0001514416-19-000055 | 10-Q | XBRL Viewer

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Summary of Significant Accounting Policies - Information about Receivables and Contract Liabilities from Contract with Customers (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Accounting Policies [Abstract]
Receivables	$ 30,030
Contract liabilities	$ 10,775

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 192,410	$ 41,261
Marketable securities	0	17,400
Accounts receivable, net of allowance for doubtful accounts	30,030	24,009
Prepaid expenses and other current assets	8,350	6,114
Deferred costs	2,522	2,630
Total current assets	233,312	91,414
Restricted cash	391	240
Property and equipment, net	36,085	25,136
Intangible assets, net	6,699	7,089
Deferred costs, non-current	1,901	1,828
Other long-term assets	1,250	487
Goodwill	6,867	6,867
Deferred tax asset, non-current	34,449	17,359
Total assets	320,954	150,420
Current liabilities:
Accounts payable	3,343	3,418
Accrued expenses and other current liabilities	28,002	21,393
Current portion of deferred revenue	5,020	5,324
Advanced billings	4,720	2,588
Total current liabilities	41,085	32,723
Deferred rent, net of current portion	3,728	2,503
Deferred revenue, net of current portion	5,755	6,424
Total liabilities	50,568	41,650
Stockholders’ equity:
Class A and Class B common stock	23	19
Additional paid-in capital	273,970	116,600
Accumulated deficit	(3,572)	(7,848)
Accumulated other comprehensive loss	(35)	(1)
Total stockholders’ equity	270,386	108,770
Total liabilities and stockholders’ equity	$ 320,954	$ 150,420

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities
Net income	$ 4,450	$ 19,213
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization	6,628	4,109
Accretion of bond discount	(700)	(80)
Gain on sale of marketable securities	(4)	0
Amortization of debt issuance costs	159	48
Stock-based compensation	4,960	2,017
Deferred taxes	(17,091)	(9,041)
Loss on disposal of property and equipment	354	27
Changes in operating assets and liabilities:
Accounts receivable	(5,304)	(2,555)
Prepaid expenses and other assets	(3,046)	(1,122)
Deferred costs	(42)	345
Accounts payable	(169)	(778)
Accrued expenses and other liabilities	4,696	4,375
Deferred revenue and advanced billings	985	5,347
Deferred rent	644	2,096
Net cash provided by (used in) operating activities	(3,480)	24,001
Cash flows from investing activities
Purchase of property and equipment	(13,088)	(4,921)
Capitalized software development costs	(2,749)	(3,511)
Proceeds from sale of property and equipment	0	3
Purchase of marketable securities	(68,361)	(23,860)
Proceeds from sales and maturities of marketable securities	86,468	9,000
Net cash (used in) provided by investing activities	2,270	(23,289)
Cash flows from financing activities
Payments on capital leases	0	(74)
Proceeds from the follow-on public offering, net of underwriting discounts	147,391	0
Payment of debt issuance costs	(142)	0
Proceeds from exercises of stock options	7,249	10,547
Proceeds from exercises of warrants	0	37
Value of equity awards withheld for tax liabilities	(1,212)	0
Net cash provided by financing activities	152,529	10,225
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(19)	0
Net increase in cash, cash equivalents, and restricted cash	151,300	10,937
Cash, cash equivalents, and restricted cash, beginning of period	41,501	37,870
Cash, cash equivalents, and restricted cash, end of period	192,801	48,807
Supplemental disclosure of cash flow information
Cash paid during the year for interest	304	74
Cash paid (refunded) for taxes	(178)	155
Supplemental disclosure of noncash financing activities
Purchase of property and equipment, accrued but not paid	2,971	2,107
Equity awards withheld for tax liabilities, accrued but not paid	180	0
IPO
Cash flows from financing activities
Payments of costs related to public offering	0	(285)
Follow-on Public Offering
Cash flows from financing activities
Payments of costs related to public offering	$ (757)	$ 0

Segment and Geographic Information - Reconciliation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 60,491	$ 50,454	$ 170,591	$ 151,770
CPaaS
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	51,499	41,537	144,501	120,267
CPaaS \| United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	50,148	41,482	142,999	120,014
CPaaS \| International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	1,351	55	1,502	253
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	8,992	8,917	26,090	31,503
Other \| United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	8,652	8,843	25,603	31,289
Other \| International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 340	$ 74	$ 487	$ 214

Summary of Significant Accounting Policies

9 Months Ended

Sep. 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 (loss) 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

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.

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 individual customer represented approximately 18% of the Company’s accounts receivable, net of allowance for doubtful accounts. As of September 30, 2019, one individual customer represented approximately 11% of the Company’s accounts receivable, net of allowance for doubtful accounts.

For the three and nine months ended September 30, 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 (loss), 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 nine months ended September 30, 2018, the revenue from usage-based fees represented $26,874 and $77,024 of CPaaS revenue, respectively, and $7,182 and $25,924 of Other revenue, respectively. For the three and nine months ended September 30, 2019, the revenue from usage-based fees represented $34,812 and $95,509 of CPaaS revenue, respectively, and $7,650 and $21,709 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 nine months ended September 30, 2018, the revenue from service fees represented $13,959 and $41,177 of CPaaS revenue, respectively, and $1,735 and $5,579 of Other revenue, respectively. For the three and nine months ended September 30, 2019, the revenue from service fees represented $15,430 and $45,318 of CPaaS revenue, respectively, and $1,342 and $4,381 of Other revenue, respectively.

