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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2017	Feb. 22, 2018	Jun. 30, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Five9, Inc.
Trading Symbol	FIVN
Entity Central Index Key	0001288847
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Common Stock, Shares Outstanding		56,734,715
Entity Public Float			$ 1,040.5

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 68,947	$ 58,122
Accounts receivable, net	19,048	13,881
Prepaid expenses and other current assets	4,840	3,008
Total current assets	92,835	75,011
Property and equipment, net	19,888	14,688
Intangible assets, net	1,073	1,539
Goodwill	11,798	11,798
Other assets	2,602	2,203
Total assets	128,196	105,239
Current liabilities:
Accounts payable	4,292	3,366
Accrued and other current liabilities	11,787	9,604
Accrued federal fees	1,151	2,742
Sales tax liability	1,326	1,347
Notes payable	336	742
Capital leases	6,651	6,230
Deferred revenue	13,975	10,047
Total current liabilities	39,518	34,078
Revolving line of credit	32,594	32,594
Sales tax liability — less current portion	1,044	1,476
Notes payable — less current portion	0	318
Capital leases — less current portion	7,161	5,915
Other long-term liabilities	1,041	530
Total liabilities	81,358	74,911
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000 shares authorized, no shares issued and outstanding as of December 31, 2017 and 2016	0	0
Common stock, $0.001 par value; 450,000 shares authorized, 56,632 shares and 53,363 shares issued and outstanding as of December 31, 2017 and 2016, respectively	57	53
Additional paid-in capital	222,202	196,555
Accumulated deficit	(175,421)	(166,280)
Total stockholders’ equity	46,838	30,328
Total liabilities and stockholders’ equity	$ 128,196	$ 105,239

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred Stock, par value (in USD per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0
Common Stock, par value (in USD per share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in shares)	450,000,000	450,000,000
Common Stock, shares issued (in shares)	56,631,647	53,363,013
Common Stock, shares outstanding (in shares)	56,631,647	53,363,013

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Revenue	$ 200,225	$ 162,090	$ 128,868
Cost of revenue	83,104	66,934	59,495
Gross profit	117,121	95,156	69,373
Operating expenses:
Research and development	27,120	23,878	22,659
Sales and marketing	66,570	52,748	42,042
General and administrative	29,151	25,072	25,822
Total operating expenses	122,841	101,698	90,523
Loss from operations	(5,720)	(6,542)	(21,150)
Other income (expense), net:
Extinguishment of debt	0	(1,026)	0
Interest expense	(3,471)	(4,226)	(4,727)
Interest income and other	490	(12)	100
Total other income (expense), net	(2,981)	(5,264)	(4,627)
Loss before income taxes	(8,701)	(11,806)	(25,777)
Provision for income taxes	268	54	61
Net loss	$ (8,969)	$ (11,860)	$ (25,838)
Net loss per share:
Basic and diluted (in USD per share)	$ (0.16)	$ (0.23)	$ (0.52)
Shares used in computing net loss per share:
Basic and diluted (in shares)	54,946	52,342	50,141
Comprehensive Loss:
Comprehensive loss	$ (8,969)	$ (11,860)	$ (25,838)

Consolidated Statements of Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands

Total

Common Stock

Additional Paid-in Capital

Accumulated Deficit

Beginning balance, shares at Dec. 31, 2014

49,322

Beginning balance at Dec. 31, 2014

$ 41,753

$ 49

$ 170,286

$ (128,582)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options and warrants, shares

992

Issuance of common stock upon exercise of stock options and warrants

1,266

$ 1

1,265

Issuance of common stock upon vesting of restricted stock units, shares

566

Issuance of common stock upon vesting of restricted stock units

$ 1

(1)

Issuance of common stock under ESPP, shares

306

Issuance of common stock under ESPP

1,369

Stock-based compensation

7,730

Forfeiture of unvested restricted common stock, shares

(21)

Forfeiture of unvested restricted common stock

Net loss

(25,838)

Ending balance at Dec. 31, 2015

26,280

$ 51

180,649

(154,420)

Ending balance, shares at Dec. 31, 2015

51,165

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options and warrants, shares

982

Issuance of common stock upon exercise of stock options and warrants

4,286

$ 1

4,285

Issuance of common stock upon vesting of restricted stock units, shares

896

Issuance of common stock upon vesting of restricted stock units

$ 1

(1)

Issuance of common stock under ESPP, shares

320

Issuance of common stock under ESPP

1,979

Stock-based compensation

9,643

Net loss

(11,860)

Ending balance at Dec. 31, 2016

30,328

$ 53

196,555

(166,280)

Ending balance, shares at Dec. 31, 2016

53,363

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options and warrants, shares

2,033

Issuance of common stock upon exercise of stock options and warrants

6,035

$ 2

6,033

Issuance of common stock upon vesting of restricted stock units, shares

971

Issuance of common stock upon vesting of restricted stock units

$ 1

(1)

Issuance of common stock under ESPP, shares

265

Issuance of common stock under ESPP

4,101

$ 1

4,100

Stock-based compensation

15,343

Other

^[1]

172

(172)

Net loss

(8,969)

Ending balance at Dec. 31, 2017

$ 46,838

$ 57

$ 222,202

$ (175,421)

Ending balance, shares at Dec. 31, 2017

56,632

[1]

Effective January 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09 - Improvements to Employee Share-Based Payment Accounting. Accordingly, the Company accounted for forfeitures as they occurred rather than by estimating expected forfeitures. This amount represents the net effect of this change. See Note 1 for more information.

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net loss	$ (8,969)	$ (11,860)	$ (25,838)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,314	8,390	7,388
Provision for doubtful accounts	95	75	171
Stock-based compensation	15,343	9,643	7,730
Amortization of debt discount and issuance costs	80	241	350
Loss on extinguishment of debt	0	1,026	0
Reversal of interest and penalties on accrued federal fees	(2,133)	0	0
Reversal of accrued federal fees	0	(3,114)	0
Non-cash adjustment on investment	(366)	0	0
Accretion of interest	21	20	0
Others	(48)	(10)	46
Changes in operating assets and liabilities:
Accounts receivable	(5,163)	(3,389)	(2,410)
Prepaid expenses and other current assets	(1,912)	(859)	(224)
Other assets	(33)	203	(312)
Accounts payable	813	811	(1,610)
Accrued and other current liabilities	1,061	2,262	426
Accrued federal fees and sales tax liability	90	(182)	441
Deferred revenue	3,882	3,680	1,038
Other liabilities	31	(99)	(135)
Net cash provided by (used in) operating activities	11,106	6,838	(12,939)
Cash flows from investing activities:
Purchases of property and equipment	(2,650)	(1,131)	(1,116)
Purchases of convertible notes held for investment	0	(1,206)	0
Decrease (increase) in restricted cash	0	(60)	806
Purchase of short-term investments	0	0	(20,000)
Proceeds from maturity of short-term investments	0	0	40,000
Net cash provided by (used in) investing activities	(2,650)	(2,397)	19,690
Cash flows from financing activities:
Proceeds from exercise of common stock options and warrants	6,035	4,286	1,266
Proceeds from sale of common stock under ESPP	4,101	1,979	1,369
Proceeds from revolving line of credit	0	32,594	0
Repayments on revolving line of credit	0	(12,500)	0
Repayments of notes payable	(699)	(24,351)	(3,447)
Payments of capital leases	(7,068)	(6,237)	(5,744)
Payment of prepayment penalty and related fees	0	(368)	0
Payments for debt issuance costs	0	(206)	0
Net cash provided by (used in) financing activities	2,369	(4,803)	(6,556)
Net increase in cash and cash equivalents	10,825	(362)	195
Cash and cash equivalents:
Beginning of period	58,122	58,484	58,289
End of period	68,947	58,122	58,484
Supplemental disclosures of cash flow data:
Cash paid for interest	3,311	4,234	4,340
Cash paid for income taxes	121	115	186
Non-cash investing and financing activities:
Equipment obtained under capital lease	10,261	8,202	6,284
Equipment purchased and unpaid at period-end	145	163	151
Capitalization of leasehold improvement through non-cash lease incentive	142	0	0
Conversion of accrued federal fees to note payable, net	$ 0	$ 0	$ 1,675

Description of Business and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Summary of Significant Accounting Policies

Five9, Inc. and its wholly-owned subsidiaries, or the Company, is a provider of cloud software for contact centers. The Company was incorporated in Delaware in 2001 and is headquartered in San Ramon, California. The Company has offices in Europe and Asia, which primarily provide research, development, sales, marketing, and client support services.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding annual financial reporting. All intercompany transactions and balances have been eliminated in consolidation.

Certain prior period amounts included in the consolidated financial statements have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of consolidated financial statements in accordance with 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The significant estimates made by management affect revenue, the allowance for doubtful accounts, loss contingencies, including the Company’s accrual for federal fees and sales tax liability, and accrued liabilities. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. For these subsidiaries, the monetary assets and liabilities are re-measured into U.S. dollars at the current exchange rate as of the balance sheet date, and all non-monetary assets and liabilities are re-measured into U.S. dollars at historical exchange rates. Revenues is primarily denominated in U.S dollars. Expenses are converted using average rates in effect on a monthly basis. Exchange gains and losses resulting from foreign currency transactions were not significant in any period and are reported in “Other income (expense), net” in the consolidated statements of operations and comprehensive loss.

Cash and Cash Equivalents

The Company considers highly liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits cash and cash equivalents with financial institutions that management believes are of high credit quality. Cash equivalents consist of money market funds and certificates of deposit with original maturities of three months or less, and are stated at cost plus accrued interest, which approximates fair value.

Concentration Risks

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash, cash equivalents, and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at two large reputable financial institutions. Total cash and cash equivalents in excess of insured limits were $68.3 million and $57.5 million as of December 31, 2017 and 2016, respectively. The Company has not experienced any losses in such accounts.

As of December 31, 2017 and 2016, no single client represented more than 10% of accounts receivable. For the years ended December 31, 2017, 2016 and 2015, no single client represented more than 10% of revenue.

Allowance for Doubtful Accounts

The Company records a provision for doubtful accounts based on historical experience and a detailed assessment of the collectability of its accounts receivable. In estimating the allowance for doubtful accounts, management considers, among other factors, the aging of the accounts receivable, historical write-offs and the creditworthiness of each client. If circumstances change, such as higher-than-expected defaults or an unexpected material adverse change in a major client’s ability to meet its financial obligations, the Company’s estimate of the recoverability of the amounts due could be reduced by a material amount.

The following table presents the changes in the allowance for doubtful accounts (in thousands):



	Year Ended December 31,
	2017			2016			2015
Balance, beginning of period	$	12		$	15		$	65
Add: bad debt expense	95			75			171
Less: write-offs, net of recoveries	(74		)	(78		)	(221		)
Balance, end of period	$	33		$	12		$	15

Property and Equipment, Net

Property and equipment is stated at cost less accumulated depreciation and amortization, and is depreciated using the straight-line method over the estimated useful lives of the assets as follows:



Asset Category		Estimated Useful Lives
Computer and network equipment		3 to 5 years
Computer software		3 years
Development costs		1 to 5 years
Furniture and fixtures		7 years
Leasehold improvements		Shorter of useful life or lease term

Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the consolidated balance sheet and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive loss in the period realized.

The Company evaluates the recoverability of property and equipment for possible impairment whenever events or circumstances indicate that the carrying amount of such assets or asset groups may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets or asset groups are expected to generate. If such evaluation indicates that the carrying amount of the assets or asset groups is not recoverable, the carrying amount of such assets or asset groups is reduced to fair value. No impairment losses have been recognized in any of the periods presented.

Goodwill and Intangible Assets

The Company records goodwill when the consideration paid in a business combination exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but instead is required to be tested for impairment annually and whenever events or changes in circumstances indicate that the carrying value of goodwill may exceed its fair value.

The Company performs testing for impairment of goodwill in its fourth quarter, or as events occur or circumstances change that would more likely than not reduce the fair value of the Company’s single reporting unit below its carrying amount. A qualitative assessment is first made to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. This initial qualitative assessment includes, among other things, consideration of: (i) market capitalization of the Company, (ii) past, current and projected future earnings and equity; (iii) recent trends and market conditions; and (iv) valuation metrics involving similar companies that are publicly-traded and acquisitions of similar companies, if available. If this initial qualitative assessment indicates that it is more likely than not that impairment exists, a second analysis will be performed, involving a comparison between the estimated fair values of the Company’s reporting unit with its respective carrying amount including goodwill. If the carrying value exceeds estimated fair value, there is an indication of potential impairment, and a third analysis is performed to measure the amount of impairment. The third analysis involves calculating an implied fair value of goodwill by measuring the excess of the estimated fair value of the reporting unit over the aggregate estimated fair values of the individual assets less liabilities. If the carrying value of goodwill exceeds the implied fair value of goodwill, an impairment charge is recorded for the excess.

Intangible assets, consisting of acquired developed technology, domain names and customer relationships, are carried at cost less accumulated amortization. All intangible assets have been determined to have definite lives and are amortized on a straight-line basis over their estimated remaining economic lives, ranging from five to seven years. Amortization expense related to developed technology is included in cost of revenue. Amortization expense related to customer relationships is included in sales and marketing expense. Amortization expense related to domain names is included in general and administrative expense. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable.

Revenue Recognition

The Company’s revenue consists of subscription services and related usage as well as professional services. The Company charges clients monthly subscription fees for access to the Company’s VCC solution. The monthly subscription fees are primarily based on the number of agent seats, as well as the specific VCC functionalities and applications deployed by the client. Agent seats are defined as the maximum number of named agents allowed to concurrently access the VCC cloud platform. Clients typically have more named agents than agent seats. Multiple named agents may use an agent seat, though not simultaneously. Substantially all of the Company’s clients purchase both subscriptions and related telephony usage. A small percentage of the Company’s clients subscribe to its platform but purchase telephony usage directly from a wholesale telecommunications service provider. The Company does not sell telephony usage on a stand-alone basis to any client. The related usage fees are based on the volume of minutes used for inbound and outbound client interactions. The Company also offers bundled plans, generally for smaller deployments, whereby the client is charged a single monthly fixed fee per agent seat that includes both subscription and unlimited usage in the contiguous 48 states and, in some cases, Canada. Professional services revenue is derived primarily from VCC implementations, including application configuration, system integration, optimization, education and training services. Clients are not permitted to take possession of the Company’s software.

The Company offers monthly, annual and multiple-year contracts to its clients, generally with 30 days’ notice required for changes in the number of agent seats and sometimes with a minimum number of agent seats requirement. Larger clients typically choose annual contracts, which generally include an implementation and ramp period of several months. Fixed subscription fees (including bundled plans) are generally billed monthly in advance, while related usage fees are billed in arrears. Support activities include technical assistance for the Company’s solution and upgrades and enhancements to the VCC cloud platform on a when-and-if-available basis, which are not billed separately.

The Company generally requires advance deposits from its clients based on estimated usage when such usage is not billed as part of a bundled plan. Fees for certain clients’ usage are applied against the advance deposit resulting in continuous consumption and therefore requiring frequent replenishment of the deposit. Any unused portion of the deposit is refundable to the client upon termination of the arrangement, provided all amounts due have been paid. All fees, except usage deposits, are non-refundable.

Professional services are primarily billed on a fixed-fee basis and are performed by the Company directly or, alternatively, clients may also choose to perform these services themselves or engage their own third-party service providers.

The Company’s sales arrangements generally involve multiple deliverables, including subscription services and related usage as well as professional services, all of which have stand-alone value to the client. The Company allocates arrangement consideration to these deliverables based on the relative stand-alone selling price method in accordance with the selling price hierarchy, which includes: (i) Vendor Specific Objective Evidence, or VSOE, if available; (ii) Third-Party Evidence, or TPE, if VSOE is not available; and (iii) Best Estimate of Selling Price, or BESP, if neither VSOE nor TPE is available.

VSOE. The Company determines VSOE based on its historical pricing and discounting practices for the specific service when sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices for these services fall within a reasonably narrow pricing range. The Company limits its assessment of VSOE for each element to either the price charged when the same element is sold separately or the price established by management, having the relevant authority to do so, for an element not yet sold separately. The Company has not met the criteria to establish selling prices based on VSOE.

TPE. When VSOE cannot be established for deliverables in multiple element arrangements, the Company applies judgment with respect to whether it can establish a selling price based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. The Company’s services are significantly differentiated such that the comparable pricing of deliverables with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine the stand-alone selling prices of similar deliverables sold by competitors. As a result, the Company has not met the criteria to establish selling prices based on TPE.

