0001514416-19-000047 | 10-Q | XBRL Viewer

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Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2019	Jul. 31, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	001-38285
Entity Registrant Name	Bandwidth Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	56-2242657
Entity Address, Address Line One	900 Main Campus Drive
Entity Address, City or Town	Raleigh
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27606
City Area Code	(800)
Local Phone Number	808-5150
Title of 12(b) Security	Class A Common Stock, par value $0.001 per share
Trading Symbol	BAND
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Central Index Key	0001514416
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false
Common Class A
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		17,762,688
Common Class B
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		5,627,060

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 140,091	$ 41,261
Marketable securities	55,839	17,400
Accounts receivable, net of allowance for doubtful accounts	26,695	24,009
Prepaid expenses and other current assets	8,541	6,114
Deferred costs	2,053	2,630
Total current assets	233,219	91,414
Property and equipment, net	31,799	25,136
Intangible assets, net	6,829	7,089
Deferred costs, non-current	1,038	1,828
Other long-term assets	2,128	727
Goodwill	6,867	6,867
Deferred tax asset	31,615	17,359
Total assets	313,495	150,420
Current liabilities:
Accounts payable	3,089	3,418
Accrued expenses and other current liabilities	24,120	21,393
Current portion of deferred revenue	4,887	5,324
Advanced billings	2,676	2,588
Total current liabilities	34,772	32,723
Deferred rent, net of current portion	3,698	2,503
Deferred revenue, net of current portion	5,900	6,424
Total liabilities	44,370	41,650
Stockholders’ equity:
Class A and Class B common stock	23	19
Additional paid-in capital	271,628	116,600
Accumulated deficit	(2,558)	(7,848)
Accumulated other comprehensive (loss) income	32	(1)
Total stockholders’ equity	269,125	108,770
Total liabilities and stockholders’ equity	$ 313,495	$ 150,420

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenue	$ 56,779	$ 48,304	$ 110,100	$ 101,316
Cost of revenue	30,110	26,566	58,876	51,930
Gross profit	26,669	21,738	51,224	49,386
Operating expenses:
Research and development	7,656	4,435	15,373	8,216
Sales and marketing	8,514	4,654	16,863	9,176
General and administrative	14,282	11,490	28,615	22,059
Total operating expenses	30,452	20,579	60,851	39,451
Operating income (loss)	(3,783)	1,159	(9,627)	9,935
Other income, net	729	90	930	139
Income (loss) before income taxes	(3,054)	1,249	(8,697)	10,074
Income tax benefit	6,526	9,263	14,161	6,629
Net income	$ 3,472	$ 10,512	$ 5,464	$ 16,703
Net income per share:
Basic (in usd per share)	$ 0.15	$ 0.58	$ 0.25	$ 0.93
Diluted (in usd per share)	$ 0.14	$ 0.50	$ 0.23	$ 0.80
Weighted average number of common shares outstanding:
Basic (in shares)	23,102,553	18,154,964	21,807,523	17,908,159
Diluted (in shares)	24,447,417	20,893,653	23,262,496	20,866,777

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Class A voting common Stock	Class B voting common Stock	Common stock Class A voting common Stock	Common stock Class A voting common Stock Conversion of Class B voting common stock to Class A voting common stock	Common stock Class B voting common Stock	Common stock Class B voting common Stock Conversion of Class B voting common stock to Class A voting common stock	Additional paid-in capital	Accumulated other comprehensive (loss) income	Accumulated deficit
Beginning balance (in shares) at Dec. 31, 2017				4,197,831		13,440,725
Beginning balance at Dec. 31, 2017	$ 76,711			$ 4		$ 13		$ 102,465	$ 0	$ (25,771)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercises of vested stock options (in shares)				5,000
Exercises of vested stock options	35			$ 1				34
Exercise of warrants to purchase common stock (in shares)						48,904
Exercise of warrants to purchase common stock	36							36
Costs in connection with initial public offering	(285)							(285)
Unrealized (loss) gain on marketable securities	(6)								(6)
Stock based compensation	493							493
Net income (loss)	6,191									6,191
Ending balance (in shares) at Mar. 31, 2018				4,202,831		13,489,629
Ending balance at Mar. 31, 2018	83,175			$ 5		$ 13		102,743	(6)	(19,580)
Beginning balance (in shares) at Dec. 31, 2017				4,197,831		13,440,725
Beginning balance at Dec. 31, 2017	76,711			$ 4		$ 13		102,465	0	(25,771)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	16,703
Ending balance (in shares) at Jun. 30, 2018				11,375,229		7,436,719
Ending balance at Jun. 30, 2018	101,386			$ 12		$ 7		110,437	(2)	(9,068)
Beginning balance (in shares) at Mar. 31, 2018				4,202,831		13,489,629
Beginning balance at Mar. 31, 2018	83,175			$ 5		$ 13		102,743	(6)	(19,580)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercises of vested stock options (in shares)				1,112,646
Exercises of vested stock options	6,933			$ 1				6,932
Vesting of restricted stock units (in shares)				6,512
Issuance of common stock (in shares)				330
Unrealized (loss) gain on marketable securities	4								4
Stock based compensation	762							762
Conversion of stock (in shares)					6,052,910		(6,052,910)
Conversion of stock	0				$ 6		$ (6)
Net income (loss)	10,512									10,512
Ending balance (in shares) at Jun. 30, 2018				11,375,229		7,436,719
Ending balance at Jun. 30, 2018	101,386			$ 12		$ 7		110,437	(2)	(9,068)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercises of vested stock options (in shares)				534,474
Exercises of vested stock options	3,579							3,579
Vesting of restricted stock units (in shares)				2,466
Unrealized (loss) gain on marketable securities	(1)								(1)
Stock based compensation	762							762
Conversion of stock (in shares)					435,313		(435,313)
Net income (loss)	2,510									2,510
Ending balance (in shares) at Sep. 30, 2018				12,347,482		7,001,406
Ending balance at Sep. 30, 2018	108,236			$ 12		$ 7		114,778	(3)	(6,558)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercises of vested stock options (in shares)				72,569
Exercises of vested stock options	500							500
Vesting of restricted stock units (in shares)				2,022
Unrealized (loss) gain on marketable securities	2								2
Stock based compensation	1,322							1,322
Conversion of stock (in shares)					490,674		(490,674)
Conversion of stock	0				$ 1		$ (1)
Net income (loss)	(1,290)									(1,290)
Ending balance (in shares) at Dec. 31, 2018		12,912,747	6,510,732	12,912,747		6,510,732
Ending balance at Dec. 31, 2018	108,770			$ 13		$ 6		116,600	(1)	(7,848)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment to opening retained earnings due to adoption of ASC 606	(174)									(174)
Exercises of vested stock options (in shares)				589,510
Exercises of vested stock options	3,935			$ 1				3,934
Vesting of restricted stock units (in shares)				105,367
Issuance of common stock (in shares)				2,875,000
Issuance of common stock	147,391			$ 3				147,388
Costs in connection with initial public offering	(785)							(785)
Unrealized (loss) gain on marketable securities	8								8
Stock based compensation	1,676							1,676
Conversion of stock (in shares)				57,230		(57,230)
Equity awards withheld for tax liability (in shares)				(16,585)
Equity awards withheld for tax liability	(938)							(938)
Net income (loss)	1,992									1,992
Ending balance (in shares) at Mar. 31, 2019				16,523,269		6,453,502
Ending balance at Mar. 31, 2019	261,875			$ 17		$ 6		267,875	7	(6,030)
Beginning balance (in shares) at Dec. 31, 2018		12,912,747	6,510,732	12,912,747		6,510,732
Beginning balance at Dec. 31, 2018	108,770			$ 13		$ 6		116,600	(1)	(7,848)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	5,464
Ending balance (in shares) at Jun. 30, 2019		17,732,453	5,627,060	17,732,453		5,627,061
Ending balance at Jun. 30, 2019	269,125			$ 18		$ 5		271,628	32	(2,558)
Beginning balance (in shares) at Mar. 31, 2019				16,523,269		6,453,502
Beginning balance at Mar. 31, 2019	261,875			$ 17		$ 6		267,875	7	(6,030)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercises of vested stock options (in shares)				366,405
Exercises of vested stock options	2,446							2,446
Vesting of restricted stock units (in shares)				20,003
Costs in connection with initial public offering	(49)							(49)
Unrealized (loss) gain on marketable securities	13								13
Foreign currency translation	12								12
Stock based compensation	1,630							1,630
Conversion of stock (in shares)				826,441		(826,441)
Conversion of stock					$ 1		$ (1)
Equity awards withheld for tax liability (in shares)				(3,665)
Equity awards withheld for tax liability	(274)							(274)
Net income (loss)	3,472									3,472
Ending balance (in shares) at Jun. 30, 2019		17,732,453	5,627,060	17,732,453		5,627,061
Ending balance at Jun. 30, 2019	$ 269,125			$ 18		$ 5		$ 271,628	$ 32	$ (2,558)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities
Net income (loss)	$ 5,464	$ 16,703
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	4,321	2,683
Accretion of bond discount	(478)	(26)
Amortization of debt issuance costs	139	32
Stock-based compensation	3,306	1,255
Deferred taxes	(14,263)	(6,677)
Loss on disposal of property and equipment	351	10
Changes in operating assets and liabilities:
Accounts receivable	(2,683)	(1,776)
Prepaid expenses and other assets	(3,586)	(620)
Deferred costs	1,290	225
Accounts payable	(95)	(2,375)
Accrued expenses and other liabilities	1,584	2,517
Deferred revenue and advanced billings	(1,047)	4,141
Deferred rent	285	1,025
Net cash provided by (used in) operating activities	(5,412)	17,117
Investing activities
Purchase of property and equipment	(7,844)	(3,113)
Capitalized software development costs	(1,675)	(1,547)
Proceeds from sale of property and equipment	0	3
Purchase of marketable securities	(55,933)	(13,995)
Maturities of marketable securities	18,000	3,000
Net cash used in investing activities	(47,452)	(15,652)
Financing activities
Proceeds from the follow-on public offering, net of underwriting discounts	147,391	0
Payments on capital leases	0	(50)
Payment of debt issuance costs	(125)	0
Proceeds from exercises of stock options	6,381	6,967
Proceeds from exercises of warrants	0	37
Equity awards withheld and paid for tax liabilities	(945)	0
Net cash provided by financing activities	151,947	6,669
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1)	0
Net increase in cash, cash equivalents, and restricted cash	99,082	8,134
Cash, cash equivalents, and restricted cash, beginning of period	41,501	37,870
Cash, cash equivalents, and restricted cash, end of period	140,583	46,004
Supplemental disclosure of cash flow information
Cash paid during the period for interest	96	45
Cash paid for taxes	157	155
Supplemental disclosure of noncash investing and financing activities
Purchase of property and equipment, accrued but not paid	2,725	2,126
Equity awards withheld for tax liabilities, accrued but not paid	267	0
Follow-on Public Offering
Financing activities
Payments of costs related to public offering	(755)	0
IPO
Financing activities
Payments of costs related to public offering	$ 0	$ (285)

