XML 29 R18.htm IDEA: XBRL DOCUMENT
v3.21.1

Debt | 3 Months Ended
--- | ---
Mar. 31, 2021
Debt Disclosure [Abstract] |
Debt | Debt Convertible Senior Notes In August 2018, we issued $230.0 million aggregate principal amount of convertible senior notes due August 1, 2023 (the 2023 Notes), in May 2020, we issued $230.0 million aggregate principal amount of convertible senior notes due May 1, 2025 (the 2025 Notes) and in March 2021, we issued $600.0 million aggregate principal amount of convertible senior notes due March 15, 2027 (the 2027 Notes) (collectively, the Notes). Further details of the Notes are as follows:
Issuance |  | Maturity Date |  | Interest Rate |  | First Interest Payment Date |  | Effective Interest Rate |  | Semi-Annual Interest Payment Dates |  | Initial Conversion Rate per $1,000 Principal |  | Initial Conversion Price |  | Number of Shares (in millions)
2023 Notes |  | August 1, 2023 |  | 1.25 | % |  | February 1, 2019 |  | 1.86 | % |  | February 1 and August 1 |  | 24.0460 |  | $ | 41.59 |  |  | 1.1 |
2025 Notes |  | May 1, 2025 |  | 2.25 | % |  | November 1, 2020 |  | 2.88 | % |  | May 1 and November 1 |  | 16.3875 |  | $ | 61.02 |  |  | 3.8 |
2027 Notes |  | March 15, 2027 |  | 0.25 | % |  | September 15, 2021 |  | 0.67 | % |  | March 15 and September 15 |  | 9.6734 |  | $ | 103.38 |  |  | 5.8 |
The 2023 Notes, the 2025 Notes and the 2027 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between the Company, as issuer, and U.S. Bank National Association, as trustee (the Indentures). The total net proceeds from the 2023 Notes, the 2025 Notes and the 2027 Notes offerings, after deducting initial purchase discounts and estimated debt issuance costs, were $223.1 million, $222.8 million and $585.0 million, respectively. Terms of the Notes The holders of the Notes may convert their respective Notes at their option at any time prior to the close of business on the business day immediately preceding their respective convertible dates only under the following circumstances: •during any calendar quarter commencing after the calendar quarter ending on December 31, 2018 for the 2023 Notes, September 30, 2020 for the 2025 Notes and March 20, 2024 for the 2027 Notes (and only during such calendar quarter), if the last reported sale price of our 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 of the respective Notes on each applicable trading day; •during the five business day period after any five consecutive trading day period for the 2023 Notes and the 2025 Notes and any ten consecutive trading day period for the 2027 Notes (measurement periods) in which the trading price (as defined in the Indentures) per $1,000 principal amount of the applicable series of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate of the respective Notes on each such trading day; •if we call any or all of the respective Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the respective redemption date; or •upon the occurrence of specified corporate events (as set forth in the Indentures). As of March 31, 2021, the conversion feature of the 2023 Notes was triggered as the last reported price of our common stock was greater than or equal to 130% of the conversion price for at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter, and therefore the 2023 Notes were convertible, in whole or in part, at the option of the holders from April 1, 2021 through June 30, 2021. Whether the 2023 Notes will be convertible following such period will depend on the continued satisfaction of this condition or another conversion condition in the future. Since we may elect to repay the 2023 Notes in cash, shares of our common stock, or a combination of both, we have continued to classify the 2023 Notes as long-term debt on our consolidated balance sheet as of March 31, 2021. As of March 31, 2021, the 2025 Notes and the 2027 Notes are not convertible at the option of the holder. As of March 31, 2021, an immaterial principal amount of the 2023 Notes was requested for conversion, which is expected to be settled during the quarter ended June 30, 2021. No additional conversion requests for the 2023 Notes have been received. The holders may convert the 2023 Notes, the 2025 Notes and the 2027 Notes at any time on or after February 1, 2023, November 1, 2024 and December 15, 2026, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indentures. If we undergo a fundamental change (as set forth in the Indentures) at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the Notes who elects to convert its Notes in connection with such a corporate event or during the related redemption period in certain circumstances. We may not redeem the 2023 Notes, the 2025 Notes or the 2027 Notes prior to August 6, 2021, May 6, 2023 and March 20, 2024 (Redemption Dates), respectively. On or after the respective Redemption Dates, we may redeem for cash all or any portion of the 2023 Notes, the 2025 Notes or the 2027 Notes, at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding, the date on which we provide the redemption notice at a redemption