BESP. Since the Company is unable to establish a selling price using VSOE or TPE, it uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The Company determines BESP for deliverables by considering multiple factors including prices it charges for similar offerings, pricing policies, market conditions and the competitive landscape. The Company limits the amount of allocable arrangement consideration to amounts that are fixed or determinable and that are not contingent on future performance or future deliverables.

The Company recognizes revenue for each unit of accounting when all of the following criteria have been met:


•	persuasive evidence of an arrangement exists;


•	delivery has occurred;


•	the fee is fixed or determinable; and


•	collection is reasonably assured.

Revenue allocated to the separate accounting units is recognized as follows:


•	fixed subscription revenue is recognized on a straight-line basis over the applicable term, predominantly the monthly contractual billing period;


•	variable usage revenue is recognized as actual usage occurs. Usage revenue in subscription arrangements that include bundled usage is recognized on a straight-line basis over the applicable term, as the Company cannot reliably estimate client usage patterns; and


•	professional services revenue is recognized as services are performed using the proportional performance method, with performance measured based on labor hours, assuming all other revenue recognition criteria have been met.

At the time of each revenue transaction, the Company assesses whether fees under the arrangement are fixed or determinable and whether collection is reasonably assured. For arrangements where the fee is not fixed or determinable, the Company recognizes revenue as these amounts become due and payable. The Company assesses collection based on a number of factors, including past transaction history and the creditworthiness of the client. If the Company determines that collection of fees is not reasonably assured, it defers the revenue and recognizes revenue at such time when collection becomes reasonably assured, which is generally upon receipt of payment. The Company maintains a revenue reserve for potential credits to be issued in accordance with service level agreements or for other revenue adjustments.

The revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, sales, use, value added and excise taxes. The Company records USF contributions and other regulatory costs on a gross basis in its consolidated statements of operations and comprehensive loss and records surcharges and sales, use and excise taxes billed to its clients on a net basis. The cost of gross USF contributions payable to the USAC and suppliers is presented as a cost of revenue in the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2017, 2016 and 2015, total USF contributions and other regulatory costs included in cost of revenue were $8.6 million, $4.6 million, and $6.2 million, respectively. Total USF contributions and other regulatory costs for the year ended December 31, 2016 was $7.7 million before the $3.1 million reversal related to the favorable Federal Communications Commission (“FCC”) Competition Wireline Bureau ruling recorded in the fourth quarter of 2016. Surcharges and sales, use and excise taxes incurred in excess of amounts billed to the Company’s clients are presented in general and administrative expense in the consolidated statements of operations and comprehensive loss.

Deferred Revenue

Deferred revenue consists of billings or payments received from clients for subscription service, usage and professional services in advance of revenue recognition and are recognized as the revenue recognition criteria are met. The Company generally invoices its clients monthly in advance for subscription services. Accordingly, the deferred revenue balance does not represent the total contract value of sales arrangements. The current portion of deferred revenue represents the amount that is expected to be recognized as revenue within one year from the balance sheet date.

Cost of Revenue

Cost of revenue consists primarily of personnel costs (including stock-based compensation), fees that the Company pays to telecommunications providers for usage, USF contributions and other regulatory costs, depreciation and related expenses of the servers and equipment, costs to build out and maintain co-location data centers, and allocated office and facility costs and amortization of acquired technology. Personnel costs include those associated with support of the Company’s solution, clients and data center operations, as well as with providing professional services. Data center costs include costs to build out and setup, as well as co-location fees for the right to place the Company’s servers in data centers owned by third parties.

Research and Development

Research and development expenses consist primarily of salary and related expenses (including stock-based compensation) for personnel related to the development of improvements and expanded features for our services, as well as quality assurance, testing, product management and allocated overhead. Research and development costs are expensed as incurred except for internal use software development costs that qualify for capitalization. The Company reviews development costs incurred for internal-use software in the application development stage and assesses costs for capitalization. As of December 31, 2017 and 2016, the amount of capitalized internal-use software development costs was $0.4 million and $0.5 million, respectively.

Advertising Costs

We primarily advertise our services through the web and in conjunction with partners. Advertising costs are expensed as incurred and were $11.4 million, $10.7 million and $9.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Commissions

Commissions consist of variable compensation earned by sales personnel and referral fees we paid to third parties. Sales commissions associated with the acquisition or renewal of a client contract are recognized as sales and marketing expense as incurred. Commission expense was $14.0 million, $10.2 million and $7.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Stock-Based Compensation

All stock-based compensation granted to employees and non-employee directors is measured as the grant date fair value of the award. The Company estimates the fair value of stock options and purchase rights under the Company’s Equity Incentive Plans and the 2014 Employee Stock Purchase Plan, or ESPP, respectively, using the Black-Scholes option-pricing model. The fair value of restricted stock awards is equal to the fair value of the Company’s common stock on the date of grant. Compensation expense is recognized net of forfeitures using the straight-line method over the service period, which is generally the vesting period.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. As of December 31, 2017 and 2016, the Company recorded a full valuation allowance against the net deferred tax assets because of its history of operating losses in the United States. The Company classifies interest and penalties on unrecognized tax benefits as income tax expense.

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding during the period, and excludes any dilutive effects of employee stock-based awards and warrants. Diluted net income per share is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options and warrants, vesting of restricted stock and purchases under the ESPP. In periods of net loss, all potentially issuable common shares are excluded from the diluted net loss per share computation because they are anti-dilutive. Therefore, basic and diluted net loss per share are the same for all years presented in the consolidated statements of operations and comprehensive loss.

Indemnification

Certain of the Company’s agreements with clients include provisions for indemnification against liabilities if its services infringe a third-party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such indemnification provisions and the Company has not accrued any liabilities related to such obligations in the consolidated financial statements as of December 31, 2017 and 2016.

Segment Information

The Company has determined that its Chief Executive Officer is its chief operating decision maker. The Company’s Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment.

Recently Adopted Accounting Pronouncements

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance was effective for the Company beginning in the first quarter of 2017. Accordingly, commencing in January 2017, the Company accounted for forfeitures as they occurred, rather than by estimating expected forfeitures. The net effect of this change was recognized as a $0.2 million reduction to accumulated deficit in the consolidated financial statements. Upon adoption of the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. The Company also recognizes excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. The Company has applied the modified retrospective adoption approach beginning January 1, 2017 and prior periods have not been adjusted. As a result, the Company established a net operating loss deferred tax asset of $5.3 million to account for prior period excess tax benefits through retained earnings, however an offsetting valuation allowance of $5.3 million was also established through retained earnings because it is not more likely than not that the deferred tax asset will be realized due to historical and expected future losses, such that there is no impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Not Yet Effective

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for certain types of financial assets held. ASU 2016-13 is effective for the Company in its first quarter of 2020, and earlier adoption is permitted beginning in the first quarter of 2019. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and issued subsequent amendments to the initial guidance in September 2017 within ASU 2017-13 (collectively, Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for both finance, or capital, and operating leases with lease terms of more than 12 months. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. Lessor accounting will remain largely unchanged from current GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach that includes a number of optional practical expedients that entities may elect to apply. This guidance is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. The Company is currently assessing the effect the guidance will have on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, September 2017 and November 2017 within ASU 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12, ASU 2017-13 and ASU 2017-14, respectively (collectively, Topic 606). Topic 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Topic 606 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates will be required within the revenue recognition process than are required under current GAAP (Accounting Standards Codification 605). Topic 606 is effective for the Company's annual and interim reporting periods beginning January 1, 2018 (“effective date”). The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company adopted the new standard effective January 1, 2018 using the modified retrospective method.

The Company anticipates the adoption of this standard will result in significant changes in the way we account for sales commissions, specifically, certain client acquisition costs will be capitalized when they are initially paid to employees, and amortized over a related benefit period of five years.

The adoption is not expected to have a material impact on the recognition or timing of revenue, or on the provision for income taxes and deferred taxes.

The Company currently anticipates the adoption of the standard will result in a decrease to accumulated deficit of $18.0 million to $28.0 million related to the recognition of deferred commission contract assets, and immaterial adjustments to deferred revenue. In addition, the new standard will expand the disclosures made in our consolidated financial statements, including disaggregation of revenue, information on contract balances, deferred contract acquisition costs, performance obligations and remaining performance obligations.

The Company has established new accounting policies and is implementing the system, processes, and internal controls necessary to support the requirement of the new standard.

There are several other new accounting pronouncements issued by the FASB, which the Company will adopt. However, the Company does not believe any of those accounting pronouncements will have a material impact on its consolidated financial position, operating results or statements of cash flows.

Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company carries cash equivalents consisting of money market funds at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 — Observable inputs which include unadjusted quoted prices in active markets for identical assets.

Level 2 — Observable inputs other than Level 1 inputs, such as quoted prices for similar assets, quoted prices for identical or similar assets in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques.

The fair value of assets and liabilities carried at fair value was determined using the following inputs (in thousands):



	December 31, 2017
	Total		Level 1		Level 3
Assets
Cash equivalents:
Money market funds	$	20,092	$	20,092	$	—
Other Assets
Embedded conversion option held for investment	$	984	$	—	$	984

	December 31, 2016
	Total		Level 1		Level 3
Assets
Cash equivalents:
Money market funds	$	20,069	$	20,069	$	—
Other Assets
Embedded conversion option held for investment	$	873	$	—	$	873

Fair Value Measured and Recorded Using Significant Unobservable Inputs (Level 3) (in thousands):



	December 31, 2017
Beginning balance	$	873
Total gains included in earnings⁽¹⁾	111
Ending balance	$	984


(1)	Amount includes both fair value and foreign currency adjustments.

The valuation of an embedded conversion option held for investment was performed using a Black-Scholes option-pricing model which relies primarily on estimates of expected term, volatility, risk-free rate, and dividends related to our investment in a privately-held company, or the investee. The most significant unobservable inputs used in the determination of estimated fair value of the option are the estimates of share price and volatility, driven by the investee’s ability to meet financial targets, and which directly correlates to the fair value recognized in other non-current assets within the consolidated balance sheets.

The fair value of this asset is estimated quarterly by management based on inputs received from the investee’s management using the excess earnings method under the income approach. Potential valuation adjustments are made as the progress toward achieving financial targets becomes determinable, with the impact of such adjustments being recorded to ‘Interest income and other’ in our consolidated statements of operations and comprehensive loss.

During 2017, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy. In addition, there were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2017.

In February 2018, the Company exercised the embedded option to convert its convertible notes into common shares of the investee company prior to the investee company’s acquisition. See Note 14.

The Company’s other financial instruments’ fair value, including accounts receivable, accounts payable and other current liabilities, approximate its carrying value due to the relatively short maturity of those instruments. The carrying amounts of the Company’s debt and capital leases approximate their fair value, which is the present value of expected future cash payments based on assumptions about current interest rates and the creditworthiness of the Company. The inputs used to measure fair value of the Company’s debt and capital leases are classified as Level 2 inputs.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2017

Cash, Cash Equivalents, and Short-term Investments [Abstract]

Cash and Cash Equivalents

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



	December 31,
	2017		2016
Cash and cash equivalents:
Cash	$	48,855	$	38,053
Money market funds	20,092		20,069
Total cash and cash equivalents	$	68,947	$	58,122

As of December 31, 2017, the Company was required to maintain $25.0 million of unrestricted cash and cash equivalents deposited with two lenders in connection with its credit agreement as a compensating balance (see Note 6).

Restricted Cash

As of December 31, 2017 and 2016, the Company’s restricted cash balance was not material. Restricted cash is included in ‘Other assets’ on the accompanying consolidated balance sheets.

Financial Statement Components

12 Months Ended

Dec. 31, 2017

Financial Statement Components [Abstract]

Financial Statement Components

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



	December 31,
	2017			2016
Trade accounts receivable	$	17,481		$	12,640
Unbilled trade accounts receivable, net of advance client deposits	1,600			1,253
Allowance for doubtful accounts	(33		)	(12		)
Accounts receivable, net	$	19,048		$	13,881

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



	December 31,
	2017		2016
Prepaid expenses	$	2,437	$	2,199
Other current assets	2,403		809
Prepaid expenses and other current assets	$	4,840	$	3,008

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



	December 31,
	2017			2016
Computer and network equipment	$	47,195		$	37,664
Computer software	6,974			5,133
Internal-use software development costs	500			475
Furniture and fixtures	1,282			1,130
Leasehold improvements	801			624
Property and equipment	56,752			45,026
Accumulated depreciation and amortization	(36,864		)	(30,338		)
Property and equipment, net	$	19,888		$	14,688

In accordance with our property and equipment policy, we review the estimated useful lives of our fixed assets on an ongoing basis. A review of our existing estimates indicated that the actual lives of certain data center assets were longer than previously estimated useful lives used for depreciation purposes in our financial statements. As a result, effective July 1, 2017, we changed the estimated useful lives of certain data center assets to better reflect the estimated periods during which these assets will remain in service. The estimated useful lives of these assets, which we previously depreciated for three years, have now been increased to a range of three to five years. For the year ended December 31, 2017, this change in accounting estimate decreased depreciation expense by $1.6 million and decreased both basic and diluted net loss per share by $0.03.

Depreciation and amortization expense associated with property and equipment was $7.8 million, $7.9 million, and $6.9 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Property and equipment capitalized under capital lease obligations consist primarily of computer and network equipment and were as follows (in thousands):



	December 31,
	2017			2016
Gross	$	46,624		$	35,504
Less: accumulated depreciation and amortization	(30,438		)	(23,128		)
Total	$	16,186		$	12,376

Accrued and other current liabilities consisted of the following (in thousands):



	December 31,
	2017		2016
Accrued expenses	$	3,130	$	2,148
Accrued compensation and benefits	8,657		7,456
Accrued and other current liabilities	$	11,787	$	9,604

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

Goodwill was recorded as a result of the Company’s acquisition in October 2013 of Face It, Corp., which the Company also refers to as SoCoCare.

During the fourth quarter of 2017, the Company completed its annual goodwill impairment test. Based on its assessment of the qualitative factors, management concluded that the fair value of the Company was more likely than not greater than its carrying amount as of December 31, 2017. As such, it was not necessary to perform the two-step quantitative goodwill impairment test. Subsequent to the 2017 annual impairment test, we believe there have been no significant events or circumstances negatively affecting the valuation of goodwill. As of December 31, 2017 and 2016, there was no impairment to the carrying value of the Company’s goodwill.

Intangible Assets

Intangible assets were acquired in connection with the Company’s acquisition of SoCoCare in October 2013. The components of intangible assets are as follows (in thousands):



	December 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed technology	$	2,460	$	(1,478	)	$	982	$	2,460	$	(1,126	)	$	1,334
Customer relationships	520		(437		)	83		520		(333		)	187
Domain names	50		(42		)	8		50		(32		)	18
Total	$	3,030	$	(1,957	)	$	1,073	$	3,030	$	(1,491	)	$	1,539

Amortization expense related to intangible assets was $0.5 million for each of the years ended December 31, 2017, 2016 and 2015. As of December 31, 2017, the expected future amortization expense for intangible assets was as follows (in thousands):



Period	Expected Future Amortization Expense
2018	$	442
2019	351
2020	280
Total	$	1,073

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable. The Company concluded that there was no impairment to the carrying value of its intangible assets as of December 31, 2017 and 2016.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Debt

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Debt

2016 Loan and Security Agreement

On August 1, 2016, or the Effective Date, the Company entered into a loan and security agreement, or the 2016 Loan and Security Agreement, with the lenders party thereto and City National Bank, as agent for such lenders. The 2016 Loan and Security Agreement provides for a revolving line of credit, or the New Revolving Credit Facility, of up to $50.0 million and matures on August 1, 2019. On the Effective Date, the Company borrowed $32.6 million under the 2016 Loan and Security Agreement. The proceeds were used to extinguish existing indebtedness under all prior loan and security agreements and for working capital and other general corporate purposes.