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 3,472	$ 10,512	$ 5,464	$ 16,703
Other Comprehensive income
Unrealized gain (loss) on marketable securities, net of income taxes	13	4	21	(2)
Foreign currency translation	12	0	12	0
Total comprehensive income	$ 3,497	$ 10,516	$ 5,497	$ 16,701

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Organization and Description of Business	6 Months Ended
Organization and Description of Business	Jun. 30, 2019
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. Follow-on Public Offering On March 11, 2019, the Company completed a follow-on public offering in which the Company sold 2,875,000 shares of its Class A common stock, including 375,000 shares sold pursuant to the exercise by the underwriters of an option to purchase additional shares, at a public offering price of $54.25 per share. The Company received aggregate proceeds of $146,557, after deducting underwriting discounts and offering expenses paid and payable by the Company.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

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 Securities and Exchange Commission (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 15, 2019.

The condensed consolidated balance sheet as of December 31, 2018, 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.

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 2019 or any future period.

Reclassification

The Company reclassified certain prior year amounts to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities, stockholder’s deficit or net income.

Principles of Consolidation

The condensed 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, estimated period of benefit, valuation allowances on deferred 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 six months ended June 30, 2019:


	December 31,		June 30,
	2018		2019
Cash and cash equivalents	$	41,261	$	140,091
Restricted cash	240		492

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	41,501	$	140,583

For the six months ended June 30, 2018:


	December 31,		June 30,
	2017		2018
Cash and cash equivalents	$	37,627	$	45,806
Restricted cash	243		198

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	37,870	$	46,004

Restricted cash is primarily for Automated Clearing House availability, customer deposits, employee withholding tax liability not yet remitted, 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, 2018, one customer represented approximately 18% of the Company’s accounts receivable, net of allowance for doubtful accounts. As of June 30, 2019, no individual customer represented more than 10% of the Company’s accounts receivable, net of allowance for doubtful accounts.

For the three and six months ended June 30, 2018 and 2019, no individual customer represented more than 10% of the Company’s total revenue.

Foreign currency translation

The Company has foreign operations with non-USD functional currencies. The Euro and British Pound are the functional currencies for the Company’s international operations. Foreign exchange gains and losses, which result from the process of remeasuring foreign currency transactions into the appropriate functional currency, are included in other income, net in the Company’s condensed consolidated statements of operations.

The impact of changes in foreign currency exchange rates resulting from the translation of foreign currency financial statements into U.S. dollars for financial reporting purposes is included in other comprehensive income, which is a separate component of stockholders’ equity. Assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average rates for the period.

Recently Adopted Accounting Standards

On January 1, 2019, the Company adopted the guidance of ASC 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2019. The Company’s results for reporting periods beginning after January 1, 2019 are presented in accordance with the provisions under ASC 606 and prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s revenue recognition policy as further described in Note 2, Summary of Significant Accounting Policies, to its Annual Report on Form 10-K for the year ended December 31, 2018.

In connection with the adoption of ASC 606, the Company recognized a net increase to its opening accumulated deficit of $174 as of January 1, 2019, related to a discount present in one of its contracts.

Prior to the adoption of ASC 606, the Company recognized the majority of its revenue based on the usage of its customers in the period the traffic traversed the Company’s network. The Company determined that ASC 606 continues to support the recognition of revenue over time for the majority of the Company’s contracts due to the continuous transfer of control to the customer.

The adoption of ASC 606 did not result in a change in the Company’s accounting for its commission costs, which will continue to be expensed as incurred. The Company pays commissions over time and a corresponding

requisite substantive service condition exists for the employee to receive the commission. The Company determined the timing of the commission payments and the underlying service performed by the employee were commensurate.

The impact on the Company’s balance sheet presentation includes separately presenting customer refundable prepayments as advanced billings, whereas under ASC 605 these were included in the current portion of deferred revenue and advanced billings.

Revenue Recognition

Revenue recognition commences upon transfer of control of promised goods or services to customers in an amount that the Company expects to receive in exchange for those products or services.

The Company determines revenue recognition through the following steps:

•identification of the contract, or contracts, with a customer;

•identification of the performance obligations in the contract;

•determination of the transaction price;

•allocation of the transaction price to the performance obligations in the contract; and

•recognition of revenue, when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

Revenue consists primarily of the sale of communications services offered through Application Programming Interface (“API”) software solutions to large enterprise, as well as small and medium-sized business, customers and is generally derived from usage and service fees in both the CPaaS and Other segments. Usage revenue includes voice communication (primarily driven by inbound minutes, outbound minutes and toll-free minutes) and messaging communication (driven by the number of messages) that traverse the platform and network. Service fees include the provision and management of phone numbers and emergency services access.

The majority of the Company’s revenue is generated from usage-based fees earned from customers accessing the Company’s communications platform. Access to the Company’s communication platform is considered a series of distinct services, with continuous transfer of control to the customer, comprising one performance obligation and usage-based fees are recognized in revenue in the period the traffic traverses the Company’s network. For the three and six months ended June 30, 2018, the revenue from usage-based fees represented $25,582 and $50,150 of CPaaS revenue, respectively, and $6,578 and $18,742 of Other revenue, respectively. For the three and six months ended June 30, 2019, the revenue from usage-based fees represented $31,647 and $60,697 of CPaaS revenue, respectively, and $7,267 and $14,059 of Other revenue, respectively.

Revenue from service fees is recognized on a ratable basis as the service is provided, which is typically one month. For the three and six months ended June 30, 2018, the revenue from service fees represented $13,533 and $27,218 of CPaaS revenue, respectively, and $1,893 and $3,844 of Other revenue, respectively. For the three and six months ended June 30, 2019, the revenue from service fees represented $15,134 and $29,888 of CPaaS revenue, respectively, and $1,523 and $3,039 of Other revenue, respectively.

