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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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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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Large Accelerated Filer
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x
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Accelerated Filer
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o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting Company)
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Smaller Reporting Company
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o
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Emerging Growth Company
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o
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•
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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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•
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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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•
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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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•
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failure to adequately expand our sales force could impede our growth;
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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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we have a history of losses and we may be unable to achieve or sustain profitability;
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•
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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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•
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failure to comply with laws and regulations could harm our business and our reputation.
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March 31, 2018
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December 31, 2017
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||||
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(Unaudited)
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|
||||
ASSETS
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|
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|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
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80,676
|
|
|
$
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68,947
|
|
Accounts receivable, net
|
|
18,534
|
|
|
19,048
|
|
||
Prepaid expenses and other current assets
|
|
7,150
|
|
|
4,840
|
|
||
Deferred contract acquisition costs
|
|
7,562
|
|
|
—
|
|
||
Total current assets
|
|
113,922
|
|
|
92,835
|
|
||
Property and equipment, net
|
|
20,876
|
|
|
19,888
|
|
||
Intangible assets, net
|
|
957
|
|
|
1,073
|
|
||
Goodwill
|
|
11,798
|
|
|
11,798
|
|
||
Other assets
|
|
1,120
|
|
|
2,602
|
|
||
Deferred contract acquisition costs
—
less current portion
|
|
17,238
|
|
|
—
|
|
||
Total assets
|
|
$
|
165,911
|
|
|
$
|
128,196
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|
|
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
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|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
5,482
|
|
|
$
|
4,292
|
|
Accrued and other current liabilities
|
|
14,132
|
|
|
11,787
|
|
||
Accrued federal fees
|
|
1,331
|
|
|
1,151
|
|
||
Sales tax liability
|
|
1,097
|
|
|
1,326
|
|
||
Notes payable
|
|
180
|
|
|
336
|
|
||
Capital leases
|
|
6,810
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|
|
6,651
|
|
||
Deferred revenue
|
|
13,700
|
|
|
13,975
|
|
||
Total current liabilities
|
|
42,732
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|
|
39,518
|
|
||