The remaining $704 and $2,066 for the three and nine months ended September 30, 2018, respectively, and $1,257 and $3,674 for the three and nine months ended September 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:


	September 30, 2019
Receivables (1)	$	30,030
Contract liabilities (2)	10,775

________________________

(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. Revenue is typically recognized in the following month when service is rendered or, in the case of nonrefundable upfront fees, over the estimated period of benefit. Customer refundable payments are recorded as advanced billings. During the three and nine months ended September 30, 2019, the Company recognized revenue of $1,601 and $6,209, respectively, related to its contract liabilities. The Company expects to recognize $5,020 in revenue over the next twelve months related to its contract liabilities as of September 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 effect of adopting this accounting guidance, but does not expect adoption will have a material impact to 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, the last day of the fiscal year, ASU 2016-02 will be effective for the 2019 annual reporting period. 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 is in the process of completing its adoption of ASU 2016-02, including reviewing its lease portfolio, completing the implementation and testing of the third-party software solution and exercising internal controls over adoption and implementation of ASU 2016-02. Therefore, the estimated impact on the Company’s condensed consolidated balance sheets cannot currently be determined. However, the Company expects the adoption of ASU 2016-02 will have a material impact on its condensed consolidated balance sheets through the recognition of right of use assets and lease liabilities for its operating leases. The Company does not expect any material changes to its condensed consolidated statements of operations or condensed consolidated statements of cash flows.

Basic and Diluted Income (Loss) per Common Share - Additional Information (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
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	0
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of weighted-average common shares outstanding (in shares)	864,605		864,605
Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of weighted-average common shares outstanding (in shares)	411,422		411,422

Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2019 (remaining)	$ 130
2020	520
2021	520
2022	520
2023	520
Thereafter	3,725
Finite-lived intangible assets, net	$ 5,935

Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Equity

Preferred Stock

As of December 31, 2018 and September 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 September 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 September 30, 2019, 18,306,776 and 5,177,400 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,	September 30,
	2018	2019
Stock options issued and outstanding	1,937,370	864,605
Nonvested restricted stock units issued and outstanding	324,252	411,422

Stock-based awards available for grant under the 2017 Plan	896,760	1,310,793
	3,158,382	2,586,820

Related Parties (Details) - Affiliated Entity - Republic - USD ($)		3 Months Ended		9 Months Ended
	Jun. 20, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Amount collected on behalf		$ 442,000	$ 2,691,000	$ 1,769,000	$ 9,166,000
Due to related parties		0		0
Transition Services Agreement
Related Party Transaction [Line Items]
Revenue from related parties		0	19,000	0	69,000
Accounts receivable, related parties		0		0		$ 0
Facilities Sharing Agreement
Related Party Transaction [Line Items]
Rental payments received		96,000	251,000	547,000	753,000
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		524,000	$ 994,000	2,093,000	$ 2,985,000
Accounts receivable, related parties		0		0		$ 327,000
Minimum monthly revenue expected from related party	$ 100,000
Minimum monthly revenue expected from related party, period	11 months
Services Agreement
Related Party Transaction [Line Items]
Accounts receivable, related parties		$ 0		$ 0

Stockholders' Equity - Preferred Stock (Details) - $ / shares	Sep. 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

Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 30, 2019:


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis September 30, 2019
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	308	$	—	$	—	$	308	$	—	$	—	$	308

U.S. Reverse repurchase agreements	118,000		—		—		—		118,000		—		118,000
Total included in cash and cash equivalents	118,308		—		—		308		118,000		—		118,308




Total financial assets	$	118,308	$	—	$	—	$	308	$	118,000	$	—	$	118,308

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


	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

Summary of Proceeds and Gross Realized Gains and Losses from Marketable Securities

The following table summarizes the proceeds and gross realized gains and losses from sales of marketable securities:


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Marketable securities:
U.S. treasury securities
Gross realized gains	$	—	$	4	$	—	$	4
Gross realized losses	$	—	$	—	$	—	$	—
Gross proceeds from sales	$	—	$	17,468	$	—	$	17,468

Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Property, Plant and Equipment [Abstract]
Capitalized software development costs, additions	$ 1,074	$ 1,964	$ 2,749	$ 3,511
Amortization of capitalized software development costs	$ 463	$ 432	$ 1,636	$ 1,305

Basic and Diluted Income (Loss) per Common Share - Components of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net income (loss) attributable to common stockholders	$ (1,014)	$ 2,510	$ 4,450	$ 19,213
Net income (loss) per share:
Basic (in usd per share)	$ (0.04)	$ 0.13	$ 0.20	$ 1.05
Diluted (in usd per share)	$ (0.04)	$ 0.12	$ 0.19	$ 0.91
Weighted Average Number of Common Shares Outstanding
Basic (in shares)	23,426,455	19,072,196	22,353,097	18,300,435
Dilutive effect of stock options, restricted stock units, and warrants (in shares)	0	2,073,928	1,339,474	2,765,367
Diluted (in shares)	23,426,455	21,146,124	23,692,571	21,065,802

- 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

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Information about Receivables and Contract Liabilities from Contracts with Customers

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


	September 30, 2019
Receivables (1)	$	30,030
Contract liabilities (2)	10,775

________________________

(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.

Debt (Details) - USD ($)	Mar. 01, 2019	Sep. 30, 2019	Jun. 04, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt instrument, term	3 years
Previous unamortized loan fees expensed	$ 125,000
Cost of assets under capital leases		$ 1,959,000		$ 1,951,000
Accumulated depreciation of assets under capital leases		1,904,000		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
Available borrowing capacity		25,000,000
Debt outstanding		0		0
Outstanding unamortized loan fees		118,000		$ 136,000
Revolving Credit Facility \| Prepaid Expenses and Other Current Assets
Debt Instrument [Line Items]
Outstanding unamortized loan fees		51,000
Revolving Credit Facility \| Noncurrent assets
Debt Instrument [Line Items]
Outstanding unamortized loan fees		$ 67,000
Revolving Credit Facility \| Pacific Western Bank
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 10,000,000
Revolving Credit Facility \| KeyBank National Association
Debt Instrument [Line Items]
Available borrowing capacity			$ 15,000,000
Revolving Credit Facility \| Federal Funds Effective Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Revolving Credit Facility \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
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