The remaining $718 and $1,362 for the three and six months ended June 30, 2018, respectively, and $1,208 and $2,417 for the three and six months ended June 30, 2019, respectively, are generated from other miscellaneous services.

Infrequently, Bandwidth’s contracts with customers may include multiple performance obligations. For such arrangements, revenues are allocated to each performance obligation based on its relative standalone selling price. Generally, standalone selling prices are determined based on the prices charged to similar customers for similar services.

When required as part of providing service, revenues and associated expenses related to nonrefundable, upfront service activation and setup fees are deferred and recognized over the longer of the associated service contract period or estimated customer life.

The Company’s contracts do not contain general rights of return. However, occasionally credits may be issued. The Company’s contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

The Company maintains a reserve for sales credits. Credits are accounted for as variable consideration and are estimated based on several inputs including historical experience and current trends of credit issuances. Adjustments to the reserve are recorded against revenue.

The Company has various sales commission plans for which eligible employees can earn commissions from the sale of products and services to customers. Eligible employees must be employed at the time of payment in order to receive a commission. The Company pays commissions over time and a corresponding requisite substantive service condition exists for the employee to receive the commission. The Company determined that the timing of the commission payments and the underlying service performed by the employee were commensurate. Accordingly, sales commissions are generally expensed as incurred. These costs are recorded within sales and marketing expenses.

Contract Assets and Liabilities

The following table provides information about receivables and contract liabilities from contracts with customers:


	June 30, 2019
Receivables (1)	$	26,695
Contract liabilities (2)	10,787

________________________

(1) Included in accounts receivable, net of allowance on the consolidated balance sheet.

(2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the condensed consolidated balance sheet.

Deferred revenue is recorded when cash payments are received in advance of future usage on contracts. Customer refundable payments are recorded as advanced billings. Revenue is typically recognized in the month following when service is rendered or, in the case of nonrefundable upfront fees, over the estimated period of benefit. During the three and six months ended June 30, 2019, the Company recognized revenue of $2,390 and $4,608, respectively, related to its contract liabilities. The Company expects to recognize $4,887 in revenue over the next twelve months related to its deferred revenue as of June 30, 2019.

Other than adoption of ASC 606, there were no changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the year ended December 31, 2018.

Recent Accounting Pronouncements Not Yet Adopted

In October 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-17, Consolidation (Topic 810), Targeted Improvements to Related Party Guidance for Variable Interest Entities, which addresses the cost and complexity of financial reporting associated with consolidation of variable interest entities (“VIE”). Since the Company will lose status as an emerging growth company as of December 31, 2019, which is the last day of the fiscal year, ASU 2018-17 will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The new guidance must be applied on a retrospective basis as a cumulative-effect adjustment as of the date of adoption. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Since the Company will lose status as an emerging growth company as of December 31, 2019, which is the last day of the fiscal year, ASU 2018-15 will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, and early adoption is permitted. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. 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 public business entities that are SEC filers for annual and interim impairment tests performed in periods beginning after December 15, 2019, 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 June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments – Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies how to apply certain aspects of the new credit losses standard. These ASUs are effective for public business entities that are SEC filers for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company is evaluating the impact of this guidance on its consolidated 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. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements, to clarify how to apply certain aspects of the new lease standard. Since the Company will lose status as an emerging growth company as of December 31, 2019, which is the last day of the fiscal year, ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after

December 15, 2019, 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. The Company expects the adoption of this standard to result in an increase to the reported assets and liabilities; however, it has not yet determined the full impact the adoption of this standard will have on its financial statements and related disclosures.

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2019

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, 2018 and June 30, 2019 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 income.

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, 2018 and June 30, 2019:


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis December 31, 2018
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	8,194	$	—	$	—	$	8,194	$	—	$	—	$	8,194

U.S. Reverse repurchase agreements	26,000		—		—		—		26,000		—		26,000
Total included in cash and cash equivalents	34,194		—		—		8,194		26,000		—		34,194
Marketable securities:
U.S. treasury securities	17,402		—		(2)		17,400		—		—		17,400

Total marketable securities	17,402		—		(2)		17,400		—		—		17,400
Total financial assets	$	51,596	$	—	$	(2)	$	25,594	$	26,000	$	—	$	51,594


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis June 30, 2019
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	19,002	$	—	$	—	$	19,002	$	—	$	—	$	19,002

U.S. Reverse repurchase agreements	115,000		—		—		—		115,000		—		115,000
Total included in cash and cash equivalents	134,002		—		—		19,002		115,000		—		134,002
Marketable securities:
U.S. treasury securities	55,810		29		—		55,839		—		—		55,839

Total marketable securities	55,810		29		—		55,839		—		—		55,839
Total financial assets	$	189,812	$	29	$	—	$	74,841	$	115,000	$	—	$	189,841

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 June 30, 2019:


	Amortized cost		Aggregate fair value
Financial assets:
Less than one year	$	55,810	$	55,839

Total	$	55,810	$	55,839

As of June 30, 2019, there were no securities in an unrealized loss position. During the three and six months ended June 30, 2018, there were $3,000 in maturities of marketable securities. During the three and six months ended June 30, 2019, there were $9,000 and $18,000 in maturities of marketable securities, respectively. Interest earned on marketable securities was $32 and $48 in the three and six months ended June 30, 2018, respectively, and $3 and $6 in the three and six months ended June 30, 2019, respectively, and is recorded as other 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

6 Months Ended

Jun. 30, 2019

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,		June 30,
	2018		2019
Trade accounts receivable	$	13,620	$	12,706
Unbilled accounts receivable	11,174		14,901
Allowance for doubtful accounts	(906)		(1,093)
Other accounts receivable	121		181
Total accounts receivable, net	$	24,009	$	26,695

Components of allowance for doubtful accounts are as follows:


	Three months ended June 30,						Six months ended June 30,
Allowance for doubtful accounts:	2018		2019		2018		2019
Balance, beginning of period	$	(1,290)	$	(1,018)	$	(32,463)	$	(906)
Charged to bad debt expense	(209)		(284)		(210)		(416)
Deductions (1)	209		209		265		229
Billings deemed not probable of collection (2)	(183)		—		(301)		—
Write-off of previously outstanding and fully reserved billings related to settlement (3)	—		—		24,968		—
Revenue recognized from outstanding billings previously deemed uncollectible related to settlement (3)	—		—		6,268		—
Balance, end of period	$	(1,473)	$	(1,093)	$	(1,473)	$	(1,093)

________________________

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

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

(3) 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.

Accrued expenses and other current liabilities consisted of the following:


	December 31,		June 30,
	2018		2019
Accrued expense	$	8,292	$	11,410
Accrued compensation and benefits	7,323		6,298
Accrued sales, use, and telecom related taxes	4,742		5,238
Deferred rent, current portion	298		316
Other accrued expenses	738		858
Total accrued expenses and other current liabilities	$	21,393	$	24,120

Property and Equipment

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

5. Property and Equipment

Property and equipment, net consisted of the following:


	December 31,		June 30,
	2018		2019
Furniture and fixtures	$	1,741	$	2,086
Computer and office equipment	7,662		7,946
Telecommunications equipment	30,694		35,865
Leasehold improvements	2,438		3,467
Software development costs	16,293		19,746
Automobile	10		10
Total cost	58,838		69,120
Less—accumulated depreciation	(33,702)		(37,321)
Total property and equipment, net	$	25,136	$	31,799

The Company capitalized $1,106 and $1,547 of software development costs in the three and six months ended June 30, 2018, respectively, and $1,080 and $1,675 in the three and six months ended June 30, 2019, respectively.

Amortization expense related to capitalized software development costs were $425 and $873 for the three and six months ended June 30, 2018, respectively, and $384 and $1,173 for the three and six months ended June 30, 2019, respectively.

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


	Three months ended June 30,						Six months ended June 30,
	2018		2019		2018		2019
Cost of revenue	$	1,015	$	1,530	$	2,078	$	2,823
Research and development	31		63		61		131
Sales and marketing	12		24		22		52
General and administrative	108		365		227		1,055
Total depreciation expense	$	1,166	$	1,982	$	2,388	$	4,061

Intangible Assets

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

6. Intangible Assets

Intangible assets, net consisted of the following as of December 31, 2018:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(4,071)	$	6,325	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	$	(8,004)	$	7,089

Intangible assets, net consisted of the following as of June 30, 2019:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(4,331)	$	6,065	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	$	(8,264)	$	6,829

Amortization expense for definite lived intangible assets was $130 and $295 for the three and six months ended June 30, 2018, respectively, and $130 and $260 for the three and six months ended June 30, 2019, respectively. The remaining amortization period for definite lived intangible assets is 12 years.

