Balance Sheet Information

9 Months Ended

Sep. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Property and Equipment, Net

Property and equipment, net consisted of the following:


	As of September 30,		As of December 31,
	2023		2022
	(in thousands)
Computer and networking equipment	$	215,330	$	225,009
Leasehold improvements	8,565		8,374
Furniture and fixtures	2,055		1,792
Office equipment	1,228		1,176
Internal-use software	88,658		66,488
Property and equipment, gross	$	315,836	$	302,839
Accumulated depreciation and amortization	(143,922)		(122,461)
Property and equipment, net	$	171,914	$	180,378

During the three months ended September 30, 2023, the Company recognized an impairment charge of $4.3 million, of which $3.0 million related to property and equipment, net and $1.3 million related to advance payments for the purchase of property and equipment. The write-off was primarily related to excess computer and networking equipment including software the Company does not expect to use and therefore abandoned. Impairment charges are included within impairment expense in the condensed consolidated statements of operations. There were no impairments during the three and nine months ended September 30, 2022.

Depreciation on property and equipment for the three months ended September 30, 2023 and 2022 was approximately $13.1 million and $10.7 million, respectively. Included in these amounts was amortization expense for capitalized internal-use software costs of approximately $3.8 million and $2.4 million for the three months ended September 30, 2023 and 2022, respectively.

Depreciation on property and equipment for the nine months ended September 30, 2023 and 2022 was approximately $38.0 million and $31.2 million, respectively. Included in these amounts was amortization expense for capitalized internal-use software costs of approximately $9.9 million and $6.0 million for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and December 31, 2022, the unamortized balance of capitalized internal-use software costs on the Company’s condensed consolidated balance sheets was approximately $57.7 million and $45.5 million, respectively.

The Company leases certain networking equipment from various third parties through equipment finance leases. The Company’s networking equipment assets as of September 30, 2023 and December 31, 2022, included a total of $74.7 million and $77.3 million acquired under finance lease agreements, respectively. These leases are capitalized in property and equipment, and the related amortization of assets under finance leases is included in depreciation and amortization expense. The accumulated depreciation of the associated networking equipment assets under finance leases totaled $36.4 million and $28.1 million as of September 30, 2023 and December 31, 2022, respectively.

Other Assets

Other assets consisted of the following:


	As of September 30,		As of December 31,
	2023		2022
	(in thousands)
Deferred contract costs, net	$	60,634	$	50,523
Advance payment for purchase of property and equipment	31,516		37,013
Other assets	2,203		5,086
Total other assets	$	94,353	$	92,622

Accrued Expenses

Accrued expenses consisted of the following:


	As of September 30,		As of December 31,
	2023		2022
	(in thousands)
Accrued compensation and related benefits	$	17,123	$	20,204
Accrued bonus	14,909		15,818
Accrued colocation and bandwidth costs	16,081		10,448
Other tax liabilities	4,811		8,698
Other accrued liabilities	3,671		5,993
Total accrued expenses	$	56,595	$	61,161

Other Current Liabilities

Other current liabilities consisted of the following:


	As of September 30,		As of December 31,
	2023		2022
	(in thousands)
Deferred revenue	$	33,253	$	28,047
Accrued computer and networking equipment	1,915		1,467
Holdback payable	3,771		4,013
Other current liabilities	1,295		867
Total other current liabilities	$	40,234	$	34,394

Accumulated Other Comprehensive Income (Loss)

For the three and nine months ended September 30, 2023 and 2022, components of accumulated other comprehensive (loss) income, net of taxes, were as follows (in thousands):


	Foreign Currency Translation		Available-for-sale investments		Accumulated Other Comprehensive Income (Loss)
Balance, June 30, 2023	$	(19)	$	(3,133)	$	(3,152)
Other comprehensive income	(8)		1,226		1,218
Balance, September 30, 2023	$	(27)	$	(1,907)	$	(1,934)


	Foreign Currency Translation		Available-for-sale investments		Accumulated Other Comprehensive Income (Loss)
Balance, June 30, 2022	$	(555)	$	(11,987)	$	(12,542)
Other comprehensive income (loss)	(22)		(114)		(136)
Balance, September 30, 2022	$	(577)	$	(12,101)	$	(12,678)


	Foreign Currency Translation		Available-for-sale investments		Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2022	$	(577)	$	(8,709)	$	(9,286)
Other comprehensive income	550		6,802		7,352
Balance, September 30, 2023	$	(27)	$	(1,907)	$	(1,934)


	Foreign Currency Translation		Available-for-sale investments		Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2021	$	(385)	$	(2,242)	$	(2,627)
Other comprehensive income loss	(192)		(9,859)		(10,051)
Balance, September 30, 2022	$	(577)	$	(12,101)	$	(12,678)

There were no material reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2023 and 2022. Additionally, there was no material tax impact on the amounts presented.