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Geographical Information (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of revenues and property and equipment by geographic region

The following table summarizes revenues by geographic region based on client billing address (in thousands):


	Year Ended December 31,
	2019		2018		2017
United States	$	301,536	$	239,378	$	188,303
International	26,470		18,286		11,922
Total revenue	$	328,006	$	257,664	$	200,225

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


	December 31,
	2019		2018
United States	$	29,246	$	23,931
International	3,944		1,954
Property and equipment, net	$	33,190	$	25,885

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 77,976	$ 81,912
Marketable investments	241,973	209,907
Accounts receivable, net	37,655	24,797
Prepaid expenses and other current assets	10,656	8,014
Deferred contract acquisition costs	13,014	9,372
Total current assets	381,274	334,002
Property and equipment, net	33,190	25,885
Operating Lease, Right-of-Use Asset	8,746
Intangible assets, net	15,533	631
Goodwill	11,798	11,798
Other assets	1,184	836
Deferred contract acquisition costs — less current portion	30,655	21,514
Total assets	482,380	394,666
Current liabilities:
Accounts payable	10,156	7,010
Accrued and other current liabilities	18,385	13,771
Operating lease liabilities	5,064
Accrued federal fees	2,303	1,434
Sales tax liabilities	1,885	1,741
Finance lease liabilities	3,518	6,647
Deferred revenue	24,681	17,391
Total current liabilities	65,992	47,994
Convertible senior notes	209,604	196,763
Sales tax liabilities — less current portion	838	841
Operating lease liabilities — less current portion	4,329
Finance lease liabilities — less current portion	809	4,509
Other long-term liabilities	4,350	1,811
Total liabilities	285,922	251,918
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, 2019 and 2018	0	0
Common stock, $0.001 par value; 450,000 shares authorized, 61,544 shares and 59,210 shares issued and outstanding as of December 31, 2019 and 2018, respectively	61	59
Additional paid-in capital	351,870	294,279
Accumulated other comprehensive income (loss)	576	(93)
Accumulated deficit	(156,049)	(151,497)
Total stockholders’ equity	196,458	142,748
Total liabilities and stockholders’ equity	$ 482,380	$ 394,666

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

Total

Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Beginning balance (in share) at Dec. 31, 2016

53,363

Beginning balance at Dec. 31, 2016

$ 30,328

$ 53

$ 196,555

$ (166,280)

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

Issuance of common stock upon exercise of stock options and warrants (in 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 (in shares)

971

Issuance of common stock upon vesting of restricted stock units

$ 1

(1)

Issuance of common stock under ESPP (in shares)

265

Issuance of common stock under ESPP

4,101

$ 1

4,100

Stock-based compensation

15,343

Other

^[1]

172

(172)

Other comprehensive income (loss)

Net loss

(8,969)

Ending balance (in shares) at Dec. 31, 2017

56,632

Ending balance at Dec. 31, 2017

46,838

$ 57

222,202

$ 0

(175,421)

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

Equity component of issuance of convertible senior notes

30,346

Issuance of common stock upon exercise of stock options and warrants (in shares)

1,285

Issuance of common stock upon exercise of stock options and warrants

7,779

$ 1

7,778

Issuance of common stock upon vesting of restricted stock units (in shares)

1,047

Issuance of common stock upon vesting of restricted stock units

$ 1

(1)

Issuance of common stock under ESPP (in shares)

246

Issuance of common stock under ESPP

5,730

$ 0

5,730

Stock-based compensation

28,484

Shares held for tax withholdings

(260)

Other comprehensive income (loss)

(93)

Net loss

(221)

Ending balance (in shares) at Dec. 31, 2018

59,210

Ending balance at Dec. 31, 2018

142,748

$ 59

294,279

(93)

(151,497)

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

Issuance of common stock upon exercise of stock options (in shares)

932

Issuance of common stock upon exercise of stock options

7,705

$ 1

7,704

Issuance of common stock upon vesting of restricted stock units (in shares)

1,204

Issuance of common stock upon vesting of restricted stock units

$ 1

(1)

Issuance of common stock under ESPP (in shares)

198

Issuance of common stock under ESPP

7,823

$ 0

7,823

Stock-based compensation

42,065

Other comprehensive income (loss)

669

Net loss

(4,552)

Ending balance (in shares) at Dec. 31, 2019

61,544

Ending balance at Dec. 31, 2019

$ 196,458

$ 61

$ 351,870

$ 576

$ (156,049)

[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.

Financial Statement Components - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Cash and Cash Equivalents
Cash and cash equivalents	$ 77,976	$ 81,912
Cash
Cash and Cash Equivalents
Cash and cash equivalents	73,100	69,893
Money market funds
Cash and Cash Equivalents
Cash and cash equivalents	2,179	10,833
U.S. Treasury
Cash and Cash Equivalents
Cash and cash equivalents	0	638
U.S. agency securities
Cash and Cash Equivalents
Cash and cash equivalents	0	50
Commercial paper
Cash and Cash Equivalents
Cash and cash equivalents	$ 2,697	$ 498

Stockholders' Equity - RSU Activities (Details) - Restricted stock units outstanding - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of Shares
Outstanding, beginning balance (in shares)	2,325
RSUs granted (in shares)	1,445
RSUs vested and released (in shares)	(1,204)
RSUs forfeited (in shares)	(194)
Outstanding, ending balance (in shares)	2,372	2,325
Weighted Average Grant Date Fair Value Per Share
Outstanding, beginning balance, weighted-average grant date fair value per share (in USD per share)	$ 25.36
Weighted average grant date fair value per share of RSUs granted (in USD per share)	53.33	$ 32.30	$ 18.29
RSUs vested and released, weighted-average grant date fair value per share (in USD per share)	26.29
RSUs forfeited, weighted-average grant date fair value per share (in USD per share)	32.60
Outstanding, ending balance, weighted-average grant date fair value per share (in USD per share)	41.32	25.36
Weighted average grant date fair value per share of RSUs granted (in USD per share)	$ 53.33	$ 32.30	$ 18.29
Total fair value of RSUs vested during the period	$ 68,072	$ 41,245	$ 21,161

Description of Business and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Description of Business and Summary of Significant Accounting Policies

Five9, Inc. and its wholly-owned subsidiaries (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 and related reserves. 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 are 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’s cash and cash equivalents consist of highly liquid investments with maturities of three months or less at the time of purchase. The Company’s cash equivalents consist of investments in money market funds, U.S. treasury securities, U.S. agency securities and commercial paper.

Marketable Investments

The Company’s marketable investments consist of U.S agency securities and government sponsored securities, U.S. treasury securities, certificates of deposit, municipal bonds, corporate bonds and commercial paper. The Company determines the appropriate classification of its investments in marketable investments at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable investments have been classified and accounted for as available-for-sale. Marketable investments are carried at fair value.

Concentration Risks

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, marketable investments and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at three large reputable financial institutions. Total cash

and cash equivalents in excess of insured limits were $77.6 million and $81.0 million as of December 31, 2019 and 2018, respectively. The Company has not experienced any losses in such accounts.

As of December 31, 2019 and 2018, no single client represented more than 10% of accounts receivable. For the years ended December 31, 2019, 2018 and 2017, 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,
	2019		2018		2017
Balance, beginning of period	$	12	$	33	$	12
Add: bad debt expense	90		90		95
Less: write-offs, net of recoveries	(91)		(111)		(74)
Balance, end of period	$	11	$	12	$	33

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,

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 three 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

Revenue is recognized when control of the promised services are transferred to customers in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company generates all of its revenue from contracts with customers. In contracts with multiple performance obligations, it identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined. The Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation. The Company then looks to how services are transferred to the customer in order to determine the timing of revenue recognition. Most services provided under the Company’s agreements result in the transfer of control over time.

The Company’s revenue consists of subscription services and related usage as well as professional services. The Company charges clients subscription fees, usually billed on a monthly basis, for access to the Company’s VCC solution. The 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 generally based on the volume of minutes used for inbound and outbound client interactions. Revenue generated from telephony usage is presented in revenue and cost of sales on a gross basis, as the Company is the party that controls the service and is responsible for fulfilling the promise to provide the call service by diverting the calls to selected carriers. 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 reductions in the number of agent seats. Increases in the number of agent seats can be provisioned almost immediately. The Company’s clients, therefore, are able to adjust the number of agent seats used to meet their changing contact center needs. The Company’s 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. 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. Revenue for professional services is recognized over time, as services are performed.

The estimation of variable consideration for each performance obligation requires the Company to make subjective judgments resulting in estimated variable consideration that is included in the transaction fee. This is done to the extent that it is probable, in the Company’s judgment, that a significant reversal in the amount of cumulative revenue recognized under the contract will not occur. The Company estimates the variable consideration in order to allocate the overall transaction fee on a relative stand-alone selling price basis to its multiple performance obligations. When services are included in the contract with the customer and are not sold at their stand-alone selling price, this requires the Company to estimate the number of seats the customer will use, especially during the initial ramp period of the contract, during which the Company bills under an ‘actual usage’ model for subscription-related services.

The Company recognizes revenue on fixed fee professional services performance obligations based on the proportion of labor hours expended compared to the total hours expected to complete the related performance obligation. The determination of the total labor hours expected to complete the performance obligations involves judgment, which influences the initial stand-alone selling price estimate as well as the timing of professional services revenue recognition, although this is typically resolved in a short time frame.

When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company assesses collection based on a number of factors, including past transaction history and the creditworthiness of the client. The Company maintains a revenue reserve for potential credits to be issued in accordance with service level agreements or for other revenue adjustments.

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 is recognized in accordance with the Company’s revenue recognition policy discussed above. 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.

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, Universal Service Fund and related funds, or 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.

Advertising Costs

The Company primarily advertises its services through the internet and in conjunction with partners. Advertising costs are expensed as incurred and were $13.4 million, $12.2 million and $11.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Commissions

Commissions consist of variable compensation earned by sales personnel and referral fees the Company pays to third parties. Under Accounting Standard Codification 605 - Revenue Recognition (“ASC 605”), all sales commissions associated with the acquisition or renewal of a client contract were recognized as sales and marketing expense as incurred. On January 1, 2018, the Company adopted Accounting Standard Codification 606 - Revenue from Contracts with Customers (“ASC 606”). In connection with the adoption of ASC 606, the Company also adopted ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers (“ASC 340-40”), which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to ASC 606 and ASC 340-40 as the “new standard.” Under the new standard, the Company defers all incremental commission costs to obtain the contract, and amortizes these costs over a period of benefit determined to be five years. Commission expense was $15.0 million, $10.3 million and $14.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Stock-Based Compensation

All stock-based compensation granted to employees and non-employee directors is measured at 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 of a change in tax rates on deferred tax assets and liabilities 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, 2019 and 2018, 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.

Comprehensive loss

Comprehensive loss consists of net income (loss), unrealized gains or losses on available-for-sale marketable investments and the effects of foreign currency translation adjustments. The Company presents comprehensive loss as part of the consolidated statements of operations. The changes in the accumulated balances of the components of other comprehensive income (loss) were not material for the periods presented.

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (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 (loss) 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 units and purchases under the ESPP. In periods of net loss, all potentially issuable shares of common stock 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 Company’s consolidated statements of operations and comprehensive loss.

Indemnification

The Company, in the ordinary course of business, 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, including breach of security,

services to be provided by the Company or from intellectual property infringement claims made by third parties. 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, 2019 and 2018.

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 Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“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 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.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASU 2014-09”), amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. The Company adopted ASU 2014-09 and its related amendments (collectively “ASC 606”) effective on January 1, 2018 using the modified retrospective method. The Company recorded a net reduction to opening accumulated deficit of $24.1 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The primary impact of adopting this new standard related to the deferral of $23.1 million in incremental commission costs of obtaining subscription contracts. The remaining $1.0 million impact of adopting this new standard related to revenue being recognized earlier than it would have been under ASC 605.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and issued subsequent amendments to the initial guidance in 2017, 2018 and 2019 (collectively, “ASC 842”). Under the new guidance, a lessee is required to recognize assets and liabilities for both finance, previously known as capital, and operating leases with lease terms of more than 12 months. ASC 842 also requires disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. Lessor accounting remained largely unchanged from previous GAAP. In transition, the Company was required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach that included a number of optional practical expedients that the Company elected to apply. The Company adopted ASC 842 using the modified retrospective method on January 1, 2019. The Company elected the available practical expedients, implemented internal controls, and a lease accounting system to enable the preparation of financial information upon adoption. The adoption of ASC 842 resulted in the recognition of operating lease liabilities of $8.4 million and operating lease right-of-use, or ROU, assets of the same amount. Existing deferred rent of $0.6 million was recorded as an offset to ROU assets, resulting in net ROU assets of $7.8 million. The

Company’s accounting for finance leases remained substantially unchanged. The adoption of ASC 842 did not have any impact on the Company's operating results or cash flows.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which clarifies the accounting for implementation costs in cloud computing arrangements. The Company early adopted ASU 2018-15 prospectively on January 1, 2019 to align the requirements for capitalizing implementation costs in a hosting arrangement that is a service contract with the requirements for capitalization costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The adoption of ASU 2018-15 did not have a material impact on the Company’s financial position and results of operations.

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 (“ASU 2016-13”), which requires measurement and recognition of expected credit losses for financial assets held at amortized cost, include trade receivables. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The Company will adopt ASU 2016-13 using the modified retrospective method on January 1, 2020. The Company does not expect the adoption of this standard to have a material impact on the Company’s financial position and results of operations.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which amends its guidance to simplify the accounting for income taxes by, among other provisions, removing exceptions to certain general principles in Topic 740, Income Taxes. The standard will be effective for the Company beginning in the first quarter of 2021, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2019-12 will have on its consolidated financial statements.

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.