Future estimated amortization expense for definite lived intangible assets is as follows:


	As of June 30, 2019
2019 (remaining)	$	260
2020	520
2021	520
2022	520
2023	520
Thereafter	3,725
	$	6,065

Debt	6 Months Ended
Debt	Jun. 30, 2019
Debt Disclosure [Abstract]
Debt	7. Debt On March 1, 2019, the Company amended and restated its Credit and Security Agreement with KeyBank National Association. The agreement is for a $25,000 revolving loan, which includes a swing line of up to $1,000 and limits letters of credit commitments to a maximum of $2,500. The term of the amended and restated Credit and Security Agreement is three years and matures on March 1, 2022. Loans under the Credit Agreement will bear interest at the highest of (i) the bank’s prime rate, (ii) the federal funds effective rate plus 0.5 percent, and (iii) the London Interbank Offered Rate plus 1.00 percent. This agreement requires that a specified minimum liquidity amount must be maintained in cash and cash equivalents at all times and that the Company meet a minimum revenue clause on a quarterly basis. On June 4, 2019, KeyBank National Association and Pacific Western Bank entered into an Assignment and Acceptance Agreement, whereby KeyBank National Association, as the Assignor, sold and assigned $10,000 of the Company's Revolving Credit Commitment to Pacific Western Bank, the Assignee. KeyBank National Association retains $15,000 of the Revolving Credit Commitment. As of December 31, 2018 and June 30, 2019, 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 June 30, 2019. As of December 31, 2018 and June 30, 2019, the outstanding unamortized loan fees associated with the revolving loan were $136 and $122, respectively, and were included in prepaid expenses and other current assets in the Company’s condensed consolidated balance sheets. On March 1, 2019, previous unamortized loan fees of $125 associated with the Credit and Security agreement prior to the amendment and restatement were expensed to interest expense, which is included in other income, net on the condensed consolidated statements of operations. Capital Leases The Company leased various equipment under leases accounted for as capital leases with expiration dates through December 2018. As of December 31, 2018, cost and accumulated depreciation of the assets under capital leases recorded by the Company were $1,951 and $1,884, respectively. As of June 30, 2019, cost and accumulated depreciation of the assets under capital leases recorded by the Company were $1,959 and $1,898, respectively. There were no remaining payments due on the Company’s capital lease obligations as of June 30, 2019.

Segment and Geographic Information

6 Months Ended

Jun. 30, 2019

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 June 30,						Six months ended June 30,
	2018		2019		2018		2019
CPaaS
Revenue	$	39,833	$	47,989	$	78,730	$	93,002
Cost of revenue	23,137		26,473		45,042		51,773
Gross profit	$	16,696	$	21,516	$	33,688	$	41,229
Other
Revenue	$	8,471	$	8,790	$	22,586	$	17,098
Cost of revenue	3,429		3,637		6,888		7,103
Gross profit	$	5,042	$	5,153	$	15,698	$	9,995
Consolidated
Revenue	$	48,304	$	56,779	$	101,316	$	110,100
Cost of revenue	26,566		30,110		51,930		58,876
Gross profit	$	21,738	$	26,669	$	49,386	$	51,224

The Company's assets were primarily held in the United States as of December 31, 2018 and June 30, 2019. Assets held outside of the United States as of December 31, 2018 and June 30, 2019 were not material.

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


	Three months ended June 30,						Six months ended June 30,
	2018		2019		2018		2019
CPaaS
United States	$	39,753	$	47,907	$	78,532	$	92,851
International	80		82		198		151
Total	$	39,833	$	47,989	$	78,730	$	93,002

Other
United States	$	8,401	$	8,722	$	22,446	$	16,951
International	70		68		140		147
Total	$	8,471	$	8,790	$	22,586	$	17,098

Stockholder's Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Equity

Preferred Stock

As of December 31, 2018 and June 30, 2019, 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, 2018 and June 30, 2019, 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, 2018, 12,912,747 and 6,510,732 shares of Class A and B common stock, respectively, were issued and outstanding. As of June 30, 2019, 17,732,453 and 5,627,060 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 Class A common stock for issuance as follows:


	December 31,	June 30,
	2018	2019
Stock options issued and outstanding	1,937,370	977,154
Nonvested restricted stock units issued and outstanding	324,252	427,494

Stock-based awards available for grant under the 2017 Plan	896,760	1,313,785
	3,158,382	2,718,433

Stock Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [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 initial public offering. 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, 2019, the shares available for grant under the 2017 Plan were automatically increased by 645,637 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.

Restricted stock units (“RSU”) 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. Certain RSUs awarded to executives vest over four years with 50% vesting in the first year in 12.5% increments on each calendar quarter immediately following the grant date and the remaining 50% earned over years two, three and four. Other RSUs awarded to executives and employees generally are earned over a service period of four years.

Stock options

The following summarizes the stock option activity for the periods presented:


	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, 2018	1,937,370	$	7.41	4.00	$	64,596
Granted	—	—
Exercised	(955,915)	6.68			48,602
Forfeited or cancelled	(4,301)	10.98
Outstanding as of June 30, 2019	977,154	$	8.11	3.98	$	65,382

Options vested and exercisable at June 30, 2019	791,472	$	6.90	3.14	$	53,915
Options vested and expected to vest as of June 30, 2019	973,332	$	8.09	3.97	$	65,149

Aggregate intrinsic value represents the difference between the option exercise price and the fair value of 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 $11.10 for the six months ended June 30, 2018. No options were granted for the three months ended June 30, 2018 and the three and six months ended June 30, 2019.

The total estimated grant date fair value of options vested was $360 and $471 for the three and six months ended June 30, 2018, respectively, and $223 and $280 for the three and six months ended June 30, 2019, respectively.

As of June 30, 2019, total unrecognized compensation cost related to all non-vested stock options was $840, which will be amortized over a weighted-average period of 1.72 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, 2018	324,252	$	26.95
Granted	231,758	43.67
Vested	(125,370)	30.09
Forfeited or cancelled	(3,146)	36.85
Nonvested RSUs as of June 30, 2019	427,494	$	35.03

As of June 30, 2019, total unrecognized compensation cost related to non-vested RSUs was $13,818, which will be amortized over a weighted-average period of 3.18 years.

Stock-Based Compensation Expense

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


	Three months ended June 30,						Six months ended June 30,
	2018		2019		2018		2019
Cost of revenue	$	32	$	50	$	49	$	106
Research and development	129		358		203		730
Sales and marketing	140		292		218		612
General and administrative	461		930		785		1,858
Total	$	762	$	1,630	$	1,255	$	3,306

Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Operating Leases

The Company leases 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 1, 2019, the Company entered into an amendment to an office building lease relating to 117,719 square feet of office space, which includes the Company’s headquarters. The amendment provides an additional 30,114 square feet to the previous 87,605 square feet and extends the lease term to January 31, 2024. In addition, this amendment gives the Company the option to extend the lease for an additional five-year term. The amendment to the office building lease commenced in April 2019. On May 29, 2019, the Company further amended the lease to provide an additional 2,322 square feet for a total of 120,041 square feet of office space. This amendment commenced in June 2019.

On April 4, 2019, the Company entered into an amendment to an office building lease relating to 9,408 square feet of office space. The amendment provides an additional 5,286 square feet to the previous 4,122 square feet and extends the lease term to September 30, 2024. In addition, this amendment gives the Company the option to extend the lease for an additional five-year term. The amendment to the office building lease commenced in July 2019.

The leases contain escalation clauses and various landlord concessions, including a tenant improvement allowance. 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 are as follows:


	As of June 30, 2019
2019 (remaining)	$	3,078
2020	6,430
2021	6,587
2022	6,301
2023	5,926
Thereafter	2,936
	$	31,258

The Company incurred rent expense of $1,022 and $1,955 for the three and six months ended June 30, 2018, respectively, and $1,434 and $2,653 for the three and six months ended June 30, 2019, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations.