Loans under the 2016 Loan and Security Agreement bear a variable annual interest rate of the prime rate plus 0.50%, subject to a 0.25% increase if the Company’s adjusted EBITDA is negative at the end of any fiscal quarter. The Company has agreed to pay a fee of 0.25% per annum on the unused portion of the New Revolving Credit Facility as well as an anniversary fee of $31,250 on each of the first and second anniversaries of the Effective Date. The Company is accreting the total estimation of unused fees and anniversary fees evenly over the full term of the 2016 Loan and Security Agreement. Under the terms of the 2016 Loan and Security Agreement, the outstanding balance cannot exceed the Company’s trailing four months of MRR (monthly recurring revenue including subscription and usage) multiplied by the average trailing 12 month dollar based retention rate (calculated on the same basis as in the Company’s periodic reports filed with the SEC). As of December 31, 2017, the outstanding principal balance under the 2016 Loan and Security Agreement was $32.6 million, which is included in ‘Revolving line of credit’ in the consolidated balance sheets. As of December 31, 2017, the amount available for additional borrowings was $17.4 million.

The Company incurred approximately $0.2 million in fees that were directly attributable to the issuance of this credit facility in 2016. These costs are deferred and included within ‘Prepaid expenses and other current assets’ and ‘Other assets’ in the Company’s consolidated balance sheets and being amortized to interest expense on a straight-line basis over three years starting from the Effective Date of the New Revolving Credit Facility.

The obligations of the Company under the 2016 Loan and Security Agreement are guaranteed by the Company’s subsidiary, Five9 Acquisition. The Company’s obligations under the 2016 Loan and Security Agreement and Five9 Acquisition’s obligations under its guaranty are secured by a first priority perfected security interest in and lien on substantially all of the Company’s and Five9 Acquisition’s assets. The 2016 Loan and Security Agreement contains certain customary covenants, including the requirement that the Company maintain $25.0 million of unrestricted cash deposited with the lenders for the term of the agreement, a minimum liquidity ratio of unrestricted cash and accounts receivable to the outstanding amounts under the 2016 Loan and Security Agreement, as well as customary events of default. Under the 2016 Loan and Security Agreement, the Company is also prohibited from declaring dividends or making other distributions on our capital stock. The Company was in compliance with these covenants as of December 31, 2017.

The Company recorded a $1.0 million loss on extinguishment of debt in the third quarter of 2016 under the 2013 Loan and Security Agreement and the 2014 Loan and Security Agreement (each as described below). The loss was comprised of $0.4 million in prepayment penalties, a $0.4 million write-off of unamortized debt discounts, and a $0.2 million write-off of unamortized debt issuance costs.

2014 Loan and Security Agreement

Prior to entering into the 2016 Loan and Security Agreement on August 1, 2016, the Company had a term loan facility of $30.0 million with a syndicate of two lenders, which was entered into in February 2014 and amended in December 2014 and February 2015, or the 2014 Loan and Security Agreement. The term loan facility was available to the Company in tranches. The first tranche for $20.0 million was advanced upon entering into the agreement. The remaining $10.0 million was available for drawdown by the Company in $1.0 million increments, which expired on February 20, 2016. The term loan bore interest at a variable per annum rate equal to the greater of 10% or LIBOR plus 9%. The term loan was secured by substantially all the assets of the Company and was subordinate to the 2013 Loan and Security Agreement. Upon the effectiveness of the 2016 Loan and Security Agreement on August 1, 2016 as described above, the Company canceled and paid back all borrowings under the 2014 Loan and Security Agreement.

In connection with entering into the 2014 Loan and Security Agreement, the Company issued to the lenders warrants to purchase 177,865 shares of common stock at $10.12 per share, which vest and become exercisable over a ten year term from the date of issuance, based on amounts drawn under the $30.0 million term loan facility. In February 2014, based on the drawdown of $20.0 million, 118,577 shares of common stock issuable under the warrants vested and were exercisable by the lenders. The remaining 59,288 shares of common stock issuable under the warrants pertaining to the undrawn $10.0 million did not vest and were canceled on February 20, 2016, when the $10.0 million was no longer available for borrowing.

2013 Loan and Security Agreement

Prior to entering into the 2016 Loan and Security Agreement on August 1, 2016, the Company had a revolving line of credit of up to $20.0 million, or the Prior Revolving Credit Facility, under a loan and security agreement with a lender entering into in March 2013 and was last amended in December 2014, or the 2013 Loan and Security Agreement. The Prior Revolving Credit Facility carried a variable annual interest rate of the prime rate plus 0.50%. The 2013 Loan and Security Agreement was collateralized by substantially all the assets of the Company. Upon the effectiveness of the 2016 Loan and Security Agreement on August 1, 2016 as described above, the Company canceled and paid back all amounts due under the Prior Revolving Credit Facility.

In connection with its acquisition of SoCoCare in October 2013, the Company also borrowed $5.0 million under a term loan under the 2013 Loan and Security Agreement in October 2013. Upon the effectiveness of the 2016 Loan and Security Agreement on August 1, 2016 as described above, the Company canceled and paid back all amounts due under the term loan.

Promissory Note

In July 2013, the Company issued a promissory note to the USAC for $4.1 million in principal amount as a financing arrangement for that amount of accrued federal fees. The promissory note carries a fixed annual interest rate of 12.75% and is repayable in 42 equal monthly installments of principal and interest beginning in August 2013. As of December 31, 2016, $0.1 million of this promissory note was outstanding and is included as notes payable in the accompanying consolidated balance sheets. This promissory note was fully paid as of January 2017.

FCC Civil Penalty

In June 2015, the Company entered into a consent decree with the FCC Enforcement Bureau (Note 10), in which the Company agreed to pay a civil penalty of $2.0 million to the U.S. Treasury in twelve equal quarterly installments starting in July 2015 without interest. As a result, the Company discounted the $2.0 million liability, which was accrued in the third quarter of 2014 for the then tentative civil penalty, to its present value of $1.7 million at an annual interest rate of 12.75% to reflect the imputed interest and reclassified this discounted liability from ‘Accrued federal fees’ to ‘Notes payable.’ The $0.3 million discount was recorded as a reduction to general and administrative expense in the three months ended June 30, 2015 and is being recognized as interest expense over the payment term of the civil penalty. As of December 31, 2017 and 2016, the outstanding civil penalty payable was $0.3 million and $1.0 million, respectively, of which the net carrying value was $0.3 million and $0.9 million, respectively, and is included as ‘Notes payable’ in the accompanying consolidated balance sheets.

As of December 31, 2017 and 2016, the Company’s outstanding debt is summarized as follows (in thousands):



	December 31,
	2017			2016
Promissory note to USAC	$	—		$	120
FCC civil penalty	333			1,000
Total notes payable, gross	333			1,120
Less: discount	(7		)	(79		)
Total notes payable, net carrying value	326			1,041
Revolving line of credit	32,594			32,594
Interest accretion under 2016 line of credit	$	10		$	19
Total debt, net carrying value	$	32,930		$	33,654
Less: current portion of debt *	(336		)	(742		)
Total debt, less current portion **	32,594			32,912


* Included in ‘Notes payable’ in the consolidated balance sheets.
** Included in ‘Notes payable - less current portion’ and ‘Revolving line of credit - less current portion’ in the consolidated balance sheets.

Maturities of the Company’s outstanding debt as of December 31, 2017 are as follows (in thousands):



Period	Amount to Mature
2018	$	333
2019	32,594
Total	$	32,927

Stockholders' Equity

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Capital Structure

Common Stock

The Company is authorized to issue 450,000,000 shares of common stock with a par value of $0.001 per share. As of December 31, 2017 and 2016, the Company had 56,631,647 and 53,363,013 shares of common stock issued and outstanding, respectively.

Holders of the Company's common stock are entitled to dividends, if and when declared by the board of directors. In the event of liquidation, dissolution or winding up, subject to the rights of the holders of any then outstanding shares of preferred stock, holders of common stock will be entitled to receive the assets and funds of the Company that are legally available for distribution.

Preferred Stock

The Company is authorized to designate and issue up to 5,000,000 shares of preferred stock with a par value of $0.001 per share in one or more series without stockholder approval and to fix the rights, preferences, privileges and restrictions thereof. As of December 31, 2017 and 2016, there were no shares of preferred stock issued and outstanding.

Warrants

As of December 31, 2017 and 2016, the Company had outstanding warrants to purchase 13,013 and 131,597 shares of common stock, respectively, with a weighted average exercise price of $5.76 and $9.80 per share, respectively. The warrants outstanding as of December 31, 2017 will expire on October 18, 2023.

Common Stock Reserved for Future Issuance

As of December 31, 2017, shares of common stock reserved for future issuance related to outstanding equity awards, warrants, and employee equity incentive plans were as follows (in thousands):



		December 31, 2017
Stock options outstanding		4,047
Restricted stock units outstanding		2,033
Shares available for future grant under 2014 Plan		7,300
Shares available for future issuance under ESPP		1,371
Common stock warrants outstanding		13
Total shares of common stock reserved		14,764

Equity Incentive Plans

Prior to its initial public offering, or IPO, in April 2014, the Company granted stock options under its Amended and Restated 2004 Equity Incentive Plan, as amended, or the 2004 Plan.

Under the terms of the 2004 Plan, the Company had the ability to grant incentive and nonstatutory stock options. Incentive stock options could only be granted to Company employees. Nonstatutory stock options could be granted to Company employees, directors and consultants. Such options are exercisable at prices, as determined by the board of directors, generally equal to the fair value of the Company’s common stock at the date of grant. Options granted to employees generally vest over a four-year period, with an initial vesting period of 12 months for 25% of the shares, and the remaining 75% of the shares vesting monthly on a ratable basis over the remaining 36 months. Options generally expire 10 years after the grant date and are generally exercisable upon vesting. Vested options generally expire 90 days after termination of the optionee’s employment or relationship as a consultant or director, unless otherwise extended by the terms of the stock option agreement.

In March 2014, the Company’s board of directors and stockholders approved the 2014 Equity Incentive Plan, or 2014 Plan, and 5,300,000 shares of common stock were authorized for issuance under the 2014 Plan. In addition, on the first day of each year beginning in 2015 and ending in 2024, the 2014 Plan provides for an annual automatic increase to the shares reserved for issuance in an amount equal to 5% of the total number of shares outstanding on December 31st of the preceding calendar year or a lesser number as determined by the Company’s board of directors. Pursuant to the automatic annual increase, 2,831,582 additional shares were reserved under the 2014 Plan on January 1, 2018.

No further grants were made under the 2004 Plan once the 2014 Plan became effective on April 3, 2014. Upon the effectiveness of the 2014 Plan, all shares reserved for future issuance under the 2004 Plan became available for issuance under the 2014 Plan. Additionally, any forfeited or expired shares that would have otherwise returned to the 2004 Plan instead return to the 2014 Plan.

The 2014 Plan allows the Company to grant stock options, restricted stock units, or RSU, restricted stock awards, performance stock awards, stock appreciation rights, performance cash awards, and other stock awards. To date, the Company has granted stock options and RSUs under the 2014 Plan. Stock options granted under the 2014 Plan are in general at a price equal to the fair market value of the common stock on the date of grant and vest over four years. The Company's stock options expire 10 years from the date of grant. Each RSU granted under the 2014 Plan represents a right to receive one share of the Company’s common stock when the RSU vests. RSUs generally vest over one to four years.

Stock Options

A summary of the Company’s stock option activity during the year ended December 31, 2017 is as follows (in thousands, except years and per share data):



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value ⁽¹⁾
Outstanding as of December 31, 2016	5,556		$	5.23
Options granted	619		18.11
Options exercised	(1,986	)	3.04
Options forfeited or expired	(142	)	12.83
Outstanding as of December 31, 2017	4,047		$	8.00	6.4	68,334
Vested and expected to vest as of December 31, 2017	4,047		8.00		6.4	68,334
Exercisable as of December 31, 2017	2,911		6.20		5.6	54,380


(1) The aggregate intrinsic value amounts are computed based on the difference between the exercise price of the stock options and the fair market value of the Company’s common stock of $24.88 per share as of December 31, 2017 for all in-the-money stock options outstanding.

Following is additional information pertaining to the Company’s stock option activity (in thousands, except per share data):



	Year Ended December 31,
	2017		2016		2015
Weighted average grant date fair value per share of options granted	$	8.81	$	4.50	$	2.38
Intrinsic value of options exercised ⁽¹⁾	33,820		5,865		3,233
Total fair value of options vested during the period	7,296		3,813		4,824
Cash received from options exercised	6,047		4,286		1,268


(1) Intrinsic value of options exercised is the difference between the fair market value of the Company’s common stock at the time of exercise and the exercise price paid.

Restricted Stock Units

A summary of RSU activity during the year ended December 31, 2017 is as follows (in thousands, except years and per share data):



	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2016	2,019		$	7.65
RSUs granted	1,176		18.29
RSUs vested and released	(971	)	8.85
RSUs forfeited	(191	)	11.42
Outstanding as of December 31, 2017	2,033		$	12.81

Following is additional information pertaining to the Company’s RSU activity (in thousands, except per share data):



	Year Ended December 31,
	2017		2016		2015
Weighted average grant date fair value per share of RSUs granted	$	18.29	$	9.71	$	5.10
Total fair value of RSUs vested during the period	21,161		10,706		2,907

Employee Stock Purchase Plan

In March 2014, the Company’s board of directors and stockholders adopted the 2014 Employee Stock Purchase Plan, or ESPP, and the shares authorized for issuance thereunder. The ESPP became effective on April 3, 2014.

The ESPP permits eligible employees to purchase shares of the Company’s common stock through payroll deductions with up to 15% of their pre-tax earnings subject to certain Internal Revenue Code limitations. The purchase price of the shares is 85% of the lower of the fair market value of the Company’s common stock on the first day of a six month offering period, except for the initial offering period, or the relevant purchase date. In addition, no participant may purchase more than 1,500 shares of common stock in each purchase period.

The number of shares of common stock originally reserved for issuance under the ESPP was 880,000 shares, which increases automatically each year, beginning on January 1, 2015 and continuing through January 1, 2024, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year; (ii) 1,000,000 shares of common stock (subject to adjustment to reflect any split or combination of our common stock); or (iii) such lesser number as determined by the Company’s board of directors. Pursuant to the automatic annual increase, 566,316 additional shares were reserved under the ESPP on January 1, 2018.

During 2017, 265,172 shares were purchased by employees under the ESPP at a weighted-average price of $15.47 per share.

Stock-Based Compensation

Stock-based compensation expenses for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):



	Year Ended December 31,
	2017		2016		2015
Cost of revenue	$	2,202	$	1,375	$	866
Research and development	3,042		2,059		1,790
Sales and marketing	4,364		2,363		1,800
General and administrative ⁽¹⁾	5,735		3,846		3,274
Total stock-based compensation	$	15,343	$	9,643	$	7,730


(1)	Effective December 2017, the Company’s former Chief Executive Officer and President resigned from his position and became the Executive Chairman of the Board. Due to this substantive change in status, certain of his stock option and RSU awards were modified which resulted in incremental stock based compensation expense of approximately $1.0 million.

As of December 31, 2017, unrecognized stock-based compensation expense by award type and their expected weighted-average recognition periods are summarized in the following table (in thousands, except years).



	Stock Option		RSU		ESPP
Unrecognized stock-based compensation expense	$	10,703	$	26,401	$	670
Weighted-average amortization period	2.5 years		2.8 years		0.4 years

The Company recognizes stock-based compensation expense that is calculated based upon awards that have vested, reduced for actual forfeitures. All stock-based compensation for equity awards granted to employees and non-employee directors is measured based on the grant date fair value of the award.

The Company values RSUs at the closing market price of its common stock on the date of grant. The Company estimates the fair value of each stock option and purchase right under the ESPP granted to employees on the date of grant using the Black-Scholes option-pricing model and using the assumptions disclosed in the table below. Expected volatility is based upon the historical volatility of a peer group of publicly traded companies. The expected term of options granted is estimated using the simplified method by taking the average of the vesting term and the contractual term of the option. The expected volatility assumption for purchase rights under the ESPP is based on the historical volatility of the Company's common stock. The risk-free rate for the expected term of the awards is based on U.S. Treasury zero-coupon issues at the time of grant. The Company has not paid, and does not anticipate paying, cash dividends on its shares of common stock. Accordingly, the expected dividend yield is zero.