Debt - 2016 Loan and Security Agreement (Details) - Line of Credit - Loan and Security Agreement 2016 - Revolving Credit Facility - USD ($)	Aug. 01, 2016	Aug. 01, 2006
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity	$ 50,000,000.0
Percentage increase in interest rate if adjusted EBITDA is negative at the end of the quarter		0.25%
Unused line of credit capacity fee		0.25%
First and second anniversary fee for line of credit		$ 31,250
Prime Rate
Line of Credit Facility [Line Items]
Debt instrument, basis spread	0.50%

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, 2019	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	4,902	5,447	6,093
Stock options outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	2,530	3,122	4,047
Restricted stock units outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	2,372	2,325	2,033
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)	0	0	13

Investments and Fair Value Measurements - Schedule of Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Losses	$ (10)	$ (176)
Fair Value	49,499	201,181
U.S. treasury
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Losses	(1)	0
Fair Value	12,926	637
U.S. agency securities
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Losses	(9)	(111)
Fair Value	36,322	153,212
Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Losses	0	(4)
Fair Value	0	6,086
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Losses	0	(61)
Fair Value	$ 251	$ 41,246

Net Loss Per Share

12 Months Ended

Dec. 31, 2019

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 shares of common stock, 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, 2019, 2018 and 2017, all potentially issuable shares of common stock 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,
	2019		2018		2017
Net loss	$	(4,552)	$	(221)	$	(8,969)
Weighted-average shares used in computing basic and diluted net loss per share	60,371		58,076		54,946
Basic and diluted net loss per share	$	(0.08)	$	—	$	(0.16)

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,
	2019	2018	2017
Stock options	2,530	3,122	4,047
Restricted stock units	2,372	2,325	2,033
Common stock warrants	—	—	13
Total	4,902	5,447	6,093

The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread of its Notes. The conversion spread will have a dilutive impact when the average market price of the

Company’s common stock for a given period exceeds the initial conversion price of $40.82 per share for the Notes. The potential shares of common stock from Notes were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive.

Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Interest Expense	$ 3,506	$ 3,486	$ 3,406	$ 3,396	$ 3,462	$ 3,595	$ 2,378	$ 810	$ 13,794	$ 10,245	$ 3,471
Convertible Senior Notes \| Convertible debt
Debt Instrument [Line Items]
Contractual interest expense									324	209
Amortization of debt discount									11,683	7,192
Amortization of issuance costs									1,105	689
Interest Expense									$ 13,112	$ 8,090

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Net operating loss and credit carryforwards	$ 69,718	$ 54,966
Accrued liabilities	4,184	4,271
Allowance for doubtful accounts	217	400
Deferred revenue	408	832
Accrued compensation	1,301	1,081
Long-term lease liabilities	1,992
Intangibles	88	4
Gross deferred tax assets	77,908	61,554
Valuation allowance	(59,939)	(47,127)
Net deferred tax assets	17,969	14,427
Deferred tax liabilities:
Property and equipment	(384)	(370)
Amortized intangibles	(68)	(155)
Other	(58)	0
Right of use assets	(1,755)
Deferred compensation - Current	(5,017)	0
Convertible senior notes	(10,687)	(13,902)
Gross deferred tax liabilities	(17,969)	(14,427)
Net deferred taxes	$ 0	$ 0

Commitments and Contingencies - State and Local Taxes and Surcharges (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Loss Contingencies [Line Items]
Sales tax liability - current	$ 1,885	$ 1,741
Contingent sales tax liabilities
Loss Contingencies [Line Items]
Sales tax liability	1,200	1,100
Sales tax liability - current	$ 400	$ 100

Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
U.S. federal									$ 0	$ 0	$ 0
U.S. state									61	28	42
Foreign									43	272	226
Total provision for income taxes	$ 74	$ 50	$ 29	$ (49)	$ 150	$ 41	$ 64	$ 45	$ 104	$ 300	$ 268

Financial Statement Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounts Receivable
Allowance for doubtful accounts	$ (11)	$ (12)		$ (33)	$ (12)
Accounts receivable, net	37,655	24,797	$ 24,797
Trade accounts receivable
Accounts Receivable
Trade accounts receivable	34,591	23,068
Unbilled trade accounts receivable, net of advance client deposits
Accounts Receivable
Trade accounts receivable	$ 3,075	$ 1,741

Stockholders' Equity - Capital Structure (Details) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Class of Stock [Line Items]
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 outstanding (in shares)	61,543,634	59,210,496
Common stock, shares issued (in shares)	61,543,634	59,210,496
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

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

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

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

Use of Estimates

Foreign Currency

Cash and Cash Equivalents

Marketable Investments

Concentration Risks

Concentration RisksFinancial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, marketable investments and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at three large reputable financial institutions.

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

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 single 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 single 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 three 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

Professional services are primarily billed on a fixed-fee basis. Revenue for professional services is recognized over time, as services are performed.

Deferred Revenue

Cost of Revenue

Research and Development

Research and DevelopmentResearch 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.

Advertising Costs

Advertising CostsThe Company primarily advertises its services through the internet and in conjunction with partners. Advertising costs are expensed as incurred

Commissions

CommissionsCommissions consist of variable compensation earned by sales personnel and referral fees the Company pays to third parties. Under Accounting Standard Codification 605 - Revenue Recognition (“ASC 605”), all sales commissions associated with the acquisition or renewal of a client contract were recognized as sales and marketing expense as incurred.

Stock-Based Compensation

Income Taxes

Comprehensive income (loss)

Comprehensive loss

Net Income (Loss) Per Share

Indemnification

services to be provided by the Company or from intellectual property infringement claims made by third parties.

Segment Information

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Company’s accounting for finance leases remained substantially unchanged. The adoption of ASC 842 did not have any impact on the Company's operating results or cash flows.

Recent Accounting Pronouncements Not Yet Effective

Description of Business and Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

Jan. 01, 2018

Dec. 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Jan. 01, 2019

Jan. 01, 2017

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Deferred tax asset

$ 77,908

$ 61,554

$ 77,908

$ 61,554

Deferred tax asset, valuation allowance

59,939

47,127

59,939

47,127

Deferred contract acquisition costs

$ 30,886

43,669

Revenue

92,263

$ 83,769

$ 77,436

$ 74,538

$ 72,335

$ 65,304

$ 61,120

$ 58,905

328,006

$ 257,664

$ 200,225

Operating lease liability

$ 9,393

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

ASU 2014-09

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Effect on financial statements

^[1]

24,145

Deferred contract acquisition costs

23,100

Revenue

1,000

ASU 2016-02

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Operating lease right-of-use asset gross

$ 8,400

Reversal of deferred rent

$ 600

Accumulated Deficit | ASU 2016-09

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Effect on financial statements

$ 200

Accumulated Deficit | ASU 2014-09

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Effect on financial statements

^[1]

$ 24,145

[1]

Effective January 2018, the Company adopted ASU 2014-09 - Revenue from Contracts with Customers: Topic 606. Accordingly, the Company recorded a net reduction to opening accumulated deficit of $24.1 million as of January 1, 2018 due to the cumulative impact of adopting the new standard. See Note 1 for more information.

Debt - Schedule of Equity Component of Debt (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Equity component of issuance of convertible senior notes	$ 30,346
Convertible debt \| Convertible Senior Notes
Debt Instrument [Line Items]
Equity component of issuance of convertible senior notes	30,346
Convertible debt \| Conversion option \| Convertible Senior Notes
Debt Instrument [Line Items]
Equity component of issuance of convertible senior notes	63,756
Convertible debt \| Payments for capped call transactions \| Convertible Senior Notes
Debt Instrument [Line Items]
Equity component of issuance of convertible senior notes	(31,412)
Convertible debt \| Issuance costs \| Convertible Senior Notes
Debt Instrument [Line Items]
Equity component of issuance of convertible senior notes	$ (1,998)

Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data (Unaudited)

Selected quarterly financial information for 2019 and 2018 is as follows:


	Quarter Ended
	Dec. 31, 2019		Sept. 30, 2019		Jun. 30, 2019		Mar. 31, 2019		Dec. 31, 2018		Sept. 30, 2018		Jun. 30, 2018		Mar. 31, 2018

	(unaudited, in thousands, except per share data)
Revenue	$	92,263	$	83,769	$	77,436	$	74,538	$	72,335	$	65,304	$	61,120	$	58,905
Cost of revenue ⁽¹⁾⁽²⁾	37,940		34,472		31,248		30,851		28,339		26,179		24,814		24,702
Gross profit	54,323		49,297		46,188		43,687		43,996		39,125		36,306		34,203
Operating expenses:
Research and development ⁽¹⁾⁽²⁾	12,168		11,665		10,811		10,546		8,451		9,582		8,367		7,772
Sales and marketing ⁽¹⁾⁽²⁾	25,627		25,014		23,250		21,701		18,793		17,818		17,912		17,478
General and administrative ⁽¹⁾⁽²⁾	13,496		12,146		12,042		11,762		10,766		10,746		9,833		9,103
Total operating expenses	51,291		48,825		46,103		44,009		38,010		38,146		36,112		34,353
Income (loss) from operations	3,032		472		85		(322)		5,986		979		194		(150)
Other income (expense), net:

Interest expense	(3,506)		(3,486)		(3,406)		(3,396)		(3,462)		(3,595)		(2,378)		(810)
Interest income and other	1,384		1,460		1,490		1,745		1,359		1,352		206		398
Total other income (expense), net	(2,122)		(2,026)		(1,916)		(1,651)		(2,103)		(2,243)		(2,172)		(412)
Income (loss) before income taxes	910		(1,554)		(1,831)		(1,973)		3,883		(1,264)		(1,978)		(562)
Provision for income taxes	74		50		29		(49)		150		41		64		45
Net income (loss)	$	836	$	(1,604)	$	(1,860)	$	(1,924)	$	3,733	$	(1,305)	$	(2,042)	$	(607)
Net income (loss) per share:
Basic	$	0.01	$	(0.03)	$	(0.03)	$	(0.03)	$	0.06	$	(0.02)	$	(0.04)	$	(0.01)
Diluted	$	0.01	$	(0.03)	$	(0.03)	$	(0.03)	$	0.06	$	(0.02)	$	(0.04)	$	(0.01)
Shares used in computing net income (loss) per share:
Basic	61,253		60,781		60,058		59,367		58,926		58,454		57,903		56,399
Diluted	65,962		60,781		60,058		59,367		62,071		58,454		57,903		56,399

(1) Included stock-based compensation as follows:


	Quarter Ended
	Dec. 31, 2019		Sept. 30, 2019		Jun. 30, 2019		Mar. 31, 2019		Dec. 31, 2018		Sept. 30, 2018		Jun. 30, 2018		Mar. 31, 2018

	(unaudited, in thousands)
Cost of revenue	$	1,745	$	1,702	$	1,658	$	1,229	$	942	$	860	$	853	$	678
Research and development	2,259		2,022		1,907		1,470		1,010		2,352		1,064		877
Sales and marketing	3,353		3,017		2,749		2,249		1,747		1,613		1,585		1,362
General and administrative	4,511		4,334		4,122		3,738		3,794		4,044		3,295		2,408
Total stock-based compensation	$	11,868	$	11,075	$	10,436	$	8,686	$	7,493	$	8,869	$	6,797	$	5,325

(2) Included depreciation and amortization expenses as follows:


	Quarter Ended
	Dec. 31, 2019		Sept. 30, 2019		Jun. 30, 2019		Mar. 31, 2019		Dec. 31, 2018		Sept. 30, 2018		Jun. 30, 2018		Mar. 31, 2018

	(unaudited, in thousands)
Cost of revenue	$	3,384	$	2,602	$	2,504	$	2,366	$	2,129	$	2,021	$	1,864	$	1,794
Research and development	461		450		450		440		331		278		233		194
Sales and marketing	2		2		1		1		6		30		30		29
General and administrative	477		443		406		385		372		338		322		303
Total depreciation and amortization	$	4,324	$	3,497	$	3,361	$	3,192	$	2,838	$	2,667	$	2,449	$	2,320

Investments and Fair Value Measurements - Schedule of Assets Carried at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Assets
Cash equivalents	$ 4,876	$ 12,019
Marketable investments	241,973	209,907
Level 1
Assets
Cash equivalents	2,179	11,471
Marketable investments	31,940	637
Level 2
Assets
Cash equivalents	2,697	548
Marketable investments	210,033	209,270
Level 3
Assets
Cash equivalents	0	0
Marketable investments	0	0
Money market funds
Assets
Cash equivalents	2,179	10,833
Money market funds \| Level 1
Assets
Cash equivalents	2,179	10,833
Money market funds \| Level 2
Assets
Cash equivalents	0	0
Money market funds \| Level 3
Assets
Cash equivalents	0	0
Commercial paper
Assets
Cash equivalents	2,697	498
Marketable investments	15,240	3,475
Commercial paper \| Level 1
Assets
Cash equivalents	0	0
Marketable investments	0	0
Commercial paper \| Level 2
Assets
Cash equivalents	2,697	498
Marketable investments	15,240	3,475
Commercial paper \| Level 3
Assets
Cash equivalents	0	0
Marketable investments	0	0
Certificates of deposit
Assets
Marketable investments	162	4,259
Certificates of deposit \| Level 1
Assets
Marketable investments	0	0
Certificates of deposit \| Level 2
Assets
Marketable investments	162	4,259
Certificates of deposit \| Level 3
Assets
Marketable investments	0	0
U.S. treasury
Assets
Cash equivalents		638
Marketable investments	31,940	637
U.S. treasury \| Level 1
Assets
Cash equivalents		638
Marketable investments	31,940	637
U.S. treasury \| Level 2
Assets
Cash equivalents		0
Marketable investments	0	0
U.S. treasury \| Level 3
Assets
Cash equivalents		0
Marketable investments	0	0
U.S. agency securities
Assets
Cash equivalents		50
Marketable investments	177,730	154,204
U.S. agency securities \| Level 1
Assets
Cash equivalents		0
Marketable investments	0
U.S. agency securities \| Level 2
Assets
Cash equivalents		50
Marketable investments	177,730
U.S. agency securities \| Level 3
Assets
Cash equivalents		0
Marketable investments	0
U.S. agency securities and government sponsored securities
Assets
Marketable investments		154,204
U.S. agency securities and government sponsored securities \| Level 1
Assets
Marketable investments		0
U.S. agency securities and government sponsored securities \| Level 2
Assets
Marketable investments		154,204
U.S. agency securities and government sponsored securities \| Level 3
Assets
Marketable investments		0
Municipal bonds
Assets
Marketable investments	3,015	6,086
Municipal bonds \| Level 1
Assets
Marketable investments	0	0
Municipal bonds \| Level 2
Assets
Marketable investments	3,015	6,086
Municipal bonds \| Level 3
Assets
Marketable investments	0	0
Corporate bonds
Assets
Marketable investments	13,886	41,246
Corporate bonds \| Level 1
Assets
Marketable investments	0	0
Corporate bonds \| Level 2
Assets
Marketable investments	13,886	41,246
Corporate bonds \| Level 3
Assets
Marketable investments	$ 0	$ 0