On January 1, 2019, the Company entered into an amendment to an office building lease relating to 40,657 square feet of office space, which the Company sub-leases to a related party, Republic Wireless, Inc. (“Republic”). The amendment gives the Company the options to extend the lease for an additional period of approximately 18 months and a subsequent additional five-year term. The amendment to the office building lease commenced in January 2019. On May 29, 2019, the Company further amended the sub-lease to reduce the square feet of office space sub-leased to 17,073. No other terms were amended. The amendment to the office building sub-lease commenced in June 2019.

The Company recorded a reduction of rent expense of $251 and $502 related to the sublease agreement for the three and six months ended June 30, 2018, respectively, and $200 and $451 for the three and six months ended June 30, 2019, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations.

Future minimum sub-lease receipts required under the non-cancellable lease are as follows:


	As of June 30, 2019
2019 (remaining)	$	221
2020	447
2021	457
2022	249

	$	1,374

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 June 30, 2019 the Company has $4,789 in other non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $4,098 will be fulfilled within a year.

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 the Company has not been served with a complaint 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	6 Months Ended
Employee Benefit Plan	Jun. 30, 2019
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 $259 and $546 for the three and six months ended June 30, 2018, respectively, and $373 and $886 for the three and six months ended June 30, 2019, respectively.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2019
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 the permanent impacts of differences in book and tax accounting. The Company’s effective tax rate was (741.6)% and (65.8)% for the three and six months ended June 30, 2018, respectively, and 213.7% and 162.8% for the three and six months ended June 30, 2019, respectively. The change in tax rate is primarily due to the change in book income and the impact of stock compensation tax deductions. The Company’s effective tax rate for the three and six months ended June 30, 2019, is higher than the U.S. federal statutory rate of 21.0% primarily due to the impact of stock compensation tax deductions.

Related Parties	6 Months Ended
Related Parties	Jun. 30, 2019
Related Party Transactions [Abstract]
Related Parties	14. Related Parties On April 20, 2015, the Company created a wholly owned subsidiary, 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 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-initial public offering 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 compensation of $22 and $50 for the three and six months ended June 30, 2018, respectively, and $0 for the three and six months ended June 30, 2019, which is included in general and administrative expenses in the condensed consolidated statements of operations. No amounts were due to the Company under the Transition Services Agreement as of December 31, 2018 and June 30, 2019. The Company received rental payments under the Facilities Sharing Agreement of $251 and $502 for the three and six months ended June 30, 2018, respectively, and $200 and $451 for the three and six months ended June 30, 2019, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations. No amounts were due to the Company under the Facilities Sharing Agreement as of December 31, 2018 and June 30, 2019. 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, 2018 and June 30, 2019. 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 $1,005 and $1,991 for the three and six months ended June 30, 2018, respectively, and $677 and $1,569 for the three and six months ended June 30, 2019, respectively. The Company recognized such amounts as revenue in the accompanying condensed consolidated statements of operations. As of December 31, 2018 and June 30, 2019, the Company had a receivable of $327 and $235, respectively, under the Master Services Agreement. On March 1, 2019 an amendment to the current Master Services Agreement was executed. Pursuant to the terms of the new agreement, Republic receives reduced pricing on its messaging services, effective April 1, 2019. All other terms and conditions of the existing agreement remain. On June 20, 2019, Republic executed a further amendment to the current Master Services Agreement. Pursuant to the terms of the June 20, 2019 amendment, Republic receives reduced pricing on its outbound voice services effective on June 20, 2019. Republic also executed a revenue commitment schedule on June 20, 2019. Pursuant to the revenue commitment schedule, Republic agreed to spend a minimum of $100 per month during the 11-month period commencing July 1, 2019 through May 31, 2020. 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. Bandwidth had collected on behalf of, and remitted withholding tax to, Republic of $6,475 for the three and six months ended June 30, 2018, and $714 and $1,327 for the three and six months ended June 30, 2019, respectively, and had a related payable of $0 as of June 30, 2019.

Basic and Diluted Income per Common Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Basic and Diluted Income per Common Share

15. Basic and Diluted Income per Common Share

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 June 30,						Six months ended June 30,
	2018		2019		2018		2019




Net income attributable to common stockholders	$	10,512	$	3,472	$	16,703	$	5,464
Net income per share:
Basic	$	0.58	$	0.15	$	0.93	$	0.25
Diluted	$	0.50	$	0.14	$	0.80	$	0.23














Weighted Average Number of Common Shares Outstanding
Basic	18,154,964		23,102,553		17,908,159		21,807,523
Dilutive effect of stock options, restricted stock units, and warrants	2,738,689		1,344,864		2,958,618		1,454,973
Diluted	20,893,653		24,447,417		20,866,777		23,262,496

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:

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Reclassification

Principles of Consolidation

Use of Estimates

Cash and Cash Equivalents

Restricted Cash

Concentration of Credit Risk

Recently Adopted Accounting Standards

Revenue Recognition

Revenue recognition commences upon transfer of control of promised goods or services to customers in an amount that the Company expects to receive in exchange for those products or services.

The Company determines revenue recognition through the following steps:

•identification of the contract, or contracts, with a customer;

•identification of the performance obligations in the contract;

•determination of the transaction price;

•allocation of the transaction price to the performance obligations in the contract; and

•recognition of revenue, when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

Contract Assets and Liabilities

The following table provides information about receivables and contract liabilities from contracts with customers:


	June 30, 2019
Receivables (1)	$	26,695
Contract liabilities (2)	10,787

________________________

(1) Included in accounts receivable, net of allowance on the consolidated balance sheet.

(2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the condensed consolidated balance sheet.

Foreign currency translation

Recent Accounting Pronouncements Not Yet Adopted

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

For the six months ended June 30, 2019:


	December 31,		June 30,
	2018		2019
Cash and cash equivalents	$	41,261	$	140,091
Restricted cash	240		492

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	41,501	$	140,583

For the six months ended June 30, 2018:


	December 31,		June 30,
	2017		2018
Cash and cash equivalents	$	37,627	$	45,806
Restricted cash	243		198

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	37,870	$	46,004

Information about Receivables and Contract Liabilities from Contract with Customers

The following table provides information about receivables and contract liabilities from contracts with customers:


	June 30, 2019
Receivables (1)	$	26,695
Contract liabilities (2)	10,787

________________________

(1) Included in accounts receivable, net of allowance on the consolidated balance sheet.

(2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the condensed consolidated balance sheet.

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

For the six months ended June 30, 2019:


	December 31,		June 30,
	2018		2019
Cash and cash equivalents	$	41,261	$	140,091
Restricted cash	240		492

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	41,501	$	140,583

For the six months ended June 30, 2018:


	December 31,		June 30,
	2017		2018
Cash and cash equivalents	$	37,627	$	45,806
Restricted cash	243		198

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	37,870	$	46,004

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

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, 2018 and June 30, 2019:


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis December 31, 2018
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	8,194	$	—	$	—	$	8,194	$	—	$	—	$	8,194

U.S. Reverse repurchase agreements	26,000		—		—		—		26,000		—		26,000
Total included in cash and cash equivalents	34,194		—		—		8,194		26,000		—		34,194
Marketable securities:
U.S. treasury securities	17,402		—		(2)		17,400		—		—		17,400

Total marketable securities	17,402		—		(2)		17,400		—		—		17,400
Total financial assets	$	51,596	$	—	$	(2)	$	25,594	$	26,000	$	—	$	51,594


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis June 30, 2019
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	19,002	$	—	$	—	$	19,002	$	—	$	—	$	19,002

U.S. Reverse repurchase agreements	115,000		—		—		—		115,000		—		115,000
Total included in cash and cash equivalents	134,002		—		—		19,002		115,000		—		134,002
Marketable securities:
U.S. treasury securities	55,810		29		—		55,839		—		—		55,839

Total marketable securities	55,810		29		—		55,839		—		—		55,839
Total financial assets	$	189,812	$	29	$	—	$	74,841	$	115,000	$	—	$	189,841

Schedule of Contractual Maturities of Marketable Securities

The following table summarizes the contractual maturities of marketable securities as of June 30, 2019:


	Amortized cost		Aggregate fair value
Financial assets:
Less than one year	$	55,810	$	55,839

Total	$	55,810	$	55,839

Financial Statement Components (Tables)

6 Months Ended

Jun. 30, 2019

Financial Statement Components [Abstract]

Schedule of Accounts Receivable, net of Allowance for Doubtful Accounts

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


	December 31,		June 30,
	2018		2019
Trade accounts receivable	$	13,620	$	12,706
Unbilled accounts receivable	11,174		14,901
Allowance for doubtful accounts	(906)		(1,093)
Other accounts receivable	121		181
Total accounts receivable, net	$	24,009	$	26,695

