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Delaware
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82-3605465
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Class A Common Stock, $0.0001 par value per share
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PS
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Nasdaq Global Select Market
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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•
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our ability to attract new customers and retain and expand our relationships with existing customers;
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•
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our ability to expand our course library and develop new platform features;
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•
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our future financial performance, including trends in billings, revenue, costs of revenue, gross margin, operating expenses, cash (used in) provided by operating activities, and free cash flow;
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•
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the demand for, and market acceptance of, our platform or for cloud-based technology learning solutions in general;
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•
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our ability to compete successfully in competitive markets;
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•
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our ability to respond to rapid technological changes;
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•
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our expectations and management of future growth;
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•
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our ability to enter new markets and manage our expansion efforts, particularly internationally;
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•
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our ability to attract and retain key employees and qualified technical and sales personnel;
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•
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our ability to improve sales management and execution;
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•
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our ability to effectively and efficiently protect our brand;
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•
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our ability to timely scale and adapt our infrastructure;
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•
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our ability to maintain, protect, and enhance our intellectual property and not infringe upon others’ intellectual property;
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•
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our ability to successfully identify, acquire, and integrate companies and assets;
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•
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our ability to successfully defend ourselves in legal proceedings;
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•
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the amount and timing of any payments we make under the fourth amended and restated limited liability company agreement of Pluralsight Holdings, or the Fourth LLC Agreement, and our Tax Receivable Agreement, or TRA, with the members of Pluralsight Holdings; and
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•
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our ability to satisfy our obligations under the convertible senior notes.
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•
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Skill and Role Assessments: Our assessment tool uses machine learning and advanced algorithms to measure a user’s skills, benchmark that user against others in the industry, and recommend opportunities for growth. Users are provided with a Skill IQ that quantifies if a user is a novice, proficient, or expert within technologies such as AngularJS, C#, and Java. Role IQ allows our users to quantify and develop a collection of skills that are required for success in technology roles. This provides greater clarity around the technology skills required for a specific job role and a clear path to concept mastery. For example, we have Role IQ’s for several roles including: Security Analyst, React Web Developer, and Cloud Architect. Skills assessments can be mapped to a defined role in order to benchmark a user’s technical proficiency against what is required to master that role. We provide a modern skill assessment experience that gives businesses a credible, adaptable, and efficient model for validating technology skills.
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•
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Course Library: Our course library includes a digital ecosystem of thousands of on-demand courses across a range of technology subject areas, including cloud, mobile, security, IT, and data. Video courses, or videos, are organized by modules and clips and are searchable, so users can either take an entire course or target an area for a specific need. The majority of our courses are transcribed, and once transcribed, are available with closed captioning in over 100 languages. We built our exclusive course library primarily by engaging our world-class community of subject-matter experts, or authors, who create content for us and share in our success by receiving revenue-share amounts based on the viewing of their content. In addition, our platform offers interactive courses with an in-browser developer environment that allows users to practice as they learn through coding challenges with real-time feedback. Interactive courses provide a hands-on learning experience to apply knowledge outside of the course library in order to assess concept mastery. Our projects feature extends the practice modules to the user’s local coding environment, allowing users to apply knowledge to real-world, on-the-job scenarios.
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•
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Paths: Based on either an assessment or a user’s goals, our directed learning paths are personalized to take users through a set of courses designed to help them master a particular subject area and not spend time reviewing content that they already know. Businesses can customize learning paths to meet company-specific objectives and roles.
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•
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Business Analytics: Our business analytics tools enable business customers to index the technology skills of their teams, align learning to key business objectives, determine the usage of our platform, examine trends in skill development, and quantify the impact of our platform on their business.
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•
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Pluralsight Flow aggregates historical git data to provide insights and reports to software developers and their leaders. The metrics within Pluralsight Flow visualize code commits and code reviews to help leaders and teams observe dynamics and patterns in the code development process. Code commit metrics show leaders the time software developers spend on reworking legacy code by providing concrete data around commit risk and code churn. Code review metrics evaluate productivity and help leaders observe team dynamics and patterns in the code review process. Team collaboration metrics help leaders manage knowledge distribution and teamwork dynamics that may be impacting cycle times and software code quality.
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•
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instructor-led training vendors, such as Global Knowledge, General Assembly, and New Horizons;
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•
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legacy e-learning services, such as Skillsoft and Cornerstone OnDemand;
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•
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individual-focused e-learning services, such as LinkedIn Learning, Udemy, and Udacity;
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•
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software development productivity tools, such as Code Climate, Waydev, and BlueOptima; and
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•
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free solutions, such as YouTube.
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•
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breadth, depth, and quality of content library;
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•
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platform features and functionality;
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•
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reliability and scalability;
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•
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performance;
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•
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user experience;
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•
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brand;
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•
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security and privacy;
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•
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price;
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•
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accessibility across several devices, operating systems, and applications;
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•
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third-party and customer integration;
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•
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effectiveness and quality of support and professional services;
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•
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customer, technology, and platform support; and
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•
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continued innovation.
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•
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The Fourth LLC Agreement of Pluralsight Holdings was amended and restated to, among other things: (i) appoint Pluralsight, Inc. as its sole managing member and (ii) effectuate the conversion of all outstanding redeemable convertible preferred limited liability company units, incentive units, and Class B incentive units into a single class of LLC Units.
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•
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Certain members of Pluralsight Holdings that were corporations merged with and into Pluralsight, Inc. and certain members of Pluralsight Holdings contributed certain of their LLC Units to Pluralsight, Inc., in each case in exchange for shares of Class A common stock.
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•
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The certificate of incorporation of Pluralsight, Inc. was amended and restated to authorize three classes of common stock, Class A common stock, Class B common stock, Class C common stock, and one class of preferred stock. Class B and Class C common stock were issued on a one-for-one basis to the members of Pluralsight Holdings who retained LLC Units, or the Continuing Members. Class B and Class C common stock have voting rights but no economic rights.
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•
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instructor-led training vendors, such as Global Knowledge, General Assembly, and New Horizons;
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•
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legacy e-learning services, such as Skillsoft and Cornerstone OnDemand;
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•
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software development productivity tools, such as Code Climate, Waydev, and BlueOptima;
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•
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individual-focused e-learning services, such as LinkedIn Learning, Udemy, and Udacity; and
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•
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free solutions, such as YouTube.
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•
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we may not be able to remain competitive in finding and retaining authors;
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•
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we generally have exclusivity with our authors with respect to the specific subject matter of the courses they create for us, but they may produce content for competitors or on their own with respect to related topics and other subjects;
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•
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our existing authors, particularly our most popular authors, may not continue creating content for us;
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•
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the topics of content created by our authors may not address the needs of our customers;
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•
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the content created by our authors may not meet the quality standards that our customers expect and demand, or effectively differentiate our content from that of our competitors with respect to content quality and breadth; and
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•
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the fees that we pay our authors may cease to be competitive with the market for their talent.
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•
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fluctuations in the demand for our platform and the timing of sales, particularly larger subscriptions;
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•
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our ability to attract new customers or retain existing customers;
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•
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our existing authors, particularly our most popular authors, may not continue creating content for us;
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•
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the content created by our authors may not address the needs of our customers and may not meet the standards that our customers expect and demand;
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•
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changes in customer renewal rates and our ability to increase sales to our existing customers;
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•
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an increase in the length of sales cycle as a higher percentage of our billings come from larger business customers;
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•
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our customers’ seasonal buying patterns;
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•
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our customers’ budgeting cycles and internal purchasing priorities;
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•
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the payment terms and subscription term length associated with our platform sales and their effect on our billings and free cash flow;
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•
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our ability to anticipate or respond to changes in the competitive landscape, including consolidation among competitors;
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•
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the timing of expenses and recognition of revenue;
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•
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the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure;
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•
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the timing and success of new product feature and service introductions by us or our competitors;
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•
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network outages;
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•
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changes in laws and regulations that impact our business; and
|
•
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general economic and market conditions.
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•
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unexpected costs and errors in tailoring our products for individual markets, including translation into foreign languages and adaptation for local practices;
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•
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difficulties in adapting to customer desires due to language and cultural differences;
|
•
|
increased expenses associated with international sales and operations, including establishing and maintaining office space and equipment for our international operations;
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•
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lack of familiarity and burdens of complying with foreign laws, legal standards, regulatory requirements, tariffs, and other barriers;
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•
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greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;
|
•
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practical difficulties of enforcing intellectual property rights in countries with fluctuating laws and standards and reduced or varied protection for intellectual property rights in some countries;
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•
|
theft of intellectual property, data and technology through intrusion by foreign actors, those affiliated with or controlled by state actors, and private parties;
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•
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unexpected changes in regulatory requirements, taxes, trade laws, tariffs, trade wars or potential changes in trade relations arising from policy initiatives implemented by the current U.S. presidential administration, export quotas, custom duties, or other trade restrictions;
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•
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limitations on technology infrastructure, which could inhibit our migration of international operations to our existing systems and result in increased costs;
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•
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difficulties in managing and staffing international operations and differing employer/employee relationships and local employment laws;
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•
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challenges in complying with local data privacy and data protection requirements and protecting the security of our platform;
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•
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challenges obtaining work permits and visas, and navigating immigration laws and systems among jurisdictions; and
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•
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potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems and restrictions on the repatriation of earnings.
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•
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implement usage-based pricing;
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•
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discount pricing for competitive products;
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•
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otherwise materially change their pricing rates or schemes;
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•
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charge us to deliver our traffic at certain levels or at all;
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•
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throttle traffic based on its source or type;
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•
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implement bandwidth caps or other usage restrictions; or
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•
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otherwise monetize or control access to their networks.
|
•
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the requirement that a majority of its board of directors consist of independent directors;
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•
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the requirement that its director nominees be selected or recommended for the board’s selection by a majority of the board’s independent directors in a vote in which only independent directors participate or by a nominating
|
•
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the requirement that its compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
|
•
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actual or anticipated fluctuations in our revenue and other results of operations, including as a result of the addition or loss of any number of customers;
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•
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announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;
|
•
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the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;
|
•
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failure of securities analysts to initiate or maintain coverage of us, changes in ratings and financial estimates and the publication of other news by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
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•
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changes in operating performance and stock market valuations of SaaS-based software or other technology companies, or those in our industry in particular;
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•
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the size of our public float;
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•
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price and volume fluctuations in the trading of our Class A common stock and in the overall stock market, including as a result of trends in the economy as a whole;
|
•
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new laws or regulations or new interpretations of existing laws or regulations applicable to our business or industry, including data privacy, data protection, and information security;
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•
|
lawsuits threatened or filed against us for claims relating to intellectual property, employment issues, or otherwise;
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•
|
actual or perceived security breaches;
|
•
|
changes in our board of directors or management;
|
•
|
short sales, hedging, and other derivative transactions involving our Class A common stock;
|
•
|
sales of large blocks of our Class A common stock including sales by our executive officers, directors, and significant stockholders; and
|
•
|
other events or factors, including changes in general economic, industry, and market conditions, and trends, as well as any natural disasters, which may affect our operations.
|
•
|
a classified board of directors with staggered three-year terms;
|
•
|
the removal of directors by stockholders only for cause;
|
•
|
our multi-class structure, which provides Aaron Skonnard, our co-founder, Chief Executive Officer, and Chairman, personally and through his associated entities, the ability to control or significantly influence the outcome of matters requiring stockholder approval;
|
•
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the ability of our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change in control;
|
•
|
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings;
|
•
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a prohibition on stockholders calling special stockholder meetings; and
|
•
|
certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws that may be amended only by the affirmative vote of the holders of at least two-thirds in voting power of all outstanding shares of our stock entitled to vote thereon, voting together as a single class.
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Company/Index
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|
May 17, 2018(1)
|
|
June 30, 2018
|
|
Sept. 30, 2018
|
|
December 31, 2018
|
|
March 31, 2019
|
|
June 30, 2019
|
|
Sept. 30, 2019
|
|
December 31, 2019
|
||||||||||||||||
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|
||||||||||||||||
Pluralsight
|
|
$
|
100
|
|
|
$
|
122
|
|
|
$
|
160
|
|
|
$
|
118
|
|
|
$
|
159
|
|
|
$
|
152
|
|
|
$
|
84
|
|
|
$
|
86
|
|
S&P 500
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
107
|
|
|
$
|
92
|
|
|
$
|
104
|
|
|
$
|
108
|
|
|
$
|
109
|
|
|
$
|
119
|
|
S&P 500 Information Technology
|
|
$
|
100
|
|
|
$
|
101
|
|
|
$
|
109
|
|
|
$
|
90
|
|
|
$
|
107
|
|
|
$
|
113
|
|
|
$
|
117
|
|
|
$
|
133
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Revenue
|
$
|
316,910
|
|
|
$
|
232,029
|
|
|
$
|
166,824
|
|
|
$
|
131,841
|
|
|
$
|
108,422
|
|
Cost of revenue(1)(2)
|
71,353
|
|
|
62,615
|
|
|
49,828
|
|
|
40,161
|
|
|
33,245
|
|
|||||
Gross profit
|
245,557
|
|
|
169,414
|
|
|
116,996
|
|
|
91,680
|
|
|
75,177
|
|
|||||
Operating expenses(1)(2):
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing
|
207,085
|
|
|
158,409
|
|
|
103,478
|
|
|
51,234
|
|
|
44,872
|
|
|||||
Technology and content
|
102,902
|
|
|
69,289
|
|
|
49,293
|
|
|
36,159
|
|
|
33,146
|
|
|||||
General and administrative
|
85,560
|
|
|
78,418
|
|
|
46,971
|
|
|
18,130
|
|
|
15,916
|
|
|||||
Total operating expenses
|
395,547
|
|
|
306,116
|
|
|
199,742
|
|
|
105,523
|
|
|
93,934
|
|
|||||
Loss from operations
|
(149,990
|
)
|
|
(136,702
|
)
|
|
(82,746
|
)
|
|
(13,843
|
)
|
|
(18,757
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(23,565
|
)
|
|
(6,826
|
)
|
|
(11,665
|
)
|
|
(6,320
|
)
|
|
(7,399
|
)
|
|||||
Loss on debt extinguishment
|
(950
|
)
|
|
(4,085
|
)
|
|
(1,882
|
)
|
|
—
|
|
|
—
|
|
|||||
Other income (expense), net
|
11,749
|
|
|
1,504
|
|
|
81
|
|
|
45
|
|
|
(18
|
)
|
|||||
Loss before income taxes
|
(162,756
|
)
|
|
(146,109
|
)
|
|
(96,212
|
)
|
|
(20,118
|
)
|
|
(26,174
|
)
|
|||||
Provision for income taxes
|
(823
|
)
|
|
(664
|
)
|
|
(324
|
)
|
|
(494
|
)
|
|
(186
|
)
|
|||||
Net loss
|
$
|
(163,579
|
)
|
|
$
|
(146,773
|
)
|
|
$
|
(96,536
|
)
|
|
$
|
(20,612
|
)
|
|
$
|
(26,360
|
)
|
Less: Net loss attributable to non-controlling interests
|
(50,921
|
)
|
|
(49,660
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss attributable to Pluralsight, Inc.
