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Delaware
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81-0578975
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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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717 17
th
Street, 5
th
Floor
Denver, Colorado
|
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80202
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(Address of principal executive offices)
|
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(Zip Code)
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|
Large accelerated filer
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¨
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Accelerated filer
|
x
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Non-accelerated filer
|
¨
(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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Page
No.
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|
|
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|
|
|
|
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|
|
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|
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|
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June 30, 2018
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December 31, 2017
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||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
184,320
|
|
|
$
|
51,389
|
|
Short-term investments
|
—
|
|
|
137,181
|
|
||
Accounts receivable, net
|
50,583
|
|
|
56,516
|
|
||
Prepaid expenses and other
|
6,081
|
|
|
6,112
|
|
||
Total current assets
|
240,984
|
|
|
251,198
|
|
||
|
|
|
|
||||
Property and equipment, net
|
34,471
|
|
|
34,119
|
|
||
Contract acquisition costs
|
3,294
|
|
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—
|
|
||
Deferred income taxes, net of current portion
|
68
|
|
|
70
|
|
||
Goodwill and intangible assets, net
|
6,334
|
|
|
6,419
|
|
||
Other assets
|
4,252
|
|
|
3,566
|
|
||
Total assets
|
$
|
289,403
|
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$
|
295,372
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,219
|
|
|
$
|
4,574
|
|
Accrued taxes
|
165
|
|
|
651
|
|
||
Accrued compensation and benefits
|
17,517
|
|
|
19,257
|
|
||
Convertible notes, net
|
149,091
|
|
|
144,167
|
|
||
Deferred revenue
|
—
|
|
|
1,282
|
|
||
Accrued expenses
|
6,433
|
|
|
6,625
|
|
||
Other current liabilities
|
4,696
|
|
|
2,104
|
|
||
Total current liabilities
|
180,121
|
|
|
178,660
|
|
||
|
|
|
|
||||
Other long-term liabilities
|
5,903
|
|
|
4,603
|
|
||
Total liabilities
|
186,024
|
|
|
183,263
|
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||
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|
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|
||||
Commitments and contingencies
(Note 5)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value; 20,000 shares authorized and none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock; $0.0001 par value; 1,000,000 shares authorized;
91,822
shares issued and
91,701
shares outstanding as of June 30, 2018; 90,380 shares issued and 90,259 shares outstanding as of December 31, 2017
|
8
|
|
|
8
|
|
||
Treasury stock
|
(441
|
)
|
|
(441
|
)
|
||
Additional paid-in capital
|
366,125
|
|
|
359,347
|
|
||
Accumulated deficit
|
(263,037
|
)
|
|
(246,207
|
)
|
||
Accumulated other comprehensive income (loss)
|
724
|
|
|
(598
|
)
|
||
Total stockholders’ equity
|
103,379
|
|
|
112,109
|
|
||
Total liabilities and stockholders’ equity
|
$
|
289,403
|
|
|
$
|
295,372
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net revenue
|
$
|
61,111
|
|
|
$
|
58,262
|
|
|
$
|
119,696
|
|
|
$
|
114,970
|
|
Cost of revenue
|
42,463
|
|
|
39,517
|
|
|
84,187
|
|
|
80,926
|
|
||||
Gross profit
|
18,648
|
|
|
18,745
|
|
|
