0001433195-19-000074 | 10-Q | XBRL Viewer

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2019	Oct. 21, 2019
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-37468
Entity Registrant Name	APPFOLIO INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-0359894
Entity Address, Address Line One	50 Castilian Drive
Entity Address, City or Town	Santa Barbara,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	93117
City Area Code	805
Local Phone Number	364-6093
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of each class	Class A Common Stock, $0.0001 par value
Trading Symbol	APPF
Security Exchange Name	NASDAQ
Entity Central Index Key	0001433195
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		16,401,460
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		17,660,747

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 20,121	$ 74,076
Investment securities—current	20,355	16,631
Accounts receivable, net	8,039	5,516
Prepaid expenses and other current assets	16,150	11,775
Total current assets	64,665	107,998
Investment securities—noncurrent	4,698	11,256
Property and equipment, net	9,842	6,871
Operating lease right-of-use assets	16,433	0
Capitalized software, net	27,621	20,485
Goodwill	58,392	15,548
Intangible assets, net	22,678	5,895
Deferred taxes	23,196	0
Other long-term assets	6,303	7,688
Total assets	233,828	175,741
Current liabilities
Accounts payable	1,539	1,481
Accrued employee expenses	13,101	12,377
Accrued expenses	9,166	8,281
Deferred revenue	4,163	3,414
Other current liabilities	13,093	1,447
Long-term debt, net—current portion	1,208	1,213
Total current liabilities	42,270	28,213
Operating lease liabilities	18,448
Long-term debt, net	47,677	48,602
Other long-term liabilities	16	7,080
Total liabilities	108,411	83,895
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding at September 30, 2019 and December 31, 2018	0	0
Additional paid-in capital	159,399	157,898
Accumulated other comprehensive income (loss)	38	(178)
Treasury stock, at cost, 370 Class A shares at September 30, 2019 and December 31, 2018	(21,562)	(21,562)
Accumulated deficit	(12,462)	(44,316)
Total stockholders’ equity	125,417	91,846
Total liabilities and stockholders’ equity	233,828	175,741
Class A common stock, $0.0001 par value, 250,000 shares authorized at September 30, 2019 and December 31, 2018; issued - 16,743 and 16,159, shares at September 30, 2019 and December 31, 2018; outstanding - 16,373 and 15,789 shares at September 30, 2019 and December 31, 2018, respectively;
Stockholders’ equity:
Common stock	2	2
Class B common stock, $0.0001 par value, 50,000 shares authorized at September 30, 2019 and December 31, 2018; 17,685 and 18,109 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively;
Stockholders’ equity:
Common stock	$ 2	$ 2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Preferred stock, par value (usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Treasury stock (in shares)	370,000	370,000
Class A common stock
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	16,743,000	16,159,000
Common stock, shares outstanding (in shares)	16,373,000	15,789,000
Class B common stock
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	17,685,000	18,109,000
Common stock, shares outstanding (in shares)	17,685,000	18,109,000

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Revenue	$ 67,935	$ 50,126	$ 188,650	$ 139,706
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	25,930	19,282	75,239	53,624
Sales and marketing	12,636	8,681	37,087	23,711
Research and product development	10,602	6,440	28,422	17,523
General and administrative	8,955	6,541	25,361	17,105
Depreciation and amortization	5,678	3,705	16,169	10,784
Total costs and operating expenses	63,801	44,649	182,278	122,747
Income from operations	4,134	5,477	6,372	16,959
Other income (expense), net	(11)	1	(68)	(20)
Interest income (expense), net	(400)	229	(1,324)	631
Income before provision for (benefit from) income taxes	3,723	5,707	4,980	17,570
Provision for (benefit from) income taxes	(1,255)	183	(26,874)	252
Net income	$ 4,978	$ 5,524	$ 31,854	$ 17,318
Net income per common share:
Basic (in dollars per share)	$ 0.15	$ 0.16	$ 0.94	$ 0.51
Diluted (in dollars per share)	$ 0.14	$ 0.16	$ 0.90	$ 0.49
Weighted average common shares outstanding:
Basic (in shares)	34,047	34,219	33,991	34,154
Diluted (in shares)	35,421	35,610	35,406	35,524