Revolving line of credit
|
|
32,594
|
|
|
32,594
|
|
||
Sales tax liability — less current portion
|
|
979
|
|
|
1,044
|
|
||
Capital leases — less current portion
|
|
7,654
|
|
|
7,161
|
|
||
Other long-term liabilities
|
|
1,500
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|
|
1,041
|
|
||
Total liabilities
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85,459
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|
81,358
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Commitments and contingencies (Note 10)
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||||
Stockholders’ equity:
|
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||||
Preferred stock, $0.001 par value; 5,000 shares authorized, no shares issued and outstanding at March 31, 2018 and December 31, 2017
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—
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—
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Common stock, $0.001 par value; 450,000 shares authorized, 57,654 shares and 56,632 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
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58
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|
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57
|
|
||
Additional paid-in capital
|
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232,277
|
|
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222,202
|
|
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Accumulated deficit
|
|
(151,883
|
)
|
|
(175,421
|
)
|
||
Total stockholders’ equity
|
|
80,452
|
|
|
46,838
|
|
||
Total liabilities and stockholders’ equity
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$
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165,911
|
|
|
$
|
128,196
|
|
|
|
|
|
|
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Three Months Ended
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Revenue
|
|
$
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58,905
|
|
|
$
|
47,014
|
|
Cost of revenue
|
|
24,702
|
|
|
19,971
|
|
||
Gross profit
|
|
34,203
|
|
|
27,043
|
|
||
Operating expenses:
|
|
|
|
|
||||
Research and development
|
|
7,772
|
|
|
6,847
|
|
||
Sales and marketing
|
|
17,478
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|
|
15,778
|
|
||
General and administrative
|
|
9,103
|
|
|
8,860
|
|
||
Total operating expenses
|
|
34,353
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|
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31,485
|
|
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Loss from operations
|
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(150
|
)
|
|
(4,442
|
)
|
||
Other income (expense), net:
|
|
|
|
|
||||
Interest expense
|
|
(810
|
)
|
|
(882
|
)
|
||
Interest income and other
|
|
398
|
|
|
118
|
|
||
Total other income (expense), net
|
|
(412
|
)
|
|
(764
|
)
|
||
Loss before income taxes
|
|
(562
|
)
|
|
(5,206
|
)
|
||
Provision for income taxes
|
|
45
|
|
|
49
|
|
||
Net loss
|
|
$
|
(607
|
)
|
|
$
|
(5,255
|
)
|
Net loss per share:
|
|
|
|
|
||||
Basic and diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.10
|
)
|
Shares used in computing net loss per share:
|
|
|
|
|
||||
Basic and diluted
|
|
56,399
|
|
|
53,688
|
|
||
Comprehensive Income (Loss):
|
|
|
|
|
||||
Net loss and comprehensive loss
|
|
$
|
(607
|
)
|
|
$
|
(5,255
|
)
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(607
|
)
|
|
$
|
(5,255
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
2,320
|
|
|
2,095
|
|
||
Provision for doubtful accounts
|
|
48
|
|
|
24
|
|
||
Stock-based compensation
|
|
5,325
|
|
|
3,129
|
|
||
Gain on sale of convertible notes held for investment
|
|
(312
|
)
|
|
—
|
|
||
Non-cash adjustment on investment
|
|
(40
|
)
|
|
(103
|
)
|
||
Amortization of debt discount and issuance costs
|
|
20
|
|
|
20
|
|
||
Accretion of interest
|
|
16
|
|
|
5
|
|
||
Others
|
|
(10
|
)
|
|
(8
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