The weighted-average assumptions used to value stock options and purchase rights under the ESPP granted during the years ended December 31, 2017, 2016 and 2015 were as follows:



Stock Options	Year Ended December 31,
	2017	2016	2015
Expected term (years)	5.9	5.7	6.1
Volatility	49%	46%	49%
Risk-free interest rate	2.1%	1.4%	1.6%
Dividend yield	—	—	—



ESPP	Granted In
	November 2017	May 2017	November 2016	May 2016	November 2015	May 2015
Expected term (years)	0.5	0.5	0.5	0.5	0.5	0.5
Volatility	36%	43%	42%	58%	54%	43%
Risk-free interest rate	1.4%	1.0%	0.6%	0.4%	0.3%	0.1%
Dividend yield	—	—	—	—	—	—

Net Loss Per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding during the period, and excludes any dilutive effects of employee stock-based awards and warrants. Diluted net income per share is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options and warrants and vesting of restricted stock. As the Company had net losses for the years ended December 31, 2017, 2016 and 2015, all potentially issuable common shares were determined to be anti-dilutive.

The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data).



	Year Ended December 31,
	2017			2016			2015
Net loss	$	(8,969	)	$	(11,860	)	$	(25,838	)
Weighted-average shares used in computing basic and diluted net loss per share	54,946			52,342			50,141
Basic and diluted net loss per share	$	(0.16	)	$	(0.23	)	$	(0.52	)

The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive (in thousands).



	December 31,
	2017	2016	2015
Stock options	4,047	5,556	6,092
Restricted stock units	2,033	2,019	1,818
ESPP	—	—	156
Common stock warrants	13	132	191
Total	6,093	7,707	8,257

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

The following table presents components of loss before income taxes for the periods presented (in thousands):



	Year Ended December 31,
	2017			2016			2015
United States	$	(9,434	)	$	(12,222	)	$	(26,305	)
International	733			416			528
Loss before income taxes	$	(8,701	)	$	(11,806	)	$	(25,777	)

Provision for income taxes for the periods presented consisted of (in thousands):



	Year Ended December 31,
	2017		2016		2015
Current:
U.S. federal	$	—	$	—	$	—
U.S. state	42		16		21
Foreign	226		38		40
Total provision for income taxes	$	268	$	54	$	61

Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 34% to pre-tax loss for the periods presented as a result of the following (in thousands):



	Year Ended December 31,
	2017			2016			2015
U.S. federal tax at statutory rate	$	(2,958	)	$	(4,014	)	$	(8,764	)
U.S. state income taxes	(708		)	490			(756		)
Non-deductible expense (benefit)	(5,673		)	931			438
Research and development credit	(402		)	(262		)	(440		)
Stock-based compensation	(14,622		)	983			737
Impact of 2017 Tax Act	25,952			—			—
Other	2			(104		)	481
Change in valuation allowance	(1,323		)	2,030			8,365
Total provision for income taxes	$	268		$	54		$	61

The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 related to the following (in thousands):



	December 31,
	2017			2016
Deferred tax assets:
Net operating loss and credit carryforwards	$	47,991		$	48,533
Accrued liabilities	3,183			3,801
Allowance for doubtful accounts	416			429
Property and equipment	(98		)	183
Deferred revenue	140			23
Accrued compensation	900			1,183
Intangibles	7			14
Gross deferred tax assets	52,539			54,166
Valuation allowance	(52,275		)	(53,598		)
Net deferred tax assets	264			568
Deferred tax liabilities:
Amortized intangibles	(264		)	(568		)
Gross deferred tax liabilities	(264		)	(568		)
Net deferred taxes	$	—		$	—

The Company has not provided for U.S. income taxes on undistributed earnings of its foreign subsidiaries because it intends to permanently re-invest those earnings outside the United States. The undistributed earnings of the Company's foreign subsidiaries was zero as of December 31, 2017 due to the one time transition tax, and were $1.2 million and $0.8 million as of December 31, 2016 and 2015, respectively.

A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes the Company’s historical operating losses, lack of taxable income, and the accumulated deficit, for the year ended December 31, 2017, the Company has provided a valuation allowance against its U.S. net deferred tax assets. The net change in the valuation allowance for the years ended December 31, 2017 and 2016 was a decrease of $1.3 million and an increase of $2.0 million, respectively.

As of December 31, 2017, the Company had net operating loss carry-forwards for federal and state income tax purposes of $188.8 million and $104.4 million, respectively, available to reduce future income subject to income taxes. If not utilized, these carryforwards will begin to expire in 2024 for federal purposes. The state net operating loss started to expire in 2017. As of December 31, 2017, the Company also had research credit carryforwards for federal and California state tax purposes of $2.8 million and $2.4 million. If not utilized, the federal research credit carryforwards will begin to expire in 2022. The California state research credits can be carried forward indefinitely. The Internal Revenue Code (“IRC”) of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses may be limited as prescribed under the IRC Section 382. Events which may cause limitations in the amount of the net operating losses that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions. In the event the Company has changes in ownership, net operating losses and research and development credit carryforwards, which are fully reserved by the deferred tax asset valuation allowance, could be limited and may expire unutilized.

Unrecognized Tax Benefits

The table below shows the changes in the gross amount of unrecognized tax benefits for the periods presented (in thousands):



	Year Ended December 31,
	2017		2016			2015
Unrecognized benefit — beginning of period	$	2,805	$	2,485		$	1,975
Gross increases — current year tax positions	310		324			522
Gross decreases — prior year tax positions	—		(4		)	(12		)
Unrecognized benefit — end of period	$	3,115	$	2,805		$	2,485

As of December 31, 2017 and 2016, an immaterial amount of the total unrecognized tax benefits, if recognized, would have an impact on the Company’s effective tax rate. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. The Company does not anticipate its total unrecognized tax benefits as of December 31, 2017 will significantly change due to settlement of examination or the expiration of statute of limitations during the next 12 months. The Company is currently unaware of any uncertain tax positions that could result in significant additional payments, accruals or other material deviation in this estimate over the next 12 months.

The Company is subject to taxation in the United States, various states and several foreign jurisdictions. Due to the Company’s net carryover of unused operating losses, all years from 2001 forward remain subject to future examination by the U.S. federal and state tax authorities. The Company’s foreign tax returns are open to audit under the statutes of limitations of the respective foreign countries in which the subsidiaries are located. The Company considers all undistributed earnings of its foreign subsidiaries indefinitely reinvested.

Tax Reform

In December 2017, President Trump signed into law new legislation (the “2017 Tax Act”) that significantly revises the Internal Revenue Code of 1986, as amended. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings, limitation of the deduction for newly generated net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated (the “Transition Tax”), future taxation of certain classes of offshore earnings regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits beginning in 2018.

In December 2017, the SEC issued Staff Accounting Bulletin No. 118 which provided a measurement period of up to one year from the enactment of the 2017 Tax Act for companies to complete the accounting for the 2017 Tax Act and its related impacts. The income tax effects of the 2017 Tax Act for which the accounting is incomplete include: the impact of the Transition Tax, whether to continue applying the exception to the presumption of the repatriation of foreign earnings and the impact of the reversal of the exception, the revaluation of deferred tax assets and liabilities to reflect the 21 percent corporate tax rate, the realizability of deferred tax assets relating to executive compensation, whether to elect to expense or depreciate new capital equipment, the US states tax impact to the aforementioned items, and the unrecognized tax benefits relating to the aforementioned items. The company has made reasonable estimates for each of these items; however it may be affected by other analyses related to the 2017 Tax Act, including but not limited to, any deferred adjustments related to the filing of the Company’s 2017 federal and state tax returns and further guidance yet to be issued.

The Transition Tax is estimated to have no impact on the Company’s US taxable income for the year ended December 31, 2017.

Principally because the 2017 Tax Act has now applied a tax on accumulated foreign earnings through December 31, 2017, the Company is evaluating whether to continue applying the exception to the presumption of the repatriation of foreign earnings. The Company has not provided for an estimate of the taxes associated with the reversal of the application of the exception. Although the historic foreign earnings have been taxed by the 2017 Tax Act for Federal and conforming states purposes, the impact of the reversal of the exception will also apply to US states which do not conform to the 2017 Tax Act, to foreign withholding taxes, and to foreign income taxes for repatriation of earnings from lower-tier foreign subsidiaries to higher-tier foreign subsidiaries. The Company is analyzing the optimal use of its US state attributes, foreign tax law regarding income recognition of distributions, as well as foreign corporation law relating to distributable foreign earnings.

Reduction of U.S. federal corporate tax rate: As a result of the 2017 Tax Act, the corporate tax rate decreased from 35% to 21% effective January 1, 2018. Accordingly, the Company’s deferred tax assets decreased by $26.0 million, fully offset by a decrease in the valuation allowance. For its deferred tax assets and liabilities, the Company recorded no provisional net decrease with no corresponding net adjustment to deferred income tax expense for the year ended December 31, 2017 due to a full valuation allowance. While the Company was able to make a reasonable estimate of the impact of the reduction in corporate rate, such estimates may be affected by other analyses related to the 2017 Tax Act, including, but not limited to, any deferred adjustments related to the filing of the Company's 2017 federal and state tax returns and the Company's calculation of the state tax effect of adjustments made to federal temporary differences.

Section 162(m): The Company's accounting for the changes to share-based payment awards and Section 162(m) of the 2017 Tax Act is incomplete, and the Company was not yet able to make reasonable estimates of the effects because the relevant regulations have yet to be issued. Therefore, no provisional adjustments were recorded.

In addition, the Company recorded no reduction to deferred tax asset related to the write-off of prior years’ post-vesting cancellations of non-qualified stock options as of fiscal year ended December 31, 2017.

The Company does not expect to have an impact from the implementation of certain limitations on executive stock-based compensation under the 2017 Tax Act.

Cost Recovery: While the Company has not yet completed all of the computations necessary or completed an inventory of its 2017 expenditures that qualify for immediate expensing, the Company has recorded no current benefit related to cost recovery due to domestic losses.

For the year ended December 31, 2017, the enactment of the 2017 Tax Act had no impact on the Company’s total income tax benefit and pretax income due to its full valuation allowance.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Leases

The Company has operating lease agreements for offices, research and development, and sales and marketing facilities that expire at various dates through 2021. The Company recognizes rent expense on a straight-line basis over the lease term and records the difference between cash rent payments and the recognized rent expense as a deferred rent liability. Rent expense was $2.6 million, $2.1 million and $2.0 million for the years ended December 31, 2017, 2016 and 2015, respectively.

The Company enters into capital leases to finance data center and other computer and networking equipment.

As of December 31, 2017, approximate remaining future minimum lease payments under non-cancelable leases were as follows (in thousands):



Year Ending December 31,	Capital Leases			Operating Leases
2018	$	7,770		$	2,750
2019	5,564			2,747
2020	2,244			2,630
2021	—			654
Total future minimum lease payment	$	15,578		$	8,781
Less — amount representing interest	(1,766		)
Present value of total capital lease obligation	$	13,812
Capital lease obligation — current portion	6,651
Capital lease obligation — net of current portion	7,161

Hosting, Telecommunication Usage and Maintenance Services

The Company has agreements with third parties to provide co-location hosting and telecommunication usage services. The agreements require payments per month for a fixed period of time in exchange for certain guarantees of network and telecommunication availability. The Company is also committed to make future payments under maintenance service contracts for certain data center equipment.

As of December 31, 2017, future minimum payments under these arrangements were as follows (in thousands):



Year Ending December 31,	Hosting Services		Telecommunication Usage Services		Equipment Maintenance Services
2018	$	855	$	2,355	$	426
2019	36		1,505		93
2020	23		90		17
Total future minimum payment	$	914	$	3,950	$	536

Universal Services Fund Liability

During the third quarter of 2012, the Company determined that based on its business activities, it is classified as a telecommunications service provider for regulatory purposes and it should make direct contributions to the federal USF and related funds based on revenues it receives from the resale of interstate and international telecommunications services. In order to comply with the obligation to make direct contributions, the Company made a voluntary self-disclosure to the FCC Enforcement Bureau and registered with the USAC, which is charged by the FCC with administering the USF. The Company filed exemption certificates with its wholesale telecommunications service providers in order to eliminate its obligation to reimburse such wholesale telecommunications service providers for their USF contributions calculated on services sold to the Company. In April 2013, the Company began remitting required contributions on a prospective basis directly to USAC.

The Company’s registration with USAC subjects it to assessments for unpaid USF contributions, as well as interest thereon and civil penalties, due to its late registration and past failure to recognize its obligation as a USF contributor and as an international carrier. The Company is required to pay assessments for periods prior to the Company’s registration. As of December 31, 2012, the total past due USF contribution being imposed by USAC and accrued by the Company for the period from 2003 through 2012 was $8.1 million, of which $4.7 million was undisputed and $3.4 million was disputed. The Company subsequently updated its filings and increased the liability related to 2008 through 2012 by $0.5 million, arriving at a new total of $3.9 million in disputed liability. In July 2013, the Company and USAC agreed to a financing arrangement for $4.1 million of the undisputed $4.7 million of the unpaid USF contributions whereby the Company issued to USAC a promissory note payable in the principal amount of the $4.1 million and paid off the remaining undisputed $0.6 million. The Company fully paid the promissory note as of January 2017.

In January 2017, the FCC’s Wireline Competition Bureau ruled in the Company's favor with respect to most of the disputed amount. In September 2017, USAC issued a credit to the Company reflecting the FCC's ruling for the $3.1 million of the $3.9 million in disputed liability. In addition, USAC reversed the interest and penalties related to the disputed liability of $3.1 million. The remaining $0.8 million in dispute involves USAC’s assessment of liability for the period of 2003 through 2007, which was prior to the five year window during which the Company was required to maintain financial records for USF contribution purposes. The Company filed a Request for Review (a form of appeal) of this disputed amount with the FCC's Wireline Competition Bureau in 2013, which remains pending. If the Request for Review is not resolved in the Company’s favor, it is possible that the Company will be held to the back assessments of $0.8 million, which includes interest and penalties on that amount.

As of December 31, 2017, the accrued liability on the remaining disputed assessments, including interest and penalties for the period of 2003 through 2007, was $0.8 million offset by $0.7 million in other USF credits.

State and Local Taxes and Surcharges

In April 2012, the Company commenced collecting and remitting sales taxes on sales of subscription services in all the U.S. states in which it determined it was obligated to do so. During the first quarter of 2015, the Company conducted an updated sales tax review of the taxability of sales of its subscription services. As a result, the Company determined that it may be obligated to collect and remit sales taxes on such sales in four additional states. Based on its best estimate of the probable sales tax liability in those four states relating to its sales of subscription services during the period 2011 through 2014, during the three months ended March 31, 2015, the Company recorded a general and administrative expense of $0.6 million to accrue for such taxes.

During 2013, the Company analyzed its activities and determined it may be obligated to collect and remit various state and local taxes and surcharges on its usage-based fees. The Company had not remitted state and local taxes on usage-based fees in any of the periods prior to 2014 and therefore accrued a sales tax liability for this contingency. In January 2014, the Company commenced paying such taxes and surcharges to certain state authorities. In June 2014, the Company commenced collecting state and local taxes or surcharges on usage-based fees from its clients on a current basis and remitting such taxes to the applicable U.S. state taxing authorities.

During 2017, 2016 and 2015, the Company remitted zero, $0.3 million and $1.1 million, respectively, for contingent sales taxes on both usage-based fees and sales of subscription services. For the years ended December 31, 2017, 2016 and 2015, the Company recognized a gain of $0.6 million, a gain of $0.4 million, and an expense of $1.2 million, respectively, as an adjustment to general and administrative expense related to its estimated sales tax liability on both usage-based fees and sales of subscription services in the U.S. and Canada, which was not being collected from its clients.

As of December 31, 2017 and 2016, the Company had total accrued liabilities of $1.5 million and $2.1 million, respectively, for such contingent sales taxes and surcharges that were not being collected from its clients but may be imposed by various taxing authorities, of which $0.4 million and $0.6 million, respectively, were included in current “Sales tax liability” on the consolidated balance sheets, and the remaining were included in non-current “Sales tax liability” on the consolidated balance sheets. The Company’s estimate of the probable loss incurred under this contingency is based on its analysis of the source location of its usage-based fees and the regulations and rules in each tax jurisdiction.

Legal Matters

The Company is involved in various legal and regulatory matters arising in the normal course of business. In management’s opinion, resolution of these matters is not expected to have a material impact on the Company’s consolidated results of operations, cash flows, or its financial position. However, due to the uncertain nature of legal matters, an unfavorable resolution of a matter could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period. The Company expenses legal fees as incurred.

The Company is currently involved in the following lawsuits as a defendant.

