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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2018	Oct. 22, 2018
Class of Stock [Line Items]
Entity Registrant Name	Bandwidth Inc.
Entity Central Index Key	0001514416
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	false
Common Class A
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding		12,655,226
Common Class B
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding		6,699,691

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 48,574	$ 37,627
Marketable securities	14,936	0
Accounts receivable, net of allowance for doubtful accounts	23,780	21,225
Prepaid expenses and other current assets	7,839	6,400
Total current assets	95,129	65,252
Property and equipment, net	21,770	14,946
Intangible assets, net	7,219	7,643
Deferred costs, non-current	1,771	2,068
Other long-term assets	769	1,192
Goodwill	6,867	6,867
Deferred tax asset	15,568	6,526
Total assets	149,093	104,494
Current liabilities:
Accounts payable	4,294	3,025
Accrued expenses and other current liabilities	20,294	15,725
Current portion of deferred revenue and advanced billings	7,052	5,768
Total current liabilities	31,640	24,518
Other liabilities	2,605	716
Deferred revenue, net of current portion	6,612	2,549
Total liabilities	40,857	27,783
Stockholders’ equity:
Class A and Class B common stock	19	17
Additional paid-in capital	114,778	102,465
Accumulated deficit	(6,558)	(25,771)
Accumulated other comprehensive loss	(3)	0
Total stockholders’ equity	108,236	76,711
Total liabilities and stockholders’ equity	$ 149,093	$ 104,494

Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Revenue	$ 50,454	$ 41,338	$ 151,770	$ 120,489
Cost of revenue	27,474	22,571	79,404	66,431
Gross profit	22,980	18,767	72,366	54,058
Operating expenses:
Research and development	5,895	2,771	14,111	7,862
Sales and marketing	5,422	3,128	14,598	8,099
General and administrative	11,576	9,797	33,635	25,691
Total operating expenses	22,893	15,696	62,344	41,652
Operating income	87	3,071	10,022	12,406
Other (expense) income, net	103	(538)	242	(1,950)
Income before taxes	190	2,533	10,264	10,456
Income tax (provision) benefit	2,320	(899)	8,949	(3,886)
Net income	2,510	1,634	19,213	6,570
Other comprehensive loss
Unrealized loss on marketable securities, net of income tax benefit	(1)	0	(3)	0
Total comprehensive income	2,509	1,634	19,210	6,570
Net income	2,510	1,634	19,213	6,570
Less: net income allocated to participating securities	0	213	0	858
Net income attributable to common stockholders	$ 2,510	$ 1,421	$ 19,213	$ 5,712
Net income per share:
Basic (in usd per share)	$ 0.13	$ 0.12	$ 1.05	$ 0.48
Diluted (in usd per share)	$ 0.12	$ 0.11	$ 0.91	$ 0.42
Weighted average number of common shares outstanding:
Basic (in shares)	19,072,196	11,828,657	18,300,435	11,814,045
Diluted (in shares)	21,146,124	13,252,737	21,065,802	13,487,649

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Operating activities
Net income	$ 19,213	$ 6,570
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,109	4,272
Accretion of bond discount	(80)	0
Amortization of debt issuance costs	48	96
Stock-based compensation	2,017	1,102
Change in fair value of shareholders’ anti-dilutive arrangement	0	689
Deferred taxes	(9,041)	3,450
Loss on disposal of property and equipment	27	55
Changes in operating assets and liabilities:
Accounts receivable	(2,555)	(1,864)
Prepaid expenses and other assets	(1,122)	(1,470)
Deferred costs	345	(3,556)
Accounts payable	(778)	(2,339)
Accrued expenses and other liabilities	6,471	1,267
Deferred revenue and advanced billings	5,347	1,405
Net cash provided by operating activities	24,001	9,677
Investing activities
Purchase of property and equipment	(4,921)	(2,155)
Capitalized software development costs	(3,511)	(2,586)
Proceeds from sale of property and equipment	3	3
Purchase of marketable securities	(23,860)	0
Maturities of marketable securities	9,000	0
Net cash used in investing activities	(23,289)	(4,738)
Financing activities
Borrowings on line of credit	0	4,000
Repayments on line of credit	0	(9,000)
Payments on capital leases	(74)	(49)
Repayments on term loan	0	(1,500)
Payment of costs related to the initial public offering	(285)	0
Proceeds from issuances of common stock	10,584	174
Net cash (used in) provided by financing activities	10,225	(6,375)
Net (decrease) increase in cash, cash equivalents, and restricted cash	10,937	(1,436)
Cash, cash equivalents, and restricted cash, beginning of period	37,870	7,028
Cash, cash equivalents, and restricted cash, end of period	48,807	5,592
Supplemental disclosure of cash flow information
Cash paid during the year for interest	74	1,346
Cash paid for taxes	155	691
Supplemental disclosure of noncash investing and financing activities
Purchase of property and equipment, accrued but not paid	$ 2,107	$ 168

Organization and Description of Business	9 Months Ended
Organization and Description of Business	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	1. Organization and Description of Business Bandwidth Inc. (together with its subsidiaries, “Bandwidth” or the “Company”) was founded in July 2000 and incorporated in Delaware on March 29, 2001. The Company’s headquarters are located in Raleigh, North Carolina. The Company is a cloud-based, software-powered communications platform-as-a-service (“CPaaS”) provider that enables enterprises to create, scale and operate voice or text communications services across any mobile application or connected device. The Company has two operating and reportable segments, CPaaS and Other. CPaaS revenue is derived from usage and monthly services fees charged for usage of Voice, Messaging, 911 and Phone Numbers solutions through the Company’s proprietary CPaaS software application programming interfaces. Other revenue consists of fees charged for services provided such as: SIP trunking, data resale, and a hosted Voice-over Internet Protocol (“VoIP”). The Other segment also includes revenue from traffic generated by other carriers, SMS registration fees and other miscellaneous product lines.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K filed with the SEC on February 26, 2018.

The condensed consolidated balance sheet as of December 31, 2017, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis. Additionally, certain items in the prior period financial statements have been reclassified to conform with the current year presentation.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2018 or any future period.

Principles of Consolidation

The consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, recoverability of long lived and intangible assets, customer relationship period, valuation allowances on tax assets, certain accrued expenses, and contingencies.

Cash and Cash Equivalents

The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating. The Company invests its cash primarily in government securities and obligations, corporate debt securities, money market funds and reverse repurchase agreements (RRAs). RRAs are collateralized by deposits in the form of Government Securities and Obligations for an amount not less than 102% of their value. The Company does not record an asset or liability as the Company is not permitted to sell or repledge the associated collateral. The Company has a policy that the collateral has at least an "A" (or equivalent) credit rating. The Company utilizes a third party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the RRAs on a daily basis. RRAs with stated maturities of greater than three months from the date of purchase are classified as marketable securities.

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:

For the nine months ended September 30, 2018:


	December 31, 2017		September 30, 2018
Cash and cash equivalents	$	37,627	$	48,574
Restricted cash	243		233

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	37,870	$	48,807

For the nine months ended September 30, 2017:


	December 31, 2016		September 30, 2017
Cash and cash equivalents	$	6,788	$	5,366
Restricted cash	240		226

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	7,028	$	5,592

Restricted cash is for Automated Clearing House (“ACH”) availability, customer deposits and for credit card security. The Company has classified this asset as a long-term asset in order to match the expected period of restriction and is included in Other long-term assets in the condensed consolidated balance sheets.

Concentration of Credit Risk

Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. Cash deposits may be in excess of insured limits. The Company believes that the financial institutions that hold its cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances.

With regard to customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for doubtful accounts are inherent in accounts receivable. As of December 31, 2017, one customer represented approximately 13% of the Company’s accounts receivable, net of allowance for doubtful accounts. As of September 30, 2018, one customer represented approximately 11% of the Company’s accounts receivable, net of allowance for doubtful accounts.

For the three and nine months ended September 30, 2017 and 2018, no individual customer represented more than 10% of the Company’s total revenue.

Recently Adopted Accounting Standards

In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation-Stock Compensation. ASU 2017-09 was effective for fiscal years and interim periods within those years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business, which amends the guidance of FASB Accounting Standards Codification Topic 805, “Business Combinations,” adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance was effective for annual and interim periods beginning after December 15, 2017. The impact from the adoption of this standard is dependent upon future transactions.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, which requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements.

In November 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires companies to account for the income tax effects of intercompany transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. This guidance was effective for fiscal years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should

be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 was effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company adopted this standard retrospectively and it had no material impact on the Company’s financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which addresses the income tax effects of items in accumulated other comprehensive income (“AOCI”) which were originally recognized in other comprehensive income, rather than in income from continuing operations. Specifically, it permits a reclassification from AOCI to retained earnings for the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate resulting from the U.S. tax law changes enacted in December 2017. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new guidance must be applied either on a prospective basis in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the U.S. tax law changes are recognized. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment. The ASU requires impairment charges to be based on the first step in today’s two-step impairment test. ASU 2017-04 is effective for annual and interim impairment tests performed in periods beginning after December 15, 2021, and early adoption is permitted. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. The standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short- term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new leases standard. In July 2018, the FASB also issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, to give entities another option for transition and to provide lessors with a practical expedient to reduce the cost and complexity of implementing the new standard. The transition option allows entities to not apply the new leases standard in the comparative periods they present in their financial statements in the year of adoption. ASU 2016-02 is effective for fiscal years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020, and early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, it has not yet determined the full impact the adoption of this standard will have on its financial statements and related disclosures.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This new guidance will replace most existing GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers: Deferral of the effective date,” which deferred by one year the effective date for the new revenue reporting standard for entities reporting under GAAP. In accordance with the deferral, this guidance will be effective for the Company beginning in the year ended December 31, 2019. This guidance can be applied either retrospectively to each period presented or as a cumulative effect

adjustment as of the date of adoption. In December 2016, the FASB issued ASU 2016-20, “Revenue from Contracts with Customers, Technical Corrections and Improvements to Topic 606,” which made 12 additional technical corrections and improvements to the new revenue standard. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing”, clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on accounting for an entity’s promise to grant a license. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients,” clarifying guidance on assessing collectability, presentation of sales taxes, noncash consideration, completed contracts and contract modifications. The effective date and transition requirements for ASU 2016-20, ASU 2016-08 and ASU 2016-10 are the same as the effective date and transition requirements for ASU 2014-09, which will be effective for the Company beginning January 1, 2019.

