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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Mindbody, Inc. | NASDAQ:MB | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 36.46 | 36.47 | 36.52 | 0 | 01:00:00 |
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-1898451
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
(Do not check if a small reporting company)
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Small reporting company
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o
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Emerging growth company
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x
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Page
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PART I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 1.
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Item 1A.
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Item 6.
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•
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our ability to attract and retain subscribers, including high value subscribers;
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•
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our ability to deepen our relationships with existing subscribers;
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•
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our business plan and beliefs and objectives for future operations, including regarding our pricing and pricing model;
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•
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benefits associated with use of our products and services;
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•
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our ability to develop or acquire new products and services, improve our existing products and services and increase the value of our products and services;
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•
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the network effects associated with our business;
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•
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our ability to increase our revenue or maintain our revenue growth rate;
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•
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our future financial performance, including expectations regarding trends in revenue, cost of revenue, operating expenses, other income and expenses, income taxes, subscriber growth, average monthly revenue per subscriber, payments volume, and dollar-based net expansion rate;
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•
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our ability to further develop strategic relationships, including our ability to increase our revenue from our API and technology partners;
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•
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our ability to strengthen and maintain our partnerships with our payment processors;
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•
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our ability to achieve positive returns on investments;
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•
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our plans to further invest in and grow our business, including investment in research and development, sales and marketing, the development of our customer support teams, and our data center infrastructure, and our ability to effectively manage our growth and associated investments;
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•
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our ability to timely and effectively scale and adapt our existing technology;
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•
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the sufficiency of our cash and cash equivalents and cash generated from operations to meet our working capital and capital expenditure requirements;
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•
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the effects of seasonal trends on our operating results;
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•
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our ability to attract and retain senior management, qualified employees and key personnel;
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•
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our ability to successfully identify, acquire and integrate companies and assets;
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•
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our ability to successfully enter new vertical and geographic markets and manage our international expansion; and
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•
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our ability to maintain, protect and enhance our intellectual property and not infringe upon others’ intellectual property.
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June 30,
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December 31,
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||||
2017
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2016
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|||||
ASSETS
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||||
Current assets:
|
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||||
Cash and cash equivalents
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$
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223,792
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$
|
85,864
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Accounts receivable
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9,284
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9,129
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||
Prepaid expenses and other current assets
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4,845
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3,702
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Total current assets
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237,921
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98,695
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Property and equipment, net
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33,461
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33,104
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Intangible assets, net
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6,245
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2,027
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Goodwill
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11,583
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9,039
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Other noncurrent assets
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604
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|
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650
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TOTAL ASSETS
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$
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289,814
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$
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143,515
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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||||
Accounts payable
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$
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5,806
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$
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4,827
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Accrued expenses and other liabilities
|
11,723
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|
|
10,470
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Deferred revenue, current portion
|
5,845
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4,859
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Other current liabilities
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2,261
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|
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581
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|
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Total current liabilities
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25,635
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20,737
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Deferred revenue, noncurrent portion
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3,319
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|
|
3,269
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Deferred rent, noncurrent portion
|
1,638
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|
|
1,387
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Financing obligation on leases, noncurrent portion
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15,197
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15,450
|
|
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Other noncurrent liabilities
|
490
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|
|
1,016
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|
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Total liabilities
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46,279
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41,859
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Commitments and contingencies (Note 7)
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Stockholders’ equity:
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||||
Class A common stock, par value of $0.000004 per share; 1,000,000,000 shares authorized, 42,225,817 shares issued and outstanding as of June 30, 2017; 1,000,000,000 shares authorized, 30,820,502 shares issued and outstanding as of December 31, 2016
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—
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—
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Class B common stock, par value of $0.000004 per share; 100,000,000 shares authorized, 4,110,108 shares issued and outstanding as of June 30, 2017; 100,000,000 shares authorized, 9,777,757 shares issued and outstanding as of December 31, 2016
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—
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|
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—
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Additional paid-in capital
|
439,337
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289,317
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Accumulated other comprehensive loss
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(157
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)
|
|
(300
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)
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Accumulated deficit
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(195,645
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)
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(187,361
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)
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Total stockholders’ equity
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243,535
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101,656
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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289,814
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$
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143,515
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
2017
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2016
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2017
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2016
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|||||||||
Revenue
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$
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44,107
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$
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33,561
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$
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86,321
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$
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65,568
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Cost of revenue
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12,738
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10,713
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24,757
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20,685
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||||
Gross profit
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31,369
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22,848
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61,564
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44,883
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Operating expenses:
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||||||||
Sales and marketing
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17,362
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13,706
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33,696
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26,935
|
|
||||
Research and development
|
8,802
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7,594
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17,450
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15,011
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||||
General and administrative
|
9,358
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7,681
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18,044
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15,204
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||||
Total operating expenses
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35,522
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28,981
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69,190
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57,150
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||||
Loss from operations
|
(4,153
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)
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(6,133
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)
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(7,626
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)
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(12,267
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)
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||||
Interest expense, net
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(83
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)
|
|
(292
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)
|
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(297
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)
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(604
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)
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||||
Other expense, net
|
(21
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)
|
|
(61
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)
|
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(101
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)
|
|
(136
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)
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||||
Loss before provision for income taxes
|
(4,257
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)
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(6,486
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)
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(8,024
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)
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(13,007
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)
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||||
Provision for income taxes
|
118
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|
|
64
|
|
|
260
|
|
|
137
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|
||||
Net loss
|
(4,375
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)
|
|
(6,550
|
)
|
|
(8,284
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)
|
|
(13,144
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)
|
||||
Net loss per share, basic and diluted
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$
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(0.10
|
)
|
|
$
|
(0.16
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)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.33
|
)
|
Weighted-average shares used to compute net loss per share, basic and diluted
|
43,146,930
|
|
|
39,706,473
|
|
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41,958,305
|
|
|
39,578,246
|
|
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Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Net loss
|
$
|
(4,375
|
)
|
|
$
|
(6,550
|
)
|
|
$
|
(8,284
|
)
|
|
$
|
(13,144
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)
|
Other comprehensive gain (loss), net of taxes:
|
|
|
|
|
|
|
|
||||||||
Change in cumulative translation adjustment
|
53
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|
|
(18
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)
|
|
143
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|
|
30
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|
||||
Comprehensive loss
|
$
|
(4,322
|
)
|
|
$
|
(6,568
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)
|
|
$
|
(8,141
|
)
|
|
$
|
(13,114
|
)
|
|
Six Months Ended June 30,
|
||||||
2017
|
|
2016
|
|||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net loss
|
$
|
(8,284
|
)
|
|
$
|
(13,144
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
4,399
|
|
|
3,658
|
|
||
Stock-based compensation expense
|
6,010
|
|
|
4,296
|
|
||
Other
|
(6
|
)
|
|
384
|
|
||
Changes in operating assets and liabilities net of effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(100
|
)
|
|
(1,673
|
)
|
||
Prepaid expenses and other current assets
|
(1,124
|
)
|
|
(541
|
)
|
||
Other assets
|
51
|
|
|
11
|
|
||
Accounts payable
|
695
|
|
|
(73
|
)
|
||
Accrued expenses and other liabilities
|
1,270
|
|
|
1,797
|
|
||
Deferred revenue
|
1,009
|
|
|
1,483
|
|
||
Deferred rent
|
247
|
|
|
86
|
|
||
Net cash provided by (used in) operating activities
|
4,167
|
|
|
(3,716
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of property and equipment
|
(3,944
|
)
|
|
(3,796
|
)
|
||
Acquisition of business
|
(1,450
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(5,394
|
)
|
|
(3,796
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Net proceeds from follow-on public offering
|
134,528
|
|
|
—
|
|
||
Proceeds from employee stock purchase plan
|
1,510
|
|
|
1,679
|
|
||
Proceeds from exercise of equity awards
|
4,637
|
|
|
543
|
|
||
Payment related to shares withheld for taxes
|
(1,461
|
)
|
|
—
|
|
||
Repayment on financing and capital lease obligations
|
(211
|
)
|
|
(188
|
)
|
||
Other
|
(33
|
)
|
|
(33
|
)
|
||
Net cash provided by financing activities
|
138,970
|
|
|
2,001
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
185
|
|
|
16
|
|
||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
137,928
|
|
|
(5,495
|
)
|
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
85,864
|
|
|
93,405
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
223,792
|
|
|
$
|
87,910
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
170
|
|
|
$
|
86
|
|
Cash paid for interest
|
621
|
|
|
650
|
|
||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
||||
Earnout in business combination deemed part of total purchase consideration
|
5,142
|
|
|
—
|
|
||
Unpaid equipment purchases
|
783
|
|
|
2,537
|
|
||
Unpaid acquisition consideration held back to satisfy potential indemnification claims
|
750
|
|
|
—
|
|
||
Unpaid follow-on public offering costs
|
254
|
|
|
—
|
|
|
June 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
(1)
|
$
|
219,296
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
219,296
|
|
|
|
|
|
|
|
|
|
||||||||
Equity:
|
|
|
|
|
|
|
|
||||||||
Acquisition-related contingent consideration
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,142
|
|
|
$
|
5,142
|
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
(1)
|
$
|
81,878
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,878
|
|
(1)
|
The Company held certain assets that are required to be measured at fair value on a recurring basis, included in cash equivalents, which are held in money market funds. All such assets as of
June 30, 2017
and
December 31, 2016
were recorded based on Level 1 inputs.
|
(2)
|
The contingent consideration related to the acquisition of Lymber (Note 4) is recorded as equity and is not subject to remeasurement. Fair value was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company determined the fair value of the contingent consideration by discounting payments that are calculated based on Lymber’s projected future gross profit scenarios using the Monte Carlo simulation. The significant inputs used in the fair value measurement of contingent consideration are the timing and amount of gross profit in the respective periods (Note 4) and the discount rate.
|
|
June 30,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Computer equipment
|
$
|
19,293
|
|
|
$
|
17,262
|
|
Leasehold improvements
|
11,760
|
|
|
11,123
|
|
||
Capitalized software development costs
|
2,114
|
|
|
1,877
|
|
||
Office equipment
|
2,887
|
|
|
2,668
|
|
||
Software licenses
|
4,174
|
|
|
3,258
|
|
||
Building, leased
|
16,438
|
|
|
16,438
|
|
||
Property and equipment – gross
|
56,666
|
|
|
52,626
|
|
||
Less: accumulated depreciation and amortization
|
(23,205
|
)
|
|
(19,522
|
)
|
||
Property and equipment – net
|
$
|
33,461
|
|
|
$
|
33,104
|
|
|
June 30,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Accrued payroll
|
$
|
6,291
|
|
|
$
|
6,072
|
|
Accrued vacation
|
2,582
|
|
|
2,069
|
|
||
Employee stock purchase plan contributions
|
1,374
|
|
|
1,171
|
|
||
Other liabilities
|
1,476
|
|
|
1,158
|
|
||
Total accrued expenses and other liabilities
|
$
|
11,723
|
|
|
$
|
10,470
|
|
|
|
Amount
|
||
Intangible asset – developed software/technology
|
|
$
|
4,798
|
|
Goodwill
|
|
2,544
|
|
|
Fair value of total purchase consideration
|
|
$
|
7,342
|
|
|
|
Amount
|
||
Liabilities assumed
|
|
$
|
(105
|
)
|
Tangible assets acquired
|
|
32
|
|
|
Intangible asset – developed software/technology
|
|
1,818
|
|
|
Goodwill
|
|
3,643
|
|
|
Fair value of total purchase consideration
|
|
$
|
5,388
|
|
|
June 30, 2017
|
||||||||||||
|
Useful Life
(Years) |
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
Network list
|
2
|
|
$
|
420
|
|
|
$
|
(420
|
)
|
|
$
|
—
|
|
Technology
|
3 to 5
|
|
7,529
|
|
|
(1,284
|
)
|
|
6,245
|
|
|||
Total intangible assets
|
|
|
$
|
7,949
|
|
|
$
|
(1,704
|
)
|
|
$
|
6,245
|
|
|
December 31, 2016
|
||||||||||||
|
Useful Life
(Years)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
Network list
|
2
|
|
$
|
420
|
|
|
$
|
(420
|
)
|
|
$
|
—
|
|
Technology
|
3 to 5
|
|
2,731
|
|
|
(704
|
)
|
|
2,027
|
|
|||
Total intangible assets
|
|
|
$
|
3,151
|
|
|
$
|
(1,124
|
)
|
|
$
|
2,027
|
|
Year Ending December 31,
|
|
||
2017 (Remaining six months)
|
$
|
822
|
|
2018
|
1,348
|
|
|
2019
|
1,322
|
|
|
2020
|
1,326
|
|
|
2021
|
1,201
|
|
|
Thereafter
|
226
|
|
|
Total amortization expense
|
$
|
6,245
|
|
Year Ending December 31,
|
|
Operating
Leases
|
|
Financing
Obligation,
Building-
Leased
|
|
Total
|
||||||
2017 (remaining six months)
|
|
$
|
2,282
|
|
|
$
|
821
|
|
|
$
|
3,103
|
|
2018
|
|
4,296
|
|
|
1,679
|
|
|
5,975
|
|
|||
2019
|
|
4,244
|
|
|
1,729
|
|
|
5,973
|
|
|||
2020
|
|
4,254
|
|
|
1,781
|
|
|
6,035
|
|
|||
2021
|
|
3,619
|
|
|
1,835
|
|
|
5,454
|
|
|||
Thereafter
|
|
11,338
|
|
|
17,527
|
|
|
28,865
|
|
|||
Total minimum lease payments
|
|
$
|
30,033
|
|
|
$
|
25,372
|
|
|
$
|
55,405
|
|
Year Ending December 31,
|
|
||
2017 (Remaining six months)
|
$
|
1,518
|
|
2018
|
3,862
|
|
|
2019
|
2,035
|
|
|
2020
|
481
|
|
|
Total minimum purchase commitments
|
$
|
7,896
|
|
•
|
established that, on any matter that is submitted to a vote of the stockholders, the holder of each share of Class A common stock is entitled to
1 vote per share
, while the holder of each share of Class B common stock is entitled to
10 votes per share
;
|
•
|
established that shares of Class B common stock are convertible into shares of Class A common stock at the option of the holder and automatically convert into shares of Class A common stock upon transfer, subject to limited exceptions; and
|
•
|
established that, except with respect to voting and conversion rights, as discussed above, the rights of the holders of Class A and Class B common stock are identical.
|
|
Number of
Shares |
|
Weighted-
Average Grant Date Fair Value (per share) |
|
Weighted-
Average Remaining Contractual Term (Years) |
|
Aggregate
Intrinsic Value |
|||||
Unvested balance – December 31, 2016
|
743,693
|
|
|
$
|
14.49
|
|
|
3.8
|
|
$
|
15,841
|
|
Granted
|
720,346
|
|
|
26.89
|
|
|
|
|
|
|||
Vested
|
(187,783
|
)
|
|
13.70
|
|
|
|
|
|
|||
Forfeited
|
(55,777
|
)
|
|
16.51
|
|
|
|
|
|
|||
Unvested balance – June 30, 2017
|
1,220,479
|
|
|
$
|
21.83
|
|
|
3.4
|
|
$
|
33,197
|
|
|
Options Outstanding
|
|||||||||||||||
Number of
Shares
Underlying
Outstanding
Options
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-Average
Grant Date Fair Value |
|
Weighted-
Average
Remaining
Contractual
Life (Years)
|
|
Aggregate
Intrinsic Value
|
||||||||
Outstanding – December 31, 2016
|
3,843,276
|
|
|
$
|
10.93
|
|
|
|
|
7.5
|
|
$
|
39,902
|
|
||
Granted
|
549,759
|
|
|
25.68
|
|
|
$
|
11.12
|
|
|
|
|
|
|||
Exercised
|
(411,076
|
)
|
|
11.03
|
|
|
|
|
|
|
6,648
|
|
||||
Forfeited or cancelled
|
(112,249
|
)
|
|
15.25
|
|
|
|
|
|
|
|
|||||
Outstanding – June 30, 2017
|
3,869,710
|
|
|
$
|
12.89
|
|
|
|
|
7.3
|
|
$
|
55,445
|
|
||
Exercisable – June 30, 2017
|
2,091,253
|
|
|
$
|
8.78
|
|
|
|
|
6.2
|
|
$
|
38,511
|
|
||
Vested and expected to vest – June 30, 2017
|
3,818,858
|
|
|
$
|
12.80
|
|
|
|
|
7.3
|
|
$
|
55,038
|
|
|
Six Months Ended June 30,
|
||
2017
|
|
2016
|
|
Expected term (in years)
|
5.8
|
|
5.8
|
Expected volatility
|
42% - 44%
|
|
45%
|
Risk-free interest rate
|
1.9% - 2.0%
|
|
1.3% - 1.5%
|
Dividend yield
|
0%
|
|
0%
|
|
Six Months Ended June 30,
|
||
2017
|
|
2016
|
|
Expected term (in years)
|
0.5 - 2.0
|
|
0.5 - 2.0
|
Expected volatility
|
35% - 50%
|
|
39% - 42%
|
Risk-free interest rate
|
0.45% - 1.22%
|
|
0.46% - 0.78%
|
Dividend yield
|
0.0%
|
|
0.0%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Cost of revenue
|
$
|
366
|
|
|
$
|
220
|
|
|
$
|
627
|
|
|
$
|
435
|
|
Sales and marketing
|
671
|
|
|
440
|
|
|
1,177
|
|
|
1,023
|
|
||||
Research and development
|
980
|
|
|
470
|
|
|
1,507
|
|
|
965
|
|
||||
General and administrative
|
1,496
|
|
|
1,253
|
|
|
2,699
|
|
|
1,873
|
|
||||
Total stock-based compensation expense
|
$
|
3,513
|
|
|
$
|
2,383
|
|
|
$
|
6,010
|
|
|
$
|
4,296
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Net loss attributable to common stockholders
|
$
|
(4,375
|
)
|
|
$
|
(6,550
|
)
|
|
$
|
(8,284
|
)
|
|
$
|
(13,144
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.10
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.33
|
)
|
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted
|
43,146,930
|
|
|
39,706,473
|
|
|
41,958,305
|
|
|
39,578,246
|
|
|
As of June 30,
|
|||
2017
|
|
2016
|
||
Shares subject to outstanding stock options and employee stock purchase plan
|
3,962,084
|
|
4,751,989
|
|
Shares subject to outstanding restricted stock units
|
1,220,479
|
|
675,653
|
|
Total
|
5,182,563
|
|
5,427,642
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Subscription and services
|
$
|
25,992
|
|
|
$
|
20,112
|
|
|
$
|
50,945
|
|
|
$
|
39,369
|
|
Payments
|
17,619
|
|
|
12,904
|
|
|
34,369
|
|
|
25,056
|
|
||||
Product and other
|
496
|
|
|
545
|
|
|
1,007
|
|
|
1,143
|
|
||||
Total revenue
|
$
|
44,107
|
|
|
$
|
33,561
|
|
|
$
|
86,321
|
|
|
$
|
65,568
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
United States
|
$
|
35,585
|
|
|
$
|
27,853
|
|
|
$
|
70,011
|
|
|
$
|
54,639
|
|
Other
|
8,522
|
|
|
5,708
|
|
|
16,310
|
|
|
10,929
|
|
||||
Total
|
$
|
44,107
|
|
|
$
|
33,561
|
|
|
$
|
86,321
|
|
|
$
|
65,568
|
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||
2017
|
|
2016
|
|
%
|
|
2017
|
|
2016
|
|
%
|
|||||||||||
(dollars in millions)
|
|||||||||||||||||||||
Revenue
|
$
|
44.1
|
|
|
$
|
33.6
|
|
|
31
|
%
|
|
$
|
86.3
|
|
|
$
|
65.6
|
|
|
32
|
%
|
Net loss
|
(4.4
|
)
|
|
(6.6
|
)
|
|
|
|
(8.3
|
)
|
|
(13.1
|
)
|
|
|
||||||
Adjusted EBITDA
(1)
|
$
|
1.7
|
|
|
$
|
(1.9
|
)
|
|
|
|
$
|
2.8
|
|
|
$
|
(4.3
|
)
|
|
|
|
As of and for the Three Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Subscribers (end of period)
|
59,345
|
|
|
55,771
|
|
||
Average monthly revenue per subscriber
|
$
|
244
|
|
|
$
|
202
|
|
Payments volume (in billions)
|
$
|
1.9
|
|
|
$
|
1.6
|
|
Dollar-based net expansion rate (end of period)
|
108
|
%
|
|
111
|
%
|
•
|
Subscribers
. Subscribers are defined as unique physical business locations or individual practitioners who have active subscriptions to our platform as of the end of the period. We believe the number of subscribers is one indicator of the growth of our platform, but the revenue contribution of individual subscribers can vary widely. For example, the vast majority of our revenue is generated from our high value subscribers. The number of subscribers on our
Solo
software level decreased from 7,507 as of June 30, 2016, to
4,979
as of
June 30, 2017
, and the number of our high value subscribers increased from 48,264 as of June 30, 2016, to
54,366
as of June 30, 2017. Growth in the number of our high value subscribers depends, in part, on our ability to successfully develop and market our platform to wellness businesses and their consumers who have not yet become part of our network. While growth in the number of subscribers can be an important indicator of expected revenue growth, it also informs our management’s decisions with respect to the areas of our business that will require further investment in order to support expected future growth. For example, as the number of subscribers increases, we may need to increase the headcount in our customer support organization, as well as increase our IT infrastructure capital expenditures in order to maintain the effectiveness of our platform and the performance of our software for our subscribers and their consumers. The number of subscribers, including our high value subscribers, has increased year over year, and we expect the number of subscribers to continue to increase over time. However, the impact of our refined subscriber growth strategy has and could continue to cause the total number of subscribers to fluctuate from quarter to quarter. For example, as of January 1, 2017, we stopped selling subscriptions of our
Solo
software level to new subscribers and increased the monthly subscription pricing across all other software levels for new subscribers. We also increased monthly subscription pricing across all of our software levels for existing subscribers without long term contracts, which has been and will continue to be rolled out over the course of 2017. In addition, we concentrated our subscriber growth strategy on high value subscribers in specific countries, all of which we believe contributed to a sequential decrease in the total number of subscribers by
574
, with a sequential increase in the total number of our high value subscribers by
288
, as of June 30, 2017. The growth rate of the number of subscribers declined as of
June 30, 2017
compared to
June 30, 2016
and may continue to do so in the future as the size of our subscriber base increases and we make changes to our pricing and subscription offerings.
|
•
|
Average Monthly Revenue per Subscriber
. We believe that our ability to increase the average monthly revenue per subscriber, which we also refer to as ARPS, is an indicator of our ability to increase the long-term value of our existing subscriber relationships. ARPS is calculated by dividing the subscription and services and payments revenue generated in a given month by the number of subscribers at the end of the previous month. For periods greater than one month, ARPS is the sum of the average monthly revenue per subscriber for each month in the applicable period, divided by the number of months in the period. For example, the ARPS measurement period in the table above was measured over each of the
three months ended June 30, 2017
and
2016
. ARPS increased for the
three months ended June 30, 2017
compared to the
three months ended June 30, 2016
, and we expect it to continue to increase in the future, although we expect the growth rate to fluctuate over time.
|
•
|
Payments Volume
. We believe that payments volume is an indicator of the underlying current health of our subscribers’ businesses and of consumer spending trends as well as being a major driver of our payments revenue. Payments volume is the total dollar volume of transactions between our subscribers and their consumers utilizing our payments platform. Payments volume increased for the
three months ended June 30, 2017
compared to the
three months ended June 30, 2016
, and we expect it to continue to increase in the future. The growth rate in payments volume decreased for the
three months ended June 30, 2017
compared to the
three months ended June 30, 2016
, and we expect it to fluctuate over time.
|
•
|
Dollar-Based Net Expansion Rate
. Our business model focuses on maximizing the lifetime value of a subscriber relationship. We can achieve this by focusing on delivering value and functionality that retains our existing subscribers and by expanding the revenue derived from our subscribers over the lifetime of the relationship by selling higher value subscriptions to subscribers on lower software levels, through the utilization of our premium customer support offering, by increasing the value of transactions processed through our payments platform, and through services provided by our API and technology partners. We assess our performance in this area by measuring our dollar-based net expansion rate. Our dollar-based net expansion rate provides a measurement of our ability to increase revenue across our existing customer base, offset by churn, downgrades in subscriptions, reduction in services utilization and reductions in the value of transactions that our subscribers process through our payments platform. Our dollar-based net expansion rate is based upon our monthly subscription and services and payments revenue for a set of subscriber accounts. We calculate our dollar-based net expansion rate by dividing our retained revenue net of contraction and churn by our base revenue. We define our base revenue as the aggregate monthly subscription and services and payments revenue of our subscriber base as of the date one year prior to the date of calculation. We define our retained revenue net of contraction and churn as the aggregate monthly subscription and services and payments revenue of the same subscriber base included in our measure of base revenue at the end of the period being measured. We expect our dollar based net expansion rate to fluctuate over time.
|
•
|
Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of stock-based compensation; or (3) tax payments that may represent a reduction in cash available to us;
|
•
|
Adjusted EBITDA excludes stock-based compensation expense, which has been and will continue to be for the foreseeable future a significant recurring expense in our business; and
|
•
|
Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
(in thousands)
|
|||||||||||||||
Net loss
|
$
|
(4,375
|
)
|
|
$
|
(6,550
|
)
|
|
$
|
(8,284
|
)
|
|
$
|
(13,144
|
)
|
Stock-based compensation expense
|
3,513
|
|
|
2,383
|
|
|
6,010
|
|
|
4,296
|
|
||||
Depreciation and amortization
|
2,309
|
|
|
1,810
|
|
|
4,399
|
|
|
3,658
|
|
||||
Provision for income taxes
|
118
|
|
|
64
|
|
|
260
|
|
|
137
|
|
||||
Other expense, net
|
104
|
|
|
353
|
|
|
398
|
|
|
739
|
|
||||
Adjusted EBITDA
|
$
|
1,669
|
|
|
$
|
(1,940
|
)
|
|
$
|
2,783
|
|
|
$
|
(4,314
|
)
|
•
|
Subscription and services
. Subscription and services revenue is generated primarily from sales of subscriptions to our cloud-based business management software for the wellness services industry. The majority of subscription fees are prepaid by subscribers on a monthly basis via a credit card and, to a lesser extent, billed to subscribers on an annual or quarterly basis. Additionally, our subscribers can choose to enter into a separate contract with our technology partners to purchase additional features and functionality. We receive a revenue share from these arrangements from our technology partners, which is recognized when earned. We also earn revenue from application programming interface, or API, partners for subscriber site access, data query, and consumer bookings through our platform. The revenue from API partners is recognized when earned. Subscription revenue is recognized ratably over the term of the subscription agreement. Amounts invoiced in excess of revenue recognized are deferred. Service revenue is generated primarily through our premium customer support offering and is recognized in the period in which it is earned. We expect our subscription and services revenue to increase over time as we increase the number of our subscribers, the average monthly subscription revenue per subscriber, and our revenue from our technology and API partners.
|
•
|
Payments
. We earn payments revenue from revenue share arrangements with third-party payment processors on transactions between our subscribers who utilize our payments platform and their consumers. These payment transactions are generally related to purchases of classes, memberships, goods or services through a subscriber’s website, at its business location, and through the MINDBODY app. These transaction fees are recorded as revenue on a net basis when the payment transactions occur. We expect our payments revenue to increase in absolute dollars as we add new subscribers who utilize our payments platform and as existing subscribers increase the volume of transactions that they process through our payments platform.
|
•
|
Product and other
. We offer various point-of-sale system products and physical gift cards to our subscribers. Product and other revenue is recognized upon the delivery of these products to our subscribers.
|
•
|
Sales and marketing
. Sales and marketing expense consists primarily of personnel costs, including salaries, benefits, bonuses, stock-based compensation and commission costs for our sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, advertising, lead generation, promotional and other marketing activities, and allocated overhead. Sales and marketing expense is our largest operating expense, driving growth in subscribers, ARPS and consumer adoption, and we expect to continue to increase this expense in absolute dollars as we increase our sales and marketing efforts, although such expense may fluctuate as a percentage of total revenue. For instance, this year we will be holding BOLD, our annual customer conference in the third quarter, instead of the fourth quarter as in previous years, which will result in a significant year over year increase in sales and marketing expense for the third quarter of 2017.
|
•
|
Research and development
. Research and development expense consists primarily of personnel costs, including salaries, benefits, bonuses, and stock-based compensation for our development personnel. Research and development expense also includes outsourced software development costs and allocated overhead. We expect research and development expense to continue to increase in absolute dollars as we continue to invest in our research and product development efforts to enhance our product capabilities and access new markets, although such expense may fluctuate as a percentage of total revenue.
|
•
|
General and administrative
. General and administrative expense consists primarily of personnel costs, including salaries, benefits, bonuses, and stock-based compensation for our executive, finance, legal, human resources, information technology, and other administrative personnel. General and administrative expense also includes consulting, legal and accounting services and allocated overhead. We expect general and administrative expense to continue to increase in absolute dollars as we grow our operations and operate as a public company, although we expect such expense to continue to decline as a percentage of total revenue.
|
•
|
Interest expense, net
. Interest expense, net, consists primarily of the interest incurred on the financing obligation associated with our build-to-suit lease arrangement and interest earned on our cash and cash equivalent balances. We entered into a line of credit agreement in January 2015, and any future draws on this agreement will incur interest expense and result in increased interest expense in future periods.
|
•
|
Other expense, net
. Other expense, net, consists primarily of gains and losses on disposals of property and equipment, gains and losses from foreign currency transactions, and other income and expenses.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
(in thousands)
|
|||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
44,107
|
|
|
$
|
33,561
|
|
|
$
|
86,321
|
|
|
$
|
65,568
|
|
Cost of revenue
(1)
|
12,738
|
|
|
10,713
|
|
|
24,757
|
|
|
20,685
|
|
||||
Gross profit
|
31,369
|
|
|
22,848
|
|
|
61,564
|
|
|
44,883
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
(1)
|
17,362
|
|
|
13,706
|
|
|
33,696
|
|
|
26,935
|
|
||||
Research and development
(1)
|
8,802
|
|
|
7,594
|
|
|
17,450
|
|
|
15,011
|
|
||||
General and administrative
(1)
|
9,358
|
|
|
7,681
|
|
|
18,044
|
|
|
15,204
|
|
||||
Total operating expenses
|
35,522
|
|
|
28,981
|
|
|
69,190
|
|
|
57,150
|
|
||||
Loss from operations
|
(4,153
|
)
|
|
(6,133
|
)
|
|
(7,626
|
)
|
|
(12,267
|
)
|
||||
Interest expense, net
|
(83
|
)
|
|
(292
|
)
|
|
(297
|
)
|
|
(604
|
)
|
||||
Other expense, net
|
(21
|
)
|
|
(61
|
)
|
|
(101
|
)
|
|
(136
|
)
|
||||
Loss before provision for income taxes
|
(4,257
|
)
|
|
(6,486
|
)
|
|
(8,024
|
)
|
|
(13,007
|
)
|
||||
Provision for income taxes
|
118
|
|
|
64
|
|
|
260
|
|
|
137
|
|
||||
Net loss
|
$
|
(4,375
|
)
|
|
$
|
(6,550
|
)
|
|
$
|
(8,284
|
)
|
|
$
|
(13,144
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||
(as a percentage of revenue)
|
|||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
||||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
29
|
%
|
|
32
|
%
|
|
29
|
%
|
|
32
|
%
|
Gross profit
|
71
|
%
|
|
68
|
%
|
|
71
|
%
|
|
68
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
39
|
%
|
|
41
|
%
|
|
39
|
%
|
|
41
|
%
|
Research and development
|
20
|
%
|
|
22
|
%
|
|
20
|
%
|
|
23
|
%
|
General and administrative
|
21
|
%
|
|
23
|
%
|
|
21
|
%
|
|
23
|
%
|
Total operating expenses
|
80
|
%
|
|
86
|
%
|
|
80
|
%
|
|
87
|
%
|
Loss from operations
|
(9
|
)%
|
|
(18
|
)%
|
|
(9
|
)%
|
|
(19
|
)%
|
Interest expense, net
|
(1
|
)%
|
|
(1
|
)%
|
|
—
|
%
|
|
(1
|
)%
|
Other expense, net
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Loss before provision for income taxes
|
(10
|
)%
|
|
(19
|
)%
|
|
(9
|
)%
|
|
(20
|
)%
|
Provision for income taxes
|
—
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
|
—
|
%
|
Net loss
|
(10
|
)%
|
|
(20
|
)%
|
|
(10
|
)%
|
|
(20
|
)%
|
(1)
|
Cost of revenue and operating expenses include stock-based compensation expense as follows (in thousands):
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Cost of revenue
|
$
|
366
|
|
|
$
|
220
|
|
|
$
|
627
|
|
|
$
|
435
|
|
Sales and marketing
|
671
|
|
|
440
|
|
|
1,177
|
|
|
1,023
|
|
||||
Research and development
|
980
|
|
|
470
|
|
|
1,507
|
|
|
965
|
|
||||
General and administrative
|
1,496
|
|
|
1,253
|
|
|
2,699
|
|
|
1,873
|
|
||||
Total stock-based compensation expense
|
$
|
3,513
|
|
|
$
|
2,383
|
|
|
$
|
6,010
|
|
|
$
|
4,296
|
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||||||||||
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscription and services
|
$
|
25,992
|
|
|
$
|
20,112
|
|
|
$
|
5,880
|
|
|
29
|
%
|
|
$
|
50,945
|
|
|
$
|
39,369
|
|
|
$
|
11,576
|
|
|
29
|
%
|
Payments
|
17,619
|
|
|
12,904
|
|
|
4,715
|
|
|
37
|
%
|
|
34,369
|
|
|
25,056
|
|
|
9,313
|
|
|
37
|
%
|
||||||
Product and other
|
496
|
|
|
545
|
|
|
(49
|
)
|
|
(9
|
)%
|
|
1,007
|
|
|
1,143
|
|
|
(136
|
)
|
|
(12
|
)%
|
||||||
Total revenue
|
$
|
44,107
|
|
|
$
|
33,561
|
|
|
$
|
10,546
|
|
|
31
|
%
|
|
$
|
86,321
|
|
|
$
|
65,568
|
|
|
$
|
20,753
|
|
|
32
|
%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||||||||||
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||||||||||||
Research and development
|
$
|
8,802
|
|
|
$
|
7,594
|
|
|
$
|
1,208
|
|
|
16
|
%
|
|
$
|
17,450
|
|
|
$
|
15,011
|
|
|
$
|
2,439
|
|
|
16
|
%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||||||||||
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||||||||||||
General and administrative
|
$
|
9,358
|
|
|
$
|
7,681
|
|
|
$
|
1,677
|
|
|
22
|
%
|
|
$
|
18,044
|
|
|
$
|
15,204
|
|
|
$
|
2,840
|
|
|
19
|
%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||||||||||
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||||||||||||
Interest expense, net
|
$
|
83
|
|
|
$
|
292
|
|
|
$
|
(209
|
)
|
|
(72
|
)%
|
|
$
|
297
|
|
|
$
|
604
|
|
|
$
|
(307
|
)
|
|
(51
|
)%
|
Other expense, net
|
21
|
|
|
61
|
|
|
(40
|
)
|
|
(66
|
)%
|
|
101
|
|
|
136
|
|
|
(35
|
)
|
|
(26
|
)%
|
||||||
Provision for income taxes
|
$
|
118
|
|
|
$
|
64
|
|
|
$
|
54
|
|
|
84
|
%
|
|
$
|
260
|
|
|
$
|
137
|
|
|
$
|
123
|
|
|
90
|
%
|
|
As of June 30,
|
||||||
2017
|
|
2016
|
|||||
Cash and cash equivalents
|
$
|
223,792
|
|
|
$
|
87,910
|
|
|
Six Months Ended June 30,
|
||||
2017
|
|
2016
|
|||
Cash provided by (used in) operating activities
|
4,167
|
|
|
(3,716
|
)
|
Cash used in investing activities
|
5,394
|
|
|
3,796
|
|
Cash provided by financing activities
|
138,970
|
|
|
2,001
|
|
•
|
continuing the development of our platform, including investments in our research and development team, the development or acquisition of new products, features and functionality, and improvements to the scalability, availability and security of our platform;
|
•
|
strategic acquisitions;
|
•
|
improving our technology infrastructure and hiring additional employees for our sales, operations and customer support teams;
|
•
|
sales and marketing expenses, including personnel and lead generation expenses;
|
•
|
expenses related to international expansion in an effort to increase our subscriber base; and
|
•
|
general and administrative expenses, including legal, regulatory, accounting and other expenses related to being a public company.
|
•
|
our ability to attract new subscribers, retain and increase sales to existing subscribers and satisfy our subscribers’ requirements;
|
•
|
the mix of our subscriber base, including the concentration of high value subscribers;
|
•
|
the volume of transactions processed on our payments platform;
|
•
|
the variability of revenues derived from our partners;
|
•
|
the number of employees added;
|
•
|
the rate of expansion and productivity of our sales force;
|
•
|
the entrance of new competitors in our market, whether by established companies or new companies;
|
•
|
changes in our or our competitors’ pricing policies;
|
•
|
the amount and timing of operating costs and capital expenditures related to the expansion of our business, including our sales force, and expenses related to the development or acquisition of technologies or businesses;
|
•
|
new pricing models, products, features or functionalities introduced by our competitors;
|
•
|
significant security breaches, technical difficulties or interruptions to our platform and any related impact on our reputation;
|
•
|
the timing of payments by subscribers and other payment processing partners and payment defaults by subscribers or other payment processing partners;
|
•
|
litigation, including class action litigation, involving our company, our services or our industry;
|
•
|
general economic conditions or declines in consumer interest in the wellness industries that we serve, either of which may adversely affect either our subscribers’ ability or willingness to purchase additional subscriptions, delay a prospective subscriber’s purchasing decision, reduce the value of new subscription contracts or affect subscriber retention;
|
•
|
changes in the relative and absolute levels of customer support we provide;
|
•
|
changes in foreign currency exchange rates;
|
•
|
extraordinary expenses such as litigation or other dispute-related settlement payments;
|
•
|
the impact of new accounting pronouncements; and
|
•
|
the timing of the grant or vesting of equity awards to employees.
|
•
|
our pricing terms;
|
•
|
the need to educate prospective subscribers about the uses and benefits of our platform;
|
•
|
the discretionary nature of purchasing and budget cycles and decisions;
|
•
|
the competitive nature of evaluation and purchasing processes;
|
•
|
evolving functionality demands;
|
•
|
announcements or planned introductions of new products, features or functionality by us or our competitors; and
|
•
|
lengthy purchasing approval processes, particularly among larger organizations.
|
•
|
these apps may not meet the same quality standards that we apply to our own development efforts (including, among other things, data and privacy protections), and to the extent they contain bugs or defects, they may create disruptions in our subscribers’ use of our platform or adversely affect our brand;
|
•
|
these apps are subject to approval and/or removal from third party distribution platforms, including Apple’s App Store and Google Play, among others;
|
•
|
we do not currently provide substantive support for software apps developed by our partner ecosystem, and users may be left without adequate support and potentially cease using our platform if our partners do not provide adequate support for these apps;
|
•
|
our partners may not possess the appropriate intellectual property rights to develop and share their apps;
|
•
|
our relationship with our partners may change, which could adversely affect our revenue and our results of operations;
|
•
|
our revenues from technology and API partners have grown rapidly in recent periods and, if our relationship with partners who contribute or have contributed more significantly to this growth or demand for products or services of these partners changes, this could adversely affect our revenue and results of operations;
|
•
|
some of our partners may use the insight they gain from integrating with our software and from information publicly available to develop competing products or product features; and
|
•
|
our partners may establish relationships with, or functionality to offer to, our subscribers that diminish or eliminate the need or desire for our API platform.
|
•
|
increased management, travel, infrastructure and legal compliance costs associated with having multiple international operations;
|
•
|
compliance with foreign privacy, information security, and data protection laws and regulations and the risks and costs of non-compliance;
|
•
|
longer payment cycles and difficulties in enforcing contracts, collecting accounts receivable or satisfying revenue recognition criteria, especially in emerging markets;
|
•
|
increased financial accounting and reporting burdens and complexities;
|
•
|
uncertainty regarding the expected departure of the United Kingdom from the European Union;
|
•
|
requirements or preferences for domestic products;
|
•
|
differing technical standards, existing or future regulatory and certification requirements and required features and functionality;
|
•
|
economic conditions in each country or region and general economic uncertainty around the world;
|
•
|
compliance with laws and regulations for foreign operations, including anti-bribery laws (such as the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. Travel Act, and the U.K. Bribery Act 2010), import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell our platform in certain foreign markets, and the risks and costs of non-compliance;
|
•
|
heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our financial results and result in restatements of our consolidated financial statements;
|
•
|
fluctuations in currency exchange rates and related effect on our operating results;
|
•
|
difficulties in repatriating or transferring funds from or converting currencies in certain countries;
|
•
|
communication and integration problems related to entering new markets with different languages, cultures and political systems;
|
•
|
differing labor standards, including restrictions related to, and the increased cost of, terminating employees in some countries;
|
•
|
the need for localized software and licensing programs;
|
•
|
the need for localized language support;
|
•
|
reduced protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; and
|
•
|
compliance with the laws of numerous foreign taxing jurisdictions, including withholding obligations, and overlapping of different tax regimes.
|
•
|
issue additional equity securities that would dilute our existing stockholders;
|
•
|
use cash that we may need in the future to operate our business;
|
•
|
incur large charges or substantial liabilities associated with the acquisition;
|
•
|
incur acquisition-related costs, which would be recognized as current period expenses;
|
•
|
encounter difficulties maintaining relationships with customers and partners of the acquired business;
|
•
|
encounter difficulties incorporating acquired technologies and rights into our platform, providing access and rights to our internal systems, and of maintaining quality and security standards consistent with our reputation and brand;
|
•
|
incur debt on terms unfavorable to us or that we are unable to repay;
|
•
|
encounter difficulties retaining key employees of the acquired company, integrating diverse software codes or business cultures or coordinating organizations that are geographically diverse and that have different business cultures; and
|
•
|
become subject to adverse tax consequences, substantial depreciation or deferred compensation charges.
|
•
|
sell or otherwise dispose of our assets;
|
•
|
make material changes in our business;
|
•
|
enter into a transaction in which stockholders who were not stockholders immediately prior to such transaction own more than 40% of our voting stock after giving effect to such transaction;
|
•
|
consolidate, merge with, or acquire other entities;
|
•
|
incur additional indebtedness;
|
•
|
create liens on our assets;
|
•
|
pay dividends or make other distributions on our capital stock;
|
•
|
make investments;
|
•
|
enter into transactions with affiliates; and
|
•
|
pay off or redeem subordinated indebtedness.
|
•
|
establishing a classified board of directors whose members serve staggered three-year terms;
|
•
|
authorizing “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers;
|
•
|
limiting the ability of our stockholders to call and bring business before special meetings;
|
•
|
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
|
•
|
controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; and
|
•
|
authorizing two classes of common stock, as discussed above.
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
volatility in the market prices and trading volumes of technology securities;
|
•
|
changes in operating performance and stock market valuations of other technology companies generally or those in our industry in particular;
|
•
|
sales of shares of our Class A common stock by us or our stockholders;
|
•
|
failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow us, or our failure to meet these estimates or the expectations of investors;
|
•
|
the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections;
|
•
|
announcements by us or our competitors of new products or services;
|
•
|
the public’s reaction to our press releases, other public announcements and filings with the SEC;
|
•
|
rumors and market speculation involving us or other companies in our industry;
|
•
|
actual or anticipated changes in our operating results or fluctuations in our operating results;
|
•
|
actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally;
|
•
|
litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
|
•
|
developments or disputes concerning our intellectual property or other proprietary rights;
|
•
|
announced or completed acquisitions of businesses or technologies by us or our competitors;
|
•
|
political, economic and regulatory developments in the United States, including as a result of the recent presidential election;
|
•
|
new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
|
•
|
changes in accounting standards, policies, guidelines, interpretations or principles;
|
•
|
any significant change in our management; and
|
•
|
general economic conditions and slow or negative growth of our markets.
|
|
MINDBODY, INC.
|
|
|
|
|
Date: August 8, 2017
|
By:
|
/s/ Richard Stollmeyer
|
|
|
Richard Stollmeyer
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: August 8, 2017
|
By:
|
/s/ Brett White
|
|
|
Brett White
|
|
|
Chief Financial Officer and Chief Operating Officer
(Principal Financial Officer)
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
10.1†
|
|
|
8-K
|
|
001-37453
|
|
10.1
|
|
June 19, 2017
|
|
31.1*
|
|
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
101.PRE*
|
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XBRL Taxonomy Extension Presentation Linkbase Document
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Filed herewith.
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Furnished herewith. The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of MINDBODY, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
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