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 4,978	$ 5,524	$ 31,854	$ 17,318
Other comprehensive income (loss):
Changes in unrealized gains (losses) on investment securities	20	57	216	(23)
Comprehensive income	$ 4,998	$ 5,581	$ 32,070	$ 17,295

- Definition

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

+ References + Details

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock Class A common stock	Common Stock Class B common stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative-effect adjustment resulting from adoption of ASU 2014-09	$ 2,964						$ 2,964
Beginning balance (in shares) at Dec. 31, 2017		14,879	19,102
Beginning balance at Dec. 31, 2017	85,079	$ 1	$ 3	$ 152,531	$ (209)		(67,247)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		98
Exercise of stock options	470	$ 0		470
Stock-based compensation	1,495			1,495
Vesting of restricted stock units, net of shares withheld for taxes (in shares)		68
Vesting of restricted stock units, net of shares withheld for taxes	(1,650)	$ 0		(1,650)
Vesting of early exercised shares	9			9
Conversion of Class B stock to Class A stock (in shares)		(47)	(47)
Conversion of Class B stock to Class A stock	0	$ 0	$ 0
Other comprehensive income (loss)	(148)				(148)
Net income	4,320						4,320
Ending balance (in shares) at Mar. 31, 2018		15,092	19,055
Ending balance at Mar. 31, 2018	92,539	$ 1	$ 3	152,855	(357)		(59,963)
Beginning balance (in shares) at Dec. 31, 2017		14,879	19,102
Beginning balance at Dec. 31, 2017	85,079	$ 1	$ 3	152,531	(209)		(67,247)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	17,318
Ending balance (in shares) at Sep. 30, 2018		15,984	18,250
Ending balance at Sep. 30, 2018	108,363	$ 2	$ 2	155,556	(232)		(46,965)
Beginning balance (in shares) at Mar. 31, 2018		15,092	19,055
Beginning balance at Mar. 31, 2018	92,539	$ 1	$ 3	152,855	(357)		(59,963)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		35
Exercise of stock options	188	$ 0		188
Stock-based compensation	1,544			1,544
Vesting of restricted stock units, net of shares withheld for taxes (in shares)		28
Vesting of restricted stock units, net of shares withheld for taxes	(844)	$ 0		(844)
Vesting of early exercised shares	9			9
Conversion of Class B stock to Class A stock (in shares)		(478)	(478)
Conversion of Class B stock to Class A stock	0	$ 1	$ (1)
Issuance of restricted stock awards (in shares)		5
Issuance of restricted stock awards	0	$ 0
Other comprehensive income (loss)	68				68
Net income	7,474						7,474
Ending balance (in shares) at Jun. 30, 2018		15,638	18,577
Ending balance at Jun. 30, 2018	100,978	$ 2	$ 2	153,752	(289)		(52,489)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		10
Exercise of stock options	55	$ 0		55
Stock-based compensation	1,953			1,953
Vesting of restricted stock units, net of shares withheld for taxes (in shares)		9
Vesting of restricted stock units, net of shares withheld for taxes	(212)	$ 0		(212)
Vesting of early exercised shares	8			8
Conversion of Class B stock to Class A stock (in shares)		(327)	(327)
Conversion of Class B stock to Class A stock	0	$ 0	$ 0
Other comprehensive income (loss)	57				57
Net income	5,524						5,524
Ending balance (in shares) at Sep. 30, 2018		15,984	18,250
Ending balance at Sep. 30, 2018	108,363	$ 2	$ 2	155,556	(232)		(46,965)
Beginning balance (in shares) at Dec. 31, 2018		15,789	18,109
Beginning balance at Dec. 31, 2018	91,846	$ 2	$ 2	157,898	(178)	$ (21,562)	(44,316)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		14
Exercise of stock options	90			90
Stock-based compensation	1,831			1,831
Vesting of restricted stock units, net of shares withheld for taxes (in shares)		58
Vesting of restricted stock units, net of shares withheld for taxes	(2,572)			(2,572)
Vesting of early exercised shares	6			6
Conversion of Class B stock to Class A stock (in shares)		(38)	(38)
Conversion of Class B stock to Class A stock	0
Other comprehensive income (loss)	129				129
Net income	3,725						3,725
Ending balance (in shares) at Mar. 31, 2019		15,899	18,071