35,509
|
|
|
34,044
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
9,252
|
|
|
8,620
|
|
|
18,490
|
|
|
16,960
|
|
||||
Research and development
|
1,780
|
|
|
1,243
|
|
|
3,296
|
|
|
3,485
|
|
||||
General and administrative
|
13,157
|
|
|
13,505
|
|
|
26,046
|
|
|
27,486
|
|
||||
Restructuring and other
|
156
|
|
|
5,715
|
|
|
209
|
|
|
5,715
|
|
||||
Total operating expenses
|
24,345
|
|
|
29,083
|
|
|
48,041
|
|
|
53,646
|
|
||||
Loss from operations
|
(5,697
|
)
|
|
(10,338
|
)
|
|
(12,532
|
)
|
|
(19,602
|
)
|
||||
Interest expense and other, net
|
(2,776
|
)
|
|
(2,646
|
)
|
|
(5,622
|
)
|
|
(4,717
|
)
|
||||
Impairment loss on investment securities
|
—
|
|
|
—
|
|
|
(1,958
|
)
|
|
—
|
|
||||
Loss before income taxes
|
(8,473
|
)
|
|
(12,984
|
)
|
|
(20,112
|
)
|
|
(24,319
|
)
|
||||
Provision for income tax expense
|
(414
|
)
|
|
(117
|
)
|
|
(427
|
)
|
|
(406
|
)
|
||||
Net loss
|
$
|
(8,887
|
)
|
|
$
|
(13,101
|
)
|
|
$
|
(20,539
|
)
|
|
$
|
(24,725
|
)
|
Net loss per common share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.10
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.28
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
91,323
|
|
|
88,813
|
|
|
90,843
|
|
|
88,600
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(8,887
|
)
|
|
$
|
(13,101
|
)
|
|
$
|
(20,539
|
)
|
|
$
|
(24,725
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on short-term investments
|
5
|
|
|
32
|
|
|
(700
|
)
|
|
105
|
|
||||
Reclassification adjustment for impairment loss included in net loss
|
—
|
|
|
—
|
|
|
1,958
|
|
|
—
|
|
||||
Net change in available for sale securities
|
5
|
|
|
32
|
|
|
1,258
|
|
|
105
|
|
||||
Foreign currency translation adjustments
|
(209
|
)
|
|
628
|
|
|
64
|
|
|
499
|
|
||||
Other comprehensive income (loss), net of tax
|
(204
|
)
|
|
660
|
|
|
1,322
|
|
|
604
|
|
||||
Comprehensive loss, net of tax
|
$
|
(9,091
|
)
|
|
$
|
(12,441
|
)
|
|
$
|
(19,217
|
)
|
|
$
|
(24,121
|
)
|
|
Common Stock
|
|
Treasury Shares/Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at December 31, 2017
|
90,380
|
|
|
$
|
8
|
|
|
(121
|
)
|
|
$
|
(441
|
)
|
|
$
|
359,347
|
|
|
$
|
(246,207
|
)
|
|
$
|
(598
|
)
|
|
$
|
112,109
|
|
Cumulative effect of ASC 606 - initial adoption (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,709
|
|
|
—
|
|
|
3,709
|
|
||||||
Adjusted balance at January 1, 2018
|
90,380
|
|
|
8
|
|
|
(121
|
)
|
|
(441
|
)
|
|
359,347
|
|
|
(242,498
|
)
|
|
(598
|
)
|
|
115,818
|
|
||||||
Proceeds from the exercise of stock options and employee stock purchase plan
|
151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
447
|
|
|
—
|
|
|
—
|
|
|
447
|
|
||||||
Issuance of common stock, restricted stock units
|
1,291
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net cash paid for payroll taxes on restricted stock unit releases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(417
|
)
|
|
—
|
|
|
—
|
|
|
(417
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,748
|
|
|
—
|
|
|
—
|
|
|
6,748
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,539
|
)
|
|
—
|
|
|
(20,539
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,322
|
|
|
1,322
|
|
||||||
Balance at June 30, 2018
|
91,822
|
|
|
$
|
8
|
|
|
(121
|
)
|
|
$
|
(441
|
)
|
|
$
|
366,125
|
|
|
$
|
(263,037
|
)
|
|
$
|
724
|
|
|
$
|
103,379
|
|
|
|
For the Six Months Ended June 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(20,539
|
)
|
|
$
|
(24,725
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
9,744
|
|
|
10,801
|
|
||
Amortization of debt discount and issuance costs
|
|
4,923
|
|
|
4,557
|
|
||
Amortization of contract acquisition costs
|
|
930
|
|
|
—
|
|
||
Amortization of premium on short-term investments
|
|
(1,197
|
)
|
|
(114
|
)
|
||
Deferred income taxes
|
|
—
|
|
|
148
|
|
||
Stock-based compensation
|
|
6,538
|
|
|
6,912
|
|
||
Restructuring and other
|
|
482
|
|
|
2,901
