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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94- 3394123
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.001 par value
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The NASDAQ Global Market
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Securities registered pursuant to Section 12(g) of the Act: None
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Large Accelerated Filer
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Accelerated Filer
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Non-accelerated filer
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(Do not check if a smaller reporting Company)
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Smaller Reporting Company
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Emerging growth company
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our quarterly and annual results may fluctuate significantly, may not fully reflect the underlying performance of our business and may result in decreases in the price of our common stock;
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if we are unable to attract new clients or sell additional services and functionality to our existing clients, our revenue and revenue growth will be harmed;
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our recent rapid growth may not be indicative of our future growth, and even if we continue to grow rapidly, we may fail to manage our growth effectively;
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failure to adequately expand our sales force could impede our growth;
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if we fail to manage our technical operations infrastructure, our existing clients may experience service outages, our new clients may experience delays in the deployment of our solution and we could be subject to, among other things, claims for credits or damages;
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security breaches and improper access to or disclosure of our data or our clients’ data, or other cyber attacks on our systems, could result in litigation and regulatory risk, harm our reputation and adversely affect our business;
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the markets in which we participate are highly competitive, and if we do not compete effectively, our operating results could be harmed;
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if our existing clients terminate their subscriptions or reduce their subscriptions and related usage, our revenues and gross margins will be harmed and we will be required to spend more money to grow our client base;
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our growth depends in part on the success of our strategic relationships with third parties and our failure to successfully grow and manage these relationships could harm our business;
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we are establishing a network of master agents and resellers to sell our solution; our failure to effectively develop, manage, and maintain this network could materially harm our revenues;
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we sell our solution to larger organizations that require longer sales and implementation cycles and often demand more configuration and integration services or customized features and functions that we may not offer, any of which could delay or prevent these sales and harm our growth rates, business and operating results;
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because a significant percentage of our revenue is derived from existing clients, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern;
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we rely on third-party telecommunications and internet service providers to provide our clients and their customers with telecommunication services and connectivity to our cloud contact center software, any increase in the cost thereof, reduction in efficacy or any failure by these service providers to provide reliable services could cause us to lose customers, increase our customers’ cost of using our solution and subject us to, among other things, claims for credits or damages;
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we have a history of losses and we may be unable to achieve or sustain profitability;
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we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; and
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failure to comply with laws and regulations could harm our business and our reputation.
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Long and complex implementation and upgrade cycles.
Implementation of legacy on-premise contact center systems requires long deployment timelines and complex integrations with other enterprise systems. Once these systems have been deployed, integrated and customized, upgrades and modifications can be extremely challenging. Due to these customized solutions and complex integrations, clients will often forego or postpone upgrades for fear of disabling key functionality. If they do choose to upgrade, clients are often required to rebuild integrations in order to retain full functionality, which frequently results in significant expenditures of time, resources and capital.
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Inflexible resource deployment.
As organizations expand globally, they require the ability to easily manage remote agents and quickly adjust agent seats to accommodate peak call volumes. Most legacy on-premise contact center systems do not provide these capabilities and, as a result, their clients are typically unable to quickly scale their contact center operations in response to changing business needs. This often results in costly over-building of additional capacity to accommodate peak volumes.
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Duplicative technology stacks across multiple sites.
Organizations must integrate multiple contact center sites to drive efficiency and create a unified customer view. Organizations running on-premise systems often find themselves with dissimilar systems at each site resulting in non-integrated and inefficient silos of technology. Moreover, technology at each site is in a constant state of change over time. The initial and ongoing integration of these contact center sites for such organizations requires significant ongoing investment.
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Adoption of cloud CRM solutions
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Sophistication of cloud contact center software solutions
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Technology refresh of on-premise contact center systems
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Simplicity of the cloud vs. complexity of legacy on-premise
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Rapid implementation, seamless updates and pre-built integrations.
Our solution is designed to be deployed quickly and seamlessly with minimal disruption to a client’s operations. The pre-built integrations with leading CRM and other enterprise applications reduce the complexity and burden-of-effort of integrating with the client’s business applications. The solution is designed to be seamlessly updated so that
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Highly flexible platform.
Our solution provides easy administration, configuration and role-based functionalities for agents, supervisors and administrators enabling the rapid adjustment of contact center resources to meet a changing mix of contact channels and peaks-and-troughs in contact volumes.
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Scalable, secure and reliable multi-tenant architecture.
Our solution provides organizations of all sizes with the robust contact center functionality, scalability, flexibility and security required in the most sophisticated and distributed environments.
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Higher agent productivity.
Our solution empowers agent productivity and effectiveness by allowing agents to handle both inbound and outbound calls and interact with customers across multiple contact channels, including voice, chat, email, web, social media and mobile. Our solution gives agents the ability to switch between media channels through an easy-to-use, unified interface that provides agents with all the relevant content and tools needed to complete the task at hand.
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Improved customer experience.
Our intelligent contact routing and self-service IVR capabilities, pre-built CRM integrations, and multichannel engagement ensure that customers receive an omnichannel experience. Each new contact is quickly routed to an appropriate agent resource. Using the rich contact history and additional context through integrations with CRM applications, agents have immediate access to the most current, relevant and accurate information about the customer, resulting in increased first contact resolutions and a more satisfying experience for the customer.
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Enhanced end-to-end visibility.
Our solution provides clients’ operations staff, quality team and leadership with a complete view of contact center performance through a comprehensive set of historical reports, real-time dashboards, and quality and performance management tools. Clients can also extract reporting data from our solution for further analysis using a spreadsheet application or using the sophistication of an enterprise business intelligence application. This insight provides an organization-wide view of customer engagement performance and allows clients to quickly determine the appropriate actions required to address changing circumstances.
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Greater operational efficiency.
Our solution provides contact center managers and supervisors with significant visibility into their agents’ productivity and effectiveness and the performance of their inbound queues and outbound campaigns. Our solution has robust intelligence and analytics capabilities to help supervisors optimize operations and campaigns in real-time to drive increased efficiency. Our role-based interfaces deliver specific functionality to both desktops and mobile devices to meet the unique needs of agents, supervisors and administrators.
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Compelling value proposition.
We provide a unified cloud-based software and telephony platform for contact center operations, including software applications, technology infrastructure, maintenance, monitoring, storage, security, client support and upgrades, which enables our clients to simplify their technology infrastructure and streamline IT costs. We manage upgrades and deployments remotely, resulting in lower total cost of operations relative to legacy on-premise contact center systems that often require in-house technical support staff.
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Cloud-based, enterprise-grade platform and end-to-end application suite.
We deliver a cloud-based enterprise-grade platform and applications suite with multi-channel capabilities that allows our clients to manage their entire contact center operation. Our highly scalable, secure and multi-tenant architecture enables us to serve large, distributed enterprises with complex contact center requirements, as well as smaller organizations, all from a single cloud platform.
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Rapid deployment and support of our comprehensive solution.
Our high-touch engagement model for larger implementations leverages a proven lifecycle approach including detailed discovery, design, testing, training and optimization. This not only accelerates agent activation, but also targets desired business
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Reliable, secure, compliant and scalable platform.
Our pla
tform delivers what we believe is industry leading reliability; cybersecurity using a defense-in-depth approach; legal and regulatory compliance features designed to assist our clients in complying with applicable laws, regulations and industry standards including Telephone Consumer Protection Act, or TCPA, Customer Proprietary Network Information, or CPNI, Health Insurance Portability and Accountability Act of 1996, Communications Assistance for Law Enforcement Act, or CALEA, Gramm-Leach-Bliley Act, EU’s General Data Protection Regulation, or GDPR, Canada’s Personal Information Protection and Electronic Documents Act, or PIPEDA, and analogous provincial laws, and Payment Card Industry Data Security Standard, or PCI DSS, and is scalable to accommodate the requirements of larger clients.
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Proven, repeatable and scalable go-to-market model.
We engage with our clients through a highly scalable and metrics-driven sales and marketing organization that effectively identifies, qualifies and closes sales opportunities. The deep domain expertise of our field sales team is instrumental in selling to larger opportunities, and our highly efficient telesales model enables us to cost-effectively identify, qualify and close a high volume of smaller opportunities. Our ecosystem of technology and system integrator partners increases awareness of our solution and helps generate new sales opportunities. We believe our go-to-market model gives us an efficient and effective means of targeting organizations of all sizes.
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Established market presence and a large, diverse client base.
We have a large, diverse client base of over
2,000
organizations across multiple industries. We believe our clients view us as a key strategic solutions provider. The performance, reliability, ease-of-use and comprehensive nature of our solution has resulted in high client retention.
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Extensive partner ecosystem.
We have cultivated a robust ecosystem of partners including a variety of leading CRM software vendors such as Salesforce, Oracle, Zendesk, Microsoft and ServiceNow; WFO vendors such as Calabrio, Verint and CSI; unified communications vendors such as Microsoft Teams (formerly Skype for Business) and Cisco; system integrators such as Accenture PLC, Deloitte Consulting LLP and PwC LLP; master agents and resellers; cloud private branch exchange, or PBX, phone systems vendors; independent software vendors; and telephony providers such as AT&T Inc., Verizon Communications Inc. and CenturyLink Communications, LLC. We believe this ecosystem has enabled us to increase our brand awareness and enhance the functionality and value of our solution for our clients.
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Focus on innovation and thought leadership.
Since our inception, we have been an innovator of cloud contact center software. Our investment in research and development has driven our growth and enabled us to deliver a cloud contact center software solution with the features and functionality to power the most complex contact centers. Our extensive domain expertise enables us to enhance our solution and serves as a critical competitive differentiator. We strive to be a thought leader in our industry, identifying and developing cloud capabilities to transform traditional contact center operations into customer engagement centers of excellence.
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Capture increased market share
. We believe that the adoption of cloud contact center software solutions is increasingly driven by mainstream adoption of cloud computing, especially within CRM, as well as the increasing capabilities of these solutions. With organizations refreshing their contact center systems every
8 to 10 years
, cloud solutions have an opportunity to replace legacy on-premise contact center systems at the time a replacement decision is made. We believe there is a substantial opportunity for us to win new clients
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Continue to increase sales in our existing client base
. Many of our clients initially deploy our solution to support only a portion of their contact center agents. We intend to increase the number of agents using our solution within our existing clients as they experience the benefits of our cloud solution. We also intend to sell our existing clients incremental applications to increase our revenue and the value of our existing client relationships.
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Maintain our innovation leadership by strengthening and extending our solution
. We have an innovative platform that has enabled us to establish a leadership position in the cloud contact center software market. To preserve and expand our leadership position, we intend to continue to make significant investments in research and development to strengthen our existing solution and develop additional industry-leading contact center features and applications.
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Further develop our partner ecosystem
. We have established strong partner relationships with organizations in the contact center ecosystem to further enhance the value of our VCC cloud platform. We intend to continue to cultivate new relationships with additional CRM, WFO and unified communications partners as well as system integrators, master agents, resellers, PBX providers, phone systems vendors, independent software vendors and telephony providers to enhance the value of our solution and drive sales.
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Expand internationally
. To date, our primary focus has been on the U.S. market, which represented
94%
, 93% and 93% of our revenue in
2017
,
2016
and
2015
, respectively, based on bill to addresses. We believe there is a significant opportunity for our cloud solution to disrupt incumbent legacy on-premise contact center systems internationally. We plan to increase our sales capabilities internationally by expanding our direct sales force and working with channel partners to target these markets and grow our international client base. We have co-location data center facilities in Europe to provide clients in certain countries of the European Union, or EU, with regional access to our cloud contact center solution to better serve local needs.
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Selectively pursue acquisitions
. In addition to organically developing and strengthening our solution, we intend to selectively explore acquisition opportunities of companies and technologies to expand the functionality of our solution, provide access to new clients or markets, or both.
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Five9 Social - Applies contact center customer service and sales best practices to social channels. Our solution routes, tracks and reports on agent performance in responding to social media posts in the same manner as other channels.
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Five9 Chat - Live consumer-to-agent chat from mobile or web devices gives agents the ability to respond, record and manage multiple chat interactions.
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Five9 Email - Makes email a high-response sales, service and support channel. Our email routing capability filters and intelligently routes email requests to enable the best qualified agents to respond in a timely manner.
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Five9 Visual IVR - Our visual IVR application provides mobile customer care for today’s connected customers. It allows clients to develop an IVR script once and deploy it on multiple touchpoints, including mobile devices and websites.