Melcher Litigation

On September 28, 2016, a complaint was filed in the United States District Court for the Southern District of California against Five9, Inc., or Five9, as the successor in interest to Face It, Corp., or Face It, and Lance Fried, a former Five9 employee who was the former Chief Executive Officer of Face It. The action, captioned Melcher, et al. v. Five9, Inc., et al., No. 16-cv-02440, or the Melcher Litigation, was filed as a direct action by Carl Melcher, or Melcher, a purported former stockholder of Face It, and his related investment entity Melcher Family Limited Partnership, or MFLP.

In the complaint, the plaintiffs alleged that Face It repurchased the plaintiffs’ stock in September 2013 before Five9 acquired Face It, and that in connection with the repurchase, Fried made material misstatements or omissions to Melcher, by failing to disclose that Face It allegedly was in concurrent discussions about a potential sale of the company to Five9. The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, as well as various claims under state law and common law. The complaint sought to set aside Face It’s September 2013 stock repurchase from the plaintiffs, as well as an unspecified amount of damages and an award of attorney’s fees and costs, in addition to other relief.

On November 8, 2016, the court entered an order staying the lawsuit and ordered the parties to proceed to arbitration of the dispute before the American Arbitration Association, or AAA. On November 16, 2016, Melcher and MFLP submitted a Demand for Arbitration to AAA against Five9, asserting claims identical to those alleged in the lawsuit.

On March 31, 2017, Five9 reached a settlement with the plaintiffs that fully resolved the plaintiffs’ claims against Five9 and provided for mutual releases between the plaintiffs and Five9 in exchange for a one-time payment by Five9 to the plaintiffs of $1.7 million. As a result of the settlement, the AAA arbitration was concluded, and on July 10, 2017 the plaintiffs filed an amended complaint in the Melcher Litigation solely against Fried, removing Five9 as a defendant.

NobelBiz Litigation

On August 5, 2011, NobelBiz sent a letter to the Company asserting infringement of a patent related to virtual call centers. On April 3, 2012, NobelBiz filed a patent infringement lawsuit against the Company in the United States District Court for the Eastern District of Texas. The patent asserted in the complaint is different, but related, to the patent asserted in the original letter. The lawsuit, NobelBiz Inc. v. Five9, Inc., Case No. 6:12-cv-00243-LED, alleged that the Company’s local caller ID management service infringed United States Patent No. 8135122, or the ‘122 patent. The ‘122 patent, titled “System and Method for Modifying Communication Information (MCI),” issued on March 13, 2012, and according to the complaint is alleged to relate to “a system for processing a telephone call from a call originator (also referred to as a calling party) to a call target (also referred to as a receiving party), where the system accesses a database storing outgoing telephone numbers, selects a replacement telephone number from the outgoing telephone numbers based on the telephone number of the call target, and originates an outbound call to the call target with a modified outgoing caller identification (‘caller ID’).” NobelBiz sought damages in the form of lost profits as well as injunctive relief. On March 28, 2013, the court granted the Company’s motion to transfer the case to the United States District Court for the Northern District of California. Subsequently, NobelBiz amended its complaint to add claims related to U.S. Patent No. 8565399, or the ‘399 patent, which is a continuation in the same family as the ‘122 patent and addresses the same technology. The Company responded to the complaint and amended complaint by asserting noninfringement and invalidity of the ‘122 and ‘399 patents. On January 16, 2015, the court issued an order regarding claim construction of the two patents-in-suit. On March 7, 2016, the court stayed the case pending an appeal in lawsuits involving NobelBiz, Global Connect and TCN that also involve the ‘122 and ‘399 patents. On July 19, 2017, the Federal Circuit Court of Appeal issued a ruling confirming the claim construction in Five9’s lawsuit and resolving the appeal in favor of Global Connect and TCN and against NobelBiz. Subsequently, the district court set a new schedule for the litigation in light of this ruling with motions for summary judgment set to occur in 2018.

Subsequently, Five9 was able to settle all claims with NobelBiz that includes a license to the ‘122 patent, the ‘399 patent, and all other patents in the same patent family. On December 4, 2017, the parties filed a joint notice of settlement and request for dismissal of the lawsuit in its entirety. On December 6, 2017, the Court issued an order dismissing the case.

Indemnification Agreements

In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify clients, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. Other than as described below, there are no claims that it is aware of that could have a material effect on the consolidated balance sheet, consolidated statement of operations and comprehensive loss, or consolidated statements of cash flows.

On October 27, 2016, the Company received notice from Lance Fried, a former officer and director of Face It, of his claim for indemnification by the Company (as successor in interest to Face It), and for advancement of all legal fees and expenses he incurs in connection with the defense of the Melcher litigation. See "Legal Matters" above. As of May 31, 2017, the Company had advanced Mr. Fried $62 thousand in connection with this claim. However, the Company disputes that Mr. Fried is entitled to advancement in connection with the Melcher litigation. On July 31, 2017, Mr. Fried filed a complaint against the Company in the Court of Chancery for the State of Delaware, in which he alleges that the Company breached advancement obligations to him. In the lawsuit, Mr. Fried seeks advancement of his legal fees and expenses in connection with the defense of the Melcher litigation, payment of his legal fees and expenses incurred in connection with his advancement action, and interest. The Company believes the action is without merit and is defending against it vigorously. On December 7, 2017, the Delaware Chancery Court stayed Mr. Fried’s advancement lawsuit, in favor of arbitration. On January 9, 2018, the Company received Mr. Fried’s demand for arbitration against the Company with respect to the same matter. Regardless of the outcome of Mr. Fried’s advancement action against the Company, Mr. Fried is required to reimburse the Company for any amounts advanced to him if it is ultimately determined that Mr. Fried is not entitled to indemnification in connection with the Melcher litigation. In addition, the Company believes that it has indemnification rights against the former stockholders of Face It (including Mr. Fried) for all losses that are incurred by the Company in connection with the Melcher litigation, including without limitation, amounts incurred to indemnify or advance the legal fees and expenses of Mr. Fried pursuant to his indemnification claim against the Company.

Geographical Information

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Geographical Information

The following table is a summary of revenues by geographic region based on client billing address and has been estimated based on the amounts billed to clients during the periods (in thousands).



	Year Ended December 31,
	2017		2016		2015
United States	$	188,303	$	151,484	$	120,037
International	11,922		10,606		8,831
Total revenue	$	200,225	$	162,090	$	128,868

The following table summarizes total property and equipment, net in the respective locations (in thousands).



	December 31,
	2017		2016		2015
United States	$	17,949	$	13,025	$	10,939
International	1,939		1,663		2,286
Property and equipment, net	$	19,888	$	14,688	$	13,225

Retirement Plans	12 Months Ended
Retirement Plans	Dec. 31, 2017
Retirement Benefits [Abstract]
Retirement Plans	Retirement Plans The Company has a 401(k) plan to provide tax deferred salary deductions for all eligible employees. Participants may make voluntary contributions to the 401(k) plan, limited by certain Internal Revenue Service restrictions. The Company is responsible for the administrative costs of the 401(k) plan. The Company does not match employee contributions. The Company complies with the requirement of maintaining a retirement plan for employees in the Philippines. This plan is a non-contributory and defined benefit type that provides retirement to employees equal to approximately one month salary for every year of credited service for employees who attain the normal retirement of age of 60 with at least five years of service. The benefits are paid in a lump sum amount upon retirement from the Company. Total defined benefit liability was $0.5 million and $0.4 million as of December 31, 2017 and 2016, respectively. Total retirement expense for this plan was $0.3 million, $0.1 million, and $0.1 million for fiscal years 2017, 2016, and 2015, respectively.

Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data (Unaudited)

Selected quarterly financial information for 2017 and 2016 is as follows:



	Quarter Ended
	Dec. 31, 2017			Sept. 30, 2017			Jun. 30, 2017			Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016

	(unaudited, in thousands, except per share data)
Revenue	$	55,403		$	50,081		$	47,727		$	47,014		$	44,207		$	40,982		$	38,886		$	38,015
Cost of revenue ⁽¹⁾⁽²⁾	22,363			20,497			20,273			19,971			15,770			17,790			16,764			16,610
Gross profit	33,040			29,584			27,454			27,043			28,437			23,192			22,122			21,405
Operating expenses:
Research and development ⁽¹⁾⁽²⁾	6,748			6,689			6,836			6,847			6,236			6,041			5,799			5,802
Sales and marketing ⁽¹⁾⁽²⁾	17,358			16,502			16,932			15,778			14,480			12,925			12,637			12,706
General and administrative ⁽¹⁾⁽²⁾	8,767			4,679			6,845			8,860			6,511			6,143			5,882			6,536
Total operating expenses	32,873			27,870			30,613			31,485			27,227			25,109			24,318			25,044
Loss from operations	167			1,714			(3,159		)	(4,442		)	1,210			(1,917		)	(2,196		)	(3,639		)
Other income (expense), net:
Extinguishment of debt	—			—			—			—			—			(1,026		)	—			—
Interest expense	(836		)	(865		)	(888		)	(882		)	(869		)	(961		)	(1,197		)	(1,199		)
Interest income and other	164			118			90			118			54			12			(33		)	(45		)
Total other income (expense), net	(672		)	(747		)	(798		)	(764		)	(815		)	(1,975		)	(1,230		)	(1,244		)
Income (loss) before income taxes	(505		)	967			(3,957		)	(5,206		)	395			(3,892		)	(3,426		)	(4,883		)
Provision for (benefit from) income taxes	126			43			50			49			(14		)	(2		)	42			28
Net income (loss)	$	(631	)	$	924		$	(4,007	)	$	(5,255	)	$	409		$	(3,890	)	$	(3,468	)	$	(4,911	)
Net income (loss) per share:
Basic	$	(0.01	)	$	0.02		$	(0.07	)	$	(0.10	)	$	0.01		$	(0.07	)	$	(0.07	)	$	(0.10	)
Diluted	$	(0.01	)	$	0.02		$	(0.07	)	$	(0.10	)	$	0.01		$	(0.07	)	$	(0.07	)	$	(0.10	)
Shares used in computing net loss per share:
Basic	56,034			55,310			54,723			53,688			53,126			52,708			52,143			51,377
Diluted	56,034			59,441			54,723			53,688			56,633			52,708			52,143			51,377

(1) Included stock-based compensation as follows:



	Quarter Ended
	Dec. 31, 2017		Sept. 30, 2017		Jun. 30, 2017		Mar. 31, 2017		Dec. 31, 2016		Sept. 30, 2016		Jun. 30, 2016		Mar. 31, 2016

	(unaudited, in thousands)
Cost of revenue	$	594	$	599	$	575	$	434	$	424	$	357	$	329	$	265
Research and development	807		797		801		637		549		547		528		435
Sales and marketing	1,128		1,084		1,224		928		759		626		544		434
General and administrative	2,111		1,240		1,254		1,130		984		989		1,013		860
Total stock-based compensation	$	4,640	$	3,720	$	3,854	$	3,129	$	2,716	$	2,519	$	2,414	$	1,994

(2) Included depreciation and amortization expenses as follows:



	Quarter Ended
	Dec. 31, 2017		Sept. 30, 2017		Jun. 30, 2017		Mar. 31, 2017		Dec. 31, 2016		Sept. 30, 2016		Jun. 30, 2016		Mar. 31, 2016

	(unaudited, in thousands)
Cost of revenue	$	1,611	$	1,397	$	1,716	$	1,576	$	1,608	$	1,668	$	1,616	$	1,680
Research and development	170		182		237		206		224		204		161		148
Sales and marketing	30		30		30		30		58		56		54		53
General and administrative	257		272		287		283		196		212		229		222
Total depreciation and amortization	$	2,068	$	1,881	$	2,270	$	2,095	$	2,086	$	2,140	$	2,060	$	2,103

Subsequent Event	12 Months Ended
Subsequent Event	Dec. 31, 2017
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event In February 2018, the Company entered into an agreement to convert the outstanding notes receivable of Euro 1.1 million to common shares in the investee company prior to the investee company’s acquisition.

Description of Business and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Use of Estimates

Foreign Currency

Cash and Cash Equivalents

Concentration Risks

Allowance for Doubtful Accounts

Property and Equipment, Net

Property and equipment is stated at cost less accumulated depreciation and amortization, and is depreciated using the straight-line method over the estimated useful lives of the assets as follows:



Asset Category		Estimated Useful Lives
Computer and network equipment		3 to 5 years
Computer software		3 years
Development costs		1 to 5 years
Furniture and fixtures		7 years
Leasehold improvements		Shorter of useful life or lease term

Goodwill and Intangible Assets

Revenue Recognition

The Company recognizes revenue for each unit of accounting when all of the following criteria have been met:


•	persuasive evidence of an arrangement exists;


•	delivery has occurred;


•	the fee is fixed or determinable; and


•	collection is reasonably assured.

Revenue allocated to the separate accounting units is recognized as follows:


•	fixed subscription revenue is recognized on a straight-line basis over the applicable term, predominantly the monthly contractual billing period;


•	variable usage revenue is recognized as actual usage occurs. Usage revenue in subscription arrangements that include bundled usage is recognized on a straight-line basis over the applicable term, as the Company cannot reliably estimate client usage patterns; and


•	professional services revenue is recognized as services are performed using the proportional performance method, with performance measured based on labor hours, assuming all other revenue recognition criteria have been met.

Deferred Revenue

Cost of Revenue

Research and Development

Advertising Costs

We primarily advertise our services through the web and in conjunction with partners. Advertising costs are expensed as incurred

Commissions

Stock-Based Compensation

Income Taxes

Net Loss Per Share

Indemnification

Certain of the Company’s agreements with clients include provisions for indemnification against liabilities if its services infringe a third-party’s intellectual property rights.

Segment Information

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Effective

The adoption is not expected to have a material impact on the recognition or timing of revenue, or on the provision for income taxes and deferred taxes.

The Company has established new accounting policies and is implementing the system, processes, and internal controls necessary to support the requirement of the new standard.

Description of Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Allowance for Doubtful Accounts

The following table presents the changes in the allowance for doubtful accounts (in thousands):



	Year Ended December 31,
	2017			2016			2015
Balance, beginning of period	$	12		$	15		$	65
Add: bad debt expense	95			75			171
Less: write-offs, net of recoveries	(74		)	(78		)	(221		)
Balance, end of period	$	33		$	12		$	15

Schedule of Property and Equipment, Useful Lives

Property and equipment is stated at cost less accumulated depreciation and amortization, and is depreciated using the straight-line method over the estimated useful lives of the assets as follows:



Asset Category		Estimated Useful Lives
Computer and network equipment		3 to 5 years
Computer software		3 years
Development costs		1 to 5 years
Furniture and fixtures		7 years
Leasehold improvements		Shorter of useful life or lease term

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



	December 31,
	2017			2016
Computer and network equipment	$	47,195		$	37,664
Computer software	6,974			5,133
Internal-use software development costs	500			475
Furniture and fixtures	1,282			1,130
Leasehold improvements	801			624
Property and equipment	56,752			45,026
Accumulated depreciation and amortization	(36,864		)	(30,338		)
Property and equipment, net	$	19,888		$	14,688

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Carried at Fair Value

The fair value of assets and liabilities carried at fair value was determined using the following inputs (in thousands):



	December 31, 2017
	Total		Level 1		Level 3
Assets
Cash equivalents:
Money market funds	$	20,092	$	20,092	$	—
Other Assets
Embedded conversion option held for investment	$	984	$	—	$	984

	December 31, 2016
	Total		Level 1		Level 3
Assets
Cash equivalents:
Money market funds	$	20,069	$	20,069	$	—
Other Assets
Embedded conversion option held for investment	$	873	$	—	$	873

Fair Value Measured and Recorded Using Significant Unobservable Inputs

Fair Value Measured and Recorded Using Significant Unobservable Inputs (Level 3) (in thousands):



	December 31, 2017
Beginning balance	$	873
Total gains included in earnings⁽¹⁾	111
Ending balance	$	984


(1)	Amount includes both fair value and foreign currency adjustments.

Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2017

Cash, Cash Equivalents, and Short-term Investments [Abstract]

Schedule of Cash and Cash Equivalents

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



	December 31,
	2017		2016
Cash and cash equivalents:
Cash	$	48,855	$	38,053
Money market funds	20,092		20,069
Total cash and cash equivalents	$	68,947	$	58,122

Financial Statement Components (Tables)

12 Months Ended

Dec. 31, 2017

Financial Statement Components [Abstract]

Schedule of Accounts Receivable

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



	December 31,
	2017			2016
Trade accounts receivable	$	17,481		$	12,640
Unbilled trade accounts receivable, net of advance client deposits	1,600			1,253
Allowance for doubtful accounts	(33		)	(12		)
Accounts receivable, net	$	19,048		$	13,881

Schedule of Prepaid Expenses and Other Current Assets

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



	December 31,
	2017		2016
Prepaid expenses	$	2,437	$	2,199
Other current assets	2,403		809
Prepaid expenses and other current assets	$	4,840	$	3,008

Schedule of Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization, and is depreciated using the straight-line method over the estimated useful lives of the assets as follows:



Asset Category		Estimated Useful Lives
Computer and network equipment		3 to 5 years
Computer software		3 years
Development costs		1 to 5 years
Furniture and fixtures		7 years
Leasehold improvements		Shorter of useful life or lease term

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



	December 31,
	2017			2016
Computer and network equipment	$	47,195		$	37,664
Computer software	6,974			5,133
Internal-use software development costs	500			475
Furniture and fixtures	1,282			1,130
Leasehold improvements	801			624
Property and equipment	56,752			45,026
Accumulated depreciation and amortization	(36,864		)	(30,338		)
Property and equipment, net	$	19,888		$	14,688

Schedule of Capital Leased Property and Equipment

Property and equipment capitalized under capital lease obligations consist primarily of computer and network equipment and were as follows (in thousands):



	December 31,
	2017			2016
Gross	$	46,624		$	35,504
Less: accumulated depreciation and amortization	(30,438		)	(23,128		)
Total	$	16,186		$	12,376

Schedule of Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):



	December 31,
	2017		2016
Accrued expenses	$	3,130	$	2,148
Accrued compensation and benefits	8,657		7,456
Accrued and other current liabilities	$	11,787	$	9,604

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

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



	December 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed technology	$	2,460	$	(1,478	)	$	982	$	2,460	$	(1,126	)	$	1,334
Customer relationships	520		(437		)	83		520		(333		)	187
Domain names	50		(42		)	8		50		(32		)	18
Total	$	3,030	$	(1,957	)	$	1,073	$	3,030	$	(1,491	)	$	1,539

Schedule of Expected Future Amortization Expense of Intangible Assets

As of December 31, 2017, the expected future amortization expense for intangible assets was as follows (in thousands):



Period	Expected Future Amortization Expense
2018	$	442
2019	351
2020	280
Total	$	1,073

Debt (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Schedule of Outstanding Debt

As of December 31, 2017 and 2016, the Company’s outstanding debt is summarized as follows (in thousands):



	December 31,
	2017			2016
Promissory note to USAC	$	—		$	120
FCC civil penalty	333			1,000
Total notes payable, gross	333			1,120
Less: discount	(7		)	(79		)
Total notes payable, net carrying value	326			1,041
Revolving line of credit	32,594			32,594
Interest accretion under 2016 line of credit	$	10		$	19
Total debt, net carrying value	$	32,930		$	33,654
Less: current portion of debt *	(336		)	(742		)
Total debt, less current portion **	32,594			32,912


* Included in ‘Notes payable’ in the consolidated balance sheets.
** Included in ‘Notes payable - less current portion’ and ‘Revolving line of credit - less current portion’ in the consolidated balance sheets.

Schedule of Maturities of Debt

Maturities of the Company’s outstanding debt as of December 31, 2017 are as follows (in thousands):



Period	Amount to Mature
2018	$	333
2019	32,594
Total	$	32,927

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
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-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Schedule of Common Stock Reserved for Future Issuance

As of December 31, 2017, shares of common stock reserved for future issuance related to outstanding equity awards, warrants, and employee equity incentive plans were as follows (in thousands):



		December 31, 2017
Stock options outstanding		4,047
Restricted stock units outstanding		2,033
Shares available for future grant under 2014 Plan		7,300
Shares available for future issuance under ESPP		1,371
Common stock warrants outstanding		13
Total shares of common stock reserved		14,764

Schedule of Stock Option Activities

A summary of the Company’s stock option activity during the year ended December 31, 2017 is as follows (in thousands, except years and per share data):



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value ⁽¹⁾
Outstanding as of December 31, 2016	5,556		$	5.23
Options granted	619		18.11
Options exercised	(1,986	)	3.04
Options forfeited or expired	(142	)	12.83
Outstanding as of December 31, 2017	4,047		$	8.00	6.4	68,334
Vested and expected to vest as of December 31, 2017	4,047		8.00		6.4	68,334
Exercisable as of December 31, 2017	2,911		6.20		5.6	54,380


(1) The aggregate intrinsic value amounts are computed based on the difference between the exercise price of the stock options and the fair market value of the Company’s common stock of $24.88 per share as of December 31, 2017 for all in-the-money stock options outstanding.

Following is additional information pertaining to the Company’s stock option activity (in thousands, except per share data):



	Year Ended December 31,
	2017		2016		2015
Weighted average grant date fair value per share of options granted	$	8.81	$	4.50	$	2.38
Intrinsic value of options exercised ⁽¹⁾	33,820		5,865		3,233
Total fair value of options vested during the period	7,296		3,813		4,824
Cash received from options exercised	6,047		4,286		1,268


(1) Intrinsic value of options exercised is the difference between the fair market value of the Company’s common stock at the time of exercise and the exercise price paid.

Schedule of RSU Activities

A summary of RSU activity during the year ended December 31, 2017 is as follows (in thousands, except years and per share data):



	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2016	2,019		$	7.65
RSUs granted	1,176		18.29
RSUs vested and released	(971	)	8.85
RSUs forfeited	(191	)	11.42
Outstanding as of December 31, 2017	2,033		$	12.81

Following is additional information pertaining to the Company’s RSU activity (in thousands, except per share data):



	Year Ended December 31,
	2017		2016		2015
Weighted average grant date fair value per share of RSUs granted	$	18.29	$	9.71	$	5.10
Total fair value of RSUs vested during the period	21,161		10,706		2,907

Schedule of Stock-based Compensation Expense

Stock-based compensation expenses for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):



	Year Ended December 31,
	2017		2016		2015
Cost of revenue	$	2,202	$	1,375	$	866
Research and development	3,042		2,059		1,790
Sales and marketing	4,364		2,363		1,800
General and administrative ⁽¹⁾	5,735		3,846		3,274
Total stock-based compensation	$	15,343	$	9,643	$	7,730


(1)	Effective December 2017, the Company’s former Chief Executive Officer and President resigned from his position and became the Executive Chairman of the Board. Due to this substantive change in status, certain of his stock option and RSU awards were modified which resulted in incremental stock based compensation expense of approximately $1.0 million.

Schedule of Unrecognized Compensation Expense



	Stock Option		RSU		ESPP
Unrecognized stock-based compensation expense	$	10,703	$	26,401	$	670
Weighted-average amortization period	2.5 years		2.8 years		0.4 years

Schedule of Valuation Assumptions, Stock Option

The weighted-average assumptions used to value stock options and purchase rights under the ESPP granted during the years ended December 31, 2017, 2016 and 2015 were as follows:



Stock Options	Year Ended December 31,
	2017	2016	2015
Expected term (years)	5.9	5.7	6.1
Volatility	49%	46%	49%
Risk-free interest rate	2.1%	1.4%	1.6%
Dividend yield	—	—	—

Schedule of Valuation Assumptions for Employee Stock Purchase Plan



ESPP	Granted In
	November 2017	May 2017	November 2016	May 2016	November 2015	May 2015
Expected term (years)	0.5	0.5	0.5	0.5	0.5	0.5
Volatility	36%	43%	42%	58%	54%	43%
Risk-free interest rate	1.4%	1.0%	0.6%	0.4%	0.3%	0.1%
Dividend yield	—	—	—	—	—	—

Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Basic and Diluted Net Loss Per Share

The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data).



	Year Ended December 31,
	2017			2016			2015
Net loss	$	(8,969	)	$	(11,860	)	$	(25,838	)
Weighted-average shares used in computing basic and diluted net loss per share	54,946			52,342			50,141
Basic and diluted net loss per share	$	(0.16	)	$	(0.23	)	$	(0.52	)

Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share

The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive (in thousands).



	December 31,
	2017	2016	2015
Stock options	4,047	5,556	6,092
Restricted stock units	2,033	2,019	1,818
ESPP	—	—	156
Common stock warrants	13	132	191
Total	6,093	7,707	8,257

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Components of Loss before Income Taxes

The following table presents components of loss before income taxes for the periods presented (in thousands):



	Year Ended December 31,
	2017			2016			2015
United States	$	(9,434	)	$	(12,222	)	$	(26,305	)
International	733			416			528
Loss before income taxes	$	(8,701	)	$	(11,806	)	$	(25,777	)

Schedule of Components of Provision for Income Taxes

Provision for income taxes for the periods presented consisted of (in thousands):



	Year Ended December 31,
	2017		2016		2015
Current:
U.S. federal	$	—	$	—	$	—
U.S. state	42		16		21
Foreign	226		38		40
Total provision for income taxes	$	268	$	54	$	61

Schedule of Effective Income Tax Amount Reconciliation

Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 34% to pre-tax loss for the periods presented as a result of the following (in thousands):



	Year Ended December 31,
	2017			2016			2015
U.S. federal tax at statutory rate	$	(2,958	)	$	(4,014	)	$	(8,764	)
U.S. state income taxes	(708		)	490			(756		)
Non-deductible expense (benefit)	(5,673		)	931			438
Research and development credit	(402		)	(262		)	(440		)
Stock-based compensation	(14,622		)	983			737
Impact of 2017 Tax Act	25,952			—			—
Other	2			(104		)	481
Change in valuation allowance	(1,323		)	2,030			8,365
Total provision for income taxes	$	268		$	54		$	61

Schedule of Deferred Tax Assets and Liabilities



	December 31,
	2017			2016
Deferred tax assets:
Net operating loss and credit carryforwards	$	47,991		$	48,533
Accrued liabilities	3,183			3,801
Allowance for doubtful accounts	416			429
Property and equipment	(98		)	183
Deferred revenue	140			23
Accrued compensation	900			1,183
Intangibles	7			14
Gross deferred tax assets	52,539			54,166
Valuation allowance	(52,275		)	(53,598		)
Net deferred tax assets	264			568
Deferred tax liabilities:
Amortized intangibles	(264		)	(568		)
Gross deferred tax liabilities	(264		)	(568		)
Net deferred taxes	$	—		$	—

Schedule of Unrecognized Tax Benefits Rollforward

The table below shows the changes in the gross amount of unrecognized tax benefits for the periods presented (in thousands):



	Year Ended December 31,
	2017		2016			2015
Unrecognized benefit — beginning of period	$	2,805	$	2,485		$	1,975
Gross increases — current year tax positions	310		324			522
Gross decreases — prior year tax positions	—		(4		)	(12		)
Unrecognized benefit — end of period	$	3,115	$	2,805		$	2,485

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments

As of December 31, 2017, approximate remaining future minimum lease payments under non-cancelable leases were as follows (in thousands):



Year Ending December 31,	Capital Leases			Operating Leases
2018	$	7,770		$	2,750
2019	5,564			2,747
2020	2,244			2,630
2021	—			654
Total future minimum lease payment	$	15,578		$	8,781
Less — amount representing interest	(1,766		)
Present value of total capital lease obligation	$	13,812
Capital lease obligation — current portion	6,651
Capital lease obligation — net of current portion	7,161

Schedule of Future Minimum Payments under Hosting, Telecommunication Usage and Maintenance Service Agreements

As of December 31, 2017, future minimum payments under these arrangements were as follows (in thousands):



Year Ending December 31,	Hosting Services		Telecommunication Usage Services		Equipment Maintenance Services
2018	$	855	$	2,355	$	426
2019	36		1,505		93
2020	23		90		17
Total future minimum payment	$	914	$	3,950	$	536

Geographical Information (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Schedule of Revenues and Property and Equipment by Geographic Region

The following table is a summary of revenues by geographic region based on client billing address and has been estimated based on the amounts billed to clients during the periods (in thousands).



	Year Ended December 31,
	2017		2016		2015
United States	$	188,303	$	151,484	$	120,037
International	11,922		10,606		8,831
Total revenue	$	200,225	$	162,090	$	128,868

The following table summarizes total property and equipment, net in the respective locations (in thousands).



	December 31,
	2017		2016		2015
United States	$	17,949	$	13,025	$	10,939
International	1,939		1,663		2,286
Property and equipment, net	$	19,888	$	14,688	$	13,225

Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

Selected quarterly financial information for 2017 and 2016 is as follows:



	Quarter Ended
	Dec. 31, 2017			Sept. 30, 2017			Jun. 30, 2017			Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016

	(unaudited, in thousands, except per share data)
Revenue	$	55,403		$	50,081		$	47,727		$	47,014		$	44,207		$	40,982		$	38,886		$	38,015
Cost of revenue ⁽¹⁾⁽²⁾	22,363			20,497			20,273			19,971			15,770			17,790			16,764			16,610
Gross profit	33,040			29,584			27,454			27,043			28,437			23,192			22,122			21,405
Operating expenses:
Research and development ⁽¹⁾⁽²⁾	6,748			6,689			6,836			6,847			6,236			6,041			5,799			5,802
Sales and marketing ⁽¹⁾⁽²⁾	17,358			16,502			16,932			15,778			14,480			12,925			12,637			12,706
General and administrative ⁽¹⁾⁽²⁾	8,767			4,679			6,845			8,860			6,511			6,143			5,882			6,536
Total operating expenses	32,873			27,870			30,613			31,485			27,227			25,109			24,318			25,044
Loss from operations	167			1,714			(3,159		)	(4,442		)	1,210			(1,917		)	(2,196		)	(3,639		)
Other income (expense), net:
Extinguishment of debt	—			—			—			—			—			(1,026		)	—			—
Interest expense	(836		)	(865		)	(888		)	(882		)	(869		)	(961		)	(1,197		)	(1,199		)
Interest income and other	164			118			90			118			54			12			(33		)	(45		)
Total other income (expense), net	(672		)	(747		)	(798		)	(764		)	(815		)	(1,975		)	(1,230		)	(1,244		)
Income (loss) before income taxes	(505		)	967			(3,957		)	(5,206		)	395			(3,892		)	(3,426		)	(4,883		)
Provision for (benefit from) income taxes	126			43			50			49			(14		)	(2		)	42			28
Net income (loss)	$	(631	)	$	924		$	(4,007	)	$	(5,255	)	$	409		$	(3,890	)	$	(3,468	)	$	(4,911	)
Net income (loss) per share:
Basic	$	(0.01	)	$	0.02		$	(0.07	)	$	(0.10	)	$	0.01		$	(0.07	)	$	(0.07	)	$	(0.10	)
Diluted	$	(0.01	)	$	0.02		$	(0.07	)	$	(0.10	)	$	0.01		$	(0.07	)	$	(0.07	)	$	(0.10	)
Shares used in computing net loss per share:
Basic	56,034			55,310			54,723			53,688			53,126			52,708			52,143			51,377
Diluted	56,034			59,441			54,723			53,688			56,633			52,708			52,143			51,377

(1) Included stock-based compensation as follows:



	Quarter Ended
	Dec. 31, 2017		Sept. 30, 2017		Jun. 30, 2017		Mar. 31, 2017		Dec. 31, 2016		Sept. 30, 2016		Jun. 30, 2016		Mar. 31, 2016

	(unaudited, in thousands)
Cost of revenue	$	594	$	599	$	575	$	434	$	424	$	357	$	329	$	265
Research and development	807		797		801		637		549		547		528		435
Sales and marketing	1,128		1,084		1,224		928		759		626		544		434
General and administrative	2,111		1,240		1,254		1,130		984		989		1,013		860
Total stock-based compensation	$	4,640	$	3,720	$	3,854	$	3,129	$	2,716	$	2,519	$	2,414	$	1,994

(2) Included depreciation and amortization expenses as follows:



	Quarter Ended
	Dec. 31, 2017		Sept. 30, 2017		Jun. 30, 2017		Mar. 31, 2017		Dec. 31, 2016		Sept. 30, 2016		Jun. 30, 2016		Mar. 31, 2016

	(unaudited, in thousands)
Cost of revenue	$	1,611	$	1,397	$	1,716	$	1,576	$	1,608	$	1,668	$	1,616	$	1,680
Research and development	170		182		237		206		224		204		161		148
Sales and marketing	30		30		30		30		58		56		54		53
General and administrative	257		272		287		283		196		212		229		222
Total depreciation and amortization	$	2,068	$	1,881	$	2,270	$	2,095	$	2,086	$	2,140	$	2,060	$	2,103