price equal to 100% principal amount of the 2023 Notes, the 2025 Notes or the 2027 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Partial Repurchase of the 2023 Notes On March 16, 2021, we used a portion of the proceeds from the issuance of the 2027 Notes, together with 2.2 million shares of our common stock, to repurchase and retire $182.6 million aggregate principal amount of the 2023 Notes, and paid accrued and unpaid interest thereon (the 2023 Notes Repurchase Transaction). The 2023 Notes Repurchase Transaction was accounted for as an induced conversion in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20). The total fair value of the additional common stock issued to induce the conversion of $2.7 million was recognized as an inducement expense and classified as a component of interest expense in our consolidated statement of operations. The remaining cash and common stock consideration issued under the original terms of the 2023 Notes was accounted for under the general conversion accounting guidance where the difference between the carrying amount of the 2023 Notes retired, including unamortized debt issuance cost of $2.7 million, and the cash consideration paid and the par amount of the common stock issued, was recorded in additional paid-in capital. Accounting for the Notes Prior to the Adoption of ASU 2020-06 Prior to our January 1, 2021 adoption of ASU 2020-06, the 2023 Notes and the 2025 Notes were separated into liability and equity components. The initial carrying amounts of the liability components were calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature. The initial carrying amounts of the equity components representing the option to convert the 2023 Notes and the 2025 Notes was $53.8 million and $48.3 million, respectively, and were determined by deducting the fair values of the liability components from the par value of the 2023 Notes and 2025 Notes. The equity components were recorded as an increase to additional paid-in capital and were not remeasured as long as they continued to meet the conditions for equity classification. The excess of the principal amount of the 2023 Notes and the 2025 Notes over their respective carrying amount of the liability component, or debt discount, was amortized to interest expense using the effective interest method over the contractual terms of the respective convertible senior notes. In addition, prior to the adoption of ASU 2020-06, the debt issuance costs of $6.9 million and $7.2 million related to the 2023 Notes and the 2025 Notes, respectively, were allocated to the liability and equity components of the 2023 Notes and 2025 Notes based on their relative values. Debt issuance costs attributable to the liability component were $5.3 million and $5.7 million, for the 2023 Notes and the 2025 Notes, respectively, and were amortized to interest expense using the effective interest method over the contractual term of the 2023 Notes and 2025 Notes, respectively. Debt issuance costs attributable to the equity component of $1.6 million and $1.5 million for the 2023 Notes and the 2025 Notes, respectively, were netted with the equity component in additional paid-in capital. Impact of the Adoption of ASU 2020-06 On January 1, 2021, we early adopted ASU 2020-06 on a modified retrospective basis. Under ASU 2020-06, we no longer separate the convertible senior notes into liability and equity components. We recognized the cumulative effect of initially applying this new standard as of January 1, 2021. Comparative prior year periods were not adjusted. As a result of applying the modified retrospective method to adopt this standard, the following adjustments were made to the consolidated balance sheet as of January 1, 2021 (in thousands):
| As Reported |  | Adjustments |  | Adjusted Under ASU 2020-06
| December 31, 2020 |  | Transfer Equity Component of the Debt to Liabilities |  | Reverse Equity Component of Debt Issuance Costs |  | Reverse Debt Discount Amortization |  | Record Debt Issuance Costs Amortization |  | Total |  | January 1, 2021
Liabilities and Stockholders' Equity: |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible senior notes, net | $ | 378,586 |  |  | $ | 102,166 |  |  | $ | (3,140) |  |  | $ | (28,811) |  |  | $ | 1,226 |  |  | $ | 71,441 |  |  | $ | 450,027 |
Total liabilities | $ | 841,586 |  |  | $ | 102,166 |  |  | $ | (3,140) |  |  | $ | (28,811) |  |  | $ | 1,226 |  |  | $ | 71,441 |  |  | $ | 913,027 |
Stockholders' Equity: |  |  |  |  |  |  |  |  |  |  |  |  |
Additional paid-in capital | $ | 692,603 |  |  | $ | (102,166) |  |  | $ | 3,140 |  |  | $ | — |  |  | $ | — |  |  | $ | (99,026) |  |  | $ | 593,577 |
Accumulated deficit | $ | (617,279) |  |  | $ | — |  |  | $ | — |  |  | $ | 28,811 |  |  | $ | (1,226) |  |  | $ | 27,585 |  |  | $ | (589,694) |
Total stockholders' equity | $ | 71,536 |  |  | $ | (102,166) |  |  | $ | 3,140 |  |  | $ | 28,811 |  |  | $ | (1,226) |  |  | $ | (71,441) |  |  | $ | 95 |
Total liabilities and stockholders' equity | $ | 913,122 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 913,122 |