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Five9 Web Engagement - Sophisticated analytics with machine learning identify user patterns on websites, match persona and outcome probabilities and trigger proactive engagement actions. This enables contact centers to proactively identify when online customers may require assistance to complete a purchase, solve a problem, answer a question or any other online interaction. Given that today the majority of contact center interactions originate on the web, Five9 Web Engagement including chat capability enables contact centers to move beyond simple interactions to true personalized engagement.
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Agent Desktop:
Serves as the unified environment for contact center agents. Agents are provided with one easy-to-use desktop that is designed to allow agents to seamlessly conduct omnichannel interactions. Our universal transaction model adjusts to the needs of the interaction, including voice, chat, email, web, social media or mobile, yet feels familiar to the agent, making training simple. Automated call scripting and real-time customer data, such as purchase and interaction history, is delivered to empower agents with the information they need to deliver a superior customer experience.
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CRM Integrations:
For clients who prefer to have their agents or sales representatives work within their CRM desktop, we offer pre-built integrations with leading providers of CRM systems such as Salesforce, Oracle, Zendesk, Microsoft and ServiceNow. In addition, professional services can provide integrations with custom or legacy CRM systems. Our solution provides softphone and telephony capabilities within the CRM desktop, and routes each customer interaction to an appropriate agent resource. Agents are able to work within a familiar desktop, equipped with full telephony controls and giving them immediate access to the most current, relevant and accurate information about the customer.
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Supervisor:
Provides supervisors with tools to optimize the contact center and ensure high quality customer interactions. These tools include a visual supervisor dashboard that provides easy to use visibility
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Administrator:
Provides administrators with a comprehensive set of integrated tools to easily configure agent skills (such as language, domain expertise, and media channels to service), determine interaction routing strategies, specify IVR scripts and manage the contact center operation. The Five9 Administrator system is easy to use so that contact center business personnel can set up and make changes themselves, without having to rely on specialized IT staff often required to manage legacy on-premise contact center systems. This represents a key advantage of our VCC cloud platform as it allows businesses to adapt quickly to keep up with the rapid changes required in contact center operations.
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Reporting and Analytics:
Real-time and historical reports provide statistics and key performance indicators to allow executives and supervisors to monitor the contact center, improve reaction time to interaction volume and manage agents more effectively. We provide more than 100 standard reports with multiple views and drill-downs into individual inbound calls and multichannel interaction metrics, customer interaction outcomes, and outbound sales and marketing program metrics. Our reporting module also enables clients to build customized reports and reporting schedules.
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breadth and depth of solution features;
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reliability, scalability and quality of the platform;
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ease and speed of deployment;
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ease of application administration and use;
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level of client satisfaction;
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domain expertise in contact center operations;
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integration with third-party applications;
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pricing;
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ability to quickly adjust agent seats based on business requirements;
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breadth and domain expertise of the sales, marketing and support organization;
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ability to keep pace with client requirements;
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extent and efficiency of our professional services;
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ability to offer multiple channels of engagement; and
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size and financial stability of operations.
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Telephone Consumer Protection Act, or TCPA, which regulates the use of automatic dialing equipment and pre-recorded messages to contact consumers;
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CALEA, which requires covered entities to assist law enforcement in undertaking electronic surveillance;
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contributions to the USF, which requires that we pay a percentage of our revenues resulting from the provision of interstate telecommunications services to support certain federal programs;
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payment of annual FCC regulatory fees based on our interstate and international revenues;
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rules pertaining to access to our services by people with disabilities and contributions to the Telecommunications Relay Services fund; and
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FCC rules regarding CPNI which require that we not use such information without customer approval, subject to certain exceptions.
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market acceptance of our solution;
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our ability to attract new clients and grow our business with existing clients;
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client renewal rates;
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our ability to adequately expand our sales and service team;
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our ability to acquire and maintain strategic and client relationships;
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the amount and timing of costs and expenses related to the maintenance and expansion of our business, operations and infrastructure;
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the timing and success of new product and feature introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, clients or strategic partners;
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network outages or security incidents, which may result in additional expenses or losses, the loss of clients, the provision of client credits, and harm to our reputation;
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seasonal factors that may cause our revenues in the first half of a year to be relatively lower than our revenues in the second half of a year;
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inaccessibility or failure of our cloud contact center software due to failures in the products or services provided by third parties;
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our ability to expand, and effectively utilize our network of master agents and resellers;
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the timing of recognition of revenues under current and future GAAP;
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changes in our pricing policies or those of our competitors;
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the level of professional services and support we provide our clients;
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the components of our revenue;
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the addition or loss of key clients, including through acquisitions or consolidations;
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general economic, industry and market conditions;
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the timing of costs and expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies;
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compliance with, or changes in, the current and future domestic and international regulatory environment;
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the hiring, training and retention of key employees;
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litigation or other claims against us;
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the ability to expand internationally, and to do so profitability;
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our ability to obtain additional financing;
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advances and trends in new technologies and industry standards; and
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increases or decreases in the costs to provide our solution or pricing changes upon any renewals of client agreements.
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compete with other vendors of cloud-based enterprise contact center systems to capture market share, including from providers of legacy on-premise systems;
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increase our existing clients’ use of our solution and further develop our partner ecosystem;
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strengthen and improve our solution through significant investments in research and development and the introduction of new and enhanced solutions;
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introduce our solution to new markets outside of the United States and increase global awareness of our brand; and
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selectively pursue acquisitions.
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sales and marketing, including a significant expansion of our sales and professional services organization;
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our technology infrastructure, including systems architecture, management tools, scalability, availability, performance and security, as well as disaster recovery measures;
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solution development, including investments in our solution development team and the development of new solutions, as well as new applications and features for existing solutions;
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international expansion; and
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general administration, including legal, regulatory compliance and accounting expenses.
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cause our clients to seek credits or damages for losses incurred;
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cause existing clients to cancel their contracts and move to a competitor;
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affect our reputation as a reliable service provider;
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make it more difficult for us to attract new clients or expand our business with existing clients; or
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require us to replace existing equipment.
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clients are not satisfied with our services, prices or the functionality of our solution;
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the stability, performance or security of our solution are not satisfactory;
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our clients’ business declines due to industry cycles, seasonality, business difficulties or other reasons;
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competition increases from other contact center providers;
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fewer clients purchase usage from us;
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alternative technologies, products or features emerge that we do not provide;
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our clients or potential clients experience financial difficulties; or
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the U.S. or global economy declines.
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damage to third-party and our infrastructure and data centers, related equipment and surrounding properties caused by earthquakes, hurricanes, tornadoes, floods, fires and other natural disasters, explosions and acts of terrorism;
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security breaches resulting in loss or disclosure of confidential client and customer data and potential liability to clients and non-client third parties for such disclosures;
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inadvertent damage from third parties; and
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other hazards that could also result in suspension of operations, personal injury and even loss of life.
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the need to establish and protect our brand in international markets;
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the need to localize and adapt our solution for specific countries, including translation into foreign languages and associated costs and expenses;
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difficulties in staffing and managing foreign operations, particularly hiring and training qualified sales and service personnel;
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the need to make implementations, and offer customer care, in various native languages;
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different pricing environments, longer sales and accounts receivable payment cycles and collections issues;
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weaker protection for intellectual property and other legal rights than in the U.S. and practical difficulties in enforcing intellectual property and other rights outside of the U.S.;
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increased risk of piracy, counterfeiting and other misappropriation of our intellectual property in our locations outside the U.S.;
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new and different sources of competition;
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general economic conditions in international markets;
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fluctuations in the value of the U.S. dollar and foreign currencies, which may make our solution more expensive in other countries or may increase our costs, impacting our operating results when translated into U.S. dollars;
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compliance with customs duties, tariffs and other international trade complexities;
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compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, tax, telecommunications and telemarketing laws and regulations;
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privacy and data protection laws and regulations that are complex, expensive to comply with and may require that client data be stored and processed in a designated territory;
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increased risk of international telecom fraud;
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laws and business practices favoring local competitors;
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compliance with laws and regulations for foreign operations, including the Foreign Corrupt Practices Act, the U.K. Bribery Act and other anti-corruption laws, import and export control laws, tariffs, trade barriers, economic sanctions and regulatory or contractual limitations on our ability to sell our solution in certain foreign markets, and the risks and costs of non-compliance;
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increased financial accounting and reporting burdens and complexities;
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restrictions or taxes on the transfer of funds;
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adverse tax consequences; and
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unstable economic and political conditions.
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inability to integrate or benefit from acquisitions in a profitable manner;
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unanticipated costs or liabilities associated with the acquisition, including legal claims arising from the activities of companies we acquire;
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acquisition-related costs;
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difficulty converting the clients of the acquired business to our solution and contract terms, including due to disparities in the revenue, licensing, support or professional services model of the acquired company;
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difficulty integrating the accounting systems, operations and personnel of the acquired business;
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difficulties and additional costs and expenses associated with supporting legacy products and the hosting infrastructure of the acquired business;
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diversion of management’s attention from other business concerns;
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harm to our existing relationships with our partners and clients as a result of the acquisition;
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the loss of our or the acquired business’s key employees;
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diversion of resources that could have been more effectively deployed in other parts of our business; and
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use of substantial portions of our available cash to consummate the acquisition.
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the Communications Assistance for Law Enforcement Act, or CALEA, which requires covered entities to assist law enforcement in undertaking electronic surveillance;
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contributions to the USF which requires that we pay a percentage of our revenues resulting from the provision of interstate telecommunications services to support certain federal programs;
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payment of annual FCC regulatory fees based on our interstate and international revenues;
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rules pertaining to access to our services by people with disabilities and contributions to the Telecommunications Relay Services fund; and
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FCC rules regarding Customer Proprietary Network Information, or CPNI, which prohibit us from using such information without client approval, subject to certain exceptions.
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actual or anticipated fluctuations in our operating results;
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the financial projections we provide to the public, any changes in these projections or our failure to meet these projections;
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failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
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ratings changes by any securities analysts who follow our company;
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sales of our common stock by us or our significant stockholders, or the public announcement of same;
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the assessment of our business or position in our market published in research and other reports;
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announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;
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changes in operating performance and stock market valuations of other technology companies generally, or those in the software as a service industry in particular;
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price and volume fluctuations in the overall stock market, including as a result of trends in the U.S. or global economy;
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any major change in our board of directors or management;
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lawsuits threatened or filed against us;
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security breaches or incidents impacting our clients or their customers;
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•
|
legislation or regulation of our business, the internet and/or contact centers;
|
•
|
loss of key personnel;
|
•
|
new entrants into the contact center market, including the transition by providers of legacy on-premise contact center systems to cloud solutions, as well as cable and incumbent telephone companies and other well-capitalized competitors;
|
•
|
new products or new sales by us or our competitors;
|
•
|
the perceived or real impact of events that harm our direct competitors;
|
•
|
developments with respect to patents or proprietary rights;
|
•
|
general market conditions;
|
•
|
distributions to limited partners, or block sales, by original venture capital investors; and
|
•
|
other events or factors, including those resulting from war, incidents of terrorism or responses to these events, which could be unrelated to, or outside of, our control.
|
•
|
provide that our board of directors is classified into three classes of directors;
|
•
|
provide that stockholders may remove directors only for cause and only with the approval of holders of at least 66
2
⁄
3
% of our then outstanding capital stock;
|
•
|
provide that the authorized number of directors may be changed only by resolution of the board of directors;
|
•
|
provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
|
•
|
provide that our stockholders may not take action by written consent, and may only take action at annual or special meetings of our stockholders;
|
•
|
provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a stockholder’s notice;
|
•
|
restrict the forum for certain litigation against us to Delaware;
|
•
|
do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election);
|
•
|
provide that special meetings of our stockholders may be called only by the chairman of the board, our chief executive officer or the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; and
|
•
|
provide that stockholders will be permitted to amend our amended and restated bylaws only upon receiving at least 66
2
/
3
% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class.