Ending balance at Mar. 31, 2019	95,055	$ 2	$ 2	157,253	(49)	(21,562)	(40,591)
Beginning balance (in shares) at Dec. 31, 2018		15,789	18,109
Beginning balance at Dec. 31, 2018	$ 91,846	$ 2	$ 2	157,898	(178)	(21,562)	(44,316)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	46
Net income	$ 31,854
Ending balance (in shares) at Sep. 30, 2019		16,373	17,685
Ending balance at Sep. 30, 2019	125,417	$ 2	$ 2	159,399	38	(21,562)	(12,462)
Beginning balance (in shares) at Mar. 31, 2019		15,899	18,071
Beginning balance at Mar. 31, 2019	95,055	$ 2	$ 2	157,253	(49)	(21,562)	(40,591)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		23
Exercise of stock options	109			109
Stock-based compensation	2,080			2,080
Vesting of restricted stock units, net of shares withheld for taxes (in shares)		42
Vesting of restricted stock units, net of shares withheld for taxes	(2,247)			(2,247)
Conversion of Class B stock to Class A stock (in shares)		(119)	(119)
Conversion of Class B stock to Class A stock	0
Issuance of restricted stock awards (in shares)		3
Issuance of restricted stock awards	0
Other comprehensive income (loss)	67				67
Net income	23,151						23,151
Ending balance (in shares) at Jun. 30, 2019		16,086	17,952
Ending balance at Jun. 30, 2019	118,215	$ 2	$ 2	157,195	18	(21,562)	(17,440)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		9
Exercise of stock options	60			60
Stock-based compensation	2,678			2,678
Vesting of restricted stock units, net of shares withheld for taxes (in shares)		11
Vesting of restricted stock units, net of shares withheld for taxes	(534)			(534)
Conversion of Class B stock to Class A stock (in shares)		(267)	(267)
Conversion of Class B stock to Class A stock	0
Other comprehensive income (loss)	20				20
Net income	4,978						4,978
Ending balance (in shares) at Sep. 30, 2019		16,373	17,685
Ending balance at Sep. 30, 2019	$ 125,417	$ 2	$ 2	$ 159,399	$ 38	$ (21,562)	$ (12,462)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash from operating activities
Net income	$ 31,854	$ 17,318
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	16,169	10,784
Amortization of operating lease right-of-use assets	3,016	0
Stock-based compensation	5,431	4,419
Deferred income taxes	(27,032)	0
Other	136	165
Changes in operating assets and liabilities:
Accounts receivable	(2,778)	(1,465)
Prepaid expenses and other current assets	(4,403)	(3,902)
Other long-term assets	1,129	(5,003)
Accounts payable	270	477
Accrued employee expenses	486	(3,225)
Accrued expenses	(14)	3,397
Deferred revenue	1,039	(4,247)
Operating lease liabilities	(2,886)	0
Other long-term liabilities	996	5,883
Net cash provided by operating activities	23,413	24,601
Cash from investing activities
Purchases of property and equipment	(4,085)	(1,740)
Additions to capitalized software	(15,669)	(8,997)
Purchases of investment securities	(10,690)	(28,784)
Sales of investment securities	2,750	701
Maturities of investment securities	11,000	28,477
Acquisition, net of cash acquired	(54,004)	(14,441)
Purchases of intangible assets	(30)	0
Net cash used in investing activities	(70,728)	(24,784)
Cash from financing activities
Proceeds from stock option exercises	259	713
Tax withholding for net share settlement	(5,541)	(2,894)
Proceeds from issuance of debt	1,697	93
Principal payments on debt	(2,634)	(93)
Payment of debt issuance costs	(420)	0
Net cash used in financing activities	(6,639)	(2,181)
Net decrease in cash, cash equivalents and restricted cash	(53,954)	(2,364)
Cash, cash equivalents and restricted cash
Beginning of period	74,506	16,537
End of period	20,552	14,173
Noncash investing and financing activities
Purchases of property and equipment included in accounts payable and accrued expenses	1,613	55
Additions of capitalized software included in accrued and accrued employee expenses	601	298
Stock-based compensation capitalized for software development	1,321	751
Purchase consideration for acquisitions included in other current liabilities	5,977	0
Total cash, cash equivalents and restricted cash	$ 20,552	$ 14,173

