|
Delaware
|
|
56-2242657
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
|
|
|
Page
|
|
|
|
|
||
Item 1.
|
||
|
Unaudited Condensed Consolidated Balance Sheets as of December 31, 2016 and September 30, 2017
|
|
|
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2016 and 2017
|
|
|
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2017
|
|
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
•
|
our ability to attract and retain customers, including large enterprises;
|
•
|
our approach to identifying, attracting and keeping new and existing customers, as well as our expectations regarding customer turnover;
|
•
|
our beliefs regarding network traffic growth and other trends related to the usage of our products and services;
|
•
|
our expectations regarding revenue, costs, expenses, gross margin, dollar based net retention rate, adjusted EBITDA and capital expenditures;
|
•
|
our beliefs regarding the growth of our business and how that impacts our liquidity and capital resources requirements;
|
•
|
the sufficiency of our cash and cash equivalents to meet our liquidity needs;
|
•
|
our ability to attract, train, and retain qualified employees and key personnel;
|
•
|
our beliefs regarding the expense and productivity of and competition for our sales force;
|
•
|
our expectations regarding headcount;
|
•
|
our ability to maintain and benefit from our corporate culture;
|
•
|
our plans to further invest in and grow our business, and our ability to effectively manage our growth and associated investments;
|
•
|
our ability to introduce new products and services and enhance existing products and services;
|
•
|
our ability to compete successfully against current and future competitors;
|
•
|
the evolution of technology affecting our products, services and markets;
|
•
|
the impact of certain new accounting standards and guidance as well as the time and cost of continued compliance with existing rules and standards;
|
•
|
our beliefs regarding the use of non-GAAP financial measures;
|
•
|
our ability to maintain, protect and enhance our intellectual property;
|
•
|
our expectations regarding litigation and other pending or potential disputes; and
|
•
|
our ability to comply with modified or new laws and regulations.
|
|
December 31,
2016 |
|
September 30,
2017 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,788
|
|
|
$
|
5,366
|
|
Accounts receivable, net of allowance for doubtful accounts
|
16,838
|
|
|
18,702
|
|
||
Prepaid expenses and other current assets
|
4,416
|
|
|
6,157
|
|
||
Total current assets
|
28,042
|
|
|
30,225
|
|
||
Property and equipment, net
|
11,181
|
|
|
12,389
|
|
||
Intangible assets, net
|
8,482
|
|
|
7,853
|
|
||
Deferred costs, non-current
|
1,696
|
|
|
4,903
|
|
||
Other long-term assets
|
1,011
|
|
|
1,069
|
|
||
Goodwill
|
6,867
|
|
|
6,867
|
|
||
Deferred tax asset
|
12,694
|
|
|
9,244
|
|
||
Total assets
|
$
|
69,973
|
|
|
$
|
72,550
|
|
Liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,688
|
|
|
$
|
2,518
|
|
Accrued expenses and other current liabilities
|
14,649
|
|
|
15,783
|
|
||
Current portion of deferred revenue and advanced billings
|
4,032
|
|
|
4,710
|
|
||
Line of credit, current portion
|
5,000
|
|
|
—
|
|
||
Current portion of long-term debt
|
2,100
|
|
|
2,849
|
|
||
Total current liabilities
|
30,469
|
|
|
25,860
|
|
||
Other liabilities
|
611
|
|
|
1,431
|
|
||
Deferred revenue, net of current portion
|
1,711
|
|
|
2,439
|
|
||
Long-term debt, net of current portion
|
37,738
|
|
|
35,501
|
|
||
Total liabilities
|
70,529
|
|
|
65,231
|
|
||
Redeemable convertible preferred stock
|
21,818
|
|
|
21,818
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ deficit:
|
|
|
|
||||
Class A and Class B common stock
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
9,356
|
|
|
10,661
|
|
||
Accumulated deficit
|
(31,742
|
)
|
|
(25,172
|
)
|
||
Total stockholders’ deficit
|
(22,374
|
)
|
|
(14,499
|
)
|
||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
$
|
69,973
|
|
|
$
|
72,550
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Revenue
|
$
|
38,603
|
|
|
$
|
41,338
|
|
|
$
|
113,373
|
|
|
$
|
120,489
|
|
Cost of revenue
|
21,514
|
|
|
22,571
|
|
|
64,177
|
|
|
66,431
|
|
||||
Gross profit
|
17,089
|
|
|
18,767
|
|
|
49,196
|
|
|
54,058
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
2,390
|
|
|
2,771
|
|
|
6,157
|
|
|
7,862
|
|
||||
Sales and marketing
|
2,418
|
|
|
3,128
|
|
|
6,876
|
|
|
8,099
|
|
||||
General and administrative
|
7,899
|
|
|
9,797
|
|
|
23,571
|
|
|
25,691
|
|
||||
Total operating expenses
|
12,707
|
|
|
15,696
|
|
|
36,604
|
|
|
41,652
|
|
||||
Operating income
|
4,382
|
|
|
3,071
|
|
|
12,592
|
|
|
12,406
|
|
||||
Other expense, net
|
(229
|
)
|
|
(538
|
)
|
|
(597
|
)
|
|
(1,950
|
)
|
||||
Income from continuing operations before income taxes
|
4,153
|
|
|
2,533
|
|
|
11,995
|
|
|
10,456
|
|
||||
Income tax provision
|
(137
|
)
|
|
(899
|
)
|
|
(406
|
)
|
|
(3,886
|
)
|
||||
Income from continuing operations
|
4,016
|
|
|
1,634
|
|
|
11,589
|
|
|
6,570
|
|
||||
Loss from discontinued operations, net of income taxes
|
(728
|
)
|
|
—
|
|
|
(3,739
|
)
|
|
—
|
|
||||
Net income
|
$
|
3,288
|
|
|
$
|
1,634
|
|
|
$
|
7,850
|