|
$
|
(112,658
|
)
|
|
$
|
(97,113
|
)
|
|
$
|
(96,536
|
)
|
|
$
|
(20,612
|
)
|
|
$
|
(26,360
|
)
|
Less: Accretion of Series A redeemable convertible preferred units
|
—
|
|
|
(176,275
|
)
|
|
(63,800
|
)
|
|
(6,325
|
)
|
|
(55,300
|
)
|
|||||
Net loss attributable to shares of Class A common stock
|
$
|
(112,658
|
)
|
|
$
|
(273,388
|
)
|
|
$
|
(160,336
|
)
|
|
$
|
(26,937
|
)
|
|
$
|
(81,660
|
)
|
Net loss per share, basic and diluted(3)
|
$
|
(1.19
|
)
|
|
$
|
(0.72
|
)
|
|
|
|
|
|
|
||||||
Weighted-average common shares used in computing basic and diluted net loss per share(3)
|
94,515
|
|
|
62,840
|
|
|
|
|
|
|
|
(1)
|
Includes equity-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cost of revenue
|
$
|
548
|
|
|
$
|
205
|
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
39
|
|
Sales and marketing
|
30,677
|
|
|
19,096
|
|
|
2,624
|
|
|
1,462
|
|
|
1,896
|
|
|||||
Technology and content
|
21,430
|
|
|
12,038
|
|
|
1,966
|
|
|
2,050
|
|
|
2,203
|
|
|||||
General and administrative
|
37,782
|
|
|
41,153
|
|
|
17,171
|
|
|
2,206
|
|
|
865
|
|
|||||
Total equity-based compensation
|
$
|
90,437
|
|
|
$
|
72,492
|
|
|
$
|
21,781
|
|
|
$
|
5,738
|
|
|
$
|
5,003
|
|
(2)
|
Includes amortization of acquired intangible assets as follows:
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cost of revenue
|
$
|
3,645
|
|
|
$
|
7,586
|
|
|
$
|
7,008
|
|
|
$
|
6,565
|
|
|
$
|
6,555
|
|
Sales and marketing
|
129
|
|
|
389
|
|
|
721
|
|
|
643
|
|
|
1,077
|
|
|||||
Technology and content
|
705
|
|
|
706
|
|
|
706
|
|
|
706
|
|
|
611
|
|
|||||
General and administrative
|
—
|
|
|
—
|
|
|
91
|
|
|
120
|
|
|
130
|
|
|||||
Total amortization of acquired intangible assets
|
$
|
4,479
|
|
|
$
|
8,681
|
|
|
$
|
8,526
|
|
|
$
|
8,034
|
|
|
$
|
8,373
|
|
(3)
|
Represents net loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the portion of the periods following the Reorganization Transactions and Pluralsight, Inc.’s IPO described in Note 1 and Note 17 to Pluralsight, Inc.’s consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
|
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
90,515
|
|
|
$
|
194,306
|
|
|
$
|
28,267
|
|
|
$
|
19,397
|
|
|
$
|
8,389
|
|
Short-term and long-term investments
|
438,039
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total assets
|
1,031,953
|
|
|
447,463
|
|
|
236,420
|
|
|
214,972
|
|
|
192,984
|
|
|||||
Deferred revenue, current and noncurrent
|
234,654
|
|
|
172,581
|
|
|
111,301
|
|
|
72,683
|
|
|
55,795
|
|
|||||
Convertible senior notes, net
|
470,228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt, net
|
—
|
|
|
—
|
|
|
116,037
|
|
|
74,069
|
|
|
83,862
|
|
|||||
Redeemable convertible preferred units
|
—
|
|
|
—
|
|
|
405,766
|
|
|
341,966
|
|
|
305,294
|
|
|||||
Non-controlling interests
|
63,175
|
|
|
107,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total stockholders’ equity/members’ deficit
|
246,160
|
|
|
208,593
|
|
|
(445,077
|
)
|
|
(307,230
|
)
|
|
(286,134
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
Business customers (end of period)
|
17,942
|
|
|
16,756
|
|
|
14,463
|
|
|
12,043
|
|
|
10,517
|
|
|||||
Billings
|
$
|
379,051
|
|
|
$
|
293,583
|
|
|
$
|
205,807
|
|
|
$
|
149,231
|
|
|
$
|
130,043
|
|
Billings from business customers
|
$
|
330,143
|
|
|
$
|
248,159
|
|
|
$
|
162,965
|
|
|
$
|
104,861
|
|
|
$
|
83,663
|
|
% of billings from business customers
|
87
|
%
|
|
85
|
%
|
|
79
|
%
|
|
70
|
%
|
|
64
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
Non-GAAP gross profit
|
$
|
249,773
|
|
|
$
|
177,221
|
|
|
$
|
124,024
|
|
|
$
|
98,265
|
|
|
$
|
81,771
|
|
Non-GAAP gross margin
|
79
|
%
|
|
76
|
%
|
|
74
|
%
|
|
75
|
%
|
|
75
|
%
|
|||||
Non-GAAP operating loss
|
$
|
(49,893
|
)
|
|
$
|
(54,349
|
)
|
|
$
|
(52,439
|
)
|
|
$
|
(71
|
)
|
|
$
|
(5,381
|
)
|
Free cash flow
|
$
|
(28,236
|
)
|
|
$
|
(18,032
|
)
|
|
$
|
(20,472
|
)
|
|
$
|
(7,927
|
)
|
|
$
|
1,699
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
Gross profit
|
$
|
245,557
|
|
|
$
|
169,414
|
|
|
$
|
116,996
|
|
|
$
|
91,680
|
|
|
$
|
75,177
|
|
Equity-based compensation
|
548
|
|
|
205
|
|
|
20
|
|
|
20
|
|
|
39
|
|
|||||
Amortization of acquired intangible assets
|
3,645
|
|
|
7,586
|
|
|
7,008
|
|
|
6,565
|
|
|
6,555
|
|
|||||
Employer payroll taxes on employee stock transactions
|
23
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-GAAP gross profit
|
$
|
249,773
|
|
|
$
|
177,221
|
|
|
$
|
124,024
|
|
|
$
|
98,265
|
|
|
$
|
81,771
|
|
Gross margin
|
77
|
%
|
|
73
|
%
|
|
70
|
%
|
|
70
|
%
|
|
69
|
%
|
|||||
Non-GAAP gross margin
|
79
|
%
|
|
76
|
%
|
|
74
|
%
|
|
75
|
%
|
|
75
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Loss from operations
|
$
|
(149,990
|
)
|
|
$
|
(136,702
|
)
|
|
$
|
(82,746
|
)
|
|
$
|
(13,843
|
)
|
|
$
|
(18,757
|
)
|
Equity-based compensation
|
90,437
|
|
|
72,492
|
|
|
21,781
|
|
|
5,738
|
|
|
5,003
|
|
|||||
Amortization of acquired intangible assets
|
4,479
|
|
|
8,681
|
|
|
8,526
|
|
|
8,034
|
|
|
8,373
|
|
|||||
Employer payroll taxes on employee stock transactions
|
3,428
|
|
|
1,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Secondary offering costs
|
918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition-related costs
|
835
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-GAAP operating loss
|
$
|
(49,893
|
)
|
|
$
|
(54,349
|
)
|
|
$
|
(52,439
|
)
|
|
$
|
(71
|
)
|
|
$
|
(5,381
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(11,729
|
)
|
|
$
|
(5,896
|
)
|
|
$
|
(12,139
|
)
|
|
$
|
4,468
|
|
|
$
|
11,942
|
|
Less: Purchases of property and equipment
|
(11,181
|
)
|
|
(8,796
|
)
|
|
(5,951
|
)
|
|
(10,142
|
)
|
|
(7,954
|
)
|
|||||
Less: Purchases of content library
|
(5,326
|
)
|
|
(3,340
|
)
|
|
(2,382
|
)
|
|
(2,253
|
)
|
|
(2,289
|
)
|
|||||
Free cash flow
|
$
|
(28,236
|
)
|
|
$
|
(18,032
|
)
|
|
$
|
(20,472
|
)
|
|
$
|
(7,927
|
)
|
|
$
|
1,699
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||
Business customers (end of period)
|
17,942
|
|
|
16,756
|
|
|
14,463
|
|
|||
Billings
|
$
|
379,051
|
|
|
$
|
293,583
|
|
|
$
|
205,807
|
|
Billings from business customers
|
$
|
330,143
|
|
|
$
|
248,159
|
|
|
$
|
162,965
|
|
% of billings from business customers
|
87
|
%
|
|
85
|
%
|
|
79
|
%
|
|||
Dollar-based net retention rate
|
123
|
%
|
|
128
|
%
|
|
117
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands)
|
||||||||||
Revenue
|
$
|
316,910
|
|
|
$
|
232,029
|
|
|
$
|
166,824
|
|
Cost of revenue(1)(2)
|
71,353
|
|
|
62,615
|
|
|
49,828
|
|
|||
Gross profit
|
245,557
|
|
|
169,414
|
|
|
116,996
|
|
|||
Operating expenses(1)(2):
|
|
|
|
|
|
||||||
Sales and marketing
|
207,085
|
|
|
158,409
|
|
|
103,478
|
|
|||
Technology and content
|
102,902
|
|
|
69,289
|
|
|
49,293
|
|
|||
General and administrative
|
85,560
|
|
|
78,418
|
|
|
46,971
|
|
|||
Total operating expenses
|
395,547
|
|
|
306,116
|
|
|
199,742
|
|
|||
Loss from operations
|
(149,990
|
)
|
|
(136,702
|
)
|
|
(82,746
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(23,565
|
)
|
|
(6,826
|
)
|
|
(11,665
|
)
|
|||
Loss on debt extinguishment
|
(950
|
)
|
|
(4,085
|
)
|
|
(1,882
|
)
|
|||
Other income, net
|
11,749
|
|
|
1,504
|
|
|
81
|
|
|||
Loss before income taxes
|
(162,756
|
)
|
|
(146,109
|
)
|
|
(96,212
|
)
|
|||
Provision for income taxes
|
(823
|
)
|
|
(664
|
)
|
|
(324
|
)
|
|||
Net loss
|
$
|
(163,579
|
)
|
|
$
|
(146,773
|
)
|
|
$
|
(96,536
|
)
|
(1)
|
Includes equity-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands)
|
||||||||||
Cost of revenue
|
$
|
548
|
|
|
$
|
205
|
|
|
$
|
20
|
|
Sales and marketing
|
30,677
|
|
|
19,096
|
|
|
2,624
|
|
|||
Technology and content
|
21,430
|
|
|
12,038
|
|
|
1,966
|
|
|||
General and administrative
|
37,782
|
|
|
41,153
|
|
|
17,171
|
|
|||
Total equity-based compensation
|
$
|
90,437
|
|
|
$
|
72,492
|
|
|
$
|
21,781
|
|
(2)
|
Includes amortization of acquired intangible assets as follows:
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands)
|
||||||||||
Cost of revenue
|
$
|
3,645
|
|
|
$
|
7,586
|
|
|
$
|
7,008
|
|
Sales and marketing
|
129
|
|
|
389
|
|
|
721
|
|
|||
Technology and content
|
705
|
|
|
706
|
|
|
706
|
|
|||
General and administrative
|
—
|
|
|
—
|
|
|
91
|
|
|||
Total amortization of acquired intangible assets
|
$
|
4,479
|
|
|
$
|
8,681
|
|
|
$
|
8,526
|
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue
|
$
|
316,910
|
|
|
$
|
232,029
|
|
|
$
|
84,881
|
|
|
37
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue
|
$
|
71,353
|
|
|
$
|
62,615
|
|
|
$
|
8,738
|
|
|
14
|
%
|
Gross profit
|
245,557
|
|
|
169,414
|
|
|
76,143
|
|
|
45
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales and marketing
|
$
|
207,085
|
|
|
$
|
158,409
|
|
|
$
|
48,676
|
|
|
31
|
%
|
Technology and content
|
102,902
|
|
|
69,289
|
|
|
33,613
|
|
|
49
|
%
|
|||
General and administrative
|
85,560
|
|
|
78,418
|
|
|
7,142
|
|
|
9
|
%
|
|||
Total operating expenses
|
$
|
395,547
|
|
|
$
|
306,116
|
|
|
$
|
89,431
|
|
|
29
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Interest expense
|
$
|
(23,565
|
)
|
|
$
|
(6,826
|
)
|
|
$
|
(16,739
|
)
|
|
245
|
%
|
Loss on debt extinguishment
|
(950
|
)
|
|
(4,085
|
)
|
|
3,135
|
|
|
(77
|
)%
|
|||
Other income, net
|
11,749
|
|
|
1,504
|
|
|
10,245
|
|
|
681
|
%
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30,
2018 |
|
Dec. 31,
2018 |
|
March 31,
2019
|
|
June 30,
2019
|
|
Sept. 30,
2019
|
|
Dec. 31,
2019
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
Revenue
|
$
|
49,644
|
|
|
$
|
53,572
|
|
|
$
|
61,553
|
|
|
$
|
67,260
|
|
|
$
|
69,617
|
|
|
$
|
75,862
|
|
|
$
|
82,620
|
|
|
$
|
88,811
|
|
Cost of revenue (1)(2)
|
14,886
|
|
|
15,933
|
|
|
15,347
|
|
|
16,449
|
|
|
16,712
|
|
|
17,803
|
|
|
17,829
|
|
|
19,009
|
|
||||||||
Gross profit
|
34,758
|
|
|
37,639
|
|
|
46,206
|
|
|
50,811
|
|
|
52,905
|
|
|
58,059
|
|
|
64,791
|
|
|
69,802
|
|
||||||||
Operating expenses (1)(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
|
29,467
|
|
|
41,857
|
|
|
42,632
|
|
|
44,453
|
|
|
44,171
|
|
|
50,046
|
|
|
55,797
|
|
|
57,071
|
|
||||||||
Technology and content
|
13,325
|
|
|
18,396
|
|
|
18,137
|
|
|
19,431
|
|
|
20,271
|
|
|
24,819
|
|
|
27,847
|
|
|
29,965
|
|
||||||||
General and administrative
|
11,292
|
|
|
26,002
|
|
|
19,818
|
|
|
21,306
|
|
|
22,191
|
|
|
20,575
|
|
|
20,844
|
|
|
21,950
|
|
||||||||
Total operating expenses
|
54,084
|
|
|
86,255
|
|
|
80,587
|
|
|
85,190
|
|
|
86,633
|
|
|
95,440
|
|
|
104,488
|
|
|
108,986
|
|
||||||||
Loss from operations
|
(19,326
|
)
|
|
(48,616
|
)
|
|
(34,381
|
)
|
|
(34,379
|
)
|
|
(33,728
|
)
|
|
(37,381
|
)
|
|
(39,697
|
)
|
|
(39,184
|
)
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest expense
|
(3,710
|
)
|
|
(2,424
|
)
|
|
(342
|
)
|
|
(350
|
)
|
|
(1,678
|
)
|
|
(7,346
|
)
|
|
(7,412
|
)
|
|
(7,129
|
)
|
||||||||
Loss on debt extinguishment
|
—
|
|
|
(4,085
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(950
|
)
|
|
—
|
|
||||||||
Other (expense) income, net
|
(13
|
)
|
|
48
|
|
|
654
|
|
|
815
|
|
|
1,676
|
|
|
4,106
|
|
|
3,001
|
|
|
2,966
|
|
||||||||
Loss before income taxes
|
(23,049
|
)
|
|
(55,077
|
)
|
|
(34,069
|
)
|
|
(33,914
|
)
|
|
(33,730
|
)
|
|
(40,621
|
)
|
|
(45,058
|
)
|
|
(43,347
|
)
|
||||||||
Provision for income taxes
|
(109
|
)
|
|
(143
|
)
|
|
(254
|
)
|
|
(158
|
)
|
|
(154
|
)
|
|
(143
|
)
|
|
(404
|
)
|
|
(122
|
)
|
||||||||
Net loss
|
$
|
(23,158
|
)
|
|
$
|
(55,220
|
)
|
|
$
|
(34,323
|
)
|
|
$
|
(34,072
|
)
|
|
$
|
(33,884
|
)
|
|
$
|
(40,764
|
)
|
|
$
|
(45,462
|
)
|
|
$
|
(43,469
|
)
|
Net loss per share, basic and diluted(3)
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.31
|
)
|
(1)
|
Includes equity-based compensation expense as follows:
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30,
2018 |
|
Dec. 31,
2018 |
|
March 31,
2019 |
|
June 30,
2019 |
|
Sept. 30,
2019 |
|
Dec. 31,
2019 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Cost of revenue
|
$
|
—
|
|
|
$
|
89
|
|
|
$
|
56
|
|
|
$
|
60
|
|
|
$
|
84
|
|
|
$
|
133
|
|
|
$
|
138
|
|
|
$
|
193
|
|
Sales and marketing
|
539
|
|
|
7,356
|
|
|
5,612
|
|
|
5,589
|
|
|
6,276
|
|
|
7,952
|
|
|
8,739
|
|
|
7,710
|
|
||||||||
Technology and content
|
381
|
|
|
4,571
|
|
|
3,700
|
|
|
3,386
|
|
|
3,710
|
|
|
5,137
|
|
|
6,666
|
|
|
5,917
|
|
||||||||
General and administrative
|
2,453
|
|
|
16,963
|
|
|
11,262
|
|
|
10,475
|
|
|
10,198
|
|
|
9,510
|
|
|
9,114
|
|
|
8,960
|
|
||||||||
Total equity-based compensation
|
$
|
3,373
|
|
|
$
|
28,979
|
|
|
$
|
20,630
|
|
|
$
|
19,510
|
|
|
$
|
20,268
|
|
|
$
|
22,732
|
|
|
$
|
24,657
|
|
|
$
|
22,780
|
|
(2)
|
Includes amortization of acquired intangible assets as follows:
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30,
2018 |
|
Dec. 31,
2018 |
|
March 31,
2019 |
|
June 30,
2019 |
|
Sept. 30,
2019 |
|
Dec. 31,
2019 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Cost of revenue
|
$
|
2,962
|
|
|
$
|
2,961
|
|
|
$
|
880
|
|
|
$
|
783
|
|
|
$
|
525
|
|
|
$
|
702
|
|
|
$
|
1,209
|
|
|
$
|
1,209
|
|
Sales and marketing
|
195
|
|
|
194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
50
|
|
|
50
|
|
||||||||
Technology and content
|
176
|
|
|
177
|
|
|
176
|
|
|
177
|
|
|
177
|
|
|
176
|
|
|
176
|
|
|
176
|
|
||||||||
Total amortization of acquired intangible assets
|
$
|
3,333
|
|
|
$
|
3,332
|
|
|
$
|
1,056
|
|
|
$
|
960
|
|
|
$
|
702
|
|
|
$
|
907
|
|
|
$
|
1,435
|
|
|
$
|
1,435
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30,
2018 |
|
Dec. 31,
2018 |
|
March 31,
2019 |
|
June 30,
2019 |
|
Sept. 30,
2019 |
|
Dec. 31,
2019
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||||
Business customers(1) (end of period)
|
14,830
|
|
|
15,507
|
|
|
16,185
|
|
|
16,756
|
|
|
17,213
|
|
|
17,735
|
|
|
17,747
|
|
|
17,942
|
|
||||||||
Billings(2)
|
$
|
55,419
|
|
|
$
|
65,297
|
|
|
$
|
72,243
|
|
|
$
|
100,624
|
|
|
$
|
77,928
|
|
|
$
|
80,552
|
|
|
$
|
92,123
|
|
|
$
|
128,448
|
|
