of two years from the IPO date.

In connection with the GitPrime acquisition, the stock options granted to GitPrime employees under the 2015 and 2018 Equity Incentive Plans were automatically converted into options to purchase shares of the Company's Class A common stock, subject to appropriate adjustments to the number of shares issuable pursuant to such options and the exercise price of such options as provided in the Merger Agreement. The options are subject to time-based vesting conditions and continue to vest over the remaining vesting period of the original award ranging from two to four years.

The following table summarizes the stock option activity for the nine months ended September 30, 2019:

	Stock Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Balance as of December 31, 2018	5,143,712		$	15.00
Granted	169,762		1.47
Exercised	(452,914	)	14.62
Forfeited or cancelled	(414,476	)	14.87
Outstanding as of September 30, 2019	4,446,084		$	14.53	8.6	$	10.0
Vested and exercisable—September 30, 2019	2,099,314		$	14.86	8.6	$	4.1

During the nine months ended September 30, 2019, the total intrinsic value of options exercised was $7.6 million. The total unrecognized equity-based compensation related to the stock options was $14.9 million, which is expected to be recognized over a weighted-average period of 1.1 years.

RSUs

RSUs represent the right to receive shares of Pluralsight, Inc.’s Class A common stock at a specified future date. Restricted share units of Pluralsight Holdings under the 2017 Plan are generally subject to both a service condition and a liquidity condition. RSUs under the 2018 Plan are generally subject to a service condition. The service condition is generally satisfied over four years, whereby 25% of the share units satisfy this condition on the first anniversary of the vesting start date and then ratably on a quarterly basis thereafter through the end of the vesting period. The liquidity condition under the 2017 plan is satisfied upon the occurrence of a qualifying event, which was satisfied upon expiration of the lock-up period following the IPO.

Under the 2017 Plan, all restricted share units granted were initially restricted share units of Pluralsight Holdings. In connection with the IPO, all restricted share units were converted into RSUs of Pluralsight, Inc., except for Class B restricted share units of Pluralsight Holdings, which remain restricted share units of Pluralsight Holdings, and represent the right to receive LLC Units and corresponding shares of Class C common stock of Pluralsight, Inc. upon vesting.

The activity for RSUs for the nine months ended September 30, 2019 was as follows:

	Number of RSUs or Units		Weighted-Average Grant Date Fair Value
RSUs of Pluralsight, Inc.
Balance at December 31, 2018	4,801,536		$	11.11
Granted	5,279,646		30.60
Forfeited or cancelled	(913,189	)	20.06
Vested	(1,621,773	)	11.85
Balance at September 30, 2019	7,546,220		$	23.51
Restricted Share Units of Pluralsight Holdings:
Balance at December 31, 2018	2,062,500		$	8.24
Vested	(562,500	)	8.24
Balance at September 30, 2019	1,500,000		$	8.24

As of September 30, 2019, unrecognized compensation cost related to RSUs, including restricted share units of Pluralsight Holdings, was $136.1 million, which is expected to be recognized over a weighted-average period of 3.1 years.

Employee Stock Purchase Plan

In May 2018, Pluralsight, Inc.'s board of directors adopted the Employee Stock Purchase Plan ("ESPP"). The ESPP generally provides for consecutive overlapping 24-month offering periods comprised of foursix-month purchase periods. The offering periods start on the first trading day on or after May 31 and November 30 of each year.

The ESPP permits participants to elect to purchase shares of Class A common stock through fixed contributions from eligible compensation paid during each purchase period during an offering period, provided that this fixed contribution amount will not exceed 75.0% of the eligible compensation a participant receives during a purchase period, or $12,500 (increased to $25,000 for purposes of the first purchase period under the ESPP). A participant may purchase a maximum of 5,000 shares during each purchase period. Amounts deducted and accumulated by the participant will be used to purchase shares of Class A common stock at the end of each purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of Class A common stock on the first trading day of each offering period or on the purchase date. If the fair market value of the common stock on any purchase date within an offering period is lower than the stock price as of the beginning of the offering period, the offering period will immediately reset after the purchase of shares on such purchase date and participants will automatically be re-enrolled in a new offering period. Participants may end their participation at any time during an offering period and will be paid their accrued contributions that have not yet been used to purchase shares of common stock. Participation ends automatically upon termination of employment.