Nature of Business	9 Months Ended
Nature of Business	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	Nature of Business AppFolio, Inc. (“we,” "us" or "our") provides industry-specific, cloud-based business software solutions, services and data analytics to the real estate market, which comprises a significant majority of our revenue, and, to a lesser extent, to the legal market. Our mission is to revolutionize vertical industry businesses by providing great software and services. We believe we accomplish this mission by providing our customers with a system of record to automate essential business processes, a system of engagement to enhance business interactions between our customers and their clients and other stakeholders, and a system of intelligence designed to leverage data to predict and optimize business workflows in order to enable superior customer experiences and increase efficiency across our customers' businesses. Customers in our real estate market directly and indirectly account for more than 90% of our annual revenue. Real estate customers include third-party property managers, owner-operators and real estate investment managers who manage and/or invest in single- and multi-family residences, commercial properties, community associations, student housing, as well as mixed real estate portfolios. Our legal customers are typically small law firms that directly and indirectly account for less than 10% of our annual revenue. Recent Developments Acquisition of Dynasty Marketplace, Inc. On January 7, 2019, we completed the acquisition of Dynasty Marketplace, Inc. ("Dynasty"), a provider of advanced artificial intelligence ("AI") solutions for the real estate market. Dynasty offers advanced conversational AI solutions that automate leasing communications, replace manual tasks and help customers grow their portfolios. Dynasty’s technology is designed to enable operational efficiency in the leasing process including consistent prospect experience, lead conversion, and improved market insights. For additional information regarding this acquisition, refer to Note 3, Business Combinations.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these Condensed Consolidated Financial Statements should be read in conjunction with our audited consolidated financial statements and the related notes included in our Annual Report filed with the Securities and Exchange Commission ("SEC") on February 28, 2019. The year-end condensed balance sheet was derived from our audited consolidated financial statements. Our unaudited interim Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the Condensed Consolidated Financial Statements. The operating results for the nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full year ending December 31, 2019.

Reclassifications

We reclassified certain amounts in our Condensed Consolidated Statements of Cash Flows within the cash from operating activities section in the prior year to conform to the current year's presentation.

Changes in Accounting Policies

On January 1, 2019, we adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-02, Leases, as amended ("ASU 2016-02" or the "new lease standard"), and have revised certain related accounting policies as follows:

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our Condensed Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As none of our leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating

lease ROU assets also include any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease arrangements with lease and non-lease components, which are generally accounted for as a single lease component. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

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 dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Net Income per Common Share

Net income per common share was the same for shares of our Class A and Class B common stock because they are entitled to the same liquidation and dividend rights and are therefore combined in the table below. The following table presents a reconciliation of the weighted average number of shares of our Class A and Class B common stock used to compute net income per common share (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Weighted average common shares outstanding	34,050	34,227	33,995	34,166
Less: Weighted average unvested restricted shares subject to repurchase	3	8	4	12
Weighted average common shares outstanding; basic	34,047	34,219	33,991	34,154
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share	1,374	1,391	1,415	1,370
Weighted average common shares outstanding; diluted	35,421	35,610	35,406	35,524

For the three and nine months ended September 30, 2019 and 2018, an aggregate of approximately 361,000 and 503,000 shares, respectively, underlying performance based options ("PSOs") and performance based restricted stock units ("PSUs"), were not included in the computations of diluted and anti-dilutive shares as they are considered contingently issuable upon the satisfaction of pre-defined performance measures and their respective performance measures have not been met.