Financial Statement Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Property and equipment	$ 87,217	$ 67,362
Accumulated depreciation and amortization	(54,027)	(41,477)
Property and equipment, net	33,190	25,885
Computer and network equipment
Property, Plant and Equipment [Line Items]
Property and equipment	67,378	54,452
Computer software
Property, Plant and Equipment [Line Items]
Property and equipment	14,157	10,064
Internal-use software development costs
Property, Plant and Equipment [Line Items]
Property and equipment	500	500
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment	2,918	1,491
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property and equipment	$ 2,264	$ 855

ASC 842 Adoption Impact - Lease Cost and Supplemental Cash Flow (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Leases [Abstract]
Operating lease cost	$ 5,153	$ 0	$ 0
Finance lease cost:
Amortization of right-of-use assets	6,345	7,125	8,470
Interest on lease liabilities	704	1,347	1,737
Total finance lease cost	7,049	8,472	10,207
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used in operating leases	(5,237)	0	0
Financing cash used in finance leases	(7,054)	(8,544)	(7,068)
Right-of-use assets obtained in exchange for operating leases	5,737	0	0
Right of use assets obtained in exchange for finance leases	$ 0	$ 6,133	$ 9,261

Financial Statement Components - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			12 Months Ended
	Jul. 01, 2017	Jun. 30, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Depreciation and amortization of property and equipment			$ 13.5	$ 9.8	$ 7.8
Basic and diluted (in USD per share)			$ (0.08)	$ 0	$ (0.16)
Previously reported
Property, Plant and Equipment [Line Items]
Useful life, in years		3 years
Service life \| Adjustment
Property, Plant and Equipment [Line Items]
Depreciation and amortization of property and equipment				$ (1.6)
Basic and diluted (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

ASC 606 Adoption Impact and Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018
Revenue from Contract with Customer [Abstract]
Accounts receivable, net	$ 37,655	$ 24,797	$ 24,797
Deferred contract acquisition costs, current	13,014	9,372	9,372
Deferred contract acquisition costs, non-current	30,655	21,514	21,514
Total deferred contract acquisition costs	43,669		30,886
Contract assets (included in prepaid expenses and other current assets)	825	330	330
Contract liabilities (deferred revenue)	24,681	$ 17,391	17,391
Net contract assets (liabilities)	$ (23,856)		$ (17,061)

Debt - Convertible Senior Notes and Capped Call (Details) - Convertible debt $ / shares in Units, shares in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	May 31, 2018 USD ($) day $ / shares	Dec. 31, 2019 USD ($) day $ / shares	Dec. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($) shares
Debt Instrument [Line Items]
Payment on debt issuance cost				$ 8,039,000
Convertible Senior Notes
Debt Instrument [Line Items]
Stated interest rate on debt		0.125%	0.125%
Proceeds from issuance of debt	$ 250,800,000
Conversion ratio on convertible debt			24.4978000
Conversion price on convertible debt (in USD per share) \| $ / shares		$ 40.82	$ 40.82
Conversion price per share requiring conversion (in USD per share) \| $ / shares		$ 53.07	$ 53.07
Sinking fund payment	$ 0
Conversion option		$ 63,756,000	$ 63,756,000	63,756,000
Effective interest rate on debt	6.39%
Payment on debt issuance cost	$ 8,000,000.0
Debt issuance costs	$ 6,000,000.0	$ 4,265,000	$ 4,265,000	$ 5,423,000
Cap price of the Capped Call Transactions (in dollars per share) \| $ / shares	$ 62.80
Number of shares covered in the Capped Call Transactions (in shares) \| shares				6.3
Cost of Capped Call Transactions recorded in additional paid in capital				$ 31,400,000
Convertible Senior Notes \| Fundamental change event
Debt Instrument [Line Items]
Debt redemption price as percentage of principal amount	100.00%
Convertible Senior Notes \| On or after May 5, 2021
Debt Instrument [Line Items]
Number of trading days \| day	20	20
Number of consecutive trading days \| day	30	30
Threshold percentage of stock price trigger	130.00%
Debt redemption price as percentage of principal amount	100.00%
Convertible, term one \| Convertible Senior Notes
Debt Instrument [Line Items]
Number of trading days \| day	20
Number of consecutive trading days \| day	30
Threshold percentage of stock price trigger	130.00%	130.00%
Convertible, term two \| Convertible Senior Notes
Debt Instrument [Line Items]
Number of trading days \| day	5
Number of consecutive trading days \| day	5
Threshold percentage of stock price trigger	98.00%

Stockholders' Equity - Stock Option Activities (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Additional information pertaining to stock options
Fair market value of common stock (in usd per share)	$ 65.58
Stock options outstanding
Number of Shares
Outstanding, beginning balance (in shares)	3,122
Options granted (in shares)	353
Options exercised (in shares)	(932)
Options forfeited or expired (in shares)	(13)
Outstanding, ending balance (in shares)	2,530	3,122
Weighted Average Exercise Price
Outstanding, beginning balance, weighted-average exercise price (in USD per share)	$ 12.52
Options granted, weighted-average exercise price (in USD per share)	51.30
Options exercised, weighted-average exercise price (in USD per share)	8.27
Options forfeited or expired, weighted-average exercise price (in USD per share)	30.18
Outstanding, ending balance, weighted-average exercise price (in USD per share)	$ 19.38	$ 12.52
Weighted average remaining contractual life	6 years
Outstanding, Aggregate intrinsic value	$ 116,874
Vested and expected to vest as of December 31, 2019
Vested and expected to vest (in shares)	2,530
Outstanding, weighted-average exercise price (in USD per share)	$ 19.38
Outstanding, weighted average remaining contractual life	6 years
Vested and expected to vest, aggregate intrinsic value	$ 116,874
Additional information pertaining to stock options
Exercisable (in shares)	1,744
Exercisable, weighted-average exercise price (in USD per share)	$ 11.26
Exercisable, weighted average remaining contractual life	4 years 10 months 24 days
Exercisable, aggregate intrinsic value	$ 94,722
Weighted average grant date fair value per share of options granted (in USD per share)	$ 24.06	$ 16.33	$ 8.81
Intrinsic value of options exercised	$ 42,204	$ 34,785	$ 33,820
Total fair value of options vested during the period	5,342	4,744	7,296
Cash received from options exercised	$ 7,705	$ 7,779	$ 6,047

Selected Quarterly Financial Data (Unaudited) - Allocation of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Total stock-based compensation	$ 11,868	$ 11,075	$ 10,436	$ 8,686	$ 7,493	$ 8,869	$ 6,797	$ 5,325	$ 42,065	$ 28,484	$ 15,343
Cost of revenue
Total stock-based compensation	1,745	1,702	1,658	1,229	942	860	853	678
Research and development
Total stock-based compensation	2,259	2,022	1,907	1,470	1,010	2,352	1,064	877
Sales and marketing
Total stock-based compensation	3,353	3,017	2,749	2,249	1,747	1,613	1,585	1,362
General and administrative
Total stock-based compensation	$ 4,511	$ 4,334	$ 4,122	$ 3,738	$ 3,794	$ 4,044	$ 3,295	$ 2,408

Geographical Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Geographical Information

The following table summarizes revenues by geographic region based on client billing address (in thousands):


	Year Ended December 31,
	2019		2018		2017
United States	$	301,536	$	239,378	$	188,303
International	26,470		18,286		11,922
Total revenue	$	328,006	$	257,664	$	200,225

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


	December 31,
	2019		2018
United States	$	29,246	$	23,931
International	3,944		1,954
Property and equipment, net	$	33,190	$	25,885

Income Taxes - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Operating Loss Carryforwards [Line Items]
U.S. federal income tax rate (percent)	21.00%
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
Federal
Operating Loss Carryforwards [Line Items]
Increase (decrease) in valuation allowance for deferred tax assets	$ (12.8)	$ (5.1)
Net operating loss carryforwards	274.4
Federal \| Research and Development Tax Credit Carryforward
Operating Loss Carryforwards [Line Items]
Research and development credit carryforwards	4.4
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	154.5
State \| Research and Development Tax Credit Carryforward
Operating Loss Carryforwards [Line Items]
Research and development credit carryforwards	$ 3.5

Investments and Fair Value Measurements - Schedule of Marketable Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Cost	$ 241,853	$ 210,082
Gross Unrealized Gains	130	1
Gross Unrealized Losses	(10)	(176)
Fair Value	241,973	209,907
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Cost	161	4,259
Gross Unrealized Gains	1	0
Gross Unrealized Losses	0	0
Fair Value	162	4,259
U.S. treasury
Debt Securities, Available-for-sale [Line Items]
Cost	31,933	637
Gross Unrealized Gains	8	0
Gross Unrealized Losses	(1)	0
Fair Value	31,940	637
U.S. agency securities
Debt Securities, Available-for-sale [Line Items]
Cost	177,629	154,314
Gross Unrealized Gains	110	1
Gross Unrealized Losses	(9)	(111)
Fair Value	177,730	154,204
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Cost	15,240	3,475
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	15,240	3,475
Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Cost	3,014	6,090
Gross Unrealized Gains	1	0
Gross Unrealized Losses	0	(4)
Fair Value	3,015	6,086
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Cost	13,876	41,307
Gross Unrealized Gains	10	0
Gross Unrealized Losses	0	(61)
Fair Value	$ 13,886	$ 41,246

Commitments and Contingencies - Commitments and Leases (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Promissory note payable	$ 258,750

ASC 842 Adoption Impact - Narrative (Details) $ in Thousands	Dec. 31, 2019 USD ($) lease	Jan. 01, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Operating Lease, Right-of-Use Asset	$ 8,746
Number of operating leases not yet commenced (in leases) \| lease	1
Amount of lease obligation, not yet commenced	$ 1,600
Operating lease not yet commenced, term of lease	3 years 6 months
ASU 2016-02
Lessee, Lease, Description [Line Items]
Operating lease right-of-use asset gross		$ 8,400
Reversal of deferred rent		600
Operating Lease, Right-of-Use Asset	$ 8,746	$ 7,800
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	1 year
Operating lease, extension term	3 years
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	5 years
Operating lease, extension term	5 years

Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

0.125% Convertible Senior Notes and Capped Call

In May 2018, the Company issued $258.8 million aggregate principal amount of 0.125% convertible senior notes (“Notes”) due May 1, 2023 in a private offering. The Notes are the Company’s senior unsecured obligations and bear interest at a fixed rate of 0.125% per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on November 1, 2018. The total net proceeds from the offering, after deducting initial purchase discounts and estimated debt issuance costs, were approximately $250.8 million.

Each $1,000 principal amount of the Notes is initially convertible into 24.4978 shares of the Company’s common stock (the “Conversion Option”), which is equivalent to an initial conversion price of approximately $40.82 per share of common stock, subject to adjustment upon the occurrence of specified events. The Notes are convertible, in multiples of $1,000 principal amount, at the option of the holders at any time prior to the close of business on the business day immediately preceding November 1, 2022, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ended on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price (as defined in the indenture governing the Notes) per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate in effect on each such trading day; (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after November 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. If the Company undergoes a fundamental change (as defined in the indenture governing the Notes), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Notes, in principal amounts of $1,000 or a multiple thereof, at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their Notes in connection with such corporate event or during the relevant redemption period.

During each of the third and fourth quarters of 2019, one of the conversion features of the Notes was triggered as the last reported sale price of the Company’s common stock was greater than $53.07 per share, which

represents 130% of the initial conversion price of $40.82 per share, for at least 20 days in the period of 30 consecutive trading days ended on the last trading day of each of the third and fourth quarter of 2019, respectively, and therefore, the Notes were convertible, in multiples of $1,000 principal amount, at the option of the Note holders between October 1, 2019 and December 31, 2019, and are currently convertible between January 1, 2020 and March 31, 2020. The Company received elections to convert a limited number of Notes in the fourth quarter of 2019. The Company elected to satisfy the conversion obligation through the payment of cash to such Note holders. The Company will continue to classify its Notes as long-term debt.

The Company may not redeem the Notes prior to May 5, 2021. The Company may redeem for cash all or any portion of the Notes, at its option, on or after May 5, 2021 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending not more than two trading days immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the Notes.

The Notes are the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

In accounting for the transaction, the Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The carrying amount of the equity component representing the conversion option was $63.8 million and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component was recorded in additional paid-in-capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (the “Debt Discount”) is being amortized to interest expense over the contractual term of the Notes at an effective interest rate of 6.39%.

In accounting for the debt issuance cost of $8.0 million related to the Notes, the Company allocated the total amount incurred to the liability and equity components of the Notes based on their relative values. Issuance costs attributable to the liability component were $6.0 million and are being amortized to interest expense using the effective interest method over the contractual term of the Notes. Issuance costs attributable to the equity component were netted with the equity component in additional paid-in-capital.

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


	December 31, 2019		December 31, 2018
Principal	$	258,750	$	258,750
Unamortized debt discount	(44,881)		(56,564)
Unamortized issuance costs	(4,265)		(5,423)
Net carrying amount	$	209,604	$	196,763

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


	December 31, 2019		December 31, 2018
Debt discount for conversion option	$	63,756	$	63,756
Issuance costs	(1,998)		(1,998)
Net carrying amount	$	61,758	$	61,758

Interest expense related to the Notes was as follows (in thousands):


	Year Ended
	December 31, 2019		December 31, 2018
Contractual interest expense	$	324	$	209
Amortization of debt discount	11,683		7,192
Amortization of issuance costs	1,105		689
Total interest expense	$	13,112	$	8,090

In connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The initial cap price of the Capped Call Transactions is $62.80 per share, and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions cover, subject to anti-dilution adjustments, approximately 6.3 million shares of the Company’s common stock. For accounting purposes, the Capped Call Transactions are separate transactions, and not part of the terms of the Notes. As these transactions meet certain accounting criteria, the Capped Call Transactions are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $31.4 million incurred in connection with the Capped Call Transactions was recorded as a reduction to additional paid-in capital.