|
|
||
Impairment loss on investment securities
|
|
1,958
|
|
|
—
|
|
||
Other
|
|
56
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable, net
|
|
5,593
|
|
|
12,239
|
|
||
Deferred revenue
|
|
174
|
|
|
(1,119
|
)
|
||
Prepaid expenses and other
|
|
(434
|
)
|
|
(37
|
)
|
||
Contract acquisition costs
|
|
(878
|
)
|
|
—
|
|
||
Accounts payable
|
|
(2,515
|
)
|
|
(825
|
)
|
||
Accrued taxes
|
|
(472
|
)
|
|
(664
|
)
|
||
Accrued compensation and benefits
|
|
(1,647
|
)
|
|
(5,164
|
)
|
||
Accrued expenses
|
|
(1,339
|
)
|
|
(1,508
|
)
|
||
Other liabilities
|
|
1,025
|
|
|
(364
|
)
|
||
Net cash provided by operating activities
|
|
2,402
|
|
|
3,038
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Acquisition of property and equipment
|
|
(7,268
|
)
|
|
(9,080
|
)
|
||
Purchases of short-term investments
|
|
(480
|
)
|
|
(37,806
|
)
|
||
Sales of short-term investments
|
|
133,920
|
|
|
33,457
|
|
||
Maturities of short-term investments
|
|
4,240
|
|
|
3,025
|
|
||
Net cash provided by (used in) investing activities
|
|
130,412
|
|
|
(10,404
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|||
Repayment on capital lease obligations
|
|
(156
|
)
|
|
(34
|
)
|
||
Proceeds from issuance of common stock
|
|
447
|
|
|
616
|
|
||
Payments related to minimum tax withholdings on restricted stock unit releases
|
|
(417
|
)
|
|
(322
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(126
|
)
|
|
260
|
|
||
Net increase/(decrease) in cash, cash equivalents and restricted cash
|
|
132,688
|
|
|
(7,106
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
243
|
|
|
(922
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
52,633
|
|
|
48,936
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
185,564
|
|
|
$
|
40,908
|
|
Supplemental disclosure of non-cash activities:
|
|
|
|
|
||||
Acquisition of property and equipment accrued in accounts payable and accrued expenses
|
|
$
|
389
|
|
|
$
|
65
|
|
Increase in contract acquisition costs and benefit to accumulated deficit related to adoption of ASC 606
|
|
$
|
3,346
|
|
|
$
|
—
|
|
Increase in prepaid expenses and other, other liabilities and benefit to accumulated deficit related to adoption of ASC 606
|
|
$
|
363
|
|
|
$
|
—
|
|
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
As reported
|
|
ASC 606 adjustments
|
|
Balances without adoption of ASC 606
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
50,583
|
|
|
$
|
80
|
|
|
$
|
50,663
|
|
Prepaid expenses and other
|
6,081
|
|
|
(148
|
)
|
|
5,933
|
|
|||
Contract acquisition costs
|
3,294
|
|
|
(3,294
|
)
|
|
—
|
|
|||
Other assets
|
4,252
|
|
|
(85
|
)
|
|
4,167
|
|
|||
Total assets
|
$
|
64,210
|
|
|
$
|
(3,447
|
)
|
|
$
|
60,763
|
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
—
|
|
|
$
|
2,541
|
|
|
$
|
2,541
|
|
Other current liabilities
|
4,696
|
|
|
(2,392
|
)
|
|
2,304
|
|
|||
Total liabilities
|
$
|
4,696
|
|
|
$
|
149
|
|
|
$
|
4,845
|
|
|
|
|
|
|
|
||||||
Accumulated deficit
|
$
|
(263,037
|
)
|
|
$
|
(3,596
|
)
|
|
$
|
(266,633
|
)
|
|
For the Three Months Ended June 30, 2018
|
||||||||||
|
As Reported
|
|
ASC 606 adjustments
|
|
Balances without adoption of ASC 606
|
||||||
Net revenue
|
$
|
61,111
|
|
|
$
|
222
|
|
|
$
|
61,333
|
|
Cost of revenue
|
42,463
|
|
|
—
|
|
|
42,463
|
|
|||
Gross profit
|
18,648
|
|
|
222
|
|
|
18,870
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
9,252
|
|
|
(55
|
)
|
|
9,197
|
|
|||
Research and development
|
1,780
|
|
|
—
|
|
|
1,780
|
|
|||
General and administrative
|
13,157
|
|
|
—
|
|
|
13,157
|
|
|||
Restructuring and other
|
156
|
|
|
—
|
|
|
156
|
|
|||
Total operating expenses
|
24,345
|
|
|
(55
|
)
|
|
24,290
|
|
|||
Loss from operations
|
(5,697
|
)
|
|
277
|
|
|
(5,420
|
)
|
|||
Interest expense and other, net
|
(2,776
|
)
|
|
—
|
|
|
(2,776
|
)
|
|||
Loss before income taxes
|
(8,473
|
)
|
|
277
|
|
|
(8,196
|
)
|
|||