ESPP employee payroll contributions accrued at September 30, 2019 and December 31, 2018, totaled $6.2 million and $1.5 million, and are included within accrued expenses in the condensed consolidated balance sheets. Employee payroll contributions ultimately used to purchase shares under the ESPP will be reclassified to stockholders' equity at the end of the purchase period. As of September 30, 2019, total unrecognized equity-based compensation for purchase rights committed under the ESPP was $9.3 million, which is expected to be recognized over a weighted-average period of 1.0 years.

Equity-Based Compensation

Equity-based compensation was classified as follows in the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
			(Restated)				(Restated)
Cost of revenue	$	138	$	56	$	355	$	145
Sales and marketing	8,739		5,612		22,967		13,507
Technology and content	6,666		3,700		15,513		8,652
General and administrative	9,114		11,262		28,822		30,678
Total equity-based compensation	$	24,657	$	20,630	$	67,657	$	52,982

Equity-based compensation capitalized as internal-use software was $0.4 million and $0.1 million for the three months ended September 30, 2019 and 2018, respectively, and $0.9 million and $0.1 million for the nine months ended September 30, 2019 and 2018, respectively.

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Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Prepaid and Other Current Assets

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

	September 30, 2019		December 31, 2018
Prepaid expenses	$	10,788	$	7,931
Other current assets	1,876		392
Prepaid expenses and other current assets	$	12,664	$	8,323

Schedule of Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	September 30, 2019		December 31, 2018
Accrued compensation	$	21,462	$	22,285
Accrued income and other taxes payable	6,534		5,408
Accrued other current liabilities	9,639		4,354
Accrued expenses	$	37,635	$	32,047

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Convertible Senior Notes and Other Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of Convertible Senior Notes Liability and Equity Components, and Interest Expense Recognized

The net carrying value of the liability component of the Notes was as follows (in thousands):

	September 30, 2019
Principal	$	593,500
Less: Unamortized debt discount	(118,788		)
Less: Unamortized issuance costs	(11,056		)
Net carrying amount	$	463,656

The net carrying value of the equity component of the Notes was as follows (in thousands):

	September 30, 2019
Proceeds allocated to the conversion option (debt discount)	$	140,776
Less: Issuance costs	(3,743		)
Less: Reacquisition of conversion option related to the repurchases of convertible senior notes	(2,965		)
Net carrying amount	$	134,068

The interest expense recognized related to the Notes was as follows (in thousands):

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Contractual interest expense	$	585	$	1,311
Amortization of debt issuance costs and discount	6,826		15,120
Total	$	7,411	$	16,431

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Convertible Senior Notes and Other Long-Term Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Convertible Senior Notes and Other Long-Term Debt

Convertible Senior Notes and Other Long-Term Debt

Convertible Senior Notes

In March 2019, Pluralsight, Inc. issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 (the "Notes"), which includes the initial purchasers’ exercise in full of their option to purchase an additional $83.5 million principal amount of the Notes, in a private placement to qualified institutional buyers exempt from registration under the Securities Act. The net proceeds from the issuance of the Notes were $616.7 million after deducting the initial purchasers’ discounts and estimated issuance costs.

The Notes are governed by an indenture (the “Indenture”) between the Company, as the issuer, and U.S. Bank National Association, as trustee. The Notes are Pluralsight, Inc.'s senior unsecured obligations and rank senior in right of payment to any of its indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company's unsecured indebtedness then existing and future liabilities that are not so subordinated; effectively junior in right of payment to any of the Company's secured indebtedness, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of its subsidiaries. The Indenture does not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by the Company or any of its subsidiaries. The Notes mature on March 1, 2024 unless earlier repurchased or converted. Interest is payable semi-annually in arrears on March 1 and September 1 of each year.

The Notes have an initial conversion rate of 25.8023 shares of the Company's Class A common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $38.76 per share of its Class A common stock and is subject to adjustment if certain events occur. Following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event. Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” per the Indenture, holders of the Notes may require the Company to repurchase for cash all or a portion of their Notes at a purchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest.

Holders of the Notes may convert all or any portion of their Notes at any time prior to the close of business on December 1, 2023, in integral multiples of $1,000 principal amount, only under the following circumstances:

• During any calendar quarter commencing after the calendar quarter ended on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

• During the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price as defined in the Indenture per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; or

• Upon the occurrence of specified corporate events described in the Indenture.