The net impact to the Company’s stockholders’ equity, included in additional paid-in capital, relating to the issuance of the Notes issued in May 2018 was as follows (in thousands):


	December 31, 2018
Conversion option	$	63,756
Payments for capped call transactions	(31,412)
Issuance costs	(1,998)
Total	$	30,346

Maturity of the Company’s outstanding debt as of December 31, 2019 was as follows (in thousands):


Period	Amount to Mature
2023	$	258,750
Total	$	258,750

2016 Loan and Security Agreement

In August 2016, 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 provided for a revolving line of credit, of up to $50.0 million and was scheduled to mature on August 1, 2019. The revolving line of credit bore a variable interest rate equal to the prime rate plus 0.50%, subject to a 0.25% increase if the Company’s adjusted EBITDA was negative at the end of any fiscal quarter. The Company was also required to pay a commitment fee equal to 0.25% of the unused portion of the revolving line of credit as well as an anniversary fee of $31,250 on each of August 1, 2017 and 2018. The obligations of the Company under the 2016 Loan and Security Agreement were guaranteed by its subsidiary, Five9 Acquisition LLC, and were secured by a first priority lien on substantially all of the assets of the Company and Five9 Acquisition LLC. In May 2018, the Company paid off the then outstanding principal balance of the revolving line of credit and, in July 2018, the Company terminated the 2016 Loan and Security Agreement.

Commitments and Contingencies - Hosting, Telecommunications Usage and Maintenance Services (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Hosting Services
Unrecorded Unconditional Purchase Obligation [Line Items]
2020	$ 307
2021	500
2022	700
2023	0
Total future minimum payment	1,507
Telecommunication Usage Services
Unrecorded Unconditional Purchase Obligation [Line Items]
2020	2,708
2021	1,626
2022	384
2023	4
Total future minimum payment	4,722
Equipment Maintenance Services
Unrecorded Unconditional Purchase Obligation [Line Items]
2020	140
2021	25
2022	0
2023	0
Total future minimum payment	$ 165

Income Taxes - Schedule of Components of Loss before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
United States	$ (5,340)	$ (638)	$ (9,434)
International	892	717	733
Income (loss) before income taxes	$ (4,448)	$ 79	$ (8,701)

Acquisition of Whendu LLC	12 Months Ended
Acquisition of Whendu LLC	Dec. 31, 2019
Asset Acquisitions [Abstract]
Acquisition of Whendu LLC	Acquisition of Whendu LLCIn November 2019, the Company acquired certain assets from Whendu LLC (“Whendu”), including Whendu’s iPaaS platform, which the Company has determined to be an asset acquisition. The purchase price, including the Company’s transaction costs, was approximately $15.8 million, of which $15.3 million was allocated to the Whendu iPaaS platform and $0.5 million was allocated to an assembled workforce, on a relative fair value basis. The assets will be amortized on a straight-line basis over their useful lives of four and three years, respectively.

Commitments and Contingencies - Legal Matters (Details) - USD ($) $ in Millions		1 Months Ended	12 Months Ended
	Mar. 31, 2017	Jun. 30, 2019	Dec. 31, 2019
Loss Contingencies [Line Items]
Settlement paid		$ 0.4
Settled Litigation \| Melcher Litigation
Loss Contingencies [Line Items]
Litigation settlement amount awarded to other party	$ 1.7
Indemnification Agreement
Loss Contingencies [Line Items]
Legal fees			$ 1.4

Stockholders' Equity

12 Months Ended

Dec. 31, 2019

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, 2019 and 2018, the Company had 61,543,634 and 59,210,496 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, 2019 and 2018, there were no shares of preferred stock issued and outstanding.

Common Stock Reserved for Future Issuance

Shares of common stock reserved for future issuance related to outstanding equity awards and employee equity incentive plans as of December 31, 2019, were as follows (in thousands):


						Common Stock Reserved
Stock options outstanding						2,530
Restricted stock units outstanding						2,372
Shares available for future grant under 2014 Plan						9,814
Shares available for future issuance under ESPP						2,085
Total shares of common stock reserved						16,801

Equity Incentive Plans

Prior to the Company’s 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, 3,077,181 additional shares were reserved under the 2014 Plan on January 1, 2020.

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 RSUs, 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, 2019 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, 2018	3,122	$	12.52
Options granted	353	51.30
Options exercised	(932)	8.27
Options forfeited or expired	(13)	30.18
Outstanding as of December 31, 2019	2,530	19.38		6.0	$	116,874
Vested and expected to vest as of December 31, 2019	2,530	19.38		6.0	116,874
Exercisable as of December 31, 2019	1,744	11.26		4.9	94,722

(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 $65.58 per share as of December 31,

2019 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,
	2019		2018		2017
Weighted average grant date fair value per share of options granted	$	24.06	$	16.33	$	8.81
Intrinsic value of options exercised ⁽¹⁾	42,204		34,785		33,820
Total fair value of options vested during the period	5,342		4,744		7,296
Cash received from options exercised	7,705		7,779		6,047


(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, 2019 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, 2018	2,325	$	25.36
RSUs granted	1,445	53.33
RSUs vested and released	(1,204)	26.29
RSUs forfeited	(194)	32.60
Outstanding as of December 31, 2019	2,372	41.32

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


	Year Ended December 31,
	2019		2018		2017
Weighted average grant date fair value per share of RSUs granted	$	53.33	$	32.30	$	18.29
Total fair value of RSUs vested during the period	68,072		41,245		21,161

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, 615,436 additional shares were reserved under the ESPP on January 1, 2020.

During 2019, 197,962 shares were purchased by employees under the ESPP at a weighted average price of 39.52 per share.

Stock-Based Compensation

Stock-based compensation expenses for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cost of revenue	$	6,334	$	3,333	$	2,202
Research and development ⁽¹⁾	7,658		5,303		3,042
Sales and marketing	11,368		6,307		4,364
General and administrative ⁽²⁾	16,705		13,541		5,735
Total stock-based compensation	$	42,065	$	28,484	$	15,343

(1)Includes an incremental stock-based compensation cost due to modification of certain stock-based awards of a former executive of the Company in the third quarter of 2018.

(2)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 in the fourth quarter of 2017.

As of December 31, 2019, 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	$	13,409	$	91,395	$	1,455
Weighted-average amortization period	2.7 years		2.9 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 weighting of the Company’s historical volatility and 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, 2019, 2018 and 2017 were as follows:


Stock Options	Year Ended December 31,
	2019	2018	2017
Expected term (years)	6.1	6.0	5.9
Volatility	46%	45%	49%
Risk-free interest rate	2.3%	2.8%	2.1%
Dividend yield	—	—	—


ESPP	Granted In
	November 2019	May 2019	November 2018	May 2018	November 2017	May 2017
Expected term (years)	0.5	0.5	0.5	0.5	0.5	0.5
Volatility	46%	51%	37%	36%	36%	43%
Risk-free interest rate	2.4%	2.5%	2.1%	1.4%	1.4%	1.0%
Dividend yield	—	—	—	—	—	—

Stockholders' Equity - Option and ESPP Valuation Assumptions (Details)	1 Months Ended						12 Months Ended
	Nov. 30, 2019	May 31, 2019	Nov. 30, 2018	May 31, 2018	Nov. 30, 2017	May 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock options outstanding
Class of Stock [Line Items]
Expected term (years)							6 years 1 month 6 days	6 years	5 years 10 months 24 days
Volatility							46.00%	45.00%	49.00%
Risk-free interest rate							2.30%	2.80%	2.10%
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	46.00%	51.00%	37.00%	36.00%	36.00%	43.00%
Risk-free interest rate	2.40%	2.50%	2.10%	1.40%	1.40%	1.00%
Dividend yield	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Financial Statement Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018
Financial Statement Components [Abstract]
Prepaid expenses	$ 4,901	$ 5,005
Other current assets	4,930	2,679
Contract assets (included in prepaid expenses and other current assets)	825	330	$ 330
Prepaid expenses and other current assets	$ 10,656	$ 8,014

Description of Business and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance, beginning of period	$ 12	$ 33	$ 12
Add: bad debt expense	90	90	95
Less: write-offs, net of recoveries	(91)	(111)	(74)
Balance, end of period	$ 11	$ 12	$ 33

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, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 92,263	$ 83,769	$ 77,436	$ 74,538	$ 72,335	$ 65,304	$ 61,120	$ 58,905	$ 328,006	$ 257,664	$ 200,225
Cost of revenue	37,940	34,472	31,248	30,851	28,339	26,179	24,814	24,702	134,511	104,034	83,104
Gross profit	54,323	49,297	46,188	43,687	43,996	39,125	36,306	34,203	193,495	153,630	117,121
Operating expenses:
Research and development	12,168	11,665	10,811	10,546	8,451	9,582	8,367	7,772	45,190	34,172	27,120
Sales and marketing	25,627	25,014	23,250	21,701	18,793	17,818	17,912	17,478	95,592	72,001	66,570
General and administrative	13,496	12,146	12,042	11,762	10,766	10,746	9,833	9,103	49,446	40,448	29,151
Total operating expenses	51,291	48,825	46,103	44,009	38,010	38,146	36,112	34,353	190,228	146,621	122,841
Income (loss) from operations	3,032	472	85	(322)	5,986	979	194	(150)	3,267	7,009	(5,720)
Other income (expense), net:
Interest expense	(3,506)	(3,486)	(3,406)	(3,396)	(3,462)	(3,595)	(2,378)	(810)	(13,794)	(10,245)	(3,471)
Interest income and other	1,384	1,460	1,490	1,745	1,359	1,352	206	398	6,079	3,315	490
Total other income (expense), net	(2,122)	(2,026)	(1,916)	(1,651)	(2,103)	(2,243)	(2,172)	(412)	(7,715)	(6,930)	(2,981)
Income (loss) before income taxes	910	(1,554)	(1,831)	(1,973)	3,883	(1,264)	(1,978)	(562)	(4,448)	79	(8,701)
Provision for income taxes	74	50	29	(49)	150	41	64	45	104	300	268
Net loss	$ 836	$ (1,604)	$ (1,860)	$ (1,924)	$ 3,733	$ (1,305)	$ (2,042)	$ (607)	$ (4,552)	$ (221)	$ (8,969)
Net income (loss) per share:
Basic (in USD per share)	$ 0.01	$ (0.03)	$ (0.03)	$ (0.03)	$ 0.06	$ (0.02)	$ (0.04)	$ (0.01)
Diluted (in USD per share)	$ 0.01	$ (0.03)	$ (0.03)	$ (0.03)	$ 0.06	$ (0.02)	$ (0.04)	$ (0.01)
Shares used in computing net loss per share:
Basic (in shares)	61,253	60,781	60,058	59,367	58,926	58,454	57,903	56,399
Diluted (in shares)	65,962	60,781	60,058	59,367	62,071	58,454	57,903	56,399

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum lease payments for hosting, telecommunication usage, and maintenance services

As of December 31, 2019, future minimum payments under these arrangements were as follows (in thousands):


Year Ending December 31,	Hosting Services		Telecommunication Usage Services		Equipment Maintenance Services
2020	$	307	$	2,708	$	140
2021	500		1,626		25
2022	700		384		—
2023	—		4		—
Total future minimum payment	$	1,507	$	4,722	$	165

Selected Quarterly Financial Data (Unaudited) - Allocation of Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Total depreciation and amortization	$ 4,324	$ 3,497	$ 3,361	$ 3,192	$ 2,838	$ 2,667	$ 2,449	$ 2,320	$ 14,374	$ 10,274	$ 8,314
Cost of revenue
Total depreciation and amortization	3,384	2,602	2,504	2,366	2,129	2,021	1,864	1,794
Research and development
Total depreciation and amortization	461	450	450	440	331	278	233	194
Sales and marketing
Total depreciation and amortization	2	2	1	1	6	30	30	29
General and administrative
Total depreciation and amortization	$ 477	$ 443	$ 406	$ 385	$ 372	$ 338	$ 322	$ 303

Income Taxes - Schedule of Effective Income Tax Amount Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
U.S. federal tax at statutory rate									$ (934)	$ 17	$ (2,958)
U.S. state income taxes									(65)	2,539	(708)
Non-deductible expense (benefit)									5,899	14,485	(5,673)
Research and development credit									(860)	(339)	(402)
Stock-based compensation									(16,619)	(11,360)	(14,622)
Impact of 2017 Tax Act									0	0	25,952
Other									(129)	106	2
Change in valuation allowance									12,812	(5,148)	(1,323)
Total provision for income taxes	$ 74	$ 50	$ 29	$ (49)	$ 150	$ 41	$ 64	$ 45	$ 104	$ 300	$ 268

Subsequent Events (Details) $ in Millions	Jan. 15, 2020 USD ($)
Coordinated Systems, Inc \| Subsequent Event
Subsequent Event [Line Items]
Cash consideration	$ 32.0

ASC 842 Adoption Impact - Balance Sheet Impacts (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset	$ 8,746
Operating lease liabilities	5,064
Operating lease liabilities — less current portion	4,329
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset	8,746	$ 7,800
Operating lease liabilities	5,064
Operating lease liabilities — less current portion	$ 4,329

Description of Business and Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years 9 months 18 days
Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life	7 years

Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2019	Feb. 21, 2020	Jun. 28, 2019
Cover page.
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	001-36383
Entity Registrant Name	Five9, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3394123
Entity Address, Address Line One	Bishop Ranch 8
Entity Address, Address Line Two	4000 Executive Parkway
Entity Address, Address Line Three	Suite 400
Entity Address, City or Town	San Ramon
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94583
City Area Code	925
Local Phone Number	201-2000
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	FIVN
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 2,468.4
Entity Common Stock, Shares Outstanding		61,583,496
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement for the 2020 Annual Stockholders’ Meeting, which the registrant expects to file with the Securities and Exchange Commission within 120 days of December 31, 2019, are incorporated by reference into Part III (Items 10, 11,12, 13 and 14) of this Annual Report on Form 10-K.
Entity Central Index Key	0001288847
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Amendment Flag	false

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Schedule of common stock reserved for future issuance

Shares of common stock reserved for future issuance related to outstanding equity awards and employee equity incentive plans as of December 31, 2019, were as follows (in thousands):


						Common Stock Reserved
Stock options outstanding						2,530
Restricted stock units outstanding						2,372
Shares available for future grant under 2014 Plan						9,814
Shares available for future issuance under ESPP						2,085
Total shares of common stock reserved						16,801

Schedule of stock option activities

A summary of the Company’s stock option activity during the year ended December 31, 2019 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, 2018	3,122	$	12.52
Options granted	353	51.30
Options exercised	(932)	8.27
Options forfeited or expired	(13)	30.18
Outstanding as of December 31, 2019	2,530	19.38		6.0	$	116,874
Vested and expected to vest as of December 31, 2019	2,530	19.38		6.0	116,874
Exercisable as of December 31, 2019	1,744	11.26		4.9	94,722

(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 $65.58 per share as of December 31,

2019 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,
	2019		2018		2017
Weighted average grant date fair value per share of options granted	$	24.06	$	16.33	$	8.81
Intrinsic value of options exercised ⁽¹⁾	42,204		34,785		33,820
Total fair value of options vested during the period	5,342		4,744		7,296
Cash received from options exercised	7,705		7,779		6,047


(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, 2019 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, 2018	2,325	$	25.36
RSUs granted	1,445	53.33
RSUs vested and released	(1,204)	26.29
RSUs forfeited	(194)	32.60
Outstanding as of December 31, 2019	2,372	41.32

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


	Year Ended December 31,
	2019		2018		2017
Weighted average grant date fair value per share of RSUs granted	$	53.33	$	32.30	$	18.29
Total fair value of RSUs vested during the period	68,072		41,245		21,161

Schedule of stock-based compensation expense

Stock-based compensation expenses for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cost of revenue	$	6,334	$	3,333	$	2,202
Research and development ⁽¹⁾	7,658		5,303		3,042
Sales and marketing	11,368		6,307		4,364
General and administrative ⁽²⁾	16,705		13,541		5,735
Total stock-based compensation	$	42,065	$	28,484	$	15,343

(1)Includes an incremental stock-based compensation cost due to modification of certain stock-based awards of a former executive of the Company in the third quarter of 2018.