The Company has selected the modified retrospective transition method of adoption and is in the process of completing its evaluation of the potential impacts of the new standard on its consolidated financial statements. While the Company has not yet completed the full analysis of the impact of the new standard, based on the Company’s evaluation to date, the Company does not believe there will be material changes to its revenue recognition. The Company expects that its revenue will continue to be recognized based on the usage by its customers, in the period the traffic traverses the Company’s network. The Company is still assessing the impact of the new standard on its accounting for sales commissions.

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

3. Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2017 and September 30, 2018 because of the relatively short duration of these instruments. Marketable securities consist of U.S. treasury securities not otherwise classified as cash equivalents. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive loss.

The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table summarizes the assets measured at fair value as of December 31, 2017 and September 30, 2018:


	Fair value measurements on a recurring basis December 31, 2017
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market account (included in cash and cash equivalents	$	28,015	$	—	$	—	$	28,015

Total financial assets	$	28,015	$	—	$	—	$	28,015

There were no marketable securities as of December 31, 2017.


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis September 30, 2018
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	15,406	$	—	$	—	$	15,406	$	—	$	—	$	15,406

U.S. Reverse repurchase agreements	21,000		—		—		—		21,000		—		21,000
Total included in cash and cash equivalents	36,406		—		—		15,406		21,000		—		36,406
Marketable securities:
U.S. treasury securities	14,940		—		(4)		14,936				—		14,936

Total marketable securities	14,940		—		(4)		14,936		—		—		14,936
Total financial assets	$	51,346	$	—	$	(4)	$	30,342	$	21,000	$	—	$	51,342

The Company classifies its marketable securities as current assets as they are available for current operating needs. The following table summarizes the contractual maturities of marketable securities as of September 30, 2018:


	Amortized cost		Aggregate fair value
Financial assets:
Less than one year	$	14,940	$	14,936

Total	$	14,940	$	14,936

For fixed income securities that had unrealized losses as of September 30, 2018, the Company determined that no other-than-temporary impairment existed. As of September 30, 2018, all securities in an unrealized loss position have been in an unrealized loss position for less than one year. During the three and nine months ended September 30, 2018, there were $6,000 and $9,000, respectively, in maturities of marketable securities. Interest earned on marketable securities in the three and nine months ended September 30, 2018 was $22 and $70, respectively, and is recorded as other (expense) income, net, in the accompanying condensed consolidated statements of operations and comprehensive income.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Financial Statement Components

9 Months Ended

Sep. 30, 2018

Financial Statement Components [Abstract]

Financial Statement Components

4. Financial Statement Components

Accounts receivable, net of allowance for doubtful accounts consist of the following:


	December 31,		September 30,
	2017		2018
Trade accounts receivable	$	44,692	$	12,374
Unbilled accounts receivable	8,653		11,831
Allowance for doubtful accounts	(32,463)		(786)
Other accounts receivable	343		361
Total accounts receivable, net	$	21,225	$	23,780

Components of allowance for doubtful accounts are as follows:


	Three months ended September 30,						Nine months ended September 30,
Allowance for doubtful accounts:	2017		2018		2017		2018
Balance, beginning of period	$	112	$	142	$	255	$	189
Charged to bad debt expense	83		73		95		283
Deductions (1)	(19)		(102)		(174)		(359)
Balance, end of period	$	176	$	113	$	176	$	113

________________________

(1) Write off of uncollectible accounts after all collection efforts have been exhausted.


	Three months ended September 30,						Nine months ended September 30,
Allowance for CABS revenue:	2017		2018		2017		2018
Balance, beginning of period	$	27,401	$	1,331	$	22,316	$	32,274
Charged to bad debt expense	—		42		—		42
Write-off of previously outstanding and fully reserved billings related to settlement	—		—		—		(24,968)
Billings deemed not probable of collection (1)	2,485		9		7,613		310
Revenue recognized from outstanding billings previously deemed uncollectible related to settlement	—		—		—		(6,268)
Deductions (2)	(22)		(709)		(65)		(717)
Balance, end of period	$	29,864	$	673	$	29,864	$	673

________________________

(1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account.

(2) Write off of uncollectible accounts after all collection efforts have been exhausted.


	Three months ended September 30,						Nine months ended September 30,
CABS revenue:	2017		2018		2017		2018
Billed	$	4,992	$	3,105	$	14,501	$	10,313
Revenue recognized from current billings (2)	2,507		3,096		6,888		10,003
Billings deemed not probable of collection (1)	$	2,485	$	9	$	7,613	$	310

________________________

(1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account.

(2) Does not include $6,268 in revenue recognized in the nine months ended September 30, 2018, as a result of a settlement agreement related to previously billed and outstanding and uncollectible invoices.

On January 29, 2018, the Company and Verizon entered into a settlement agreement to resolve an ongoing dispute and litigation with Verizon, which is a CABS customer of the Company. The settlement agreement also resolved Verizon’s counter-claims against the Company. Pursuant to the settlement agreement, Verizon made a lump sum payment to the Company on February 8, 2018 of $4,400, which was recognized as revenue. Immediately following receipt of the $4,400 payment, the Company issued to Verizon bill credits with respect to other CABS amounts previously billed and reserved to Verizon of $24,968. The amount credited to Verizon comprised the majority of the allowance for CABS revenue as of December 31, 2017. The Company recognized as revenue $6,268, including the $4,400 payment made on February 8, 2018 and the other current outstanding Verizon CABS receivables which had been previously reserved as uncollectible, but for which collection was no longer in doubt as a result of the settlement. The settlement agreement also specifies certain terms for the Company’s CABS billings to Verizon prospectively.

Accrued expenses and other current liabilities consisted of the following:


	December 31,		September 30,
	2017		2018
Accrued expense	$	6,851	$	11,003
Accrued compensation and benefits	5,237		5,243
Accrued sales, use, and telecom related taxes	3,030		3,102
Other accrued expenses	607		946
Total accrued expenses and other current liabilities	$	15,725	$	20,294

Property and Equipment

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

5. Property and Equipment

Property and equipment, net consisted of the following:


	December 31,		September 30,
	2017		2018
Furniture and fixtures	$	863	$	1,338
Computer and office equipment	7,545		7,342
Telecommunications equipment	19,985		24,181
Leasehold improvements	453		1,917
Software development costs	15,517		19,121
Automobile	10		10
Total cost	44,373		53,909
Less—accumulated depreciation	(29,427)		(32,139)
Total property and equipment, net	$	14,946	$	21,770

The Company capitalized $988 and $2,586 of software development costs in the three and nine months ended September 30, 2017, respectively, and $1,964 and $3,511 in the three and nine months ended September 30, 2018, respectively.

Amortization expense related to capitalized software development costs were $524 and $1,659 in the three and nine months ended September 30, 2017, respectively, and $432 and $1,305 in the three and nine months ended September 30, 2018, respectively.

The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows:


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
Cost of revenue	$	1,161	$	1,135	$	3,245	$	3,214
Research and development	29		47		51		108
Sales and marketing	6		13		20		35
General and administrative	45		101		327		328
Total depreciation expense	$	1,241	$	1,296	$	3,643	$	3,685

Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

6. Intangible Assets

Intangible assets consisted of the following as of December 31, 2017:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(3,552)	$	6,844	20
Domain name and related trademarks	2,678		(2,643)		35		3–7
Licenses, amortizable	341		(341)		—		2
Non-compete agreements	139		(139)		—		2–5
Developed technology	775		(775)		—		3
Licenses, indefinite lived	764		—		764		Indefinite
Total intangible assets, net	$	15,093	$	(7,450)	$	7,643

Intangible assets consisted of the following as of September 30, 2018:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(3,941)	$	6,455	20
Domain name and related trademarks	2,678		(2,678)		—		3–7
Licenses, amortizable	341		(341)		—		2
Non-compete agreements	139		(139)		—		2–5
Developed technology	775		(775)		—		3
Licenses, indefinite lived	764		—		764		Indefinite
Total intangible assets, net	$	15,093	$	(7,874)	$	7,219

Amortization expense for definite lived intangible assets was $210 and $629 in the three and nine months ended September 30, 2017, respectively, and $130 and $424 in the three and nine months ended September 30, 2018, respectively.

Future estimated amortization expense for definite lived intangible assets subsequent to September 30, 2018 is as follows:


	Amount
2018 (remaining)	$	130
2019	520
2020	520
2021	520
2022	520
Thereafter	4,245
	$	6,455

Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt

7. Debt

Revolving Loan

As of December 31, 2017 and September 30, 2018, the Company had $0 outstanding on the revolving loan and was in compliance with all financial and non-financial covenants for all periods presented. The available borrowing capacity under the revolving loan was $25,000 as of September 30, 2018.