On or after December 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing conditions. Upon conversion, holders will receive cash, shares of the Company's Class A common stock or a combination of cash and shares of Class A common stock, at the Company's election.

During the nine months ended September 30, 2019, the conditions allowing holders of the Notes to convert were not met. The Notes are therefore not currently convertible and are classified as long-term debt.

The Company accounts for the Notes as separate liability and equity components. The Company determined the carrying amount of the liability component as the present value of its cash flows using a discount rate of approximately 5.5% based on comparable debt transactions for similar companies. The estimated interest rate was applied to the Notes, which resulted in a fair value of the liability component of $492.7 million upon issuance, calculated as the present value of future contractual payments based on the $633.5 million aggregate principal amount. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense over the term of the Notes using the effective interest method. The $140.8 million difference between the gross proceeds received from issuance of the Notes of $633.5 million and the estimated fair value of the liability component represents the equity component, or the conversion option, of the Notes and was recorded in additional paid-in capital. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

The Company allocates issuance costs related to the issuance of the Notes to the liability and equity components using the same proportions as the initial carrying value of the Notes. Issuance costs attributable to the liability component were $13.1 million and are being amortized to interest expense using the effective interest method over the term of the Notes. Issuance costs attributable to the equity components were $3.7 million and are netted with the equity component of the Notes in stockholders’ equity on the condensed consolidated balance sheets.

Repurchases of Convertible Senior Notes

In September 2019, Pluralsight, Inc. repurchased a total of $40.0 million in aggregate principal of its Notes for approximately $35.0 million in cash (the "Repurchase"). The Company first allocated the cash paid to repurchase the Notes to the liability component based on the estimated fair value of that component immediately prior to the extinguishment. The Company estimated the fair value of the liability component to be $32.0 million, using an estimated discount rate of approximately 5.5% based on comparable debt transactions for similar companies. The remaining consideration of approximately $3.0 million was allocated to the reacquisition of the equity component and recognized as a reduction of stockholders' equity.

The net carrying value of the liability component of the Notes was as follows (in thousands):

	September 30, 2019
Principal	$	593,500
Less: Unamortized debt discount	(118,788		)
Less: Unamortized issuance costs	(11,056		)
Net carrying amount	$	463,656

The net carrying value of the equity component of the Notes was as follows (in thousands):

	September 30, 2019
Proceeds allocated to the conversion option (debt discount)	$	140,776
Less: Issuance costs	(3,743		)
Less: Reacquisition of conversion option related to the repurchases of convertible senior notes	(2,965		)
Net carrying amount	$	134,068

The interest expense recognized related to the Notes was as follows (in thousands):

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Contractual interest expense	$	585	$	1,311
Amortization of debt issuance costs and discount	6,826		15,120
Total	$	7,411	$	16,431

Capped Calls

In connection with the offering of the Notes, the Company entered into privately-negotiated capped call transactions ("Capped Calls") with certain counterparties. The Capped Calls each have an initial strike price of approximately $38.76 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have initial cap prices of $58.50 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, 16,345,757 shares of the Company's Class A common stock. The Capped Calls are generally intended to reduce or offset the potential dilution from shares of Class A common stock issued upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. As the Capped Call transactions are considered indexed to the Company's own stock and are considered equity classified, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $69.4 million incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets.

In connection with the repurchase of the convertible senior notes, the Company terminated a portion of its existing Capped Calls that cover 1,032,092 shares of the Company's Class A common stock, which corresponds to the number of shares underlying the principal amount of Notes that were repurchased. The Company received proceeds of $1.3 million in connection with the portion of the Capped Calls that were terminated.

Intercompany Convertible Promissory Note with Pluralsight Holdings

In connection with the issuance of the Notes, Pluralsight, Inc. entered into an intercompany convertible promissory note with Pluralsight Holdings, whereby Pluralsight, Inc. provided the net proceeds from the issuance of the Notes to Pluralsight Holdings. The terms of the convertible promissory note mirror the terms of the Notes issued by Pluralsight, Inc. The intent of the convertible promissory note is to maintain the parity of shares of Class A common stock with LLC Units as required by the LLC Agreement in order to preserve the Company's legal structure. This note was amended in September 2019 in connection with the Repurchase. All effects of the convertible promissory note on the condensed consolidated financial statements have been eliminated in consolidation.