Schedule of unrecognized compensation expense


	Stock Option		RSU		ESPP
Unrecognized stock-based compensation expense	$	13,409	$	91,395	$	1,455
Weighted-average amortization period	2.7 years		2.9 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, 2019, 2018 and 2017 were as follows:


Stock Options	Year Ended December 31,
	2019	2018	2017
Expected term (years)	6.1	6.0	5.9
Volatility	46%	45%	49%
Risk-free interest rate	2.3%	2.8%	2.1%
Dividend yield	—	—	—

Schedule of valuation assumptions for stock option purchase plan


ESPP	Granted In
	November 2019	May 2019	November 2018	May 2018	November 2017	May 2017
Expected term (years)	0.5	0.5	0.5	0.5	0.5	0.5
Volatility	46%	51%	37%	36%	36%	43%
Risk-free interest rate	2.4%	2.5%	2.1%	1.4%	1.4%	1.0%
Dividend yield	—	—	—	—	—	—

ASC 842 Adoption Impact

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

ASC 842 Adoption Impact

ASC 842 Adoption ImpactThe Company has leases for offices, data centers and other computer and networking equipment that expire at various dates through 2024. The Company’s leases have remaining terms of one to five years, some of the leases include a Company option to extend the leases for up to three to five years, and some of the leases include the option to terminate the leases upon 30-days’ notice.

The Company adopted ASC 842 using the modified retrospective method on January 1, 2019. The Company elected the available practical expedients, implemented internal controls, and a lease accounting system to enable the preparation of financial information upon adoption. The adoption of ASC 842 resulted in the recognition of operating lease liabilities of $8.4 million and operating lease right-of-use, or ROU, assets of the same amount. Existing deferred rent of $0.6 million was recorded as an offset to ROU assets, resulting in net ROU assets of $7.8 million. The Company’s accounting for finance leases remained substantially unchanged. The adoption of ASC 842 did not have any impact on the Company’s operating results or cash flows.

The components of lease expenses were as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Operating lease cost	$	5,153	$	—	$	—
Finance lease cost:
Amortization of right-of-use assets	$	6,345	$	7,125	$	8,470
Interest on finance lease liabilities	704		1,347		1,737
Total finance lease cost	$	7,049	$	8,472	$	10,207

Supplemental cash flow information related to leases was as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used in operating leases	$	(5,237)	$	—	$	—
Financing cash used in finance leases	(7,054)		(8,544)		(7,068)
Right of use assets obtained in exchange for lease obligations:
Operating leases	5,737		—		—
Finance leases	—		6,133		9,261

Supplemental balance sheet information related to leases was as follows (in thousands):


	December 31,
	2019		2018
Operating leases
Operating lease right-of-use assets	$	8,746	$	—

Operating lease liabilities:	$	5,064	$	—
Operating lease liabilities — less current portion	4,329		—
Total operating lease liabilities	$	9,393	$	—
Finance leases
Property and equipment, gross	$	46,671	$	47,383
Less: accumulated depreciation and amortization	(39,190)		(33,547)
Property and equipment, net	$	7,481	$	13,836
Finance lease liabilities:
Finance leases	$	3,518	$	6,647
Finance lease liabilities — less current portion	809		4,509
Total finance lease liabilities	$	4,327	$	11,156

Weighted average remaining terms were as follows (in years):

December 31,

2019

2018

Weighted average remaining lease term

Operating leases

2.7 years

2.0 years

Finance leases

1.1 years

1.8 years

Weighted average discount rates were as follows:


	December 31,
	2019		2018
Weighted average discount rate
Operating leases	4.7	%	—	%
Finance leases	7.5	%	9.0	%

Maturities of lease liabilities were as follows (in thousands):


Year Ending December 31,	Operating Leases		Finance Leases
2020	$	5,376	$	3,778
2021	2,070		825
2022	986		—
2023	855		—
2024	703		—
Total future minimum lease payment	9,990		4,603
Less: imputed interest	(597)		(276)
Total	$	9,393	$	4,327

As of December 31, 2019, the Company had one additional operating lease for office space that had not yet commenced, representing a total commitment over its term of $1.6 million. This operating lease commenced in January 2020 with a lease term of 3.5 years.

Impact on Consolidated Balance Sheet


	December 31, 2019
(in thousands)	As Reported		Balances without adoption of ASC 842		Effect of Change Higher (Lower)
Assets:
Operating lease right-of-use-assets	$	8,746	$	—	$	8,746
Liabilities
Operating lease liabilities	5,064		—		5,064
Operating lease liabilities — less current portion	4,329		—		4,329

Change in Accounting Policy

Leases

The Company determines if an arrangement is or contains a lease at inception. Operating leases are included in operating lease ROU assets and operating lease liabilities in the Company’s condensed consolidated balance sheets. Finance leases are included in property and equipment, and finance lease liabilities in the Company’s condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on an amount equal to the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company uses the implicit rate when it is readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.

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, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings Per Share [Abstract]
Net loss	$ 836	$ (1,604)	$ (1,860)	$ (1,924)	$ 3,733	$ (1,305)	$ (2,042)	$ (607)	$ (4,552)	$ (221)	$ (8,969)
Weighted-average shares used in computing basic and diluted net loss per share (in shares)									60,371	58,076	54,946
Basic and diluted (in USD per share)									$ (0.08)	$ 0	$ (0.16)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Acquisition of Whendu LLC (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
Acquisition of Whendu LLC (Details) - USD ($) $ in Millions	Nov. 30, 2019	Dec. 31, 2019
Asset Acquisitions Line Items [Line Items]
Payments for asset acquisition	$ 15.8
Useful life		3 years 9 months 18 days
iPaaS Platform
Asset Acquisitions Line Items [Line Items]
Assets acquired	$ 15.3
Useful life	4 years	3 years 10 months 24 days
Acquired workforce
Asset Acquisitions Line Items [Line Items]
Assets acquired	$ 0.5
Useful life	3 years	2 years 10 months 24 days

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
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)	61,543,634	59,210,496
Common stock, shares outstanding (in shares)	61,543,634	59,210,496

Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Convertible debt
Payment on debt issuance cost	$ 8,039

Description of Business and Summary of Significant Accounting Policies - Concentration Risks (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Cash, uninsured amount	$ 77.6	$ 81.0

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

12 Months Ended

Dec. 31, 2019

Accounting Policies [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,
	2019		2018		2017
Balance, beginning of period	$	12	$	33	$	12
Add: bad debt expense	90		90		95
Less: write-offs, net of recoveries	(91)		(111)		(74)
Balance, end of period	$	11	$	12	$	33

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,
	2019		2018
Computer and network equipment	$	67,378	$	54,452
Computer software	14,157		10,064
Internal-use software development costs	500		500
Furniture and fixtures	2,918		1,491
Leasehold improvements	2,264		855
Property and equipment	87,217		67,362
Accumulated depreciation and amortization	(54,027)		(41,477)
Property and equipment, net	$	33,190	$	25,885

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of components of loss before income taxes

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


	Year Ended December 31,
	2019		2018		2017
United States	$	(5,340)	$	(638)	$	(9,434)
International	892		717		733
Income (loss) before income taxes	$	(4,448)	$	79	$	(8,701)

Schedule of components of provision for income taxes

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


	Year Ended December 31,
	2019		2018		2017
Current:
U.S. federal	$	—	$	—	$	—
U.S. state	61		28		42
Foreign	43		272		226
Total provision for income taxes	$	104	$	300	$	268

Schedule of effective income tax reconciliation

Income tax expense differed from the amount computed by applying the U.S. federal statutory income tax rate of 21% to pre-tax income (loss) for the periods presented as a result of the following (in thousands):


	Year Ended December 31,
	2019		2018		2017
U.S. federal tax at statutory rate	$	(934)	$	17	$	(2,958)
U.S. state income taxes	(65)		2,539		(708)
Non-deductible expense (benefit)	5,899		14,485		(5,673)
Research and development credit	(860)		(339)		(402)
Stock-based compensation	(16,619)		(11,360)		(14,622)
Impact of 2017 Tax Act	—		—		25,952
Other	(129)		106		2
Change in valuation allowance	12,812		(5,148)		(1,323)
Total provision for income taxes	$	104	$	300	$	268

Schedule of deferred tax assets and liabilities

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, 2019 and 2018 related to the following (in thousands):


	December 31,
	2019		2018
Deferred tax assets:
Net operating loss and credit carryforwards	$	69,718	$	54,966
Accrued liabilities	4,184		4,271
Allowance for doubtful accounts	217		400

Deferred revenue	408		832
Accrued compensation	1,301		1,081
Long-term lease liabilities	1,992		—
Intangibles	88		4
Gross deferred tax assets	77,908		61,554
Valuation allowance	(59,939)		(47,127)
Net deferred tax assets	17,969		14,427
Deferred tax liabilities:
Property and equipment	(384)		(370)
Amortized intangibles	(68)		(155)
Other	(58)		—
Right of use assets	(1,755)		—
Deferred compensation - Current	(5,017)		—
Convertible senior notes	(10,687)		(13,902)
Gross deferred tax liabilities	(17,969)		(14,427)
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,
	2019		2018		2017
Unrecognized benefit — beginning of period	$	10,723	$	3,115	$	2,805
Gross increases — current year tax positions	963		7,608		310
Gross decreases — prior year tax positions	(7,215)		—		—
Unrecognized benefit — end of period	$	4,471	$	10,723	$	3,115

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments

As of December 31, 2019, $258.8 million of the Notes were outstanding. The Notes are due May 1, 2023. See Note 6 for more information.

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, 2019, future minimum payments under these arrangements were as follows (in thousands):


Year Ending December 31,	Hosting Services		Telecommunication Usage Services		Equipment Maintenance Services
2020	$	307	$	2,708	$	140
2021	500		1,626		25
2022	700		384		—
2023	—		4		—
Total future minimum payment	$	1,507	$	4,722	$	165

Universal Services Fund Liability

The Company is classified as a telecommunications service provider for regulatory purposes and is required to make contributions to the USF based on the revenue the Company receives from the resale of interstate and international telecommunications services. In order to comply with the obligation to make direct contributions, the Company is registered with the Universal Service Administrative Company, or USAC, which is charged by the FCC with administering the USF, and has been remitting the required contributions to USAC since its registration with the USAC in April 2013. In June 2015, in connection with the Company’s late registration with the USAC and past failure to make USF contributions prior to 2013, the Company entered into a consent decree with the FCC Enforcement Bureau. In the consent decree, the Company agreed to pay a civil penalty of $2.0 million to the U.S. Treasury, which was paid in installments ending on December 31, 2018. The Company also agreed to make USF contributions of $3.9 million based on its revenues for the period from 2008 to 2012. The Company is still in dispute with the FCC regarding whether the Company is liable for USF contributions related to the period from 2003 through 2007. As of December 31, 2019, the Company had accrued $0.9 million in respect of the remaining disputed assessments, including interest and penalties, for the period of 2003 through 2007.

State and Local Taxes and Surcharges

The Company, based on analysis of its activities, has determined that it is obligated to collect and remit U.S. state or local sales, use, gross receipts, excise and utility user taxes, as well as fees or surcharges as a communications service provider in certain U.S. states, municipalities or local tax jurisdictions. The Company is registered for, collecting and remitting applicable taxes where such a determination has been made. Prior to the Company’s making such determination, the Company neither collected nor remitted these taxes, fees or surcharges to applicable local, municipal or state jurisdictions. The Company continues to analyze its activities to determine if it is subject to these taxes in additional jurisdictions and based on the Company’s ongoing assessment of its U.S. state and local tax collection and remittance obligations, the Company registers for tax and regulatory purposes in such jurisdictions and commences collecting and remitting applicable state and local taxes and surcharges to these jurisdictions.

As of December 31, 2019 and 2018, the Company had total accrued liabilities of $1.2 million and $1.1 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 $0.1 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 its 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.

For a discussion of the indemnification claims arising out of this matter, see “—Indemnification Agreements.”

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, including breach of security, 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, officers and certain 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, Corp. 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 lawsuit captioned Melcher, et al. v. Five9, Inc., et al., No. 16-cv-02440, in the U.S. District Court for the Southern District of California. In the lawsuit, plaintiff Carl Melcher, a purported former stockholder of Face It, and his related investment entity, Melcher Family Limited Partnership, alleged that Face It repurchased the plaintiffs’ stock in September 2013 before the Company 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 its company to the Company. The lawsuit 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. On January 9, 2018, Mr. Fried initiated an arbitration proceeding against the Company in which he alleged that the Company breached advancement obligations to him. The Company asserted counterclaims in the arbitration proceeding against both Mr. Fried and the representative of the former Face It stockholders, seeking to recoup all losses incurred by the Company in connection with the Melcher Litigation, including any amounts incurred to indemnify or advance the legal fees and expenses of Mr. Fried pursuant to his indemnification claim.

On June 11, 2018, the arbitrator ordered the Company to advance the fees Mr. Fried incurred in connection with the defense of the Melcher Litigation, and ordered the Company’s counterclaims stayed pending the resolution of the Melcher litigation.