As of December 31, 2017 and September 30, 2018, the outstanding unamortized loan fees associated with the availability of the revolving loan were $175 and $127, respectively, and are included in other long-term assets.

Capital Leases

The Company leases various equipment under leases accounted for as capital leases with expiration dates through December 2018. As of December 31, 2017, cost and accumulated depreciation of the assets under capital leases recorded by the Company were $1,951 and $1,855, respectively. As of September 30, 2018, cost and accumulated depreciation of the assets under capital leases recorded by the Company were $1,951 and $1,879, respectively.

Remaining payments due on the Company’s capital lease obligations as of September 30, 2018, are as follows:


	Amount
2018 (remaining)	$	17
Less amount representing interest	—
Current portion of long-term capital lease obligation (1)	17
Less current maturities	17
Long-term capital lease obligation	$	—

______________________

(1) Included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Segment and Geographic Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment and Geographic Information

8. Segment and Geographic Information

The Company has two reportable segments, CPaaS and Other. Segments are primarily evaluated based on revenue and gross profit. The Company does not allocate operating expenses, interest expense or income tax expense to its segments. Accordingly, the Company does not report such information. Additionally, the Chief Operating Decision Maker does not evaluate the Company’s operating segments using discrete asset information. The segments share the majority of the Company’s assets. Therefore, no segment asset information is reported.


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
CPaaS
Revenue	$	33,397	$	41,537	$	96,591	$	120,267
Cost of revenue	19,247		23,996		56,394		69,038
Gross profit	$	14,150	$	17,541	$	40,197	$	51,229
Other
Revenue	$	7,941	$	8,917	$	23,898	$	31,503
Cost of revenue	3,324		3,478		10,037		10,366
Gross profit	$	4,617	$	5,439	$	13,861	$	21,137
Consolidated
Revenue	$	41,338	$	50,454	$	120,489	$	151,770
Cost of revenue	22,571		27,474		66,431		79,404
Gross profit	$	18,767	$	22,980	$	54,058	$	72,366

All assets were held in the United States as of December 31, 2017 and September 30, 2018.

The Company generates its revenue primarily in the United States. Revenue by geographical area is detailed in the table below (which is determined based on the customer billing address):


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
United States	$	41,188	$	50,325	$	120,090	$	151,303
International	150		129		399		467
Total	$	41,338	$	50,454	$	120,489	$	151,770

Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Equity

Preferred Stock

As of December 31, 2017 and September 30, 2018, the Company had authorized 10,000,000 shares of undesignated preferred stock, par value $0.001, of which no shares were issued and outstanding.

Common Stock

As of December 31, 2017 and September 30, 2018, the Company had authorized 100,000,000 shares of Class A common stock with one vote per share and 20,000,000 shares of Class B common stock with ten votes per share, each par value $0.001. As of December 31, 2017, 4,197,831 and 13,440,724 shares of Class A and B common stock, respectively, were issued and outstanding. As of September 30, 2018, 12,347,482 and 7,001,405 shares of Class A and B common stock, respectively, were issued and outstanding.

Shares of Class B common stock are convertible into shares of Class A common stock upon the stockholder’s voluntary written notice to the Company’s transfer agent or a transfer by the stockholder, subject to limited exceptions for transfers for estate planning purposes.

The Company had reserved shares of common stock for issuance under stock-based award agreements as follows:


	December 31,	September 30,
	2017	2018
Stock options issued and outstanding	3,659,791	2,010,666
Nonvested restricted stock units issued and outstanding	—	320,482
Stock purchase warrants issued and outstanding	51,350	—
Stock-based awards available for grant under the 2017 Plan	1,050,000	902,552
	4,761,141	3,233,700

Stock Based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Based Compensation

10. Stock Based Compensation

2001 and 2010 Stock Option Plans

During 2001, the Company adopted the Bandwidth Inc. Stock Option Plan (the “2001 Plan”). As of July 26, 2010, the Company adopted the 2010 Equity Compensation Plan (the “2010 Plan”).

Following the effectiveness of the 2010 Plan, the Company did not make any further grants under the 2001 Plan. On November 9, 2017, the 2010 Plan was terminated in connection with the Company’s IPO. Accordingly, no shares are available for future issuance under the 2010 Plan. However, the 2010 Plan continues to govern the terms and conditions of the outstanding awards granted thereunder.

2017 Incentive Award Plan

The Company’s 2017 Incentive Award Plan (the “2017 Plan”) became effective on November 9, 2017. The 2017 Plan provides for the grant of stock options, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, dividend equivalents, restricted stock units, and other stock or cash based awards to employees, consultants and directors of the Company. A total of 1,050,000 shares of the Company’s Class A common stock were originally reserved for issuance under the 2017 Plan. These available shares automatically increase each January 1, beginning on January 1, 2018, by 5% of the number of shares of the Company’s Class A common stock outstanding on the final day of the immediately preceding calendar year. On January 1, 2018, the shares available for grant under the 2017 Plan were automatically increased by 200,000 shares.

The terms of the stock option grants are determined by the Company’s Board of Directors. The Company’s stock options vest based on terms of the stock option agreements, which is generally over four years. The stock options have a contractual life of ten years.

RSUs granted under the 2017 Plan are subject to a time-based vesting condition. The compensation expense related to these awards is based on the grant date fair value of the RSUs and is recognized on a ratable basis over the applicable service period. The Company granted restricted stock units to its non-employee Board of Directors, some of which vested immediately while others vest 25% as of each calendar quarter immediately following the grant date. Other RSUs awarded to executives and employees are earned over a service period of four years.

Stock options

The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below:


	Three months ended September 30,			Nine months ended September 30,
	2017	2018	2017	2018
Expected dividend yield	—%	N/A	—%	—%
Expected stock price volatility	47%-49%	N/A	44%-49%	47%
Average risk-free interest rate	1.9%	N/A	1.9%–2.3%	2.5%
Expected life	6.2 years	N/A	6.2 years	6.2 years
Fair value of common stock	$18.40-$20.83	N/A	$9.60-$20.83	$22.81

No options were granted in the three months ended September 30, 2018.

The following summarizes the stock option activity for the nine months ended September 30, 2018:


	Number of options outstanding	Weighted-average exercise price (per share)		Weighted-average remaining contract life (in years)	Aggregate intrinsic value (in thousands)
Outstanding as of December 31, 2017	3,659,791	$	6.88	4.38	$	59,436
Granted	17,988	22.81
Exercised	(1,652,120)	6.38			53,332
Forfeited or cancelled	(14,993)	11.97
Outstanding as of September 30, 2018	2,010,666	$	7.39	4.22	$	92,849

Options vested and exercisable at September 30, 2018	1,702,652	$	6.55	3.55	$	80,065

Aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the option exercise price and the estimated fair value of the Company’s common stock. Prior to the IPO, the fair value of the Company’s common stock was estimated by the Company’s board of directors. After the IPO, the fair value of the Company’s common stock is the Company’s Class A common stock price as reported on the NASDAQ Global Select Market.

The weighted average grant-date fair value of stock options granted was $9.45 and $7.48 for the three and nine months ended September 30, 2017, respectively, and $11.10 for the nine months ended September 30, 2018. No options were granted during the three months ended September 30, 2018.

The total estimated grant date fair value of options vested was $443 and $1,070 for the three and nine months ended September 30, 2017, respectively, and $246 and $716 for the three and nine months ended September 30, 2018, respectively.

As of September 30, 2018, total unrecognized compensation cost related to all non-vested stock options was $1,402, which will be amortized over a weighted-average period of 2.21 years.

Restricted Stock Units

The following summarizes the restricted stock unit activity for the periods presented:


	Number of awards outstanding	Weighted-average grant date fair value (per share)
Nonvested RSUs as of December 31, 2017	—	$	—
Granted	335,089	26.40
Vested	(8,978)	22.81
Forfeited or cancelled	(5,629)	29.35
Nonvested RSUs as of September 30, 2018	320,482	$	26.44

As of September 30, 2018, total unrecognized compensation cost related to non-vested RSUs was $7,360, which will be amortized over a weighted-average period of 3.42 years.

Stock-Based Compensation Expense

The Company recognized total stock-based compensation expense in continuing operations as follows:


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
Cost of revenue	$	17	$	30	$	57	$	79
Research and development	38		173		100		376
Sales and marketing	54		146		124		364
General and administrative	503		413		821		1,198
Total	$	612	$	762	$	1,102	$	2,017

Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Operating Leases

The Company leases approximately 181,000 square feet of office space under operating lease agreements that expire at various dates beginning in 2021 and extend through 2025 in several locations within the United States including its headquarters, which is located in Raleigh, NC. On January 12, 2018, the Company entered into an 84-month operating lease agreement to provide 40,035 square feet of additional office space, which was occupied in September 2018. On March 27, 2018, the Company entered into a 60-month operating lease agreement to provide 5,930 square feet of additional office space, which commenced in June 2018. On July 20, 2018, the Company entered into a 12-month operating lease agreement to provide 2,605 square feet of additional office space, which commenced in July 2018. The leases contain escalation clauses and various landlord concessions including tenant improvement allowances. The Company recognizes the total minimum lease payments on a straight-line basis over the term of the lease.