Billings from business customers
|
$
|
45,252
|
|
|
$
|
54,623
|
|
|
$
|
61,143
|
|
|
$
|
87,141
|
|
|
$
|
67,156
|
|
|
$
|
69,104
|
|
|
$
|
80,707
|
|
|
$
|
113,176
|
|
% of billings from business customers
|
82
|
%
|
|
84
|
%
|
|
85
|
%
|
|
87
|
%
|
|
86
|
%
|
|
86
|
%
|
|
88
|
%
|
|
88
|
%
|
(1)
|
See the section entitled “—Key Business Metrics—Business customers” for additional information.
|
(2)
|
See the section entitled “—Key Business Metrics—Billings” for additional information.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands)
|
||||||||||
Net cash used in operating activities
|
$
|
(11,729
|
)
|
|
$
|
(5,896
|
)
|
|
$
|
(12,139
|
)
|
Net cash used in investing activities
|
(616,721
|
)
|
|
(12,136
|
)
|
|
(8,333
|
)
|
|||
Net cash provided by financing activities
|
536,760
|
|
|
200,789
|
|
|
29,498
|
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
50
|
|
|
(163
|
)
|
|
54
|
|
|||
Net (decrease) increase in cash, cash equivalents, and restricted cash
|
$
|
(91,640
|
)
|
|
$
|
182,594
|
|
|
$
|
9,080
|
|
|
|
|
Payments due by period
|
||||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Convertible senior notes
|
$
|
593,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
593,500
|
|
|
$
|
—
|
|
Interest obligations for convertible senior notes
|
10,015
|
|
|
2,226
|
|
|
4,451
|
|
|
3,338
|
|
|
—
|
|
|||||
Lease obligations(1)
|
146,859
|
|
|
11,197
|
|
|
23,658
|
|
|
21,933
|
|
|
90,071
|
|
|||||
Other contractual obligations
|
19,788
|
|
|
7,543
|
|
|
12,245
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
770,162
|
|
|
$
|
20,966
|
|
|
$
|
40,354
|
|
|
$
|
618,771
|
|
|
$
|
90,071
|
|
(1)
|
We signed a non-cancellable lease for our future corporate headquarters that will be constructed in Draper, Utah. The lease has not yet commenced, however, the amounts shown above reflect the expected future lease payments for this facility.
|
•
|
Identification of the contract, or contracts, with a customer;
|
•
|
Identification of the performance obligations in a contract;
|
•
|
Determination of the transaction price;
|
•
|
Allocation of the transaction price to the performance obligations in the contract; and
|
•
|
Recognition of revenue when, or as, performance obligations are satisfied.
|
•
|
Fair Value of Common Stock: We determine the fair value of common stock as of each grant date using the market closing price of our Class A common stock on the date of grant.
|
•
|
Risk-free Interest Rate: The risk-free interest rate is derived from the implied yield available on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the options.
|
•
|
Expected Term: The expected term is estimated using the simplified method due to a lack of historical exercise activity for us. The simplified method calculates the expected term as the mid-point between the vesting date and the contractual expiration date of the award. For the ESPP, we use the period from the beginning of the offering period to the end of each purchase period.
|
•
|
Volatility: The price volatility factor is based on the historical volatilities of comparable companies as we do not have sufficient trading history for our common stock. To determine comparable companies, we consider public enterprise cloud-based application providers and select those that are similar in size, stage of life cycle, and financial leverage. We will continue to use this process until a sufficient amount of historical information regarding volatility becomes available, or until circumstances change such that the identified companies are no longer relevant, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.
|
•
|
Dividend Yield: We have not and do not expect to pay dividends for the foreseeable future.
|
•
|
Opportunity: Increase access to technology skill development and promote inclusion across the globe.
|
•
|
Education: Revolutionize the way the world learns and address the root issues contributing to the increasing technology skills gap to prevent nonprofit organizations, educators and the populations they support from becoming left behind.
|
•
|
Employability: Equip individuals with the technology skills they need to access dignified employment, thrive, and keep pace in any industry.
|
•
|
Innovation: Invest in catalytic solutions that accelerate our mission and the missions of nonprofits around the world.
|
•
|
Product: Pluralsight One creates freedom, equality and opportunity by helping nonprofits, educators, and the communities they support develop the technology skills needed to build better lives and a better future for us all.
|
•
|
Volunteerism: Pluralsight One empowers the Pluralsight community to transfer skills that meet identified community needs and create lasting impact through volunteerism and mentorship opportunities.
|
•
|
Investments: Pluralsight One fuels innovation and amplifies impact by funding solutions and programs that scale.
|
|
Page
|
|
|
|
|
Revenue recognition - identification of and accounting for performance obligations
|
|
|
|
Description of the Matter
|
|
As described in Note 3 to the consolidated financial statements, the Company derives substantially all of its revenue from the sale of subscriptions to its platform. The company also provides professional services, including consulting and customized content creation services. When the Company’s contracts contain multiple performance obligations that are determined to be distinct, the performance obligations are accounted for separately. In such cases, the transaction price is allocated to the distinct performance obligations on a standalone selling price basis and the timing of revenue recognition is determined separately for each performance obligation.
|
|
|
|
How We Addressed the Matter in Our Audit
|
|
Auditing the Company's determination of distinct performance obligations, the allocation of the transaction price to these performance obligations on a relative stand-alone selling price and the timing of revenue recognition can be challenging because judgment is involved to determine the distinct performance obligations, the estimation of stand-alone selling price and the method to recognize revenue. For example, there may be nonstandard terms and conditions or changes in management’s business practices that can have a material effect on the distinct performance obligations, the appropriate stand-alone selling price and the timing of revenue recognition.
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's process to identify the distinct performance obligations and allocate the transaction price to those performance obligations, including the underlying assumptions related to the determination of the relative standalone selling price and the timing of revenue recognition.
Our audit procedures also included, among others, testing a sample of contracts to understand and evaluate management’s assessment of distinct performance obligations, the timing of revenue recognition for each distinct performance obligation, and the allocation of the consideration paid based on stand-alone selling price. We also tested the accuracy and completeness of all relevant underlying data.
|
|
|
Valuation of intangible assets in acquisition of GitPrime, Inc.
|
|
|
|
Description of the Matter
|
|
On May 9, 2019, the Company completed its acquisition of GitPrime, Inc. and recognized $24.8 million of intangible assets including developed technology and customer relationship intangible assets as disclosed in Note 8 to the consolidated financial statements. The transaction was accounted for as a business combination.
Auditing the Company's valuation of intangible assets from the acquisition of GitPrime, Inc. was complex due to the significant estimation uncertainty required by management to determine the fair value of the acquired intangible assets. The significant estimation uncertainty was primarily due to the sensitivity of the significant underlying assumptions utilized in the measurement of the fair value of the developed technology and customer relationship intangible assets. The Company used an excess earnings model to determine the value of developed technology and a distributor model to value the customer relationship intangible asset acquired. The significant assumptions used in the excess earnings model, to estimate the value of developed technology, included sales, anticipated expenses as a percentage of revenue, contributory asset charges, and technology obsolescence rates. The significant assumptions used in the distributor model, to estimate the value of the customer-relationships intangible asset, included expected 2019 sales, expected revenue growth rates, anticipated attrition rate, contributory asset charges, and economic life. These significant assumptions were in many cases based on projected financial information which can be affected by future economic and market conditions.
|
|
|
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the valuation of intangible assets related to the acquisition. For example, we tested controls over the recognition and measurement of the developed technology and customer relationship intangible assets, including the valuation models and underlying assumptions used to develop such estimates.
To test the estimated fair value of the developed technology and customer relationship intangible assets, we involved valuation specialists to assist in evaluating the key assumptions and methodologies employed by management in developing the estimates, including testing the completeness and accuracy of the data and calculations supporting the significant assumptions and models. As an example of the procedures performed, we compared the significant assumptions to current industry, market and economic trends, and historical results of the Company's business and other guideline companies within the same industry.
|
|
|
Current and deferred income tax assets/liabilities
|
|
|
|
Description of the Matter
|
|
As of and for the year ended December 31, 2019, the net deferred income tax liabilities and income tax expense for Pluralsight, Inc. were $0.5 million and $0.8 million, respectively. Net deferred tax assets consist of $342.9 million of gross deferred tax assets, $5.6 million of gross deferred tax liabilities and $337.8 million of valuation allowance.
Pluralsight, Inc’s operations are currently held in lower-tier partnerships, Pluralsight Holdings, LLC (“Pluralsight Holdings”) and Pluralsight, LLC. The Company historically conducted its operations at the partnership level. However, it underwent a reorganization as part of its IPO and it now operates as a public corporation which owns interests in Pluralsight Holdings (the “UP-C Structure”). When Pluralsight, Inc. implemented its UP-C structure, it also put in place a Tax Receivable Agreement “TRA,” in which it agreed to pay Continuing Members of Pluralsight Holdings for cash tax savings it receives as a result of LLC Unit exchanges. Each time a Continuing Member of Pluralsight Holdings exchanges LLC Units with Pluralsight, Inc., Pluralsight, Inc. receives an amortizable basis adjustment, which increases its basis in Pluralsight, Inc. and creates future tax deductions.
|
|
|
As a result of the UP-C structure, the taxable income/(loss) generated at the partnership level must be allocated to each of its partners, including Pluralsight, Inc. As a result, Pluralsight, Inc. records income taxes based on its share of taxable income (loss) allocated from the partnerships which in turn affects the tax basis Pluralsight, Inc. holds in Pluralsight Holdings and the related deferred tax asset and valuation allowance. Certain income and deduction items at the partnership levels are specially allocated to the partners to consider built-in-gain and built-in-losses existing in the assets contributed upon the partnership formation. Further, in future years, built-in-gains and built-in-losses are also computed and tracked when certain events occur that alter the existing equity sharing of the partnerships. The recovery of the built-in-gains and built-in losses are tracked by asset, and then specially allocated to each partner pursuant to the partnership tax regulations. Therefore, the taxable income at the partnership level is not simply allocated to each partner based on its ownership share.
Auditing of the Company’s deferred tax assets and liabilities, and the associated valuation allowance, is complex due to the UP-C structure. The proper application of the applicable tax regulations and the proper interpretation of the partnership agreement drives the allocation of the taxable income to Pluralsight, Inc., which has a significant impact on the calculation of the deferred tax asset it records with respect to its interest in Pluralsight Holdings, LLC, and the determination of whether a valuation allowance is necessary. The valuation allowance determines whether the income tax accounts are reserved on the financial statements, as well as whether the TRA liability is recorded. Auditing the allocation of taxable income to Pluralsight, Inc. and the computation of the TRA liability and deferred tax asset, requires the involvement of partnership tax specialists to determine if the proper tax regulations are being applied and if the partnership agreement is being properly followed.
|
|
|
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the calculation of the deferred tax assets and liabilities and valuation allowance. We tested controls over management’s review of the allocation of income among the partners of Pluralsight Holdings, including the calculation of built-in-gains and losses; the reconciliation of its deferred tax asset associated with the difference between Pluralsight Inc.’s tax basis and GAAP basis in its investment in Pluralsight Holdings; and the Company’s assertion that it is more likely than not it will not recognize the benefit of its deferred tax assets.