In June 2019, Mr. Fried reached a settlement in the Melcher Litigation. Pursuant to a separate June 2019 settlement agreement between the Company, Mr. Fried, and the representative of the former Face It stockholders, the Company agreed to contribute a portion of the amount Mr. Fried agreed to pay the Melcher parties. Specifically, the Company agreed to pay $0.4 million to the Melcher parties on Mr. Fried’s behalf in light of Mr. Fried’s asserted indemnity obligations against the Company. As a result of the settlements, all claims against the Company, including claims for indemnification, have been released by Mr. Fried and the former Face It stockholders. The Company also released claims it asserted against Mr. Fried and the former Face It stockholders. The Melcher Litigation and the arbitration proceeding have been dismissed. The Company incurred a total of approximately $1.4 million in fees and expenses including legal fees advanced on Mr. Fried’s behalf and settlement contributions for the Melcher Litigation. These amounts were included in general and administrative expenses.

Revenue (Tables)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Contract with customer, asset and liability

The following table provides information about accounts receivable, net, deferred contract acquisition costs, contract assets and contract liabilities from contracts with customers (in thousands):


	December 31, 2019		December 31, 2018
Accounts receivable, net	$	37,655	$	24,797

Deferred contract acquisition costs:
Current	$	13,014	$	9,372
Non-current	30,655		21,514
Total deferred contract acquisition costs	$	43,669	$	30,886

Contract assets and contract liabilities:
Contract assets (included in prepaid expenses and other current assets)	$	825	$	330
Contract liabilities (deferred revenue)	24,681		17,391
Net contract assets (liabilities)	$	(23,856)	$	(17,061)

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

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


	Year Ended December 31,
	2019		2018		2017
United States	$	(5,340)	$	(638)	$	(9,434)
International	892		717		733
Income (loss) before income taxes	$	(4,448)	$	79	$	(8,701)

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


	Year Ended December 31,
	2019		2018		2017
Current:
U.S. federal	$	—	$	—	$	—
U.S. state	61		28		42
Foreign	43		272		226
Total provision for income taxes	$	104	$	300	$	268


	Year Ended December 31,
	2019		2018		2017
U.S. federal tax at statutory rate	$	(934)	$	17	$	(2,958)
U.S. state income taxes	(65)		2,539		(708)
Non-deductible expense (benefit)	5,899		14,485		(5,673)
Research and development credit	(860)		(339)		(402)
Stock-based compensation	(16,619)		(11,360)		(14,622)
Impact of 2017 Tax Act	—		—		25,952
Other	(129)		106		2
Change in valuation allowance	12,812		(5,148)		(1,323)
Total provision for income taxes	$	104	$	300	$	268


	December 31,
	2019		2018
Deferred tax assets:
Net operating loss and credit carryforwards	$	69,718	$	54,966
Accrued liabilities	4,184		4,271
Allowance for doubtful accounts	217		400

Deferred revenue	408		832
Accrued compensation	1,301		1,081
Long-term lease liabilities	1,992		—
Intangibles	88		4
Gross deferred tax assets	77,908		61,554
Valuation allowance	(59,939)		(47,127)
Net deferred tax assets	17,969		14,427
Deferred tax liabilities:
Property and equipment	(384)		(370)
Amortized intangibles	(68)		(155)
Other	(58)		—
Right of use assets	(1,755)		—
Deferred compensation - Current	(5,017)		—
Convertible senior notes	(10,687)		(13,902)
Gross deferred tax liabilities	(17,969)		(14,427)
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 were immaterial as of December 31, 2019, 2018 and 2017.

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, 2019, 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, 2019 and 2018 was an increase of $12.8 million and a decrease of $5.1 million, respectively.

As of December 31, 2019, the Company had net operating loss carryforwards for federal and state income tax purposes of $274.4 million and $154.5 million, respectively, available to reduce future income subject to income taxes. If not utilized, the federal and state net operating loss carryforwards will begin to expire in 2024 and 2028, respectively. As of December 31, 2019, the Company also had gross research credit carryforwards for federal and California state tax purposes of $4.4 million and $3.5 million, available to reduce future income subject to income taxes. The federal research credit carryforwards will begin to expire in 2024 and 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 that 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 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,
	2019		2018		2017
Unrecognized benefit — beginning of period	$	10,723	$	3,115	$	2,805
Gross increases — current year tax positions	963		7,608		310
Gross decreases — prior year tax positions	(7,215)		—		—
Unrecognized benefit — end of period	$	4,471	$	10,723	$	3,115

As of December 31, 2019 and 2018, 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, 2019 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, new legislation (the “2017 Tax Act”) was enacted that significantly revised the Internal Revenue Code of 1986, as amended. The 2017 Tax Act, 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. Upon completion of the accounting related to the income tax effect of the 2017 Tax Act, there were no material adjustments made to the previous estimates.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2019
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn January 15, 2020, the Company entered into a definitive agreement to acquire all of the outstanding shares of Coordinated Systems, Inc. (rebranded as Virtual Observer) for cash consideration of approximately $32.0 million, which amount is to be adjusted at the closing for certain liabilities. The Company expects this transaction will close in the second quarter of 2020, subject to the satisfaction of certain closing conditions.

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Revenue	$ 328,006	$ 257,664	$ 200,225
Cost of revenue	134,511	104,034	83,104
Gross profit	193,495	153,630	117,121
Operating expenses:
Research and development	45,190	34,172	27,120
Sales and marketing	95,592	72,001	66,570
General and administrative	49,446	40,448	29,151
Total operating expenses	190,228	146,621	122,841
Income (loss) from operations	3,267	7,009	(5,720)
Other income (expense), net:
Interest expense	(13,794)	(10,245)	(3,471)
Interest income and other	6,079	3,315	490
Total other income (expense), net	(7,715)	(6,930)	(2,981)
Income (loss) before income taxes	(4,448)	79	(8,701)
Provision for income taxes	104	300	268
Net loss	$ (4,552)	$ (221)	$ (8,969)
Net loss per share:
Basic and diluted (in USD per share)	$ (0.08)	$ 0	$ (0.16)
Shares used in computing net loss per share:
Basic and diluted (in shares)	60,371	58,076	54,946
Comprehensive Loss:
Net loss	$ (4,552)	$ (221)	$ (8,969)
Other comprehensive income (loss)	669	(93)	0
Comprehensive loss	$ (3,883)	$ (314)	$ (8,969)

Financial Statement Components - Schedule of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial Statement Components [Abstract]
Accrued expenses	$ 4,152	$ 3,494
Accrued compensation and benefits	14,233	10,277
Accrued and other current liabilities	$ 18,385	$ 13,771

Stockholders' Equity - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock-based Compensation Expense
Stock-based compensation expense		$ 42,065	$ 28,484	$ 15,343
Stock options outstanding
Stock-based Compensation Expense
Unrecognized stock-based compensation expense		$ 13,409
Weighted-average amortization period		2 years 8 months 12 days
Restricted stock units outstanding
Stock-based Compensation Expense
Unrecognized stock-based compensation expense		$ 91,395
Weighted-average amortization period		2 years 10 months 24 days
ESPP
Stock-based Compensation Expense
Unrecognized stock-based compensation expense		$ 1,455
Weighted-average amortization period		4 months 24 days
Cost of revenue
Stock-based Compensation Expense
Stock-based compensation expense		$ 6,334	3,333	2,202
Research and development
Stock-based Compensation Expense
Stock-based compensation expense		7,658	5,303	3,042
Sales and marketing
Stock-based Compensation Expense
Stock-based compensation expense		11,368	6,307	4,364
General and administrative
Stock-based Compensation Expense
Stock-based compensation expense		$ 16,705	$ 13,541	$ 5,735
Board of Directors Executive Chairman \| General and administrative
Stock-based Compensation Expense
Stock-based compensation expense	$ 1,000

Stockholders' Equity - Common Stock Reserved for Future Issuance (Details) shares in Thousands	Dec. 31, 2019 shares
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	16,801
Shares available for future grant under 2014 Plan
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	9,814
Stock options outstanding
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	2,530
Restricted stock units outstanding
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	2,372
Shares available for future issuance under ESPP
Class of Stock [Line Items]
Shares of common stock reserved for future issuance (in shares)	2,085

Retirement Plans	12 Months Ended
Retirement Plans	Dec. 31, 2019
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 began matching employee contributions in cash in the fourth quarter of 2019. The contribution expense for the year ended December 31, 2019 was $0.3 million. 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 $0.4 million and $0.7 million as of December 31, 2019 and 2018, respectively. Total retirement expense for this plan was $0.1 million, $0.1 million, and $0.3 million for the years ended December 31, 2019, 2018, and 2017, respectively.

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Nov. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount		$ 18,244	$ 2,460
Accumulated Amortization		(2,711)	(1,829)
Total Net Carrying Amount		$ 15,533	631
Useful life		3 years 9 months 18 days
Developed technology
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount		$ 17,777	2,460
Accumulated Amortization		(2,690)	(1,829)
Total Net Carrying Amount		$ 15,087	631
Useful life	4 years	3 years 10 months 24 days
Acquired workforce
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount		$ 467	0
Accumulated Amortization		(21)	0
Total Net Carrying Amount		$ 446	$ 0
Useful life	3 years	2 years 10 months 24 days

Financial Statement Components (Tables)

12 Months Ended

Dec. 31, 2019

Financial Statement Components [Abstract]

Schedule of cash and cash equivalents

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


	December 31,
	2019		2018
Cash and cash equivalents:
Cash	$	73,100	$	69,893
Money market funds	2,179		10,833
U.S. Treasury	—		638
U.S. agency securities	—		50
Commercial paper	2,697		498
Total cash and cash equivalents	$	77,976	$	81,912

Schedule of accounts receivable

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


	December 31,
	2019		2018
Trade accounts receivable	$	34,591	$	23,068
Unbilled trade accounts receivable, net of advance client deposits	3,075		1,741
Allowance for doubtful accounts	(11)		(12)
Accounts receivable, net	$	37,655	$	24,797

Schedule of prepaid expenses and other current assets

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


	December 31,
	2019		2018
Prepaid expenses	$	4,901	$	5,005
Other current assets	4,930		2,679
Contract assets	825		330
Prepaid expenses and other current assets	$	10,656	$	8,014

Schedule of useful lives 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,
	2019		2018
Computer and network equipment	$	67,378	$	54,452
Computer software	14,157		10,064
Internal-use software development costs	500		500
Furniture and fixtures	2,918		1,491
Leasehold improvements	2,264		855
Property and equipment	87,217		67,362
Accumulated depreciation and amortization	(54,027)		(41,477)
Property and equipment, net	$	33,190	$	25,885

Schedule of lease obligations

Property and equipment capitalized under finance lease obligations consists primarily of computer and network equipment and was as follows (in thousands):


	December 31,
	2019		2018
Gross	$	46,671	$	47,383
Less: accumulated depreciation and amortization	(39,190)		(33,547)
Total	$	7,481	$	13,836

The components of lease expenses were as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Operating lease cost	$	5,153	$	—	$	—
Finance lease cost:
Amortization of right-of-use assets	$	6,345	$	7,125	$	8,470
Interest on finance lease liabilities	704		1,347		1,737
Total finance lease cost	$	7,049	$	8,472	$	10,207

Supplemental cash flow information related to leases was as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used in operating leases	$	(5,237)	$	—	$	—
Financing cash used in finance leases	(7,054)		(8,544)		(7,068)
Right of use assets obtained in exchange for lease obligations:
Operating leases	5,737		—		—
Finance leases	—		6,133		9,261

Weighted average remaining terms were as follows (in years):

December 31,

2019

2018

Weighted average remaining lease term

Operating leases

2.7 years

2.0 years

Finance leases

1.1 years

1.8 years

Weighted average discount rates were as follows:


	December 31,
	2019		2018
Weighted average discount rate
Operating leases	4.7	%	—	%
Finance leases	7.5	%	9.0	%

Schedule of accrued and other current liabilities

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


	December 31,
	2019		2018
Accrued expenses	$	4,152	$	3,494
Accrued compensation and benefits	14,233		10,277
Accrued and other current liabilities	$	18,385	$	13,771

Revenue

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue

Contract Balances

The following table provides information about accounts receivable, net, deferred contract acquisition costs, contract assets and contract liabilities from contracts with customers (in thousands):


	December 31, 2019		December 31, 2018
Accounts receivable, net	$	37,655	$	24,797

Deferred contract acquisition costs:
Current	$	13,014	$	9,372
Non-current	30,655		21,514
Total deferred contract acquisition costs	$	43,669	$	30,886

Contract assets and contract liabilities:
Contract assets (included in prepaid expenses and other current assets)	$	825	$	330
Contract liabilities (deferred revenue)	24,681		17,391
Net contract assets (liabilities)	$	(23,856)	$	(17,061)

The Company receives payments from customers based upon billing cycles. Invoice payment terms are usually 30 days or less. Accounts receivable are recorded when the right to consideration becomes unconditional.

Deferred contract acquisition costs are recorded when incurred and are amortized over a customer benefit period of five years.

The Company’s contract assets consist of unbilled amounts typically resulting from professional services revenue recognition when it exceeds the total amounts billed to the customer. The Company’s contract liabilities consist of advance payments and billings in excess of revenue recognized.

In the year ended December 31, 2019, the Company recognized revenue of $15.9 million related to its contract liabilities at December 31, 2018.

Remaining Performance Obligations

As of December 31, 2019, the aggregate amount of the total transaction price allocated in contracts with original duration of greater than one year to the remaining performance obligations was $159.9 million. The Company expects to recognize revenue on approximately four-fifths of the remaining performance obligation over the next 24 months, with the balance recognized thereafter. The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less. Such remaining performance obligations represent unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606.