Provision for income tax expense
|
(414
|
)
|
|
—
|
|
|
(414
|
)
|
|||
Net loss
|
$
|
(8,887
|
)
|
|
$
|
277
|
|
|
$
|
(8,610
|
)
|
Net loss per common share:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.09
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic and diluted
|
91,323
|
|
|
—
|
|
|
91,323
|
|
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
As Reported
|
|
ASC 606 adjustments
|
|
Balances without adoption of ASC 606
|
||||||
Net revenue
|
$
|
119,696
|
|
|
$
|
61
|
|
|
$
|
119,757
|
|
Cost of revenue
|
84,187
|
|
|
—
|
|
|
84,187
|
|
|||
Gross profit
|
35,509
|
|
|
61
|
|
|
35,570
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
18,490
|
|
|
(51
|
)
|
|
18,439
|
|
|||
Research and development
|
3,296
|
|
|
—
|
|
|
3,296
|
|
|||
General and administrative
|
26,046
|
|
|
—
|
|
|
26,046
|
|
|||
Restructuring and other
|
209
|
|
|
—
|
|
|
209
|
|
|||
Total operating expenses
|
48,041
|
|
|
(51
|
)
|
|
47,990
|
|
|||
Loss from operations
|
(12,532
|
)
|
|
112
|
|
|
(12,420
|
)
|
|||
Interest expense and other, net
|
(5,622
|
)
|
|
—
|
|
|
(5,622
|
)
|
|||
Impairment loss on investment securities
|
(1,958
|
)
|
|
—
|
|
|
(1,958
|
)
|
|||
Loss before income taxes
|
(20,112
|
)
|
|
112
|
|
|
(20,000
|
)
|
|||
Provision for income tax expense
|
(427
|
)
|
|
—
|
|
|
(427
|
)
|
|||
Net loss
|
$
|
(20,539
|
)
|
|
$
|
112
|
|
|
$
|
(20,427
|
)
|
Net loss per common share:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.23
|
)
|
|
$
|
—
|
|
|
$
|
(0.23
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted
|
90,843
|
|
|
—
|
|
|
90,843
|
|
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
As Reported
|
|
ASC 606 adjustments
|
|
Balances without adoption of ASC 606
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(20,539
|
)
|
|
$
|
112
|
|
|
$
|
(20,427
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
9,744
|
|
|
—
|
|
|
9,744
|
|
|||
Amortization of debt discount and issuance costs
|
4,923
|
|
|
—
|
|
|
4,923
|
|
|||
Amortization of contract acquisition cost
|
930
|
|
|
(930
|
)
|
|
—
|
|
|||
Amortization of premium on short-term investments
|
(1,197
|
)
|
|
—
|
|
|
(1,197
|
)
|
|||
Stock-based compensation
|
6,538
|
|
|
—
|
|
|
6,538
|
|
|||
Restructuring and other
|
482
|
|
|
—
|
|
|
482
|
|
|||
Impairment loss on investment securities
|
1,958
|
|
|
—
|
|
|
1,958
|
|
|||
Other
|
56
|
|
|
—
|
|
|
56
|
|
|||
Changes in operating assets and liabilities:
|
|
|
—
|
|
|
|
|
||||
Accounts receivable, net
|
5,593
|
|
|
(80
|
)
|
|
5,513
|
|
|||
Deferred revenue
|
174
|
|
|
2,541
|
|
|
2,715
|
|
|||
Contract acquisition costs
|
(878
|
)
|
|
878
|
|
|
—
|
|
|||
Prepaid expenses and other
|
(434
|
)
|
|
(129
|
)
|
|
(563
|
)
|
|||
Accounts payable
|
(2,515
|
)
|
|
—
|
|
|
(2,515
|
)
|
|||
Accrued taxes
|
(472
|
)
|
|
—
|
|
|
(472
|
)
|
|||
Accrued compensation and benefits
|
(1,647
|
)
|
|
—
|
|
|
(1,647
|
)
|
|||
Accrued expenses
|
(1,339
|
)
|
|
—
|
|
|
(1,339
|
)
|
|||
Other liabilities
|
1,025
|
|
|
(2,392
|
)
|
|
(1,367
|
)
|
|||
Net cash provided by operating activities
|
2,402
|
|
|
—
|
|
|
2,402
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Net cash provided by investing activities
|
130,412
|
|
|
—
|
|
|
130,412
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Net cash used in financing activities
|
(126
|
)
|
|
—
|
|
|
(126
|
)
|
|||
Net increase in cash, cash equivalents and restricted cash
|
132,688
|
|
|
—
|
|
|
132,688
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
243
|
|
|
—
|
|
|
243
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
52,633
|
|
|
—
|
|
|
52,633
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
185,564
|
|
|
$
|
—
|
|
|
$
|
185,564
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
43,391
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,391
|
|
Money market mutual funds
|
199
|
|
|
—
|
|
|
—
|
|
|
199
|
|
||||