519
|
|
|
(1,595
|
)
|
||
Prepaid expenses and other current assets
|
|
(1,833
|
)
|
|
(2,129
|
)
|
||
Deferred contract acquisition costs
|
|
(1,662
|
)
|
|
—
|
|
||
Other assets
|
|
(90
|
)
|
|
30
|
|
||
Accounts payable
|
|
1,181
|
|
|
(95
|
)
|
||
Accrued and other current liabilities
|
|
2,791
|
|
|
3,119
|
|
||
Accrued federal fees and sales tax liability
|
|
(115
|
)
|
|
(11
|
)
|
||
Deferred revenue
|
|
121
|
|
|
909
|
|
||
Other liabilities
|
|
325
|
|
|
24
|
|
||
Net cash provided by operating activities
|
|
7,997
|
|
|
159
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(433
|
)
|
|
(514
|
)
|
||
Proceeds from sale of convertible notes held for investment
|
|
1,923
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
|
1,490
|
|
|
(514
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from exercise of common stock options
|
|
4,751
|
|
|
793
|
|
||
Payments of notes payable
|
|
(157
|
)
|
|
(258
|
)
|
||
Payments of capital leases
|
|
(2,352
|
)
|
|
(1,850
|
)
|
||
Net cash provided by (used in) financing activities
|
|
2,242
|
|
|
(1,315
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
11,729
|
|
|
(1,670
|
)
|
||
Cash and cash equivalents:
|
|
|
|
|
||||
Beginning of period
|
|
68,947
|
|
|
58,122
|
|
||
End of period
|
|
$
|
80,676
|
|
|
$
|
56,452
|
|
Supplemental disclosures of cash flow data:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
765
|
|
|
$
|
840
|
|
Cash paid for income taxes
|
|
$
|
33
|
|
|
$
|
21
|
|
Non-cash investing and financing activities:
|
|
|
|
|
||||
Equipment obtained under capital lease
|
|
$
|
2,635
|
|
|
$
|
2,603
|
|
Equipment purchased and unpaid at period-end
|
|
$
|
281
|
|
|
$
|
159
|
|
|
|
March 31, 2018
|
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without adoption of ASC 606
|
|
Effect of Change
Higher (Lower) |
||||||
Assets:
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
18,534
|
|
|
$
|
18,431
|
|
|
$
|
103
|
|
Prepaid expenses and other current assets
|
|
7,150
|
|
|
6,849
|
|
|
301
|
|
|||
Deferred contract acquisition costs
|
|
24,800
|
|
|
—
|
|
|
24,800
|
|
|||
Liabilities:
|
|
|
|
|
|
|
||||||
Deferred revenue - current
|
|
13,700
|
|
|
14,811
|
|
|
(1,111
|
)
|
|||
Shareholders' Equity:
|
|
|
|
|
|
|
||||||
Accumulated deficit
|
|
(151,883
|
)
|
|
(178,198
|
)
|
|
26,315
|
|
|
|
Three months ended March 31, 2018
|
||||||||||
(in thousands, except per share amounts)
|
|
As Reported
|
|
Balances without adoption of ASC 606
|
|
Effect of Change
Higher (Lower) |
||||||
Revenue
|
|
$
|
58,905
|
|
|
$
|
58,152
|
|
|
$
|
753
|
|
Cost of revenue
|
|
24,702
|
|
|
24,457
|
|
|
245
|
|
|||
Gross profit
|
|
34,203
|
|
|
33,695
|
|
|
508
|
|
|||
Sales and marketing
|
|
17,478
|
|
|
19,140
|
|
|
(1,662
|
)
|
|||
Loss from operations
|
|
(150
|
)
|
|
(2,320
|
)
|
|
2,170
|
|
|||
Net loss
|
|
(607
|
)
|
|
(2,777
|
)
|
|
2,170
|
|
|||
Basic and diluted net loss per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2018
|
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without adoption of ASC 606
|
|
Effect of Change
Higher (Lower) |
||||||
Accounts receivable
|
|
$
|
519
|
|
|
$
|
622
|
|
|
$
|
(103
|
)
|
Prepaid expenses and other current assets
|
|
(1,833
|
)
|
|
(1,532
|
)
|
|
(301
|
)
|
|||
Deferred contract acquisition costs
|
|
(1,662
|
)
|
|
—
|
|
|
(1,662
|
)
|
|||
Deferred revenue
|
|
121
|
|
|
1,232
|
|
|
(1,111
|
)
|
|||
Net cash provided by operating activities
|
|
7,997
|
|
|
7,997
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
March 31, 2018
|
||
Receivables
|
|
$
|
18,534
|
|
Deferred contract acquisition costs
|
|
24,800
|
|
|
Short-term contract assets
|
|
785
|
|
|
Short-term contract liabilities (deferred revenue)
|
|
13,700
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||
|
|
March 31, 2018
|
|||||||
|
|
Contract
Assets Increase (Decrease) |
|
Contract
Liabilities Increase (Decrease) (1) |
|||||
Revenue recognized that was included in the contract liability (deferred revenue) balance at January 1, 2018