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Organization and Description of Business

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

Organization and Description of Business

Pluralsight, Inc. was incorporated as a Delaware corporation on December 4, 2017 as a holding company for the purpose of facilitating an initial public offering (“IPO”) and other related transactions in order to carry on the business of Pluralsight Holdings, LLC (“Pluralsight Holdings”) and its subsidiaries (together with Pluralsight, Inc., the “Company” or “Pluralsight”). Pluralsight Holdings is a limited liability company (“LLC”) and was organized on August 29, 2014 in the state of Delaware and is the parent company of Pluralsight, LLC, and its directly and indirectly wholly-owned subsidiaries. Pluralsight, LLC was organized on June 17, 2004 in the state of Nevada. Pluralsight operates a cloud-based technology skills platform that provides a broad range of tools for businesses and individuals, including skill assessments, a curated library of courses, learning paths, developer productivity metrics, and business analytics. As the sole managing member of Pluralsight Holdings, Pluralsight, Inc. operates and controls all of the business operations and affairs of Pluralsight.

Initial Public Offering

In May 2018, Pluralsight, Inc. completed its IPO, in which it sold 23,805,000 shares of Class A common stock at a public offering price of $15.00 per share for net proceeds of $332.1 million, after deducting underwriters' discounts and commissions, which Pluralsight, Inc. used to purchase newly issued common limited liability company units (“LLC Units") from Pluralsight Holdings. In connection with the IPO, the Company reclassified $7.4 million of offering costs into stockholders’ equity as a reduction of the net proceeds received from the IPO.

Reorganization Transactions

In connection with the IPO, the Company completed the following transactions (“Reorganization Transactions”):

• The limited liability company agreement of Pluralsight Holdings (“LLC Agreement”) was amended and restated to, among other things: (i) appoint Pluralsight, Inc. as its sole managing member and (ii) effectuate the conversion of all outstanding redeemable convertible preferred limited liability company units, incentive units, and Class B incentive units of Pluralsight Holdings into a single class of common units. See Note 13—Stockholders' Equity for additional details.

• Certain members of Pluralsight Holdings that were corporations merged with and into Pluralsight, Inc. and certain members of Pluralsight Holdings contributed certain of their LLC Units to Pluralsight, Inc., in each case in exchange for shares of Class A common stock.

• The certificate of incorporation of Pluralsight, Inc. was amended and restated to authorize three classes of common stock, Class A common stock, Class B common stock, Class C common stock, and one class of preferred stock. Class B and Class C common stock were issued on a one-for-one basis to the members of Pluralsight Holdings who retained LLC Units (“Continuing Members”). Class B and Class C common stock have voting rights but no economic rights. See Note 13—Stockholders' Equity for additional details.

As the sole managing member of Pluralsight Holdings, Pluralsight, Inc. has the sole voting interest in Pluralsight Holdings and controls all of the business operations, affairs, and management of Pluralsight Holdings. Accordingly, Pluralsight, Inc. consolidates the financial results of Pluralsight Holdings and reports the non-controlling interests of the Continuing Members' LLC Units on its consolidated financial statements. As of September 30, 2019, Pluralsight, Inc. owned 73.4% of Pluralsight Holdings and the Continuing Members owned the remaining 26.6% of Pluralsight Holdings.

As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Prior to the Reorganization Transactions, Pluralsight, Inc. had no operations.

Secondary Offering

In March 2019, the Company completed a secondary offering, in which certain stockholders sold 15,592,234 shares of Class A common stock at a public offering price of $29.25 per share. Pluralsight did not receive any proceeds from the sale of shares by selling stockholders. A total of $0.9 million in costs were incurred by Pluralsight in connection with this offering. In connection with the secondary offering, the Company issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 in a private placement to qualified institutional buyers exempt from registration under the Securities Act. See Note 11—Convertible Senior Notes and Other Long-Term Debt for additional details.