Future minimum lease payments required under operating leases as of September 30, 2018 are as follows:


	Amount
2018 (remaining)	$	1,247
2019	5,044
2020	5,180
2021	5,254
2022	3,438
Thereafter	3,742
	$	23,905

The Company incurred rent expense of $1,034 and $2,414 for the three and nine months ended September 30, 2017, respectively, and $1,173 and $3,128 for the three and nine months ended September 30, 2018, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

On April 20, 2015, the Company created a wholly owned subsidiary, Republic Wireless, Inc. (“Republic”), which was incorporated in Delaware. On November 30, 2016, the Company completed a pro-rata distribution of the common stock of Republic to its stockholders of record as of the close of business (the “Spin-Off”).

In conjunction with the Spin-Off, the Company signed a Facilities Service Agreement with Republic in which the Company agreed to sub-lease 40,657 square feet of office space to Republic. The sub-lease is non-cancellable and extends to May 2022. The Company recorded a reduction of rent expense of $251 and $697 for the three and nine months ended September 30, 2017, respectively, and $251 and $753 for the three and nine months ended September 30, 2018, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

Future minimum sub-lease receipts required under the non-cancellable lease as of September 30, 2018 are as follows:


	Amount
2018 (remaining)	$	257
2019	1,042
2020	1,065
2021	1,089
2022	594
	$	4,047

Contractual Obligations

On October 25, 2015, the Company entered into an agreement with a telecommunications service provider. The service agreement requires the Company to pay a monthly recurring charge beginning on January 1, 2016 associated with the services received. The service agreement is non-cancellable and contains annual minimum commitments of $1,200 to be fulfilled over five years or for as long as the Company continues to receive services from this vendor. In addition, as of September 30, 2018 the Company has $3,933 in other non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts.

Legal Matters

The Company is involved as a defendant in various lawsuits alleging that the Company failed to bill, collect and remit certain taxes and surcharges associated with the provision of 911 services pursuant to applicable laws in various jurisdictions. In August 2016, the Company received a Civil Investigative Demand from the Consumer Protection Division of the North Carolina Department of Justice, though no formal complaint has been filed in connection with that investigation. The North Carolina Department of Justice is investigating the billing, collection and remission of certain taxes and surcharges associated with 911 service pursuant to applicable laws of the State of North Carolina.

While the results of these legal proceedings cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations.

Employee Benefit Plan	9 Months Ended
Employee Benefit Plan	Sep. 30, 2018
Retirement Benefits [Abstract]
Employee Benefit Plan	12. Employee Benefit Plan The Company sponsors a defined contribution 401(k) plan which allows eligible employees to defer a portion of their compensation. The Company, at its discretion, may make matching contributions. The Company made matching contributions of $181 and $596 for the three and nine months ended September 30, 2017, respectively, and $261 and $807 for the three and nine months ended September 30, 2018, respectively.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	13. Income Taxes At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter. The effective income tax rate reflects the effect of federal and state income taxes and certain non-deductible items. The Company’s effective tax rate was 35.5% and 37.2% for the three and nine months ended September 30, 2017, respectively, and (1,221.1)% and (87.2)% for the three and nine months ended September 30, 2018, respectively. The change in tax rate is primarily due to the decrease in the federal statutory tax rate under the Tax Cuts and Jobs Act from 35.0% to 21.0%, as well as the impact of stock compensation tax deductions as a result of stock option exercises, which occurred during the three and nine months ended September 30, 2018. The Company’s effective tax rate for the three and nine months ended September 30, 2018, respectively, is lower than the U.S. federal statutory rate of 21.0% primarily due to the impact of stock compensation tax deductions. There has been no material change to the Company’s SAB 118 assertion.

Related Parties	9 Months Ended
Related Parties	Sep. 30, 2018
Related Party Transactions [Abstract]
Related Parties	14. Related Parties In connection with the Spin-Off on November 30, 2016, the Company and Republic entered into certain agreements in order to govern the ongoing relationships between the two companies after the Spin-Off and to provide for an orderly transition. The agreements include a Transition Services Agreement, Facilities Sharing Agreement, Tax Sharing Agreement, and Master Services Agreement. The equity holders of Bandwidth pre-IPO are comprised of substantially the same individuals and entities that are the equity owners of Republic. The Company has determined the equity owners of Republic are related parties of Bandwidth. The Company has certain involvement with Republic via ongoing services arrangements, with these ongoing services arrangements creating a variable interest in Republic. The Company assessed the relationship with Republic under guidance for variable interest entities. Because investors in Republic have disproportionate voting rights, the Company concluded that Republic is a VIE, but Bandwidth is not a primary beneficiary. The Company’s maximum exposure to loss relating to this variable interest entity is limited to amounts due under the service agreements between the Company and Republic. The Company received net compensation under the Transition Services Agreement of $37 and $548 for the three and nine months ended September 30, 2017, respectively, and $19 and $69 for the three and nine months ended September 30, 2018, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. In addition, there was approximately $15 and $6 due from Republic as of December 31, 2017 and September 30, 2018, respectively, which was recorded within accounts receivable in the accompanying condensed consolidated balance sheets. The Company received rental payments under the Facilities Sharing Agreement of $251 and $697 for the three and nine months ended September 30, 2017, respectively, and $251 and $753 for the three and nine months ended September 30, 2018, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. No amounts were due to the Company under the Facilities Sharing Agreement as of December 31, 2017 and September 30, 2018. The Tax Sharing Agreement governs rights and obligations after the Spin-Off regarding income taxes and other taxes, including tax liabilities and benefits, attributes, returns and contests. There are no amounts outstanding or payable under this agreement as of December 31, 2017 and September 30, 2018. The Master Services Agreement specifies certain wholesale telecommunications services to be provided by the Company. The agreement is cancellable at any time by either party. The Company provided telecommunication services to Republic of $550 and $1,623 for the three and nine months ended September 30, 2017, respectively, and $994 and $2,985 for the three and nine months ended September 30, 2018, respectively. The Company recognized such amounts as revenue in the accompanying condensed consolidated statements of operations and comprehensive income. As of December 31, 2017 and September 30, 2018, the Company had a receivable of $311 and $332, respectively, under the Master Services Agreement. Subsequent to the expiration of the 180-day blackout window on May 9, 2018, Republic employees that held Bandwidth stock options began exercising their options. Upon exercise, Bandwidth withholds the employee tax amounts due from the proceeds. For the three and nine months ended September 30, 2018, Bandwidth had collected on behalf of and remitted withholding tax to Republic of $2,691 and $9,166, respectively, and had a related payable of $0 as of September 30, 2018.

Basic and Diluted Income per Common Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Basic and Diluted Income per Common Share

15. Basic and Diluted Income per Common Share

During the year ended December 31, 2017, the Company used the two-class method to compute net income per common share, because it had issued securities, other than common stock, that contractually entitled the holders to participate in dividends and earnings. These participating securities included the Company’s redeemable convertible preferred stock which had non-forfeitable rights to participate in any dividends declared on the Company’s common stock. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options and warrants. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period.

As of January 1, 2018, the Company no longer had outstanding securities other than common stock, which required holders’ participation in dividends and earnings; therefore, the Company no longer was required to calculate EPS under the two-class method. Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by giving effect to all potential shares of common stock, including stock options, stock related to unvested restricted stock awards, and outstanding warrants to the extent dilutive.

The components of basic and diluted earnings per share, or EPS, are as follows:


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
Earnings per share
Net income	$	1,634	$	2,510	$	6,570	$	19,213
Less: net income allocated to participating securities	213		—		858		—
Net income attributable to common stockholders	$	1,421	$	2,510	$	5,712	$	19,213
Net income per share:
Basic	$	0.12	$	0.13	$	0.48	$	1.05
Diluted	$	0.11	$	0.12	$	0.42	$	0.91














Weighted Average Number of Common Shares Outstanding
Basic	11,828,657		19,072,196		11,814,045		18,300,435
Dilutive effect of stock options, restricted stock units, and warrants	1,424,080		2,073,928		1,673,604		2,765,367
Diluted	13,252,737		21,146,124		13,487,649		21,065,802

The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding, because the effect is anti-dilutive for the periods presented:


	Three months ended September 30,			Nine months ended September 30,
	2017	2018	2017	2018
Anti-dilutive Disclosure
Series A redeemable convertible preferred stock outstanding	1,775,000	—	1,775,000	—
Stock options issued and outstanding	110,125	—	110,125	—