Stockholders' Equity - Reserved Shares of Common Stock for Issuance (Details) - shares	Sep. 30, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	2,586,820	3,158,382
Stock options issued and outstanding
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	864,605	1,937,370
Nonvested restricted stock units issued and outstanding
Class of Stock [Line Items]
Common stock reserved for future issuance (in shares)	411,422	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)	1,310,793	896,760

Stock Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		9 Months Ended
	Jan. 01, 2019	Jan. 01, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 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)			2,586,820		2,586,820		3,158,382
Estimated grant date fair value of options vested			$ 222	$ 246	$ 502	$ 716
Unrecognized cost for stock based compensation			649		649
Unrecognized compensation cost related to non-vested RSUs			$ 12,657		$ 12,657
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options, granted (in shares)			0	0	0
Unrecognized cost for stock based compensation, period for recognition (in years)					1 year 7 months 2 days
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)			411,422		411,422		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)					2 years 11 months 19 days
Restricted Stock Units (RSUs) \| Executives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)					4 years
Restricted Stock Units (RSUs) \| Executives \| Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					50.00%
Restricted Stock Units (RSUs) \| Executives \| Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					12.50%
Restricted Stock Units (RSUs) \| Executives \| Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					12.50%
Restricted Stock Units (RSUs) \| Executives \| Tranche Four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					12.50%
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

Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization	$ (8,394)	$ (8,004)
Finite-lived intangible assets, net	5,935
Gross amount	15,093	15,093
Net carrying value	6,699	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	(4,461)	(4,071)
Finite-lived intangible assets, net	$ 5,935	$ 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

Commitments and Contingencies - Future Minimum Lease Receipts (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019 (remaining)	$ 111
2020	447
2021	457
2022	249
Future minimum lease receipts, total	$ 1,264

Employee Benefit Plan	9 Months Ended
Employee Benefit Plan	Sep. 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 $261 and $807 for the three and nine months ended September 30, 2018, respectively, and $415 and $1,301 for the three and nine months ended September 30, 2019, respectively.

Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 130	$ 130	$ 390	$ 424
Weighted average amortization period			11 years

Debt	9 Months Ended
Debt	Sep. 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 September 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 September 30, 2019. As of December 31, 2018, the outstanding unamortized loan fees associated with the revolving loan were $136, which were included in prepaid expenses and other current assets. As of September 30, 2019, the outstanding unamortized loan fees associated with the revolving loan were $118, of which $51 were included in prepaid expenses and other current assets and $67 were included in other long-term 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 September 30, 2019, cost and accumulated depreciation of the assets under capital leases recorded by the Company were $1,959 and $1,904, respectively. There were no remaining payments due on the Company’s capital lease obligations as of September 30, 2019.

Basic and Diluted Income (Loss) per Common Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Basic and Diluted Income (Loss) per Common Share

15. Basic and Diluted Income (Loss) per Common Share

Basic net income (loss) 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 (loss) 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 income (loss) per share are as follows:


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019




Net income (loss) attributable to common stockholders	$	2,510	$	(1,014)	$	19,213	$	4,450
Net income (loss) per share:
Basic	$	0.13	$	(0.04)	$	1.05	$	0.20
Diluted	$	0.12	$	(0.04)	$	0.91	$	0.19














Weighted Average Number of Common Shares Outstanding
Basic	19,072,196		23,426,455		18,300,435		22,353,097
Dilutive effect of stock options, restricted stock units, and warrants	2,073,928		—		2,765,367		1,339,474
Diluted	21,146,124		23,426,455		21,065,802		23,692,571

There were no common share equivalents with anti-dilutive effects for the three and nine months ended September 30, 2018 and the nine months ended September 30, 2019. The 864,605 stock options and 411,422 nonvested RSUs outstanding as of September 30, 2019 have been excluded from the calculation of the weighted average common shares outstanding for the three months ended September 30, 2019 because the effect is anti-dilutive for the period.

Segment and Geographic Information

9 Months Ended

Sep. 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 September 30,						Nine months ended September 30,
	2018		2019		2018		2019
CPaaS
Revenue	$	41,537	$	51,499	$	120,267	$	144,501
Cost of revenue	23,996		29,297		69,038		81,070
Gross profit	$	17,541	$	22,202	$	51,229	$	63,431
Other
Revenue	$	8,917	$	8,992	$	31,503	$	26,090
Cost of revenue	3,478		3,807		10,366		10,910
Gross profit	$	5,439	$	5,185	$	21,137	$	15,180
Consolidated
Revenue	$	50,454	$	60,491	$	151,770	$	170,591
Cost of revenue	27,474		33,104		79,404		91,980
Gross profit	$	22,980	$	27,387	$	72,366	$	78,611

The Company's assets were primarily held in the United States as of December 31, 2018 and September 30, 2019. Assets held outside of the United States as of December 31, 2018 and September 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 September 30,						Nine months ended September 30,
	2018		2019		2018		2019
CPaaS
United States	$	41,482	$	50,148	$	120,014	$	142,999
International	55		1,351		253		1,502
Total	$	41,537	$	51,499	$	120,267	$	144,501

Other
United States	$	8,843	$	8,652	$	31,289	$	25,603
International	74		340		214		487
Total	$	8,917	$	8,992	$	31,503	$	26,090

Stockholders' Equity - Common Stock (Details)	Sep. 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)	18,306,776	12,912,747
Common stock, shares outstanding (in shares)	18,306,776	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, par value (in usd per share) \| $ / shares	$ 0.001	$ 0.001
Common stock, shares issued (in shares)	5,177,400	6,510,732
Common stock, shares outstanding (in shares)	5,177,400	6,510,732

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Maturities of marketable securities	$ 51,000	$ 6,000	$ 69,000	$ 9,000
Interest earned on marketable securities	$ 0	$ 22	$ 6	$ 70