Components of allowance for doubtful accounts are as follows:


	Three months ended June 30,						Six months ended June 30,
Allowance for doubtful accounts:	2018		2019		2018		2019
Balance, beginning of period	$	(1,290)	$	(1,018)	$	(32,463)	$	(906)
Charged to bad debt expense	(209)		(284)		(210)		(416)
Deductions (1)	209		209		265		229
Billings deemed not probable of collection (2)	(183)		—		(301)		—
Write-off of previously outstanding and fully reserved billings related to settlement (3)	—		—		24,968		—
Revenue recognized from outstanding billings previously deemed uncollectible related to settlement (3)	—		—		6,268		—
Balance, end of period	$	(1,473)	$	(1,093)	$	(1,473)	$	(1,093)

________________________

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

(2) Represents amounts billed in the period but where collectability 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,		June 30,
	2018		2019
Accrued expense	$	8,292	$	11,410
Accrued compensation and benefits	7,323		6,298
Accrued sales, use, and telecom related taxes	4,742		5,238
Deferred rent, current portion	298		316
Other accrued expenses	738		858
Total accrued expenses and other current liabilities	$	21,393	$	24,120

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment, Net

Property and equipment, net consisted of the following:


	December 31,		June 30,
	2018		2019
Furniture and fixtures	$	1,741	$	2,086
Computer and office equipment	7,662		7,946
Telecommunications equipment	30,694		35,865
Leasehold improvements	2,438		3,467
Software development costs	16,293		19,746
Automobile	10		10
Total cost	58,838		69,120
Less—accumulated depreciation	(33,702)		(37,321)
Total property and equipment, net	$	25,136	$	31,799

Schedule of Depreciation Expense

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


	Three months ended June 30,						Six months ended June 30,
	2018		2019		2018		2019
Cost of revenue	$	1,015	$	1,530	$	2,078	$	2,823
Research and development	31		63		61		131
Sales and marketing	12		24		22		52
General and administrative	108		365		227		1,055
Total depreciation expense	$	1,166	$	1,982	$	2,388	$	4,061

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets, net consisted of the following as of December 31, 2018:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(4,071)	$	6,325	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	$	(8,004)	$	7,089

Intangible assets, net consisted of the following as of June 30, 2019:


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(4,331)	$	6,065	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	$	(8,264)	$	6,829

Schedule of Future Estimated Amortization Expense

Future estimated amortization expense for definite lived intangible assets is as follows:


	As of June 30, 2019
2019 (remaining)	$	260
2020	520
2021	520
2022	520
2023	520
Thereafter	3,725
	$	6,065

Segment and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment


	Three months ended June 30,						Six months ended June 30,
	2018		2019		2018		2019
CPaaS
Revenue	$	39,833	$	47,989	$	78,730	$	93,002
Cost of revenue	23,137		26,473		45,042		51,773
Gross profit	$	16,696	$	21,516	$	33,688	$	41,229
Other
Revenue	$	8,471	$	8,790	$	22,586	$	17,098
Cost of revenue	3,429		3,637		6,888		7,103
Gross profit	$	5,042	$	5,153	$	15,698	$	9,995
Consolidated
Revenue	$	48,304	$	56,779	$	101,316	$	110,100
Cost of revenue	26,566		30,110		51,930		58,876
Gross profit	$	21,738	$	26,669	$	49,386	$	51,224

Schedule of Revenue by Geographical Area

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


	Three months ended June 30,						Six months ended June 30,
	2018		2019		2018		2019
CPaaS
United States	$	39,753	$	47,907	$	78,532	$	92,851
International	80		82		198		151
Total	$	39,833	$	47,989	$	78,730	$	93,002

Other
United States	$	8,401	$	8,722	$	22,446	$	16,951
International	70		68		140		147
Total	$	8,471	$	8,790	$	22,586	$	17,098

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Schedule of Reserved Shares of Common Stock for Issuance

The Company had reserved shares of Class A common stock for issuance as follows:


	December 31,	June 30,
	2018	2019
Stock options issued and outstanding	1,937,370	977,154
Nonvested restricted stock units issued and outstanding	324,252	427,494

Stock-based awards available for grant under the 2017 Plan	896,760	1,313,785
	3,158,382	2,718,433

- 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.

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+ Details

Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Summary of Stock Option Activity

The following summarizes the stock option activity for the periods presented:


	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, 2018	1,937,370	$	7.41	4.00	$	64,596
Granted	—	—
Exercised	(955,915)	6.68			48,602
Forfeited or cancelled	(4,301)	10.98
Outstanding as of June 30, 2019	977,154	$	8.11	3.98	$	65,382

Options vested and exercisable at June 30, 2019	791,472	$	6.90	3.14	$	53,915
Options vested and expected to vest as of June 30, 2019	973,332	$	8.09	3.97	$	65,149

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, 2018	324,252	$	26.95
Granted	231,758	43.67
Vested	(125,370)	30.09
Forfeited or cancelled	(3,146)	36.85
Nonvested RSUs as of June 30, 2019	427,494	$	35.03

Schedule of Stock-Based Compensation Expense in Continuing Operations

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


	Three months ended June 30,						Six months ended June 30,
	2018		2019		2018		2019
Cost of revenue	$	32	$	50	$	49	$	106
Research and development	129		358		203		730
Sales and marketing	140		292		218		612
General and administrative	461		930		785		1,858
Total	$	762	$	1,630	$	1,255	$	3,306

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments for Operating Leases

Future minimum lease payments required under operating leases are as follows:


	As of June 30, 2019
2019 (remaining)	$	3,078
2020	6,430
2021	6,587
2022	6,301
2023	5,926
Thereafter	2,936
	$	31,258

Schedule of Future Minimum Lease Receipts for Operating Lease

Future minimum sub-lease receipts required under the non-cancellable lease are as follows:


	As of June 30, 2019
2019 (remaining)	$	221
2020	447
2021	457
2022	249

	$	1,374

Basic and Diluted Income per Common Share (Tables)

6 Months Ended

Jun. 30, 2019

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 June 30,						Six months ended June 30,
	2018		2019		2018		2019




Net income attributable to common stockholders	$	10,512	$	3,472	$	16,703	$	5,464
Net income per share:
Basic	$	0.58	$	0.15	$	0.93	$	0.25
Diluted	$	0.50	$	0.14	$	0.80	$	0.23














Weighted Average Number of Common Shares Outstanding
Basic	18,154,964		23,102,553		17,908,159		21,807,523
Dilutive effect of stock options, restricted stock units, and warrants	2,738,689		1,344,864		2,958,618		1,454,973
Diluted	20,893,653		24,447,417		20,866,777		23,262,496

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 June 30,			Six months ended June 30,
	2018	2019	2018	2019
Anti-dilutive Disclosure

Stock options issued and outstanding	—	—	15,603	—

Organization and Description of Business (Details) $ / shares in Units, $ in Thousands		6 Months Ended
	Mar. 11, 2019 USD ($) $ / shares shares	Jun. 30, 2019 segment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of operating segments \| segment		2
Number of reportable segments \| segment		2
Proceeds from follow-on public offering \| $	$ 146,557
Follow-on Public Offering \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares) \| shares	2,875,000
Shares issued, price (in usd per share) \| $ / shares	$ 54.25
Over-Allotment Option \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares) \| shares	375,000

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Jan. 01, 2019
Accounting Policies [Abstract]
RRAs collateralized by deposits in form of Government Securities and Obligations as percentage of value	102.00%		102.00%
Concentration Risk [Line Items]
Adjustment to opening retained earnings due to adoption of ASC 606					$ 174
Revenue	$ 56,779	$ 48,304	$ 110,100	$ 101,316
Revenue recognized related to its contract liabilities	2,390		4,608
Customer One \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk percentage					18.00%
Retained earnings
Concentration Risk [Line Items]
Adjustment to opening retained earnings due to adoption of ASC 606					$ 174
Accounting Standards Update 2014-09 \| Retained earnings
Concentration Risk [Line Items]
Adjustment to opening retained earnings due to adoption of ASC 606						$ 174
CPaaS, Usage-Based Fees
Concentration Risk [Line Items]
Revenue	31,647	25,582	60,697	50,150
Other, Usage-Based Fees
Concentration Risk [Line Items]
Revenue	7,267	6,578	14,059	18,742
CPaaS, Service Fees
Concentration Risk [Line Items]
Revenue	15,134	13,533	29,888	27,218
Other, Service Fees
Concentration Risk [Line Items]
Revenue	1,523	1,893	3,039	3,844
Other miscellaneous services
Concentration Risk [Line Items]
Revenue	$ 1,208	$ 718	$ 2,417	$ 1,362

Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Cash and cash equivalents	$ 140,091	$ 41,261	$ 45,806	$ 37,627
Restricted cash	492	240	198	243
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$ 140,583	$ 41,501	$ 46,004	$ 37,870

Summary of Significant Accounting Policies - Information about Receivables and Contract Liabilities from Contract with Customers (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Accounting Policies [Abstract]
Receivables	$ 26,695
Contract liabilities	$ 10,787

Summary of Significant Accounting Policies - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 $ in Thousands	Jun. 30, 2019 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 4,887
Revenue, remaining performance obligation, amount, expected timing of satisfaction, period	12 months

Fair Value of Financial Instruments - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, amortized cost or carrying value	$ 140,091	$ 41,261	$ 45,806	$ 37,627
Marketable securities, amortized cost or carrying value	55,810	17,402
Marketable securities, unrealized gain	29	0
Marketable securities, net unrealized losses	0	(2)
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	19,002	8,194
Cash and cash equivalents, unrealized gains	0	0
Cash and cash equivalents, unrealized loss	0	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	115,000	26,000
Cash and cash equivalents, unrealized gains	0	0
Cash and cash equivalents, unrealized loss	0	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	134,002	34,194
Cash and cash equivalents, unrealized gains	0	0
Cash and cash equivalents, unrealized loss	0	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	55,810	17,402
Marketable securities, unrealized gain	29	0
Marketable securities, net unrealized losses	0	(2)
Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	189,812	51,596
Financial assets, unrealized gain	29	0
FinancialAssetsGrossUnrealizedLoss	0	(2)
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	55,839	17,400
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	19,002	8,194
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	115,000	26,000
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	134,002	34,194
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	55,839	17,400
Fair Value, Measurements, Recurring \| Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	189,841	51,594
Level 1 \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	55,839	17,400
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	19,002	8,194
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	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	19,002	8,194
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	55,839	17,400
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	74,841	25,594
Level 2 \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	0	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	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	115,000	26,000
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	115,000	26,000
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	0	0
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	115,000	26,000
Level 3 \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	0	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	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	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	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	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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized cost	$ 55,810		$ 55,810
Aggregate fair value	55,839		55,839
Maturities of marketable securities	9,000	$ 3,000	18,000	$ 3,000
Interest earned on marketable securities	3	$ 32	6	$ 48
U.S. treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized cost	55,810		55,810
Aggregate fair value	$ 55,839		$ 55,839

Financial Statement Components - Accounts Receivable, Net of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Financial Statement Components [Abstract]
Trade accounts receivable	$ 12,706	$ 13,620
Unbilled accounts receivable	14,901	11,174
Allowance for doubtful accounts	(1,093)	(906)
Other accounts receivable	181	121
Total accounts receivable, net	$ 26,695	$ 24,009

Financial Statement Components - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance, beginning of period	$ (1,018)	$ (1,290)	$ (906)	$ (32,463)
Balance, end of period	(1,093)	(1,473)	(1,093)	(1,473)
Accounts Receivable, Excluding Carrier Access Billing (CAB)
Allowance for Doubtful Accounts Receivable [Roll Forward]
Charged to bad debt expense	(284)	(209)	(416)	(210)
Deductions	209	209	229	265
Billings deemed not probable of collection	0	(183)	0	(301)
Carrier Access Billing (CAB)
Allowance for Doubtful Accounts Receivable [Roll Forward]
Write-off of previously outstanding and fully reserved billings related to settlement	0	0	0	24,968
Revenue recognized from outstanding billings previously deemed uncollectible related to settlement	$ 0	$ 0	$ 0	$ 6,268

Financial Statement Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Financial Statement Components [Abstract]
Accrued expense	$ 11,410	$ 8,292
Accrued compensation and benefits	6,298	7,323
Accrued sales, use, and telecom related taxes	5,238	4,742
Deferred rent, current portion	316	298
Other accrued expenses	858	738
Total accrued expenses and other current liabilities	$ 24,120	$ 21,393

Property and Equipment - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Total cost	$ 69,120	$ 58,838
Less—accumulated depreciation	(37,321)	(33,702)
Total property and equipment, net	31,799	25,136
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total cost	2,086	1,741
Computer and office equipment
Property, Plant and Equipment [Line Items]
Total cost	7,946	7,662
Telecommunications equipment
Property, Plant and Equipment [Line Items]
Total cost	35,865	30,694
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total cost	3,467	2,438
Software development costs
Property, Plant and Equipment [Line Items]
Total cost	19,746	16,293
Automobile
Property, Plant and Equipment [Line Items]
Total cost	$ 10	$ 10

Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Capitalized software development costs, additions	$ 1,080	$ 1,106	$ 1,675	$ 1,547
Amortization of capitalized software development costs	$ 384	$ 425	$ 1,173	$ 873

Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Depreciation Expense [Line Items]
Depreciation	$ 1,982	$ 1,166	$ 4,061	$ 2,388
Cost of revenue
Depreciation Expense [Line Items]
Depreciation	1,530	1,015	2,823	2,078
Research and development
Depreciation Expense [Line Items]
Depreciation	63	31	131	61
Sales and marketing
Depreciation Expense [Line Items]
Depreciation	24	12	52	22
General and administrative
Depreciation Expense [Line Items]
Depreciation	$ 365	$ 108	$ 1,055	$ 227

Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization	$ (8,264)	$ (8,004)
Finite-lived intangible assets, net	6,065
Gross amount	15,093	15,093
Net carrying value	6,829	7,089
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	(4,331)	(4,071)
Finite-lived intangible assets, net	$ 6,065	$ 6,325
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)	(2,678)
Finite-lived intangible assets, net	$ 0	$ 0
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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 130	$ 130	$ 260	$ 295
Weighted average amortization period			12 years

Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2019 (remaining)	$ 260
2020	520
2021	520
2022	520
2023	520
Thereafter	3,725
Finite-lived intangible assets, net	$ 6,065

Debt (Details) - USD ($)	Mar. 01, 2019	Jun. 30, 2019	Jun. 04, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt instrument, term	3 years
Cost of assets under capital leases		$ 1,959,000		$ 1,951,000
Accumulated depreciation of assets under capital leases		1,898,000		1,884,000
Remaining payments due on capital lease		0
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 25,000,000
Debt outstanding		0		0
Available borrowing capacity		25,000,000
Outstanding unamortized loan fees		$ 122,000		$ 136,000
Interest expense	125,000
Swing line
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	1,000,000
Letters of credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 2,500,000
Federal Funds Effective Rate \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
London Interbank Offered Rate (LIBOR) \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Pacific Western Bank \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 10,000,000
KeyBank National Association \| Revolving Credit Facility
Debt Instrument [Line Items]
Available borrowing capacity			$ 15,000,000

Segment and Geographic Information - Reconciliation of Segment Profit (Loss) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) segment	Jun. 30, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment			2
Revenue	$ 56,779	$ 48,304	$ 110,100	$ 101,316
Cost of revenue	30,110	26,566	58,876	51,930
Gross profit	26,669	21,738	51,224	49,386
CPaaS
Segment Reporting Information [Line Items]
Revenue	47,989	39,833	93,002	78,730
Cost of revenue	26,473	23,137	51,773	45,042
Gross profit	21,516	16,696	41,229	33,688
Other
Segment Reporting Information [Line Items]
Revenue	8,790	8,471	17,098	22,586
Cost of revenue	3,637	3,429	7,103	6,888
Gross profit	$ 5,153	$ 5,042	$ 9,995	$ 15,698

Segment and Geographic Information - Reconciliation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 56,779	$ 48,304	$ 110,100	$ 101,316
CPaaS
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	47,989	39,833	93,002	78,730
CPaaS \| United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	47,907	39,753	92,851	78,532
CPaaS \| International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	82	80	151	198
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	8,790	8,471	17,098	22,586
Other \| United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	8,722	8,401	16,951	22,446
Other \| International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 68	$ 70	$ 147	$ 140

Stockholder's Equity - Preferred Stock (Details) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Equity [Abstract]
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0