The following table presents the number of anti-dilutive common shares excluded from the calculation of weighted average number of shares used to compute diluted net income per common share for the three and nine months ended September 30, 2019 and 2018 (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Unvested restricted stock units	3	3	12	3
Contingent restricted stock units⁽¹⁾	—	1	—	1
Total shares excluded from diluted net income per common share	3	4	12	4

⁽¹⁾ The reported shares are based on fixed price restricted stock unit (“RSU”) commitments for which the number of shares was not determined at the grant date. For the purposes of this table, the number of shares has been determined by dividing the fixed price commitment to issue shares in the future by the closing price of our common stock as of the applicable reporting period date.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, which requires an entity to recognize ROU assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and

quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements ("ASU 2018-11"). Among other things, ASU 2018-11 provides administrative relief by allowing entities to implement the lease standard on a modified retrospective basis (the "Optional Transition Method"). Effectively, the Optional Transition Method permits us to adopt the lease standard through a cumulative effect adjustment to our opening balance sheet as of January 1, 2019, and report under the new lease standard on a post-adoption basis.

We adopted ASU 2016-02 effective January 1, 2019, using the Optional Transition Method. We elected the package of practical expedients permitted under the transition guidance, which allows us to carry forward our historical lease classification, our assessment of whether a contract is or contains a lease, and our initial direct costs for any leases that existed prior to adoption of the new lease standard. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We updated our accounting policies, processes, internal controls and information systems that were required to meet the new lease standard's reporting and disclosure requirements.

The adoption of ASU 2016-02 had a material impact on our Condensed Consolidated Balance Sheets, but did not have an impact on our Condensed Consolidated Statements of Operations or our Condensed Consolidated Statements of Cash Flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. We also reclassified prepaid and deferred rent to the ROU asset balance as of January 1, 2019.

The cumulative effect of the changes made to our Condensed Consolidated Balance Sheet at January 1, 2019 for the adoption of the new lease standard was as follows (in thousands):



	Balance at December 31, 2018		Adjustments			Balance at January 1, 2019
Assets
Prepaid expenses and other current assets	$	11,775	$	(317	)	$	11,458
Operating lease right-of-use assets	—		16,945			16,945

Liabilities and Stockholders’ Equity
Other current liabilities	$	1,447	$	3,493		$	4,940
Operating lease liabilities	—		20,056			20,056
Other long-term liabilities	7,080		(6,921		)	159

In March 2017, the FASB issued ASU No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”). ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, ASU 2017-08 requires the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment made directly to retained earnings at the beginning of the period of adoption. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07"). This amendment expands the scope of Topic 718, Compensation—Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for available-for-sale investment securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period after December 15, 2018. We do not

expect the adoption of ASU 2016-13 will have a material impact on our financial condition, results of operations, cash flows or disclosures.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"), a series of amendments which align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. For public business entities, the amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. We will adopt ASU 2018-15 on January 1, 2020, on a prospective basis for all implementation costs incurred after the date of adoption. We do not expect the adoption of this guidance will have a material impact on our financial condition, results of operations, cash flows or disclosures.

Business Combinations

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Business Combinations

Acquisition of Dynasty

On January 7, 2019, we acquired 100% of the voting equity interest of Dynasty, a provider of advanced AI solutions for the real estate market. Dynasty offers advanced conversational AI solutions that automate leasing communications, replace manual tasks and help customers grow their portfolios. Dynasty’s technology is designed to enable operational efficiency in the leasing process including consistent prospect experience, lead conversion, and improved market insights.