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 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	$ 60,491	$ 50,454	$ 170,591	$ 151,770
Revenue recognized related to its contract liabilities	1,601		6,209
CPaaS, Usage-Based Fees
Concentration Risk [Line Items]
Revenue	34,812	26,874	95,509	77,024
Other, Usage-Based Fees
Concentration Risk [Line Items]
Revenue	7,650	7,182	21,709	25,924
CPaaS, Service Fees
Concentration Risk [Line Items]
Revenue	15,430	13,959	45,318	41,177
Other, Service Fees
Concentration Risk [Line Items]
Revenue	1,342	1,735	4,381	5,579
Other miscellaneous services
Concentration Risk [Line Items]
Revenue	$ 1,257	$ 704	$ 3,674	$ 2,066
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
Customer One \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk percentage			11.00%		18.00%

Financial Statement Components - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance, beginning of period	$ (1,093)	$ (1,473)	$ (906)	$ (32,463)
Balance, end of period	(1,406)	(786)	(1,406)	(786)
Accounts Receivable, Excluding Carrier Access Billing (CAB)
Allowance for Doubtful Accounts Receivable [Roll Forward]
Charged to bad debt expense	(711)	(115)	(1,127)	(325)
Deductions	398	811	627	1,076
Billings deemed not probable of collection	0	(9)	0	(310)
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

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2019	Oct. 31, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 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
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
Title of 12(b) Security	Class A Common Stock, par value $0.001 per share
Trading Symbol	BAND
Security Exchange Name	NASDAQ
Entity Central Index Key	0001514416
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Class A
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		18,564,427
Common Class B
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		4,927,400

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 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 September 30, 2019
2019 (remaining)	$	1,571
2020	6,430
2021	6,587
2022	6,301
2023	5,926
Thereafter	2,936
	$	29,751

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 September 30, 2019
2019 (remaining)	$	111
2020	447
2021	457
2022	249

	$	1,264

Related Parties	9 Months Ended
Related Parties	Sep. 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 $19 and $69 for the three and nine months ended September 30, 2018, respectively, and $0 for each of the three and nine months ended September 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 September 30, 2019. The Company recorded a reduction of rent expense under the Facilities Sharing Agreement of $251 and $753 for the three and nine months ended September 30, 2018, respectively, and $96 and $547 for the three and nine months ended September 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 September 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 September 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 $994 and $2,985 for the three and nine months ended September 30, 2018, respectively, and $524 and $2,093 for the three and nine months ended September 30, 2019, respectively. The Company recognized such amounts as revenue in the accompanying condensed consolidated statements of operations. As of December 31, 2018 and September 30, 2019, the Company had a receivable of $327 and $0, 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 $2,691 and $9,166 for the three and nine months ended September 30, 2018, and $442 and $1,769 for the three and nine months ended September 30, 2019, respectively, and had a related payable of $0 as of September 30, 2019. On September 30, 2019, the Company entered into a services agreement with Republic. Pursuant to the terms of the new agreement, Republic receives services performed by the Company’s legal department, effective September 30, 2019. The Company is compensated by Republic for these services based on costs incurred by the Company. There was no outstanding receivable as of September 30, 2019.

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Revenue	$ 60,491	$ 50,454	$ 170,591	$ 151,770
Cost of revenue	33,104	27,474	91,980	79,404
Gross profit	27,387	22,980	78,611	72,366
Operating expenses:
Research and development	7,939	5,895	23,312	14,111
Sales and marketing	8,784	5,422	25,647	14,598
General and administrative	15,269	11,576	43,884	33,635
Total operating expenses	31,992	22,893	92,843	62,344
Operating income (loss)	(4,605)	87	(14,232)	10,022
Other income, net	781	103	1,711	242
Income (loss) before income taxes	(3,824)	190	(12,521)	10,264
Income tax benefit	2,810	2,320	16,971	8,949
Net income (loss)	$ (1,014)	$ 2,510	$ 4,450	$ 19,213
Net income (loss) per share
Basic (in usd per share)	$ (0.04)	$ 0.13	$ 0.20	$ 1.05
Diluted (in usd per share)	$ (0.04)	$ 0.12	$ 0.19	$ 0.91
Weighted average number of common shares outstanding:
Basic (in shares)	23,426,455	19,072,196	22,353,097	18,300,435
Diluted (in shares)	23,426,455	21,146,124	23,692,571	21,065,802

Organization and Description of Business	9 Months Ended
Organization and Description of Business	Sep. 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.

Fair Value Measurements - Summary of Proceeds and Gross Realized Gains and Losses from Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Proceeds from sales and maturities of marketable securities			$ 86,468	$ 9,000
U.S. treasury securities
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Marketable Securities, Realized Loss	$ 0	$ 0	0	0
Marketable Securities, Realized Gain	4	0	4	0
Proceeds from sales and maturities of marketable securities	$ 17,468	$ 0	$ 17,468	$ 0

Financial Statement Components (Tables)

9 Months Ended

Sep. 30, 2019

Financial Statement Components [Abstract]

Schedule of Accounts Receivable, net, and Allowance for Doubtful Accounts

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


	December 31,		September 30,
	2018		2019
Trade accounts receivable	$	13,620	$	14,708
Unbilled accounts receivable	11,174		16,328
Allowance for doubtful accounts	(906)		(1,406)
Other accounts receivable	121		400
Total accounts receivable, net	$	24,009	$	30,030

Components of allowance for doubtful accounts are as follows:


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Allowance for doubtful accounts:
Balance, beginning of period	$	(1,473)	$	(1,093)	$	(32,463)	$	(906)
Charged to bad debt expense	(115)		(711)		(325)		(1,127)
Deductions (1)	811		398		1,076		627
Billings deemed not probable of collection (2)	(9)		—		(310)		—
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	$	(786)	$	(1,406)	$	(786)	$	(1,406)

________________________

(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 customer's 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.