Total cash and cash equivalents
|
43,590
|
|
|
—
|
|
|
—
|
|
|
43,590
|
|
||||
Level 2
(2)
:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
104,794
|
|
|
6
|
|
|
—
|
|
|
104,800
|
|
||||
Commercial paper
|
4,997
|
|
|
—
|
|
|
—
|
|
|
4,997
|
|
||||
U.S. agency securities
|
30,932
|
|
|
1
|
|
|
—
|
|
|
30,933
|
|
||||
Total cash equivalents
|
140,723
|
|
|
7
|
|
|
—
|
|
|
140,730
|
|
||||
Cash and cash equivalents
|
$
|
184,313
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
184,320
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
48,712
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,712
|
|
Money market mutual funds
|
2,677
|
|
|
—
|
|
|
—
|
|
|
2,677
|
|
||||
Total cash and cash equivalents
|
51,389
|
|
|
—
|
|
|
—
|
|
|
51,389
|
|
||||
Level 2
(2)
:
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
55,763
|
|
|
1
|
|
|
(346
|
)
|
|
55,418
|
|
||||
U.S. agency securities
|
34,640
|
|
|
—
|
|
|
(410
|
)
|
|
34,230
|
|
||||
Asset-backed securities
|
21,739
|
|
|
—
|
|
|
(127
|
)
|
|
21,612
|
|
||||
U.S. Treasury securities
|
26,292
|
|
|
—
|
|
|
(371
|
)
|
|
25,921
|
|
||||
Total short-term investments:
|
138,434
|
|
|
1
|
|
|
(1,254
|
)
|
|
137,181
|
|
||||
Cash, cash equivalents and short-term investments
|
$
|
189,823
|
|
|
$
|
1
|
|
|
$
|
(1,254
|
)
|
|
$
|
188,570
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Less than 1 year
|
$
|
140,922
|
|
|
$
|
140,929
|
|
Total
|
$
|
140,922
|
|
|
$
|
140,929
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Principal amount
|
$
|
150,000
|
|
|
$
|
150,000
|
|
Unamortized debt discount
|
(832
|
)
|
|
(5,336
|
)
|
||
Unamortized debt issuance costs
|
(77
|
)
|
|
(497
|
)
|
||
Net carrying amount
|
$
|
149,091
|
|
|
$
|
144,167
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Contractual interest expense at 1.50% per annum
|
$
|
562
|
|
|
$
|
563
|
|
|
$
|
1,125
|
|
|
$
|
1,125
|
|
Amortization of debt issuance costs
|
214
|
|
|
197
|
|
|
420
|
|
|
388
|
|
||||
Accretion of debt discount
|
2,289
|
|
|
2,119
|
|
|
4,504
|
|
|
4,169
|
|
||||
Total
|
$
|
3,065
|
|
|
$
|
2,879
|
|
|
$
|
6,049
|
|
|
$
|
5,682
|
|
Fiscal Year
|
Operating Leases
|
|
Operating Subleases
|
||||
Remainder of 2018
|
$
|
5,869
|
|
|
$
|
915
|
|
2019
|
10,049
|
|
|
1,875
|
|
||
2020
|
8,798
|
|
|
1,932
|
|
||
2021
|
8,275
|
|
|
1,989
|
|
||
2022
|
5,232
|
|
|
1,878
|
|
||
Thereafter
|
599
|
|
|
—
|
|
||
Total
|
$
|
38,822
|
|
|
$
|
8,589
|
|
Fiscal Year
|
|
||
Remainder of 2018
|
$
|
2,735
|
|
2019
|
6,111
|
|
|
2020
|
4,578
|
|
|
2021
|
98
|
|
|
Total
|
$
|
13,522
|
|
Fiscal Year
|
|
||
Remainder of 2018
|
$
|
326
|
|
2019
|
874
|
|
|
2020
|
864
|
|
|
2021
|
393
|
|
|
Total
|
$
|
2,457
|
|
|
For the Three Months Ended June 30, 2018
|
|
For the Six Months Ended June 30, 2018
|
||||
Professional services
|
$
|
692
|
|
|
$
|
2,699
|
|
Selling services
|
60,419
|
|
|
116,997
|
|
||
Total revenue
|
$
|
61,111
|
|
|
$
|
119,696
|
|
|
For the Three Months Ended June 30, 2018
|
|
For the Six Months Ended June 30, 2018
|
||||
APJ
|
$
|
9,255
|
|
|
$
|
16,849
|
|
EMEA
|
14,669
|
|
|
30,191
|
|
||
NALA
|
37,187
|
|
|
72,656
|
|
||
Total revenue
|
$
|
61,111
|
|
|
$
|
119,696
|
|
|
For the Three Months Ended June 30, 2018
|
|
For the Six Months Ended June 30, 2018
|
||||
Variable consideration
|
$
|
40,428
|
|
|
$
|
81,271
|
|
Fixed consideration
|
20,683
|
|
|
38,425
|
|
||
Total revenue
|
$
|
61,111
|
|
|
$
|
119,696
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of revenue
|
$
|
279
|
|
|
$
|
294
|
|
|
$
|
558
|
|
|
$
|
584
|
|
Sales and marketing
|
833
|
|
|
970
|
|
|
1,719
|
|
|
1,852
|
|
||||
Research and development
|
58
|
|
|
(35
|
)
|
|
122
|
|
|
65
|
|
||||
General and administrative
|
2,257
|
|
|
2,466
|
|
|
4,139
|
|
|
4,411
|
|
||||
Total stock-based compensation
|
$
|
3,427
|
|
|
$
|
3,695
|
|
|
$
|
6,538
|
|
|
$
|
6,912
|
|
|
Shares
|
|
Weighted-Average Option Price Per Share