Description of Business and Summary of Significant Accounting Policies - Concentration Risks (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash, uninsured amount	$ 68.3	$ 57.5

Description of Business and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance, beginning of period	$ 12	$ 15	$ 65
Add: bad debt expense	95	75	171
Less: write-offs, net of recoveries	(74)	(78)	(221)
Balance, end of period	$ 33	$ 12	$ 15

Description of Business and Summary of Significant Accounting Policies - Property and Equipment, Net (Details)	12 Months Ended
	Dec. 31, 2017
Computer and network equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life, in years	3 years
Computer and network equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life, in years	5 years
Computer software
Property, Plant and Equipment [Line Items]
Useful life, in years	3 years
Development costs \| Minimum
Property, Plant and Equipment [Line Items]
Useful life, in years	1 year
Development costs \| Maximum
Property, Plant and Equipment [Line Items]
Useful life, in years	5 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Useful life, in years	7 years

Description of Business and Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2017
Minimum
Finite-Lived Intangible Assets [Line Items]
Finite-live intangible asset, useful life	5 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Finite-live intangible asset, useful life	7 years

Description of Business and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
USF contributions and other regulatory costs, before reversal		$ 7,700
Reversal of accrued federal fees	$ 0	(3,114)	$ 0
USF contributions and other regulatory costs	$ 8,600	$ 4,600	$ 6,200

Description of Business and Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Capitalized internal-use software development costs	$ 0.4	$ 0.5

Description of Business and Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Advertising expense	$ 11.4	$ 10.7	$ 9.2

Description of Business and Summary of Significant Accounting Policies - Commissions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Commission expense	$ 14.0	$ 10.2	$ 7.2

Description of Business and Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred tax asset	$ 52,539		$ 54,166
Deferred tax asset, valuation allowance	52,275		$ 53,598
ASU 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred tax asset		$ 5,300
Deferred tax asset, valuation allowance		5,300
Accumulated Deficit \| ASU 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Effect on financial statements		$ 200
Pro Forma \| Minimum \| Accumulated Deficit \| ASU 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Effect on financial statements	18,000
Pro Forma \| Maximum \| Accumulated Deficit \| ASU 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Effect on financial statements	$ 28,000

Fair Value Measurements - Schedule of Assets Carried at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Money market funds
Assets
Cash equivalents	$ 20,092	$ 20,069
Money market funds \| Level 1
Assets
Cash equivalents	20,092	20,069
Money market funds \| Level 3
Assets
Cash equivalents	0	0
Embedded conversion option held for investment
Assets
Embedded conversion option held for investment	984	873
Embedded conversion option held for investment \| Level 1
Assets
Embedded conversion option held for investment	0	0
Embedded conversion option held for investment \| Level 3
Assets
Embedded conversion option held for investment	$ 984	$ 873

Fair Value Measurements - Reconciliation of Unobservable Inputs (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Fair Value Disclosures [Abstract]
Beginning balance	$ 873
Total gains included in earnings	111
Ending balance	$ 984

Cash and Cash Equivalents - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash and Cash Equivalents [Abstract]
Cash	$ 48,855	$ 38,053
Money market funds	20,092	20,069
Total cash and cash equivalents	$ 68,947	$ 58,122	$ 58,484	$ 58,289

Cash and Cash Equivalents (Details) - Revolving Credit Facility $ in Millions	Dec. 31, 2017 USD ($) lender
Cash and Cash Equivalents
Unrestricted cash required to be deposited with lenders \| $	$ 25.0
Number of lenders \| lender	2

Financial Statement Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounts Receivable
Allowance for doubtful accounts	$ (33)	$ (12)	$ (15)	$ (65)
Accounts receivable, net	19,048	13,881
Trade accounts receivable
Accounts Receivable
Trade accounts receivable	17,481	12,640
Unbilled trade accounts receivable, net of advance client deposits
Accounts Receivable
Trade accounts receivable	$ 1,600	$ 1,253

Financial Statement Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financial Statement Components [Abstract]
Prepaid expenses	$ 2,437	$ 2,199
Other current assets	2,403	809
Prepaid expenses and other current assets	$ 4,840	$ 3,008

Financial Statement Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment	$ 56,752	$ 45,026
Accumulated depreciation and amortization	(36,864)	(30,338)
Property and equipment, net	19,888	14,688	$ 13,225
Computer and network equipment
Property, Plant and Equipment [Line Items]
Property and equipment	47,195	37,664
Computer software
Property, Plant and Equipment [Line Items]
Property and equipment	6,974	5,133
Internal-use software development costs
Property, Plant and Equipment [Line Items]
Property and equipment	500	475
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment	1,282	1,130
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property and equipment	$ 801	$ 624

Financial Statement Components - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Depreciation and amortization of property and equipment	$ 7.8	$ 7.9	$ 6.9
Favorable impact to basic and diluted EPS related to change in estimated useful life (in USD per share)	$ (0.16)	$ (0.23)	$ (0.52)
Previously reported
Property, Plant and Equipment [Line Items]
Useful life, in years	3 years
Service life \| Adjustments
Property, Plant and Equipment [Line Items]
Depreciation and amortization of property and equipment	$ (1.6)
Favorable impact to basic and diluted EPS related to change in estimated useful life (in USD per share)	$ 0.03
Minimum \| Service life
Property, Plant and Equipment [Line Items]
Useful life, in years	3 years
Maximum \| Service life
Property, Plant and Equipment [Line Items]
Useful life, in years	5 years

Financial Statement Components - Schedule of Capital Leased Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financial Statement Components [Abstract]
Gross	$ 46,624	$ 35,504
Less: accumulated depreciation and amortization	(30,438)	(23,128)
Total	$ 16,186	$ 12,376

Financial Statement Components - Schedule of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financial Statement Components [Abstract]
Accrued expenses	$ 3,130	$ 2,148
Accrued compensation and benefits	8,657	7,456
Accrued and other current liabilities	$ 11,787	$ 9,604

Goodwill and Intangible Assets - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment, accumulated	$ 0	$ 0
Amortization of intangible assets	500,000	500,000	$ 500,000
Impairment of intangible assets	$ 0	$ 0

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	$ 3,030	$ 3,030
Accumulated Amortization	(1,957)	(1,491)
Total Net Carrying Amount	1,073	1,539
Developed technology
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	2,460	2,460
Accumulated Amortization	(1,478)	(1,126)
Total Net Carrying Amount	982	1,334
Customer relationships
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	520	520
Accumulated Amortization	(437)	(333)
Total Net Carrying Amount	83	187
Domain names
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	50	50
Accumulated Amortization	(42)	(32)
Total Net Carrying Amount	$ 8	$ 18

Goodwill and Intangible Assets - Schedule of Expected Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
2018	$ 442
2019	351
2020	280
Total Net Carrying Amount	$ 1,073	$ 1,539

Debt - 2016 Loan and Security Agreement (Details) - USD ($)		3 Months Ended								12 Months Ended
	Aug. 01, 2016	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Loss on extinguishment of debt		$ 0	$ 0	$ 0	$ 0	$ 0	$ 1,026,000	$ 0	$ 0	$ 0	$ 1,026,000	$ 0
Prepayment penalties on extinguishment of debt										0	368,000	$ 0
Loan and Security Agreements 2014 and 2013
Debt Instrument [Line Items]
Loss on extinguishment of debt							1,000,000
Prepayment penalties on extinguishment of debt							400,000
Write-off of unamortized debt discounts							400,000
Write-off of unamortized debt issuance costs							$ 200,000
Revolving Credit Facility
Debt Instrument [Line Items]
Unrestricted cash required to be deposited with lenders		25,000,000								25,000,000
Revolving Credit Facility \| Line of Credit \| Loan and Security Agreement 2016
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 50,000,000.0
Credit agreement, amount outstanding	$ 32,600,000	32,600,000								32,600,000
Unused line of credit capacity, fee	0.25%
First and second anniversary fee for line of credit	$ 31,250
Credit facility, remaining borrowing capacity		$ 17,400,000								$ 17,400,000
Debt issuance costs						$ 200,000					$ 200,000
Debt issuance costs, amortization period	3 years
Revolving Credit Facility \| Line of Credit \| Loan and Security Agreement 2016 \| Prime Rate
Debt Instrument [Line Items]
Debt instrument, basis spread (as a percentage)	0.50%
Percentage increase in interest rate if adjusted EBITDA is negative at end of quarter	0.25%

Debt - 2014 Loan and Security Agreement (Details) - Term Loan	1 Months Ended
	Feb. 28, 2014 USD ($) lender $ / shares shares	Aug. 01, 2016 shares
2014 Loan and Security Agreement
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 30,000,000.0
Number of lenders \| lender	2
Credit facility, remaining borrowing capacity	$ 10,000,000.0
Credit facility, minimum incremental borrowing amount	$ 1,000,000.0
Term loan, minimum interest rate	10.00%
2014 Loan and Security Agreement \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread (as a percentage)	9.00%
Tranche One
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 20,000,000.0
Common Stock \| 2014 Loan and Security Agreement
Debt Instrument [Line Items]
Warrants issued \| shares	177,865
Exercise price (in dollars per share) \| $ / shares	$ 10.12
Common Stock \| Tranche One
Debt Instrument [Line Items]
Warrants vested, shares \| shares	118,577
Common Stock Warrant \| 2014 Loan and Security Agreement
Debt Instrument [Line Items]
Class of warrant or right, vesting period (in years)	10 years
Warrants unvested, shares \| shares		59,288

Debt - 2013 Loan and Security Agreement (Details) - 2013 Loan and Security Agreement - USD ($)	1 Months Ended
	Mar. 31, 2013	Oct. 31, 2013
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 20,000,000.0
Revolving Credit Facility \| Prime Rate
Debt Instrument [Line Items]
Debt instrument, basis spread (as a percentage)	0.50%
Term Loan
Debt Instrument [Line Items]
Amount borrowed under agreement		$ 5,000,000.0

Debt - Promissory Note/FCC Civil Penalty (Details) $ in Thousands	1 Months Ended
	Jun. 30, 2015 USD ($) payment	Jul. 31, 2013 USD ($) installment	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2014 USD ($)
Debt Instrument [Line Items]
Total debt, net carrying value			$ 32,930	$ 33,654
Debt, gross			32,927
Discount on debt			7	79
FCC Enforcement Bureau Civil Penalty
Debt Instrument [Line Items]
Accrued civil penalty liability					$ 2,000
Notes Payable
Debt Instrument [Line Items]
Total debt, net carrying value			326	1,041
Debt, gross			333	1,120
Notes Payable \| Promissory Note
Debt Instrument [Line Items]
Promissory note, stated interest rate		12.75%
Promissory note, number of monthly payments \| installment		42
Total debt, net carrying value				100
Debt, gross		$ 4,100	0	120
Notes Payable \| FCC Enforcement Bureau Civil Penalty
Debt Instrument [Line Items]
Total debt, net carrying value	$ 1,700		300	900
Debt, gross	$ 2,000		$ 333	$ 1,000
Number of quarterly payments \| payment	12
Imputed interest rate	12.75%
Discount on debt	$ 300

Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2015	Jul. 31, 2013
Debt Instrument [Line Items]
Debt, gross	$ 32,927
Less: discount	(7)	$ (79)
Total debt, net carrying value	32,930	33,654
Less: current portion of debt	(336)	(742)
Total debt, less current portion	32,594	32,912
Notes Payable
Debt Instrument [Line Items]
Debt, gross	333	1,120
Total debt, net carrying value	326	1,041
Notes Payable \| Promissory Note to USAC
Debt Instrument [Line Items]
Debt, gross	0	120		$ 4,100
Total debt, net carrying value		100
Notes Payable \| FCC Civil Penalty
Debt Instrument [Line Items]
Debt, gross	333	1,000	$ 2,000
Less: discount			(300)
Total debt, net carrying value	300	900	$ 1,700
Line of Credit
Debt Instrument [Line Items]
Debt, gross	32,594	32,594
Interest accretion under 2016 line of credit	$ 10	$ 19

Debt - Schedule of Maturities of Debt (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Debt Disclosure [Abstract]
2018	$ 333
2019	32,594
Total	$ 32,927

Stockholders' Equity - Capital Structure (Details) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Equity [Abstract]
Common Stock, shares authorized (in shares)	450,000,000	450,000,000
Common Stock, par value (in USD per share)	$ 0.001	$ 0.001
Common Stock, shares issued (in shares)	56,631,647	53,363,013
Common Stock, shares outstanding (in shares)	56,631,647	53,363,013
Preferred Stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred Stock, par value (in USD per share)	$ 0.001	$ 0.001
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0

Stockholders' Equity - Warrants (Details) - $ / shares	12 Months Ended
Stockholders' Equity - Warrants (Details) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Class of Warrant or Right [Line Items]
Warrant expiration date	2023-10
Common Stock
Class of Warrant or Right [Line Items]
Warrants outstanding	13,013	131,597
Outstanding warrants weighted average exercise price (dollars per share)	$ 5.76	$ 9.80

Stockholders' Equity - Common Stock Reserved for Future Issuance (Details) - shares	Dec. 31, 2017	Apr. 03, 2014
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	14,764,000
2014 Equity Incentive Plan
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	7,300,000
Employee Stock Options
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	4,047,000
Restricted Stock Units
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	2,033,000
ESPP
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	1,371,000	880,000
Common stock warrants
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	13,000

Stockholders' Equity - Equity Incentive Plans (Details) - shares	12 Months Ended
	Dec. 31, 2017	Jan. 01, 2018
2004 Equity Incentive Plan \| Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	4 years
Award expiration period	10 years
Expiration period, after termination of employment or relationship of consultant or director	90 days
2004 Equity Incentive Plan \| Employee Stock Options \| Tranche One
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	12 months
Award vesting, percentage of award	25.00%
2004 Equity Incentive Plan \| Employee Stock Options \| Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	36 months
Award vesting, percentage of award	75.00%
2014 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of shares authorized for issuance	5,300,000
Automatic annual increase in common stock reserved for issuance, percentage	5.00%
2014 Equity Incentive Plan \| Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award
Shares of common stock reserved for future issuance, additional shares		2,831,582
2014 Equity Incentive Plan \| Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award expiration period	10 years
2014 Equity Incentive Plan \| Restricted Stock Units \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	1 year
2014 Equity Incentive Plan \| Restricted Stock Units \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	4 years

Stockholders' Equity - Stock Option Activities (Details) - Employee Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of Shares
Outstanding, beginning balance (share)	5,556
Options granted (shares)	619
Options exercised (shares)	(1,986)
Options forfeited or expired (shares)	(142)
Outstanding, ending balance (shares)	4,047	5,556
Weighted Average Exercise Price
Outstanding, beginning balance, weighted-average exercise price	$ 5.23
Options granted, weighted-average exercise price	18.11
Options exercised, weighted-average exercise price	3.04
Options forfeited or expired, weighted-average exercise price	12.83
Outstanding, ending balance, weighted-average exercise price	$ 8.00	$ 5.23
Weighted average remaining contractual life	6 years 4 months 24 days
Outstanding, Aggregate intrinsic value	$ 68,334
Vested and expected to vest as of December 31, 2017
Vested and expected to vest, shares	4,047
Outstanding, weighted-average exercise price	$ 8.00
Outstanding, weighted average remaining contractual life	6 years 4 months 24 days
Vested and expected to vest, aggregate intrinsic value	$ 68,334
Additional information pertaining to stock options
Exercisable, shares	2,911
Exercisable, weighted-average exercise price	$ 6.20
Exercisable, weighted average remaining contractual life	5 years 7 months 6 days
Exercisable, aggregate intrinsic value	$ 54,380
Fair market value of common stock	$ 24.88
Weighted average grant date fair value per share of options granted	$ 8.81	$ 4.50	$ 2.38
Intrinsic value of options exercised	$ 33,820	$ 5,865	$ 3,233
Total fair value of options vested during the period	7,296	3,813	4,824
Cash received from options exercised	$ 6,047	$ 4,286	$ 1,268