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Balance Sheet Components

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

Balance Sheet Components

Prepaid Expenses and Other Current Assets

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

	September 30, 2019		December 31, 2018
Prepaid expenses	$	10,788	$	7,931
Other current assets	1,876		392
Prepaid expenses and other current assets	$	12,664	$	8,323

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	September 30, 2019		December 31, 2018
Accrued compensation	$	21,462	$	22,285
Accrued income and other taxes payable	6,534		5,408
Accrued other current liabilities	9,639		4,354
Accrued expenses	$	37,635	$	32,047

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Restatement of Condensed Consolidated Financial Statements

9 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Restatement of Condensed Consolidated Financial Statements

Restatement of Condensed Consolidated Financial Statements

The Company previously restated the financial statements for the year ended December 31, 2018 in its Annual Report on Form 10-K/A as filed on June 27, 2019, and included detailed disclosure of the restatement impact on the consolidated financial statements for the quarterly and year-to-date periods ended June 30, 2018 and September 30, 2018. However, because the Company did not amend its Quarterly Reports on Form 10-Q for the period ended September 30, 2018, the effects of the restatement on the condensed consolidated financial statements for such interim period are reflected in the comparative interim financial statements contained herein.

As described in the Company's Annual Report on Form 10-K/A, the Board of Directors of Pluralsight, Inc., in consultation with the Audit Committee of the Board, reached a determination on June 13, 2019 that the Company's consolidated financial statements and related disclosures for the year ended December 31, 2018, and the condensed consolidated financial statements for each of the quarterly and year-to-date periods ended June 30 and September 30, 2018, contained a material error in recognizing non-cash equity-based compensation resulting in an understatement of net loss. This non-cash equity-based compensation error related to the incorrect timing of recognition of expense for certain RSUs, which expense was initially recognized on a straight-line attribution basis. Upon further review, management determined that the non-cash equity-based compensation expense for such RSUs should have been recognized on a tranche-by-tranche basis ("accelerated attribution method") because the RSUs have a graded-vesting schedule and contain a performance condition. The impact of correcting the attribution shifts the non-cash equity-based compensation expense to earlier reporting periods, while the total cumulative expense expected to be recognized over the service period will remain the same.

The following tables present the effects of the restatement on the Company's unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine-month periods ended September 30, 2018, and on the unaudited condensed consolidated statements of redeemable convertible preferred units, members’ deficit, and stockholders’ equity, and cash flows for the nine months ended September 30, 2018.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Revenue	$	61,553		$	—		$	61,553		$	164,769		$	—		$	164,769
Cost of revenue	15,331			16			15,347			46,107			59			46,166
Gross profit	46,222			(16		)	46,206			118,662			(59		)	118,603
Operating expenses:
Sales and marketing	41,392			1,240			42,632			109,792			4,164			113,956
Technology and content	17,227			910			18,137			47,045			2,813			49,858
General and administrative	17,398			2,420			19,818			48,138			8,974			57,112
Total operating expenses	76,017			4,570			80,587			204,975			15,951			220,926
Loss from operations	(29,795		)	(4,586		)	(34,381		)	(86,313		)	(16,010		)	(102,323		)
Other (expense) income:
Interest expense	(342		)	—			(342		)	(6,476		)	—			(6,476		)
Loss on debt extinguishment	—			—			—			(4,085		)	—			(4,085		)
Other income, net	654			—			654			689			—			689
Loss before income taxes	(29,483		)	(4,586		)	(34,069		)	(96,185		)	(16,010		)	(112,195		)
Provision for income taxes	(254		)	—			(254		)	(506		)	—			(506		)
Net loss	$	(29,737	)	$	(4,586	)	$	(34,323	)	$	(96,691	)	$	(16,010	)	$	(112,701	)
Less: Net loss attributable to non-controlling interests	(15,578		)	(2,402		)	(17,980		)	(28,284		)	(3,606		)	(31,890		)
Net loss attributable to Pluralsight, Inc.	$	(14,159	)	$	(2,184	)	$	(16,343	)	$	(68,407	)	$	(12,404	)	$	(80,811	)
Less: Accretion of Series A redeemable convertible preferred units	—			—			—			(176,275		)	—			(176,275		)
Net loss attributable to shares of Class A common stock	$	(14,159	)	$	(2,184	)	$	(16,343	)	$	(244,682	)	$	(12,404	)	$	(257,086	)
Net loss per share, basic and diluted(1)	$	(0.23	)	$	(0.03	)	$	(0.26	)	$	(0.41	)	$	(0.06	)	$	(0.47	)
Weighted-average shares of Class A common stock used in computing basic and diluted net loss per share(1)	62,472						62,472			62,400						62,400