|
|
Weighted-Average Fair Value of Options Granted During the Year
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Intrinsic Value
|
|||||||
Issued and outstanding as of December 31, 2017
|
6,511
|
|
|
$
|
4.48
|
|
|
|
|
|
|
$
|
7
|
|
||
Granted
|
116
|
|
|
$
|
3.78
|
|
|
$
|
1.84
|
|
|
|
|
|
||
Options exercised
|
(31
|
)
|
|
$
|
3.21
|
|
|
|
|
|
|
$
|
32
|
|
||
Expired and/or Forfeited
|
(735
|
)
|
|
$
|
4.87
|
|
|
|
|
|
|
|
||||
Issued and outstanding as of June 30, 2018
|
5,861
|
|
|
$
|
4.43
|
|
|
|
|
5.99
|
|
$
|
382
|
|
||
Options exercisable as of June 30, 2018
|
4,783
|
|
|
$
|
4.52
|
|
|
|
|
5.65
|
|
$
|
248
|
|
|
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Unvested as of December 31, 2017
|
5,027
|
|
|
$
|
3.98
|
|
Granted
|
3,200
|
|
|
$
|
3.92
|
|
Vested
(1)
|
(1,401
|
)
|
|
$
|
3.67
|
|
Forfeited
|
(500
|
)
|
|
$
|
4.03
|
|
Unvested as of June 30, 2018
|
6,326
|
|
|
$
|
4.01
|
|
|
Severance and Other Employee Costs
|
|
Lease and Other Contract Termination Costs
|
|
Total
|
||||||
Balance as of December 31, 2017
|
$
|
71
|
|
|
$
|
1,754
|
|
|
$
|
1,825
|
|
Restructuring and other charges
|
120
|
|
|
89
|
|
|
209
|
|
|||
Cash paid
|
(98
|
)
|
|
(1,013
|
)
|
|
(1,111
|
)
|
|||
Change in estimates and non-cash charges
|
(3
|
)
|
|
276
|
|
|
273
|
|
|||
Balance as of June 30, 2018
|
$
|
90
|
|
|
$
|
1,106
|
|
|
$
|
1,196
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Severance pay and other employee costs
|
$
|
120
|
|
|
$
|
2,970
|
|
|
$
|
120
|
|
|
$
|
2,970
|
|
Lease
|
36
|
|
|
1,859
|
|
|
89
|
|
|
1,859
|
|
||||
Asset impairment
|
—
|
|
|
886
|
|
|
—
|
|
|
886
|
|
||||
Total
|
$
|
156
|
|
|
$
|
5,715
|
|
|
$
|
209
|
|
|
$
|
5,715
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Net revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
69
|
%
|
|
68
|
%
|
|
70
|
%
|
|
70
|
%
|
Gross profit
|
31
|
%
|
|
32
|
%
|
|
30
|
%
|
|
30
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
15
|
%
|
|
15
|
%
|
|
15
|
%
|
|
15
|
%
|
Research and development
|
3
|
%
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
General and administrative
|
22
|
%
|
|
23
|
%
|
|
22
|
%
|
|
24
|
%
|
Restructuring and other
|
—
|
%
|
|
10
|
%
|
|
—
|
%
|
|
5
|
%
|
Total operating expenses
|
40
|
%
|
|
50
|
%
|
|
40
|
%
|
|
47
|
%
|
Loss from operations
|
(9
|
)%
|
|
(18
|
)%
|
|
(10
|
)%
|
|
(17
|
)%
|
•
|
$2.6 million increase in employee costs related to operational improvements in managed services, new clients and expansion of business with existing clients resulting in an increase in headcount to lower cost locations;
|
•
|
$0.6 million increase in IT costs; and
|
•
|
$0.2 million increase in travel costs due to the increase in new business with our existing client base; partially offset by
|
•
|
$0.4 million decrease in professional fees and consulting costs.
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2018
|
|
2017
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
$
|
9,252
|
|
|
15
|
%
|
|
$
|
8,620
|
|
|
15
|
%
|
|
$
|
632
|
|
|
7
|
%
|
Research and development
|
1,780
|
|
|
3
|
%
|
|
1,243
|
|
|
2
|
%
|
|
537
|
|
|
43
|
%
|
|||
General and administrative
|
13,157
|
|
|
22
|
%
|
|
13,505
|
|
|
23
|
%
|
|
(348
|
)
|
|
(3
|
)%
|
|||
Restructuring and other
|
156
|
|
|
—
|
%
|
|
5,715
|
|
|
10
|
%
|
|
(5,559
|
)
|
|
(97
|
)%
|
|||
Total operating expenses
|
$
|
24,345
|
|
|
40
|
%
|
|
$
|
29,083
|
|
|
50
|
%
|
|
$
|
(4,738
|
)
|
|
(16
|
)%
|
•
|
$0.5 million increase in contract acquisition costs due to the adoption of ASC 606, see Notes to the Consolidated Financial Statements “Note 2 - Summary of Significant Accounting Policies” for additional information; and
|
•
|
$0.2 million increase in employee related costs driven by increases in revenue performance; partially offset by
|
•
|
$0.1 million decrease in amortization of intangibles that were fully depreciated in 2017.