The total purchase consideration was $60.2 million, subject to certain adjustments, of which $6.0 million (the "Holdback Amount") was retained by the Company to satisfy any such adjustments, including without limitation certain indemnification claims. The balance of the Holdback Amount, less any amount retained with respect to any unresolved indemnification claims, will be released to the stockholders of Dynasty, within three business days after the one-year anniversary of the Closing Date. The Holdback Amount is recorded in other current liabilities on the Condensed Consolidated Balance Sheet as of September 30, 2019.

The transaction was accounted for using the acquisition method, and as a result, assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires management to make significant judgments and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, the software decay rate and database ramp up rate and the selection of comparable companies. We are in the process of finalizing the valuation of the assets. Based on additional information obtained during the quarter ended September 30, 2019, we recorded a decrease to the deferred tax liability, net of $0.1 million with a corresponding decrease to goodwill. Additionally, we recorded a working capital adjustment of $22,000. The following table summarizes the preliminary purchase price allocation (in thousands) as well as the estimated useful lives of the acquired intangible assets over which they are amortized on a straight-line basis, as this approximates the pattern in which economic benefits are consumed:



	Amount (in thousands)		Estimated Useful Life (in years)
Total current assets	$	305
Identified intangible assets:
Technology	5,730		4.0
Database	4,710		10.0
Customer relationships	1,110		5.0
Backlog	470		1.0
Trademark & trade name	1,390		10.0
Non-compete agreement	7,340		5.0
Total intangible assets subject to amortization	20,750		6.0
Goodwill	42,844		Indefinite
Other noncurrent assets	35
Total assets acquired	63,934

Accrued and other liabilities	48
Deferred tax liability, net	3,678
Total liabilities assumed	3,726
Purchase consideration	$	60,208

Goodwill is mainly attributable to synergies expected from the acquisition and assembled workforce and is non-deductible for U.S. federal income tax purposes.

We incurred a total of $291,000 in transaction costs related to the acquisition and expensed all transaction costs incurred during the period in which such service was received. The results of operations of Dynasty since the acquisition are included in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019. Revenue and net loss attributable to Dynasty for the three months ended September 30, 2019 was $0.8 million and $2.5 million, respectively, and in the period from the acquisition date of January 7, 2019 through September 30, 2019, was $2.0 million and $6.6 million, respectively.

Acquisition of WegoWise

On August 31, 2018, we completed the acquisition of substantially all of the assets of WegoWise, Inc. ("WegoWise"), a provider of cloud-based utility analytics software solutions serving the real estate market. The WegoWise platform empowers building owners and third-party property managers to better manage operating and capital expenditures relating to utilities. Earlier this year we launched our AppFolio Utility Management Value+ service, which has been developed from certain key aspects of the WegoWise platform, and is a fully integrated offering that provides enhanced functionality to our real estate customers for utility analytics and management.

The consideration paid in cash for the assets was $14.4 million. The transaction was accounted for using the acquisition method, and as a result, assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The following table summarizes the final purchase price allocation (in thousands) as well as the estimated useful lives of the acquired intangible assets over which they are amortized on a straight-line basis, as this approximates the pattern in which economic benefits are consumed:



	Amount (in thousands)		Estimated Useful Life (in years)
Net tangible assets	$	270
Identified intangible assets:
Customer relationships	1,170		5.0
Database	3,620		10.0
Trademark and trade name	370		10.0
Non-compete agreement	60		5.0
Backlog	140		1.0
Total intangible assets subject to amortization	5,360		8.6
Goodwill	8,811		Indefinite
Purchase consideration, paid in cash	$	14,441

Goodwill is mainly attributable to synergies expected from the acquisition and assembled workforce and is deductible for U.S. federal income tax purposes.

We incurred a total of $240,000 in transaction costs related to the acquisition and expensed all transaction costs incurred during the period in which such service was received.