________________________

(1) Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Net loss	$	(29,737	)	$	(4,586	)	$	(34,323	)	$	(96,691	)	$	(16,010	)	$	(112,701	)
Other comprehensive loss:
Foreign currency translation losses, net	(39		)	—			(39		)	(97		)	—			(97		)
Comprehensive loss	$	(29,776	)	$	(4,586	)	$	(34,362	)	$	(96,788	)	$	(16,010	)	$	(112,798	)
Less: Comprehensive loss attributable to non-controlling interests	(15,599		)	(2,402		)	(18,001		)	(28,326		)	(3,606		)	(31,932		)
Comprehensive loss attributable to Pluralsight, Inc.	$	(14,177	)	$	(2,184	)	$	(16,361	)	$	(68,462	)	$	(12,404	)	$	(80,866	)

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit

As Previously Reported for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares		Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—		$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—		—		—	—		—	—		—			—			—			—			984
Equity-based compensation	—		—			—		13,155			—		—		—	—		—	—		—			—			—			—			13,155
Accretion of Series A redeemable convertible preferred units	—		176,275			—		(14,139		)	—		—		—	—		—	—		—			—			(162,136		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss	—		—			—		—			—		—		—	—		—	—		—			—			(42,660		)	—			(42,660		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660		4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000		2		—	—		—	—		324,704			—			—			—			324,706
Allocation of equity to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—		—			—		—			(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Settlement of equity appreciation rights	—		—			—		—			—		—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation	—		—			—		—			—		—		—	—		—	—		23,931			—			—			—			23,931
Adjustment to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(13,073		)	—			—			13,073			—
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(37		)	—			(42		)	(79		)
Net loss	—		—			—		—			—		—		—	—		—	—		—			—			(25,747		)	(28,284		)	(54,031		)
Balance at September 30, 2018	—		$	—		—		$	—		62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	443,182		$	(34	)	$	(335,863	)	$	118,976		$	226,274

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

Restatement Adjustments for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units			Members’ Capital				Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount			Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	—		$	—	$	—		$	—		$	—
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	9,123			—	—		—	—		—	—		—			—		—			—			9,123
Accretion of Series A redeemable convertible preferred units	—	—		—	(9,123		)	—	—		—	—		—	—		—			—		9,123			—			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(9,123		)	—			(9,123		)
Effect of the Reorganization Transactions and initial public offering:																												—
Effect of the reorganization transactions	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Initial public offering, net of offering costs	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Allocation of equity to non-controlling interests	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Settlement of equity appreciation rights	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	—			—	—		—	—		—	—		6,887			—		—			—			6,887
Adjustment to non-controlling interests	—	—		—	—			—	—		—	—		—	—		(3,606		)	—		—			3,606			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(3,281		)	(3,606		)	(6,887		)
Balance at September 30, 2018	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	3,281		$	—	$	(3,281	)	$	—		$	—

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

As Restated for the Nine Months Ended September 30, 2018

(in thousands, except share/unit amounts)

	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock				Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares		Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—		$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—		—		—	—		—	—		—			—			—			—			984
Equity-based compensation, as restated	—		—			—		22,278			—		—		—	—		—	—		—			—			—			—			22,278
Accretion of Series A redeemable convertible preferred units, as restated	—		176,275			—		(23,262		)	—		—		—	—		—	—		—			—			(153,013		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(51,783		)	—			(51,783		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660		4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000		2		—	—		—	—		324,704			—			—			—			324,706
Allocation of equity to non-controlling interests	—		—			—		—			—		—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Effect of the Rescission Transactions	—		—			—		—			(605,390	)	—		455,217	—		150,173	—		—			—			—			—			—
Settlement of equity appreciation rights	—		—			—		—			—		—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation, as restated	—		—			—		—			—		—		—	—		—	—		30,818			—			—			—			30,818
Adjustment to non-controlling interests, as restated	—		—			—		—			—		—		—	—		—	—		(16,679		)	—			—			16,679			—
Foreign currency translation losses	—		—			—		—			—		—		—	—		—	—		—			(37		)	—			(42		)	(79		)
Net loss, as restated	—		—			—		—			—		—		—	—		—	—		—			—			(29,028		)	(31,890		)	(60,918		)
Balance at September 30, 2018, as restated	—		$	—		—		$	—		62,310,270		$	6	58,566,789	$	6	14,198,311	$	1	$	446,463		$	(34	)	$	(339,144	)	$	118,976		$	226,274