|
|
$
|
6,570
|
|
Total comprehensive income, net of income tax
|
$
|
3,288
|
|
|
$
|
1,634
|
|
|
$
|
7,850
|
|
|
$
|
6,570
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
4,016
|
|
|
$
|
1,634
|
|
|
$
|
11,589
|
|
|
$
|
6,570
|
|
Less: income allocated to participating securities
|
531
|
|
|
213
|
|
|
1,533
|
|
|
858
|
|
||||
Income from continuing operations attributable to common stockholders
|
$
|
3,485
|
|
|
$
|
1,421
|
|
|
$
|
10,056
|
|
|
$
|
5,712
|
|
Income from continuing operations per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.30
|
|
|
$
|
0.12
|
|
|
$
|
0.86
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
0.11
|
|
|
$
|
0.78
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
3,288
|
|
|
$
|
1,634
|
|
|
$
|
7,850
|
|
|
$
|
6,570
|
|
Less: income allocated to participating securities
|
435
|
|
|
213
|
|
|
1,038
|
|
|
858
|
|
||||
Net income attributable to common stockholders
|
$
|
2,853
|
|
|
$
|
1,421
|
|
|
$
|
6,812
|
|
|
$
|
5,712
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
0.12
|
|
|
$
|
0.59
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.11
|
|
|
$
|
0.53
|
|
|
$
|
0.42
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,600,189
|
|
|
11,828,657
|
|
|
11,643,664
|
|
|
11,814,045
|
|
||||
Diluted
|
12,810,379
|
|
|
13,252,737
|
|
|
12,828,894
|
|
|
13,487,649
|
|
|
Nine Months Ended
September 30, |
||||||
|
2016
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
7,850
|
|
|
$
|
6,570
|
|
Loss from discontinued operations, net of income taxes
|
3,739
|
|
|
—
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
4,768
|
|
|
4,272
|
|
||
Amortization of debt issuance costs
|
27
|
|
|
96
|
|
||
Stock-based compensation
|
1,099
|
|
|
1,102
|
|
||
Change in fair value of shareholders’ anti-dilutive arrangement
|
—
|
|
|
689
|
|
||
Deferred taxes
|
253
|
|
|
3,450
|
|
||
Loss on disposal of property and equipment
|
11
|
|
|
55
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(3,483
|
)
|
|
(1,864
|
)
|
||
Prepaid expenses and other assets
|
(1,421
|
)
|
|
(1,470
|
)
|
||
Deferred costs
|
(671
|
)
|
|
(3,556
|
)
|
||
Accounts payable
|
1,087
|
|
|
(2,170
|
)
|
||
Accrued expenses and other liabilities
|
(1,598
|
)
|
|
1,267
|
|
||
Deferred revenue and advance billings
|
1,066
|
|
|
1,405
|
|
||
Net cash provided by operating activities from continuing operations
|
12,727
|
|
|
9,846
|
|
||
Net cash used in operating activities from discontinued operations
|
(7,613
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
5,114
|
|
|
9,846
|
|
||
Investing activities
|
|
|
|
||||
Purchase of property and equipment
|
(2,688
|
)
|
|
(2,323
|
)
|
||
Capitalized software development costs
|
(1,537
|
)
|
|
(2,586
|
)
|
||
Net cash used in investing activities from continuing operations
|
(4,225
|
)
|
|
(4,909
|
)
|
||
Net cash used in investing activities from discontinued operations
|
(1,005
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(5,230
|
)
|
|
(4,909
|
)
|
||
Financing activities
|
|
|
|
||||
Borrowings on line of credit
|
40,200
|
|
|
4,000
|
|
||
Repayments on line of credit
|
(45,200
|
)
|
|
(9,000
|
)
|
||
Payments on capital leases
|
(81
|
)
|
|
(49
|
)
|
||
Repayments on term loan
|
—
|
|
|
(1,500
|
)
|
||
Payment of debt issuance costs
|
(13
|
)
|
|
—
|
|
||
Proceeds from issuances of common stock
|
932
|
|
|
174
|
|
||
Decrease in restricted cash
|
38
|
|
|
16
|
|
||
Net cash used in financing activities from continuing operations
|
(4,124
|
)
|
|
(6,359
|
)
|
||
Net decrease in cash and cash equivalents
|
(4,240
|
)
|
|
(1,422
|
)
|
||
Cash and cash equivalents, beginning of period
|
10,059
|
|
|
6,788
|
|
||
Cash and cash equivalents, end of period
|
$
|
5,819
|
|
|
$
|
5,366
|
|
Supplemental disclosure of cash flow information
|
|
|
|
||||
Cash paid during the year for interest
|
571
|
|
|
1,346
|
|
||
Cash paid for taxes
|
$
|
159
|
|
|
$
|
691
|
|
Supplemental disclosure of noncash financing activities
|
|
|
|
||||
Acquisition of equipment through capital leases
|
$
|
132
|
|
|
$
|
—
|
|
|
Three Months Ended
September 30, 2016 |
|
Nine Months Ended
September 30, 2016 |
||||
Revenue
|
$
|
25,919
|
|
|
$
|
68,164
|
|
Direct costs of network services and equipment
|
(19,335
|
)
|
|
(50,823
|
)
|
||
Operating expense
|
(7,072
|
)
|
|
(20,312
|
)
|
||
Depreciation and interest
|
(240
|
)
|
|
(768
|
)
|
||
Loss from discontinued operations
|
$
|
(728
|
)
|
|
$
|
(3,739
|
)
|
|
Fair Value Measurements on a Recurring Basis
December 31, 2016 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Money Market Account
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63
|
|
Shareholders’ anti-dilutive arrangement
|
—
|
|
|
—
|
|
|
(184
|
)
|
|
(184
|
)
|
|
Fair Value Measurements on a Recurring Basis
September 30, 2017 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Money Market Account
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64
|
|
Shareholders’ anti-dilutive arrangement
|
—
|
|
|
—
|
|
|
(873
|
)
|
|
(873
|
)
|
•
|
closing of a “Qualified Public Offering,” which is defined as one resulting in aggregate net proceeds to the Company equal to or greater than
$20 million
, or
|
•
|
a “true sale” as defined in the Investors’ Rights Agreement.