Stockholder's Equity - Common Stock (Details)	Jun. 30, 2019 vote $ / shares shares	Dec. 31, 2018 vote $ / shares shares
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 \| vote	1	1
Common stock, par value (in usd per share) \| $ / shares	$ 0.001	$ 0.001
Common stock, shares issued (in shares)	17,732,453	12,912,747
Common stock, shares outstanding (in shares)	17,732,453	12,912,747
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 \| vote	10	10
Common stock, shares issued (in shares)	5,627,060	6,510,732
Common stock, shares outstanding (in shares)	5,627,060	6,510,732

Stockholders' Equity - Reserved Shares of Common Stock for Issuance (Details) - shares	Jun. 30, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	2,718,433	3,158,382
Stock options issued and outstanding
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	977,154	1,937,370
Nonvested restricted stock units issued and outstanding
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	427,494	324,252
Stock-based awards available for grant under the 2017 Plan
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	1,313,785	896,760

Stock Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		6 Months Ended
	Jan. 01, 2019	Jan. 01, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Nov. 09, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)			2,718,433		2,718,433		3,158,382
Estimated grant date fair value of options vested			$ 223	$ 360	$ 280	$ 471
Unrecognized cost for stock based compensation			840		840
Unrecognized compensation cost related to non-vested RSUs			$ 13,818		$ 13,818
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options, granted (in shares)			0	0	0	0
Unrecognized cost for stock based compensation, period for recognition (in years)					1 year 8 months 19 days
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)			427,494		427,494		324,252
Vesting percentage					25.00%
Share-based compensation arrangement, requisite service period			4 years
Unrecognized cost for stock based compensation, period for recognition (in years)					3 years 2 months 4 days
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)	645,637
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)						$ 11.10
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
Executives \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)					4 years
Tranche One \| Executives \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					50.00%
Tranche Two \| Executives \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					12.50%
Tranche Three \| Executives \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					12.50%
Tranche Four \| Executives \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					12.50%

Stock Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options vested and expected to vest (in shares)	973,332		973,332
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted average exercise price, options vested and expected to vest (in usd per share)	$ 8.09		$ 8.09
Aggregate intrinsic value, options vested and expected to vest	$ 65,149		$ 65,149
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of options outstanding, beginning balance (in shares)			1,937,370
Number of options, granted (in shares)	0	0	0	0
Number of options exercised (in shares)			(955,915)
Number of options, forfeited or cancelled (in shares)			(4,301)
Number of options outstanding, ending balance (in shares)	977,154		977,154		1,937,370
Number of options outstanding, options vested and exercisable (in shares)	791,472		791,472
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)			$ 7.41
Weighted-average exercise price, granted (in usd per share)			0
Weighted-average exercise price, exercised (in usd per share)			6.68
Weighted-average exercise price, forfeited or cancelled (in usd per share)			10.98
Weighted-average exercise price, ending balance (in usd per share)	$ 8.11		8.11		$ 7.41
Weighted-average exercise price, options vested and exercisable (in usd per share)	$ 6.90		$ 6.90
Weighted-average remaining contract life, options outstanding (in years)			3 years 11 months 23 days		4 years
Weighted-average remaining contract life, options vested and exercisable (in years)			3 years 1 month 20 days
Weighted average remaining contract life, options vested and expected to vest			3 years 11 months 19 days
Aggregate intrinsic value, options outstanding	$ 65,382		$ 65,382		$ 64,596
Aggregate intrinsic value, options exercised			48,602
Aggregate intrinsic value, options vested and exercisable	$ 53,915		$ 53,915

Stock Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2019 $ / 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	324,252
Number of nonvested RSUs, granted (in shares) \| shares	231,758
Number of nonvested RSUs, vested (in shares) \| shares	(125,370)
Number of nonvested RSUs, forfeited or cancelled (in shares) \| shares	(3,146)
Number of nonvested RSUs outstanding, ending balance (in shares) \| shares	427,494
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	$ 26.95
Weighted average grant-date fair value of nonvested RSUS, granted (in usd per share) \| $ / shares	43.67
Weighted-average grant date fair value of nonvested RSUs, vested (in usd per share) \| $ / shares	30.09
Weighted-average grant date fair value of nonvested restricted RSUs, forfeited or cancelled (in usd per share) \| $ / shares	36.85
Weighted-average grant date fair value, ending balance (in usd per share) \| $ / shares	$ 35.03

Stock Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 1,630	$ 762	$ 3,306	$ 1,255
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	50	32	106	49
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	358	129	730	203
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	292	140	612	218
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 930	$ 461	$ 1,858	$ 785

Commitments and Contingencies - Additional Information (Details) $ in Thousands		3 Months Ended		6 Months Ended
	Oct. 25, 2015 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	May 29, 2019 ft²	Apr. 04, 2019 ft²	Apr. 03, 2019 ft²	Jan. 01, 2019 ft²	Dec. 31, 2018 ft²
Lessee, Lease, Description [Line Items]
Rent expense		$ 1,434	$ 1,022	$ 2,653	$ 1,955
Service agreement, annual minimum commitments	$ 1,200
Service agreement, term of agreement (in years)	5 years
Non-cancellable purchase obligation		4,789		4,789
Non-cancellable purchase obligation, fulfilled within a year		4,098		4,098
General and administrative
Lessee, Lease, Description [Line Items]
Reduction of rent expense		$ 200	$ 251	$ 451	$ 502
Raleigh, NC
Lessee, Lease, Description [Line Items]
Office space (in square foot) \| ft²						120,041	9,408	4,122	117,719	87,605
Increase of office space (in square foot) \| ft²						2,322	5,286		30,114
Lessee, operating lease, renewal term							5 years		5 years
Spin-off
Lessee, Lease, Description [Line Items]
Office space (in square foot) \| ft²						17,073			40,657
Lessee, operating lease, renewal term									5 years
Lessee, operating lease, additional renewal term				18 months

Commitments and Contingencies - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019 (remaining)	$ 3,078
2020	6,430
2021	6,587
2022	6,301
2023	5,926
Thereafter	2,936
Future minimum payments due, total	$ 31,258

Commitments and Contingencies - Future Minimum Lease Receipts (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019 (remaining)	$ 221
2020	447
2021	457
2022	249
Future minimum lease receipts, total	$ 1,374

Employee Benefit Plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Retirement Benefits [Abstract]
Matching contributions	$ 373	$ 259	$ 886	$ 546

Income Taxes (Details)	3 Months Ended		6 Months Ended
Income Taxes (Details)	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Effective tax rate	213.70%	(741.60%)	162.80%	(65.80%)

Related Parties (Details) - Affiliated Entity - Republic - USD ($)		3 Months Ended		6 Months Ended
	Jun. 20, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Amount collected on behalf		$ 714,000	$ 6,475,000	$ 1,327,000	$ 6,475,000
Due to related parties		0		0
Transition Services Agreement
Related Party Transaction [Line Items]
Revenue from related parties		0	22,000	0	50,000
Accounts receivable, related parties		0		0		$ 0
Facilities Sharing Agreement
Related Party Transaction [Line Items]
Rental payments received		200,000	251,000	451,000	502,000
Due from related parties		0		0		0
Tax Sharing Agreement
Related Party Transaction [Line Items]
Due from related parties		0		0		0
Master Services Agreement
Related Party Transaction [Line Items]
Revenue from related parties		677,000	$ 1,005,000	1,569,000	$ 1,991,000
Accounts receivable, related parties		$ 235,000		$ 235,000		$ 327,000
Minimum monthly revenue expected from related party	$ 100,000
Minimum monthly revenue expected from related party, period	11 months

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Net income attributable to common stockholders	$ 3,472	$ 10,512	$ 5,464	$ 16,703
Net income per share:
Basic (in usd per share)	$ 0.15	$ 0.58	$ 0.25	$ 0.93
Diluted (in usd per share)	$ 0.14	$ 0.50	$ 0.23	$ 0.80
Weighted Average Number of Common Shares Outstanding
Basic (in shares)	23,102,553	18,154,964	21,807,523	17,908,159
Dilutive effect of stock options, restricted stock units, and warrants (in shares)	1,344,864	2,738,689	1,454,973	2,958,618
Diluted (in shares)	24,447,417	20,893,653	23,262,496	20,866,777

- Definition

The amount of net income (loss) from continuing operations per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

The amount of net income (loss) derived from continuing operations during the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Basic and Diluted Income per Common Share - Antidilutive Securities Excluded from the Computation (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
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 (in shares)	0	0	0	15,603