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Financial Statement Components | 9 Months Ended
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Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Financial Statement Components | Note 3. Financial Statement Components Cash and cash equivalents consisted of the following (in thousands):
| September 30, 2022 |  | December 31, 2021
Cash | $ | 90,818 |  |  | $ | 91,499 |
Money market funds | 214,565 |  |  | 175,663 |
Total cash and cash equivalents | $ | 305,383 |  |  | $ | 267,162 |
As of September 30, 2022, $5.5 million in the cash balance above represents restricted cash, which is held in the form of a bank deposit for issuance of a foreign bank guarantee. Accounts receivable, net consisted of the following (in thousands):
| September 30, 2022 |  | December 31, 2021
Accounts receivable | $ | 200,869 |  |  | $ | 193,192 |
Unbilled accounts receivable | 74,104 |  |  | 47,676 |
Allowance for doubtful accounts | (8,987) |  |  | (8,026) |
Accounts receivable, net | $ | 265,986 |  |  | $ | 232,842 |
Prepaid expenses and other current assets consisted of the following (in thousands):
| September 30, 2022 |  | December 31, 2021
Prepaid expenses | $ | 26,849 |  |  | $ | 26,254 |
Inventory | 1,256 |  |  | 5,655 |
Other current assets | 23,834 |  |  | 16,256 |
Total prepaid expenses and other current assets | $ | 51,939 |  |  | $ | 48,165 |
Property and equipment, net consisted of the following (in thousands):
| September 30, 2022 |  | December 31, 2021
Computer hardware and software | $ | 214,446 |  |  | $ | 197,395 |
Internal-use software development costs | 185,622 |  |  | 140,424 |
Furniture and fixtures | 8,768 |  |  | 8,660 |
Leasehold improvements | 13,592 |  |  | 13,533 |
Total property and equipment, gross | 422,428 |  |  | 360,012 |
Less: accumulated depreciation and amortization | (240,234) |  |  | (193,102) |
Property and equipment, net | $ | 182,194 |  |  | $ | 166,910 |
Total depreciation and amortization expense related to property and equipment was $18.3 million and $15.5 million for the three months ended September 30, 2022 and 2021, respectively, and $52.8 million and $42.7 million for the nine months ended September 30, 2022 and 2021, respectively. The carrying value of goodwill is as follows (in thousands):
Balance at December 31, 2021 | $ | 55,490 |
Foreign currency translation adjustments | (2,918) |
Balance at September 30, 2022 | $ | 52,572 |
The carrying values of intangible assets are as follows (in thousands):
|  |  | September 30, 2022 |  | December 31, 2021
| Weighted-Average Remaining Useful Life |  | Cost |  | Accumulated Amortization |  | Acquired Intangibles, Net |  | Cost |  | Accumulated Amortization |  | Acquired Intangibles, Net
Customer relationships | 1.0 year |  | $ | 20,126 |  |  | $ | 17,602 |  |  | $ | 2,524 |  |  | $ | 21,333 |  |  | $ | 15,725 |  |  | $ | 5,608 |
Developed technology | 4.0 years |  | 814,380 |  |  | 232,163 |  |  | 582,217 |  |  | 814,873 |  |  | 103,875 |  |  | 710,998 |
Total acquired intangible assets |  |  | $ | 834,506 |  |  | $ | 249,765 |  |  | $ | 584,741 |  |  | $ | 836,206 |  |  | $ | 119,600 |  |  | $ | 716,606 |
Amortization expense from acquired intangible assets for the three months ended September 30, 2022 and 2021 was $43.7 million and $12.0 million, respectively, and $131.4 million and $35.5 million for the nine months ended September 30, 2022 and 2021, respectively. Amortization of developed technology is included in cost of revenues and amortization of customer relationships is included in sales and marketing expenses in the Condensed Consolidated Statements of Operations. Estimated amortization expense for acquired intangible assets for the following fiscal years is as follows (in thousands):
2022 (remaining) | $ | 41,198 |
2023 | 150,457 |
2024 | 147,099 |
2025 | 132,930 |
2026 onwards | 113,057 |
Total estimated amortization expense | $ | 584,741 |
Accrued liabilities consisted of the following (in thousands):
| September 30, 2022 |  | December 31, 2021
Accrued compensation and benefits | $ | 45,286 |  |  | $ | 48,911 |
Accrued sales, use, and telecom related taxes | 37,557 |  |  | 30,463 |
Accrued marketing | 68,278 |  |  | 52,547 |
Operating lease liabilities, short-term | 16,685 |  |  | 18,686 |
Other accrued expenses | 173,450 |  |  | 129,191 |
Total accrued liabilities | $ | 341,256 |  |  | $ | 279,798 |
Deferred and Prepaid Sales Commission Costs Amortization expense for the deferred and prepaid sales commission costs was $31.5 million and $19.9 million for the three months ended September 30, 2022 and 2021, respectively, and $81.5 million and $53.3 million for the nine months ended September 30, 2022 and 2021, respectively. There was no impairment loss in relation to the deferred commissions costs capitalized for the periods presented. In October 2019, the Company entered into certain agreements for a strategic partnership with Avaya Holdings Corp. (“Avaya”) and its subsidiaries, including Avaya Inc. In connection with the strategic partnership, the Company prepaid Avaya in the Company's class A Common Stock predominantly for future sales commission to be earned for each qualified unit of Avaya Cloud Office by RingCentral (“ACO”) sold during the term of the partnership. The unutilized prepaid sales commission is refundable and payable to the Company at the end of the contractual term. Avaya recently disclosed in its earnings release, among other things, a substantial doubt about its ability to continue as a “going concern.” While Avaya provided preliminary third quarter financial information and related disclosures, it also indicated that it would be unable to timely file its Form 10-Q for the quarter ended June 30, 2022. Avaya has not made any additional financial information publicly available with respect to its third quarter or its financial results for its fiscal year ended September 30, 2022. The Company evaluates the recoverability of its deferred and prepaid sales commission balance whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Avaya continues to sell the ACO product and earn sales commissions, which the Company is applying against the prepaid sales commission balance, but as a result of the uncertainty regarding Avaya’s financial condition, the Company performed a recoverability assessment based on the facts and circumstances known to date. While the Company lacks Avaya's financial information, in light of Avaya's public disclosures, the Company has recorded a non-cash asset write-down charge of $124.9 million, out of which $21.7 million of this balance is accrued interest and is recorded in other expenses in the Condensed Consolidated Statement of Operations. As of September 30, 2022, the remaining prepaid sales commission balance was $162.2 million. The Company will continue to evaluate the recoverability of the assets on an ongoing basis and if the evaluation indicates that the carrying amount of the assets is not recoverable, the Company may incur significant incremental write down charges in the future.

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- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -URI https://asc.fasb.org/topic&trid=2122208 + Details
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