To test the taxable income (loss) allocated to Pluralsight, Inc. from the partnerships, our audit procedures included, among others, evaluating the methodology used to compute the taxable income ultimately allocated to Pluralsight, Inc. We tested the underlying permanent and temporary book-tax differences utilized to determine the total Pluralsight Holdings taxable income (loss) and the computation of the Pluralsight Holdings specially allocated income and deduction items. We also tested the subsequent allocation of the specially allocated items to each partner, based on their share of the built-in-gain or built-in loss, and the non-specially allocated items to each partner, to confirm each item is allocated appropriately based on the income tax regulations and Pluralsight Holdings’ operating agreement. Additionally, we tested the Company’s deferred tax assets and liabilities, as well as the related valuation allowance, by testing the underlying temporary book-tax differences and evaluating the Company’s realizability assertions.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
90,515
|
|
|
$
|
194,306
|
|
Short-term investments
|
332,234
|
|
|
—
|
|
||
Accounts receivable, net of allowances of $3,465 and $2,501 as of December 31, 2019 and 2018, respectively
|
101,576
|
|
|
63,436
|
|
||
Deferred contract acquisition costs, net
|
18,331
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
14,174
|
|
|
8,323
|
|
||
Total current assets
|
556,830
|
|
|
266,065
|
|
||
Restricted cash
|
28,916
|
|
|
16,765
|
|
||
Long-term investments
|
105,805
|
|
|
—
|
|
||
Property and equipment, net
|
22,896
|
|
|
31,641
|
|
||
Right-of-use assets
|
15,804
|
|
|
—
|
|
||
Content library, net
|
8,958
|
|
|
7,050
|
|
||
Intangible assets, net
|
22,631
|
|
|
1,759
|
|
||
Goodwill
|
262,532
|
|
|
123,119
|
|
||
Deferred contract acquisition costs, noncurrent, net
|
5,982
|
|
|
—
|
|
||
Other assets
|
1,599
|
|
|
1,064
|
|
||
Total assets
|
$
|
1,031,953
|
|
|
$
|
447,463
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
10,615
|
|
|
$
|
7,160
|
|
Accrued expenses
|
40,703
|
|
|
32,047
|
|
||
Accrued author fees
|
11,694
|
|
|
10,002
|
|
||
Lease liabilities
|
5,752
|
|
|
—
|
|
||
Deferred revenue
|
215,137
|
|
|
157,695
|
|
||
Total current liabilities
|
283,901
|
|
|
206,904
|
|
||
Deferred revenue, noncurrent
|
19,517
|
|
|
14,886
|
|
||
Convertible senior notes, net
|
470,228
|
|
|
—
|
|
||
Lease liabilities, noncurrent
|
11,167
|
|
|
—
|
|
||
Facility financing obligations
|
—
|
|
|
15,777
|
|
||
Other liabilities
|
980
|
|
|
1,303
|
|
||
Total liabilities
|
785,793
|
|
|
238,870
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Class A common stock, $0.0001 par value per share, 1,000,000,000 shares authorized, 104,083,271 and 65,191,907 shares issued and outstanding as of December 31, 2019 and 2018, respectively
|
10
|
|
|
7
|
|
||
Class B common stock, $0.0001 par value per share, 200,000,000 shares authorized, 23,211,418 and 57,490,881 shares issued and outstanding as of December 31, 2019 and 2018, respectively
|
2
|
|
|
6
|
|
||
Class C common stock, $0.0001 par value per share, 50,000,000 shares authorized, 14,269,199 and 14,586,173 shares issued and outstanding as of December 31, 2019 and 2018, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
641,128
|
|
|
456,899
|
|
||
Accumulated other comprehensive income (loss)
|
225
|
|
|
(41
|
)
|
||
Accumulated deficit
|
(458,381
|
)
|
|
(355,446
|
)
|
||
Total stockholders’ equity attributable to Pluralsight, Inc.
|
182,985
|
|
|
101,426
|
|
||
Non-controlling interests
|
63,175
|
|
|
107,167
|
|
||
Total stockholders’ equity
|
246,160
|
|
|
208,593
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,031,953
|
|
|
$
|
447,463
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Revenue
|
$
|
316,910
|
|
|
$
|
232,029
|
|
|
$
|
166,824
|
|
Cost of revenue
|
71,353
|
|
|
62,615
|
|
|
49,828
|
|
|||
Gross profit
|
245,557
|
|
|
169,414
|
|
|
116,996
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
207,085
|
|
|
158,409
|
|
|
103,478
|
|
|||
Technology and content
|
102,902
|
|
|
69,289
|
|
|
49,293
|
|
|||
General and administrative
|
85,560
|
|
|
78,418
|
|
|
46,971
|
|
|||
Total operating expenses
|
395,547
|
|
|
306,116
|
|
|
199,742
|
|
|||
Loss from operations
|
(149,990
|
)
|
|
(136,702
|
)
|
|
(82,746
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(23,565
|
)
|
|
(6,826
|
)
|
|
(11,665
|
)
|
|||
Loss on debt extinguishment
|
(950
|
)
|
|
(4,085
|
)
|
|
(1,882
|
)
|
|||
Other income, net
|
11,749
|
|
|
1,504
|
|
|
81
|
|
|||
Loss before income taxes
|
(162,756
|
)
|
|
(146,109
|
)
|
|
(96,212
|
)
|
|||
Provision for income taxes
|
(823
|
)
|
|
(664
|
)
|
|
(324
|
)
|
|||
Net loss
|
$
|
(163,579
|
)
|
|
$
|
(146,773
|
)
|
|
$
|
(96,536
|
)
|
Less: Net loss attributable to non-controlling interests
|
(50,921
|
)
|
|
(49,660
|
)
|
|
—
|
|
|||
Net loss attributable to Pluralsight, Inc.
|
$
|
(112,658
|
)
|
|
$
|
(97,113
|
)
|
|
$
|
(96,536
|
)
|
Less: Accretion of Series A redeemable convertible preferred units
|
—
|
|
|
(176,275
|
)
|
|
(63,800
|
)
|
|||
Net loss attributable to shares of Class A common stock
|
$
|
(112,658
|
)
|
|
$
|
(273,388
|
)
|
|
$
|
(160,336
|
)
|
Net loss per share, basic and diluted(1)
|
$
|
(1.19
|
)
|
|
$
|
(0.72
|
)
|
|
|
||
Weighted-average common shares used in computing basic and diluted net loss per share(1)
|
94,515
|
|
|
62,840
|
|
|
|
(1)
|
Represents net loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the portion of the periods following the Reorganization Transactions and Pluralsight, Inc.’s initial public offering described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Net loss
|
$
|
(163,579
|
)
|
|
$
|
(146,773
|
)
|
|
$
|
(96,536
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gains on investments
|
333
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation gains (losses), net
|
40
|
|
|
(112
|
)
|
|
33
|
|
|||
Comprehensive loss
|
$
|
(163,206
|
)
|
|
$
|
(146,885
|
)
|
|
$
|
(96,503
|
)
|
Less: Comprehensive loss attributable to non-controlling interests
|
(50,814
|
)
|
|
(49,710
|
)
|
|
—
|
|
|||
Comprehensive loss attributable to Pluralsight, Inc.
|
$
|
(112,392
|
)
|
|
$
|
(97,175
|
)
|
|
$
|
(96,503
|
)
|
|
Redeemable
Convertible
Preferred Units
|
|
|
Members’ Capital
|
|
Class A Common Stock
|
|
Class B Common Stock
|
|
Class C Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other
Comprehensive Income (Loss)
|
|
Accumulated
Deficit
|
|
Non-Controlling Interests
|
|
Total
|
|||||||||||||||||||||||||||||||||||
|
Units
|
|
Amount
|
|
|
Units
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance at January 1, 2017
|
48,447,880
|
|
|
341,966
|
|
|
|
47,782,272
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(307,222
|
)
|
|
—
|
|
|
(307,230
|
)
|
||||||||||
Exchange of Class A common units for Class B common units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
2,074
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,074
|
|
||||||||||
Issuance of Class A common units
|
—
|
|
|
—
|
|
|
|
625,373
|
|
|
4,399
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,399
|
|
||||||||||
Redemption of incentive units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(3,724
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,724
|
)
|
||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
|
—
|
|
|
19,707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,707
|
|
||||||||||
Accretion of Series A redeemable convertible preferred units
|
—
|
|
|
63,800
|
|
|
|
—
|
|
|
(22,456
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,344
|
)
|
|
—
|
|
|
(63,800
|
)
|
||||||||||
Foreign currency translation gains
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96,536
|
)
|
|
—
|
|
|
(96,536
|
)
|
||||||||||
Balance at December 31, 2017
|
48,447,880
|
|
|
$
|
405,766
|
|
|
|
48,407,645
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
(445,102
|
)
|
|
$
|
—
|
|
|
$
|
(445,077
|
)
|
|
Redeemable
Convertible
Preferred Units
|
|
|
Members’ Capital
|
|
Class A Common Stock
|
|
Class B Common Stock
|
|
Class C Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated
Deficit
|
|
Non-Controlling Interests
|
|
Total
|
|||||||||||||||||||||||||||||||||||
|
Units
|
|
Amount
|
|
|
Units
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance at January 1, 2018
|
48,447,880
|
|
|
$
|
405,766
|
|
|
|
48,407,645
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
(445,102
|
)
|
|
$
|
—
|
|
|
$
|
(445,077
|
)
|
Activity prior to the Reorganization Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Issuance of warrants to purchase shares of Class A common stock
|
—
|
|
|
—
|
|
|
|
—
|
|
|
984
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
984
|
|
||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
|
—
|
|
|
22,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,278
|
|
||||||||||
Accretion of Series A redeemable convertible preferred units
|
—
|
|
|
176,275
|
|
|
|
—
|
|
|
(23,262
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(153,013
|
)
|
|
—
|
|
|
(176,275
|
)
|
||||||||||
Foreign currency translation losses
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,783
|
)
|
|
—
|
|
|
(51,783
|
)
|
||||||||||
Effect of the Reorganization Transactions and initial public offering:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Effect of Reorganization Transactions
|
(48,447,880
|
)
|
|
(582,041
|
)
|
|
|
(48,407,645
|
)
|
|
—
|
|
|
39,110,660
|
|
|
4
|
|
|
58,111,572
|
|
|
6
|
|
|
14,048,138
|
|
|
1
|
|
|
582,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
582,041
|
|
||||||||||
Initial public offering, net of offering costs
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
23,805,000
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
324,704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
324,706
|
|
||||||||||
Allocation of equity to non-controlling interests
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(474,007
|
)
|
|
(4
|
)
|
|
339,782
|
|
|
134,229
|
|
|
—
|
|
||||||||||
Activity subsequent to the Reorganization Transactions and initial public offering:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Effect of the Rescission Transactions
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(605,390
|
)
|
|
—
|
|
|
455,217
|
|
|
—
|
|
|
150,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Settlement of equity appreciation rights
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(325
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(325
|
)
|
||||||||||
Effect of exchanges of LLC Units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
1,107,448
|
|
|
—
|
|
|
(1,071,448
|
)
|
|
—
|
|
|
(36,000
|
)
|
|
—
|
|
|
1,723
|
|
|
—
|
|
|
—
|
|
|
(1,723
|
)
|
|
—
|
|
||||||||||
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
836,365
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,537
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,538
|
|
||||||||||
Vesting of restricted stock units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
608,488
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
423,862
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Exercise of common stock warrants
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
267,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Exercise of common stock options
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
61,418
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
840
|
|
||||||||||
Forfeiture of unvested LLC Units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,460
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Shares withheld for tax withholding on equity awards
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,905
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,905
|
)
|
||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,673
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,673
|
|
||||||||||
Adjustments to non-controlling interests
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,371
|
)
|
|
—
|
|
|
—
|
|
|
24,371
|
|
|
—
|
|
||||||||||
Foreign currency translation losses
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
(50
|
)
|
|
(94
|
)
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,330
|
)
|
|
(49,660
|
)
|
|
(94,990
|
)
|
||||||||||
Balance at December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
65,191,907
|
|
|
$
|
7
|
|
|
57,490,881
|
|
|
$
|
6
|
|
|
14,586,173
|
|
|
$
|
1
|
|
|
$
|
456,899
|
|
|
$
|
(41
|
)
|
|
$
|
(355,446
|
)
|
|
$
|
107,167
|
|
|
$
|
208,593
|
|
|
Redeemable
Convertible
Preferred Units
|
|
|
Members’ Capital
|
|
Class A Common Stock
|
|
Class B Common Stock
|
|
Class C Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated
Deficit
|
|
Non-Controlling Interests
|
|
Total
|
|||||||||||||||||||||||||||||||||||
|
Units
|
|
Amount
|
|
|
Units
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance at January 1, 2019
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
65,191,907
|
|
|
$
|
7
|
|
|
57,490,881
|
|
|
$
|
6
|
|
|
14,586,173
|
|
|
$
|
1
|
|
|
$
|
456,899
|
|
|
$
|
(41
|
)
|
|
$
|
(355,446
|
)
|
|
$
|
107,167
|
|
|
$
|
208,593
|
|
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,723
|
|
|
10,273
|
|
|
19,996
|
|
||||||||||
Effect of exchanges of LLC Units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
34,892,796
|
|
|
3
|
|
|
(34,157,618
|
)
|
|
(4
|
)
|
|
(735,178
|
)
|
|
—
|
|
|
61,754
|
|
|
—
|
|
|
—
|
|
|
(61,753
|
)
|
|
—
|
|
||||||||||
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
1,299,748
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,128
|
|
||||||||||
Vesting of restricted stock units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
2,171,529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
418,204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Exercise of common stock options
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
527,291
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,700
|
|
||||||||||
Forfeiture of unvested LLC Units
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(121,845
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Shares withheld for tax withholding on equity awards
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,574
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,574
|
)
|
||||||||||