Financial Statement Components

12 Months Ended

Dec. 31, 2019

Financial Statement Components [Abstract]

Financial Statement Components

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


	December 31,
	2019		2018
Cash and cash equivalents:
Cash	$	73,100	$	69,893
Money market funds	2,179		10,833
U.S. Treasury	—		638
U.S. agency securities	—		50
Commercial paper	2,697		498
Total cash and cash equivalents	$	77,976	$	81,912

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


	December 31,
	2019		2018
Trade accounts receivable	$	34,591	$	23,068
Unbilled trade accounts receivable, net of advance client deposits	3,075		1,741
Allowance for doubtful accounts	(11)		(12)
Accounts receivable, net	$	37,655	$	24,797

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


	December 31,
	2019		2018
Prepaid expenses	$	4,901	$	5,005
Other current assets	4,930		2,679
Contract assets	825		330
Prepaid expenses and other current assets	$	10,656	$	8,014

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


	December 31,
	2019		2018
Computer and network equipment	$	67,378	$	54,452
Computer software	14,157		10,064
Internal-use software development costs	500		500
Furniture and fixtures	2,918		1,491
Leasehold improvements	2,264		855
Property and equipment	87,217		67,362
Accumulated depreciation and amortization	(54,027)		(41,477)
Property and equipment, net	$	33,190	$	25,885

In accordance with the Company’s property and equipment policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. The Company’s review of its existing estimates indicated that the actual lives of certain data center assets were longer than the previously estimated useful lives used for depreciation purposes in the Company’s financial statements. As a result, effective July 1, 2017, the Company 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 the Company previously depreciated for three years, was 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 $13.5 million, $9.8 million, and $7.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Property and equipment capitalized under finance lease obligations consists primarily of computer and network equipment and was as follows (in thousands):


	December 31,
	2019		2018
Gross	$	46,671	$	47,383
Less: accumulated depreciation and amortization	(39,190)		(33,547)
Total	$	7,481	$	13,836

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


	December 31,
	2019		2018
Accrued expenses	$	4,152	$	3,494
Accrued compensation and benefits	14,233		10,277
Accrued and other current liabilities	$	18,385	$	13,771

Goodwill and Intangible Assets - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment, accumulated	$ 0	$ 0
Amortization of intangible assets	900,000	400,000	$ 500,000
Impairment of intangible assets	$ 0	$ 0

Retirement Plans (Details) - USD ($) $ in Millions	12 Months Ended
Retirement Plans (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Retirement Benefits [Abstract]
Contribution expense	$ 0.3
Defined benefit liability	0.4	$ 0.7
Retirement expense	$ 0.1	$ 0.1	$ 0.3

Revenue - Narrative (Details) $ in Millions	12 Months Ended
Revenue - Narrative (Details) $ in Millions	Dec. 31, 2019 USD ($)
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract revenue recognized	$ 15.9
Remaining performance obligation	$ 159.9
Contract acquisition costs
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Amortization period of capitalized contract cost	5 years

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

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


	December 31, 2019													December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	$	17,777	$	(2,690)	$	15,087	3.9	$	2,460	$	(1,829)	$	631



Acquired workforce	467		(21)		446		2.9	—		—		—
Total	$	18,244	$	(2,711)	$	15,533	3.8	$	2,460	$	(1,829)	$	631

Schedule of expected future amortization expense of intangible assets

As of December 31, 2019, the expected future amortization expense for intangible assets was as follows (in thousands):


Period	Expected Future Amortization Expense
2020	$	4,265
2021	3,985
2022	3,964
2023	3,319
Total	$	15,533

Financial Statement Components - Schedule of Capital Leased Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial Statement Components [Abstract]
Gross	$ 46,671	$ 47,383
Less: accumulated depreciation and amortization	(39,190)	(33,547)
Total	$ 7,481	$ 13,836

Investments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of marketable investments

The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable investments as of December 31, 2019 and 2018 were as follows (in thousands):



	December 31, 2019
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	161	$	1	$	—	$	162
U.S. treasury	31,933		8		(1)		31,940
U.S. agency securities	177,629		110		(9)		177,730
Commercial paper	15,240		—		—		15,240
Municipal bonds	3,014		1		—		3,015
Corporate bonds	13,876		10		—		13,886
Total	$	241,853	$	130	$	(10)	$	241,973



	December 31, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	4,259	$	—	$	—	$	4,259
U.S. treasury	637		—		—		637
U.S. agency and government sponsored securities	154,314		1		(111)		154,204
Commercial paper	3,475		—		—		3,475
Municipal bonds	6,090		—		(4)		6,086
Corporate bonds	41,307		—		(61)		41,246
Total	$	210,082	$	1	$	(176)	$	209,907

Schedule of gross unrealized losses and fair value of marketable investments

The following table presents the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than 12 months as of December 31, 2019 and 2018 (in thousands):


	December 31, 2019						December 31, 2018

	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
U.S. treasury	$	(1)	$	12,926	$	—	$	637
U.S. agency and government sponsored securities	(9)		36,322		(111)		153,212
Municipal bonds	—		—		(4)		6,086
Corporate bonds	—		251		(61)		41,246
Total	$	(10)	$	49,499	$	(176)	$	201,181

Schedule of assets carried at fair value

The following table sets forth the Company’s assets measured at fair value by level within the fair value hierarchy (in thousands):


	December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents
Money market funds	$	2,179	$	—	$	—	$	2,179
Commercial paper	—		2,697		—		2,697
Total cash equivalents	$	2,179	$	2,697	$	—	$	4,876
Marketable investments
Certificates of deposit	$	—	$	162	$	—	$	162
U.S. Treasury	31,940		—		—		31,940
U.S. agency securities	—		177,730		—		177,730
Commercial paper	—		15,240		—		15,240
Municipal bonds	—		3,015		—		3,015
Corporate bonds	—		13,886		—		13,886
Total marketable investments	$	31,940	$	210,033	$	—	$	241,973

	December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents
Money market funds	$	10,833	$	—	$	—	$	10,833
U.S. Treasury	638		—		—		638
U.S. agency securities	—		50		—		50
Commercial paper	—		498		—		498
Total cash equivalents	$	11,471	$	548	$	—	$	12,019
Marketable investments
Certificates of deposit	$	—	$	4,259	$	—	$	4,259
U.S. Treasury	637		—		—		637
U.S. agency securities and government sponsored securities	—		154,204		—		154,204
Commercial paper	—		3,475		—		3,475
Municipal bonds	—		6,086		—		6,086
Corporate bonds	—		41,246		—		41,246
Total marketable investments	$	637	$	209,270	$	—	$	209,907

ASC 842 Adoption Impact - Weighted Average Remaining Terms and Discount Rates (Details)	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Weighted average remaining lease term, Operating leases	2 years 8 months 12 days	2 years
Weighted average remaining lease term, Finance leases	1 year 1 month 6 days	1 year 9 months 18 days
Weighted average discount rate, Operating leases	4.70%	0.00%
Weighted average discount rate, Finance leases	7.50%	9.00%

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (4,552)	$ (221)	$ (8,969)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	14,374	10,274	8,314
Amortization of operating lease right-of-use assets	4,735
Amortization of premium on marketable investments	(1,108)	(670)	0
Provision for doubtful accounts	90	90	95
Stock-based compensation	42,065	28,484	15,343
Reversal of interest and penalties on accrued federal fees	0	0	(2,133)
Gain on sale of convertible note held for investment	(217)	(312)	0
Others	448	160	(313)
Changes in operating assets and liabilities:
Accounts receivable	(12,935)	(5,829)	(5,163)
Prepaid expenses and other current assets	(2,671)	(2,806)	(1,912)
Deferred contract acquisition costs	(12,783)	(7,748)	0
Other assets	(348)	193	(33)
Accounts payable	2,549	2,418	813
Accrued and other current liabilities	(544)	1,865	1,061
Accrued federal fees and sales tax liability	1,010	495	90
Deferred revenue	8,695	3,956	3,882
Other liabilities	(375)	392	31
Net cash provided by operating activities	51,221	38,622	11,106
Cash flows from investing activities:
Purchases of marketable investments	(359,470)	(220,704)	0
Proceeds from maturities of marketable investments	328,740	11,293	0
Purchases of property and equipment	(19,228)	(9,261)	(2,650)
Cash paid to acquire substantially all of the assets of Whendu, LLC	(13,890)	0	0
Proceeds from sale of convertible note held for investment	217	1,923	0
Net cash used in investing activities	(63,631)	(216,749)	(2,650)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs paid $8,039	0	250,711	0
Payments for capped call transactions	0	(31,412)	0
Proceeds from exercise of common stock options	7,705	7,779	6,035
Proceeds from sale of common stock under ESPP	7,823	5,730	4,101
Payments of employee taxes related to vested common stock	0	(260)	0
Repayments on revolving line of credit	0	(32,594)	0
Repayments of notes payable	0	(318)	(699)
Payments of finance leases	(7,054)	(8,544)	(7,068)
Net cash provided by financing activities	8,474	191,092	2,369
Net increase (decrease) in cash and cash equivalents	(3,936)	12,965	10,825
Cash and cash equivalents:
Beginning of year	81,912	68,947	58,122
End of year	77,976	81,912	68,947
Supplemental disclosures of cash flow data:
Cash paid for interest	1,029	2,288	3,311
Cash paid for income taxes	281	159	121
Non-cash investing and financing activities:
Equipment obtained under finance lease	0	5,142	10,261
Equipment purchased and unpaid at period-end	2,890	1,583	145
Capitalization of leasehold improvement through non-cash lease incentive	79	0	142
Acquisition and related transaction costs accrued at period-end	1,895	0	0
Convertible debt
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of debt discount and issuance costs	$ 12,788	$ 7,881	$ 0

Description of Business and Summary of Significant Accounting Policies - Property and Equipment, Net (Details)	12 Months Ended
	Dec. 31, 2019
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

Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Schedule of 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,
	2019		2018		2017
Net loss	$	(4,552)	$	(221)	$	(8,969)
Weighted-average shares used in computing basic and diluted net loss per share	60,371		58,076		54,946
Basic and diluted net loss per share	$	(0.08)	$	—	$	(0.16)

Schedule of securities excluded from calculation of diluted 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,
	2019	2018	2017
Stock options	2,530	3,122	4,047
Restricted stock units	2,372	2,325	2,033
Common stock warrants	—	—	13
Total	4,902	5,447	6,093

Income Taxes - Schedule of Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of Unrecognized Tax Benefits
Unrecognized benefit — beginning of period	$ 10,723	$ 3,115	$ 2,805
Gross increases — current year tax positions	963	7,608	310
Gross decreases — prior year tax positions	(7,215)	0	0
Unrecognized benefit — end of period	$ 4,471	$ 10,723	$ 3,115

Description of Business and Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Advertising expense	$ 13.4	$ 12.2	$ 11.4

Net Loss Per Share - Narrative (Details)	Dec. 31, 2019 $ / shares
Convertible Senior Notes \| Convertible debt
Debt Instrument [Line Items]
Conversion price on convertible debt (in USD per share)	$ 40.82

ASC 842 Adoption Impact - Balance Sheet Disclosures (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Operating Lease, Right-of-Use Asset	$ 8,746
Operating lease liabilities	5,064
Operating lease liabilities — less current portion	4,329
Total operating lease liabilities	9,393
Gross	46,671	$ 47,383
Finance Lease, Right-of-Use Asset, Accumulated Amortization	(39,190)	(33,547)
Total	7,481	13,836
Finance lease liabilities	3,518	6,647
Finance lease liabilities — less current portion	809	4,509
Total finance lease liabilities	$ 4,327	$ 11,156

Debt - Schedule of Net Carrying Amount of Equity Component of the Notes (Details) - Convertible debt - Convertible Senior Notes - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Conversion option	$ 63,756	$ 63,756
Issuance costs	(1,998)	(1,998)
Net carrying amount	$ 61,758	$ 61,758

ASC 842 Adoption Impact - Lease Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Operating Leases
2020	$ 5,376
2021	2,070
2022	986
2023	855
2024	703
Total lease payments	9,990
Less: imputed interest	(597)
Total	9,393
Finance Leases
2020	3,778
2021	825
2022	0
2023	0
2024	0
Total lease payments	4,603
Less: imputed interest	(276)
Total	$ 4,327	$ 11,156

ASC 842 Adoption Impact (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Schedule of lease obligations

Property and equipment capitalized under finance lease obligations consists primarily of computer and network equipment and was as follows (in thousands):


	December 31,
	2019		2018
Gross	$	46,671	$	47,383
Less: accumulated depreciation and amortization	(39,190)		(33,547)
Total	$	7,481	$	13,836

The components of lease expenses were as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Operating lease cost	$	5,153	$	—	$	—
Finance lease cost:
Amortization of right-of-use assets	$	6,345	$	7,125	$	8,470
Interest on finance lease liabilities	704		1,347		1,737
Total finance lease cost	$	7,049	$	8,472	$	10,207

Supplemental cash flow information related to leases was as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used in operating leases	$	(5,237)	$	—	$	—
Financing cash used in finance leases	(7,054)		(8,544)		(7,068)
Right of use assets obtained in exchange for lease obligations:
Operating leases	5,737		—		—
Finance leases	—		6,133		9,261

Weighted average remaining terms were as follows (in years):

December 31,

2019

2018

Weighted average remaining lease term

Operating leases

2.7 years

2.0 years

Finance leases

1.1 years

1.8 years

Weighted average discount rates were as follows:


	December 31,
	2019		2018
Weighted average discount rate
Operating leases	4.7	%	—	%
Finance leases	7.5	%	9.0	%

Schedule of balance sheet information related to leases

Supplemental balance sheet information related to leases was as follows (in thousands):


	December 31,
	2019		2018
Operating leases
Operating lease right-of-use assets	$	8,746	$	—

Operating lease liabilities:	$	5,064	$	—
Operating lease liabilities — less current portion	4,329		—
Total operating lease liabilities	$	9,393	$	—
Finance leases
Property and equipment, gross	$	46,671	$	47,383
Less: accumulated depreciation and amortization	(39,190)		(33,547)
Property and equipment, net	$	7,481	$	13,836
Finance lease liabilities:
Finance leases	$	3,518	$	6,647
Finance lease liabilities — less current portion	809		4,509
Total finance lease liabilities	$	4,327	$	11,156

Schedule of operating lease maturities

Maturities of lease liabilities were as follows (in thousands):


Year Ending December 31,	Operating Leases		Finance Leases
2020	$	5,376	$	3,778
2021	2,070		825
2022	986		—
2023	855		—
2024	703		—
Total future minimum lease payment	9,990		4,603
Less: imputed interest	(597)		(276)
Total	$	9,393	$	4,327

Schedule of finance lease maturities

Maturities of lease liabilities were as follows (in thousands):


Year Ending December 31,	Operating Leases		Finance Leases
2020	$	5,376	$	3,778
2021	2,070		825
2022	986		—
2023	855		—
2024	703		—
Total future minimum lease payment	9,990		4,603
Less: imputed interest	(597)		(276)
Total	$	9,393	$	4,327