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	December 31,		September 30,
	2018		2019
Accrued expense	$	8,292	$	13,876
Accrued compensation and benefits	7,323		7,631
Accrued sales, use, and telecom related taxes	4,742		5,201
Deferred rent, current portion	298		455
Other accrued expenses	738		839
Total accrued expenses and other current liabilities	$	21,393	$	28,002

Organization and Description of Business (Details) $ / shares in Units, $ in Thousands		9 Months Ended
	Mar. 11, 2019 USD ($) $ / shares shares	Sep. 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

Commitments and Contingencies

9 Months Ended

Sep. 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 September 30, 2019
2019 (remaining)	$	1,571
2020	6,430
2021	6,587
2022	6,301
2023	5,926
Thereafter	2,936
	$	29,751

The Company incurred rent expense of $1,173 and $3,128 for the three and nine months ended September 30, 2018, respectively, and $1,573 and $4,226 for the three and nine months ended September 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 $753 related to the sublease agreement for the three and nine months ended September 30, 2018, respectively, and $96 and $547 for the three and nine months ended September 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 September 30, 2019
2019 (remaining)	$	111
2020	447
2021	457
2022	249

	$	1,264

Contractual Obligations

On October 25, 2015, the Company entered into an agreement with a telecommunications service provider. The service agreement requires the Company to pay a monthly recurring charge beginning on January 1, 2016 associated with the services received. The service agreement is non-cancellable and contains annual minimum commitments of $1,200, to be fulfilled over five years or for as long as the Company continues to receive services from this vendor. In addition, as of September 30, 2019 the Company has $6,690 in other non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $5,999 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.

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment, Net

Property and equipment, net consisted of the following:


	December 31,		September 30,
	2018		2019
Furniture and fixtures	$	1,741	$	2,509
Computer and office equipment	7,662		8,073
Telecommunications equipment	30,694		38,699
Leasehold improvements	2,438		4,632
Software development costs	16,293		21,654
Automobile	10		10
Total cost	58,838		75,577
Less—accumulated depreciation	(33,702)		(39,492)
Total property and equipment, net	$	25,136	$	36,085

Schedule of Depreciation Expense

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


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Cost of revenue	$	1,135	$	1,700	$	3,214	$	4,523
Research and development	47		65		108		197
Sales and marketing	13		27		35		79
General and administrative	101		385		328		1,439
Total depreciation expense	$	1,296	$	2,177	$	3,685	$	6,238

Stock Based Compensation

9 Months Ended

Sep. 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	(1,064,276)	6.81			56,610
Forfeited or cancelled	(8,489)	12.36
Outstanding as of September 30, 2019	864,605	$	8.09	3.68	$	49,297

Options vested and exercisable at September 30, 2019	717,083	$	7.07	2.93	$	41,617
Options vested and expected to vest as of September 30, 2019	861,888	$	8.07	3.67	$	49,159

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 nine months ended September 30, 2018. No options were granted for the three months ended September 30, 2018. Similarly, no options were granted for the three and nine months ended September 30, 2019.

The total estimated grant date fair value of options vested was $246 and $716 for the three and nine months ended September 30, 2018, respectively, and $222 and $502 for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2019, total unrecognized compensation cost related to all non-vested stock options was $649, which will be amortized over a weighted-average period of 1.59 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	237,203	44.49
Vested	(144,434)	31.66
Forfeited or cancelled	(5,599)	37.93
Nonvested RSUs as of September 30, 2019	411,422	$	35.26

As of September 30, 2019, total unrecognized compensation cost related to non-vested RSUs was $12,657, which will be amortized over a weighted-average period of 2.97 years.

Stock-Based Compensation Expense

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


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Cost of revenue	$	30	$	52	$	79	$	158
Research and development	173		371		376		1,101
Sales and marketing	146		280		364		892
General and administrative	413		951		1,198		2,809
Total	$	762	$	1,654	$	2,017	$	4,960

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 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

Foreign currency translation

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:


	September 30, 2019
Receivables (1)	$	30,030
Contract liabilities (2)	10,775

________________________

(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.

Recent Accounting Pronouncements Not Yet Adopted

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 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)	19,213
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)
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
Conversion of stock (in shares)					6,052,910		(6,052,910)
Conversion of stock	0				$ 6		$ (6)
Unrealized (loss) gain on marketable securities	4								4
Stock based compensation	762							762
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
Conversion of stock (in shares)					435,313		(435,313)
Unrealized (loss) gain on marketable securities	(1)								(1)
Stock based compensation	762							762
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
Conversion of stock (in shares)					490,674		(490,674)
Conversion of stock	0				$ 1		$ (1)
Unrealized (loss) gain on marketable securities	2								2
Stock based compensation	1,322							1,322
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]
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 offering	(785)							(785)
Equity awards withheld for tax liability (in shares)				(16,585)
Equity awards withheld for tax liability	(938)							(938)
Conversion of stock (in shares)					57,230		(57,230)
Unrealized (loss) gain on marketable securities	8								8
Stock based compensation	1,676							1,676
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)	4,450
Ending balance (in shares) at Sep. 30, 2019		18,306,776	5,177,400	18,306,776		5,177,401
Ending balance at Sep. 30, 2019	270,386			$ 18		$ 5		273,970	(35)	(3,572)
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 offering	(49)							(49)
Equity awards withheld for tax liability (in shares)				(3,665)
Equity awards withheld for tax liability	(274)							(274)
Conversion of stock (in shares)					826,441		(826,441)
Conversion of stock					$ 1		$ (1)
Unrealized (loss) gain on marketable securities	13								13
Foreign currency translation	12								12
Stock based compensation	1,630							1,630
Net income (loss)	3,472									3,472
Ending balance (in shares) at Jun. 30, 2019				17,732,453		5,627,061
Ending balance at Jun. 30, 2019	269,125			$ 18		$ 5		271,628	32	(2,558)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercises of vested stock options (in shares)				108,361
Exercises of vested stock options	868							868
Vesting of restricted stock units (in shares)				19,064
Equity awards withheld for tax liability (in shares)				(2,762)
Equity awards withheld for tax liability	(180)							(180)
Conversion of stock (in shares)					449,660		(449,660)
Unrealized (loss) gain on marketable securities	(21)								(21)
Foreign currency translation	(46)								(46)
Stock based compensation	1,654							1,654
Net income (loss)	(1,014)									(1,014)
Ending balance (in shares) at Sep. 30, 2019		18,306,776	5,177,400	18,306,776		5,177,401
Ending balance at Sep. 30, 2019	$ 270,386			$ 18		$ 5		$ 273,970	$ (35)	$ (3,572)