|
|
$
|
—
|
|
|
$
|
(6,440
|
)
|
|
Increases due to invoicing in current period, excluding amounts recognized as revenue during the period
|
|
—
|
|
|
6,572
|
|
|||
Transferred to receivables from contract assets recognized at January 1, 2018
|
|
(86
|
)
|
|
—
|
|
|||
Additional contract assets recognized, net of reclassification to receivables
|
|
135
|
|
|
—
|
|
|||
Performance obligations satisfied in previous periods (transition adjustment)
|
|
736
|
|
|
(407
|
)
|
|||
|
|
|
|
|
|
(1)
|
Comprised of deferred revenue
|
|
|
March 31, 2018
|
||||||||||
|
|
Total
|
|
Level 1
|
|
Level 3
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Cash equivalents
|
|
|
|
|
|
|
||||||
Money market funds
|
|
$
|
20,132
|
|
|
$
|
20,132
|
|
|
$
|
—
|
|
Other Assets
|
|
|
|
|
|
|
||||||
Embedded conversion option held for investment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
|
|
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
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Cash
|
|
$
|
60,544
|
|
|
$
|
48,855
|
|
Money market funds
|
|
20,132
|
|
|
20,092
|
|
||
Cash and cash equivalents
|
|
$
|
80,676
|
|
|
$
|
68,947
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Trade accounts receivable
|
|
$
|
16,678
|
|
|
$
|
17,481
|
|
Unbilled trade accounts receivable, net of advance client deposits
|
|
1,884
|
|
|
1,600
|
|
||
Allowance for doubtful accounts
|
|
(28
|
)
|
|
(33
|
)
|
||
Accounts receivable, net
|
|
$
|
18,534
|
|
|
$
|
19,048
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Prepaid expenses
|
|
$
|
4,431
|
|
|
$
|
2,437
|
|
Other current assets
|
|
1,934
|
|
|
2,403
|
|
||
Contract assets
|
|
785
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
|
$
|
7,150
|
|
|
$
|
4,840
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Computer and network equipment
|
|
$
|
49,780
|
|
|
$
|
47,195
|
|
Computer software
|
|
7,387
|
|
|
6,974
|
|
||
Internal-use software development costs
|
|
500
|
|
|
500
|
|
||
Furniture and fixtures
|
|
1,433
|
|
|
1,282
|
|
||
Leasehold improvements
|
|
817
|
|
|
801
|
|
||
Property and equipment
|
|
59,917
|
|
|
56,752
|
|
||
Accumulated depreciation and amortization
|
|
(39,041
|
)
|
|
(36,864
|
)
|
||
Property and equipment, net
|
|
$
|
20,876
|
|
|
$
|
19,888
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Gross
|
|
$
|
49,167
|
|
|
$
|
46,624
|
|
Less: accumulated depreciation and amortization
|
|
(32,149
|
)
|
|
(30,438
|
)
|
||
Total
|
|
$
|
17,018
|
|
|
$
|
16,186
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Accrued compensation and benefits
|
|
$
|
11,153
|
|
|
$
|
8,657
|
|
Accrued expenses
|
|
2,979
|
|
|
3,130
|
|
||
Accrued and other current liabilities
|
|
$
|
14,132
|
|
|
$
|
11,787
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Developed technology
|
|
$
|
2,460
|
|
|
$
|
(1,565
|
)
|
|
$
|
895
|
|
|
$
|
2,460
|
|
|
$
|
(1,478
|
)
|
|
$
|
982
|
|
Customer relationships
|
|
520
|
|
|
(463
|
)
|
|
57
|
|
|
520
|
|
|
(437
|
)
|
|
83
|
|
||||||
Domain names
|
|
50
|
|
|
(45
|
)
|
|
5
|
|
|
50
|
|
|
(42
|
)
|
|
8
|
|
||||||
Total
|
|
$
|
3,030
|
|
|
$
|
(2,073
|
)
|
|
$
|
957
|
|
|
$
|
3,030
|
|
|
$
|
(1,957
|
)
|
|
$
|
1,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Expected Future Amortization Expense
|
||
2018
|
|
$
|
326
|
|
2019
|
|
351
|
|
|
2020
|
|
280
|
|
|
Total
|
|
$
|
957
|
|
|
|
|
Period
|
|
Amount to Mature
|
||
2018
|
|
$
|
167
|
|
2019
|
|
32,594
|
|
|
Total
|
|
$
|
32,761
|
|
|
|
|
|
|
March 31, 2018
|
|
Stock options outstanding
|
|
3,491
|
|
Restricted stock units outstanding
|
|
2,427
|
|
Shares available for future grant under 2014 Plan
|
|
9,272
|
|
Shares available for future issuance under ESPP
|
|
1,937
|
|
Common stock warrants outstanding
|
|
13
|
|
Total shares of common stock reserved
|
|
17,140
|
|
|
|
|
|
|
Number of
Shares |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Life (Years) |
|
Aggregate
Intrinsic Value |
|||||