Stockholders' Equity - RSU Activities (Details) - Restricted Stock Units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of Shares
Outstanding, beginning balance	2,019
RSUs granted	1,176
RSUs vested and released	(971)
RSUs forfeited	(191)
Outstanding, ending balance	2,033	2,019
Weighted Average Grant Date Fair Value Per Share
Outstanding, beginning balance, weighted-average grant date fair value per share	$ 7.65
RSUs granted, weighted-average grant date fair value per share	18.29	$ 9.71	$ 5.10
RSUs vested and released, weighted-average grant date fair value per share	8.85
RSUs forfeited, weighted-average grant date fair value per share	11.42
Outstanding, ending balance, weighted-average grant date fair value per share	12.81	7.65
Weighted average grant date fair value per share of RSUs granted	$ 18.29	$ 9.71	$ 5.10
Total fair value of RSUs vested during the period	$ 21,161	$ 10,706	$ 2,907

Stockholders' Equity - ESPP (Details) - $ / shares	12 Months Ended
Stockholders' Equity - ESPP (Details) - $ / shares	Dec. 31, 2017	Jan. 01, 2018	Apr. 03, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Shares of common stock reserved for future issuance (in shares)	14,764,000
ESPP
Share-based Compensation Arrangement by Share-based Payment Award
Maximum employee subscription rate, percentage of pre-tax earnings	15.00%
Purchase price of shares, percentage of the fair market value of the Company's common stock	85.00%
Maximum number of shares per employee per purchase period	1,500
Shares of common stock reserved for future issuance (in shares)	1,371,000		880,000
Automatic annual increase in common stock reserved for issuance, percentage	1.00%
Maximum annual increase of shares reserved	1,000,000
Issuance of common stock under ESPP, shares	265,172
Weighted-average price per share	$ 15.47
ESPP \| Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award
Shares of common stock reserved for future issuance, additional shares		566,316

Stockholders' Equity - Stock-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Stock-based Compensation Expense
Stock-based compensation expense	$ 15,343	$ 9,643	$ 7,730
Employee Stock Options
Stock-based Compensation Expense
Unrecognized stock-based compensation expense	$ 10,703
Weighted-average amortization period	2 years 6 months
Restricted Stock Units
Stock-based Compensation Expense
Unrecognized stock-based compensation expense	$ 26,401
Weighted-average amortization period	2 years 9 months 18 days
ESPP
Stock-based Compensation Expense
Unrecognized stock-based compensation expense	$ 670
Weighted-average amortization period	4 months 24 days
Cost of revenue
Stock-based Compensation Expense
Stock-based compensation expense	$ 2,202	1,375	866
Research and development
Stock-based Compensation Expense
Stock-based compensation expense	3,042	2,059	1,790
Sales and marketing
Stock-based Compensation Expense
Stock-based compensation expense	4,364	2,363	1,800
General and administrative
Stock-based Compensation Expense
Stock-based compensation expense	5,735	$ 3,846	$ 3,274
Board of Directors Executive Chairman \| General and administrative
Stock-based Compensation Expense
Stock-based compensation expense	$ 1,000

Stockholders' Equity - Option and ESPP Valuation Assumptions (Details)	1 Months Ended						12 Months Ended
	Nov. 30, 2017	May 31, 2017	Nov. 30, 2016	May 31, 2016	Nov. 30, 2015	May 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee Stock Options
Class of Stock [Line Items]
Expected term (years)							5 years 10 months 24 days	5 years 8 months 6 days	6 years 29 days
Volatility							49.00%	46.00%	49.00%
Risk-free interest rate							2.10%	1.40%	1.60%
Dividend yield							0.00%	0.00%	0.00%
ESPP
Class of Stock [Line Items]
Expected term (years)	6 months	6 months	6 months	6 months	6 months	6 months
Volatility	36.00%	43.00%	42.00%	58.00%	54.00%	43.00%
Risk-free interest rate	1.40%	1.00%	0.60%	0.40%	0.30%	0.10%
Dividend yield	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Net Loss Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share [Abstract]
Net loss	$ (631)	$ 924	$ (4,007)	$ (5,255)	$ 409	$ (3,890)	$ (3,468)	$ (4,911)	$ (8,969)	$ (11,860)	$ (25,838)
Weighted-average shares used in computing basic and diluted net loss per share (in shares)									54,946	52,342	50,141
Basic and diluted (in USD per share)									$ (0.16)	$ (0.23)	$ (0.52)

Net Loss Per Share - Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	6,093	7,707	8,257
Employee Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	4,047	5,556	6,092
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	2,033	2,019	1,818
ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	0	0	156
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	13	132	191

Income Taxes - Schedule of Components of Loss before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
United States	$ (9,434)	$ (12,222)	$ (26,305)
International	733	416	528
Loss before income taxes	$ (8,701)	$ (11,806)	$ (25,777)

Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
U.S. federal									$ 0	$ 0	$ 0
U.S. state									42	16	21
Foreign									226	38	40
Total provision for income taxes	$ 126	$ 43	$ 50	$ 49	$ (14)	$ (2)	$ 42	$ 28	$ 268	$ 54	$ 61

Income Taxes - Narrative (Details) - USD ($)	12 Months Ended
Income Taxes - Narrative (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating Loss Carryforwards [Line Items]
U.S. federal income tax rate (percent)	34.00%	34.00%	34.00%
Undistributed earnings of foreign subsidiaries	$ 0	$ 1,200,000	$ 800,000
Limitation on use of net operating loss, cumulative ownership change, more than	50.00%
Limitation on use of net operating loss, cumulative ownership change, period of change	3 years
Decrease in deferred tax assets due to tax reform of 2017	$ 26,000,000
Federal
Operating Loss Carryforwards [Line Items]
Increase (decrease) in valuation allowance for deferred tax assets	(1,300,000)	$ 2,000,000
Net operating loss carryforwards	188,800,000
Federal \| Research and Development Tax Credit Carryforward
Operating Loss Carryforwards [Line Items]
Research and development credit carryforwards	2,800,000
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	104,400,000
State \| Research and Development Tax Credit Carryforward
Operating Loss Carryforwards [Line Items]
Research and development credit carryforwards	$ 2,400,000

Income Taxes - Schedule of Effective Income Tax Amount Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
U.S. federal tax at statutory rate									$ (2,958)	$ (4,014)	$ (8,764)
U.S. state income taxes									(708)	490	(756)
Non-deductible expense (benefit)									(5,673)	931	438
Research and development credit									(402)	(262)	(440)
Stock-based compensation									(14,622)	983	737
Impact of 2017 Tax Act									25,952	0	0
Other									2	(104)	481
Change in valuation allowance									(1,323)	2,030	8,365
Total provision for income taxes	$ 126	$ 43	$ 50	$ 49	$ (14)	$ (2)	$ 42	$ 28	$ 268	$ 54	$ 61

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Net operating loss and credit carryforwards	$ 47,991	$ 48,533
Accrued liabilities	3,183	3,801
Allowance for doubtful accounts	416	429
Property and equipment	(98)
Property and equipment		183
Deferred revenue	140	23
Accrued compensation	900	1,183
Intangibles	7	14
Gross deferred tax assets	52,539	54,166
Valuation allowance	(52,275)	(53,598)
Net deferred tax assets	264	568
Deferred tax liabilities:
Amortized intangibles	(264)	(568)
Gross deferred tax liabilities	(264)	(568)
Net deferred taxes	$ 0	$ 0

Income Taxes - Schedule of Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of Unrecognized Tax Benefits
Unrecognized benefit — beginning of period	$ 2,805	$ 2,485	$ 1,975
Gross increases — current year tax positions	310	324	522
Gross decreases — prior year tax positions	0	(4)	(12)
Unrecognized benefit — end of period	$ 3,115	$ 2,805	$ 2,485

Commitments and Contingencies - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 2,600	$ 2,100	$ 2,000
Capital Leases
2018	7,770
2019	5,564
2020	2,244
2021	0
Total future minimum lease payment	15,578
Less — amount representing interest	(1,766)
Present value of total capital lease obligation	13,812
Capital lease obligation — current portion	6,651	6,230
Capital lease obligation — net of current portion	7,161	$ 5,915
Operating Leases
2018	2,750
2019	2,747
2020	2,630
2021	654
Total future minimum lease payment	$ 8,781

Commitments and Contingencies - Hosting, Telecommunications Usuage and Maintenance Services (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Hosting Services
Unrecorded Unconditional Purchase Obligation [Line Items]
2018	$ 855
2019	36
2020	23
Total future minimum payment	914
Telecommunication Usage Services
Unrecorded Unconditional Purchase Obligation [Line Items]
2018	2,355
2019	1,505
2020	90
Total future minimum payment	3,950
Equipment Maintenance Services
Unrecorded Unconditional Purchase Obligation [Line Items]
2018	426
2019	93
2020	17
Total future minimum payment	$ 536

Commitments and Contingencies - Universal Services Fund Liability (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Jul. 31, 2013	Mar. 31, 2013	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2017	Dec. 31, 2012
Loss Contingencies [Line Items]
Accrued federal fees			$ 1,151	$ 2,742
Increase in accrued federal fees			0	$ (3,114)	$ 0
Promissory note payable			32,927
Year 2003 through 2012 \| USF Obligations
Loss Contingencies [Line Items]
Accrued federal fees							$ 8,100
Undisputed portion \| Year 2003 through 2012 \| USF Obligations
Loss Contingencies [Line Items]
Accrued federal fees							4,700
Payments on usage-based fees	$ 600
Disputed portion \| Year 2003 through 2012 \| USF Obligations
Loss Contingencies [Line Items]
Accrued federal fees		$ 3,900					$ 3,400
USF credits						$ 3,100
Disputed liability related to reversal of interest and penalties						3,100
Disputed portion \| Year 2008 Through 2012 \| USF Obligations
Loss Contingencies [Line Items]
Increase in accrued federal fees		$ 500
Disputed portion \| Year 2003 To Year 2007 \| USF Obligations
Loss Contingencies [Line Items]
Accrued federal fees			800			$ 800
Promissory Note \| USF Obligations
Loss Contingencies [Line Items]
Promissory note payable	$ 4,100
Universal Services Fund
Loss Contingencies [Line Items]
USF credits			$ 700

Commitments and Contingencies - State and Local Taxes and Surcharges (Details)	3 Months Ended									12 Months Ended
	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($) state	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Loss Contingencies [Line Items]
General and administrative expense	$ 8,767,000	$ 4,679,000	$ 6,845,000	$ 8,860,000	$ 6,511,000	$ 6,143,000	$ 5,882,000	$ 6,536,000		$ 29,151,000	$ 25,072,000	$ 25,822,000
Sales tax liability - current	1,326,000				1,347,000					1,326,000	1,347,000
Contingent sales tax liabilities
Loss Contingencies [Line Items]
Number of states with sales tax liability \| state									4
General and administrative expense									$ 600,000
Payments on usage-based fees										0	300,000	1,100,000
Sales tax liability expense (income)										(600,000)	(400,000)	$ 1,200,000
Sales tax liability	1,500,000				2,100,000					1,500,000	2,100,000
Sales tax liability - current	$ 400,000				$ 600,000					$ 400,000	$ 600,000

Commitments and Contingencies - Legal Matters (Details) - USD ($) $ in Thousands	Mar. 31, 2017	May 31, 2017
Settled Litigation \| Melcher Litigation
Loss Contingencies [Line Items]
Litigation settlement amount awarded to other party	$ 1,700
Indemnification Agreement
Loss Contingencies [Line Items]
Estimate of possible loss		$ 62

Geographical Information - Schedule of Revenue and Property and Equipment by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets
Revenue	$ 55,403	$ 50,081	$ 47,727	$ 47,014	$ 44,207	$ 40,982	$ 38,886	$ 38,015	$ 200,225	$ 162,090	$ 128,868
Property and equipment, net	19,888				14,688				19,888	14,688	13,225
United States
Revenues from External Customers and Long-Lived Assets
Revenue									188,303	151,484	120,037
Property and equipment, net	17,949				13,025				17,949	13,025	10,939
International
Revenues from External Customers and Long-Lived Assets
Revenue									11,922	10,606	8,831
Property and equipment, net	$ 1,939				$ 1,663				$ 1,939	$ 1,663	$ 2,286

Retirement Plans (Details) - USD ($) $ in Millions	12 Months Ended
Retirement Plans (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Retirement Benefits [Abstract]
Defined benefit liability	$ 0.5	$ 0.4
Retirement expense	$ 0.3	$ 0.1	$ 0.1

Selected Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 55,403	$ 50,081	$ 47,727	$ 47,014	$ 44,207	$ 40,982	$ 38,886	$ 38,015	$ 200,225	$ 162,090	$ 128,868
Cost of revenue	22,363	20,497	20,273	19,971	15,770	17,790	16,764	16,610	83,104	66,934	59,495
Gross profit	33,040	29,584	27,454	27,043	28,437	23,192	22,122	21,405	117,121	95,156	69,373
Operating expenses:
Research and development	6,748	6,689	6,836	6,847	6,236	6,041	5,799	5,802	27,120	23,878	22,659
Sales and marketing	17,358	16,502	16,932	15,778	14,480	12,925	12,637	12,706	66,570	52,748	42,042
General and administrative	8,767	4,679	6,845	8,860	6,511	6,143	5,882	6,536	29,151	25,072	25,822
Total operating expenses	32,873	27,870	30,613	31,485	27,227	25,109	24,318	25,044	122,841	101,698	90,523
Loss from operations	167	1,714	(3,159)	(4,442)	1,210	(1,917)	(2,196)	(3,639)	(5,720)	(6,542)	(21,150)
Other income (expense), net:
Extinguishment of debt	0	0	0	0	0	(1,026)	0	0	0	(1,026)	0
Interest expense	(836)	(865)	(888)	(882)	(869)	(961)	(1,197)	(1,199)	(3,471)	(4,226)	(4,727)
Interest income and other	164	118	90	118	54	12	(33)	(45)	490	(12)	100
Total other income (expense), net	(672)	(747)	(798)	(764)	(815)	(1,975)	(1,230)	(1,244)	(2,981)	(5,264)	(4,627)
Income (loss) before income taxes	(505)	967	(3,957)	(5,206)	395	(3,892)	(3,426)	(4,883)	(8,701)	(11,806)	(25,777)
Provision for (benefit from) income taxes	126	43	50	49	(14)	(2)	42	28	268	54	61
Net loss	$ (631)	$ 924	$ (4,007)	$ (5,255)	$ 409	$ (3,890)	$ (3,468)	$ (4,911)	$ (8,969)	$ (11,860)	$ (25,838)
Net income (loss) per share:
Net income (loss) per share, basic (in USD per share)	$ (0.01)	$ 0.02	$ (0.07)	$ (0.10)	$ 0.01	$ (0.07)	$ (0.07)	$ (0.10)
Net income (loss) per share, diluted (in USD per share)	$ (0.01)	$ 0.02	$ (0.07)	$ (0.10)	$ 0.01	$ (0.07)	$ (0.07)	$ (0.10)
Shares used in computing net loss per share:
Basic (in shares)	56,034	55,310	54,723	53,688	53,126	52,708	52,143	51,377
Diluted (in shares)	56,034	59,441	54,723	53,688	56,633	52,708	52,143	51,377

Selected Quarterly Financial Data (Unaudited) - Allocation of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total stock-based compensation	$ 4,640	$ 3,720	$ 3,854	$ 3,129	$ 2,716	$ 2,519	$ 2,414	$ 1,994	$ 15,343	$ 9,643	$ 7,730
Cost of revenue
Total stock-based compensation	594	599	575	434	424	357	329	265
Research and development
Total stock-based compensation	807	797	801	637	549	547	528	435
Sales and marketing
Total stock-based compensation	1,128	1,084	1,224	928	759	626	544	434
General and administrative
Total stock-based compensation	$ 2,111	$ 1,240	$ 1,254	$ 1,130	$ 984	$ 989	$ 1,013	$ 860

Selected Quarterly Financial Data (Unaudited) - Allocation of Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total depreciation and amortization	$ 2,068	$ 1,881	$ 2,270	$ 2,095	$ 2,086	$ 2,140	$ 2,060	$ 2,103	$ 8,314	$ 8,390	$ 7,388
Cost of revenue
Total depreciation and amortization	1,611	1,397	1,716	1,576	1,608	1,668	1,616	1,680
Research and development
Total depreciation and amortization	170	182	237	206	224	204	161	148
Sales and marketing
Total depreciation and amortization	30	30	30	30	58	56	54	53
General and administrative
Total depreciation and amortization	$ 257	$ 272	$ 287	$ 283	$ 196	$ 212	$ 229	$ 222

Subsequent Event (Details) € in Millions	Feb. 27, 2018 EUR (€)
Subsequent Event
Subsequent Event [Line Items]
Outstanding notes receivable	€ 1.1