Stock Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Number of awards outstanding
Number of nonvested RSUs outstanding, beginning balance (in shares) \| shares	324,252
Number of nonvested RSUs, granted (in shares) \| shares	237,203
Number of nonvested RSUs, vested (in shares) \| shares	(144,434)
Number of nonvested RSUs, forfeited or cancelled (in shares) \| shares	(5,599)
Number of nonvested RSUs outstanding, ending balance (in shares) \| shares	411,422
Weighted-average grant date fair value (per share)
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	44.49
Weighted-average grant date fair value of nonvested RSUs, vested (in usd per share) \| $ / shares	31.66
Weighted-average grant date fair value of nonvested restricted RSUs, forfeited or cancelled (in usd per share) \| $ / shares	37.93
Weighted-average grant date fair value, ending balance (in usd per share) \| $ / shares	$ 35.26

Income Taxes	9 Months Ended
Income Taxes	Sep. 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 (1,221.1)% and (87.2)% for the three and nine months ended September 30, 2018, respectively, and 73.5% and 135.5% for the three and nine months ended September 30, 2019, respectively. The change in tax rate is primarily due to the change in book income. The Company’s effective tax rate for the three and nine months ended September 30, 2019, is higher than the U.S. federal statutory rate of 21.0% primarily due to the impact of stock compensation tax deductions.

Commitments and Contingencies - Additional Information (Details) $ in Thousands		3 Months Ended		9 Months Ended
	Oct. 25, 2015 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 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		$ 1,573	$ 1,173	$ 4,226	$ 3,128
Service agreement, annual minimum commitments	$ 1,200
Service agreement, term of agreement (in years)	5 years
Non-cancellable purchase obligation		6,690		6,690
Non-cancellable purchase obligation, fulfilled within a year		5,999		5,999
General and administrative
Lessee, Lease, Description [Line Items]
Reduction of rent expense		$ 96	$ 251	$ 547	$ 753
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
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

Segment and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
CPaaS
Revenue	$	41,537	$	51,499	$	120,267	$	144,501
Cost of revenue	23,996		29,297		69,038		81,070
Gross profit	$	17,541	$	22,202	$	51,229	$	63,431
Other
Revenue	$	8,917	$	8,992	$	31,503	$	26,090
Cost of revenue	3,478		3,807		10,366		10,910
Gross profit	$	5,439	$	5,185	$	21,137	$	15,180
Consolidated
Revenue	$	50,454	$	60,491	$	151,770	$	170,591
Cost of revenue	27,474		33,104		79,404		91,980
Gross profit	$	22,980	$	27,387	$	72,366	$	78,611

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 September 30,						Nine months ended September 30,
	2018		2019		2018		2019
CPaaS
United States	$	41,482	$	50,148	$	120,014	$	142,999
International	55		1,351		253		1,502
Total	$	41,537	$	51,499	$	120,267	$	144,501

Other
United States	$	8,843	$	8,652	$	31,289	$	25,603
International	74		340		214		487
Total	$	8,917	$	8,992	$	31,503	$	26,090

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

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 September 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 September 30, 2019:


	Amortized cost or carrying value		Unrealized gains		Unrealized losses		Fair value measurements on a recurring basis September 30, 2019
															Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents:
Money market account	$	308	$	—	$	—	$	308	$	—	$	—	$	308

U.S. Reverse repurchase agreements	118,000		—		—		—		118,000		—		118,000
Total included in cash and cash equivalents	118,308		—		—		308		118,000		—		118,308




Total financial assets	$	118,308	$	—	$	—	$	308	$	118,000	$	—	$	118,308

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


	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

The Company classifies its marketable securities as current assets as they are available for current operating needs.

As of September 30, 2019, there were no securities in an unrealized loss position. During the three and nine months ended September 30, 2018, there were $6,000 and $9,000 in maturities of marketable securities, respectively. During the three and nine months ended September 30, 2019, there were $51,000 and $69,000 in maturities of marketable securities, respectively.

The following table summarizes the proceeds and gross realized gains and losses from sales of marketable securities:


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Marketable securities:
U.S. treasury securities
Gross realized gains	$	—	$	4	$	—	$	4
Gross realized losses	$	—	$	—	$	—	$	—
Gross proceeds from sales	$	—	$	17,468	$	—	$	17,468

The cost of the securities sold was based on the specific identification method and the gross realized gain is recorded as other income, net, in the condensed consolidated statements of operations.

Interest earned on marketable securities was $22 and $70 in the three and nine months ended September 30, 2018, respectively, and $0 and $6 in the three and nine months ended September 30, 2019, respectively, and is recorded as other income, net, in the accompanying condensed consolidated statements of operations.

- 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

Property and Equipment

9 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

5. Property and Equipment

Property and equipment, net consisted of the following:


	December 31,		September 30,
	2018		2019
Furniture and fixtures	$	1,741	$	2,509
Computer and office equipment	7,662		8,073
Telecommunications equipment	30,694		38,699
Leasehold improvements	2,438		4,632
Software development costs	16,293		21,654
Automobile	10		10
Total cost	58,838		75,577
Less—accumulated depreciation	(33,702)		(39,492)
Total property and equipment, net	$	25,136	$	36,085

The Company capitalized $1,964 and $3,511 of software development costs in the three and nine months ended September 30, 2018, respectively, and $1,074 and $2,749 in the three and nine months ended September 30, 2019, respectively.