|
|
December 31,
2016 |
|
September 30,
2017 |
||||
Trade accounts receivable
|
$
|
31,734
|
|
|
$
|
40,351
|
|
Unbilled accounts receivable
|
7,368
|
|
|
7,859
|
|
||
Allowance for doubtful accounts
|
(22,571
|
)
|
|
(30,040
|
)
|
||
Other accounts receivable
|
307
|
|
|
532
|
|
||
Total accounts receivable, net
|
$
|
16,838
|
|
|
$
|
18,702
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
Allowance for doubtful accounts:
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Balance, beginning of period
|
$
|
182
|
|
|
$
|
112
|
|
|
$
|
238
|
|
|
$
|
255
|
|
Charged to bad debt expense
|
(87
|
)
|
|
83
|
|
|
45
|
|
|
95
|
|
||||
Deductions(1)
|
(25
|
)
|
|
(19
|
)
|
|
(213
|
)
|
|
(174
|
)
|
||||
Balance, end of period
|
$
|
70
|
|
|
$
|
176
|
|
|
$
|
70
|
|
|
$
|
176
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended September 30,
|
||||||||||||
Allowance for CABS revenue:
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Balance, beginning of period
|
$
|
15,641
|
|
|
$
|
27,401
|
|
|
$
|
12,318
|
|
|
$
|
22,316
|
|
Billings deemed not probable of collection(1)
|
5,119
|
|
|
2,485
|
|
|
8,466
|
|
|
7,613
|
|
||||
Deductions(2)
|
(1
|
)
|
|
(22
|
)
|
|
(25
|
)
|
|
(65
|
)
|
||||
Balance, end of period
|
$
|
20,759
|
|
|
$
|
29,864
|
|
|
$
|
20,759
|
|
|
$
|
29,864
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended September 30,
|
||||||||||||
CABS revenue:
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Billed
|
$
|
7,246
|
|
|
$
|
4,992
|
|
|
$
|
15,094
|
|
|
$
|
14,501
|
|
Revenue recognized
|
2,127
|
|
|
2,507
|
|
|
6,628
|
|
|
6,888
|
|
||||
Billings deemed not probable of collection(1)
|
$
|
5,119
|
|
|
$
|
2,485
|
|
|
$
|
8,466
|
|
|
$
|
7,613
|
|
|
December 31,
2016 |
|
September 30,
2017 |
||||
Accrued expense
|
$
|
6,853
|
|
|
$
|
8,319
|
|
Accrued compensation and benefits(1)
|
4,373
|
|
|
4,656
|
|
||
Accrued sales, use, and telecom related taxes
|
2,769
|
|
|
2,325
|
|
||
Other accrued expenses
|
654
|
|
|
483
|
|
||
Total accrued expenses
|
$
|
14,649
|
|
|
$
|
15,783
|
|
|
December 31,
2016 |
|
September 30,
2017 |
||||
Furniture and fixtures
|
$
|
680
|
|
|
$
|
680
|
|
Computer and office equipment
|
7,539
|
|
|
7,525
|
|
||
Telecommunications equipment
|
13,718
|
|
|
16,815
|
|
||
Leasehold improvements
|
453
|
|
|
453
|
|
||
Software development costs
|
13,677
|
|
|
15,198
|
|
||
Automobile
|
10
|
|
|
10
|
|
||
Total cost
|
36,077
|
|
|
40,681
|
|
||
Less—accumulated depreciation
|
(24,896
|
)
|
|
(28,292
|
)
|
||
Total property and equipment, net
|
$
|
11,181
|
|
|
$
|
12,389
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Cost of revenue
|
$
|
1,155
|
|
|
$
|
1,161
|
|
|
$
|
3,514
|
|
|
$
|
3,245
|
|
Research and development
|
15
|
|
|
29
|
|
|
64
|
|
|
51
|
|
||||
Sales and marketing
|
6
|
|
|
6
|
|
|
15
|
|
|
20
|
|
||||
General and administrative
|
149
|
|
|
45
|
|
|
506
|
|
|
327
|
|
||||
Total depreciation expense
|
$
|
1,325
|
|
|
$
|
1,241
|
|
|
$
|
4,099
|
|
|
$
|
3,643
|
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Amortization
Period
|
||||||
|
|
|
|
|
|
|
(Years)
|
||||||
Customer relationships
|
$
|
10,396
|
|
|
$
|
(3,032
|
)
|
|
$
|
7,364
|
|
|
20
|
Domain name and related trademarks
|
2,678
|
|
|
(2,324
|
)
|
|
354
|
|
|
3–7
|
|||
Licenses, amortizable
|
341
|
|
|
(341
|
)
|
|
—
|
|
|
2
|
|||
Non-compete agreements
|
139
|
|
|
(139
|
)
|
|
—
|
|
|
2–5
|
|||
Developed technology
|
775
|
|
|
(775
|
)
|
|
—
|
|
|
3
|
|||
Licenses, indefinite lived
|
764
|
|
|
—
|
|
|
764
|
|
|
Indefinite
|
|||
Total intangible assets, net
|
$
|
15,093
|
|
|
$
|
(6,611
|
)
|
|
$
|
8,482
|
|
|
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Amortization
Period
|
||||||
|
|
|
|
|
|
|
(Years)
|
||||||
Customer relationships
|
$
|
10,396
|
|
|
$
|
(3,422
|
)
|
|
$
|
6,974
|
|
|
20
|
Domain name and related trademarks
|
2,678
|
|
|
(2,563
|
)
|
|
115
|
|
|
3–7
|
|||
Licenses, amortizable
|
341
|
|
|
(341
|
)
|
|
—
|
|
|
2
|
|||
Non-compete agreements
|
139
|
|
|
(139
|
)
|
|
—
|
|
|
2–5
|
|||
Developed technology
|
775
|
|