|
•
|
$0.4 million increase in employee related costs driven by lower capitalization of employee costs due to the migration from our Renew OnDemand platform to PRISM; and
|
•
|
$0.3 million increase in IT costs; partially offset by
|
•
|
$0.2 million decrease in facility costs primarily due to the restructuring of the Company in May 2017.
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2018
|
|
2017
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Interest expense
|
$
|
(3,106
|
)
|
|
(5
|
)%
|
|
$
|
(2,889
|
)
|
|
(5
|
)%
|
|
$
|
(217
|
)
|
|
8
|
%
|
Other, net
|
$
|
330
|
|
|
1
|
%
|
|
$
|
243
|
|
|
—
|
%
|
|
$
|
87
|
|
|
36
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
||||||||||||||
|
2018
|
|
2017
|
|
|
|
|
||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||
Provision for income tax expense
|
$
|
(414
|
)
|
|
(1
|
)%
|
|
$
|
(117
|
)
|
|
—
|
%
|
|
$
|
(297
|
)
|
|
*
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2018
|
|
2017
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Net revenue
|
$
|
119,696
|
|
|
100
|
%
|
|
$
|
114,970
|
|
|
100
|
%
|
|
$
|
4,726
|
|
|
4
|
%
|
Cost of revenue
|
84,187
|
|
|
70
|
%
|
|
80,926
|
|
|
70
|
%
|
|
3,261
|
|
|
4
|
%
|
|||
Gross profit
|
$
|
35,509
|
|
|
30
|
%
|
|
$
|
34,044
|
|
|
30
|
%
|
|
$
|
1,465
|
|
|
4
|
%
|
•
|
$3.0 million increase in employee costs related to operational improvements in managed services, new clients and expansion of business with existing clients resulting in an increase in headcount;
|
•
|
$0.4 million increase in travel cost due to the increase in new business with our existing clients; and
|
•
|
$0.4 million increase in IT costs; partially offset by
|
•
|
$0.7 million decrease in professional fees and consulting costs.
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2018
|
|
2017
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
$
|
18,490
|
|
|
15
|
%
|
|
$
|
16,960
|
|
|
15
|
%
|
|
$
|
1,530
|
|
|
9
|
%
|
Research and development
|
3,296
|
|
|
3
|
%
|
|
3,485
|
|
|
3
|
%
|
|
(189
|
)
|
|
(5
|
)%
|
|||
General and administrative
|
26,046
|
|
|
22
|
%
|
|
27,486
|
|
|
24
|
%
|
|
(1,440
|
)
|
|
(5
|
)%
|
|||
Restructuring and other
|
209
|
|
|
—
|
%
|
|
5,715
|
|
|
5
|
%
|
|
(5,506
|
)
|
|
(96
|
)%
|
|||
Total operating expenses
|
$
|
48,041
|
|
|
40
|
%
|
|
$
|
53,646
|
|
|
47
|
%
|
|
$
|
(5,605
|
)
|
|
(10
|
)%
|
•
|
$0.9 million increase in contract acquisition costs due to the adoption of ASC 606, see Notes to the Consolidated Financial Statements “Note 2 - Summary of Significant Accounting Policies” for additional information; and
|
•
|
$0.8 million increase in employee costs related to operational improvements in managed services, new clients and expansion of business with existing clients resulting in an increase in headcount to lower cost locations; partially offset by
|
•
|
$0.4 million decrease in marketing events.
|
•
|
$0.4 million decrease in temporary labor and consulting costs, related to migrating customers from our Renew OnDemand platform to PRISM; partially offset by
|
•
|
$0.3 million increase in employee related costs.
|
•
|
$2.0 million decrease in employee compensation costs due to lower headcount resulting from our efforts to better align our cost structure;
|
•
|
$0.4 million decrease in facility costs due to the restructuring of the Company in May 2017; partially offset by
|
•
|
$0.6 million increase in training and professional service fees; and
|
•
|
$0.2 million increase in recruiting fees for business expansion.