Amortization expense related to capitalized software development costs were $432 and $1,305 for the three and nine months ended September 30, 2018, respectively, and $463 and $1,636 for the three and nine months ended September 30, 2019, respectively.

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


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Cost of revenue	$	1,135	$	1,700	$	3,214	$	4,523
Research and development	47		65		108		197
Sales and marketing	13		27		35		79
General and administrative	101		385		328		1,439
Total depreciation expense	$	1,296	$	2,177	$	3,685	$	6,238

Stock Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 1,654	$ 762	$ 4,960	$ 2,017
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	52	30	158	79
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	371	173	1,101	376
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	280	146	892	364
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 951	$ 413	$ 2,809	$ 1,198

Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Depreciation Expense [Line Items]
Total depreciation expense	$ 2,177	$ 1,296	$ 6,238	$ 3,685
Cost of revenue
Depreciation Expense [Line Items]
Total depreciation expense	1,700	1,135	4,523	3,214
Research and development
Depreciation Expense [Line Items]
Total depreciation expense	65	47	197	108
Sales and marketing
Depreciation Expense [Line Items]
Total depreciation expense	27	13	79	35
General and administrative
Depreciation Expense [Line Items]
Total depreciation expense	$ 385	$ 101	$ 1,439	$ 328

Stockholders' Equity (Tables)

9 Months Ended

Sep. 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,	September 30,
	2018	2019
Stock options issued and outstanding	1,937,370	864,605
Nonvested restricted stock units issued and outstanding	324,252	411,422

Stock-based awards available for grant under the 2017 Plan	896,760	1,310,793
	3,158,382	2,586,820

- Definition

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

+ References

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+ Details

Stock Based Compensation - Stock Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Dec. 31, 2018
Number of options outstanding
Number of options outstanding, beginning balance (in shares)			1,937,370
Number of options, granted (in shares)	0	0	0
Number of options exercised (in shares)			(1,064,276)
Number of options, forfeited or cancelled (in shares)			(8,489)
Number of options outstanding, ending balance (in shares)	864,605		864,605	1,937,370
Options vested and exercisable (in shares)	717,083		717,083
Options vested and expected to vest (in shares)	861,888		861,888
Weighted- average exercise price (per share)
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)			6.81
Weighted-average exercise price, forfeited or cancelled (in usd per share)			12.36
Weighted-average exercise price, ending balance (in usd per share)	$ 8.09		8.09	$ 7.41
Weighted-average exercise price, options vested and exercisable (in usd per share)	7.07		7.07
Weighted average exercise price, options vested and expected to vest (in usd per share)	$ 8.07		$ 8.07
Weighted-average remaining contract life, options outstanding (in years)			3 years 8 months 4 days	4 years
Weighted-average remaining contract life, options vested and exercisable (in years)			2 years 11 months 4 days
Weighted average remaining contract life, options vested and expected to vest			3 years 8 months 1 day
Aggregate intrinsic value, options outstanding	$ 49,297		$ 49,297	$ 64,596
Aggregate intrinsic value, options exercised			56,610
Aggregate intrinsic value, options vested and exercisable	41,617		41,617
Aggregate intrinsic value, options vested and expected to vest	$ 49,159		$ 49,159

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

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


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(4,461)	$	5,935	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	$	(8,394)	$	6,699

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

Schedule of Future Estimated Amortization Expense

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


	As of September 30, 2019
2019 (remaining)	$	130
2020	520
2021	520
2022	520
2023	520
Thereafter	3,725
	$	5,935

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (1,014)	$ 2,510	$ 4,450	$ 19,213
Other comprehensive loss
Unrealized loss on marketable securities, net of income taxes	(21)	(1)	0	(3)
Foreign currency translation	(46)	0	(34)	0
Total other comprehensive loss	(67)	(1)	(34)	(3)
Total comprehensive income (loss)	$ (1,081)	$ 2,509	$ 4,416	$ 19,210

- Definition

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

+ References + Details

Financial Statement Components - Accounts Receivable, Net of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Financial Statement Components [Abstract]
Trade accounts receivable	$ 14,708	$ 13,620
Unbilled accounts receivable	16,328	11,174
Allowance for doubtful accounts	(1,406)	(906)
Other accounts receivable	400	121
Total accounts receivable, net	$ 30,030	$ 24,009

Basic and Diluted Income (Loss) per Common Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The components of basic and diluted income (loss) per share are as follows:


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019




Net income (loss) attributable to common stockholders	$	2,510	$	(1,014)	$	19,213	$	4,450
Net income (loss) per share:
Basic	$	0.13	$	(0.04)	$	1.05	$	0.20
Diluted	$	0.12	$	(0.04)	$	0.91	$	0.19














Weighted Average Number of Common Shares Outstanding
Basic	19,072,196		23,426,455		18,300,435		22,353,097
Dilutive effect of stock options, restricted stock units, and warrants	2,073,928		—		2,765,367		1,339,474
Diluted	21,146,124		23,426,455		21,065,802		23,692,571

Financial Statement Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Financial Statement Components [Abstract]
Accrued expense	$ 13,876	$ 8,292
Accrued compensation and benefits	7,631	7,323
Accrued sales, use, and telecom related taxes	5,201	4,742
Deferred rent, current portion	455	298
Other accrued expenses	839	738
Total accrued expenses and other current liabilities	$ 28,002	$ 21,393

Income Taxes (Details)	3 Months Ended		9 Months Ended
Income Taxes (Details)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Effective tax rate	73.50%	(1221.10%)	135.50%	(87.20%)