|
|
|
High
|
|
Low
|
||||
Year 2017
|
|
|
|
|
||||
First quarter
|
|
$
|
18.93
|
|
|
$
|
14.00
|
|
Second quarter
|
|
24.80
|
|
|
16.30
|
|
||
Third quarter
|
|
23.93
|
|
|
19.53
|
|
||
Fourth quarter
|
|
27.81
|
|
|
22.51
|
|
||
|
|
|
|
|
||||
Year 2016
|
|
|
|
|
||||
First quarter
|
|
$
|
9.84
|
|
|
$
|
6.14
|
|
Second quarter
|
|
12.96
|
|
|
8.23
|
|
||
Third quarter
|
|
16.23
|
|
|
11.46
|
|
||
Fourth quarter
|
|
16.40
|
|
|
12.58
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||||||
Revenue
|
|
$
|
200,225
|
|
|
$
|
162,090
|
|
|
$
|
128,868
|
|
|
$
|
103,102
|
|
|
$
|
84,132
|
|
Cost of revenue
|
|
83,104
|
|
|
66,934
|
|
|
59,495
|
|
|
54,661
|
|
|
48,807
|
|
|||||
Gross profit
|
|
117,121
|
|
|
95,156
|
|
|
69,373
|
|
|
48,441
|
|
|
35,325
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
(1)(2)
|
|
27,120
|
|
|
23,878
|
|
|
22,659
|
|
|
22,110
|
|
|
17,529
|
|
|||||
Sales and marketing
(1)(2)
|
|
66,570
|
|
|
52,748
|
|
|
42,042
|
|
|
37,445
|
|
|
28,065
|
|
|||||
General and administrative
(1)(2)
|
|
29,151
|
|
|
25,072
|
|
|
25,822
|
|
|
24,416
|
|
|
18,053
|
|
|||||
Total operating expenses
|
|
122,841
|
|
|
101,698
|
|
|
90,523
|
|
|
83,971
|
|
|
63,647
|
|
|||||
Loss from operations
|
|
(5,720
|
)
|
|
(6,542
|
)
|
|
(21,150
|
)
|
|
(35,530
|
)
|
|
(28,322
|
)
|
|||||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Extinguishment of debt
|
|
—
|
|
|
(1,026
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest and other
|
|
(2,981
|
)
|
|
(4,238
|
)
|
|
(4,627
|
)
|
|
(3,916
|
)
|
|
(1,051
|
)
|
|||||
Change in fair value of convertible preferred and common stock warrant liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,745
|
|
|
(1,871
|
)
|
|||||
Total other income (expense), net
|
|
(2,981
|
)
|
|
(5,264
|
)
|
|
(4,627
|
)
|
|
(2,171
|
)
|
|
(2,922
|
)
|
|||||
Loss before income taxes
|
|
(8,701
|
)
|
|
(11,806
|
)
|
|
(25,777
|
)
|
|
(37,701
|
)
|
|
(31,244
|
)
|
|||||
Provision for income taxes
|
|
268
|
|
|
54
|
|
|
61
|
|
|
85
|
|
|
70
|
|
|||||
Net loss
|
|
$
|
(8,969
|
)
|
|
$
|
(11,860
|
)
|
|
$
|
(25,838
|
)
|
|
$
|
(37,786
|
)
|
|
$
|
(31,314
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
|
$
|
(0.16
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(1.00
|
)
|
|
$
|
(7.82
|
)
|
Shares used in computing net loss per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
|
54,946
|
|
|
52,342
|
|
|
50,141
|
|
|
37,604
|
|
|
4,006
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cost of revenue
|
|
$
|
6,300
|
|
|
$
|
6,573
|
|
|
$
|
5,950
|
|
|
$
|
5,138
|
|
|
$
|
3,709
|
|
Research and development
|
|
795
|
|
|
737
|
|
|
455
|
|
|
229
|
|
|
214
|
|
|||||
Sales and marketing
|
|
120
|
|
|
221
|
|
|
206
|
|
|
196
|
|
|
83
|
|
|||||
General and administrative
|
|
1,099
|
|
|
859
|
|
|
777
|
|
|
900
|
|
|
409
|
|
|||||
Total depreciation and amortization
|
|
$
|
8,314
|
|
|
$
|
8,390
|
|
|
$
|
7,388
|
|
|
$
|
6,463
|
|
|
$
|
4,415
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cost of revenue
|
|
$
|
2,202
|
|
|
$
|
1,375
|
|
|
$
|
866
|
|
|
$
|
542
|
|
|
$
|
194
|
|
Research and development
|
|
3,042
|
|
|
2,059
|
|
|
1,790
|
|
|
1,931
|
|
|
499
|
|
|||||
Sales and marketing
|
|
4,364
|
|
|
2,363
|
|
|
1,800
|
|
|
1,510
|
|
|
751
|
|
|||||
General and administrative
|
|
5,735
|
|
|
3,846
|
|
|
3,274
|
|
|
2,770
|
|
|
505
|
|
|||||
Total stock-based compensation
|
|
$
|
15,343
|
|
|
$
|
9,643
|
|
|
$
|
7,730
|
|
|
$
|
6,753
|
|
|
$
|
1,949
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and short-term investments
|
|
$
|
68,947
|
|
|
$
|
58,122
|
|
|
$
|
58,484
|
|
|
$
|
78,289
|
|
|
$
|
17,748
|
|
Working capital
|
|
53,317
|
|
|
40,933
|
|
|
22,712
|
|
|
56,234
|
|
|
1,076
|
|
|||||
Total assets
|
|
128,196
|
|
|
105,239
|
|
|
99,233
|
|
|
116,934
|
|
|
56,278
|
|
|||||
Total debt and capital leases
|
|
46,742
|
|
|
45,799
|
|
|
46,617
|
|
|
47,696
|
|
|
30,332
|
|
|||||
Additional paid-in capital
|
|
222,202
|
|
|
196,555
|
|
|
180,649
|
|
|
170,286
|
|
|
34,089
|
|
|||||
Total stockholders’ equity (deficit)
|
|
46,838
|
|
|
30,328
|
|
|
26,280
|
|
|
41,753
|
|
|
(2,968
|
)
|
|
|
Twelve Months Ended December 31,
|
||||
|
|
2017
|
|
2016
|
|
2015
|
Annual Dollar-Based Retention Rate
|
|
98%
|
|
100%
|
|
96%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss
|
|
$
|
(8,969
|
)
|
|
$
|
(11,860
|
)
|
|
$
|
(25,838
|
)
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
(1)
|
|
8,314
|
|
|
8,390
|
|
|
7,388
|
|
|||
Stock-based compensation
(2)
|
|
15,343
|
|
|
9,643
|
|
|
7,730
|
|
|||
Extinguishment of debt
|
|
—
|
|
|
1,026
|
|
|
—
|
|
|||
Interest expense
|
|
3,471
|
|
|
4,226
|
|
|
4,727
|
|
|||
Interest (income) and other
|
|
(490
|
)
|
|
13
|
|
|
(100
|
)
|
|||
Legal settlement
(3)
|
|
1,700
|
|
|
—
|
|
|
—
|
|
|||
Legal and indemnification fees related to settlement
|
|
135
|
|
|
—
|
|
|
—
|
|
|||
Reversal of interest and penalties on accrued federal fees
(4)
|
|
(2,133
|
)
|
|
—
|
|
|
—
|
|
|||
Reversal of accrued federal fees
(5)
|
|
—
|
|
|
(3,114
|
)
|
|
—
|
|
|||
Provision for income taxes
|
|
268
|
|
|
54
|
|
|
61
|
|
|||
Out of period adjustment for sales tax liability
(6)
|
|
—
|
|
|
—
|
|
|
765
|
|
|||
Adjusted EBITDA
|
|
$
|
17,639
|
|
|
$
|
8,378
|
|
|
$
|
(5,267
|
)
|
|
|
|
|
|
|
|
(1)
|
See ITEM 6 of this Form 10-K for depreciation and amortization expenses included in our results of operations for the periods presented.
|
(2)
|
See Note
7
of the notes to the consolidated financial statements under ITEM 8 of this Form 10-K for stock-based compensation expense included in our results of operations for the periods presented.
|
(3)
|
See “Legal Matters” in Note
10
of the notes to the consolidated financial statements under ITEM 8 of this Form 10-K for additional information.
|
(4)
|
Included in general and administrative expense. Amount represents the reversal of accrued interest and penalties related to the Universal Services Fund ("USF") liability following a favorable ruling from the FCC's Wireline Competition Bureau. See Note
10
of the notes to the consolidated financial statements under ITEM 8 of this Form 10-K for additional information.
|
(5)
|
Included in cost of revenue. Amount represents a credit recorded in the fourth quarter of 2016 following a favorable ruling from the FCC’s Wireline Competition Bureau. See Note
10
of the notes to the consolidated financial statements under ITEM 8 of this Form 10-K.
|
(6)
|
Included in general and administrative expense. The 2015 amount represents immaterial out of period adjustments recorded in the first two quarters of 2015 for 2011 through 2014.
|
|
|
Year Ended December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Revenue
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
|
42
|
%
|
|
41
|
%
|
|
46
|
%
|
Gross profit
|
|
58
|
%
|
|
59
|
%
|
|
54
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|||
Research and development
|
|
14
|
%
|
|
15
|
%
|
|
18
|
%
|
Sales and marketing
|
|
32
|
%
|
|
32
|
%
|
|
32
|
%
|
General and administrative
|
|
15
|
%
|
|
16
|
%
|
|
20
|
%
|
Total operating expenses
|
|
61
|
%
|
|
63
|
%
|
|
70
|
%
|
Loss from operations
|
|
(3
|
)%
|
|
(4
|
)%
|
|
(16
|
)%
|
Other income (expense), net:
|
|
|
|
|
|
|
|||
Extinguishment of debt
|
|
—
|
%
|
|
(1
|
)%
|
|
—
|
%
|
Interest expense
|
|
(2
|
)%
|
|
(2
|
)%
|
|
(4
|
)%
|
Interest income and other
|
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
Total other income (expense), net
|
|
(1
|
)%
|
|
(3
|
)%
|
|
(4
|
)%
|
Loss before income taxes
|
|
(4
|
)%
|
|
(7
|
)%
|
|
(20
|
)%
|
Provision for income taxes
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Net loss
|
|
(4
|
)%
|
|
(7
|
)%
|
|
(20
|
)%
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
Cost of revenue
|
|
$83,104
|
|
$66,934
|
|
$16,170
|
|
24%
|
% of Revenue
|
|
42%
|
|
41%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
Research and development
|
|
$27,120
|
|
$23,878
|
|
$3,242
|
|
14%
|
% of Revenue
|
|
14%
|
|
15%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
General and administrative
|
|
$29,151
|
|
$25,072
|
|
$4,079
|
|
16%
|
% of Revenue
|
|
15%
|
|
16%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Extinguishment of debt
|
|
$
|
—
|
|
|
$
|
(1,026
|
)
|
|
1,026
|
|
|
100
|
%
|
|
Interest expense
|
|
$
|
(3,471
|
)
|
|
$
|
(4,226
|
)
|
|
$
|
755
|
|
|
18
|
%
|
Interest income and other
|
|
490
|
|
|
(12
|
)
|
|
502
|
|
|
4,183
|
%
|
|||
Total other income (expense), net
|
|
$
|
(2,981
|
)
|
|
$
|
(5,264
|
)
|
|
$
|
2,283
|
|
|
43
|
%
|
% of Revenue
|
|
(1
|
)%
|
|
(3
|
)%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
Revenue
|
|
$162,090
|
|
$128,868
|
|
$33,222
|
|
26%
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
Cost of revenue
|
|
$66,934
|
|
$59,495
|
|
$7,439
|
|
13%
|
% of Revenue
|
|
41%
|
|
46%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
Research and development
|
|
$23,878
|
|
$22,659
|
|
$1,219
|
|
5%
|
% of Revenue
|
|
15%
|
|
18%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
Sales and marketing
|
|
$52,748
|
|
$42,042
|
|
$10,706
|
|
25%
|
% of Revenue
|
|
32%
|
|
32%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages)
|
||||||
General and administrative
|
|
$25,072
|
|
$25,822
|
|
$(750)
|
|
(3)%
|
% of Revenue
|
|
16%
|
|
20%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Extinguishment of debt
|
|
$
|
(1,026
|
)
|
|
$
|
—
|
|
|
$
|
(1,026
|
)
|
|
(100
|
)%
|
Interest expense
|
|
$
|
(4,226
|
)
|
|
$
|
(4,727
|
)
|
|
501
|
|
|
(11
|
)%
|
|
Interest income and other
|
|
(12
|
)
|
|
100
|
|
|
(112
|
)
|
|
(112
|
)%
|
|||
Total other income (expense), net
|
|
$
|
(5,264
|
)
|
|
$
|
(4,627
|
)
|
|
$
|
(637
|
)
|
|
14
|
%
|
% of Revenue
|
|
(3
|
)%
|
|
(4
|
)%
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by (used in) operating activities
|
|
$
|
11,106
|
|
|
$
|
6,838
|
|
|
$
|
(12,939
|
)
|
Net cash provided by (used in) investing activities
|
|
(2,650
|
)
|
|
(2,397
|
)
|
|
19,690
|
|
|||
Net cash provided by (used in) financing activities
|
|
2,369
|
|
|
(4,803
|
)
|
|
(6,556
|
)
|
|||
Net increase in cash and cash equivalents
|
|
$
|
10,825
|
|
|
$
|
(362
|
)
|
|
$
|
195
|
|
•
|
persuasive evidence of an arrangement exists;
|
•
|
delivery has occurred;
|
•
|
the fee is fixed or determinable; and
|
•
|
collection is reasonably assured.