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Restated
Operating activities
Net loss	$	(96,691	)	$	(16,010	)	$	(112,701	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	6,331			—			6,331
Amortization of acquired intangible assets	7,721			—			7,721
Amortization of course creation costs	1,437			—			1,437
Equity-based compensation	36,972			16,010			52,982
Amortization of debt discount and debt issuance costs	1,215			—			1,215
Debt extinguishment costs	4,085			—			4,085
Other	507			—			507
Changes in assets and liabilities:
Accounts receivable	(10,352		)	—			(10,352		)
Prepaid expenses and other assets	(2,990		)	—			(2,990		)
Accounts payable	928			—			928
Accrued expenses and other liabilities	6,912			—			6,912
Accrued author fees	1,452			—			1,452
Deferred revenue	28,190			—			28,190
Net cash used in operating activities	(14,283		)	—			(14,283		)
Investing activities
Purchases of property and equipment	(6,576		)	—			(6,576		)
Purchases of content library	(2,345		)	—			(2,345		)
Net cash used in investing activities	(8,921		)	—			(8,921		)
Financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions	332,080			—			332,080
Payments of costs related to initial public offering	(7,083		)	—			(7,083		)
Borrowings of long-term debt	20,000			—			20,000
Repayments of long-term debt	(137,710		)	—			(137,710		)
Payments of debt extinguishment costs	(2,179		)	—			(2,179		)
Payments of debt issuance costs	(450		)	—			(450		)
Payments to settle equity appreciation rights	(325		)	—			(325		)
Taxes paid related to net share settlement	(78		)	—			(78		)
Payments of facility financing obligation	(13		)	—			(13		)
Net cash provided by financing activities	204,242			—			204,242
Effect of exchange rate change on cash, cash equivalents, and restricted cash	(136		)	—			(136		)
Net increase in cash, cash equivalents, and restricted cash	180,902			—			180,902
Cash, cash equivalents, and restricted cash, beginning of period	28,477			—			28,477
Cash, cash equivalents, and restricted cash, end of period	$	209,379		$	—		$	209,379

Description of Adjustments

The adjustments in the tables above reflect an increase in equity-based compensation expense due to the correction of an error in attribution of equity-based compensation from the straight-line method to the accelerated attribution method. The following table outlines the classification of the equity-based compensation adjustments in the statements of operations:

	Three Months Ended September 30, 2018						Nine Months Ended September 30, 2018
	As Previously Reported		Adjustments		As Restated		As Previously Reported		Adjustments		As Restated
Cost of revenue	$	40	$	16	$	56	$	86	$	59	$	145
Sales and marketing	4,372		1,240		5,612		9,343		4,164		13,507
Technology and content	2,790		910		3,700		5,839		2,813		8,652
General and administrative	8,842		2,420		11,262		21,704		8,974		30,678
Total equity-based compensation	$	16,044	$	4,586	$	20,630	$	36,972	$	16,010	$	52,982

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended				5 Months Ended	9 Months Ended
	Sep. 30, 2019		Sep. 30, 2018		Sep. 30, 2018	Sep. 30, 2019		Sep. 30, 2018
Income Statement [Abstract]
Revenue	$ 82,620		$ 61,553			$ 228,099		$ 164,769
Cost of revenue	17,825		15,347			52,336		46,166
Gross profit	64,795		46,206			175,763		118,603
Operating expenses:
Sales and marketing	55,727		42,632			149,852		113,956
Technology and content	27,799		18,137			72,829		49,858
General and administrative	20,817		19,818			63,591		57,112
Total operating expenses	104,343		80,587			286,272		220,926
Loss from operations	(39,548)		(34,381)			(110,509)		(102,323)
Other (expense) income:
Interest expense	(7,778)		(342)			(17,499)		(6,476)
Loss on debt extinguishment	(950)		0			(950)		(4,085)
Other income, net	2,878		654			8,532		689
Loss before income taxes	(45,398)		(34,069)			(120,426)		(112,195)
Provision for income taxes	(404)		(254)			(701)		(506)
Net loss	(45,802)		(34,323)		$ (60,918)	(121,127)		(112,701)
Less: Net loss attributable to non-controlling interests	(13,073)		(17,980)		(31,890)	(39,763)		(31,890)
Net loss attributable to Pluralsight, Inc.	(32,729)		(16,343)		$ (29,028)	(81,364)		(80,811)
Less: Accretion of Series A redeemable convertible preferred units	0		0			0		(176,275)
Net loss attributable to shares of Class A common stock	$ (32,729)		$ (16,343)			$ (81,364)		$ (257,086)
Net loss per unit, basic and diluted (in dollars per share)	$ (0.32)	[1]	$ (0.26)	[1]	$ (0.47)	$ (0.89)	[1]	$ (0.47)	[1]
Weighted average shares of Class A common stock used in computing basic and diluted net loss per unit (in shares)	101,407	[1]	62,472	[1]	62,400	91,741	[1]	62,400	[1]

