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Financial Statement Components
 9 Months Ended
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, 2022December 31, 2021
Cash$90,818 $91,499 
Money market funds214,565 175,663 
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, 2022December 31, 2021
Accounts receivable$200,869 $193,192 
Unbilled accounts receivable74,104 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, 2022December 31, 2021
Prepaid expenses$26,849 $26,254 
Inventory1,256 5,655 
Other current assets23,834 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, 2022December 31, 2021
Computer hardware and software$214,446 $197,395 
Internal-use software development costs185,622 140,424 
Furniture and fixtures8,768 8,660 
Leasehold improvements13,592 13,533 
Total property and equipment, gross422,428 360,012 
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, 2022December 31, 2021
Weighted-Average Remaining Useful LifeCostAccumulated
Amortization		Acquired
Intangibles, Net		CostAccumulated
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 
2023150,457 
2024147,099 
2025132,930 
2026 onwards113,057 
Total estimated amortization expense$584,741 
Accrued liabilities consisted of the following (in thousands):
September 30, 2022December 31, 2021
Accrued compensation and benefits$45,286 $48,911 
Accrued sales, use, and telecom related taxes37,557 30,463 
Accrued marketing68,278 52,547 
Operating lease liabilities, short-term16,685 18,686 
Other accrued expenses173,450 129,191 
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.