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2018
Subsequent Events [Abstract]
Subsequent Events	16. Subsequent Events On October 30, 2018, Bandwidth Inc. announced the resignation of its co-founder and director, Henry R. Kaestner, effective as of October 30, 2018. The Company also announced that the Board of Directors (the “Board”) appointed Luke Roush to fill the vacancy resulting from Mr. Kaestner’s resignation, effective as of October 30, 2018. Mr. Roush will serve as a Class I Director and will serve until the 2021 annual meeting of the Company’s stockholders. Mr. Roush will also serve on the Board’s Audit Committee and Compensation Committee. Mr. Roush co-founded Sovereign’s Capital in 2012 and is a Managing Partner for Sovereign’s Capital. Prior to Sovereign’s Capital, Mr. Roush served as Vice President for Sales, Marketing, and Business Development at TransEnterix, a medical device company that developed and commercialized a minimally invasive surgical system in the United States, Europe, and Asia. Prior to joining TransEnterix, Mr. Roush served as Chief Operating Officer at Liquidia Technologies, a nanotechnology company focused on biopharmaceutical applications. Mr. Roush previously served as global marketing manager for the neurovascular stroke business at Boston Scientific. Mr. Roush graduated summa cum laude from Duke University, and later earned his MBA from The Fuqua School of Business. Mr. Roush will receive the standard compensation provided to the Company’s independent directors. Mr. Roush will receive the following compensation in connection with his service on the Board: • an annual retainer of $50,000 for service as a Board member; • an annual retainer of $5,000 for service as an Audit Committee member; and • an annual retainer of $2,500 for service as a Compensation Committee member. The Company also provides that each of the Company’s independent directors, on an annual basis, will be granted restricted stock units having a grant date value of $75,000. Mr. Roush was awarded 378 restricted stock units, which represents a pro-rated grant date value of $18,750 for the year ending December 31, 2018. The grant will vest on December 31, 2018, subject to Mr. Roush’s continued service as a director. In addition, Mr. Roush and the Company will enter into the Company’s standard indemnification agreement, the terms of which are described in the Company’s Registration Statement on Form S-1 (File No. 333-220945) (the “Registration Statement”) and a form of such agreement was filed as Exhibit 10.2 to the Registration Statement. Effective as of October 30, 2018, the Board’s Audit Committee consists of Brian D. Bailey, Luke Roush, and Douglas A. Suriano. Effective as of October 30, 2018, the Board’s Compensation Committee consists of Brian D. Bailey, Luke Roush, and Douglas A Suriano.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2018
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K filed with the SEC on February 26, 2018. The condensed consolidated balance sheet as of December 31, 2017, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis. Additionally, certain items in the prior period financial statements have been reclassified to conform with the current year presentation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2018 or any future period.
Principles of Consolidation	The consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, recoverability of long lived and intangible assets, customer relationship period, valuation allowances on tax assets, certain accrued expenses, and contingencies.
Cash and Cash Equivalents	The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating. The Company invests its cash primarily in government securities and obligations, corporate debt securities, money market funds and reverse repurchase agreements (RRAs). RRAs are collateralized by deposits in the form of Government Securities and Obligations for an amount not less than 102% of their value. The Company does not record an asset or liability as the Company is not permitted to sell or repledge the associated collateral. The Company has a policy that the collateral has at least an "A" (or equivalent) credit rating. The Company utilizes a third party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the RRAs on a daily basis. RRAs with stated maturities of greater than three months from the date of purchase are classified as marketable securities.
Concentration of Credit Risk	Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. Cash deposits may be in excess of insured limits. The Company believes that the financial institutions that hold its cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances.With regard to customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for doubtful accounts are inherent in accounts receivable.
Recent Accounting Standards	Recently Adopted Accounting Standards In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation-Stock Compensation. ASU 2017-09 was effective for fiscal years and interim periods within those years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business, which amends the guidance of FASB Accounting Standards Codification Topic 805, “Business Combinations,” adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance was effective for annual and interim periods beginning after December 15, 2017. The impact from the adoption of this standard is dependent upon future transactions. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, which requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements. In November 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires companies to account for the income tax effects of intercompany transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. This guidance was effective for fiscal years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 was effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company adopted this standard retrospectively and it had no material impact on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Adopted In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which addresses the income tax effects of items in accumulated other comprehensive income (“AOCI”) which were originally recognized in other comprehensive income, rather than in income from continuing operations. Specifically, it permits a reclassification from AOCI to retained earnings for the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate resulting from the U.S. tax law changes enacted in December 2017. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new guidance must be applied either on a prospective basis in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the U.S. tax law changes are recognized. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment. The ASU requires impairment charges to be based on the first step in today’s two-step impairment test. ASU 2017-04 is effective for annual and interim impairment tests performed in periods beginning after December 15, 2021, and early adoption is permitted. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short- term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new leases standard. In July 2018, the FASB also issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, to give entities another option for transition and to provide lessors with a practical expedient to reduce the cost and complexity of implementing the new standard. The transition option allows entities to not apply the new leases standard in the comparative periods they present in their financial statements in the year of adoption. ASU 2016-02 is effective for fiscal years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020, and early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, it has not yet determined the full impact the adoption of this standard will have on its financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This new guidance will replace most existing GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers: Deferral of the effective date,” which deferred by one year the effective date for the new revenue reporting standard for entities reporting under GAAP. In accordance with the deferral, this guidance will be effective for the Company beginning in the year ended December 31, 2019. This guidance can be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. In December 2016, the FASB issued ASU 2016-20, “Revenue from Contracts with Customers, Technical Corrections and Improvements to Topic 606,” which made 12 additional technical corrections and improvements to the new revenue standard. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing”, clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on accounting for an entity’s promise to grant a license. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients,” clarifying guidance on assessing collectability, presentation of sales taxes, noncash consideration, completed contracts and contract modifications. The effective date and transition requirements for ASU 2016-20, ASU 2016-08 and ASU 2016-10 are the same as the effective date and transition requirements for ASU 2014-09, which will be effective for the Company beginning January 1, 2019. The Company has selected the modified retrospective transition method of adoption and is in the process of completing its evaluation of the potential impacts of the new standard on its consolidated financial statements. While the Company has not yet completed the full analysis of the impact of the new standard, based on the Company’s evaluation to date, the Company does not believe there will be material changes to its revenue recognition. The Company expects that its revenue will continue to be recognized based on the usage by its customers, in the period the traffic traverses the Company’s network. The Company is still assessing the impact of the new standard on its accounting for sales commissions.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

For the nine months ended September 30, 2018:


	December 31, 2017		September 30, 2018
Cash and cash equivalents	$	37,627	$	48,574
Restricted cash	243		233

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	37,870	$	48,807

For the nine months ended September 30, 2017:


	December 31, 2016		September 30, 2017
Cash and cash equivalents	$	6,788	$	5,366
Restricted cash	240		226

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	7,028	$	5,592

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

For the nine months ended September 30, 2018:


	December 31, 2017		September 30, 2018
Cash and cash equivalents	$	37,627	$	48,574
Restricted cash	243		233

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	37,870	$	48,807

For the nine months ended September 30, 2017:


	December 31, 2016		September 30, 2017
Cash and cash equivalents	$	6,788	$	5,366
Restricted cash	240		226

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	7,028	$	5,592

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

The following table summarizes the assets measured at fair value as of December 31, 2017 and September 30, 2018:


	Fair value measurements on a recurring basis December 31, 2017
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market account (included in cash and cash equivalents	$	28,015	$	—	$	—	$	28,015

Total financial assets	$	28,015	$	—	$	—	$	28,015

There were no marketable securities as of December 31, 2017.


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis September 30, 2018
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	15,406	$	—	$	—	$	15,406	$	—	$	—	$	15,406

U.S. Reverse repurchase agreements	21,000		—		—		—		21,000		—		21,000
Total included in cash and cash equivalents	36,406		—		—		15,406		21,000		—		36,406
Marketable securities:
U.S. treasury securities	14,940		—		(4)		14,936				—		14,936

Total marketable securities	14,940		—		(4)		14,936		—		—		14,936
Total financial assets	$	51,346	$	—	$	(4)	$	30,342	$	21,000	$	—	$	51,342

Schedule of Contractual Maturities of Marketable Securities

The following table summarizes the contractual maturities of marketable securities as of September 30, 2018:


	Amortized cost		Aggregate fair value
Financial assets:
Less than one year	$	14,940	$	14,936

Total	$	14,940	$	14,936

Financial Statement Components (Tables)

9 Months Ended

Sep. 30, 2018

Financial Statement Components [Abstract]

Schedule of Accounts Receivable, CABS Revenue, Allowance for Doubtful Accounts, Accrued Expenses and Other Current Liabilities

Accounts receivable, net of allowance for doubtful accounts consist of the following:


	December 31,		September 30,
	2017		2018
Trade accounts receivable	$	44,692	$	12,374
Unbilled accounts receivable	8,653		11,831
Allowance for doubtful accounts	(32,463)		(786)
Other accounts receivable	343		361
Total accounts receivable, net	$	21,225	$	23,780

Components of allowance for doubtful accounts are as follows:


	Three months ended September 30,						Nine months ended September 30,
Allowance for doubtful accounts:	2017		2018		2017		2018
Balance, beginning of period	$	112	$	142	$	255	$	189
Charged to bad debt expense	83		73		95		283
Deductions (1)	(19)		(102)		(174)		(359)
Balance, end of period	$	176	$	113	$	176	$	113

________________________

(1) Write off of uncollectible accounts after all collection efforts have been exhausted.


	Three months ended September 30,						Nine months ended September 30,
Allowance for CABS revenue:	2017		2018		2017		2018
Balance, beginning of period	$	27,401	$	1,331	$	22,316	$	32,274
Charged to bad debt expense	—		42		—		42
Write-off of previously outstanding and fully reserved billings related to settlement	—		—		—		(24,968)
Billings deemed not probable of collection (1)	2,485		9		7,613		310
Revenue recognized from outstanding billings previously deemed uncollectible related to settlement	—		—		—		(6,268)
Deductions (2)	(22)		(709)		(65)		(717)
Balance, end of period	$	29,864	$	673	$	29,864	$	673

________________________

(1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account.

(2) Write off of uncollectible accounts after all collection efforts have been exhausted.


	Three months ended September 30,						Nine months ended September 30,
CABS revenue:	2017		2018		2017		2018
Billed	$	4,992	$	3,105	$	14,501	$	10,313
Revenue recognized from current billings (2)	2,507		3,096		6,888		10,003
Billings deemed not probable of collection (1)	$	2,485	$	9	$	7,613	$	310

________________________

(1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account.