Equity component of convertible senior notes, net of issuance costs
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
137,033
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
137,033
|
|
||||||||||
Purchase of capped calls related to issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,432
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,432
|
)
|
||||||||||
Repurchases of equity component of convertible senior notes
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,965
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,965
|
)
|
||||||||||
Settlement of capped calls related to repurchases of convertible senior notes
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,284
|
|
||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91,603
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91,603
|
|
||||||||||
Adjustments to non-controlling interests
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,302
|
)
|
|
—
|
|
|
—
|
|
|
58,302
|
|
|
—
|
|
||||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
266
|
|
|
—
|
|
|
107
|
|
|
373
|
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(112,658
|
)
|
|
(50,921
|
)
|
|
(163,579
|
)
|
||||||||||
Balance at December 31, 2019
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
104,083,271
|
|
|
$
|
10
|
|
|
23,211,418
|
|
|
$
|
2
|
|
|
14,269,199
|
|
|
$
|
1
|
|
|
$
|
641,128
|
|
|
$
|
225
|
|
|
$
|
(458,381
|
)
|
|
$
|
63,175
|
|
|
$
|
246,160
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(163,579
|
)
|
|
$
|
(146,773
|
)
|
|
$
|
(96,536
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
||||||
Depreciation of property and equipment
|
|
9,464
|
|
|
8,318
|
|
|
6,675
|
|
|||
Amortization of acquired intangible assets
|
|
4,479
|
|
|
8,681
|
|
|
8,526
|
|
|||
Amortization of course creation costs
|
|
2,543
|
|
|
1,993
|
|
|
1,462
|
|
|||
Equity-based compensation
|
|
90,437
|
|
|
72,492
|
|
|
21,781
|
|
|||
Amortization of deferred contract acquisition costs
|
|
23,587
|
|
|
—
|
|
|
—
|
|
|||
Amortization of debt discount and issuance costs
|
|
21,691
|
|
|
1,215
|
|
|
1,847
|
|
|||
Investment discount and premium amortization, net
|
|
(2,446
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on debt extinguishment
|
|
950
|
|
|
4,085
|
|
|
931
|
|
|||
Other
|
|
380
|
|
|
696
|
|
|
459
|
|
|||
Changes in assets and liabilities, net of acquired assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(37,274
|
)
|
|
(26,156
|
)
|
|
(16,123
|
)
|
|||
Deferred contract acquisition costs
|
|
(27,688
|
)
|
|
—
|
|
|
—
|
|
|||
Prepaid expenses and other assets
|
|
(5,663
|
)
|
|
(3,482
|
)
|
|
(2,796
|
)
|
|||
Right-of-use assets
|
|
5,586
|
|
|
—
|
|
|
—
|
|
|||
Accounts payable
|
|
2,683
|
|
|
1,385
|
|
|
2,561
|
|
|||
Accrued expenses and other liabilities
|
|
5,887
|
|
|
7,973
|
|
|
17,960
|
|
|||
Accrued author fees
|
|
1,692
|
|
|
2,123
|
|
|
2,131
|
|
|||
Lease liabilities
|
|
(6,659
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred revenue
|
|
62,201
|
|
|
61,554
|
|
|
38,983
|
|
|||
Net cash used in operating activities
|
|
(11,729
|
)
|
|
(5,896
|
)
|
|
(12,139
|
)
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
|
(11,181
|
)
|
|
(8,796
|
)
|
|
(5,951
|
)
|
|||
Purchases of content library
|
|
(5,326
|
)
|
|
(3,340
|
)
|
|
(2,382
|
)
|
|||
Cash paid for acquisition, net of cash acquired
|
|
(163,771
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of investments
|
|
(694,246
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales of investments
|
|
4,967
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from maturities of investments
|
|
252,836
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
|
(616,721
|
)
|
|
(12,136
|
)
|
|
(8,333
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Proceeds from issuance of convertible senior notes, net of discount and issuance costs
|
|
616,654
|
|
|
—
|
|
|
—
|
|
|||
Purchase of capped calls related to issuance of convertible senior notes
|
|
(69,432
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchases of convertible senior notes
|
|
(35,000
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from terminations of capped calls related to repurchases of convertible senior notes
|
|
1,284
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of common stock from employee equity plans
|
|
24,828
|
|
|
13,378
|
|
|
—
|
|
|||
Taxes paid related to net share settlement
|
|
(1,574
|
)
|
|
(16,905
|
)
|
|
—
|
|
|||
Proceeds from initial public offering, net of underwriting discounts and commissions
|
|
—
|
|
|
332,080
|
|
|
—
|
|
|||
Payments of costs related to initial public offering
|
|
—
|
|
|
(7,083
|
)
|
|
(307
|
)
|
|||
Borrowings of long-term debt
|
|
—
|
|
|
20,000
|
|
|
115,000
|
|
|||
Repayments of long-term debt
|
|
—
|
|
|
(137,710
|
)
|
|
(85,000
|
)
|
|||
Payments of debt extinguishment costs
|
|
—
|
|
|
(2,179
|
)
|
|
—
|
|
|||
Payments of debt issuance costs
|
|
—
|
|
|
(450
|
)
|
|
(854
|
)
|
|||
Payments to settle equity appreciation rights
|
|
—
|
|
|
(325
|
)
|
|
—
|
|
|||
Proceeds from the issuance of common units, net of issuance costs
|
|
—
|
|
|
—
|
|
|
4,399
|
|
|||
Redemption of incentive units
|
|
—
|
|
|
—
|
|
|
(3,724
|
)
|
|||
Other
|
|
—
|
|
|
(17
|
)
|
|
(16
|
)
|
|||
Net cash provided by financing activities
|
|
536,760
|
|
|
200,789
|
|
|
29,498
|
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
50
|
|
|
(163
|
)
|
|
54
|
|
|||
Net (decrease) increase in cash, cash equivalents, and restricted cash
|
|
(91,640
|
)
|
|
182,594
|
|
|
9,080
|
|
|||
Cash, cash equivalents, and restricted cash, beginning of period
|
|
211,071
|
|
|
28,477
|
|
|
19,397
|
|
|||
Cash, cash equivalents, and restricted cash, end of period
|
|
$
|
119,431
|
|
|
$
|
211,071
|
|
|
$
|
28,477
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Supplemental cash flow disclosure:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
1,126
|
|
|
$
|
4,271
|
|
|
$
|
6,858
|
|
Cash paid for income taxes, net
|
$
|
836
|
|
|
$
|
452
|
|
|
$
|
425
|
|
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Lease liabilities arising from obtaining right-of-use assets
|
$
|
11,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unpaid capital expenditures
|
$
|
3,865
|
|
|
$
|
519
|
|
|
$
|
555
|
|
Equity-based compensation capitalized as internal-use software
|
$
|
1,166
|
|
|
$
|
459
|
|
|
$
|
—
|
|
Unrealized gains on investments
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Conversion of redeemable convertible preferred units
|
$
|
—
|
|
|
$
|
582,041
|
|
|
$
|
—
|
|
Redeemable convertible preferred unit accretion
|
$
|
—
|
|
|
$
|
176,275
|
|
|
$
|
63,800
|
|
Costs related to initial public offering, accrued but not yet paid
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,699
|
|
Issuance of warrants to purchase shares of Class A common stock
|
$
|
—
|
|
|
$
|
984
|
|
|
$
|
—
|
|
Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
90,515
|
|
|
$
|
194,306
|
|
|
$
|
28,267
|
|
Restricted cash
|
28,916
|
|
|
16,765
|
|
|
210
|
|
|||
Total cash, cash equivalents, and restricted cash
|
$
|
119,431
|
|
|
$
|
211,071
|
|
|
$
|
28,477
|
|
•
|
The limited liability company agreement of Pluralsight Holdings (“LLC Agreement”) was amended and restated to, among other things: (i) appoint Pluralsight, Inc. as its sole managing member and (ii) effectuate the conversion of all outstanding redeemable convertible preferred limited liability company units, incentive units, and Class B incentive units of Pluralsight Holdings into a single class of LLC Units. See Note 13—Stockholders’ Equity for additional details.
|
•
|
Certain members of Pluralsight Holdings that were corporations merged with and into Pluralsight, Inc. and certain members of Pluralsight Holdings contributed certain of their LLC Units to Pluralsight, Inc., in each case in exchange for shares of Class A common stock.
|
•
|
The certificate of incorporation of Pluralsight, Inc. was amended and restated to authorize three classes of common stock, Class A common stock, Class B common stock, Class C common stock, and one class of preferred stock. Class B and Class C common stock were issued on a one-for-one basis to the members of Pluralsight Holdings who retained LLC Units (“Continuing Members”). Class B and Class C common stock have voting rights but no economic rights. See Note 13—Stockholders’ Equity for additional details.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Balance, beginning of period
|
$
|
2,501
|
|
|
$
|
1,552
|
|
|
$
|
708
|
|
Provision for doubtful accounts
|
10,649
|
|
|
2,185
|
|
|
1,246
|
|
|||
Accounts written-off, net of recoveries
|
(9,685
|
)
|
|
(1,236
|
)
|
|
(402
|
)
|
|||
Balance, end of period
|
$
|
3,465
|
|
|
$
|
2,501
|
|
|
$
|
1,552
|
|
|
Estimated Useful Life
|
|
|
Computer equipment
|
3-5 years
|
Purchased software
|
1-5 years
|
Internal-use software
|
1-3 years
|
Furniture and fixtures
|
5-7 years
|
Leasehold improvements
|
Shorter of remaining lease term or estimated useful life
|
•
|
Identification of the contract, or contracts, with a customer;
|
•
|
Identification of the performance obligations in a contract;
|
•
|
Determination of the transaction price;
|
•
|
Allocation of the transaction price to the performance obligations in the contract; and
|
•
|
Recognition of revenue when, or as, performance obligations are satisfied.
|
•
|
Fair Value of Common Stock: The Company determines the fair value of common stock as of each grant date using the market closing price of Pluralsight, Inc.’s Class A common stock on the date of grant.
|
•
|
Risk-free Interest Rate: The risk-free interest rate is derived from the implied yield available on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the options.
|
•
|
Expected Term: The expected term is estimated using the simplified method due to a lack of historical exercise activity for the Company. The simplified method calculates the expected term as the mid-point between the vesting date and the contractual expiration date of the award. For the ESPP, the Company uses the period from the beginning of the offering period to the end of each purchase period.
|
•
|
Volatility: The price volatility factor is based on the historical volatilities of comparable companies as the Company does not have sufficient trading history for its common stock. To determine comparable companies, the Company considers public enterprise cloud-based application providers and selects those that are similar in size, stage of life cycle, and financial leverage. The Company will continue to use this process until a sufficient amount of historical information regarding volatility becomes available, or until circumstances change such that the identified companies are no longer relevant, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.
|
•
|
Dividend Yield: The Company has not and does not expect to pay dividends for the foreseeable future.
|
|
|
As Reported
|
|
ASC 606 Adjustments
|
|
ASC 842 Adjustments
|
|
As Adjusted
|
||||||||||||
|
|
December 31, 2018
|
|
Revenue Recognition
|
|
Incremental Costs of Obtaining a Contract
|
|
|
January 1, 2019
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable, net
|
|
$
|
63,436
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63,469
|
|
Deferred contract acquisition costs, net
|
|
—
|
|
|
—
|
|
|
16,461
|
|
|
—
|
|
|
16,461
|
|
|||||
Prepaid expenses and other current assets
|
|
8,323
|
|
|
—
|
|
|
—
|
|
|
(645
|
)
|
|
7,678
|
|
|||||
Property and equipment, net
|
|
31,641
|
|
|
—
|
|
|
—
|
|
|
(15,054
|
)
|
|
16,587
|
|
|||||
Right-of-use assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,197
|
|
|
10,197
|
|
|||||
Deferred contract acquisition costs, noncurrent, net
|
|
—
|
|
|
—
|
|
|
3,751
|
|
|
—
|
|
|
3,751
|
|
|||||
Accrued expenses
|
|
32,047
|
|
|
—
|
|
|
—
|
|
|
(170
|
)
|
|
31,877
|
|
|||||
Lease liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,045
|
|
|
5,045
|
|
|||||
Deferred revenue
|
|
157,695
|
|
|
(389
|
)
|
|
—
|
|
|
—
|
|
|
157,306
|
|
|||||
Deferred revenue, noncurrent
|
|
14,886
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,886
|
|
|||||
Lease liabilities, noncurrent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,339
|
|
|
7,339
|
|
|||||
Facility financing obligation
|
|
15,777
|
|
|
—
|
|
|
—
|
|
|
(15,777
|
)
|
|
—
|
|
|||||
Other liabilities
|
|
1,303
|
|
|
—
|
|
|
—
|
|
|
(1,301
|
)
|
|
2
|
|
|||||
Accumulated deficit
|
|
(355,446
|
)
|
|
205
|
|
|
9,828
|
|
|
(310
|
)
|
|
(345,723
|
)
|
|||||
Non-controlling interests
|
|
107,167
|
|
|
217
|
|
|
10,384
|
|
|
(328
|
)
|
|
117,440
|
|
|
|
December 31, 2019
|
||||||||||
|
|
As Reported
|
|
Balance without Adoption of
ASC 606 |
|
Effect of Adoption Increase/(Decrease)
|
||||||
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
101,576
|
|
|
$
|
100,783
|
|
|
$
|
793
|
|
Goodwill(1)
|
|
262,532
|
|
|
263,755
|
|
|
(1,223
|
)
|
|||
Deferred contract acquisition costs, net
|
|
18,331
|
|
|
—
|
|
|
18,331
|
|
|||
Deferred contract acquisition costs, noncurrent, net
|
|
5,982
|
|
|
—
|
|
|
5,982
|
|
|||
Deferred revenue
|
|
215,137
|
|
|
217,308
|
|
|
(2,171
|
)
|
|||
Deferred revenue, noncurrent
|
|
19,517
|
|
|
19,517
|
|
|
—
|
|
|||
Accumulated deficit
|
|
(458,381
|
)
|
|
(477,739
|
)
|
|
19,358
|
|
|||
Non-controlling interests
|
|
63,175
|
|
|
56,479
|
|
|
6,696
|
|
(1)
|
Reflects the difference in Goodwill from applying ASC 606 to the deferred revenue balance acquired from GitPrime, Inc. See Note 8—Acquisition of GitPrime, Inc. for additional details. The difference in deferred revenue under ASC 606 is primarily due to the timing of recognition for subscriptions that allow the customer to install the software on premise without significant penalty.
|
|
|
Year Ended December 31, 2019
|
||||||||||
|
|
As Reported
|
|
Balance without Adoption of
ASC 606 |
|
Effect of Adoption Increase/(Decrease)
|
||||||
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
316,910
|
|
|
$
|
315,591
|
|
|
$
|
1,319
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Sales and marketing
|
|
207,085
|
|
|
211,186
|
|
|
(4,101
|
)
|
|||
Loss from operations
|
|
(149,990
|
)
|
|
(155,410
|
)
|
|
5,420
|
|
|||
Net loss
|
|
(163,579
|
)
|
|
(168,999
|
)
|
|
5,420
|
|
|||
Less: Net loss attributable to non-controlling interests
|
|
(50,921
|
)
|
|
(52,444
|
)
|
|
1,523
|
|
|||
Net loss attributable to Pluralsight, Inc.