Outstanding as of December 31, 2017
|
|
4,047
|
|
|
$
|
8.00
|
|
|
|
|
|
||
Options granted (weighted average grant date fair value of $14.02 per share)
|
|
237
|
|
|
30.08
|
|
|
|
|
|
|||
Options exercised
|
|
(786
|
)
|
|
6.04
|
|
|
|
|
|
|||
Options forfeited or expired
|
|
(7
|
)
|
|
4.71
|
|
|
|
|
|
|||
Outstanding as of March 31, 2018
|
|
3,491
|
|
|
$
|
9.95
|
|
|
6.5
|
|
$
|
69,323
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value Per Share
|
|||
Outstanding as of December 31, 2017
|
|
2,033
|
|
|
$
|
7.65
|
|
RSUs granted
|
|
656
|
|
|
29.48
|
|
|
RSUs vested and released
|
|
(236
|
)
|
|
10.02
|
|
|
RSUs forfeited
|
|
(26
|
)
|
|
14.32
|
|
|
Outstanding as of March 31, 2018
|
|
2,427
|
|
|
$
|
17.56
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Cost of revenue
|
|
$
|
678
|
|
|
$
|
434
|
|
Research and development
|
|
877
|
|
|
637
|
|
||
Sales and marketing
|
|
1,362
|
|
|
928
|
|
||
General and administrative
|
|
2,408
|
|
|
1,130
|
|
||
Total stock-based compensation
|
|
$
|
5,325
|
|
|
$
|
3,129
|
|
|
|
|
|
|
|
|
Stock Option
|
|
RSU
|
|
ESPP
|
||||||
Unrecognized stock-based compensation expense
|
|
$
|
12,467
|
|
|
$
|
41,974
|
|
|
$
|
220
|
|
Weighted-average amortization period
|
|
2.7 years
|
|
|
3.2 years
|
|
|
0.1 years
|
|
Stock Options
|
|
Three Months Ended
|
||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||
Expected term (years)
|
|
6.0
|
|
|
6.0
|
|
Volatility
|
|
45
|
%
|
|
49
|
%
|
Risk-free interest rate
|
|
2.7
|
%
|
|
2.0
|
%
|
Dividend yield
(1)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
(1)
|
The Company has not paid, and does not anticipate paying, cash dividends on its shares of common stock. Accordingly, the expected dividend yield is zero.
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net loss
|
|
$
|
(607
|
)
|
|
$
|
(5,255
|
)
|
Weighted-average shares of common stock outstanding
|
|
56,399
|
|
|
53,688
|
|
||
Basic and diluted net loss per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
|
|
March 31, 2018
|
|
March 31, 2017
|
||
Stock options
|
|
3,491
|
|
|
5,127
|
|
Restricted stock units
|
|
2,427
|
|
|
2,607
|
|
Common stock warrants
|
|
13
|
|
|
13
|
|
Total
|
|
5,931
|
|
|
7,747
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
United States
|
|
$
|
55,171
|
|
|
$
|
44,358
|
|
International
|
|
3,734
|
|
|
2,656
|
|
||
Total revenue
|
|
$
|
58,905
|
|
|
$
|
47,014
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
United States
|
|
$
|
19,091
|
|
|
$
|
17,949
|
|
International
|
|
1,785
|
|
|
1,939
|
|
||
Property and equipment, net
|
|
$
|
20,876
|
|
|
$
|
19,888
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
||
|
|
March 31, 2018
|
|
March 31, 2017
|
Annual Dollar-Based Retention Rate
|
|
98%
|
|
99%
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net loss
|
|
$
|
(607
|
)
|
|
$
|
(5,255
|
)
|
Non-GAAP adjustments:
|
|
|
|
|
||||
Depreciation and amortization
(1)
|
|
2,320
|
|
|
2,095
|
|
||
Stock-based compensation
(2)
|
|
5,325
|
|
|
3,129
|
|
||
Interest expense
|
|
810
|
|
|
882
|
|
||
Interest income and other
|
|
(398
|
)
|
|
(118
|
)
|
||
Legal settlement
(3)
|
|
—
|
|
|
1,700
|
|
||
Legal and indemnification fees related to settlement
(3)
|
|
—
|
|
|
135
|
|
||
Provision for
income taxes
|
|
45
|
|
|
49
|
|
||
Adjusted EBITDA
|
|
$
|
7,495
|
|
|
$
|
2,617
|
|
|
|
|
|
|
(1)
|
Depreciation and amortization expenses included in our results of operations are as follows (in thousands):
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Cost of revenue
|
|
$
|
1,794
|
|
|
$
|
1,576
|
|
Research and development
|
|
194
|
|
|
206
|
|
||
Sales and marketing
|
|
29
|
|
|
30
|
|
||
General and administrative
|
|
303
|
|
|
283
|
|
||
Total depreciation and amortization
|
|
$
|
2,320
|
|
|
$
|
2,095
|
|
|
|
|
|
|
(2)
|
See Note
7
of the notes to condensed consolidated financial statements for stock-based compensation expense included in our results of operations for the periods presented.