|
•
|
fixed subscription revenue is recognized on a straight-line basis over the applicable term, predominantly the monthly contractual billing period;
|
•
|
variable usage revenue is recognized as actual usage occurs. Usage revenue in subscription arrangements that include bundled usage is recognized on a straight-line basis over the applicable term, as the Company cannot reliably estimate client usage patterns; and
|
•
|
professional services revenue is recognized as services are performed using the proportional performance method, with performance measured based on labor hours, assuming all other revenue recognition criteria have been met.
|
|
|
Payment Due by Period
|
||||||||||||||||||
|
|
|
|
Less Than
|
|
|
|
|
|
More than
|
||||||||||
|
|
Total
|
|
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
5 Years
|
||||||||||
Notes payable
(1)
|
|
$
|
333
|
|
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Revolving line of credit
(2)
|
|
32,594
|
|
|
—
|
|
|
32,594
|
|
|
—
|
|
|
—
|
|
|||||
Capital lease obligations
(3)
|
|
15,578
|
|
|
7,770
|
|
|
7,808
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
(4)
|
|
8,781
|
|
|
2,750
|
|
|
5,377
|
|
|
654
|
|
|
—
|
|
|||||
Hosting services
(5)
|
|
914
|
|
|
855
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|||||
Telecommunication usage
(6)
|
|
3,950
|
|
|
2,355
|
|
|
1,595
|
|
|
—
|
|
|
—
|
|
|||||
Equipment maintenance
(7)
|
|
536
|
|
|
426
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
62,686
|
|
|
$
|
14,489
|
|
|
$
|
47,543
|
|
|
$
|
654
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
68,947
|
|
|
$
|
58,122
|
|
Accounts receivable, net
|
|
19,048
|
|
|
13,881
|
|
||
Prepaid expenses and other current assets
|
|
4,840
|
|
|
3,008
|
|
||
Total current assets
|
|
92,835
|
|
|
75,011
|
|
||
Property and equipment, net
|
|
19,888
|
|
|
14,688
|
|
||
Intangible assets, net
|
|
1,073
|
|
|
1,539
|
|
||
Goodwill
|
|
11,798
|
|
|
11,798
|
|
||
Other assets
|
|
2,602
|
|
|
2,203
|
|
||
Total assets
|
|
$
|
128,196
|
|
|
$
|
105,239
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
4,292
|
|
|
$
|
3,366
|
|
Accrued and other current liabilities
|
|
11,787
|
|
|
9,604
|
|
||
Accrued federal fees
|
|
1,151
|
|
|
2,742
|
|
||
Sales tax liability
|
|
1,326
|
|
|
1,347
|
|
||
Notes payable
|
|
336
|
|
|
742
|
|
||
Capital leases
|
|
6,651
|
|
|
6,230
|
|
||
Deferred revenue
|
|
13,975
|
|
|
10,047
|
|
||
Total current liabilities
|
|
39,518
|
|
|
34,078
|
|
||
Revolving line of credit
|
|
32,594
|
|
|
32,594
|
|
||
Sales tax liability — less current portion
|
|
1,044
|
|
|
1,476
|
|
||
Notes payable — less current portion
|
|
—
|
|
|
318
|
|
||
Capital leases — less current portion
|
|
7,161
|
|
|
5,915
|
|
||
Other long-term liabilities
|
|
1,041
|
|
|
530
|
|
||
Total liabilities
|
|
81,358
|
|
|
74,911
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000 shares authorized, no shares issued and outstanding as of December 31, 2017 and 2016
|
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 450,000 shares authorized, 56,632 shares and 53,363 shares issued and outstanding as of December 31, 2017 and 2016, respectively
|
|
57
|
|
|
53
|
|
||
Additional paid-in capital
|
|
222,202
|
|
|
196,555
|
|
||
Accumulated deficit
|
|
(175,421
|
)
|
|
(166,280
|
)
|
||
Total stockholders’ equity
|
|
46,838
|
|
|
30,328
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
128,196
|
|
|
$
|
105,239
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
200,225
|
|
|
$
|
162,090
|
|
|
$
|
128,868
|
|
Cost of revenue
|
|
83,104
|
|
|
66,934
|
|
|
59,495
|
|
|||
Gross profit
|
|
117,121
|
|
|
95,156
|
|
|
69,373
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Research and development
|
|
27,120
|
|
|
23,878
|
|
|
22,659
|
|
|||
Sales and marketing
|
|
66,570
|
|
|
52,748
|
|
|
42,042
|
|
|||
General and administrative
|
|
29,151
|
|
|
25,072
|
|
|
25,822
|
|
|||
Total operating expenses
|
|
122,841
|
|
|
101,698
|
|
|
90,523
|
|
|||
Loss from operations
|
|
(5,720
|
)
|
|
(6,542
|
)
|
|
(21,150
|
)
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
||||||
Extinguishment of debt
|
|
—
|
|
|
(1,026
|
)
|
|
—
|
|
|||
Interest expense
|
|
(3,471
|
)
|
|
(4,226
|
)
|
|
(4,727
|
)
|
|||
Interest income and other
|
|
490
|
|
|
(12
|
)
|
|
100
|
|
|||
Total other income (expense), net
|
|
(2,981
|
)
|
|
(5,264
|
)
|
|
(4,627
|
)
|
|||
Loss before income taxes
|
|
(8,701
|
)
|
|
(11,806
|
)
|
|
(25,777
|
)
|
|||
Provision for income taxes
|
|
268
|
|
|
54
|
|
|
61
|
|
|||
Net loss
|
|
$
|
(8,969
|
)
|
|
$
|
(11,860
|
)
|
|
$
|
(25,838
|
)
|
Net loss per share:
|
|
|
|
|
|
|
||||||
Basic and diluted
|
|
$
|
(0.16
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.52
|
)
|
Shares used in computing net loss per share:
|
|
|
|
|
|
|
||||||
Basic and diluted
|
|
54,946
|
|
|
52,342
|
|
|
50,141
|
|
|||
Comprehensive Loss:
|
|
|
|
|
|
|
||||||
Net loss and comprehensive loss
|
|
$
|
(8,969
|
)
|
|
$
|
(11,860
|
)
|
|
$
|
(25,838
|
)
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated
Deficit
|
|
Total Stockholders’ Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|||||||||||||||
Balance as of December 31, 2014
|
|
49,322
|
|
|
$
|
49
|
|
|
$
|
170,286
|
|
|
$
|
(128,582
|
)
|
|
$
|
41,753
|
|
Issuance of common stock upon exercise of stock options and warrants
|
|
992
|
|
|
1
|
|
|
1,265
|
|
|
—
|
|
|
1,266
|
|
||||
Issuance of common stock upon vesting of restricted stock units
|
|
566
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Issuance of common stock under ESPP
|
|
306
|
|
|
—
|
|
|
1,369
|
|
|
—
|
|
|
1,369
|
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
7,730
|
|
|
—
|
|
|
7,730
|
|
||||
Forfeiture of unvested restricted common stock
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,838
|
)
|
|
(25,838
|
)
|
||||
Balance as of December 31, 2015
|
|
51,165
|
|
|
51
|
|
|
180,649
|
|
|
(154,420
|
)
|
|
26,280
|
|
||||
Issuance of common stock upon exercise of stock options and warrants
|
|
982
|
|
|
1
|
|
|
4,285
|
|
|
—
|
|
|
4,286
|
|
||||
Issuance of common stock upon vesting of restricted stock units
|
|
896
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Issuance of common stock under ESPP
|
|
320
|
|
|
—
|
|
|
1,979
|
|
|
—
|
|
|
1,979
|
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
9,643
|
|
|
—
|
|
|
9,643
|
|
||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,860
|
)
|
|
(11,860
|
)
|
||||
Balance as of December 31, 2016
|
|
53,363
|
|
|
53
|
|
|
196,555
|
|
|
(166,280
|
)
|
|
30,328
|
|
||||
Issuance of common stock upon exercise of stock options and warrants
|
|
2,033
|
|
|
2
|
|
|
6,033
|
|
|
—
|
|
|
6,035
|
|
||||
Issuance of common stock upon vesting of restricted stock units
|
|
971
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Issuance of common stock under ESPP
|
|
265
|
|
|
1
|
|
|
4,100
|
|
|
—
|
|
|
4,101
|
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
15,343
|
|
|
—
|
|
|
15,343
|
|
||||
Other
(1)
|
|
—
|
|
|
—
|
|
|
172
|
|
|
(172
|
)
|
|
—
|
|
||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,969
|
)
|
|
(8,969
|
)
|
||||
Balance as of December 31, 2017
|
|
56,632
|
|
|
$
|
57
|
|
|
$
|
222,202
|
|
|
$
|
(175,421
|
)
|
|
$
|
46,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(8,969
|
)
|
|
$
|
(11,860
|
)
|
|
$
|
(25,838
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
8,314
|
|
|
8,390
|
|
|
7,388
|
|
|||
Provision for doubtful accounts
|
|
95
|
|
|
75
|
|
|
171
|
|
|||
Stock-based compensation
|
|
15,343
|
|
|
9,643
|
|
|
7,730
|
|
|||
Amortization of debt discount and issuance costs
|
|
80
|
|
|
241
|
|
|
350
|
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
1,026
|
|
|
—
|
|
|||
Reversal of interest and penalties on accrued federal fees
|
|
(2,133
|
)
|
|
—
|
|
|
—
|
|
|||
Reversal of accrued federal fees
|
|
—
|
|
|
(3,114
|
)
|
|
—
|
|
|||
Non-cash adjustment on investment
|
|
(366
|
)
|
|
—
|
|
|
—
|
|
|||
Accretion of interest
|
|
21
|
|
|
20
|
|
|
—
|
|
|||
Others
|
|
(48
|
)
|
|
(10
|
)
|
|
46
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(5,163
|
)
|
|
(3,389
|
)
|
|
(2,410
|
)
|
|||
Prepaid expenses and other current assets
|
|
(1,912
|
)
|
|
(859
|
)
|
|
(224
|
)
|
|||
Other assets
|
|
(33
|
)
|
|
203
|
|
|
(312
|
)
|
|||
Accounts payable
|
|
813
|
|
|
811
|
|
|
(1,610
|
)
|
|||
Accrued and other current liabilities
|
|
1,061
|
|
|
2,262
|
|
|
426
|
|
|||
Accrued federal fees and sales tax liability
|
|
90
|
|
|
(182
|
)
|
|
441
|
|
|||
Deferred revenue
|
|
3,882
|
|
|
3,680
|
|
|
1,038
|
|
|||
Other liabilities
|
|
31
|
|
|
(99
|
)
|
|
(135
|
)
|
|||
Net cash provided by (used in) operating activities
|
|
11,106
|
|
|
6,838
|
|
|
(12,939
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
|
(2,650
|
)
|
|
(1,131
|
)
|
|
(1,116
|
)
|
|||
Purchases of convertible notes held for investment
|
|
—
|
|
|
(1,206
|
)
|
|
—
|
|
|||
Decrease (increase) in restricted cash
|
|
—
|
|
|
(60
|
)
|
|
806
|
|
|||
Purchase of short-term investments
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
|||
Proceeds from maturity of short-term investments
|
|
—
|
|
|
—
|
|
|
40,000
|
|
|||
Net cash provided by (used in) investing activities
|
|
(2,650
|
)
|
|
(2,397
|
)
|
|
19,690
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from exercise of common stock options and warrants
|
|
6,035
|
|
|
4,286
|
|
|
1,266
|
|
|||
Proceeds from sale of common stock under ESPP
|
|
4,101
|
|
|
1,979
|
|
|
1,369
|
|
|||
Proceeds from revolving line of credit
|
|
—
|
|
|
32,594
|
|
|
—
|
|
|||
Repayments on revolving line of credit
|
|
—
|
|
|
(12,500
|
)
|
|
—
|
|
|||
Repayments of notes payable
|
|
(699
|
)
|
|
(24,351
|
)
|
|
(3,447
|
)
|
|||
Payments of capital leases
|
|
(7,068
|
)
|
|
(6,237
|
)
|
|
(5,744
|
)
|
|||
Payment of prepayment penalty and related fees
|
|
—
|
|
|
(368
|
)
|
|
—
|
|
|||
Payments for debt issuance costs
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
|
2,369
|
|
|
(4,803
|
)
|
|
(6,556
|
)
|
|||
Net increase in cash and cash equivalents
|
|
10,825
|
|
|
(362
|
)
|
|
195
|
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
|
||||||
Beginning of period
|
|
58,122
|
|
|
58,484
|
|
|
58,289
|
|
|||
End of period
|
|
$
|
68,947
|
|
|
$
|
58,122
|
|
|
$
|
58,484
|
|
Supplemental disclosures of cash flow data:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
3,311
|
|
|
$
|
4,234
|
|
|
$
|
4,340
|
|
Cash paid for income taxes
|
|
121
|
|
|
115
|
|
|
186
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
||||||
Equipment obtained under capital lease
|
|
$
|
10,261
|
|
|
$
|
8,202
|
|
|
$
|
6,284
|
|
Equipment purchased and unpaid at period-end
|
|
145
|
|
|
163
|
|
|
151
|
|
|||
Capitalization of leasehold improvement through non-cash lease incentive
|
|
142
|
|
|
—
|
|
|
—
|
|
|||
Conversion of accrued federal fees to note payable, net
|
|
—
|
|
|
—
|
|
|
1,675
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, beginning of period
|
|
$
|
12
|
|
|
$
|
15
|
|
|
$
|
65
|
|
Add: bad debt expense
|
|
95
|
|
|
75
|
|
|
171
|
|
|||
Less: write-offs, net of recoveries
|
|
(74
|
)
|
|
(78
|
)
|
|
(221
|
)
|
|||
Balance, end of period
|
|
$
|
33
|
|
|
$
|
12
|
|
|
$
|
15
|
|
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
|
•
|
persuasive evidence of an arrangement exists;
|
•
|
delivery has occurred;
|
•
|
the fee is fixed or determinable; and
|
•
|
collection is reasonably assured.