|
(775
|
)
|
|
—
|
|
|
3
|
|||
Licenses, indefinite lived
|
764
|
|
|
—
|
|
|
764
|
|
|
Indefinite
|
|||
Total intangible assets, net
|
$
|
15,093
|
|
|
$
|
(7,240
|
)
|
|
$
|
7,853
|
|
|
|
|
Amount
|
||
2017 (remaining three months)
|
$
|
209
|
|
2018
|
555
|
|
|
2019
|
520
|
|
|
2020
|
520
|
|
|
2021
|
520
|
|
|
Thereafter
|
4,765
|
|
|
|
$
|
7,089
|
|
|
Amount
|
||
2017 (remaining three months)
|
$
|
500
|
|
2018
|
3,000
|
|
|
2019
|
3,000
|
|
|
2020
|
4,000
|
|
|
2021
|
28,000
|
|
|
|
$
|
38,500
|
|
|
Amount
|
||
2017
|
$
|
25
|
|
2018
|
91
|
|
|
Less amount representing interest
|
—
|
|
|
|
116
|
|
|
Less current maturities
|
99
|
|
|
|
$
|
17
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
CPaaS
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
30,249
|
|
|
$
|
33,397
|
|
|
$
|
86,900
|
|
|
$
|
96,591
|
|
Cost of revenue
|
18,197
|
|
|
19,247
|
|
|
53,576
|
|
|
56,394
|
|
||||
Gross profit
|
$
|
12,052
|
|
|
$
|
14,150
|
|
|
$
|
33,324
|
|
|
$
|
40,197
|
|
Other
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
8,354
|
|
|
$
|
7,941
|
|
|
$
|
26,473
|
|
|
$
|
23,898
|
|
Cost of revenue
|
3,317
|
|
|
3,324
|
|
|
10,601
|
|
|
10,037
|
|
||||
Gross profit
|
$
|
5,037
|
|
|
$
|
4,617
|
|
|
$
|
15,872
|
|
|
$
|
13,861
|
|
Consolidated
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
38,603
|
|
|
$
|
41,338
|
|
|
$
|
113,373
|
|
|
$
|
120,489
|
|
Cost of revenue
|
21,514
|
|
|
22,571
|
|
|
64,177
|
|
|
66,431
|
|
||||
Gross profit
|
$
|
17,089
|
|
|
$
|
18,767
|
|
|
$
|
49,196
|
|
|
$
|
54,058
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
United States
|
$
|
38,408
|
|
|
$
|
41,188
|
|
|
$
|
113,027
|
|
|
$
|
120,090
|
|
International
|
195
|
|
|
150
|
|
|
346
|
|
|
399
|
|
||||
Total
|
$
|
38,603
|
|
|
$
|
41,338
|
|
|
$
|
113,373
|
|
|
$
|
120,489
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Expected dividend yield
|
0%
|
|
0%
|
|
0%
|
|
0%
|
Expected stock price volatility
|
44%
|
|
47%-49%
|
|
44%
|
|
44%-49%
|
Average risk-free interest rate
|
1.3%
|
|
1.9%
|
|
1.3%–1.6%
|
|
1.9%–2.3%
|
Expected life
|
6.2 years
|
|
6.2 years
|
|
6.2 years
|
|
6.2 years
|
Fair value of common stock
|
$9.57
|
|
$18.40-$20.83
|
|
$9.57
|
|
$9.60-$20.83
|
|
Number of
Options
Outstanding
|
|
Weighted-
Average
Exercise Price
(per share)
|
|
Weighted-
Average
Remaining
Contract Life
(in years)
|
|
Aggregate
Intrinsic
value (in
thousands)
|
|||||
Balance, December 31, 2016
|
3,582,241
|
|
|
$
|
6.54
|
|
|
5.12
|
|
$
|
11,049
|
|
Grants
|
179,922
|
|
|
13.79
|
|
|
|
|
|
|||
Exercised
|
(58,162
|
)
|
|
5.27
|
|
|
|
|
445
|
|
||
Forfeited or cancelled
|
(41,115
|
)
|
|
9.48
|
|
|
|
|
|
|||
Balance, September 30, 2017
|
3,662,886
|
|
|
$
|
6.88
|
|
|
4.63
|
|
$
|
51,292
|
|
Options vested and exercisable at September 30, 2017
|
3,159,450
|
|
|
$
|
6.23
|
|
|
4.01
|
|
$
|
46,326
|
|
Options vested and expected to vest as of September 30, 2017
|
3,640,526
|
|
|
$
|
6.85
|
|
|
4.60
|
|
$
|
51,092
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Cost of revenue
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
45
|
|
|
$
|
57
|
|
Research and development
|
30
|
|
|
38
|
|
|
108
|
|
|
100
|
|
||||
Sales and marketing
|
37
|
|
|
54
|
|
|
142
|
|
|
124
|
|
||||
General and administrative(1)
|
161
|
|
|
503
|
|
|
804
|
|
|
821
|
|
||||
Total
|
$
|
245
|
|
|
$
|
612
|
|
|
$
|
1,099
|
|
|
$
|
1,102
|
|
|
Amount
|
||
2017
|
$
|
905
|
|
2018
|
3,631
|
|
|
2019
|
3,700
|
|
|
2020
|
3,838
|
|
|
2021
|
3,873
|
|
|
2022 and thereafter
|
2,018
|
|
|
|
$
|
17,965
|
|
|
Amount
|
||
2017
|
$
|
251
|
|
2018
|
1,020
|
|
|
2019
|
1,042
|
|
|
2020
|
1,065
|
|
|
2021
|
1,089
|
|
|
2022 and thereafter
|
594
|
|
|
|
$
|
5,061
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Income from Continuing Operations
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
4,016
|
|
|
$
|
1,634
|
|
|
$
|
11,589
|
|
|
$
|
6,570
|
|
Less: income allocated to participating securities
|
531
|
|
|
213
|
|
|
1,533
|
|
|
858
|
|
||||
Income from continuing operations attributable to common stockholders