Post Adoption of ASU 2020-06 In accounting for the issuance of the 2027 Notes, the principal of $600.0 million less estimated debt issuance costs of $15.0 million was recorded as long-term debt on our consolidated balance sheet. The debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the 2027 Notes. The net carrying amount of the Notes as of March 31, 2021 and December 31, 2020 was as follows (in thousands):
|  | As of March 31, 2021 |  | As of December 31, 2020
|  | 2023 Notes |  | 2025 Notes |  | 2027 Notes |  | Total |  | 2023 Notes |  | 2025 Notes |  | Total
Principal |  | $ | 47,353 |  |  | $ | 230,000 |  |  | $ | 600,000 |  |  | $ | 877,353 |  |  | $ | 230,000 |  |  | $ | 230,000 |  |  | $ | 460,000 |
Unamortized debt discount |  | — |  |  | — |  |  | — |  |  | — |  |  | (30,425) |  |  | (42,930) |  |  | (73,355) |
Unamortized debt issuance costs |  | (778) |  |  | (5,957) |  |  | (14,909) |  |  | (21,644) |  |  | (3,009) |  |  | (5,050) |  |  | (8,059) |
Net carrying amount |  | $ | 46,575 |  |  | $ | 224,043 |  |  | $ | 585,091 |  |  | $ | 855,709 |  |  | $ | 196,566 |  |  | $ | 182,020 |  |  | $ | 378,586 |
Interest expense related to the Notes was as follows (in thousands):
| Three Months Ended March 31, 2021 |  | Three Months Ended March 31, 2020
| 2023 Notes |  | 2025 Notes |  | 2027 Notes |  | Total |  | 2023 Notes |  | Total
Contractual interest expense | $ | 558 |  |  | $ | 1,294 |  |  | $ | 50 |  |  | $ | 1,902 |  |  | $ | 719 |  |  | $ | 719 |
Amortization of debt discount | — |  |  | — |  |  | — |  |  | — |  |  | 2,496 |  |  | 2,496 |
Amortization of debt issuance costs | 221 |  |  | 319 |  |  | 80 |  |  | 620 |  |  | 247 |  |  | 247 |
Induced conversion expense | 2,740 |  |  | — |  |  | — |  |  | 2,740 |  |  | — |  |  | — |
Total interest expense | $ | 3,519 |  |  | $ | 1,613 |  |  | $ | 130 |  |  | $ | 5,262 |  |  | $ | 3,462 |  |  | $ | 3,462 |
Capped Calls In connection with the offering of the 2023 Notes, the 2025 Notes and the 2027 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the 2023 Capped Calls, 2025 Capped Calls and 2027 Capped Calls). The initial strike prices for the 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls are $41.59, $61.02 and $103.38 per share, respectively, subject to certain adjustments, which correspond to the initial conversion price of the 2023 Notes, the 2025 Notes and the 2027 Notes. The initial cap prices for the 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls are $63.98, $93.88 and $159.04 per share, respectively, subject to certain adjustments. The 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls are expected to offset potential dilution to our common stock upon conversion of the respective 2023 Notes, the 2025 Notes or the 2027 Notes, with such offset subject to a cap based on the cap price. For accounting purposes, the 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls are separate transactions, and not part of the terms of the 2023 Notes, the 2025 Notes and the 2027 Notes. The 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. Accordingly, the cost of $26.9 million, $27.3 million and $76.0 million, respectively, for the 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls was recorded as a reduction to additional paid-in capital at the time of each transaction. Credit Agreement In April 2020, we entered into a Credit and Security Agreement (the Credit Agreement), with KeyBank National Association that provides for a $30.0 million revolving credit facility, with a letter of credit sublimit of $15.0 million and an accordion feature under which we can increase the credit facility to up to $70.0 million. In May 2020, we utilized the accordion feature to increase the credit facility to $50.0 million. We incurred fees of $0.4 million in connection with entering into the Credit Agreement. The fees are recorded in other current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement. The commitment fee of 0.2% per annum on the unused portion of the credit facility is expensed as incurred and included within interest expense on the consolidated statement of operations. The Credit Agreement matures on April 23, 2023 and contains certain financial covenants including a requirement that we maintain specified minimum recurring revenue and liquidity amounts. The borrowings under the Credit Agreement bear interest, at our option, at a rate equal to either the London Interbank Offered Rate (LIBOR) rate (subject to a 1.00% floor), plus an applicable margin equal to 2.50% per annum or the alternate base rate (subject to a floor), plus an applicable margin equal to 0% per annum. As of March 31, 2021, we did not have any outstanding borrowings and we were in compliance with all covenants under the Credit Agreement. As of March 31, 2021, we had a total of $7.6 million in letters of credit outstanding as collateral for certain office space leases and corporate credit card programs which reduce the amount of borrowing available under our Credit Agreement.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration