Document and Entity Information Statement

6 Months Ended

Jun. 30, 2015

Aug. 4, 2015

Common Class A [Member]

Aug. 4, 2015

Common Class B [Member]

Document Information [Line Items]

Document Type

10-Q

Amendment Flag

false

Document Period End Date

Jun. 30, 2015

Document Fiscal Year Focus

2015

Document Fiscal Period Focus

Q2

Entity Registrant Name

TABLEAU SOFTWARE INC

Entity Central Index Key

0001303652

Current Fiscal Year End Date

--12-31

Entity Filer Category

Large Accelerated Filer

Entity Common Stock, Shares Outstanding

51,273,560

20,559,166

Condensed Consolidated Balance Sheets (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2015

Dec. 31, 2014

Current assets

Cash and cash equivalents

$ 729,506

$ 680,613

Accounts receivable, net of allowance for doubtful accounts of $1,006 and $1,111

97,998

99,910

Prepaid expenses and other current assets

15,594

10,777

Income taxes receivable

150

229

Deferred income taxes

21,752

18,732

Total current assets

865,000

810,261

Property and equipment, net

56,168

45,627

Deferred income taxes

6,371

5,879

Deposits and other assets

6,181

3,895

Total assets

933,720

865,662

Current liabilities

Accounts payable

4,582

1,978

Accrued compensation and employee related benefits

33,353

40,164

Other accrued Liabilities

28,126

15,769

Income taxes payable

413

378

Deferred revenue

139,435

121,985

Total current liabilities

205,909

180,274

Deferred revenue

11,381

7,825

Other long-term liabilities

8,868

5,557

Total liabilities

226,158

193,656

Commitments and contingencies (Note 6)

Stockholders' equity

Preferred stock

0

Additional paid-in capital

724,905

660,668

Accumulated other comprehensive income

465

140

Retained earnings (accumulated deficit)

(17,815)

11,191

Total stockholders' equity

707,562

672,006

Total liabilities and stockholders' equity

933,720

865,662

Common Class B [Member]

Stockholders' equity

Common Stock

2

Common Class A [Member]

Stockholders' equity

Common Stock

$ 5

Condensed Consolidated Balance Sheets Balance Sheet Parenthetical (USD $)

In Thousands, except Share data, unless otherwise specified

Jun. 30, 2015

Dec. 31, 2014

Preferred stock, par value (in USD per share)

$ 0.0001

Preferred Stock, Shares Authorized

10,000,000

Preferred stock, shares issued

0

Allowance for Doubtful Accounts Receivable

$ 1,006

$ 1,111

Common Class B [Member]

Common stock, par value (in USD per share)

$ 0.0001

Common Stock, shares authorized

75,000,000

Common Stock, shares issued

20,559,166

22,620,509

Common stock, shares outstanding

20,559,166

22,620,509

Common Class A [Member]

Common stock, par value (in USD per share)

$ 0.0001

Common Stock, shares authorized

750,000,000

Common Stock, shares issued

51,222,204

47,247,710

Common stock, shares outstanding

51,222,204

47,247,710

Condensed Consolidated Statements of Operations (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Revenues

License

$ 96,741

$ 60,354

$ 181,161

$ 108,799

Maintenance and services

53,119

30,319

98,844

56,425

Total revenues

149,860

90,673

280,005

165,224

Cost of revenues

License

477

131

1,349

295

Maintenance and services

16,276

8,509

30,825

15,538

Total cost of revenues

16,753 ¹

8,640 ¹

32,174 ¹

15,833 ¹

Gross profit

133,107

82,033

247,831

149,391

Operating expenses

Sales and marketing

85,061 ¹

50,050 ¹

157,251 ¹

89,371 ¹

Research and development

47,333 ¹

25,990 ¹

89,183 ¹

48,164 ¹

General and administrative

18,674 ¹

10,085 ¹

33,169 ¹

17,842 ¹

Total operating expenses

151,068

86,125

279,603

155,377

Operating loss

(17,961)

(4,092)

(31,772)

(5,986)

Other income (expense), net

(623)

(309)

1,187

(516)

Loss before income tax expense (benefit)

(18,584)

(4,401)

(30,585)

(6,502)

Income tax expense (benefit)

395

173

(1,579)

3,701

Net loss

$ (18,979)

$ (4,574)

$ (29,006)

$ (10,203)

Net loss per share:

Basic (in usd per share)

$ (0.27)

$ (0.07)

$ (0.41)

$ (0.15)

Diluted (in usd per share)

$ (0.27)

$ (0.07)

$ (0.41)

$ (0.15)

Weighted average shares used to compute net loss per share:

Weighted Average Number of Shares Outstanding, Basic and Diluted

71,426

68,292

70,961

65,882

Condensed Consolidated Statements of Operations Parenthetical (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Cost of revenues

Allocated Share-based Compensation Expense

$ 1,644

$ 504

$ 2,948

$ 843

Sales and marketing

Allocated Share-based Compensation Expense

10,790

4,302

19,299

7,461

Research and development

Allocated Share-based Compensation Expense

12,462

4,817

22,548

8,221

General and administrative

Allocated Share-based Compensation Expense

$ 3,561

$ 1,425

$ 5,909

$ 2,486

Condensed Consolidated Statements of Comprehensive Loss Statement (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Statement of Comprehensive Income [Abstract]

Net loss

$ (18,979)

$ (4,574)

$ (29,006)

$ (10,203)

Other comprehensive income (loss):

Foreign currency translation, net

(263)

88

325

103

Comprehensive loss

$ (19,242)

$ (4,486)

$ (28,681)

$ (10,100)

Condensed Consolidated Statements of Cash Flows (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Operating activities

Net loss

$ (29,006)

$ (10,203)

Adjustments to reconcile net loss to net cash provided by operating activities

Depreciation and amortization expense

10,146

5,542

Stock-based compensation expense

50,704

19,011

Excess tax benefit from stock-based compensation

(633)

(3,146)

Deferred income taxes

(2,884)

3,176

Changes in operating assets and liabilities

Accounts receivable, net

605

4,704

Prepaid expenses, deposits and other assets

(7,173)

(455)

Income taxes receivable

77

(36)

Deferred revenue

22,783

14,036

Accounts payable and accrued liabilities

10,383

(212)

Income taxes payable

49

53

Net cash provided by operating activities

55,051

32,470

Investing activities

Purchase of property and equipment

(19,117)

(14,478)

Net cash used in investing activities

(19,117)

(14,478)

Financing activities

Proceeds from public offering, net of underwriters' discount and offering costs

0

344,097

Proceeds from exercise of stock options

12,900

9,388

Excess tax benefit from stock-based compensation

633

3,146

Net cash provided by financing activities

13,533

356,631

Effect of exchange rate changes on cash and cash equivalents

(574)

17

Net increase in cash and cash equivalents

48,893

374,640

Cash and cash equivalents

Beginning of period

680,613

252,674

End of period

729,506

627,314

Non-cash activities

Accrued purchases of property and equipment

6,002

3,649

Asset retirement obligations recognized

304

0

Property and equipment acquired under build-to-suit lease

$ 0

$ 11,600

Description of Business

Tableau Software, Inc., a Delaware corporation, and its wholly-owned subsidiaries (the "Company," "we," "us" or "our") are headquartered in Seattle, Washington. Our software products put the power of data into the hands of everyday people, allowing a broad population of business users to engage with their data, ask questions, solve problems and create value. Based on innovative core technologies originally developed at Stanford University, our products dramatically reduce the complexity, inflexibility and expense associated with traditional business intelligence applications. We currently make four key products: Tableau Desktop, a self-service, powerful analytics product for anyone with data; Tableau Server, a business intelligence platform for organizations; Tableau Online, a cloud-based hosted version of Tableau Server; and Tableau Public, a free cloud-based platform for analyzing and sharing public data.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial information has been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet data as of December 31, 2014 was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated financial information should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on February 27, 2015.

In the opinion of management, the accompanying unaudited condensed consolidated financial information includes all normal recurring adjustments necessary for a fair statement of the Company's financial position, results of operations, comprehensive loss and cash flows for the interim periods, but is not necessarily indicative of the results that may be expected for the year ending December 31, 2015. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassification

In the condensed consolidated statement of cash flows, certain prior year amounts have been reclassified to conform to the current year presentation. There was no change to the net cash flows from operating, investing, or financing activities as a result of the reclassification.

Public Offering

In March 2014, we closed a follow-on public offering, in which we sold 4,000,000 shares of our Class A common stock at a price to the public of $89.25 per share. The aggregate offering price for shares sold in the offering was approximately $344.1 million, net of underwriters' discounts and commissions, and offering expenses.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates include depreciable lives for property and equipment, stock-based compensation, income taxes, accrued liabilities, and collectability of accounts receivable. Actual results could differ from those estimates.

Risks and Uncertainties

Inherent in our business are various risks and uncertainties, including our limited history operating our business at its current scale and development of advanced technologies in a rapidly changing industry. These risks include our ability to manage our rapid growth and our ability to attract new customers and expand sales to existing customers, as well as other risks and uncertainties. In the event that we do not successfully implement our business plan, certain assets may not be recoverable, certain liabilities may not be paid and investments in our capital stock may not be recoverable. Our success depends upon the acceptance of our technology, development of sales and distribution channels, and our ability to generate significant revenues from the sale of our technology.

Segments

We follow the authoritative literature that established annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products and services, geographic regions and major customers.

We operate our business as one operating segment. Our chief operating decision makers are our Chief Executive Officer and Chief Financial Officer, who review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources.

Concentrations of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We extend credit to customers based upon an evaluation of the customer’s financial condition and generally collateral is not required. As of June 30, 2015 and December 31, 2014, no individual customer accounted for 10% or more of total accounts receivable. For the three and six months ended June 30, 2015 and 2014, no individual customer represented 10% or more of our total revenues.

Recent Accounting Pronouncements

In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards ("IFRS"), the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 related to revenue recognition. The new guidance sets forth a new five-step revenue recognition model that replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 provides retrospective or modified prospective methods of initial adoption and is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2016 and interim periods within those annual periods. We are currently evaluating the method of adoption and the impact that this standard will have on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15 related to status as a going concern. The new guidance explicitly requires that management assess an entity's ability to continue as a going concern and may require additional detailed disclosures. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Though permitted, we do not plan to early adopt. We do not believe that this standard will have an impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05 related to a customer's accounting for fees paid in a cloud computing arrangement. The new guidance requires that management evaluate each cloud computing arrangement in order to determine whether it includes a software license that must be accounted for separately from hosted services. ASU 2015-05 applies the same guidance cloud service providers use to make this determination and also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. ASU 2015-05 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015 and provides the option of applying the guidance prospectively to all arrangements entered into or materially modified after the effective date or on a retrospective basis. Early adoption is permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

Stockholders' Equity

Common Stock

Our certificate of incorporation, as amended and restated, authorizes us to issue 75,000,000 shares of Class B common stock, $0.0001 par value per share, and 750,000,000 shares of Class A common stock, $0.0001 par value per share. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each holder of Class B common stock is entitled to ten votes per share and each holder of Class A common stock is entitled to one vote per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder, and are automatically converted upon sale or transfer to Class A common stock, subject to certain limited exceptions. At its discretion, the board of directors may declare dividends on shares of common stock, subject to the rights of our preferred stockholders, if any. Upon liquidation or dissolution, holders of common stock will receive distributions only after preferred stock preferences have been satisfied.

Preferred Stock

Our certificate of incorporation, as amended and restated, authorizes us to issue 10,000,000 shares of preferred stock at $0.0001 par value per share. Our board of directors has the authority to provide for the issuance of all the shares in one or more series. At its discretion, our board of directors may designate the voting rights and preferences of the preferred stock.

Stock-Based Compensation

Our 2004 Equity Incentive Plan (the "2004 Plan") authorizes the granting of options to purchase shares of our Class B common stock, restricted stock units ("RSUs") and other stock-based awards to our employees, consultants, officers and directors. Our 2013 Equity Incentive Plan (the "2013 Plan" and, together with the 2004 Plan, the "Plans"), which was a successor to our 2004 Plan, authorizes the granting of options to purchase shares of our Class A common stock, RSUs and other stock-based awards to our employees, consultants, officers and directors.

Options granted under the Plans may be incentive or nonstatutory stock options. Incentive stock options may only be granted to employees. The term of each option is stated in the award agreement, but shall be no more than ten years from the date of grant. Options typically vest over a period of four years.

A summary of the option activity under the Plans during the six months ended June 30, 2015 is presented below:



	Options Outstanding
	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in years)	(in thousands)
Balances at December 31, 2014	8,515,879		$	8.76
Options exercised	(1,555,909	)	8.29
Options canceled	(10	)	9.30
Options forfeited	(56,715	)	16.13
Balances at June 30, 2015	6,903,245		$	8.81	6.51	$	735,146
Vested and expected to vest at June 30, 2015	6,853,506		$	8.76	6.50	$	730,143
Exercisable at June 30, 2015	4,510,114		$	7.16	6.06	$	487,705

RSUs entitle the holder to receive shares of Class A common stock as the award vests. RSUs typically vest over a period of four years. The fair value of an RSU is determined by using the closing price of our Class A common stock as reported on the New York Stock Exchange on the date of grant. The Company's non-vested RSUs do not have nonforfeitable rights to dividends or dividend equivalents.

A summary of the RSU activity under the 2013 Plan during the six months ended June 30, 2015 is presented below:



	Number of Shares Underlying Outstanding RSUs		Weighted-Average Grant-Date Fair Value per RSU

Non-Vested outstanding at December 31, 2014	2,818,661		$	77.77
RSUs granted	2,041,106		102.12
RSUs vested	(357,242	)	82.42
RSUs forfeited	(79,987	)	82.48
Non-Vested outstanding at June 30, 2015	4,422,538		$	88.54

Stock-based compensation expense is amortized using the straight-line method over the requisite service period. As of June 30, 2015, total unrecognized compensation expense, adjusted for estimated forfeitures, related to stock options and non-vested RSUs was approximately $344.4 million which is expected to be recognized over a period of 3.2 years.

The summary of shares available for issuance of equity based awards (including stock options and RSUs) during the six months ended June 30, 2015 is as follows:



	Shares Available for Grant
Balance at December 31, 2014	6,229,892
Authorized	3,493,410
Granted	(2,041,106	)
Canceled	10
Forfeited	136,702
Balance at June 30, 2015	7,818,908

Income Taxes

Our provision for income taxes for interim periods is determined using an estimate of our annual effective tax rate and adjusted for discrete items, if any, in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Our effective tax rate is impacted by and differs from the federal statutory rate primarily due to non-deductible stock-based compensation and the adverse effect of losses incurred in certain foreign jurisdictions for which we do not realize a tax benefit. Our effective tax rate may also be adversely impacted by the amount of our income (loss) before income tax expense (benefit) relative to our income tax expense, non-deductible expenses and changes in tax law such as the expiration of the U.S. federal research and development credit at the end of 2014.

Our effective tax rate was (2.1)% and (3.9)% for the three months ended June 30, 2015 and 2014, and 5.2% and (56.9)% for the six months ended June 30, 2015 and 2014, respectively. The difference in the effective tax rates between the six month periods is attributable to the change in the relationship between non-deductible tax items and the loss before income tax expense (benefit). These non-deductible tax items primarily include stock-based compensation and meals and entertainment expenses. The impact of adjustments to our effective tax rate for discrete items and non-deductible expenses is greater in periods close to break-even.

During the six months ended June 30, 2015, we recognized an income tax benefit of $1.6 million, which includes $1.4 million of discrete tax benefits relating to disqualifying dispositions on incentive stock options. During the six months ended June 30, 2014, we recognized an income tax expense of $3.7 million, which included $1.0 million of discrete tax benefits relating to disqualifying dispositions on incentive stock options.

We are currently under audit by the Internal Revenue Service ("IRS") for taxable years 2012 and 2013, which may lead to proposed adjustments to our taxes or net operating losses with respect to the years under examination as well as in subsequent periods that utilize these net operating losses. To date, we have not received any notices of proposed adjustments from the IRS related to this or any other examination periods.

Commitments and Contingencies

As of June 30, 2015, our principal obligations consisted of obligations outstanding under non-cancellable operating leases that expire at various dates through 2026. The following table represents our non-cancellable minimum lease payments remaining as of June 30, 2015 (in thousands):



Period Ending	Amount
Remainder of 2015	$	8,101
2016	17,102
2017	17,655
2018	17,607
2019	16,415
Thereafter	76,410
Total	$	153,290

We are subject to certain routine legal proceedings, as well as demands and claims that arise in the normal course of our business. We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter.

We are not aware of any pending legal proceedings that we believe, individually or in the aggregate, would be expected to have a material adverse effect on our business, operating results, or financial condition. We may in the future be party to litigation arising in the ordinary course of business, including claims that we allegedly infringe upon third party intellectual property rights. Such claims, even if not meritorious, could result in the expenditure of significant financial and management resources.

Segments and Information about Revenues by Geographic Region

Segments and Information about Revenues by Geographic Area

The following table presents our revenues by geographic region of end users who purchased products or services for the periods presented below:



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in thousands)
United States and Canada	$	113,119	$	70,604	$	211,562	$	128,370
International	36,741		20,069		68,443		36,854
Total revenues	$	149,860	$	90,673	$	280,005	$	165,224

Net Income (Loss) Per Share

The following table presents the computation of basic and diluted net loss per share:



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands, except per share amounts)
Net loss per share - basic and diluted
Net loss	$	(18,979	)	$	(4,574	)	$	(29,006	)	$	(10,203	)
Weighted average shares used to compute basic and diluted net loss per share	71,426			68,292			70,961			65,882
Net loss per share - basic and diluted	$	(0.27	)	$	(0.07	)	$	(0.41	)	$	(0.15	)

The following shares subject to outstanding awards were excluded from the computation of diluted net loss per share for the periods presented as their effect would have been antidilutive:



	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
	(in thousands)
Shares subject to outstanding common stock awards	11,326	11,430	11,326	11,430

Fair Value Measurements

We categorize assets and liabilities recorded at fair value based upon the level of judgment associated with inputs used to measure their fair value. The levels of the fair value hierarchy are as follows:


•	Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.


•	Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.


•	Level 3—Inputs are unobservable inputs based on our own assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

The following table presents the fair value of our financial assets using the fair value hierarchy:



	June 30, 2015
Description	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	698,608	$	—	$	—	$	698,608

	December 31, 2014
Description	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	667,210	$	—	$	—	$	667,210

We have no material financial assets or liabilities measured using Level 2 or Level 3 inputs.

Subsequent Events (Notes)

Subsequent Events

On July 2, 2015, the Company entered into an office lease agreement with an annual minimum lease payment of approximately $7.5 million, subject to annual increases of 3%. The initial term of the lease agreement is approximately 11 years, which includes a twelve month rent free period and other lease incentives.

Summary of Significant Accounting Policies (Policies)

Basis of Presentation

The accompanying unaudited condensed consolidated financial information has been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet data as of December 31, 2014 was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated financial information should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on February 27, 2015.

In the opinion of management, the accompanying unaudited condensed consolidated financial information includes all normal recurring adjustments necessary for a fair statement of the Company's financial position, results of operations, comprehensive loss and cash flows for the interim periods, but is not necessarily indicative of the results that may be expected for the year ending December 31, 2015. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassification

In the condensed consolidated statement of cash flows, certain prior year amounts have been reclassified to conform to the current year presentation. There was no change to the net cash flows from operating, investing, or financing activities as a result of the reclassification.

Pubic Offering

Public Offering

In March 2014, we closed a follow-on public offering, in which we sold 4,000,000 shares of our Class A common stock at a price to the public of $89.25 per share. The aggregate offering price for shares sold in the offering was approximately $344.1 million, net of underwriters' discounts and commissions, and offering expenses.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates include depreciable lives for property and equipment, stock-based compensation, income taxes, accrued liabilities, and collectability of accounts receivable. Actual results could differ from those estimates.

Risk And Uncertainties

Risks and Uncertainties

Inherent in our business are various risks and uncertainties, including our limited history operating our business at its current scale and development of advanced technologies in a rapidly changing industry. These risks include our ability to manage our rapid growth and our ability to attract new customers and expand sales to existing customers, as well as other risks and uncertainties. In the event that we do not successfully implement our business plan, certain assets may not be recoverable, certain liabilities may not be paid and investments in our capital stock may not be recoverable. Our success depends upon the acceptance of our technology, development of sales and distribution channels, and our ability to generate significant revenues from the sale of our technology.

Segments

We follow the authoritative literature that established annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products and services, geographic regions and major customers.

We operate our business as one operating segment. Our chief operating decision makers are our Chief Executive Officer and Chief Financial Officer, who review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources.

Concentrations of Credit Risk

Concentrations of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We extend credit to customers based upon an evaluation of the customer’s financial condition and generally collateral is not required. As of June 30, 2015 and December 31, 2014, no individual customer accounted for 10% or more of total accounts receivable. For the three and six months ended June 30, 2015 and 2014, no individual customer represented 10% or more of our total revenues.

Recent Accounting Pronouncements

In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards ("IFRS"), the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 related to revenue recognition. The new guidance sets forth a new five-step revenue recognition model that replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 provides retrospective or modified prospective methods of initial adoption and is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2016 and interim periods within those annual periods. We are currently evaluating the method of adoption and the impact that this standard will have on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15 related to status as a going concern. The new guidance explicitly requires that management assess an entity's ability to continue as a going concern and may require additional detailed disclosures. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Though permitted, we do not plan to early adopt. We do not believe that this standard will have an impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05 related to a customer's accounting for fees paid in a cloud computing arrangement. The new guidance requires that management evaluate each cloud computing arrangement in order to determine whether it includes a software license that must be accounted for separately from hosted services. ASU 2015-05 applies the same guidance cloud service providers use to make this determination and also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. ASU 2015-05 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015 and provides the option of applying the guidance prospectively to all arrangements entered into or materially modified after the effective date or on a retrospective basis. Early adoption is permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

Stock-Based Compensation (Tables)

Summary of Option Activity

A summary of the option activity under the Plans during the six months ended June 30, 2015 is presented below:



	Options Outstanding
	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in years)	(in thousands)
Balances at December 31, 2014	8,515,879		$	8.76
Options exercised	(1,555,909	)	8.29
Options canceled	(10	)	9.30
Options forfeited	(56,715	)	16.13
Balances at June 30, 2015	6,903,245		$	8.81	6.51	$	735,146
Vested and expected to vest at June 30, 2015	6,853,506		$	8.76	6.50	$	730,143
Exercisable at June 30, 2015	4,510,114		$	7.16	6.06	$	487,705

Summary of RSU Activity

A summary of the RSU activity under the 2013 Plan during the six months ended June 30, 2015 is presented below:



	Number of Shares Underlying Outstanding RSUs		Weighted-Average Grant-Date Fair Value per RSU

Non-Vested outstanding at December 31, 2014	2,818,661		$	77.77
RSUs granted	2,041,106		102.12
RSUs vested	(357,242	)	82.42
RSUs forfeited	(79,987	)	82.48
Non-Vested outstanding at June 30, 2015	4,422,538		$	88.54

Summary of shares available for grant

The summary of shares available for issuance of equity based awards (including stock options and RSUs) during the six months ended June 30, 2015 is as follows:



	Shares Available for Grant
Balance at December 31, 2014	6,229,892
Authorized	3,493,410
Granted	(2,041,106	)
Canceled	10
Forfeited	136,702
Balance at June 30, 2015	7,818,908

Commitments and Contigencies (Tables)

Future Minimum Lease Payments

The following table represents our non-cancellable minimum lease payments remaining as of June 30, 2015 (in thousands):



Period Ending	Amount
Remainder of 2015	$	8,101
2016	17,102
2017	17,655
2018	17,607
2019	16,415
Thereafter	76,410
Total	$	153,290

Segments and Information about Revenues by Geographic Region (Tables)

Reconciliation of Revenue from Segments to Consolidated

The following table presents our revenues by geographic region of end users who purchased products or services for the periods presented below:



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in thousands)
United States and Canada	$	113,119	$	70,604	$	211,562	$	128,370
International	36,741		20,069		68,443		36,854
Total revenues	$	149,860	$	90,673	$	280,005	$	165,224

Net Income (Loss) Per Share (Tables)

Schedule of Computation of Earnings Per Share, Basic and Diluted

The following table presents the computation of basic and diluted net loss per share:



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands, except per share amounts)
Net loss per share - basic and diluted
Net loss	$	(18,979	)	$	(4,574	)	$	(29,006	)	$	(10,203	)
Weighted average shares used to compute basic and diluted net loss per share	71,426			68,292			70,961			65,882
Net loss per share - basic and diluted	$	(0.27	)	$	(0.07	)	$	(0.41	)	$	(0.15	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following shares subject to outstanding awards were excluded from the computation of diluted net loss per share for the periods presented as their effect would have been antidilutive:



	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
	(in thousands)
Shares subject to outstanding common stock awards	11,326	11,430	11,326	11,430

Fair Value Measurements (Tables)

Fair Value of Financial Assets

The following table presents the fair value of our financial assets using the fair value hierarchy:



	June 30, 2015
Description	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	698,608	$	—	$	—	$	698,608

	December 31, 2014
Description	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	667,210	$	—	$	—	$	667,210

Description of Business Narrative (Details)

Jun. 30, 2015

product

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Number of Products

4

Summary of Significant Accounting Policies (Details) (USD $)

In Thousands, except Share data, unless otherwise specified

1 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

1 Months Ended

Mar. 31, 2014

Jun. 30, 2015

segment

Jun. 30, 2014

Jun. 30, 2015

Accounts Receivable [Member]

Customer Concentration Risk [Member]

customer

Dec. 31, 2014

Accounts Receivable [Member]

Customer Concentration Risk [Member]

customer

Jun. 30, 2015

Sales Revenue, Net [Member]

Customer Concentration Risk [Member]

customer

Jun. 30, 2014

Sales Revenue, Net [Member]

Customer Concentration Risk [Member]

customer

Jun. 30, 2015

Sales Revenue, Net [Member]

Customer Concentration Risk [Member]

customer

Jun. 30, 2014

Sales Revenue, Net [Member]

Customer Concentration Risk [Member]

customer

Mar. 31, 2014

Common Class A [Member]

Mar. 21, 2014

Common Class A [Member]

Class of Stock [Line Items]

New share issues

4,000,000

Price of new shares issued (in dollars per share)

$ 89.25

Proceeds from public offering, net of underwriters' discount and offering costs

$ 344,100

$ 0

$ 344,097

Number of Operating Segments

1

Number of Customers with more than 10% of Period Receivables

0

Number of Customers with More than 10% of Period Revenue

0

Stockholders' Equity (Details) (USD $)

6 Months Ended

Jun. 30, 2015

votes

Dec. 31, 2014

Class of Stock [Line Items]

Preferred Stock, Shares Authorized

10,000,000

Preferred stock, par value (in USD per share)

$ 0.0001

Common Class B [Member]

Class of Stock [Line Items]

Common Stock, shares authorized

75,000,000

Common stock, par value (in USD per share)

$ 0.0001

Votes per share entitled to share holder

10

Common Class A [Member]

Class of Stock [Line Items]

Common Stock, shares authorized

750,000,000

Common stock, par value (in USD per share)

$ 0.0001

Votes per share entitled to share holder

1

Stock-Based Compensation (Details 1) (Details) (USD $)

In Thousands, except Share data, unless otherwise specified

6 Months Ended

Jun. 30, 2015

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]

Options Outstanding, Shares, Beginning of Period

8,515,879

Options Outstanding, Shares, Options exercised

(1,555,909)

Options Outstanding, Shares, Options canceled

(10)

Options Outstanding, Shares, forfeited

(56,715)

Options Outstanding, Shares, End of Period

6,903,245

Options Outstanding, Shares, Vested and Expected to Vest

6,853,506

Options Outstanding, Shares, Exercisable

4,510,114

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]

Options Outstanding, Weighted Average Exercise Price, Beginning of Period, USD per share

$ 8.76

Options Outstanding, Weighted Average Exercise Price, Options exercised, USD per share

$ 8.29

Options Outstanding, Weighted Average Exercise Price, Options canceled, USD per share

$ 9.30

Options Outstanding, Weighted Average Exercise Price, Options forfeited, USD per share

$ 16.13

Options Outstanding, Weighted Average Exercise Price, End of Period, USD per share

$ 8.81

Options Outstanding, Weighted Average Exercise Price Per Share, Vested and Expected to Vest, USD per share

$ 8.76

Options Outstanding, Weighted Average Exercise Price Per Share, Exercisable, USD per share

$ 7.16

Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]

Options Outstanding, Weighted Average Remaining Contractual Term, End of Period (in years)

6 years 6 months 3 days

Options Outstanding, Weighted Average Remaining Contractual Term, Vested and Expected to Vest (in years)

6 years 6 months

Options Outstanding, Weighted Average Remaining Contractual Term, Exercisable (in years)

6 years 0 months 21 days

Options Outstanding, Aggregate Intrinsic Value, End of Period

$ 735,146

Options Outstanding, Aggregate Intrinsic Value, Vested and Expected to Vest

730,143

Options Outstanding, Aggregate Intrinsic Value, Exercisable

$ 487,705

Stock-Based Compensation Stock Based Compensation (RSU) Details 2 (Details) (USD $)

6 Months Ended

Jun. 30, 2015

Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]

RSUs granted

2,041,106

Restricted Stock Units (RSUs) [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]

RSU Shares Outstanding, Beginning of Period

2,818,661

RSUs granted

2,041,106

RSUs vested

(357,242)

RSUs forfeited

(79,987)

RSU Shares Outstanding, End of Period

4,422,538

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Exercise Price [Roll Forward]

Weighted Average Fair Value, Beginning of Period, USD per share

$ 77.77

Weighted Average Fair Value, RSUs granted, USD per share

$ 102.12

Weighted Average Fair Value, RSUs vested, USD per share

$ 82.42

Weighted Average Fair Value, RSUs forfeited, USD per share

$ 82.48

Weighted Average Fair Value, End of Period, USD per share

$ 88.54

Stock-Based Compensation (Narrative) (Details) (USD $)

In Millions, unless otherwise specified

6 Months Ended

Jun. 30, 2015

Share-based Compensation [Abstract]

Option expiration period (in years)

10 years

Option vesting period (in years)

4 years

Unrecognized compensation expense

$ 344.4

Recognition period

3 years 2 months 12 days

Stock-Based Compensation Stock-Based Compensation (Details 3) (Details)

6 Months Ended

Jun. 30, 2015

Share-based Compensation Arrangement by Share-based Payment Award, Equity Awards, Outstanding [Roll Forward]

Equity based awards, beginning of period

6,229,892

Authorized

3,493,410

Granted

(2,041,106)

Canceled

10

Forfeited

136,702

Equity based awards, end of period

7,818,908

Income Taxes - Narrative (Details) (USD $)

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Effective tax rate

(2.10%)

(3.90%)

5.20%

(56.90%)

Income tax expense (benefit)

$ 395,000

$ 173,000

$ (1,579,000)

$ 3,701,000

Discrete tax benefit related to dispositions on incentive stock options

$ (1,400,000)

$ (1,000,000)

Commitments and Contingencies Commitments and Contingencies - Obligations (Details) (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Remainder of 2015

$ 8,101

2016

17,102

2017

17,655

2018

17,607

2019

16,415

Thereafter

76,410

Total

$ 153,290

Segments and Information about Revenues by Geographic Region (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Segment Reporting Information [Line Items]

Revenues

$ 149,860

$ 90,673

$ 280,005

$ 165,224

United States and Canada

Segment Reporting Information [Line Items]

Revenues

113,119

70,604

211,562

128,370

International

Segment Reporting Information [Line Items]

Revenues

$ 36,741

$ 20,069

$ 68,443

$ 36,854

Net Income (Loss) Per Share (Details) (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Net loss

$ (18,979)

$ (4,574)

$ (29,006)

$ (10,203)

Weighted Average Number of Shares Outstanding, Basic and Diluted

71,426

68,292

70,961

65,882

Net loss per share - basic and diluted (in USD per share)

$ (0.27)

$ (0.07)

$ (0.41)

$ (0.15)

Employee Stock Option [Member]

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Antidilutive shares excluded from computation of diluted net loss

11,326

11,430

11,326

11,430

Fair Value Measurements (Details) (Money Market Funds [Member], USD $)

In Thousands, unless otherwise specified

Jun. 30, 2015

Dec. 31, 2014

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Investments fair value

$ 698,608

$ 667,210

Level 1 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Investments fair value

698,608

667,210

Level 2 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Investments fair value

0

Level 3 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Investments fair value

$ 0

Subsequent Events Narrative (Details) (Subsequent event, USD $)

In Millions, unless otherwise specified

0 Months Ended

Jul. 2, 2015

Subsequent event

Subsequent Event [Line Items]

Operating lease, minimum lease payment

$ 7.5

Operating lease, annual rent increase percentage

3.00%

Operating lease, inital term (in years)

11 years

Operating lease, rent abatement period (in months)

12 months