|
$
|
3,485
|
|
|
$
|
1,421
|
|
|
$
|
10,056
|
|
|
$
|
5,712
|
|
Income from continuing operations per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.30
|
|
|
$
|
0.12
|
|
|
$
|
0.86
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
0.11
|
|
|
$
|
0.78
|
|
|
$
|
0.42
|
|
Loss from Discontinued Operations
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations
|
$
|
(728
|
)
|
|
$
|
—
|
|
|
$
|
(3,739
|
)
|
|
$
|
—
|
|
Less: loss allocated to participating securities
|
(96
|
)
|
|
—
|
|
|
(495
|
)
|
|
—
|
|
||||
Loss from discontinued operations attributable to common stockholders
|
$
|
(632
|
)
|
|
$
|
—
|
|
|
$
|
(3,244
|
)
|
|
$
|
—
|
|
Loss from discontinued operations per share attributable to stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
—
|
|
|
$
|
(0.28
|
)
|
|
$
|
—
|
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
—
|
|
|
$
|
(0.25
|
)
|
|
$
|
—
|
|
Net income
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
3,288
|
|
|
$
|
1,634
|
|
|
$
|
7,850
|
|
|
$
|
6,570
|
|
Less: income allocated to participating securities
|
435
|
|
|
213
|
|
|
1,038
|
|
|
858
|
|
||||
Net income attributable to common stockholders
|
$
|
2,853
|
|
|
$
|
1,421
|
|
|
$
|
6,812
|
|
|
$
|
5,712
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
0.12
|
|
|
$
|
0.59
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.11
|
|
|
$
|
0.53
|
|
|
$
|
0.42
|
|
Weighted Average Number of Common Shares Outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,600,189
|
|
|
11,828,657
|
|
|
11,643,664
|
|
|
11,814,045
|
|
||||
Dilutive effect of stock options and warrants
|
1,210,190
|
|
|
1,424,080
|
|
|
1,185,230
|
|
|
1,673,604
|
|
||||
Diluted
|
12,810,379
|
|
|
13,252,737
|
|
|
12,828,894
|
|
|
13,487,649
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||
Anti-dilutive Disclosure
|
|
|
|
|
|
|
|
||||
Series A redeemable convertible preferred stock outstanding
|
1,775,000
|
|
|
1,775,000
|
|
|
1,775,000
|
|
|
1,775,000
|
|
Stock options issued and outstanding
|
569,947
|
|
|
110,125
|
|
|
569,947
|
|
|
110,125
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
September 30, |
||||||
|
2016
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Number of Active CPaaS customers (as of period end)
|
781
|
|
|
918
|
|
||
Dollar-based net retention rate
|
112
|
%
|
|
105
|
%
|
||
Net income
|
$
|
3,288
|
|
|
$
|
1,634
|
|
Adjusted EBITDA
|
$
|
6,201
|
|
|
$
|
5,180
|
|
Net Cash provided by operating activities from continuing operations
|
$
|
2,174
|
|
|
$
|
4,766
|
|
Free cash flow
|
$
|
1,317
|
|
|
$
|
2,652
|
|
•
|
income tax expense (benefit);
|
•
|
interest expense, net;
|
•
|
depreciation and amortization expense;
|
•
|
stock-based compensation expense;
|
•
|
impairment of intangible assets, if any;
|
•
|
loss (gain) from disposal of property and equipment; and
|
•
|
change in fair value of financial instruments, including any change in shareholders’ anti-dilutive arrangements.
|
•
|
depreciation and amortization; and
|
•
|
stock-based compensation.
|
•
|
stock-based compensation;
|
•
|
change in fair value of shareholders’ antidilutive arrangement;
|
•
|
amortization of acquired intangible assets related to the Dash acquisition;
|
•
|
impairment charges of intangibles assets
, if any
;
|
•
|
loss (gain) on disposal of property and equipment; and
|
•
|
estimated tax impact of above adjustments.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Consolidated Gross Profit
|
$
|
17,088
|
|
|
$
|
18,767
|
|
|
$
|
49,196
|
|
|
$
|
54,058
|
|
Depreciation
|
1,155
|
|
|
1,161
|
|
|
3,513
|
|
|
3,245
|
|
||||
Stock-based compensation
|
17
|
|
|
17
|
|
|
45
|
|
|
57
|
|
||||
Non-GAAP Gross Profit
|
$
|
18,260
|
|
|
$
|
19,945
|
|
|
$
|
52,754
|
|
|
$
|
57,360
|
|
Non-GAAP Gross Margin %
|
47
|
%
|
|
48
|
%
|
|
47
|
%
|
|
48
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
CPaaS Gross Profit
|
$
|
12,052
|
|
|
$
|
14,150
|
|
|
$
|
33,324
|
|
|
$
|
40,197
|
|
Depreciation
|
1,155
|
|
|
1,161
|
|
|
3,513
|
|
|
3,245
|
|
||||
Stock-based compensation
|
17
|
|
|
17