Summary of Significant Accounting Policies - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 $ in Thousands	Sep. 30, 2019 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 5,020
Revenue, remaining performance obligation, amount, expected timing of satisfaction, period	12 months

Segment and Geographic Information - Reconciliation of Segment Profit (Loss) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) segment	Sep. 30, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment			2
Revenue	$ 60,491	$ 50,454	$ 170,591	$ 151,770
Cost of revenue	33,104	27,474	91,980	79,404
Gross profit	27,387	22,980	78,611	72,366
CPaaS
Segment Reporting Information [Line Items]
Revenue	51,499	41,537	144,501	120,267
Cost of revenue	29,297	23,996	81,070	69,038
Gross profit	22,202	17,541	63,431	51,229
Other
Segment Reporting Information [Line Items]
Revenue	8,992	8,917	26,090	31,503
Cost of revenue	3,807	3,478	10,910	10,366
Gross profit	$ 5,185	$ 5,439	$ 15,180	$ 21,137

Commitments and Contingencies - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019 (remaining)	$ 1,571
2020	6,430
2021	6,587
2022	6,301
2023	5,926
Thereafter	2,936
Future minimum payments due, total	$ 29,751

Financial Statement Components

9 Months Ended

Sep. 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,		September 30,
	2018		2019
Trade accounts receivable	$	13,620	$	14,708
Unbilled accounts receivable	11,174		16,328
Allowance for doubtful accounts	(906)		(1,406)
Other accounts receivable	121		400
Total accounts receivable, net	$	24,009	$	30,030

Components of allowance for doubtful accounts are as follows:


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Allowance for doubtful accounts:
Balance, beginning of period	$	(1,473)	$	(1,093)	$	(32,463)	$	(906)
Charged to bad debt expense	(115)		(711)		(325)		(1,127)
Deductions (1)	811		398		1,076		627
Billings deemed not probable of collection (2)	(9)		—		(310)		—
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	$	(786)	$	(1,406)	$	(786)	$	(1,406)

________________________

(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 customer's collection experience. Amounts were charged to a contra-revenue account.

Accrued expenses and other current liabilities consisted of the following:


	December 31,		September 30,
	2018		2019
Accrued expense	$	8,292	$	13,876
Accrued compensation and benefits	7,323		7,631
Accrued sales, use, and telecom related taxes	4,742		5,201
Deferred rent, current portion	298		455
Other accrued expenses	738		839
Total accrued expenses and other current liabilities	$	21,393	$	28,002

Fair Value Measurements - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, amortized cost or carrying value	$ 192,410	$ 41,261
Marketable securities, amortized cost or carrying value		17,402
Marketable securities, unrealized gains		0
Marketable securities, unrealized losses		(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	308	8,194
Cash and cash equivalents, unrealized gains	0	0
Cash and cash equivalents, unrealized losses	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	118,000	26,000
Cash and cash equivalents, unrealized gains	0	0
Cash and cash equivalents, unrealized losses	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	118,308	34,194
Cash and cash equivalents, unrealized gains	0	0
Cash and cash equivalents, unrealized losses	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		17,402
Marketable securities, unrealized gains		0
Marketable securities, unrealized losses		(2)
Financial assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets, fair value	118,308	51,596
Financial assets, unrealized gains	0	0
Financial assets, unrealized losses	0	(2)
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value		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	308	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	118,000	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	118,308	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		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	118,308	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		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	308	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	308	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		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	308	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
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	118,000	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	118,000	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
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	118,000	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
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
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

Employee Benefit Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Retirement Benefits [Abstract]
Matching contributions	$ 415	$ 261	$ 1,301	$ 807

Stock Based Compensation (Tables)

9 Months Ended

Sep. 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	(1,064,276)	6.81			56,610
Forfeited or cancelled	(8,489)	12.36
Outstanding as of September 30, 2019	864,605	$	8.09	3.68	$	49,297

Options vested and exercisable at September 30, 2019	717,083	$	7.07	2.93	$	41,617
Options vested and expected to vest as of September 30, 2019	861,888	$	8.07	3.67	$	49,159

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	237,203	44.49
Vested	(144,434)	31.66
Forfeited or cancelled	(5,599)	37.93
Nonvested RSUs as of September 30, 2019	411,422	$	35.26

Schedule of Stock-Based Compensation Expense

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


	Three months ended September 30,						Nine months ended September 30,
	2018		2019		2018		2019
Cost of revenue	$	30	$	52	$	79	$	158
Research and development	173		371		376		1,101
Sales and marketing	146		280		364		892
General and administrative	413		951		1,198		2,809
Total	$	762	$	1,654	$	2,017	$	4,960

Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

6. Intangible Assets

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


	Gross Amount		Accumulated Amortization		Net Carrying Value		Amortization Period
							(Years)
Customer relationships	$	10,396	$	(4,461)	$	5,935	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	$	(8,394)	$	6,699

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

Amortization expense for definite lived intangible assets was $130 and $424 for the three and nine months ended September 30, 2018, respectively, and $130 and $390 for the three and nine months ended September 30, 2019, respectively. The remaining amortization period for definite lived intangible assets is 11 years.

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


	As of September 30, 2019
2019 (remaining)	$	130
2020	520
2021	520
2022	520
2023	520
Thereafter	3,725
	$	5,935

Property and Equipment - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Total cost	$ 75,577	$ 58,838
Less—accumulated depreciation	(39,492)	(33,702)
Total property and equipment, net	36,085	25,136
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total cost	2,509	1,741
Computer and office equipment
Property, Plant and Equipment [Line Items]
Total cost	8,073	7,662
Telecommunications equipment
Property, Plant and Equipment [Line Items]
Total cost	38,699	30,694
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total cost	4,632	2,438
Software development costs
Property, Plant and Equipment [Line Items]
Total cost	21,654	16,293
Automobile
Property, Plant and Equipment [Line Items]
Total cost	$ 10	$ 10