[1] Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the nine months ended September 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

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Intangible Assets - Schedule of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 123,119
Goodwill recorded in connection with acquisition	138,603
Reduction in goodwill due to working capital adjustments	(100)
Ending balance	$ 261,622

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Equity-Based Compensation - Schedule of Equity Award Activity (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
LLC Units
Number of Shares
Beginning balance (in shares) | shares	3,195,322
Forfeited or cancelled (in shares) | shares	(121,845)
Vested (in shares) | shares	(1,245,633)
Ending balance (in shares) | shares	1,827,844
Weighted- Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 7.63
Forfeited or cancelled (in dollars per share) | $ / shares	5.73
Vested (in dollars per share) | $ / shares	7.58
Ending balance (in dollars per share) | $ / shares	$ 8.58
Parent Company | Restricted Stock Units (RSUs)
Number of Shares
Beginning balance (in shares) | shares	4,801,536
Granted (in shares) | shares	5,279,646
Forfeited or cancelled (in shares) | shares	(913,189)
Vested (in shares) | shares	(1,621,773)
Ending balance (in shares) | shares	7,546,220
Weighted- Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 11.11
Granted (in dollars per share) | $ / shares	30.60
Forfeited or cancelled (in dollars per share) | $ / shares	20.06
Vested (in dollars per share) | $ / shares	11.85
Ending balance (in dollars per share) | $ / shares	$ 23.51
Subsidiaries | Restricted Stock Units (RSUs)
Number of Shares
Beginning balance (in shares) | shares	2,062,500
Vested (in shares) | shares	(562,500)
Ending balance (in shares) | shares	1,500,000
Weighted- Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 8.24
Vested (in dollars per share) | $ / shares	8.24
Ending balance (in dollars per share) | $ / shares	$ 8.24

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Contingency [Line Items]
Effective tax rate	(0.90%)	(0.70%)	(0.60%)	(0.50%)
Total unrecorded TRA liability	$ 252.8		$ 252.8
Common Stock | Class A Common Stock
Income Tax Contingency [Line Items]
Effect of exchanges of LLC Units (in shares)	116,709		33,536,262

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Commitments and Contingencies - Schedule of Future Minimum Operating Lease Payments (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019 (remaining three months)	$ 1,995
2020	9,026
2021	10,032
2022	10,025
2023	9,926
Thereafter	99,324
Less: Sublease rental income	(763)
Total future minimum lease payments	$ 139,565

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Stockholders' Equity - Exchange of LLC Units (Details) - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Common Stock | Class A Common Stock
Class of Stock [Line Items]
Effect of exchanges of LLC Units (in shares)	116,709	33,536,262

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Related Party Transactions - Narrative (Details) - Chief Executive Officer $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)
Related Party Transaction [Line Items]
Due to related parties	$ 0.4
Amount paid under the arrangement	$ 0.7

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Cash Equivalents and Investments - Schedule of Investments by Maturity (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Amortized Cost
Amortized Cost	$ 510,774
Fair Value
Fair Value	511,173
Investments
Amortized Cost
Due within one year	328,323
Due between one and two years	84,091
Amortized Cost	412,414
Fair Value
Due within one year	328,602
Due between one and two years	84,210
Fair Value	$ 412,812

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Revenue - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	May 09, 2019
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 70,900	$ 137,100
Remaining performance obligations	$ 265,800	$ 265,800
Product Concentration Risk | Revenue | Subscription Accounts
Disaggregation of Revenue [Line Items]
Revenue, percent	95.00%	97.00%
GitPrime, Inc.
Disaggregation of Revenue [Line Items]
Deferred revenue			$ 1,367
Contract assets within accounts receivable	$ 700	$ 700