|
|
|
45
|
|
|
57
|
|
||||
Non-GAAP Gross Profit
|
$
|
13,224
|
|
|
$
|
15,328
|
|
|
$
|
36,882
|
|
|
$
|
43,499
|
|
Non-GAAP Gross CPaaS Margin %
|
44
|
%
|
|
46
|
%
|
|
42
|
%
|
|
45
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Income from continuing operations
|
$
|
4,016
|
|
|
$
|
1,634
|
|
|
$
|
11,589
|
|
|
$
|
6,570
|
|
Income tax provision
|
137
|
|
|
899
|
|
|
406
|
|
|
3,886
|
|
||||
Interest expense, net
|
229
|
|
|
402
|
|
|
597
|
|
|
1,261
|
|
||||
Depreciation
|
1,325
|
|
|
1,241
|
|
|
4,099
|
|
|
3,643
|
|
||||
Amortization
|
222
|
|
|
210
|
|
|
669
|
|
|
629
|
|
||||
Stock-based compensation
|
245
|
|
|
612
|
|
|
1,099
|
|
|
1,102
|
|
||||
Loss on disposal of property and equipment
|
27
|
|
|
46
|
|
|
11
|
|
|
55
|
|
||||
Change in fair value of shareholders' anti-dilutive arrangement (1)
|
—
|
|
|
136
|
|
|
—
|
|
|
689
|
|
||||
Adjusted EBITDA
|
$
|
6,201
|
|
|
$
|
5,180
|
|
|
$
|
18,470
|
|
|
$
|
17,835
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Net income
|
$
|
3,288
|
|
|
$
|
1,634
|
|
|
$
|
7,850
|
|
|
$
|
6,570
|
|
Stock-based compensation
|
245
|
|
|
612
|
|
|
1,099
|
|
|
1,102
|
|
||||
Change in fair value of shareholders' anti-dilutive arrangement (1)
|
—
|
|
|
136
|
|
|
—
|
|
|
689
|
|
||||
Amortization related to acquisitions
|
130
|
|
|
130
|
|
|
390
|
|
|
390
|
|
||||
Loss (gain) on disposal of property and equipment
|
27
|
|
|
46
|
|
|
11
|
|
|
55
|
|
||||
Estimated tax effects of adjustments (2)
|
—
|
|
|
(351
|
)
|
|
—
|
|
|
(852
|
)
|
||||
Non-GAAP net income
|
$
|
3,690
|
|
|
$
|
2,207
|
|
|
$
|
9,350
|
|
|
$
|
7,954
|
|
Non-GAAP net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.28
|
|
|
$
|
0.16
|
|
|
$
|
0.70
|
|
|
$
|
0.59
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
0.15
|
|
|
$
|
0.64
|
|
|
$
|
0.52
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Net cash provided by operating activities from continuing operations
|
$
|
2,174
|
|
|
$
|
4,766
|
|
|
$
|
12,727
|
|
|
$
|
9,846
|
|
Net cash used in investing activities from continuing operations(1)
|
(857
|
)
|
|
(2,114
|
)
|
|
(4,225
|
)
|
|
(4,909
|
)
|
||||
Free cash flow
|
$
|
1,317
|
|
|
$
|
2,652
|
|
|
$
|
8,502
|
|
|
$
|
4,937
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
CPaaS revenue
|
$
|
30,249
|
|
|
$
|
33,397
|
|
|
$
|
86,900
|
|
|
$
|
96,591
|
|
Other revenue
|
8,354
|
|
|
7,941
|
|
|
26,473
|
|
|
23,898
|
|
||||
Total revenue
|
38,603
|
|
|
41,338
|
|
|
113,373
|
|
|
120,489
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
CPaaS cost of revenue
|
18,197
|
|
|
19,247
|
|
|
53,576
|
|
|
56,394
|
|
||||
Other cost of revenue
|
3,317
|
|
|
3,324
|
|
|
10,601
|
|
|
10,037
|
|
||||
Total cost of revenue
|
21,514
|
|
|
22,571
|
|
|
64,177
|
|
|
66,431
|
|
||||
Gross profit:
|
|
|
|
|
|
|
|
||||||||
CPaaS
|
12,052
|
|
|
14,150
|
|
|
33,324
|
|
|
40,197
|
|
||||
Other
|
5,037
|
|
|
4,617
|
|
|
15,872
|
|
|
13,861
|
|
||||
Total gross profit
|
17,089
|
|
|
18,767
|
|
|
49,196
|
|
|
54,058
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
2,390
|
|
|
2,771
|
|
|
6,157
|
|
|
7,862
|
|
||||
Sales and marketing
|
2,418
|
|
|
3,128
|
|
|
6,876
|
|
|
8,099
|
|
||||
General and administrative
|
7,899
|
|
|
9,797
|
|
|
23,571
|
|
|
25,691
|
|
||||
Total operating expenses
|
12,707
|
|
|
15,696
|
|
|
36,604
|
|
|
41,652
|
|
||||
Operating income
|
4,382
|
|
|
3,071
|
|
|
12,592
|
|
|
12,406
|
|
||||
Other expense:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(229
|
)
|
|
(402
|
)
|
|
(597
|
)
|
|
(1,261
|
)
|
||||
Change in fair value of shareholders’ anti-dilutive arrangement
|
—
|
|
|
(136
|
)
|
|
—
|
|
|
(689
|
)
|
||||
Income from continuing operations before income taxes
|
4,153
|
|
|
2,533
|
|
|
11,995
|
|
|
10,456
|
|
||||
Income tax provision
|
(137
|
)
|
|
(899
|
)
|
|
(406
|
)
|
|
(3,886
|
)
|
||||
Income from continuing operations
|
4,016
|
|
|
1,634
|
|
|
11,589
|
|
|
6,570
|
|
||||
Loss from discontinued operations, net of income tax
|
(728
|
)
|
|
—
|
|
|
(3,739
|
)
|
|
—
|
|
||||
Net income
|
$
|
3,288
|
|
|
$
|
1,634
|
|
|
$
|
7,850
|
|
|
$
|
6,570
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||
Revenue:
|
|
|
|
|
|
|
|
||||
CPaaS revenue
|
78
|
%
|
|
81
|
%
|
|
77
|
%
|
|
80
|
%
|
Other revenue
|
22
|
%
|
|
19
|
%
|
|
23
|
%
|
|
20
|
%
|
Total revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
|
|
|
||||
CPaaS cost of revenue
|
47
|
%
|
|
47
|
%
|
|
47
|
%
|
|
47
|
%
|
Other cost of revenue
|
9
|
%
|
|
8
|
%
|
|
9
|
%
|
|
8
|
%
|
Total cost of revenue
|
56
|
%
|
|
55
|
%
|
|
56
|
%
|
|
55
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
||||
CPaaS
|
31
|
%
|
|
34
|
%
|
|
29
|
%
|
|
33
|
%
|
Other
|
13
|
%
|
|
11
|
%
|
|
14
|
%
|
|
12
|
%
|
Total gross profit
|
44
|
%
|
|
45
|
%
|
|
43
|
%
|
|
45
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development
|
6
|
%
|
|
7
|
%
|
|
5
|
%
|
|
7
|
%
|
Sales and marketing
|
6
|
%
|
|
8
|
%
|
|
6
|
%
|
|
7
|
%
|
General and administrative
|
20
|
%
|
|
24
|
%
|
|
21
|
%
|
|
21
|
%
|
Total operating expenses
|
32
|
%
|
|
39
|
%
|
|
32
|
%
|
|
35
|
%
|
Operating income
|
11
|
%
|
|
7
|
%
|
|
11
|
%
|
|
10
|
%
|
Other expense:
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(1
|
)%
|
|
(1
|
)%
|
|
(1
|
)%
|
|
(1
|
)%
|
Change in fair value of shareholders’ anti-dilutive arrangement
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(1
|
)%
|
Income from continuing operations before income taxes
|
11
|
%
|
|
6
|
%
|
|
11
|
%
|
|
9
|
%
|
Income tax provision
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
|
(3
|
)%
|
Income from continuing operations
|
10
|
%
|
|
4
|
%
|
|
10
|
%
|
|
5
|
%
|
Loss from discontinued operations, net of income tax
|
(2
|
)%
|
|
—
|
%
|
|
(3
|
)%
|
|
—
|
%
|
Net income
|
9
|
%
|
|
4
|
%
|
|
7
|
%
|
|
5
|
%
|
|
Three Months Ended
September 30, |
|
|
|
|
|
|||||||
|
2016
|
|
2017
|
|
Change
|
||||||||
|
(In thousands)
|
|
|
|
|
|
|||||||
CPaaS revenue
|
$
|
30,249
|
|
|
$
|
33,397
|
|
|
$
|
3,148
|
|
|
10%
|
Other revenue
|
8,354
|
|
|
7,941
|
|
|
(413
|
)
|
|
-5%
|
|||
Total revenue
|
$
|
38,603
|
|
|
$
|
41,338
|
|
|
$
|
2,735
|
|
|
7%
|
|
Three Months Ended
September 30, |
|
|
|
|
||||||||
|
2016
|
|
2017
|
|
Change
|
||||||||
|
(In thousands)
|
|
|
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||
CPaaS cost of revenue
|
$
|
18,197
|
|
|
$
|
19,247
|
|
|
$
|
1,050
|
|
|
6%
|
Other cost of revenue
|
3,317
|
|
|
3,324
|
|
|
7
|
|
|
0%
|
|||
Total cost of revenue
|
21,514
|
|
|
22,571
|
|
|
1,057
|
|
|
5%
|
|||
Gross profit
|
$
|
17,089
|
|
|
$
|
18,767
|
|
|
$
|
1,678
|
|
|
10%
|
Gross margin:
|
|
|
|
|
|
|
|
||||||
CPaaS
|
40%
|
|
42%
|
|
2%
|
|
|
||||||
Other
|
60%
|
|
58%
|
|
-2%
|
|
|
||||||
Total gross margin
|
44%
|
|
45%
|
|
1%
|
|
|
|
Three Months Ended
September 30, |
|
|
|
|
||||||||
|
2016
|
|
2017
|
|
Change
|
||||||||
|
(In thousands)
|
|
|
|
|
||||||||
Research and development
|
$
|
2,390
|
|
|
$
|
2,771
|
|
|
$
|
381
|
|
|
16%
|
Sales and marketing
|
2,418
|
|
|
3,128
|
|
|
710
|
|
|
29%
|
|||
General and administrative
|
7,899
|
|
|
9,797
|
|
|
1,898
|
|
|
24%
|
|||
Total operating expenses
|
$
|
12,707
|
|
|
$
|
15,696
|
|
|
$
|
2,989
|
|
|
24%
|
|
Nine Months Ended
September 30, |
|
|
|
|
||||||||
|
2016
|
|
2017
|
|
Change
|
||||||||
|
(In thousands)
|
|
|
|
|
||||||||
CPaaS revenue
|
$
|
86,900
|
|
|
$
|
96,591
|
|
|
$
|
9,691
|
|
|
11%
|
Other revenue
|
26,473
|
|
|
23,898
|
|
|
(2,575
|
)
|
|
-10%
|
|||
Total revenue
|
$
|
113,373
|
|
|
$
|
120,489
|
|
|
$
|
7,116
|
|
|
6%
|
|
Nine Months Ended
September 30, |
|
|
|
|
||||||||
|
2016
|
|
2017
|
|
Change
|
||||||||
|
(In thousands)
|
|
|
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||
CPaaS cost of revenue
|
$
|
53,576
|
|
|
$
|
56,394
|
|
|
$
|
2,818
|
|
|
5%
|
Other cost of revenue
|
10,601
|
|
|
10,037
|
|
|
(564
|
)
|
|
-5%
|
|||
Total cost of revenue
|
64,177
|
|
|
66,431
|
|
|
2,254
|
|
|
4%
|
|||
Gross profit
|
$
|
49,196
|
|
|
$
|
54,058
|
|
|
$
|
4,862
|
|
|
10%
|
Gross margin:
|
|
|
|
|
|
|
|
||||||
CPaaS
|
38%
|
|
42%
|
|
4%
|
|
|
||||||
Other
|
60%
|
|
58%
|
|
-2%
|
|
|
||||||
Total gross margin
|
43%
|
|
45%
|
|
2%
|
|
|
|
Nine Months Ended
September 30, |
|
|
|
|
||||||||
|
2016
|
|
2017
|
|
Change
|
||||||||
|
(In thousands)
|
|
|
|
|
||||||||
Research and development
|
$
|
6,157
|
|
|
$
|
7,862
|
|
|
$
|
1,705
|
|
|
28%
|
Sales and marketing
|
6,876
|
|
|
8,099
|
|
|
1,223
|
|
|
18%
|
|||
General and administrative
|
23,571
|
|
|
25,691
|
|
|
2,120
|
|
|
9%
|
|||
Total operating expenses
|
$
|
36,604
|
|
|
$
|
41,652
|
|
|
$
|
5,048
|
|
|
14%
|
|
Nine Months Ended
September 30, |
||||||
|
2016
|
|
2017
|
||||
|
(In thousands)
|
||||||
Net cash provided by operating activities from continuing operations
|
$
|
12,727
|
|
|
$
|
9,846
|
|
Net cash used by investing activities from continuing operations
|
(4,225
|
)
|
|
(4,909
|
)
|
||
Net cash used in financing activities from continuing operations
|
(4,124
|
)
|
|
(6,359
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
4,378
|
|
|
$
|
(1,422
|
)
|
|
Total
|
|
Less
Than 1
Year
|
|
1 to 2
Years
|
|
3 to 5
Years
|
|
More
than 5
years
|
||||||||||
As of September 30, 2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Term loan
|
$
|
38,500
|
|
|
$
|
2,750
|
|
|
$
|
6,750
|
|
|
$
|
29,000
|
|
|
$
|
—
|
|
Interest expense
(1)
|
4,274
|
|
|
1,170
|
|
|
2,910
|
|
|
194
|
|
|
—
|
|
|||||
Operating leases
(2)
|
17,965
|
|
|
905
|
|
|
3,631
|
|
|
11,411
|
|
|
2,018
|
|
|||||
Capital leases
|
116
|
|
|
25
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations
(3)
|
5,308
|
|
|
3,880
|
|
|
1,190
|
|
|
238
|
|
|
—
|
|
|||||
Total
|
$
|
66,163
|
|
|
$
|
8,730
|
|
|
$
|
14,572
|
|
|
$
|
40,843
|
|
|
$
|
2,018
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Exhibit
number
|
Description of Exhibit
|
Second Amended and Restated Certificate of Incorporation
|
|
Second Amended and Restated Bylaws
|
|
Certificate of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 2002
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed "filed" for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates by reference
|
|
BANDWIDTH INC.
|
|
|
|
|
|
By:
|
|
|
|
David A. Morken
|
|
|
Chief Executive Officer and Chairman
|
|
|
(Principal Executive Officer)
|
|
BANDWIDTH INC.
|
|
|
|
|
|
By:
|
|
|
|
Jeffrey A. Hoffman
|
|
|
Chief Financial Officer
|
|
|
(Principal Accounting and Financial Officer)
|
A.
|
The Corporation was originally incorporated under the name of Bandwidth.com, Inc., and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on March 29, 2001.
|
B.
|
An Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on February 22, 2011, as amended.
|
C.
|
This Second Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “
DGCL
”), and has been duly approved by the written consent of the requisite stockholders of the Corporation in accordance with Section 228 of the DGCL.
|
D.
|
The Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:
|
|
BANDWIDTH INC.
|
|
|
|
|
|
By:
|
|
|
|
David A. Morken
|
|
|
Chief Executive Officer
|
1.1
|
||
1.2
|
||
2.1
|
||
2.2
|
||
2.3
|
||
2.4
|
||
2.5
|
||
2.6
|
||
2.7
|
||
2.8
|
||
2.9
|
||
2.1
|
||
2.11
|
||
2.12
|
||
2.13
|
||
2.14
|
||
3.1
|
||
3.2
|
||
3.3
|
||
3.4
|
||
3.5
|
||
3.6
|
||
3.7
|
||
3.8
|
||
3.9
|
||
3.1
|
||
3.11
|
||
4.1
|
||
4.2
|
||
4.3
|
||
4.4
|
||
5.1
|
||
5.2
|
||
5.3
|
||
5.4
|
5.5
|
||
5.6
|
||
5.7
|
||
6.1
|
||
6.2
|
||
6.3
|
||
6.4
|
||
6.5
|
||
6.6
|
||
6.7
|
||
7.1
|
||
7.2
|
||
7.3
|
||
7.4
|
||
7.5
|
||
9.1
|
||
9.2
|
||
9.3
|
||
9.4
|
||
9.5
|
||
9.6
|
||
9.7
|
||
9.8
|
||
9.9
|
||
9.1
|
||
9.11
|
||
9.12
|
||
10.1
|
||
10.2
|
||
10.3
|
||
10.4
|
||
|
By:
|
/s/ W. Christopher Matton
|
|
|
W. Christopher Matton, Secretary
|
/s/ David A. Morken
|
|
David A. Morken
|
|
Chief Executive Officer and Chairman
(Principal Executive Officer)
|
|
/s/ Jeffrey A. Hoffman
|
|
Jeffrey A. Hoffman
|
|
Chief Financial Officer
|
|
(Principal Accounting and Financial Officer)
|
|
/s/ David A. Morken
|
|
David A. Morken
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Jeffrey A. Hoffman
|
|
Jeffrey A. Hoffman
|
|
Chief Financial Officer
|
|
(Principal Accounting and Financial Officer)
|
|