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	December 31,		September 30,
	2017		2018
Accrued expense	$	6,851	$	11,003
Accrued compensation and benefits	5,237		5,243
Accrued sales, use, and telecom related taxes	3,030		3,102
Other accrued expenses	607		946
Total accrued expenses and other current liabilities	$	15,725	$	20,294

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment, Net

Property and equipment, net consisted of the following:


	December 31,		September 30,
	2017		2018
Furniture and fixtures	$	863	$	1,338
Computer and office equipment	7,545		7,342
Telecommunications equipment	19,985		24,181
Leasehold improvements	453		1,917
Software development costs	15,517		19,121
Automobile	10		10
Total cost	44,373		53,909
Less—accumulated depreciation	(29,427)		(32,139)
Total property and equipment, net	$	14,946	$	21,770

Schedule of Depreciation Expense

The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows:


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
Cost of revenue	$	1,161	$	1,135	$	3,245	$	3,214
Research and development	29		47		51		108
Sales and marketing	6		13		20		35
General and administrative	45		101		327		328
Total depreciation expense	$	1,241	$	1,296	$	3,643	$	3,685

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets consisted of the following as of December 31, 2017:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(3,552)	$	6,844	20
Domain name and related trademarks	2,678		(2,643)		35		3–7
Licenses, amortizable	341		(341)		—		2
Non-compete agreements	139		(139)		—		2–5
Developed technology	775		(775)		—		3
Licenses, indefinite lived	764		—		764		Indefinite
Total intangible assets, net	$	15,093	$	(7,450)	$	7,643

Intangible assets consisted of the following as of September 30, 2018:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(3,941)	$	6,455	20
Domain name and related trademarks	2,678		(2,678)		—		3–7
Licenses, amortizable	341		(341)		—		2
Non-compete agreements	139		(139)		—		2–5
Developed technology	775		(775)		—		3
Licenses, indefinite lived	764		—		764		Indefinite
Total intangible assets, net	$	15,093	$	(7,874)	$	7,219

Schedule of Future Estimated Amortization Expense

Future estimated amortization expense for definite lived intangible assets subsequent to September 30, 2018 is as follows:


	Amount
2018 (remaining)	$	130
2019	520
2020	520
2021	520
2022	520
Thereafter	4,245
	$	6,455

Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Remaining Payments due on Capital Lease Obligations

Remaining payments due on the Company’s capital lease obligations as of September 30, 2018, are as follows:


	Amount
2018 (remaining)	$	17
Less amount representing interest	—
Current portion of long-term capital lease obligation (1)	17
Less current maturities	17
Long-term capital lease obligation	$	—

______________________

(1) Included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Segment and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
CPaaS
Revenue	$	33,397	$	41,537	$	96,591	$	120,267
Cost of revenue	19,247		23,996		56,394		69,038
Gross profit	$	14,150	$	17,541	$	40,197	$	51,229
Other
Revenue	$	7,941	$	8,917	$	23,898	$	31,503
Cost of revenue	3,324		3,478		10,037		10,366
Gross profit	$	4,617	$	5,439	$	13,861	$	21,137
Consolidated
Revenue	$	41,338	$	50,454	$	120,489	$	151,770
Cost of revenue	22,571		27,474		66,431		79,404
Gross profit	$	18,767	$	22,980	$	54,058	$	72,366

Schedule of Revenue by Geographical Area

The Company generates its revenue primarily in the United States. Revenue by geographical area is detailed in the table below (which is determined based on the customer billing address):


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
United States	$	41,188	$	50,325	$	120,090	$	151,303
International	150		129		399		467
Total	$	41,338	$	50,454	$	120,489	$	151,770

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Schedule of Reserved Shares of Common Stock for Issuance

The Company had reserved shares of common stock for issuance under stock-based award agreements as follows:


	December 31,	September 30,
	2017	2018
Stock options issued and outstanding	3,659,791	2,010,666
Nonvested restricted stock units issued and outstanding	—	320,482
Stock purchase warrants issued and outstanding	51,350	—
Stock-based awards available for grant under the 2017 Plan	1,050,000	902,552
	4,761,141	3,233,700

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

+ References

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+ Details

Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Fair Value of Options Granted Using the Black-Scholes Pricing Model

The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below:


	Three months ended September 30,			Nine months ended September 30,
	2017	2018	2017	2018
Expected dividend yield	—%	N/A	—%	—%
Expected stock price volatility	47%-49%	N/A	44%-49%	47%
Average risk-free interest rate	1.9%	N/A	1.9%–2.3%	2.5%
Expected life	6.2 years	N/A	6.2 years	6.2 years
Fair value of common stock	$18.40-$20.83	N/A	$9.60-$20.83	$22.81

Summary of Stock Option Activity

The following summarizes the stock option activity for the nine months ended September 30, 2018:


	Number of options outstanding	Weighted-average exercise price (per share)		Weighted-average remaining contract life (in years)	Aggregate intrinsic value (in thousands)
Outstanding as of December 31, 2017	3,659,791	$	6.88	4.38	$	59,436
Granted	17,988	22.81
Exercised	(1,652,120)	6.38			53,332
Forfeited or cancelled	(14,993)	11.97
Outstanding as of September 30, 2018	2,010,666	$	7.39	4.22	$	92,849

Options vested and exercisable at September 30, 2018	1,702,652	$	6.55	3.55	$	80,065

Summary of Restricted Stock Unit Activity

The following summarizes the restricted stock unit activity for the periods presented:


	Number of awards outstanding	Weighted-average grant date fair value (per share)
Nonvested RSUs as of December 31, 2017	—	$	—
Granted	335,089	26.40
Vested	(8,978)	22.81
Forfeited or cancelled	(5,629)	29.35
Nonvested RSUs as of September 30, 2018	320,482	$	26.44

Schedule of Stock-Based Compensation Expense in Continuing Operations

The Company recognized total stock-based compensation expense in continuing operations as follows:


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
Cost of revenue	$	17	$	30	$	57	$	79
Research and development	38		173		100		376
Sales and marketing	54		146		124		364
General and administrative	503		413		821		1,198
Total	$	612	$	762	$	1,102	$	2,017

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments for Operating Leases

Future minimum lease payments required under operating leases as of September 30, 2018 are as follows:


	Amount
2018 (remaining)	$	1,247
2019	5,044
2020	5,180
2021	5,254
2022	3,438
Thereafter	3,742
	$	23,905

Schedule of Future Minimum Lease Receipts for Operating Lease

Future minimum sub-lease receipts required under the non-cancellable lease as of September 30, 2018 are as follows:


	Amount
2018 (remaining)	$	257
2019	1,042
2020	1,065
2021	1,089
2022	594
	$	4,047

Basic and Diluted Income per Common Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The components of basic and diluted earnings per share, or EPS, are as follows:


	Three months ended September 30,						Nine months ended September 30,
	2017		2018		2017		2018
Earnings per share
Net income	$	1,634	$	2,510	$	6,570	$	19,213
Less: net income allocated to participating securities	213		—		858		—
Net income attributable to common stockholders	$	1,421	$	2,510	$	5,712	$	19,213
Net income per share:
Basic	$	0.12	$	0.13	$	0.48	$	1.05
Diluted	$	0.11	$	0.12	$	0.42	$	0.91














Weighted Average Number of Common Shares Outstanding
Basic	11,828,657		19,072,196		11,814,045		18,300,435
Dilutive effect of stock options, restricted stock units, and warrants	1,424,080		2,073,928		1,673,604		2,765,367
Diluted	13,252,737		21,146,124		13,487,649		21,065,802

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding, because the effect is anti-dilutive for the periods presented:


	Three months ended September 30,			Nine months ended September 30,
	2017	2018	2017	2018
Anti-dilutive Disclosure
Series A redeemable convertible preferred stock outstanding	1,775,000	—	1,775,000	—
Stock options issued and outstanding	110,125	—	110,125	—

Organization and Description of Business (Details)	9 Months Ended
Organization and Description of Business (Details)	Sep. 30, 2018 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	2
Number of reportable segments	2

Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Cash and cash equivalents	$ 48,574	$ 37,627	$ 5,366	$ 6,788
Restricted cash	233	243	226	240
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$ 48,807	$ 37,870	$ 5,592	$ 7,028

Summary of Significant Accounting Policies - Additional Information (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
RRAs collateralized by deposits in form of Government Securities and Obligations as percentage of value	102.00%
Customer One \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk percentage	11.00%	13.00%