|
•
|
fixed subscription revenue is recognized on a straight-line basis over the applicable term, predominantly the monthly contractual billing period;
|
•
|
variable usage revenue is recognized as actual usage occurs. Usage revenue in subscription arrangements that include bundled usage is recognized on a straight-line basis over the applicable term, as the Company cannot reliably estimate client usage patterns; and
|
•
|
professional services revenue is recognized as services are performed using the proportional performance method, with performance measured based on labor hours, assuming all other revenue recognition criteria have been met.
|
|
|
December 31, 2017
|
||||||||||
|
|
Total
|
|
Level 1
|
|
Level 3
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
||||||
Money market funds
|
|
$
|
20,092
|
|
|
$
|
20,092
|
|
|
$
|
—
|
|
Other Assets
|
|
|
|
|
|
|
||||||
Embedded conversion option held for investment
|
|
$
|
984
|
|
|
$
|
—
|
|
|
$
|
984
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2016
|
||||||||||
|
|
Total
|
|
Level 1
|
|
Level 3
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
||||||
Money market funds
|
|
$
|
20,069
|
|
|
$
|
20,069
|
|
|
$
|
—
|
|
Other Assets
|
|
|
|
|
|
|
||||||
Embedded conversion option held for investment
|
|
$
|
873
|
|
|
$
|
—
|
|
|
$
|
873
|
|
|
|
December 31,
2017 |
||
Beginning balance
|
|
$
|
873
|
|
Total gains included in earnings
(1)
|
|
111
|
|
|
Ending balance
|
|
$
|
984
|
|
|
|
|
||
|
|
|
(1)
|
Amount includes both fair value and foreign currency adjustments.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Cash
|
|
$
|
48,855
|
|
|
$
|
38,053
|
|
Money market funds
|
|
20,092
|
|
|
20,069
|
|
||
Total cash and cash equivalents
|
|
$
|
68,947
|
|
|
$
|
58,122
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Trade accounts receivable
|
|
$
|
17,481
|
|
|
$
|
12,640
|
|
Unbilled trade accounts receivable, net of advance client deposits
|
|
1,600
|
|
|
1,253
|
|
||
Allowance for doubtful accounts
|
|
(33
|
)
|
|
(12
|
)
|
||
Accounts receivable, net
|
|
$
|
19,048
|
|
|
$
|
13,881
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Prepaid expenses
|
|
$
|
2,437
|
|
|
$
|
2,199
|
|
Other current assets
|
|
2,403
|
|
|
809
|
|
||
Prepaid expenses and other current assets
|
|
$
|
4,840
|
|
|
$
|
3,008
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Computer and network equipment
|
|
$
|
47,195
|
|
|
$
|
37,664
|
|
Computer software
|
|
6,974
|
|
|
5,133
|
|
||
Internal-use software development costs
|
|
500
|
|
|
475
|
|
||
Furniture and fixtures
|
|
1,282
|
|
|
1,130
|
|
||
Leasehold improvements
|
|
801
|
|
|
624
|
|
||
Property and equipment
|
|
56,752
|
|
|
45,026
|
|
||
Accumulated depreciation and amortization
|
|
(36,864
|
)
|
|
(30,338
|
)
|
||
Property and equipment, net
|
|
$
|
19,888
|
|
|
$
|
14,688
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Gross
|
|
$
|
46,624
|
|
|
$
|
35,504
|
|
Less: accumulated depreciation and amortization
|
|
(30,438
|
)
|
|
(23,128
|
)
|
||
Total
|
|
$
|
16,186
|
|
|
$
|
12,376
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Accrued expenses
|
|
$
|
3,130
|
|
|
$
|
2,148
|
|
Accrued compensation and benefits
|
|
8,657
|
|
|
7,456
|
|
||
Accrued and other current liabilities
|
|
$
|
11,787
|
|
|
$
|
9,604
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
Developed technology
|
|
$
|
2,460
|
|
|
$
|
(1,478
|
)
|
|
$
|
982
|
|
|
$
|
2,460
|
|
|
$
|
(1,126
|
)
|
|
$
|
1,334
|
|
Customer relationships
|
|
520
|
|
|
(437
|
)
|
|
83
|
|
|
520
|
|
|
(333
|
)
|
|
187
|
|
||||||
Domain names
|
|
50
|
|
|
(42
|
)
|
|
8
|
|
|
50
|
|
|
(32
|
)
|
|
18
|
|
||||||
Total
|
|
$
|
3,030
|
|
|
$
|
(1,957
|
)
|
|
$
|
1,073
|
|
|
$
|
3,030
|
|
|
$
|
(1,491
|
)
|
|
$
|
1,539
|
|
Period
|
|
Expected Future
Amortization Expense |
||
2018
|
|
$
|
442
|
|
2019
|
|
351
|
|
|
2020
|
|
280
|
|
|
Total
|
|
$
|
1,073
|
|
Period
|
|
Amount to Mature
|
||
2018
|
|
$
|
333
|
|
2019
|
|
32,594
|
|
|
Total
|
|
$
|
32,927
|
|
|
|
December 31, 2017
|
|
Stock options outstanding
|
|
4,047
|
|
Restricted stock units outstanding
|
|
2,033
|
|
Shares available for future grant under 2014 Plan
|
|
7,300
|
|
Shares available for future issuance under ESPP
|
|
1,371
|
|
Common stock warrants outstanding
|
|
13
|
|
Total shares of common stock reserved
|
|
14,764
|
|
|
|
Number of Shares
|
|
Weighted
Average Exercise Price |
|
Weighted
Average
Remaining
Contractual
Life
(Years)
|
|
Aggregate
Intrinsic Value (1) |
||||
Outstanding as of December 31, 2016
|
|
5,556
|
|
|
$
|
5.23
|
|
|
|
|
|
|
Options granted
|
|
619
|
|
|
18.11
|
|
|
|
|
|
||
Options exercised
|
|
(1,986
|
)
|
|
3.04
|
|
|
|
|
|
||
Options forfeited or expired
|
|
(142
|
)
|
|
12.83
|
|
|
|
|
|
||
Outstanding as of December 31, 2017
|
|
4,047
|
|
|
$
|
8.00
|
|
|
6.4
|
|
68,334
|
|
Vested and expected to vest as of December 31, 2017
|
|
4,047
|
|
|
8.00
|
|
|
6.4
|
|
68,334
|
|
|
Exercisable as of December 31, 2017
|
|
2,911
|
|
|
6.20
|
|
|
5.6
|
|
54,380
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
(1) The aggregate intrinsic value amounts are computed based on the difference between the exercise price of the stock options and the fair market value of the Company’s common stock of $24.88 per share as of December 31, 2017 for all in-the-money stock options outstanding.
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value Per Share
|
|||
Outstanding as of December 31, 2016
|
|
2,019
|
|
|
$
|
7.65
|
|
RSUs granted
|
|
1,176
|
|
|
18.29
|
|
|
RSUs vested and released
|
|
(971
|
)
|
|
8.85
|
|
|
RSUs forfeited
|
|
(191
|
)
|
|
11.42
|
|
|
Outstanding as of December 31, 2017
|
|
2,033
|
|
|
$
|
12.81
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Weighted average grant date fair value per share of RSUs granted
|
|
$
|
18.29
|
|
|
$
|
9.71
|
|
|
$
|
5.10
|
|
Total fair value of RSUs vested during the period
|
|
21,161
|
|
|
10,706
|
|
|
2,907
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of revenue
|
|
$
|
2,202
|
|
|
$
|
1,375
|
|
|
$
|
866
|
|
Research and development
|
|
3,042
|
|
|
2,059
|
|
|
1,790
|
|
|||
Sales and marketing
|
|
4,364
|
|
|
2,363
|
|
|
1,800
|
|
|||
General and administrative
(1)
|
|
5,735
|
|
|
3,846
|
|
|
3,274
|
|
|||
Total stock-based compensation
|
|
$
|
15,343
|
|
|
$
|
9,643
|
|
|
$
|
7,730
|
|
|
|
|
|
|
|
|
(1)
|
Effective December 2017, the Company’s former Chief Executive Officer and President resigned from his position and became the Executive Chairman of the Board. Due to this substantive change in status, certain of his stock option and RSU awards were modified which resulted in incremental stock based compensation expense of approximately $
1.0 million
.
|
|
|
Stock Option
|
|
RSU
|
|
ESPP
|
||||||
Unrecognized stock-based compensation expense
|
|
$
|
10,703
|
|
|
$
|
26,401
|
|
|
$
|
670
|
|
Weighted-average amortization period
|
|
2.5 years
|
|
|
2.8 years
|
|
|
0.4 years
|
|
Stock Options
|
|
Year Ended December 31,
|
||||
|
|
2017
|
|
2016
|
|
2015
|
Expected term (years)
|
|
5.9
|
|
5.7
|
|
6.1
|
Volatility
|
|
49%
|
|
46%
|
|
49%
|
Risk-free interest rate
|
|
2.1%
|
|
1.4%
|
|
1.6%
|
Dividend yield
|
|
—
|
|
—
|
|
—
|
ESPP
|
|
Granted In
|
||||||||||
|
|
November 2017
|
|
May 2017
|
|
November 2016
|
|
May 2016
|
|
November 2015
|
|
May 2015
|
Expected term (years)
|
|
0.5
|
|
0.5
|
|
0.5
|
|
0.5
|
|
0.5
|
|
0.5
|
Volatility
|
|
36%
|
|
43%
|
|
42%
|
|
58%
|
|
54%
|
|
43%
|
Risk-free interest rate
|
|
1.4%
|
|
1.0%
|
|
0.6%
|
|
0.4%
|
|
0.3%
|
|
0.1%
|
Dividend yield
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss
|
|
$
|
(8,969
|
)
|
|
$
|
(11,860
|
)
|
|
$
|
(25,838
|
)
|
Weighted-average shares used in computing basic and diluted net loss per share
|
|
54,946
|
|
|
52,342
|
|
|
50,141
|
|
|||
Basic and diluted net loss per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.52
|
)
|
|
|
December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Stock options
|
|
4,047
|
|
|
5,556
|
|
|
6,092
|
|
Restricted stock units
|
|
2,033
|
|
|
2,019
|
|
|
1,818
|
|
ESPP
|
|
—
|
|
|
—
|
|
|
156
|
|
Common stock warrants
|
|
13
|
|
|
132
|
|
|
191
|
|
Total
|
|
6,093
|
|
|
7,707
|
|
|
8,257
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
|
$
|
(9,434
|
)
|
|
$
|
(12,222
|
)
|
|
$
|
(26,305
|
)
|
International
|
|
733
|
|
|
416
|
|
|
528
|
|
|||
Loss before income taxes
|
|
$
|
(8,701
|
)
|
|
$
|
(11,806
|
)
|
|
$
|
(25,777
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
||||||
U.S. federal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. state
|
|
42
|
|
|
16
|
|
|
21
|
|
|||
Foreign
|
|
226
|
|
|
38
|
|
|
40
|
|
|||
Total provision for income taxes
|
|
$
|
268
|
|
|
$
|
54
|
|
|
$
|
61
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. federal tax at statutory rate
|
|
$
|
(2,958
|
)
|
|
$
|
(4,014
|
)
|
|
$
|
(8,764
|
)
|
U.S. state income taxes
|
|
(708
|
)
|
|
490
|
|
|
(756
|
)
|
|||
Non-deductible expense (benefit)
|
|
(5,673
|
)
|
|
931
|
|
|
438
|
|
|||
Research and development credit
|
|
(402
|
)
|
|
(262
|
)
|
|
(440
|
)
|
|||
Stock-based compensation
|
|
(14,622
|
)
|
|
983
|
|
|
737
|
|
|||
Impact of 2017 Tax Act
|
|
25,952
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
2
|
|
|
(104
|
)
|
|
481
|
|
|||
Change in valuation allowance
|
|
(1,323
|
)
|
|
2,030
|
|
|
8,365
|
|
|||
Total provision for income taxes
|
|
$
|
268
|
|
|
$
|
54
|
|
|
$
|
61
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss and credit carryforwards
|
|
$
|
47,991
|
|
|
$
|
48,533
|
|
Accrued liabilities
|
|
3,183
|
|
|
3,801
|
|
||
Allowance for doubtful accounts
|
|
416
|
|
|
429
|
|
||
Property and equipment
|
|
(98
|
)
|
|
183
|
|
||
Deferred revenue
|
|
140
|
|
|
23
|
|
||
Accrued compensation
|
|
900
|
|
|
1,183
|
|
||
Intangibles
|
|
7
|
|
|
14
|
|
||
Gross deferred tax assets
|
|
52,539
|
|
|
54,166
|
|
||
Valuation allowance
|
|
(52,275
|
)
|
|
(53,598
|
)
|
||
Net deferred tax assets
|
|
264
|
|
|
568
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Amortized intangibles
|
|
(264
|
)
|
|
(568
|
)
|
||
Gross deferred tax liabilities
|
|
(264
|
)
|
|
(568
|
)
|
||
Net deferred taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized benefit — beginning of period
|
|
$
|
2,805
|
|
|
$
|
2,485
|
|
|
$
|
1,975
|
|
Gross increases — current year tax positions
|
|
310
|
|
|
324
|
|
|
522
|
|
|||
Gross decreases — prior year tax positions
|
|
—
|
|
|
(4
|
)
|
|
(12
|
)
|
|||
Unrecognized benefit — end of period
|
|
$
|
3,115
|
|
|
$
|
2,805
|
|
|
$
|
2,485
|
|
Year Ending December 31,
|
|
Capital Leases
|
|
Operating Leases
|
||||
2018
|
|
$
|
7,770
|
|
|
$
|
2,750
|
|
2019
|
|
5,564
|
|
|
2,747
|
|
||
2020
|
|
2,244
|
|
|
2,630
|
|
||
2021
|
|
—
|
|
|
654
|
|
||
Total future minimum lease payment
|
|
$
|
15,578
|
|
|
$
|
8,781
|
|
Less — amount representing interest
|
|
(1,766
|
)
|
|
|
|||
Present value of total capital lease obligation
|
|
$
|
13,812
|
|
|
|
||
Capital lease obligation — current portion
|
|
6,651
|
|
|
|
|||
Capital lease obligation — net of current portion
|
|
7,161
|
|
|
|
Year Ending December 31,
|
|
Hosting Services
|
|
Telecommunication Usage Services
|
|
Equipment Maintenance Services
|
||||||
2018
|
|
$
|
855
|
|
|
$
|
2,355
|
|
|
$
|
426
|
|
2019
|
|
36
|
|
|
1,505
|
|
|
93
|
|
|||
2020
|
|
23
|
|
|
90
|
|
|
17
|
|
|||
Total future minimum payment
|
|
$
|
914
|
|
|
$
|
3,950
|
|
|
$
|
536
|
|
|
|
December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
|
$
|
17,949
|
|
|
$
|
13,025
|
|
|
$
|
10,939
|
|
International
|
|
1,939
|
|
|
1,663
|
|
|
2,286
|
|
|||
Property and equipment, net
|
|
$
|
19,888
|
|
|
$
|
14,688
|
|
|
$
|
13,225
|
|
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
|
|
Dec. 31, 2017
|
|
Sept. 30, 2017
|
|
Jun. 30, 2017
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
Jun. 30, 2016
|
|
Mar. 31, 2016
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
(unaudited, in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Revenue
|
|
$
|
55,403
|
|
|
$
|
50,081
|
|
|
$
|
47,727
|
|
|
$
|
47,014
|
|
|
$
|
44,207
|
|
|
$
|
40,982
|
|
|
$
|
38,886
|
|
|
$
|
38,015
|
|
Cost of revenue
(1)(2)
|
|
22,363
|
|
|
20,497
|
|
|
20,273
|
|
|
19,971
|
|
|
15,770
|
|
|
17,790
|
|
|
16,764
|
|
|
16,610
|
|
||||||||
Gross profit
|
|
33,040
|
|
|
29,584
|
|
|
27,454
|
|
|
27,043
|
|
|
28,437
|
|
|
23,192
|
|
|
22,122
|
|
|
21,405
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
(1)(2)
|
|
6,748
|
|
|
6,689
|
|
|
6,836
|
|
|
6,847
|
|
|
6,236
|
|
|
6,041
|
|
|
5,799
|
|
|
5,802
|
|
||||||||
Sales and marketing
(1)(2)
|
|
17,358
|
|
|
16,502
|
|
|
16,932
|
|
|
15,778
|
|
|
14,480
|
|
|
12,925
|
|
|
12,637
|
|
|
12,706
|
|
||||||||
General and administrative
(1)(2)
|
|
8,767
|
|
|
4,679
|
|
|
6,845
|
|
|
8,860
|
|
|
6,511
|
|
|
6,143
|
|
|
5,882
|
|
|
6,536
|
|
||||||||
Total operating expenses
|
|
32,873
|
|
|
27,870
|
|
|
30,613
|
|
|
31,485
|
|
|
27,227
|
|
|
25,109
|
|
|
24,318
|
|
|
25,044
|
|
||||||||
Loss from operations
|
|
167
|
|
|
1,714
|
|
|
(3,159
|
)
|
|
(4,442
|
)
|
|
1,210
|
|
|
(1,917
|
)
|
|
(2,196
|
)
|
|
(3,639
|
)
|
||||||||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,026
|
)
|
|
—
|
|
|
—
|
|
||||||||
Interest expense
|
|
(836
|
)
|
|
(865
|
)
|
|
(888
|
)
|
|
(882
|
)
|
|
(869
|
)
|
|
(961
|
)
|
|
(1,197
|
)
|
|
(1,199
|
)
|
||||||||
Interest income and other
|
|
164
|
|
|
118
|
|
|
90
|
|
|
118
|
|
|
54
|
|
|
12
|
|
|
(33
|
)
|
|
(45
|
)
|
||||||||
Total other income (expense), net
|
|
(672
|
)
|
|
(747
|
)
|
|
(798
|
)
|
|
(764
|
)
|
|
(815
|
)
|
|
(1,975
|
)
|
|
(1,230
|
)
|
|
(1,244
|
)
|
||||||||
Income (loss) before income taxes
|
|
(505
|
)
|
|
967
|
|
|
(3,957
|
)
|
|
(5,206
|
)
|
|
395
|
|
|
(3,892
|
)
|
|
(3,426
|
)
|
|
(4,883
|
)
|
||||||||
Provision for (benefit from) income taxes
|
|
126
|
|
|
43
|
|
|
50
|
|
|
49
|
|
|
(14
|
)
|
|
(2
|
)
|
|
42
|
|
|
28
|
|
||||||||
Net income (loss)
|
|
$
|
(631
|
)
|
|
$
|
924
|
|
|
$
|
(4,007
|
)
|
|
$
|
(5,255
|
)
|
|
$
|
409
|
|
|
$
|
(3,890
|
)
|
|
$
|
(3,468
|
)
|
|
$
|
(4,911
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$
|
(0.01
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
Diluted
|
|
$
|
(0.01
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
Shares used in computing net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
56,034
|
|
|
55,310
|
|
|
54,723
|
|
|
53,688
|
|
|
53,126
|
|
|
52,708
|
|
|
52,143
|
|
|
51,377
|
|
||||||||
Diluted
|
|
56,034
|
|
|
59,441
|
|
|
54,723
|
|
|
53,688
|
|
|
56,633
|
|
|
52,708
|
|
|
52,143
|
|
|
51,377
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
|
|
Dec. 31, 2017
|
|
Sept. 30, 2017
|
|
Jun. 30, 2017
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
Jun. 30, 2016
|
|
Mar. 31, 2016
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
(unaudited, in thousands)
|
||||||||||||||||||||||||||||||
Cost of revenue
|
|
$
|
594
|
|
|
$
|
599
|
|
|
$
|
575
|
|
|
$
|
434
|
|
|
$
|
424
|
|
|
$
|
357
|
|
|
$
|
329
|
|
|
$
|
265
|
|
Research and development
|
|
807
|
|
|
797
|
|
|
801
|
|
|
637
|
|
|
549
|
|
|
547
|
|
|
528
|
|
|
435
|
|
||||||||
Sales and marketing
|
|
1,128
|
|
|
1,084
|
|
|
1,224
|
|
|
928
|
|
|
759
|
|
|
626
|
|
|
544
|
|
|
434
|
|
||||||||
General and administrative
|
|
2,111
|
|
|
1,240
|
|
|
1,254
|
|
|
1,130
|
|
|
984
|
|
|
989
|
|
|
1,013
|
|
|
860
|
|
||||||||
Total stock-based compensation
|
|
$
|
4,640
|
|
|
$
|
3,720
|
|
|
$
|
3,854
|
|
|
$
|
3,129
|
|
|
$
|
2,716
|
|
|
$
|
2,519
|
|
|
$
|
2,414
|
|
|
$
|
1,994
|
|
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
|
|
Dec. 31, 2017
|
|
Sept. 30, 2017
|
|
Jun. 30, 2017
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
Jun. 30, 2016
|
|
Mar. 31, 2016
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
(unaudited, in thousands)
|
||||||||||||||||||||||||||||||
Cost of revenue
|
|
$
|
1,611
|
|
|
$
|
1,397
|
|
|
$
|
1,716
|
|
|
$
|
1,576
|
|
|
$
|
1,608
|
|
|
$
|
1,668
|
|
|
$
|
1,616
|
|
|
$
|
1,680
|
|
Research and development
|
|
170
|
|
|
182
|
|
|
237
|
|
|
206
|
|
|
224
|
|
|
204
|
|
|
161
|
|
|
148
|
|
||||||||
Sales and marketing
|
|
30
|
|
|
30
|
|
|
30
|
|
|
30
|
|
|
58
|
|
|
56
|
|
|
54
|
|
|
53
|
|
||||||||
General and administrative
|
|
257
|
|
|
272
|
|
|
287
|
|
|
283
|
|
|
196
|
|
|
212
|
|
|
229
|
|
|
222
|
|
||||||||
Total depreciation and amortization
|
|
$
|
2,068
|
|
|
$
|
1,881
|
|
|
$
|
2,270
|
|
|
$
|
2,095
|
|
|
$
|
2,086
|
|
|
$
|
2,140
|
|
|
$
|
2,060
|
|
|
$
|
2,103
|
|
Exhibit Index
|
||
Exhibit Number
|
|
Description
|
|
|
|
3.1
Ø
|
|
Amended and Restated Certificate of Incorporation of Five9, Inc.
(filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 10, 2014 (File No. 001-36383) and incorporated by reference herein).
|
3.2
Ø
|
|
Amended and Restated Bylaws of Five9, Inc.
(filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 10, 2014 (File No. 001-36383) and incorporated by reference herein).
|
4.1
Ø
|
|
Form of Common Stock Certificate
(filed as Exhibit 4.1 to Amendment No.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 24, 2014 (File No. 333-194258) and incorporated by reference herein).
|
4.2
Ø
|
|
Eighth Amended and Restated Stockholders’ Agreement, dated October 28, 2013, among the Registrant and certain holders of its capital stock, as amended by the First Amendment dated December 20, 2013 and the Second Amendment dated December 30, 2013
(filed as Exhibit 4.2 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 24, 2014 (File No. 333-194258) and incorporated by reference herein).
|
4.3
Ø
|
|
Joinder to the Eighth Amended and Restated Stockholders’ Agreement, dated April 1, 2014
(filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2014 (File No. 001-36383) and incorporated by reference herein).
|
4.4
Ø
|
|
Third Amendment to Eighth Amended and Restated Stockholders’ Agreement, dated April 15, 2014
(filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2014 (File No. 001-36383) and incorporated by reference herein).
|
4.5
Ø
|
|
Warrant to purchase shares of series D-2 preferred stock issued to City National Bank
(filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
Exhibit Index
|
||
Exhibit Number
|
|
Description
|
4.6
Ø
|
|
Form of Warrant to purchase shares of common stock
(filed as Exhibit 4.5 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
4.7
Ø
|
|
Form of Warrant to purchase shares of common stock issued to Fifth Street Finance Corp. and Fifth Street Mezzanine Partners V, L.P.
(filed as Exhibit 4.6 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.1+
Ø
|
|
Independent Contractor Agreement between the Registrant and Michael Burkland
(filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2018 (File No. 001-36383) and incorporated by referenced herein).
|
10.2+
Ø
|
|
Form of Indemnification Agreement between the Registrant and each of its directors and executive officers, as amended on July 31, 2015
(filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2015 (File No. 001-36383) and incorporated by referenced herein.)
|
10.3+
Ø
|
|
Employment Agreement between the Registrant and Michael Burkland
(filed as Exhibit 10.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.4+
Ø
|
|
Confirmation Letter between the Registrant and Barry Zwarenstein
(filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.5+
Ø
|
|
Offer Letter between the Registrant and Dan Burkland and amendment
(filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.6+
Ø
|
|
Offer Letter between the Registrant and Scott Welch
(filed as Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2015 (File No. 001-36383) and incorporated by referenced herein).
|
10.7+
Ø
|
|
Five9, Inc. Amended and Restated 2004 Equity Incentive Plan
(filed as Exhibit 10.8 to Amendment No.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on April 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.8+
Ø
|
|
Amendment to Five9, Inc. Amended and Restated 2004 Equity Incentive Plan, effective March 6, 2014
(filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2014 (File No. 001-36383) and incorporated by reference herein).
|
10.9+
Ø
|
|
Five9, Inc. 2014 Equity Incentive Plan and related form agreements
(filed as Exhibit 10.9 to Amendment No.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 24, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.10+
Ø
|
|
Five9, Inc. 2014 Employee Stock Purchase Plan
(filed as Exhibit 10.10 to Amendment No.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 24, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.11+
Ø
|
|
Key Employee Severance Benefit Plan
(filed as Exhibit 10.12 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.12+
Ø
|
|
Five9 Inc. 2016 Executive Bonus Plan
(filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed with the SEC on March 3, 2016 (File No. 001-36383) and incorporated by reference herein).
|
10.13+
Ø
|
|
Five9 Inc. Non-Employee Director Compensation Policy
(filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K filed with the SEC on March 3, 2016 (File No. 001-36383) and incorporated by reference herein).
.
|
10.14+
|
|
|
10.15+
Ø
|
|
Five9 Inc. 2017 Executive Bonus Program
(filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed with the SEC on March 3, 2016 (File No. 001-36383) and incorporated by reference herein).
.
|
Exhibit Index
|
||
Exhibit Number
|
|
Description
|
10.16
|
|
|
10.17
Ø
|
|
Loan and Security Agreement, dated March 8, 2012, by and between the Registrant and City National Bank
(filed as Exhibit 10.15 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.18
Ø
|
|
First Amendment to Loan and Security Agreement, dated as of October 18, 2013, by and between the Registrant and City National Bank
(filed as Exhibit 10.16 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.19
Ø
|
|
Consent and Second Amendment to Loan and Security Agreement, dated as of February 20, 2014, by and between the Registrant and City National Bank
(filed as Exhibit 10.17 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.20
Ø
|
|
Third Amendment to Loan and Security Agreement, dated December 16, 2014, by and between Five9, Inc. and City National Bank
(filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 18, 2014 (File No. 001-36383) and incorporated by reference herein).
|
10.21
Ø
|
|
Loan and Security Agreement, dated as of February 20, 2014, by and among the Registrant, Five9 Acquisition LLC, Fifth Street Finance Corp. and Fifth Street Mezzanine Partners V, L.P. as lenders, and Fifth Street Finance Corp. as agent
(filed as Exhibit 10.18 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.22
Ø
|
|
First Amendment to Loan and Security Agreement, dated December 16, 2014, by and between Five9, Inc., Five9 Acquisition LLC, Fifth Street Finance Corp. and Fifth Street Mezzanine Partners V, L.P.
(filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 18, 2014 (File No. 001-36383) and incorporated by reference herein).
|
10.23
Ø
|
|
Second Amendment to Loan and Security Agreement, dated February 19, 2015, by and between Five9, Inc., Five9 Acquisition LLC, Fifth Street Finance Corp. and Fifth Street Mezzanine Partners V, L.P.
(filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2015 (File No. 001-36383) and incorporated by reference herein).
|
10.24
Ø
|
|
Equipment Lease Agreement, dated November 8, 2012, between the Registrant and Winmark Capital Corporation
(filed as Exhibit 10.20 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
10.25
Ø
|
|
Loan and Security Agreement, dated August 1, 2016, by and among Five9, Inc., the lenders party thereto and City National Bank, as agent for such lenders
(filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 3, 2016 (File No. 001-36383) and incorporated by reference herein).
|
10.26
Ø
|
|
Promissory Note, dated July 16, 2013, between the Registrant and Universal Service Administrative Company
(filed as Exhibit 10.26 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 3, 2014 (File No. 333-194258) and incorporated by reference herein).
|
21.1
|
|
|
23.1
|
|
|
24.1
|
|
Power of Attorney (included on signature page to this Annual Report on Form 10-K).
|
31.1
|
|
|
31.2
|
|
|
32.1†
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Schema Linkbase Document
|
Exhibit Index
|
||
Exhibit Number
|
|
Description
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Labels Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
|
Five9, Inc.
|
|
|
|
|
Date:
|
March 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Interim Chief Executive Officer and Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Barry Zwarenstein
|
|
Interim Chief Executive Officer and Chief Financial Officer
|
|
March 1, 2018
|
Barry Zwarenstein
|
|
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Michael Burkland
|
|
Executive Chairman, Director
|
|
March 1, 2018
|
Michael Burkland
|
|
|
|
|
|
|
|
|
|
/s/ Jack Acosta
|
|
Director
|
|
March 1, 2018
|
Jack Acosta
|
|
|
|
|
|
|
|
|
|
/s/ Kimberly Alexy
|
|
Director
|
|
March 1, 2018
|
Kimberly Alexy
|
|
|
|
|
|
|
|
|
|
/s/ Michael Burdiek
|
|
Director
|
|
March 1, 2018
|
Michael Burdiek
|
|
|
|
|
|
|
|
|
|
/s/ David DeWalt
|
|
Director
|
|
March 1, 2018
|
David DeWalt
|
|
|
|
|
|
|
|
|
|
/s/ David Welsh
|
|
Director; Lead Independent Director
|
|
March 1, 2018
|
David Welsh
|
|
|
|
|
|
|
|
|
|
/s/ Robert Zollars
|
|
Director
|
|
March 1, 2018
|
Robert Zollars
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
Name
|
|
Annual Target Bonus
(USD)
|
|
Annual Target Bonus as a Percentage of Base Salary
|
||
Barry Zwarenstein
|
|
$
|
275,000
|
|
|
75%
|
Daniel Burkland
|
|
$
|
325,000
|
|
|
81%
|
Scott Welch
|
|
$
|
164,000
|
|
|
50%
|
Gaurav Passi
|
|
$
|
164,000
|
|
|
50%
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
1
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
2
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
3
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
4
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
5
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
6
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
7
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
8
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
9
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
10
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
11
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
12
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
13
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
14
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
15
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
16
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
17
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
18
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
19
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
20
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
21
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
22
|
Landlord (JC)
|
Landlord:
|
|
Tenant:
|
Alexander Properties Company
|
|
five9, Inc.
|
One Annabel Lane, Suite 201
|
|
4000 Executive Parkway, Suite 400
|
San Ramon, CA 94583
|
|
San Ramon, CA 94583
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
23
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
24
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
25
|
Landlord (JC)
|
Landlord:
|
|
Tenant:
|
||
Alexander Properties Company,
a California limited partnership |
|
five9, Inc.
a Delaware corporation |
||
By:
|
/s/ Jim Clancy
|
|
By:
|
/s/ Michael Burkland
|
Title:
|
CFO
|
|
Title:
|
CEO
|
By:
|
/s/ Steve Barale
|
|
By:
|
|
Title:
|
Controller
|
|
Title:
|
|
46,414 RSF
Bishop Ranch 8, Building P 4000 Executive Parkway, Suite 400 San Ramon, CA 94583 |
Please Initial
Tenant (MB) Landlord (JC ) |
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
|
Landlord (JC)
|
•
|
All core areas, elevator lobbies and restrooms complete.
|
•
|
Main HVAC loop in place ready to receive mixing boxes for zoning.
|
•
|
Main fire sprinkler risers and grid in place ready for drop down.
|
•
|
After receipt of Tenant’s approved Construction Drawings, all perimeter walls sheetrocked and ready for finish.
|
•
|
Tenant side of core partitions are to be fire taped.
|
•
|
Board over window heads to be finish taped.
|
•
|
Column Furring at exterior columns is to be finish taped.
|
•
|
Electrical service to closets on floor.
|
•
|
Telephone sleeve to closets on floor.
|
•
|
Prismatic fixtures with dual switches.
|
•
|
Indirect lighting is an alternate and must be approved by Landlord.
|
•
|
One zone per 800 usable square feet.
|
•
|
Individual pneumatic thermostats per 800 usable square feet.
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
|
Landlord (JC)
|
•
|
One 165 degree rate, semi-recessed sprinkler head per 144 usable square feet.
|
•
|
5/8-inch drywall on 2-1/2 inch steel studs with smooth finish.
|
•
|
Solid core oak doors 36” x 96”.
|
•
|
Aluminum door jambs.
|
•
|
Schlage “D” locks and latchsets.
|
•
|
Kelly Moore or equal.
|
•
|
USG: Aurora Reveal Tile.
|
•
|
Donn DXL
|
•
|
Carpet: 38 oz. Bigelow or carpet tile of equal cost.
|
•
|
Armstrong Imperial Modern Excelon Tile or equal.
|
•
|
3/8 inch nylon composition pad.
|
•
|
4 inch rubber top set base or equal.
|
•
|
Mini Blinds.
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
|
Landlord (JC)
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
|
Landlord (JC)
|
Landlord:
|
|
Tenant:
|
||
By:
|
/s/ Jim Clancy
|
|
By:
|
/s/ Michael Burkland
|
Date:
|
12/16/11
|
|
Date:
|
|
1.
|
Empty all waste baskets and disposal cans, if liners used, replace as necessary.
|
2.
|
Spot dust desks, chairs, file cabinets, counters and furniture.
|
3.
|
Spot vacuum all carpets and walk-off mats; spot as necessary.
|
4.
|
Sweep all hard surface floors with treated dust mop.
|
1.
|
Vacuum carpets completely, including around base boards, etc.
|
2.
|
Perform low dusting of furniture.
|
3.
|
Dust window sills and ledges.
|
1.
|
Perform all high dusting of doors, sashes, moldings, etc.
|
2.
|
Dust mini blinds as needed.
|
1.
|
Vacuum carpets and dust mop any hard floors.
|
2.
|
Spot clean carpets of all spillage.
|
3.
|
Clean all thresholds.
|
1.
|
Perform all high dusting of doors, sashes, moldings, etc.
|
2.
|
Vacuum and clean all ceiling vents.
|
3.
|
Polish any metal railings, placards, etc.
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
1
|
Landlord (MC)
|
1.
|
Sweep all hard surface steps.
|
2.
|
Dust banisters.
|
1.
|
Sweep all hard surfaces.
|
2.
|
Spot mop all spills as needed.
|
1.
|
Empty all waste containers and replace liners as needed.
|
2.
|
Clean all metal, mirrors, and fixtures.
|
3.
|
Sinks, toilet bowls and urinals are to be kept free of scale.
|
4.
|
Clean all lavatory fixtures using disinfectant cleaners.
|
5.
|
Wash and disinfect underside and tops of toilet seats.
|
6.
|
Wipe down walls around urinals.
|
7.
|
Refill soap, towel, and tissue dispensers.
|
8.
|
Wet mop tile floors with disinfectant solution.
|
9.
|
Refill sanitary napkin machines as necessary.
|
1.
|
Perform high dusting and vacuum vents.
|
2.
|
Use germicidal solution in urinal traps, lavatory traps, and floor drains.
|
1.
|
Scrub floors with power machine.
|
2.
|
Wash down all ceramic tile and toilet compartments.
|
1.
|
Vacuum floors.
|
2.
|
Clean thresholds.
|
3.
|
Spot walls and polish surfaces.
|
|
|
Please Initial
|
|
|
Tenant (MB)
|
|
2
|
Landlord (MC)
|
1.
|
I, the undersigned hereby authorize Landlord to order one glass door sign. The business name on it shall read: (All lettering must be left justified, no logos.)
|
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
|
|
(17 characters max)
|
|
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
|
|
(17 characters max)
|
|
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
|
|
(17 characters max)
|
|
2.
|
The lobby directory strip shall read:
|
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
|
|
(23 characters max)
|
|
3.
|
The floor directory strip shall read:
|
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
|
|
(23 characters max)
|
|
|
|
Street Address:
|
4000 Executive Parkway
|
Suite No:
|
400
|
Building:
|
P
|
Complex:
|
Bishop Ranch 8
|
(a)
|
the “Commencement Date” under that certain Lease dated ,
2011
and between
Alexander Properties Company
as Landlord and
five9
as Tenant, covering Premises located at 4000 Executive Parkway,
Suite 400
, is ,
2012
,
|
(b)
|
the “Expiration Date” thereof is
5:00 P.M.
on ,
2018
, and
|
(c)
|
Landlord has completed all of its construction obligations under the Work Letter, except for the following punch list items, which shall be completed by Landlord in accordance with the Lease and the Work Letter attached thereto.
|
Landlord:
|
|
Tenant:
|
||
By:
|
|
|
By:
|
/s/ Michael Burkland
|
Date:
|
|
|
Title
|
CEO
|
a)
|
The Base Rental Rate shall be $28.50 per rentable square foot per annum
|
b)
|
The suite improvements shall be the same as those Landlord provided Tenant in Expansion Space A
|
Landlord:
Alexander Properties Company, LLC,
a California limited liability company
|
|
Tenant:
Five9, Inc.,
a Delaware corporation
|
||
By:
|
/s/ Jim Clancy
|
|
By:
|
/s/ Michael Burkland
|
Title:
|
CFO
|
|
Title:
|
CEO
|
|
|
|
|
|
By:
|
/s/ Steve Barale
|
|
By:
|
|
Title:
|
Controller
|
|
Title:
|
|
|
|
|
|
|
Date:
|
10/26/12
|
|
Date:
|
10/24/2012
|
|
Regarding:
|
|
|
|
Expansion Space A:
|
|
|
|
Bishop Ranch 8, Building P
|
|
4000 Executive Parkway, Suite 520
|
|
San Ramon, CA 94583
|
16,063 RSF
Bishop Ranch 8, Building P
4000 Executive Parkway, Suite 520
San Ramon, CA 94583
|
|
Please Initial
Tenant ( MB )
Landlord ( JC )
|
Landlord:
|
|
|
Tenant:
|
|
|
|
|
|
|
By:
|
/
s/ Illegible
|
|
By:
|
/
s/ David Hill
|
Date:
|
Jan. 15, 2013
|
|
Date:
|
1-15-13
|
Landlord:
Alexander Properties Company, LLC,
a California limited liability company
|
|
Tenant:
Five9, Inc.,
a Delaware corporation
|
||
By:
|
/s/ Jim Clancy
|
|
By:
|
/s/ Michael Burkland
|
Title:
|
CFO
|
|
Title:
|
|
|
|
|
|
|
By:
|
/s/ Steve Barale
|
|
By:
|
|
Title:
|
Controller
|
|
Title:
|
|
|
|
|
|
|
Date:
|
1/24/14
|
|
Date:
|
|
Expansion Space B:
|
|
Bishop Ranch 8, Building P
|
4000 Executive Parkway, Suite 515
|
San Ramon, CA 94583
|
|
Existing Premises:
|
|
Bishop Ranch 8, Building P
|
4000 Executive Parkway, Suites 400/520
|
San Ramon, CA 94583
|
5,510 RSF
Bishop Ranch 8, Building P
4000 Executive Parkway, Suite 515
San Ramon, CA 94583
|
|
Please Initial
Tenant ( )
Landlord ( )
|
Landlord:
|
|
Tenant:
|
||
By:
|
|
|
By:
|
|
Date:
|
|
|
Title
|
|
Period in Months
|
Annual Rate per Rentable Square Foot
|
Monthly Base Rent
|
3/1/2018 – 2/28/2019*
|
$30.60
|
$186,387.15
|
3/1/2019 – 2/29/2020
|
$31.52
|
$191,978.76
|
3/1/2020 – 2/28/2021
|
$32.46
|
$197,738.13
|
3/1/2021 – 3/31/2021
|
$33.44
|
$203,670.27
|
* Subject to abatement for a certain month pursuant to Section 3.4 of this Addendum.
|
(a)
|
Base Year
:
The calendar year for which the Taxes and Operating Costs are calculated for the Premises shall be 2018.
|
6.
|
Subsection 5.2 of the Lease is amended in its entirety to read as follows:
|
10.
|
Section 25.14 of the Lease is amended to include the following updated Notice addresses for Landlord and Tenant:
|
Landlord:
Alexander Properties Company, LLC
2600 Camino Ramon, Suite 201
San Ramon, CA 94583
Attention: General Counsel
|
Tenant:
five9, Inc.
4000 Executive Parkway, Suite 400
San Ramon, CA 94583
|
11.
|
Section 25.17 of the Lease is supplemented as follows:
|
14.
|
Definitions
.
All capitalized terms not otherwise defined herein shall have the respective meanings given to them in the Lease. The Lease, as amended by this Addendum, is referred to herein as the “Lease.” Unless otherwise specifically provided herein, all provisions of this Addendum shall be effective as of the later of the dates on which Landlord and Tenant execute this Addendum.
|
15.
|
Miscellaneous
.
To the extent the provisions of this Addendum and the Lease are inconsistent, the provisions of this Addendum shall govern.
|
|
Regarding:
|
|
|
|
Bishop Ranch 8, Building P
|
|
4000 Executive Parkway, Suites 400 & 520
|
|
San Ramon, CA 94583
|
Period in Months
|
Annual Rate per Rentable Square Foot
|
Monthly Base Rent
|
9/1/2017 – 8/31/2018
|
$30.60
|
$16,531.65
|
9/1/2018 – 8/31/2019
|
$31.52
|
$17,027.60
|
9/1/2019 – 8/31/2020
|
$32.46
|
$17,538.43
|
9/1/2020 – 3/31/2021
|
$33.44
|
$18,064.58
|
(a)
|
Base Year
: The calendar year for which the Taxes and Operating Costs are calculated for Expansion Space C shall be 2017.
|
7.
|
Subsection 5.2 of the Lease is amended in its entirety to read as follows:
|
8.
|
Section 25.17 of the Lease is supplemented as follows:
|
10.
|
Definitions
. All capitalized terms not otherwise defined herein shall have the respective meanings given to them in the Lease. The Lease, as amended by this Addendum, is referred to herein as the “Lease.” Unless otherwise specifically provided herein, all provisions of this Addendum shall be effective as of the later of the dates on which Landlord and Tenant execute this Addendum.
|
11.
|
Miscellaneous
. To the extent the provisions of this Addendum and the Lease are inconsistent, the provisions of this Addendum shall govern.
|
|
Regarding:
|
|
|
|
Existing Premises:
|
|
|
|
Bishop Ranch 8, Building P
|
|
4000 Executive Parkway, Suites 400 & 520
|
|
San Ramon, CA 94583
|
|
|
|
|
|
Expansion Space C:
|
|
|
|
Bishop Ranch 8, Building P
|
|
4000 Executive Parkway, Suite 514
|
|
San Ramon, CA 94583
|
(i)
|
the actual construction costs of the Suite Improvements, including materials and labor (“Construction Costs”);
|
(ii)
|
the General Contractor’s profit and overhead not to exceed, as a percentage of the Construction Costs, 8% for overhead and 4% for profit (“Profit and Overhead”); and
|
(iii)
|
a review and supervision fee to SDC equal to two percent (2%) of the Construction Costs (“Construction Management Fee”).
|
(a)
|
The “Expansion Space Commencement Date” under the Fourth Lease Addendum is _______________;
|
(b)
|
The “Expiration Date” thereof is 11:59 p.m. on __________________;
|
(c)
|
intentionally deleted; and
|
(d)
|
The “Rent Commencement Date” for Expansion Space C under the Fourth Lease Addendum is ____________.
|
Landlord:
Alexander Properties Company, LLC,
a California limited liability company
|
|
Tenant:
five9, Inc.
a Delaware corporation
|
||
By:
|
|
|
By:
|
|
|
Authorized Signatory
|
|
Title:
|
|
Date:
|
|
|
Date:
|
|
A.
|
Landlord and Tenant are parties to that certain Bishop Ranch Building Lease dated December 16, 2011, as amended by that certain First Lease Addendum dated October 24, 2012 and as further amended by that certain Second Lease Addendum dated January 23, 2014, as amended by that certain Third Lease Addendum dated April 3, 2017 (the “
3
rd
Addendum
”), as amended by that certain Fourth Lease Addendum dated June 30, 2017 (the “
4
th
Addendum
”) (collectively, the “
Lease
”), pursuant to which Landlord leases to Tenant, and Tenant leases from Landlord
Suites 400, 514 and 520
collectively containing
74,470 rentable square feet
(the “
Premises
”) located at
4000 Executive Parkway
, San Ramon, California. Pursuant to the 3
rd
Addendum, effective
March 1, 2018
, the size of the Premises shall increase to
79,576 rentable square feet
.
|
B.
|
The Term of the Lease is scheduled to expire on
March 31, 2021
.
|
C.
|
The parties desire to amend the Lease to make certain other modifications to the Lease as set forth below.
|
1.
|
Refurbishment Allowance.
In connection with the Suite Improvements to Expansion Space C, as described in the 4
th
Addendum, Landlord hereby agrees that Tenant may apply a portion of the Refurbishment Allowance set forth in the 3
rd
Addendum, in an amount not to exceed Fifty Thousand Dollars ($50,000.00), to the construction of the Suite Improvements for Expansion Space C. The remainder of the Refurbishment Allowance shall be subject to the terms and conditions set forth in the 3
rd
Addendum.
|
2.
|
Brokers
. Tenant warrants and represents to Landlord that in the negotiating or making of this Addendum neither Tenant nor anyone acting on its behalf has dealt with any real estate broker or finder who might be entitled to a fee or commission for this Addendum. Tenant shall indemnify and hold Landlord harmless from any claim or claims, including costs, expenses and attorney’s fees incurred by Landlord as a result of any other broker or finder asserting a claim for a fee or
|
3.
|
Definitions
. All capitalized terms not otherwise defined herein shall have the respective meanings given to them in the Lease. The Lease, as amended by this Addendum, is referred to herein as the “Lease.” Unless otherwise specifically provided herein, all provisions of this Addendum shall be effective as of the later of the dates on which Landlord and Tenant execute this Addendum.
|
4.
|
Miscellaneous
. To the extent the provisions of this Addendum and the Lease are inconsistent, the provisions of this Addendum shall govern.
|
|
Regarding:
|
|
|
|
Existing Premises
|
|
|
|
Bishop Ranch 8, Building P
|
|
4000 Executive Parkway, Suites 400 & 520
|
|
San Ramon, CA 94583
|
|
|
|
|
|
Expansion Space C:
|
|
|
|
Bishop Ranch 8, Building P
|
|
4000 Executive Parkway, Suite 514
|
|
San Ramon, CA 94583
|
Entity Name
|
|
Jurisdiction
|
Five9.ru
|
|
Russia
|
Five9 Philippines Inc.
|
|
Philippines
|
Five9 Acquisition LLC
|
|
Delaware
|
Five9 Inc. Ireland Limited
|
|
Ireland
|
Five9 India Private Limited
|
|
India
|
Five9, Inc. UK Limited
|
|
United Kingdom
|
1.
|
I have reviewed this annual report on Form 10-K of Five9, Inc. for the year ended
December 31, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Interim Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Five9, Inc. for the year ended
December 31, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
Date:
|
March 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Interim Chief Executive Officer
|
Date:
|
March 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Chief Financial Officer
|