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2018
|
|
2017
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Interest expense
|
$
|
(6,128
|
)
|
|
(5
|
)%
|
|
$
|
(5,707
|
)
|
|
(5
|
)%
|
|
$
|
(421
|
)
|
|
7
|
%
|
Other, net
|
$
|
506
|
|
|
—
|
%
|
|
$
|
990
|
|
|
1
|
%
|
|
$
|
(484
|
)
|
|
(49
|
)%
|
Impairment loss on investment securities
|
$
|
(1,958
|
)
|
|
(2
|
)%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
(1,958
|
)
|
|
100
|
%
|
|
For the Six Months Ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Net cash provided by operating activities
|
$
|
2,402
|
|
|
$
|
3,038
|
|
Net cash provided by (used in) investing activities
|
$
|
130,412
|
|
|
$
|
(10,404
|
)
|
Net cash (used in) provided by financing activities
|
$
|
(126
|
)
|
|
$
|
260
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash net of the effect of exchange rates on cash, cash equivalents and restricted cash
|
$
|
132,931
|
|
|
$
|
(8,028
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Purchased intangible asset amortization
|
$
|
—
|
|
|
$
|
378
|
|
|
$
|
85
|
|
|
$
|
756
|
|
Internally developed software amortization
|
3,044
|
|
|
3,363
|
|
|
5,876
|
|
|
6,159
|
|
||||
Property and equipment depreciation
|
1,897
|
|
|
1,928
|
|
|
3,783
|
|
|
3,860
|
|
||||
Depreciation and amortization
|
4,941
|
|
|
5,669
|
|
|
9,744
|
|
|
10,775
|
|
||||
Adjustments and other
|
—
|
|
|
401
|
|
|
—
|
|
|
26
|
|
||||
Total depreciation and amortization
|
$
|
4,941
|
|
|
$
|
6,070
|
|
|
$
|
9,744
|
|
|
$
|
10,801
|
|
•
|
$101.7 million
increase
in cash inflows from the sale and maturity of short-term investments;
|
•
|
$37.3 million
decrease
in cash outflows related to the purchase of short-term investments during
2017
; and
|
•
|
$1.8 million
decrease
in cash outflows related to the acquisition of property and equipment, which includes
$1.1 million
of decreased internally developed software costs.
|
•
|
$0.2 million
decrease
in cash inflows due to proceeds of approximately
$0.6 million
from the exercise of stock options and the employee purchase plan during
2017
compared to proceeds of approximately
$0.4 million
from the exercise of stock options and the employee purchase plan during
2018
;
|
•
|
$0.1 million
increase
in cash outflows due to capital lease obligations; and
|
•
|
$0.1 million
increase
in cash outflows due to the minimum tax withholding requirement.
|
|
Total
|
|
Less than 1 year
|
|
1- 3 years
|
|
4- 5 years
|
|
More than 5 years
|
||||||||||
Capital lease commitments
|
$
|
2,457
|
|
|
$
|
767
|
|
|
$
|
1,572
|
|
|
$
|
118
|
|
|
$
|
—
|
|
Operating lease commitments
(1)
|
38,822
|
|
|
10,865
|
|
|
17,988
|
|
|
9,694
|
|
|
275
|
|
|||||
Service contracts
|
13,522
|
|
|
5,988
|
|
|
7,534
|
|
|
—
|
|
|
—
|
|
|||||
Total
(2)
|
$
|
54,801
|
|
|
$
|
17,620
|
|
|
$
|
27,094
|
|
|
$
|
9,812
|
|
|
$
|
275
|
|
Exhibit
Number
|
Description of Document
|
|
|
3.1*
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32.1*
|
|
|
|
32.2*
|
|
|
|
101
|
Interactive data files (XBRL) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, (ii) the Consolidated Statement of Operations for the three and six months ended June 30, 2018 and 2017, (iii) the Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2018 and 2017, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 and (v) the Notes to Consolidated Financial Statements.
|
|
|
SERVICESOURCE INTERNATIONAL, INC.
(Registrant)
|
|
|
|
|
|
Date:
|
August 6, 2018
|
By:
|
/s/ ROBERT N. PINKERTON
|
|
|
|
Robert N. Pinkerton
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ServiceSource International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 controls over financial reporting.
|
Date:
|
August 6, 2018
|
By:
|
/s/ CHRISTOPHER M. CARRINGTON
|
|
|
|
Name: Christopher M. Carrington
|
|
|
|
Title: Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ServiceSource International, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
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Date:
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August 6, 2018
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By:
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/s/ ROBERT N. PINKERTON
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Name: Robert N. Pinkerton
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Title: Chief Financial Officer
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Date:
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August 6, 2018
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By:
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/s/ CHRISTOPHER M. CARRINGTON
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Name: Christopher M. Carrington
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Title: Chief Executive Officer
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Date:
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August 6, 2018
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By:
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/s/ ROBERT N. PINKERTON
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Name: Robert N. Pinkerton
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Title: Chief Financial Officer
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