|
(3)
|
Represents settlement amount, legal and indemnification fees related to the settlement of a litigation.
|
|
|
Three Months Ended
|
||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||
Revenue
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
|
42
|
%
|
|
42
|
%
|
Gross profit
|
|
58
|
%
|
|
58
|
%
|
Operating expenses:
|
|
|
|
|
||
Research and development
|
|
13
|
%
|
|
15
|
%
|
Sales and marketing
|
|
30
|
%
|
|
34
|
%
|
General and administrative
|
|
15
|
%
|
|
18
|
%
|
Total operating expenses
|
|
58
|
%
|
|
67
|
%
|
Loss from operations
|
|
—
|
%
|
|
(9
|
)%
|
Other income (expense), net:
|
|
|
|
|
||
Interest expense
|
|
(1
|
)%
|
|
(2
|
)%
|
Interest income and other
|
|
—
|
%
|
|
—
|
%
|
Total other income (expense), net
|
|
(1
|
)%
|
|
(2
|
)%
|
Loss before income taxes
|
|
(1
|
)%
|
|
(11
|
)%
|
Provision for income taxes
|
|
—
|
%
|
|
—
|
%
|
Net loss
|
|
(1
|
)%
|
|
(11
|
)%
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$
Change |
|
%
Change |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Revenue
|
|
$
|
58,905
|
|
|
$
|
47,014
|
|
|
$
|
11,891
|
|
|
25
|
%
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$
Change |
|
%
Change |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Cost of revenue
|
|
$
|
24,702
|
|
|
$
|
19,971
|
|
|
$
|
4,731
|
|
|
24
|
%
|
% of Revenue
|
|
42
|
%
|
|
42
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$
Change |
|
%
Change |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Gross profit
|
|
$
|
34,203
|
|
|
$
|
27,043
|
|
|
$
|
7,160
|
|
|
26
|
%
|
% of Revenue
|
|
58
|
%
|
|
58
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$
Change |
|
%
Change |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Research and development
|
|
$
|
7,772
|
|
|
$
|
6,847
|
|
|
$
|
925
|
|
|
14
|
%
|
% of Revenue
|
|
13
|
%
|
|
15
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$
Change |
|
%
Change |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Sales and marketing
|
|
$
|
17,478
|
|
|
$
|
15,778
|
|
|
$
|
1,700
|
|
|
11
|
%
|
% of Revenue
|
|
30
|
%
|
|
34
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$
Change |
|
%
Change |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
General and administrative
|
|
$
|
9,103
|
|
|
$
|
8,860
|
|
|
$
|
243
|
|
|
3
|
%
|
% of Revenue
|
|
15
|
%
|
|
18
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$
Change |
|
%
Change |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Interest expense
|
|
$
|
(810
|
)
|
|
$
|
(882
|
)
|
|
$
|
72
|
|
|
8
|
%
|
Interest income and other
|
|
398
|
|
|
118
|
|
|
280
|
|
|
237
|
%
|
|||
Total other income (expense), net
|
|
$
|
(412
|
)
|
|
$
|
(764
|
)
|
|
$
|
352
|
|
|
46
|
%
|
% of Revenue
|
|
(1
|
)%
|
|
(2
|
)%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
$ Change
|
|
% Change
|
|||||||
Net cash provided by operating activities
|
|
$
|
7,997
|
|
|
$
|
159
|
|
|
$
|
7,838
|
|
|
4,930
|
%
|
Net cash provided by (used in) investing activities
|
|
1,490
|
|
|
(514
|
)
|
|
2,004
|
|
|
390
|
%
|
|||
Net cash provided by (used in) financing activities
|
|
2,242
|
|
|
(1,315
|
)
|
|
3,557
|
|
|
270
|
%
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
11,729
|
|
|
$
|
(1,670
|
)
|
|
$
|
13,399
|
|
|
802
|
%
|
|
|
|
|
|
|
|
|
|
•
|
market acceptance of our solution;
|
•
|
our ability to attract new clients and grow our business with existing clients;
|
•
|
client renewal rates;
|
•
|
our ability to adequately expand our sales and service team;
|
•
|
our ability to acquire and maintain strategic and client relationships;
|
•
|
the amount and timing of costs and expenses related to the maintenance and expansion of our business, operations and infrastructure;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
inaccessibility or failure of our cloud contact center software due to failures in the products or services provided by third parties;
|
•
|
our ability to expand, and effectively utilize our network of master agents and resellers;
|
•
|
the timing of recognition of revenues under current and future GAAP;
|
•
|
changes in our pricing policies or those of our competitors;
|
•
|
the level of professional services and support we provide our clients;
|
•
|
the components of our revenue;
|
•
|
the addition or loss of key clients, including through acquisitions or consolidations;
|
•
|
general economic, industry and market conditions;
|
•
|
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;
|
•
|