Schedule of impacts from new accounting pronouncements

Impact on Consolidated Balance Sheet


	December 31, 2019
(in thousands)	As Reported		Balances without adoption of ASC 842		Effect of Change Higher (Lower)
Assets:
Operating lease right-of-use-assets	$	8,746	$	—	$	8,746
Liabilities
Operating lease liabilities	5,064		—		5,064
Operating lease liabilities — less current portion	4,329		—		4,329

Investments and Fair Value Measurements - Narrative (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Nonrecurring
Debt Instrument [Line Items]
Assets measured at fair value on nonrecurring basis	$ 0	$ 0
Convertible Senior Notes \| Convertible debt
Debt Instrument [Line Items]
Stated interest rate on debt	0.125%
Convertible Senior Notes \| Level 2 \| Convertible debt
Debt Instrument [Line Items]
Fair value of long-term debt	$ 437,000,000.0	$ 316,100,000

Goodwill and Intangible Assets - Schedule of Expected Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
2020	$ 4,265
2021	3,985
2022	3,964
2023	3,319
Total Net Carrying Amount	$ 15,533	$ 631

Investments and Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Investments and Fair Value Measurements

Marketable Investments



	December 31, 2019
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	161	$	1	$	—	$	162
U.S. treasury	31,933		8		(1)		31,940
U.S. agency securities	177,629		110		(9)		177,730
Commercial paper	15,240		—		—		15,240
Municipal bonds	3,014		1		—		3,015
Corporate bonds	13,876		10		—		13,886
Total	$	241,853	$	130	$	(10)	$	241,973



	December 31, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	4,259	$	—	$	—	$	4,259
U.S. treasury	637		—		—		637
U.S. agency and government sponsored securities	154,314		1		(111)		154,204
Commercial paper	3,475		—		—		3,475
Municipal bonds	6,090		—		(4)		6,086
Corporate bonds	41,307		—		(61)		41,246
Total	$	210,082	$	1	$	(176)	$	209,907


	December 31, 2019						December 31, 2018

	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
U.S. treasury	$	(1)	$	12,926	$	—	$	637
U.S. agency and government sponsored securities	(9)		36,322		(111)		153,212
Municipal bonds	—		—		(4)		6,086
Corporate bonds	—		251		(61)		41,246
Total	$	(10)	$	49,499	$	(176)	$	201,181

The contractual maturities of the Company’s marketable investments as of December 31, 2019 and 2018 were less than one year.

Fair Value Measurements

The Company carries cash equivalents and marketable investments at fair value. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 or liabilities.

Level 2 — Observable inputs other than Level 1 inputs, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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 Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.

Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. The Company performs routine procedures such as comparing prices obtained from independent source to ensure that appropriate fair values are recorded.

The following table sets forth the Company’s assets measured at fair value by level within the fair value hierarchy (in thousands):


	December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents
Money market funds	$	2,179	$	—	$	—	$	2,179
Commercial paper	—		2,697		—		2,697
Total cash equivalents	$	2,179	$	2,697	$	—	$	4,876
Marketable investments
Certificates of deposit	$	—	$	162	$	—	$	162
U.S. Treasury	31,940		—		—		31,940
U.S. agency securities	—		177,730		—		177,730
Commercial paper	—		15,240		—		15,240
Municipal bonds	—		3,015		—		3,015
Corporate bonds	—		13,886		—		13,886
Total marketable investments	$	31,940	$	210,033	$	—	$	241,973

	December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents
Money market funds	$	10,833	$	—	$	—	$	10,833
U.S. Treasury	638		—		—		638
U.S. agency securities	—		50		—		50
Commercial paper	—		498		—		498
Total cash equivalents	$	11,471	$	548	$	—	$	12,019
Marketable investments
Certificates of deposit	$	—	$	4,259	$	—	$	4,259
U.S. Treasury	637		—		—		637
U.S. agency securities and government sponsored securities	—		154,204		—		154,204
Commercial paper	—		3,475		—		3,475
Municipal bonds	—		6,086		—		6,086
Corporate bonds	—		41,246		—		41,246
Total marketable investments	$	637	$	209,270	$	—	$	209,907

As of December 31, 2019 and 2018, the estimated fair value of the Company’s outstanding 0.125% convertible senior notes due 2023 was $437.0 million and $316.1 million, respectively. The fair value was determined based on the quoted price of the convertible senior notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2 in the fair value hierarchy. See Note 6 for further information on the Company’s 0.125% convertible senior notes due 2023.

There were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2019 and 2018.

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 finance 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.

Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

Selected quarterly financial information for 2019 and 2018 is as follows:


	Quarter Ended
	Dec. 31, 2019		Sept. 30, 2019		Jun. 30, 2019		Mar. 31, 2019		Dec. 31, 2018		Sept. 30, 2018		Jun. 30, 2018		Mar. 31, 2018

	(unaudited, in thousands, except per share data)
Revenue	$	92,263	$	83,769	$	77,436	$	74,538	$	72,335	$	65,304	$	61,120	$	58,905
Cost of revenue ⁽¹⁾⁽²⁾	37,940		34,472		31,248		30,851		28,339		26,179		24,814		24,702
Gross profit	54,323		49,297		46,188		43,687		43,996		39,125		36,306		34,203
Operating expenses:
Research and development ⁽¹⁾⁽²⁾	12,168		11,665		10,811		10,546		8,451		9,582		8,367		7,772
Sales and marketing ⁽¹⁾⁽²⁾	25,627		25,014		23,250		21,701		18,793		17,818		17,912		17,478
General and administrative ⁽¹⁾⁽²⁾	13,496		12,146		12,042		11,762		10,766		10,746		9,833		9,103
Total operating expenses	51,291		48,825		46,103		44,009		38,010		38,146		36,112		34,353
Income (loss) from operations	3,032		472		85		(322)		5,986		979		194		(150)
Other income (expense), net:

Interest expense	(3,506)		(3,486)		(3,406)		(3,396)		(3,462)		(3,595)		(2,378)		(810)
Interest income and other	1,384		1,460		1,490		1,745		1,359		1,352		206		398
Total other income (expense), net	(2,122)		(2,026)		(1,916)		(1,651)		(2,103)		(2,243)		(2,172)		(412)
Income (loss) before income taxes	910		(1,554)		(1,831)		(1,973)		3,883		(1,264)		(1,978)		(562)
Provision for income taxes	74		50		29		(49)		150		41		64		45
Net income (loss)	$	836	$	(1,604)	$	(1,860)	$	(1,924)	$	3,733	$	(1,305)	$	(2,042)	$	(607)
Net income (loss) per share:
Basic	$	0.01	$	(0.03)	$	(0.03)	$	(0.03)	$	0.06	$	(0.02)	$	(0.04)	$	(0.01)
Diluted	$	0.01	$	(0.03)	$	(0.03)	$	(0.03)	$	0.06	$	(0.02)	$	(0.04)	$	(0.01)
Shares used in computing net income (loss) per share:
Basic	61,253		60,781		60,058		59,367		58,926		58,454		57,903		56,399
Diluted	65,962		60,781		60,058		59,367		62,071		58,454		57,903		56,399

(1) Included stock-based compensation as follows:


	Quarter Ended
	Dec. 31, 2019		Sept. 30, 2019		Jun. 30, 2019		Mar. 31, 2019		Dec. 31, 2018		Sept. 30, 2018		Jun. 30, 2018		Mar. 31, 2018

	(unaudited, in thousands)
Cost of revenue	$	1,745	$	1,702	$	1,658	$	1,229	$	942	$	860	$	853	$	678
Research and development	2,259		2,022		1,907		1,470		1,010		2,352		1,064		877
Sales and marketing	3,353		3,017		2,749		2,249		1,747		1,613		1,585		1,362
General and administrative	4,511		4,334		4,122		3,738		3,794		4,044		3,295		2,408
Total stock-based compensation	$	11,868	$	11,075	$	10,436	$	8,686	$	7,493	$	8,869	$	6,797	$	5,325

(2) Included depreciation and amortization expenses as follows:


	Quarter Ended
	Dec. 31, 2019		Sept. 30, 2019		Jun. 30, 2019		Mar. 31, 2019		Dec. 31, 2018		Sept. 30, 2018		Jun. 30, 2018		Mar. 31, 2018

	(unaudited, in thousands)
Cost of revenue	$	3,384	$	2,602	$	2,504	$	2,366	$	2,129	$	2,021	$	1,864	$	1,794
Research and development	461		450		450		440		331		278		233		194
Sales and marketing	2		2		1		1		6		30		30		29
General and administrative	477		443		406		385		372		338		322		303
Total depreciation and amortization	$	4,324	$	3,497	$	3,361	$	3,192	$	2,838	$	2,667	$	2,449	$	2,320

Debt - Schedule of Maturities of Debt (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Debt Disclosure [Abstract]
2023	$ 258,750
Total	$ 258,750

Debt - Schedule of Net Carrying Amount of the Liability Component of the Notes (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	May 31, 2018
Debt Instrument [Line Items]
Principal	$ 258,750
Convertible debt \| Convertible Senior Notes
Debt Instrument [Line Items]
Principal	258,750	$ 258,750
Debt Instrument, Unamortized Discount	(44,881)	(56,564)
Unamortized issuance costs	(4,265)	(5,423)	$ (6,000)
Total debt, net carrying value	$ 209,604	$ 196,763

Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Schedule of net carrying amount of the liability component of the notes

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


	December 31, 2019		December 31, 2018
Principal	$	258,750	$	258,750
Unamortized debt discount	(44,881)		(56,564)
Unamortized issuance costs	(4,265)		(5,423)
Net carrying amount	$	209,604	$	196,763

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


	December 31, 2019		December 31, 2018
Debt discount for conversion option	$	63,756	$	63,756
Issuance costs	(1,998)		(1,998)
Net carrying amount	$	61,758	$	61,758

The net impact to the Company’s stockholders’ equity, included in additional paid-in capital, relating to the issuance of the Notes issued in May 2018 was as follows (in thousands):


	December 31, 2018
Conversion option	$	63,756
Payments for capped call transactions	(31,412)
Issuance costs	(1,998)
Total	$	30,346

Schedule of interest expense related to notes

Interest expense related to the Notes was as follows (in thousands):


	Year Ended
	December 31, 2019		December 31, 2018
Contractual interest expense	$	324	$	209
Amortization of debt discount	11,683		7,192
Amortization of issuance costs	1,105		689
Total interest expense	$	13,112	$	8,090

Schedule of maturities of debt

Maturity of the Company’s outstanding debt as of December 31, 2019 was as follows (in thousands):


Period	Amount to Mature
2023	$	258,750
Total	$	258,750

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

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 2019, the Company completed its annual goodwill impairment test. Based on its assessment of the qualitative factors, the Company’s management concluded that the fair value of the Company’s goodwill was more likely than not greater than its carrying amount as of December 31, 2019. As such, it was not necessary to perform the two-step quantitative goodwill impairment test. Subsequent to the 2019 annual impairment test, the Company believes there have been no significant events or circumstances negatively affecting the valuation of goodwill. As of December 31, 2019 and 2018, 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 and Whendu in October 2013 and November 2019, respectively. The components of intangible assets were as follows (in thousands):


	December 31, 2019													December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	$	17,777	$	(2,690)	$	15,087	3.9	$	2,460	$	(1,829)	$	631



Acquired workforce	467		(21)		446		2.9	—		—		—
Total	$	18,244	$	(2,711)	$	15,533	3.8	$	2,460	$	(1,829)	$	631

Amortization expense related to intangible assets was $0.9 million, $0.4 million and $0.5 million for the years ended December 31, 2019, 2018 and 2017. As of December 31, 2019, the expected future amortization expense for intangible assets was as follows (in thousands):


Period	Expected Future Amortization Expense
2020	$	4,265
2021	3,985
2022	3,964
2023	3,319
Total	$	15,533

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, 2019 and 2018.

Description of Business and Summary of Significant Accounting Policies - Commissions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Commission expense	$ 15.0	$ 10.3	$ 14.0

Geographical Information - Schedule of Revenue and Property and Equipment by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets
Revenue	$ 92,263	$ 83,769	$ 77,436	$ 74,538	$ 72,335	$ 65,304	$ 61,120	$ 58,905	$ 328,006	$ 257,664	$ 200,225
Property and equipment, net	33,190				25,885				33,190	25,885
United States
Revenues from External Customers and Long-Lived Assets
Revenue									301,536	239,378	188,303
Property and equipment, net	29,246				23,931				29,246	23,931
International
Revenues from External Customers and Long-Lived Assets
Revenue									26,470	18,286	$ 11,922
Property and equipment, net	$ 3,944				$ 1,954				$ 3,944	$ 1,954

Stockholders' Equity - ESPP (Details) - $ / shares	12 Months Ended
Stockholders' Equity - ESPP (Details) - $ / shares	Dec. 31, 2019	Apr. 03, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Shares of common stock reserved for future issuance (in shares)	16,801,000
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 (in shares)	1,500
Shares of common stock reserved for future issuance (in shares)		880,000
Automatic annual increase in common stock reserved for issuance, percentage	1.00%
Maximum annual increase of shares reserved (in shares)	1,000,000
Shares of common stock reserved for future issuance (in shares)	615,436
Issuance of common stock under ESPP (in shares)	197,962
Weighted-average price per share (in USD per share)	$ 39.52

Commitments and Contingencies - Universal Services Fund Liability (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2015
Loss Contingencies [Line Items]
Accrued federal fees	$ 2,303	$ 1,434
Civil penalty
Loss Contingencies [Line Items]
Accrued federal fees			$ 2,000
Year 2008 through 2012 \| USF Obligations
Loss Contingencies [Line Items]
Accrued federal fees			$ 3,900
Disputed portion \| Year 2003 To Year 2007 \| USF Obligations
Loss Contingencies [Line Items]
Disputed liability related to reversal of interest and penalties	$ 900

Stockholders' Equity - Equity Incentive Plans (Details) - shares	12 Months Ended
	Dec. 31, 2019	Mar. 31, 2015
2004 Equity Incentive Plan \| Stock options outstanding
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 \| Stock options outstanding \| 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 \| Stock options outstanding \| 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 (in shares)		5,300,000
Automatic annual increase in common stock reserved for issuance, percentage	5.00%
Shares of common stock reserved for future issuance (in shares)	3,077,181
2014 Equity Incentive Plan \| Stock options outstanding
Share-based Compensation Arrangement by Share-based Payment Award
Award expiration period	10 years
2014 Equity Incentive Plan \| Restricted stock units outstanding \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	1 year
2014 Equity Incentive Plan \| Restricted stock units outstanding \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	4 years