Fair Value of Financial Instruments - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, amortized cost or carrying value	$ 48,574	$ 37,627	$ 5,366	$ 6,788
Marketable securities, amortized cost or carrying value	14,940
Marketable securities, unrealized gain	0
Marketable securities, net unrealized losses	(4)
Money market account
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, amortized cost or carrying value	15,406
Cash and cash equivalents, unrealized gains	0
Cash and cash equivalents, unrealized loss	0
U.S. Reverse repurchase agreements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, amortized cost or carrying value	21,000
Cash and cash equivalents, unrealized gains	0
Cash and cash equivalents, unrealized loss	0
Financial assets excluding marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, amortized cost or carrying value	36,406
Cash and cash equivalents, unrealized gains	0
Cash and cash equivalents, unrealized loss	0
U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, amortized cost or carrying value	14,940
Marketable securities, unrealized gain	0
Marketable securities, net unrealized losses	(4)
Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	51,346
Financial assets, unrealized gain	0
FinancialAssetsGrossUnrealizedLoss	(4)
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		28,015
Marketable securities, fair value	14,936
Fair Value, Measurements, Recurring \| Money market account
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	15,406
Fair Value, Measurements, Recurring \| U.S. Reverse repurchase agreements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	21,000
Fair Value, Measurements, Recurring \| Financial assets excluding marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	36,406
Fair Value, Measurements, Recurring \| U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	14,936
Fair Value, Measurements, Recurring \| Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	51,342	28,015
Level 1 \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		28,015
Marketable securities, fair value	14,936
Level 1 \| Fair Value, Measurements, Recurring \| Money market account
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	15,406
Level 1 \| Fair Value, Measurements, Recurring \| U.S. Reverse repurchase agreements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0
Level 1 \| Fair Value, Measurements, Recurring \| Financial assets excluding marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	15,406
Level 1 \| Fair Value, Measurements, Recurring \| U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	14,936
Level 1 \| Fair Value, Measurements, Recurring \| Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	30,342	28,015
Level 2 \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		0
Marketable securities, fair value	0
Level 2 \| Fair Value, Measurements, Recurring \| Money market account
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0
Level 2 \| Fair Value, Measurements, Recurring \| U.S. Reverse repurchase agreements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	21,000
Level 2 \| Fair Value, Measurements, Recurring \| Financial assets excluding marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	21,000
Level 2 \| Fair Value, Measurements, Recurring \| U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value
Level 2 \| Fair Value, Measurements, Recurring \| Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	21,000	0
Level 3 \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		0
Marketable securities, fair value	0
Level 3 \| Fair Value, Measurements, Recurring \| Money market account
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0
Level 3 \| Fair Value, Measurements, Recurring \| U.S. Reverse repurchase agreements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0
Level 3 \| Fair Value, Measurements, Recurring \| Financial assets excluding marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0
Level 3 \| Fair Value, Measurements, Recurring \| U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	0
Level 3 \| Fair Value, Measurements, Recurring \| Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	$ 0	$ 0

Fair Value of Financial Instruments - Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized cost	$ 14,940	$ 14,940
Aggregate fair value	14,936	14,936
Maturities of marketable securities	6,000	9,000	$ 0
Interest earned on marketable securities	22	70
U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized cost	14,940	14,940
Aggregate fair value	$ 14,936	$ 14,936

Financial Statement Components - Accounts Receivable, Net of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Financial Statement Components [Abstract]
Trade accounts receivable	$ 12,374	$ 44,692
Unbilled accounts receivable	11,831	8,653
Allowance for doubtful accounts	(786)	(32,463)
Other accounts receivable	361	343
Total accounts receivable, net	$ 23,780	$ 21,225

Financial Statement Components - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Allowance for Doubtful Accounts Receivable [Roll Forward]
Revenue	$ 50,454	$ 41,338	$ 151,770	$ 120,489
Carrier Access Billing (CAB)
Allowance for Doubtful Accounts Receivable [Roll Forward]
Billings deemed not probable of collection	9	2,485	310	7,613
Revenue recognized as a result of settlement agreement			(6,268)
Billed	3,105	4,992	10,313	14,501
Revenue	3,096	2,507	10,003	6,888
Accounts Receivable, Excluding Carrier Access Billing (CAB)
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance, beginning of period	142	112	189	255
Charged to bad debt expense	73	83	283	95
Deductions	(102)	(19)	(359)	(174)
Balance, end of period	113	176	113	176
Carrier Access Billing (CAB)
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance, beginning of period	1,331	27,401	32,274	22,316
Charged to bad debt expense	42	0	42	0
Write-off of previously outstanding and fully reserved billings related to settlement	0	0	(24,968)	0
Billings deemed not probable of collection	9	2,485	310	7,613
Revenue recognized as a result of settlement agreement	0	0	(6,268)	0
Deductions	(709)	(22)	(717)	(65)
Balance, end of period	$ 673	$ 29,864	$ 673	$ 29,864

Financial Statement Components - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 08, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Carrier Access Billing (CAB)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Settlement agreement lump sum payment	$ 4,400
Revenue recognized as a result of settlement agreement				$ 6,268
Carrier Access Billing (CAB)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Write-off of previously outstanding and fully reserved billings related to settlement		$ 0	$ 0	24,968	$ 0
Revenue recognized as a result of settlement agreement		$ 0	$ 0	$ 6,268	$ 0

Financial Statement Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Financial Statement Components [Abstract]
Accrued expense	$ 11,003	$ 6,851
Accrued compensation and benefits	5,243	5,237
Accrued sales, use, and telecom related taxes	3,102	3,030
Other accrued expenses	946	607
Total accrued expenses and other current liabilities	$ 20,294	$ 15,725

Property and Equipment - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 53,909	$ 44,373
Less—accumulated depreciation	(32,139)	(29,427)
Total property and equipment, net	21,770	14,946
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,338	863
Computer and office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,342	7,545
Telecommunications equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	24,181	19,985
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,917	453
Software development costs
Property, Plant and Equipment [Line Items]
Property and equipment, gross	19,121	15,517
Automobile
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 10	$ 10

Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Property, Plant and Equipment [Abstract]
Capitalized software development costs	$ 1,964	$ 988	$ 3,511	$ 2,586
Amortization of capitalized software development costs	$ 432	$ 524	$ 1,305	$ 1,659

Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Depreciation Expense [Line Items]
Depreciation	$ 1,296	$ 1,241	$ 3,685	$ 3,643
Cost of revenue
Depreciation Expense [Line Items]
Depreciation	1,135	1,161	3,214	3,245
Research and development
Depreciation Expense [Line Items]
Depreciation	47	29	108	51
Sales and marketing
Depreciation Expense [Line Items]
Depreciation	13	6	35	20
General and administrative
Depreciation Expense [Line Items]
Depreciation	$ 101	$ 45	$ 328	$ 327

Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization	$ (7,874)	$ (7,450)
Finite-lived intangible assets, net	6,455
Gross amount	15,093	15,093
Net carrying value	7,219	7,643
Licenses
Indefinite-lived Intangible Assets [Line Items]
Licenses, indefinite lived	764	764
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	10,396	10,396
Accumulated amortization	(3,941)	(3,552)
Finite-lived intangible assets, net	$ 6,455	$ 6,844
Amortization period	20 years	20 years
Domain name and related trademarks
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 2,678	$ 2,678
Accumulated amortization	(2,678)	(2,643)
Finite-lived intangible assets, net	$ 0	$ 35
Domain name and related trademarks \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization period	3 years	3 years
Domain name and related trademarks \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization period	7 years	7 years
Licenses
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 341	$ 341
Accumulated amortization	(341)	(341)
Finite-lived intangible assets, net	$ 0	$ 0
Amortization period	2 years	2 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 139	$ 139
Accumulated amortization	(139)	(139)
Finite-lived intangible assets, net	$ 0	$ 0
Non-compete agreements \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization period	2 years	2 years
Non-compete agreements \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization period	5 years	5 years
Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 775	$ 775
Accumulated amortization	(775)	(775)
Finite-lived intangible assets, net	$ 0	$ 0
Amortization period	3 years	3 years

Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 130	$ 210	$ 424	$ 629

Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2018 (remaining)	$ 130
2019	520
2020	520
2021	520
2022	520
Thereafter	4,245
Finite-lived intangible assets, net	$ 6,455

Debt - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Cost of assets under capital leases	$ 1,951	$ 1,951
Accumulated depreciation of assets under capital leases	1,879	1,855
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit	0	0
Available borrowing capacity	25,000
Outstanding unamortized loan fees	$ 127	$ 175

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Debt - Remaining Payments due on Capital Lease Obligations (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Debt Disclosure [Abstract]
2018 (remaining)	$ 17
Less amount representing interest	0
Current portion of long-term capital lease obligation	17
Less current maturities	17
Long-term capital lease obligation	$ 0

Segment and Geographic Information - Reconciliation of Segment Profit (Loss) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) segment	Sep. 30, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment			2
Revenue	$ 50,454	$ 41,338	$ 151,770	$ 120,489
Cost of revenue	27,474	22,571	79,404	66,431
Gross profit	22,980	18,767	72,366	54,058
CPaaS
Segment Reporting Information [Line Items]
Revenue	41,537	33,397	120,267	96,591
Cost of revenue	23,996	19,247	69,038	56,394
Gross profit	17,541	14,150	51,229	40,197
Other
Segment Reporting Information [Line Items]
Revenue	8,917	7,941	31,503	23,898
Cost of revenue	3,478	3,324	10,366	10,037
Gross profit	$ 5,439	$ 4,617	$ 21,137	$ 13,861

Segment and Geographic Information - Reconciliation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 50,454	$ 41,338	$ 151,770	$ 120,489
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	50,325	41,188	151,303	120,090
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 129	$ 150	$ 467	$ 399

Stockholders' Equity - Additional Information (Details)	Sep. 30, 2018 vote $ / shares shares	Dec. 31, 2017 vote $ / shares shares
Class of Stock [Line Items]
Preferred A stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred A stock, par value (in usd per share) \| $ / shares	$ 0.001	$ 0.001
Preferred A stock, shares issued (in shares)	0	0
Preferred A stock, shares outstanding (in shares)	0	0
Common Class A
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock voting rights, votes per share (in vote) \| vote	1	1
Common stock, par value (in usd per share) \| $ / shares	$ 0.001	$ 0.001
Common stock, shares issued (in shares)	12,347,482	4,197,831
Common stock, shares outstanding (in shares)	11,375,229	4,197,831
Common Class B
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock voting rights, votes per share (in vote) \| vote	10	10
Common stock, par value (in usd per share) \| $ / shares	$ 0.001	$ 0.001
Common stock, shares issued (in shares)	7,001,405	13,440,724
Common stock, shares outstanding (in shares)	7,436,718	13,440,724