|
|
(112,658
|
)
|
|
(116,555
|
)
|
|
3,897
|
|
|||
Net loss per share, basic and diluted
|
|
$
|
(1.19
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
0.04
|
|
Weighted-average common shares used in computing basic and diluted net loss per share
|
|
94,515
|
|
|
94,515
|
|
|
|
|
|
Year Ended December 31, 2019
|
||||||||||
|
|
As Reported
|
|
Balance without Adoption of
ASC 606 |
|
Effect of Adoption Increase/(Decrease)
|
||||||
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(163,579
|
)
|
|
$
|
(168,999
|
)
|
|
$
|
5,420
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
||||||
Amortization of deferred contract acquisition costs
|
|
23,587
|
|
|
—
|
|
|
23,587
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(37,274
|
)
|
|
(37,214
|
)
|
|
(60
|
)
|
|||
Deferred contract acquisition costs
|
|
(27,688
|
)
|
|
—
|
|
|
(27,688
|
)
|
|||
Deferred revenue
|
|
62,201
|
|
|
63,460
|
|
|
(1,259
|
)
|
|||
Cash used in operating activities
|
|
(11,729
|
)
|
|
(11,729
|
)
|
|
—
|
|
|
|
Year Ended December 31,
|
|
Growth
|
|||||||||||||
|
|
2019
|
|
2018
|
|
Rate
|
|||||||||||
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
United States
|
|
$
|
198,815
|
|
|
63
|
%
|
|
$
|
148,439
|
|
|
64
|
%
|
|
34
|
%
|
Europe, Middle East and Africa(1)
|
|
86,192
|
|
|
27
|
%
|
|
61,509
|
|
|
27
|
%
|
|
40
|
%
|
||
Other foreign locations
|
|
31,903
|
|
|
10
|
%
|
|
22,081
|
|
|
9
|
%
|
|
44
|
%
|
||
Total revenue
|
|
$
|
316,910
|
|
|
100
|
%
|
|
$
|
232,029
|
|
|
100
|
%
|
|
|
(1)
|
Revenue from the United Kingdom represented 11% and 10% of revenue for the year ended December 31, 2019 and 2018, respectively.
|
|
|
Year Ended December 31,
|
||
|
|
2019
|
||
|
|
|
||
Business customers
|
|
$
|
271,819
|
|
Individual customers
|
|
45,091
|
|
|
Total revenue
|
|
$
|
316,910
|
|
Balance as of January 1, 2019
|
$
|
20,212
|
|
Capitalization of contract acquisition costs
|
27,688
|
|
|
Amortization of deferred contract acquisition costs
|
(23,587
|
)
|
|
Balance as of December 31, 2019
|
$
|
24,313
|
|
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
62,085
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,085
|
|
Commercial paper
|
|
4,991
|
|
|
—
|
|
|
—
|
|
|
4,991
|
|
||||
Total cash equivalents
|
|
$
|
67,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67,076
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
|
$
|
33,627
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,627
|
|
U.S. treasury securities
|
|
149,353
|
|
|
53
|
|
|
—
|
|
|
149,406
|
|
||||
Corporate notes and obligations
|
|
148,993
|
|
|
215
|
|
|
(7
|
)
|
|
149,201
|
|
||||
Total short-term investments
|
|
$
|
331,973
|
|
|
$
|
268
|
|
|
$
|
(7
|
)
|
|
$
|
332,234
|
|
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Corporate notes and obligations
|
|
$
|
78,353
|
|
|
$
|
121
|
|
|
$
|
(46
|
)
|
|
$
|
78,428
|
|
U.S. agency obligations
|
|
26,436
|
|
|
1
|
|
|
(4
|
)
|
|
26,433
|
|
||||
Certificates of deposit
|
|
$
|
944
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
944
|
|
Total long-term investments
|
|
$
|
105,733
|
|
|
$
|
122
|
|
|
$
|
(50
|
)
|
|
$
|
105,805
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total cash equivalents and investments
|
|
$
|
504,782
|
|
|
$
|
390
|
|
|
$
|
(57
|
)
|
|
$
|
505,115
|
|
|
|
Amortized Cost
|
|
Fair Value
|
||||
|
|
|
|
|
||||
Due within one year
|
|
$
|
331,973
|
|
|
$
|
332,234
|
|
Due between one and two years
|
|
105,733
|
|
|
105,805
|
|
||
Total investments
|
|
$
|
437,706
|
|
|
$
|
438,039
|
|
|
As of December 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
62,085
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,085
|
|
Commercial paper
|
—
|
|
|
4,991
|
|
|
—
|
|
|
4,991
|
|
||||
Total cash equivalents
|
$
|
62,085
|
|
|
$
|
4,991
|
|
|
$
|
—
|
|
|
$
|
67,076
|
|
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
33,627
|
|
|
$
|
—
|
|
|
$
|
33,627
|
|
U.S. treasury securities
|
—
|
|
|
149,406
|
|
|
—
|
|
|
149,406
|
|
||||
Corporate notes and obligations
|
—
|
|
|
149,201
|
|
|
—
|
|
|
149,201
|
|
||||
Total short-term investments
|
$
|
—
|
|
|
$
|
332,234
|
|
|
$
|
—
|
|
|
$
|
332,234
|
|
Restricted cash
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
28,371
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,371
|
|
Long-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate notes and obligations
|
$
|
—
|
|
|
$
|
78,428
|
|
|
$
|
—
|
|
|
$
|
78,428
|
|
U.S. agency obligations
|
—
|
|
|
26,433
|
|
|
—
|
|
|
26,433
|
|
||||
Certificates of deposit
|
—
|
|
|
944
|
|
|
—
|
|
|
944
|
|
||||
Total long-term investments
|
$
|
—
|
|
|
$
|
105,805
|
|
|
$
|
—
|
|
|
$
|
105,805
|
|
|
As of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
185,405
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
185,405
|
|
Restricted cash
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
16,765
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,765
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Prepaid expenses
|
$
|
11,469
|
|
|
$
|
7,931
|
|
Other current assets
|
2,705
|
|
|
392
|
|
||
Prepaid expenses and other current assets
|
$
|
14,174
|
|
|
$
|
8,323
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Accrued compensation
|
$
|
23,310
|
|
|
$
|
22,285
|
|
Accrued income and other taxes payable
|
7,116
|
|
|
5,408
|
|
||
Accrued other current liabilities
|
10,277
|
|
|
4,354
|
|
||
Accrued expenses
|
$
|
40,703
|
|
|
$
|
32,047
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Computer equipment
|
$
|
9,047
|
|
|
$
|
9,369
|
|
Software
|
2,047
|
|
|
2,031
|
|
||
Capitalized internal-use software costs
|
23,021
|
|
|
13,880
|
|
||
Furniture and fixtures
|
5,826
|
|
|
5,478
|
|
||
Buildings
|
—
|
|
|
11,251
|
|
||
Leasehold improvements
|
9,871
|
|
|
1,490
|
|
||
Construction in progress
|
4,427
|
|
|
1,671
|
|
||
Build-to-suit lease asset under construction
|
—
|
|
|
8,281
|
|
||
Total property and equipment
|
54,239
|
|
|
53,451
|
|
||
Less: Accumulated depreciation
|
(31,343
|
)
|
|
(21,810
|
)
|
||
Property and equipment, net
|
$
|
22,896
|
|
|
$
|
31,641
|
|
|
|
Fair Value
|
||
|
|
|
||
Cash and cash equivalents
|
|
$
|
5,290
|
|
Accounts receivable
|
|
1,798
|
|
|
Other assets acquired
|
|
207
|
|
|
Property and equipment
|
|
223
|
|
|
Right-of-use assets
|
|
549
|
|
|
Goodwill
|
|
139,413
|
|
|
Intangible assets
|
|
24,800
|
|
|
Lease liabilities
|
|
(549
|
)
|
|
Deferred revenue
|
|
(1,367
|
)
|
|
Other liabilities assumed
|
|
(1,303
|
)
|
|
Total fair value of net assets acquired
|
|
$
|
169,061
|
|
|
|
Fair Value of Intangible Assets Acquired
(in thousands)
|
|
Useful Lives
(in years)
|
||
|
|
|
|
|
||
Technology
|
|
$
|
24,000
|
|
|
5 years
|
Customer relationships
|
|
800
|
|
|
4 years
|
|
Total fair value of intangible assets acquired
|
|
$
|
24,800
|
|
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
|
|
(unaudited)
|
||||||
Revenue
|
|
$
|
320,800
|
|
|
$
|
234,882
|
|
Net loss
|
|
(166,725
|
)
|
|
(163,145
|
)
|
||
Net loss per share, basic and diluted
|
|
$
|
(1.21
|
)
|
|
$
|
(0.81
|
)
|
|
As of December 31, 2019
|
|||||||||||||
|
Weighted Average
Remaining Useful Life (in years) |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
|||||||
|
|
|
|
|
|
|
|
|||||||
Content library:
|
|
|
|
|
|
|
|
|||||||
Acquired content library
|
1.6
|
|
|
$
|
32,835
|
|
|
$
|
32,780
|
|
|
$
|
55
|
|
Course creation costs
|
3.8
|
|
|
17,717
|
|
|
8,814
|
|
|
8,903
|
|
|||
Total
|
|
|
$
|
50,552
|
|
|
$
|
41,594
|
|
|
$
|
8,958
|
|
|
Intangible assets:
|
|
|
|
|
|
|
|
|||||||
Technology
|
4.2
|
|
|
$
|
28,500
|
|
|
$
|
6,585
|
|
|
$
|
21,915
|
|
Trademarks
|
—
|
|
|
162
|
|
|
162
|
|
|
—
|
|
|||
Noncompetition agreements
|
—
|
|
|
390
|
|
|
390
|
|
|
—
|
|
|||
Customer relationships
|
—
|
|
|
3,550
|
|
|
2,879
|
|
|
671
|
|
|||
Database
|
—
|
|
|
40
|
|
|
40
|
|
|
—
|
|
|||
Domain names
|
Indefinite
|
|
|
45
|
|
|
—
|
|
|
45
|
|
|||
Total
|
|
|
$
|
32,687
|
|
|
$
|
10,056
|
|
|
$
|
22,631
|
|
|
As of December 31, 2018
|
|||||||||||||
|
Weighted Average
Remaining Useful Life (in years) |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
|||||||
|
|
|
|
|
|
|
|
|||||||
Content library:
|
|
|
|
|
|
|
|
|||||||
Acquired content library
|
0.5
|
|
|
$
|
32,835
|
|
|
$
|
32,229
|
|
|
$
|
606
|
|
Course creation costs
|
3.5
|
|
|
13,552
|
|
|
7,108
|
|
|
6,444
|
|
|||
Total
|
|
|
$
|
46,387
|
|
|
$
|
39,337
|
|
|
$
|
7,050
|
|
|
Intangible assets:
|
|
|
|
|
|
|
|
|||||||
Technology
|
2.6
|
|
|
$
|
4,500
|
|
|
$
|
2,786
|
|
|
$
|
1,714
|
|
Trademarks
|
—
|
|
|
162
|
|
|
162
|
|
|
—
|
|
|||
Noncompetition agreements
|
—
|
|
|
390
|
|
|
390
|
|
|
—
|
|
|||
Customer relationships
|
—
|
|
|
2,750
|
|
|
2,750
|
|
|
—
|
|
|||
Database
|
—
|
|
|
40
|
|
|
40
|
|
|
—
|
|
|||
Domain names
|
Indefinite
|
|
|
45
|
|
|
—
|
|
|
45
|
|
|||
Total
|
|
|
$
|
7,887
|
|
|
$
|
6,128
|
|
|
$
|
1,759
|
|
Year Ending December 31,
|
|
Amortization
Expense |
||
|
|
|
||
2020
|
|
$
|
8,346
|
|
2021
|
|
7,783
|
|
|
2022
|
|
6,900
|
|
|
2023
|
|
6,242
|
|
|
2024
|
|
2,273
|
|
|
Total
|
|
$
|
31,544
|
|
Goodwill at December 31, 2018
|
$
|
123,119
|
|
Goodwill recorded in connection with acquisition
|
138,603
|
|
|
Change in goodwill due to measurement period adjustments
|
810
|
|
|
Goodwill as of December 31, 2019
|
$
|
262,532
|
|
•
|
During any calendar quarter commencing after the calendar quarter ended on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
|
•
|
During the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price as defined in the Indenture per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; or
|
•
|
Upon the occurrence of specified corporate events described in the Indenture.
|
|
|
December 31, 2019
|
||
|
|
|
||
Principal
|
|
$
|
593,500
|
|
Less: Unamortized debt discount
|
|
(112,776
|
)
|
|
Less: Unamortized issuance costs
|
|
(10,496
|
)
|
|
Net carrying amount
|
|
$
|
470,228
|
|
|
|
December 31, 2019
|
||
|
|
|
||
Proceeds allocated to the conversion option (debt discount)
|
|
$
|
140,776
|
|
Less: Issuance costs
|
|
(3,743
|
)
|
|
Less: Reacquisition of conversion option related to the repurchases of convertible senior notes
|
|
(2,965
|
)
|
|
Net carrying amount
|
|
$
|
134,068
|
|
|
|
December 31, 2019
|
||
|
|
|
||
Contractual interest expense
|
|
$
|
1,867
|
|
Amortization of debt issuance costs and discount
|
|
21,691
|
|
|
Total
|
|
$
|
23,558
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Operating lease expense
|
|
$
|
6,512
|
|
|
$
|
4,795
|
|
|
$
|
1,976
|
|
Variable lease expense
|
|
346
|
|
|
—
|
|
|
—
|
|
|||
Short-term lease expense
|
|
705
|
|
|
—
|
|
|
—
|
|
|||
Total lease expense
|
|
$
|
7,563
|
|
|
$
|
4,795
|
|
|
$
|
1,976
|
|
Year Ending December 31,
|
|
|
||
|
|
|
||
2020
|
$
|
6,603
|
|
|
2021
|
3,878
|
|
||
2022
|
3,687
|
|
||
2023
|
3,043
|
|
||
2024
|
2,147
|
|
||
Thereafter
|
—
|
|
||
Total lease payments
|
19,358
|
|
||
Less: Imputed interest
|
(2,439
|
)
|
||
Lease liabilities
|
$
|
16,919
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
|
Units
|
|
Ownership %
|
|
Units
|
|
Ownership %
|
||||
|
|
|
|
|
|
|
|
||||
Pluralsight, Inc.'s ownership of LLC Units
|
104,083,271
|
|
|
74.3
|
%
|
|
65,191,907
|
|
|
48.6
|
%
|
LLC Units owned by the Continuing Members(1)
|
35,936,804
|
|
|
25.7
|
%
|
|
68,881,732
|
|
|
51.4
|
%
|
|
140,020,075
|
|
|
100.0
|
%
|
|
134,073,639
|
|
|
100.0
|
%
|
|
Stock Options Outstanding
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average
Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in millions)
|
|||||
|
|
|
|
|
|
|
|
|||||
Outstanding as of December 31, 2018
|
5,143,712
|
|
|
$
|
15.00
|
|
|
|
|
|
||
Granted
|
169,762
|
|
|
1.47
|
|
|
|
|
|
|||
Exercised
|
(527,291
|
)
|
|
14.61
|
|
|
|
|
|
|||
Forfeited or cancelled
|
(424,465
|
)
|
|
14.67
|
|
|
|
|
|
|||
Outstanding as of December 31, 2019
|
4,361,718
|
|
|
$
|
14.55
|
|
|
8.4
|
|
$
|
11.6
|
|
Vested and exercisable as of December 31, 2019
|
3,150,870
|
|
|
$
|
14.84
|
|
|
8.4
|
|
$
|
7.5
|
|
|
Number of
RSUs or Units
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
|
|
|
|
|||
RSUs of Pluralsight, Inc.:
|
|
|
|
|||
Balance at December 31, 2018
|
4,801,536
|
|
|
$
|
11.11
|
|
Granted
|
6,295,630
|
|
|
28.48
|
|
|
Forfeited or cancelled
|
(1,499,690
|
)
|
|
23.58
|
|
|
Vested
|
(1,925,438
|
)
|
|
11.97
|
|
|
Balance at December 31, 2019
|
7,672,038
|
|
|
$
|
22.71
|
|
|
|
|
|
|||
|
|
|
|
|||
Restricted Share Units of Pluralsight Holdings:
|
|
|
|
|||
Balance at December 31, 2018
|
2,062,500
|
|
|
$
|
8.24
|
|
Vested
|
(750,000
|
)
|
|
8.24
|
|
|
Balance at December 31, 2019
|
1,312,500
|
|
|
$
|
8.24
|
|
|
Year Ended
December 31, |
||
|
2019
|
|
2018
|
|
|
|
|
Dividend yield
|
None
|
|
None
|
Volatility
|
59.00%—67.45%
|
|
55.00%—65.00%
|
Risk-free interest rate
|
1.60%—2.35%
|
|
2.05%—2.80%
|
Expected term (years)
|
0.5—2.0
|
|
0.5—2.0
|
|
Unvested Units
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||
|
|
|
|
|||
Unvested LLC Units outstanding—December 31, 2018
|
3,195,322
|
|
|
$
|
7.63
|
|
Forfeited or cancelled
|
(121,845
|
)
|
|
5.73
|
|
|
Vested
|
(1,529,664
|
)
|
|
7.63
|
|
|
Unvested LLC Units outstanding—December 31, 2019
|
1,543,813
|
|
|
$
|
8.72
|
|
Dividend yield
|
None
|
Volatility
|
55.00%
|
Risk-free interest rate
|
1.20%—1.80%
|
Expected term (years)
|
1.3—1.8
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
548
|
|
|
$
|
205
|
|
|
$
|
20
|
|
Sales and marketing
|
30,677
|
|
|
19,096
|
|
|
2,624
|
|
|||
Technology and content
|
21,430
|
|
|
12,038
|
|
|
1,966
|
|
|||
General and administrative
|
37,782
|
|
|
41,153
|
|
|
17,171
|
|
|||
Total equity-based compensation
|
$
|
90,437
|
|
|
$
|
72,492
|
|
|
$
|
21,781
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Domestic
|
$
|
(165,074
|
)
|
|
$
|
(147,717
|
)
|
|
$
|
(96,814
|
)
|
Foreign
|
2,318
|
|
|
1,608
|
|
|
602
|
|
|||
Total
|
$
|
(162,756
|
)
|
|
$
|
(146,109
|
)
|
|
$
|
(96,212
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
State
|
$
|
10
|
|
|
$
|
26
|
|
|
$
|
10
|
|
Foreign
|
895
|
|
|
890
|
|
|
397
|
|
|||
Total current tax expense
|
905
|
|
|
916
|
|
|
407
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
State
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
(82
|
)
|
|
(252
|
)
|
|
(83
|
)
|
|||
Total deferred tax benefit
|
(82
|
)
|
|
(252
|
)
|
|
(83
|
)
|
|||
Provision for income taxes
|
$
|
823
|
|
|
$
|
664
|
|
|
$
|
324
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Partnership outside basis difference
|
$
|
275,856
|
|
|
$
|
39,133
|
|
Net operating loss carryforwards
|
60,973
|
|
|
18,591
|
|
||
Promissory note
|
13,200
|
|
|
—
|
|
||
Research and development credits
|
2,601
|
|
|
573
|
|
||
Interest expense carryforward
|
2,569
|
|
|
—
|
|
||
Operating leases
|
1,223
|
|
|
—
|
|
||
Compensation and benefits
|
451
|
|
|
324
|
|
||
Other
|
576
|
|
|
—
|
|
||
Less: Valuation allowance
|
(337,787
|
)
|
|
(57,957
|
)
|
||
Total deferred tax assets
|
19,662
|
|
|
664
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Promissory note
|
(13,304
|
)
|
|
—
|
|
||
Content library and intangible assets
|
(5,595
|
)
|
|
(343
|
)
|
||
Operating leases
|
(1,223
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
(20,122
|
)
|
|
(343
|
)
|
||
Net deferred tax (liabilities) assets
|
$
|
(460
|
)
|
|
$
|
321
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Unrecognized benefit—beginning of the year
|
$
|
1,277
|
|
|
$
|
853
|
|
|
$
|
568
|
|
Gross increases—current period positions
|
686
|
|
|
424
|
|
|
285
|
|
|||
Unrecognized benefit—end of period
|
$
|
1,963
|
|
|
$
|
1,277
|
|
|
$
|
853
|
|
|
Year Ended December 31, 2019
|
|
May 16, 2018 through December 31, 2018
|
||||
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net loss
|
$
|
(163,579
|
)
|
|
$
|
(94,990
|
)
|
Less: Net loss attributable to non-controlling interests
|
(50,921
|
)
|
|
(49,660
|
)
|
||
Net loss attributable to Pluralsight, Inc.
|
$
|
(112,658
|
)
|
|
$
|
(45,330
|
)
|
Denominator:
|
|
|
|
||||
Weighted-average shares of Class A common stock outstanding, basic and diluted
|
94,515
|
|
|
63,119
|
|
||
Less: Weighted-average shares of Class A common stock subject to time-based vesting
|
—
|
|
|
(279
|
)
|
||
Weighted-average shares of Class A common stock outstanding, basic and diluted
|
94,515
|
|
|
62,840
|
|
||
Net loss per share:
|
|
|
|
||||
Net loss per share, basic and diluted
|
$
|
(1.19
|
)
|
|
$
|
(0.72
|
)
|
|
As of December 31, 2019
|
|
|
|
|
LLC Units held by Continuing Members
|
37,481
|
|
Stock options
|
4,362
|
|
RSUs of Pluralsight, Inc.
|
7,672
|
|
Restricted share units of Pluralsight Holdings
|
1,313
|
|
Purchase rights committed under the ESPP
|
1,340
|
|
Total
|
52,168
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30,
2018 |
|
Dec. 31,
2018 |
|
March 31, 2019 (1)
|
|
June 30, 2019 (1)
|
|
Sept. 30, 2019 (1)
|
|
Dec. 31, 2019
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
Revenue
|
$
|
49,644
|
|
|
$
|
53,572
|
|
|
$
|
61,553
|
|
|
$
|
67,260
|
|
|
$
|
69,617
|
|
|
$
|
75,862
|
|
|
$
|
82,620
|
|
|
$
|
88,811
|
|
Cost of revenue
|
14,886
|
|
|
15,933
|
|
|
15,347
|
|
|
16,449
|
|
|
16,712
|
|
|
17,803
|
|
|
17,829
|
|
|
19,009
|
|
||||||||
Gross profit
|
34,758
|
|
|
37,639
|
|
|
46,206
|
|
|
50,811
|
|
|
52,905
|
|
|
58,059
|
|
|
64,791
|
|
|
69,802
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
|
29,467
|
|
|
41,857
|
|
|
42,632
|
|
|
44,453
|
|
|
44,171
|
|
|
50,046
|
|
|
55,797
|
|
|
57,071
|
|
||||||||
Technology and content
|
13,325
|
|
|
18,396
|
|
|
18,137
|
|
|
19,431
|
|
|
20,271
|
|
|
24,819
|
|
|
27,847
|
|
|
29,965
|
|
||||||||
General and administrative
|
11,292
|
|
|
26,002
|
|
|
19,818
|
|
|
21,306
|
|
|
22,191
|
|
|
20,575
|
|
|
20,844
|
|
|
21,950
|
|
||||||||
Total operating expenses
|
54,084
|
|
|
86,255
|
|
|
80,587
|
|
|
85,190
|
|
|
86,633
|
|
|
95,440
|
|
|
104,488
|
|
|
108,986
|
|
||||||||
Loss from operations
|
(19,326
|
)
|
|
(48,616
|
)
|
|
(34,381
|
)
|
|
(34,379
|
)
|
|
(33,728
|
)
|
|
(37,381
|
)
|
|
(39,697
|
)
|
|
(39,184
|
)
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest expense
|
(3,710
|
)
|
|
(2,424
|
)
|
|
(342
|
)
|
|
(350
|
)
|
|
(1,678
|
)
|
|
(7,346
|
)
|
|
(7,412
|
)
|
|
(7,129
|
)
|
||||||||
Loss on debt extinguishment
|
—
|
|
|
(4,085
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(950
|
)
|
|
—
|
|
||||||||
Other income (expense), net
|
(13
|
)
|
|
48
|
|
|
654
|
|
|
815
|
|
|
1,676
|
|
|
4,106
|
|
|
3,001
|
|
|
2,966
|
|
||||||||
Loss before income taxes
|
(23,049
|
)
|
|
(55,077
|
)
|
|
(34,069
|
)
|
|
(33,914
|
)
|
|
(33,730
|
)
|
|
(40,621
|
)
|
|
(45,058
|
)
|
|
(43,347
|
)
|
||||||||
Provision for income taxes
|
(109
|
)
|
|
(143
|
)
|
|
(254
|
)
|
|
(158
|
)
|
|
(154
|
)
|
|
(143
|
)
|
|
(404
|
)
|
|
(122
|
)
|
||||||||
Net loss
|
$
|
(23,158
|
)
|
|
$
|
(55,220
|
)
|
|
$
|
(34,323
|
)
|
|
$
|
(34,072
|
)
|
|
$
|
(33,884
|
)
|
|
$
|
(40,764
|
)
|
|
$
|
(45,462
|
)
|
|
$
|
(43,469
|
)
|
Net loss per share, basic and diluted(2)
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.31
|
)
|
(1)
|
The amounts for the three months ended March 31, 2019, June 30, 2019 and September 30, 2019 have been adjusted from previously reported amounts as a result of the adoption of ASC 842. Refer to the tables below for a reconciliation of the previously reported amounts to the adjusted amounts.
|
(2)
|
Represents net loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the portion of the periods following the Reorganization Transactions and Pluralsight, Inc.'s IPO described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.
|
|
Three Months Ended March 31, 2019
|
||||||||||
|
As Previously Reported
|
|
ASC 842 Adjustments
|
|
As Adjusted
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands, except per share amounts)
|
||||||||||
Revenue
|
$
|
69,617
|
|
|
$
|
—
|
|
|
$
|
69,617
|
|
Cost of revenue
|
16,710
|
|
|
2
|
|
|
16,712
|
|
|||
Gross profit
|
52,907
|
|
|
(2
|
)
|
|
52,905
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
44,131
|
|
|
40
|
|
|
44,171
|
|
|||
Technology and content
|
20,244
|
|
|
27
|
|
|
20,271
|
|
|||
General and administrative
|
22,173
|
|
|
18
|
|
|
22,191
|
|
|||
Total operating expenses
|
86,548
|
|
|
85
|
|
|
86,633
|
|
|||
Loss from operations
|
(33,641
|
)
|
|
(87
|
)
|
|
(33,728
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(2,024
|
)
|
|
346
|
|
|
(1,678
|
)
|
|||
Loss on debt extinguishment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other income (expense), net
|
1,614
|
|
|
62
|
|
|
1,676
|
|
|||
Loss before income taxes
|
(34,051
|
)
|
|
321
|
|
|
(33,730
|
)
|
|||
Provision for income taxes
|
(154
|
)
|
|
—
|
|
|
(154
|
)
|
|||
Net loss
|
$
|
(34,205
|
)
|
|
$
|
321
|
|
|
$
|
(33,884
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.25
|
)
|
|
$
|
—
|
|
|
$
|
(0.25
|
)
|
|
Three Months Ended June 30, 2019
|
||||||||||
|
As Previously Reported
|
|
ASC 842 Adjustments
|
|
As Adjusted
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands, except per share amounts)
|
||||||||||
Revenue
|
$
|
75,862
|
|
|
$
|
—
|
|
|
$
|
75,862
|
|
Cost of revenue
|
17,801
|
|
|
2
|
|
|
17,803
|
|
|||
Gross profit
|
58,061
|
|
|
(2
|
)
|
|
58,059
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
49,994
|
|
|
52
|
|
|
50,046
|
|
|||
Technology and content
|
24,786
|
|
|
33
|
|
|
24,819
|
|
|||
General and administrative
|
20,601
|
|
|
(26
|
)
|
|
20,575
|
|
|||
Total operating expenses
|
95,381
|
|
|
59
|
|
|
95,440
|
|
|||
Loss from operations
|
(37,320
|
)
|
|
(61
|
)
|
|
(37,381
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(7,697
|
)
|
|
351
|
|
|
(7,346
|
)
|
|||
Loss on debt extinguishment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other income (expense), net
|
4,040
|
|
|
66
|
|
|
4,106
|
|
|||
Loss before income taxes
|
(40,977
|
)
|
|
356
|
|
|
(40,621
|
)
|
|||
Provision for income taxes
|
(143
|
)
|
|
—
|
|
|
(143
|
)
|
|||
Net loss
|
$
|
(41,120
|
)
|
|
$
|
356
|
|
|
$
|
(40,764
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.30
|
)
|
|
$
|
—
|
|
|
$
|
(0.30
|
)
|
|
Three Months Ended September 30, 2019
|
||||||||||
|
As Previously Reported
|
|
ASC 842 Adjustments
|
|
As Adjusted
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands, except per share amounts)
|
||||||||||
Revenue
|
$
|
82,620
|
|
|
$
|
—
|
|
|
$
|
82,620
|
|
Cost of revenue
|
17,825
|
|
|
4
|
|
|
17,829
|
|
|||
Gross profit
|
64,795
|
|
|
(4
|
)
|
|
64,791
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
55,727
|
|
|
70
|
|
|
55,797
|
|
|||
Technology and content
|
27,799
|
|
|
48
|
|
|
27,847
|
|
|||
General and administrative
|
20,817
|
|
|
27
|
|
|
20,844
|
|
|||
Total operating expenses
|
104,343
|
|
|
145
|
|
|
104,488
|
|
|||
Loss from operations
|
(39,548
|
)
|
|
(149
|
)
|
|
(39,697
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(7,778
|
)
|
|
366
|
|
|
(7,412
|
)
|
|||
Loss on debt extinguishment
|
(950
|
)
|
|
—
|
|
|
(950
|
)
|
|||
Other income (expense), net
|
2,878
|
|
|
123
|
|
|
3,001
|
|
|||
Loss before income taxes
|
(45,398
|
)
|
|
340
|
|
|
(45,058
|
)
|
|||
Provision for income taxes
|
(404
|
)
|
|
—
|
|
|
(404
|
)
|
|||
Net loss
|
$
|
(45,802
|
)
|
|
$
|
340
|
|
|
$
|
(45,462
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.32
|
)
|
|
$
|
—
|
|
|
$
|
(0.32
|
)
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
|
Exhibit Title
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
|
|
|
|
|
|
|
|
3.1
|
|
S-1
|
333-230057
|
3.3
|
03/04/19
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
S-1
|
333-230057
|
3.1
|
03/04/19
|
|
|
|
|
|
|
|
|
|
|
3.3
|
|
10-Q
|
001-38498
|
3.2
|
08/01/18
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
8-K
|
001-38498
|
4.1
|
03/11/19
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
8-K
|
001-38498
|
4.1
|
3/11/19
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
S-1/A
|
333-224301
|
4.1
|
05/07/18
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.1
|
|
S-1/A
|
333-224301
|
10.1
|
05/07/18
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
10-Q
|
001-38498
|
10.1
|
08/01/18
|
|
|
|
|
|
|
|
|
|
|
10.3+
|
|
S-1
|
333-224301
|
10.3
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.4+
|
|
10-Q
|
001-38498
|
10.5
|
07/31/19
|
|
|
|
|
|
|
|
|
|
|
10.5+
|
|
S-1
|
333-224301
|
10.4
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.6+
|
|
10-Q
|
001-38498
|
10.6
|
07/31/19
|
|
|
|
|
|
|
|
|
|
|
10.7+
|
|
S-1/A
|
333-224301
|
10.5
|
05/07/18
|
|
|
|
|
|
|
|
|
|
|
10.8+
|
|
S-1/A
|
333-224301
|
10.6
|
05/07/18
|
|
|
|
|
|
|
|
|
|
|
10.9+
|
|
S-1
|
333-224301
|
10.7
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.10+
|
|
10-K
|
001-38498
|
10.8
|
02/21/19
|
|
|
|
|
|
|
|
|
|
|
10.11+
|
|
10-K
|
001-38498
|
10.9
|
02/21/19
|
|
|
|
|
|
|
|
|
|
|
10.12+
|
|
10-K
|
001-38498
|
10.10
|
02/21/19
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
|
Exhibit Title
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
|
|
|
|
|
|
|
|
10.13+
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.14+
|
|
S-1
|
333-224301
|
10.11
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.15+
|
|
S-1
|
333-224301
|
10.12
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.16+
|
|
S-1
|
333-224301
|
10.13
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.17+
|
|
S-1
|
333-224301
|
10.14
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.18+
|
|
S-1
|
333-224301
|
10.15
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.19+
|
|
S-1
|
333-224301
|
10.21
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.20+
|
|
S-1
|
333-224301
|
10.22
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.21+
|
|
10-K
|
001-38498
|
10.18
|
02/21/19
|
|
|
|
|
|
|
|
|
|
|
10.22+
|
|
10-K
|
001-38498
|
10.19
|
02/21/19
|
|
|
|
|
|
|
|
|
|
|
10.23
|
|
S-1
|
333-224301
|
10.16
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.24
|
|
S-1
|
333-224301
|
10.17
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.25
|
|
S-1
|
333-224301
|
10.18
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.26
|
|
S-1
|
333-224301
|
10.19
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
10.27
|
|
10-Q
|
001-38498
|
10.1
|
10/24/18
|
|
|
|
|
|
|
|
|
|
|
10.28
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.29
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.30+
|
|
S-1
|
333-224301
|
10.23
|
04/16/18
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
|
Exhibit Title
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
10.31+
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.32+
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.33+
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.34
|
|
S-1/A
|
333-224301
|
10.24
|
05/07/18
|
|
|
|
|
|
|
|
|
|
|
10.35+
|
|
S-1/A
|
333-224301
|
10.26
|
05/15/18
|
|
|
|
|
|
|
|
|
|
|
10.36+
|
|
10-Q
|
001-38498
|
10.7
|
07/31/19
|
|
|
|
|
|
|
|
|
|
|
10.37
|
|
10-Q
|
001-38498
|
10.2
|
08/01/18
|
|
|
|
|
|
|
|
|
|
|
10.38
|
|
10-Q
|
001-38498
|
10.3
|
08/01/18
|
|
|
|
|
|
|
|
|
|
|
10.39+
|
|
S-1/A
|
333-224301
|
10.29
|
05/07/18
|
|
|
|
|
|
|
|
|
|
|
10.40+
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
10.41
|
|
8-K
|
001-38498
|
10.1
|
03/07/19
|
|
|
|
|
|
|
|
|
|
|
10.42
|
|
10-Q
|
001-38498
|
10.2
|
05/01/19
|
|
|
|
|
|
|
|
|
|
|
10.43
|
|
8-K
|
001-38498
|
2.1
|
05/01/19
|
|
|
|
|
|
|
|
|
|
|
10.44
|
|
10-Q
|
001-38498
|
10.1
|
10/30/19
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
23.1
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
23.2
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
24.1
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
31.1
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
|
Exhibit Title
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
31.2
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
32.1*
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
32.2*
|
|
-
|
-
|
-
|
-
|
X
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
-
|
-
|
-
|
-
|
X
|
+
|
Indicates a management contract or compensatory plan.
|
*
|
The certifications attached as Exhibit 32.1 and 32.2 accompanying this Annual Report on Form 10-K, are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of Pluralsight, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
|
|
PLURALSIGHT, INC.
|
|
|
|
|
|
By:
|
/s/ Aaron Skonnard
|
March 2, 2020
|
|
Aaron Skonnard
Chief Executive Officer
|
|
PLURALSIGHT, INC.
|
|
|
|
|
|
By:
|
/s/ James Budge
|
March 2, 2020
|
|
James Budge
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Aaron Skonnard
|
|
Chief Executive Officer and Director
|
|
March 2, 2020
|
Aaron Skonnard
|
|
(Principal Executive Officer)
|
|
|
|
|
|
||
/s/ James Budge
|
|
Chief Financial Officer
|
|
March 2, 2020
|
James Budge
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
||
/s/ Gary Crittenden
|
|
Director
|
|
March 2, 2020
|
Gary Crittenden
|
|
|
|
|
|
|
|
||
/s/ Scott Dorsey
|
|
Director
|
|
March 2, 2020
|
Scott Dorsey
|
|
|
|
|
|
|
|
||
/s/ Arne Duncan
|
|
Director
|
|
March 2, 2020
|
Arne Duncan
|
|
|
|
|
|
|
|
||
/s/ Ryan Hinkle
|
|
Director
|
|
March 2, 2020
|
Ryan Hinkle
|
|
|
|
|
|
|
|
||
/s/ Leah Johnson
|
|
Director
|
|
March 2, 2020
|
Leah Johnson
|
|
|
|
|
|
|
|
|
|
/s/ Timothy Maudlin
|
|
Director
|
|
March 2, 2020
|
Timothy Maudlin
|
|
|
|
|
|
|
|
||
/s/ Frederick Onion
|
|
Director
|
|
March 2, 2020
|
Frederick Onion
|
|
|
|
|
|
|
|
||
/s/ Brad Rencher
|
|
Director
|
|
March 2, 2020
|
Brad Rencher
|
|
|
|
|
|
|
|
||
/s/ Bonita Stewart
|
|
Director
|
|
March 2, 2020
|
Bonita Stewart
|
|
|
|
|
|
|
|
|
|
/s/ Karenann Terrell
|
|
Director
|
|
March 2, 2020
|
Karenann Terrell
|
|
|
|
|
3.
|
Duties.
|
4.
|
Compensation and Related Matters.
|
8.
|
Certain Defined Terms. For purposes of this Agreement:
|
9.
|
Effect of Termination.
|
10.
|
Restrictive Covenants.
|
15.
|
Miscellaneous.
|
THE COMPANY:
|
|
|
|
PLURALSIGHT, LLC
|
|
|
|
By:
|
/s/ Aaron Skonnard
|
Its:
|
Chief Executive Officer
|
|
|
EXECUTIVE:
|
|
|
|
/s/ Ross Meyercord
|
|
Ross Meyercord
|
Periods
|
Sublease Basic Monthly Rent
|
Annual Cost Per
Rentable Square Foot
|
|
|
|
October 1, 2017 through
|
$-0- per month
|
$-0-
|
October 31, 2017, inclusive
|
|
|
|
|
|
November 1, 2017 through
|
$73,121.08 per month
|
$29.00
|
January 31, 2018
|
|
|
|
|
|
February 1, 2018 through
|
$73,121.08 per month
|
$
|
February 28, 2018 inclusive
|
|
|
|
|
|
March 1, 2018 through
|
$107,606.92 per month
|
$29.00
|
September 30, 2018, inclusive
|
|
|
|
|
|
October 1, 2018 through
|
$110,315.64 per month
|
$29.73
|
September 30, 2019, inclusive
|
|
|
|
|
|
October 1, 2019 through
|
$113,061.47 per month
|
$30.47
|
September 30, 2020, inclusive
|
|
|
SUBLANDLORD:
|
|
SUBTENANT:
|
||
|
|
|
|
|
LUCID SOFTWARE INC.,
|
|
PLURALSIGHT, LLC,
|
||
a Delaware corporation
|
|
a Nevada limited liability company
|
||
|
|
|
|
|
By:
|
/s/ Karl Sun
|
|
By:
|
/s/ James Budge
|
Name:
|
Karl Sun
|
|
Name:
|
James Budge
|
Title:
|
CEO
|
|
Title:
|
Chief Financial Officer
|
2.
|
Monthly Basic Rent.
|
Months
|
Annual Basic Rent per Rentable square foot of
the Premises
|
Monthlv Installments
|
09/01/19 -08/31/20
|
$30.95
|
$74,718.46
|
LANDLORD:
|
|
TENANT:
|
||
|
|
|
|
|
Station Park CenterCal, LLC,
|
|
Pluralsight, LLC,
|
||
a Delaware limited liability company
|
|
a Nevada limited liability company
|
||
|
|
|
|
|
By:
|
CenterCal, LLC,
|
|
By:
|
/s/ James Budge
|
|
a Delaware limited liability company
|
Its:
|
Chief Financial Officer
|
|
Its:
|
Sole Member
|
|
|
|
|
|
|
|
|
By:
|
CenterCal Associates, LLC,
|
|
|
|
|
a Delaware limited liability company
|
|
|
|
Its:
|
Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jean Paul Wardy
|
|
|
|
Its:
|
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
CASH COMPENSATION
|
Lead Independent Director:
|
$17,000
|
Chair of Audit Committee:
|
$20,000
|
Member of Audit Committee:
|
$9,500
|
Chair of Compensation Committee:
|
$14,000
|
Member of Compensation Committee:
|
$5,000
|
Chair of Nominating and Governance Committee:
|
$7,500
|
Member of Nominating and Governance Committee:
|
$3,500
|
2.
|
ELECTIONS TO RECEIVE RESTRICTED STOCK UNITS IN LIEU OF RETAINER CASH PAYMENTS
|
a.
|
Initial Election. Each individual who first becomes an Outside Director (the date such individual first becomes an Outside Director, the "Initial Director Date") may make a Retainer Award Election with respect to Annual Retainer Cash Payments payable to such Outside Director in the following calendar year (the "Initial Election"). The Initial Election must be submitted to the Company’s Chief Legal Officer within the Company’s next open trading window following the Initial Director Date that occurs in the same calendar year (the last day of such trading window, the "Initial Election Deadline"), and, except as provided in Section 2(c) below, the Initial Election shall become irrevocable effective as of the Initial Election Deadline, provided that if no open trading window occurs in the same calendar year following the Initial Director Date, such Outside Director will not be eligible to make an Initial Election in such calendar year.
|
b.
|
Annual Election. Following the calendar year containing the Initial Director Date, each Outside Director may make a Retainer Award Election with respect to Annual Retainer Cash Payments payable to such Outside Director in the following calendar year (the "Annual Election"). The Annual Election must be submitted to the Company’s Chief Legal Officer within the Company’s fourth quarter open trading window (the "Fourth Quarter Trading
|
c.
|
Revocation. Following the calendar year containing the Initial Director Date, an Outside Director may revoke his or her Retainer Award Election during a Fourth Quarter Trading Window with respect to Annual Retainer Cash Payments related to future calendar years. If a calendar year does not contain a Fourth Quarter Trading Window, Outside Directors will not be eligible to revoke a Retainer Award Election in such calendar year.
|
d.
|
No Adjustment to Retainer Awards. After the Retainer Award is granted, it will not be adjusted to reflect changes in the value of an Outside Director’s corresponding Annual Retainer Cash Payments for the applicable calendar year in which the Retainer Award is granted. Increases in the value of an Outside Director’s corresponding Annual Retainer Cash Payments will be paid to the Outside Director in cash pursuant to Section 1 of this Policy. Decreases in the value of an Outside Director’s corresponding Annual Retainer Cash Payments will not have any effect on previously granted Retainer Awards.
|
3.
|
EQUITY COMPENSATION
|
4.
|
CHANGE IN CONTROL
|
5.
|
ANNUAL COMPENSATION LIMIT
|
6.
|
TRAVEL EXPENSES
|
7.
|
ADDITIONAL PROVISIONS
|
8.
|
ADJUSTMENTS
|
9.
|
SECTION 409A
|
10.
|
REVISIONS
|
Name of Subsidiary
|
Jurisdiction of Organization
|
AFK, LLC
|
Utah
|
Code School Acquisition Sub, LLC
|
Delaware
|
Pluralsight Canada ULC
|
Canada
|
Pluralsight Creative, LLC
|
Oklahoma
|
Pluralsight Europe Ltd.
|
United Kingdom
|
Pluralsight Germany GmbH
|
Germany
|
Pluralsight Holdings, LLC
|
Delaware
|
Pluralsight India Private Limited
|
India
|
Pluralsight International, LLC
|
Delaware
|
Pluralsight Ireland Ltd.
|
Ireland
|
Pluralsight Management, Inc.
|
Delaware
|
Pluralsight Netherlands B.V.
|
Netherlands
|
Pluralsight Pty Ltd.
|
Australia
|
Pluralsight Singapore Pte. Ltd.
|
Singapore
|
Pluralsight Sweden AB
|
Sweden
|
Pluralsight, LLC
|
Nevada
|
Pluralsight Technologies Inc.
|
Delaware
|
Pluralsight New Zealand Limited
|
New Zealand
|
GitPrime, Inc.
|
Delaware
|
Pluralsight Europe Ltd.
|
United Kingdom
|
Pluralsight Germany GmbH
|
Germany
|
Pluralsight Holdings, LLC
|
Delaware
|
1.
|
Registration Statement (Form S-8 No. 333-224992) pertaining to the 2018 Equity Incentive Plan and the 2018 Employee Stock Purchase Plan of Pluralsight, Inc. and the 2017 Equity Incentive Plan of Pluralsight Holdings, LLC
|
2.
|
Registration Statement (Form S-8 No. 333-230038) pertaining to the 2018 Equity Incentive Plan and the 2018 Employee Stock Purchase Plan of Pluralsight, Inc.
|
3.
|
Registration Statement (Form S-8 No. 333-231339) pertaining to the 2015 Equity Incentive Plan and the 2018 Equity Incentive Plan of GitPrime, Inc.;
|
1.
|
I have reviewed this Annual Report on Form 10-K/A of Pluralsight, 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 control over financial reporting.
|
Date: March 2, 2020
|
|
|
|
|
/s/ Aaron Skonnard
|
|
|
|
|
|
|
Aaron Skonnard
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Annual Report on Form 10-K/A of Pluralsight, 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 control over financial reporting.
|
Date: March 2, 2020
|
|
|
|
|
/s/ James Budge
|
|
|
|
|
|
|
James Budge
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
1.
|
the Annual Report on Form 10-K/A of the Company for the fiscal year ended December 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 2, 2020
|
|
|
|
|
/s/ Aaron Skonnard
|
|
|
|
|
|
|
Aaron Skonnard
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
1.
|
the Annual Report on Form 10-K/A of the Company for the fiscal year ended December 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 2, 2020
|
|
|
|
|
/s/ James Budge
|
|
|
|
|
|
|
James Budge
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|