compliance with, or changes in, the current and future domestic and international regulatory environment;
|
•
|
the hiring, training and retention of key employees;
|
•
|
litigation or other claims against us;
|
•
|
the ability to expand internationally, and to do so profitability;
|
•
|
our ability to obtain additional financing;
|
•
|
advances and trends in new technologies and industry standards; and
|
•
|
increases or decreases in the costs to provide our solution or pricing changes upon any renewals of client agreements.
|
•
|
compete with other vendors of cloud-based enterprise contact center systems to capture market share, including from providers of legacy on-premise systems;
|
•
|
increase our existing clients’ use of our solution and further develop our partner ecosystem;
|
•
|
strengthen and improve our solution through significant investments in research and development and the introduction of new and enhanced solutions;
|
•
|
introduce our solution to new markets outside of the United States and increase global awareness of our brand; and
|
•
|
selectively pursue acquisitions.
|
•
|
sales and marketing, including a significant expansion of our sales and professional services organization;
|
•
|
our technology infrastructure, including systems architecture, management tools, scalability, availability, performance and security, as well as disaster recovery measures;
|
•
|
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;
|
•
|
international expansion; and
|
•
|
general administration, including legal, regulatory compliance and accounting expenses.
|
•
|
cause our clients to seek credits or damages for losses incurred;
|
•
|
cause existing clients to cancel their contracts and move to a competitor;
|
•
|
affect our reputation as a reliable service provider;
|
•
|
make it more difficult for us to attract new clients or expand our business with existing clients; or
|
•
|
require us to replace existing equipment.
|
•
|
clients are not satisfied with our services, prices or the functionality of our solution;
|
•
|
the stability, performance or security of our solution are not satisfactory;
|
•
|
our clients’ business declines due to industry cycles, seasonality, business difficulties or other reasons;
|
•
|
competition increases from other contact center providers;
|
•
|
fewer clients purchase usage from us;
|
•
|
alternative technologies, products or features emerge that we do not provide;
|
•
|
our clients or potential clients experience financial difficulties; or
|
•
|
the U.S. or global economy declines.
|
•
|
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;
|
•
|
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;
|
•
|
inadvertent damage from third parties; and
|
•
|
other hazards that could also result in suspension of operations, personal injury and even loss of life.
|
•
|
the need to establish and protect our brand in international markets;
|
•
|
the need to localize and adapt our solution for specific countries, including translation into foreign languages and associated costs and expenses;
|
•
|
difficulties in staffing and managing foreign operations, particularly hiring and training qualified sales and service personnel;
|
•
|
the need to make implementations, and offer customer care, in various native languages;
|
•
|
different pricing environments, longer sales and accounts receivable payment cycles and collections issues;
|
•
|
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.;
|
•
|
increased risk of piracy, counterfeiting and other misappropriation of our intellectual property in our locations outside the U.S.;
|
•
|
new and different sources of competition;
|
•
|
general economic conditions in international markets;
|
•
|
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;
|
•
|
compliance with customs duties, tariffs and other international trade complexities;
|
•
|
compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, tax, telecommunications and telemarketing laws and regulations;
|
•
|
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;
|
•
|
increased risk of international telecom fraud;
|
•
|
laws and business practices favoring local competitors;
|
•
|
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;
|
•
|
increased financial accounting and reporting burdens and complexities;
|
•
|
restrictions or taxes on the transfer of funds;
|
•
|
adverse tax consequences; and
|
•
|
unstable economic and political conditions.
|
•
|
inability to integrate or benefit from acquisitions in a profitable manner;
|
•
|
unanticipated costs or liabilities associated with the acquisition, including legal claims arising from the activities of companies we acquire;
|
•
|
acquisition-related costs;
|
•
|
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;
|
•
|
difficulty integrating the accounting systems, operations and personnel of the acquired business;
|
•
|
difficulties and additional costs and expenses associated with supporting legacy products and the hosting infrastructure of the acquired business;
|
•
|
diversion of management’s attention from other business concerns;
|
•
|
harm to our existing relationships with our partners and clients as a result of the acquisition;
|
•
|
the loss of our or the acquired business’s key employees;
|
•
|
diversion of resources that could have been more effectively deployed in other parts of our business; and
|
•
|
use of substantial portions of our available cash to consummate the acquisition.
|
•
|
the Communications Assistance for Law Enforcement Act, or CALEA, which requires covered entities to assist law enforcement in undertaking electronic surveillance;
|
•
|
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;
|
•
|
payment of annual FCC regulatory fees based on our interstate and international revenues;
|
•
|
rules pertaining to access to our services by people with disabilities and contributions to the Telecommunications Relay Services fund; and
|
•
|
FCC rules regarding Customer Proprietary Network Information, or CPNI, which prohibit us from using such information without client approval, subject to certain exceptions.
|
•
|
actual or anticipated fluctuations in our operating results;
|
•
|
the financial projections we provide to the public, any changes in these projections or our failure to meet these projections;
|
•
|
failure of securities analysts to initiate or maintain coverage of 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;
|
•
|
ratings changes by any securities analysts who follow our company;
|
•
|
sales of our common stock by us or our significant stockholders, or the public announcement of same;
|
•
|
the assessment of our business or position in our market published in research and other reports;
|
•
|
announcements by us or our competitors of significant technical innovations, financings, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
•
|
changes in operating performance and stock market valuations of other technology companies generally, or those in the software as a service industry in particular;
|
•
|
price and volume fluctuations in the overall stock market, including as a result of trends in the U.S. or global economy;
|
•
|
any major change in our board of directors or management;
|
•
|
lawsuits threatened or filed against us;
|
•
|
security breaches or incidents impacting our clients or their customers;
|
•
|
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.
|
Exhibit
Number
|
|
Description
|
|
|
|
|
||
|
Five9, Inc. 2018 Executive Bonus Plan
(
filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2018 (File No. 001-36383) and incorporated by reference herein)
|
|
31.1
*
|
|
|
31.2
*
|
|
|
32.1
**
|
|
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Schema Linkbase Document
|
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:
|
May 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Interim Chief Executive Officer and Chief Financial Officer
|
|
|
|
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
Cloud Contact Center
Software
|
|
|
Cloud Contact Center
Software
|
|
|
Cloud Contact Center
Software
|
|
|
Cloud Contact Center
Software
|
|
|
Moni Manor
|
||
Executive VP of Products
|
||
|
||
Agreed to and accepted on
|
|
08/13/2013
|
|
||
/s/ Gaurav Passi
|
||
(Signature)
|
||
|
||
GAURAV PASSI
|
||
(Print Name)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Five9, Inc. for the quarter ended
March 31, 2018
;
|
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:
|
May 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Interim Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Five9, Inc. for the quarter ended
March 31, 2018
;
|
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:
|
May 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
Date:
|
May 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Interim Chief Executive Officer
|
Date:
|
May 1, 2018
|
By:
|
/s/ Barry Zwarenstein
|
|
|
|
Barry Zwarenstein
|
|
|
|
Chief Financial Officer
|