Stockholders' Equity - Reserved Shares of Common Stock for Issuance (Details) - shares	Sep. 30, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	3,233,700	4,761,141
Stock options issued and outstanding
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	2,010,666	3,659,791
Nonvested restricted stock units issued and outstanding
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	320,482	0
Stock purchase warrants issued and outstanding
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	0	51,350
Stock-based awards available for grant under the 2017 Plan
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	902,552	1,050,000

Stock Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		9 Months Ended
	Jan. 01, 2018	Nov. 09, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)			3,233,700		3,233,700		4,761,141
Estimated grant date fair value of options vested			$ 246	$ 443	$ 716	$ 1,070
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options, granted (in shares)			0		17,988
Unrecognized cost for stock based compensation			$ 1,402		$ 1,402
Unrecognized cost for stock based compensation, period for recognition (in years)					2 years 2 months 15 days
Nonvested restricted stock units issued and outstanding
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)			320,482		320,482		0
Vesting percentage					25.00%
Unrecognized cost for stock based compensation, period for recognition (in years)					3 years 5 months 1 day
Unrecognized compensation cost related to non-vested RSUs			$ 7,360		$ 7,360
2017 Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)		1,050,000
Common stock reserved for future issuance, percent increase	5.00%
Increase in shares available for grant (in shares)	200,000
2010 Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant-date fair value of stock options granted (in usd per share)				$ 9.45	$ 11.10	$ 7.48
2010 Equity Compensation Plan \| Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		4 years
Contractual life (in years)		10 years

Stock Based Compensation - Fair Value of Options Granted Using the Black-Scholes Pricing Model (Details) - Employee Stock Option - $ / shares	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%	0.00%
Expected stock price volatility		47.00%
Average risk-free interest rate	1.90%	2.50%
Average risk-free interest rate, minimum			1.90%
Average risk-free interest rate, maximum			2.30%
Expected life (in years)	6 years 2 months 12 days	6 years 2 months 12 days	6 years 2 months 12 days
Fair value of common stock (in usd per share)		$ 22.81
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected stock price volatility	47.00%		44.00%
Fair value of common stock (in usd per share)	$ 18.40		$ 9.60
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected stock price volatility	49.00%		49.00%
Fair value of common stock (in usd per share)	$ 20.83		$ 20.83

Stock Based Compensation - Stock Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of options outstanding, beginning balance (in shares)		3,659,791
Number of options, granted (in shares)	0	17,988
Number of options exercised (in shares)		(1,652,120)
Number of options, forfeited or cancelled (in shares)		(14,993)
Number of options outstanding, ending balance (in shares)	2,010,666	2,010,666
Number of options outstanding, options vested and exercisable (in shares)	1,702,652	1,702,652
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted-average exercise price, beginning balance (in usd per share)		$ 6.88
Weighted-average exercise price, granted (in usd per share)		22.81
Weighted-average exercise price, exercised (in usd per share)		6.38
Weighted-average exercise price, forfeited or cancelled (in usd per share)		11.97
Weighted-average exercise price, ending balance (in usd per share)	$ 7.39	7.39
Weighted-average exercise price, options vested and exercisable (in usd per share)	$ 6.55	$ 6.55
Weighted-average remaining contract life, options outstanding (in years)		4 years 2 months 19 days	4 years 4 months 17 days
Weighted-average remaining contract life, options vested and exercisable (in years)		3 years 6 months 18 days
Aggregate intrinsic value, options outstanding	$ 92,849	$ 92,849		$ 59,436
Aggregate intrinsic value, options exercised		53,332
Aggregate intrinsic value, options vested and exercisable	$ 80,065	$ 80,065

Stock Based Compensation - Restricted Stock Unit Activity (Details) - Nonvested restricted stock units issued and outstanding	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Number of nonvested RSUs outstanding, beginning balance (in shares) \| shares	0
Number of nonvested RSUs, granted (in shares) \| shares	335,089
Number of nonvested RSUs, vested (in shares) \| shares	(8,978)
Number of nonvested RSUs, forfeited or cancelled (in shares) \| shares	(5,629)
Number of nonvested RSUs outstanding, ending balance (in shares) \| shares	320,482
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-average grant date fair value, beginning balance (in usd per share) \| $ / shares	$ 0
Weighted average grant-date fair value of nonvested RSUS, granted (in usd per share) \| $ / shares	26.40
Weighted-average grant date fair value of nonvested RSUs, vested (in usd per share) \| $ / shares	22.81
Weighted-average grant date fair value of nonvested restricted RSUs, forfeited or cancelled (in usd per share) \| $ / shares	29.35
Weighted-average grant date fair value, ending balance (in usd per share) \| $ / shares	$ 26.44

Stock Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 762	$ 612	$ 2,017	$ 1,102
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	30	17	79	57
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	173	38	376	100
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	146	54	364	124
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 413	$ 503	$ 1,198	$ 821

Commitments and Contingencies - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) ft²	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) ft²	Sep. 30, 2017 USD ($)	Jul. 20, 2018 ft²	Mar. 27, 2018 ft²	Jan. 12, 2018 ft²	Nov. 30, 2016 ft²
Lessee, Lease, Description [Line Items]
Office space (in square foot) \| ft²					2,605	5,930	40,035	40,657
Term of lease (in months)					12 months	60 months	84 months
Rent expense	$ 1,173	$ 1,034	$ 3,128	$ 2,414
Annual minimum commitments	1,200		$ 1,200
Term of agreement (in years)			5 years
Non-cancellable purchase obligation	3,933		$ 3,933
General and administrative
Lessee, Lease, Description [Line Items]
Reduction of rent expense	$ 251	$ 251	$ 753	$ 697
Operating Lease \| Raleigh, NC
Lessee, Lease, Description [Line Items]
Office space (in square foot) \| ft²	181,000		181,000

Commitments and Contingencies - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018 (remaining)	$ 1,247
2019	5,044
2020	5,180
2021	5,254
2022	3,438
Thereafter	3,742
Future minimum payments due, total	$ 23,905

Commitments and Contingencies - Future Minimum Lease Receipts (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018 (remaining)	$ 257
2019	1,042
2020	1,065
2021	1,089
2022	594
Future minimum lease receipts, total	$ 4,047

Employee Benefit Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Retirement Benefits [Abstract]
Matching contributions	$ 261	$ 181	$ 807	$ 596

Income Taxes (Details)	3 Months Ended		9 Months Ended
Income Taxes (Details)	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Effective tax rate	(1221.10%)	35.50%	(87.20%)	37.20%

Related Parties (Details) - Affiliated Entity - Republic - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Amount collected on behalf	$ 2,691,000		$ 9,166,000
Due to related parties	0		0
Transition Services Agreement
Related Party Transaction [Line Items]
Revenue from related parties	19,000	$ 37,000	69,000	$ 548,000
Accounts receivable, related parties	6,000		6,000		$ 15,000
Facilities Sharing Agreement
Related Party Transaction [Line Items]
Due from related parties	0		0		0
Rental payments received	251,000	251,000	753,000	697,000
Tax Sharing Agreement
Related Party Transaction [Line Items]
Due from related parties	0		0		0
Due to related parties	0		0		0
Master Services Agreement
Related Party Transaction [Line Items]
Revenue from related parties	994,000	$ 550,000	2,985,000	$ 1,623,000
Accounts receivable, related parties	$ 332,000		$ 332,000		$ 311,000

Basic and Diluted Income per Common Share - Components of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Net income	$ 2,510	$ 1,634	$ 19,213	$ 6,570
Less: net income allocated to participating securities	0	213	0	858
Net income attributable to common stockholders	$ 2,510	$ 1,421	$ 19,213	$ 5,712
Net income per share:
Basic (in usd per share)	$ 0.13	$ 0.12	$ 1.05	$ 0.48
Diluted (in usd per share)	$ 0.12	$ 0.11	$ 0.91	$ 0.42
Weighted Average Number of Common Shares Outstanding
Basic (in shares)	19,072,196	11,828,657	18,300,435	11,814,045
Dilutive effect of stock options, restricted stock units, and warrants (in shares)	2,073,928	1,424,080	2,765,367	1,673,604
Diluted (in shares)	21,146,124	13,252,737	21,065,802	13,487,649

Basic and Diluted Income per Common Share - Antidilutive Securities Excluded from the Computation (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Series A redeemable convertible preferred stock outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of weighted-average common shares outstanding	0	1,775,000	0	1,775,000
Stock options issued and outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of weighted-average common shares outstanding	0	110,125	0	110,125

Subsequent Events (Details) - Subsequent Event - USD ($)	Dec. 31, 2018	Oct. 30, 2018
Board of Directors Member
Subsequent Event [Line Items]
Annual compensation for service		$ 50,000
Audit Committee Member
Subsequent Event [Line Items]
Annual compensation for service		5,000
Compensation Committee Member
Subsequent Event [Line Items]
Annual compensation for service		$ 2,500
Scenario, Forecast \| Director \| Restricted Stock Units
Subsequent Event [Line Items]
Award grant date value	$ 75,000
Awards outstanding (in shares)	378
Pro-rated grant date value of awards	$ 18,750