Pro Forma Results of Acquisitions

The following unaudited pro forma information has been prepared for illustrative purposes only, and assumes that the aforementioned Dynasty and WegoWise acquisitions occurred on January 1, 2018 and January 1, 2017, respectively, and includes pro forma adjustments related to the amortization of acquired intangible assets, elimination of historical interest and amortization expense, income taxes, compensation arrangements, and the transaction costs incurred. The unaudited pro forma results have been prepared based on estimates and assumptions, which we believe are reasonable; however, they are not necessarily indicative of the consolidated results of operations had the acquisitions occurred at the beginning of the periods presented, or of future results of operations. The unaudited pro forma results are as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Revenue	$	67,935	$	51,125	$	188,685	$	142,733
Net income	$	4,978	$	2,201	$	27,911	$	10,970

Net income per common share:
Basic	$	0.15	$	0.06	$	0.82	$	0.32
Diluted	$	0.14	$	0.06	$	0.79	$	0.31

Investment Securities and Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Investment Securities and Fair Value Measurements

Investment Securities

Investment securities classified as available-for-sale consisted of the following at September 30, 2019 and December 31, 2018 (in thousands):



	September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	12,606	$	31	$	(9	)	$	12,628
Agency securities	5,556		15		—			5,571
Treasury securities	6,853		2		(1		)	6,854
Total available-for-sale investment securities	$	25,015	$	48	$	(10	)	$	25,053



	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	23,720	$	—	$	(163	)	$	23,557
Agency securities	4,345		4		(19		)	4,330
Total available-for-sale investment securities	$	28,065	$	4	$	(182	)	$	27,887

At September 30, 2019, the unrealized losses on investment securities which have been in a net loss position for 12 months or greater were not material. These unrealized losses are considered temporary and there were no impairments considered to be "other-than-temporary" based on our evaluation of available evidence, which includes our intent to hold these investments to maturity or until a recovery of the cost basis.

At September 30, 2019 and December 31, 2018, the contractual maturities of our investments did not exceed 36 months. The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands):



	September 30, 2019				December 31, 2018
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	20,326	$	20,355	$	16,738	$	16,631
Due after one year through three years	4,689		4,698		11,327		11,256
Total available-for-sale investment securities	$	25,015	$	25,053	$	28,065	$	27,887

During the nine months ended September 30, 2019 and 2018, we had sales and maturities (which include calls) of investment securities, as follows (in thousands):



	Nine Months Ended September 30, 2019
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(1	)	$	2,750	$	8,350
Agency securities	—		—			—		2,650
Treasury securities	—		—			—		—
Total sales and maturities (including calls) of investment securities	$	—	$	(1	)	$	2,750	$	11,000



	Nine Months Ended September 30, 2018
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(1	)	$	—	$	16,457
Agency securities	—		—			—		6,000
Certificates of deposit	—		—			—		2,490
Treasury securities	—		—			701		3,530
Total sales and maturities (including calls) of investment securities	$	—	$	(1	)	$	701	$	28,477

Interest income, net of the amortization and accretion of the premium and discount, was $0.1 million and $0.3 million for the three months ended September 30, 2019 and 2018, respectively, and $0.5 million and $0.8 million for the nine months ended September 30, 2019 and 2018, respectively.

Fair Value Measurements

Recurring Fair Value Measurements

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables summarize our financial assets measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 by level within the fair value hierarchy (in thousands):



	September 30, 2019
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	116	$	—	$	—	$	116
Available-for-sale investment securities:
Corporate bonds	—		12,628		—		12,628
Agency securities	—		5,571		—		5,571
Treasury securities	6,854		—		—		6,854
Total	$	6,970	$	18,199	$	—	$	25,169



	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	10,694	$	—	$	—	$	10,694
Available-for-sale investment securities:
Corporate bonds	—		23,557		—		23,557
Agency securities	—		4,330		—		4,330
Total	$	10,694	$	27,887	$	—	$	38,581

The carrying amounts of cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of these items.

The estimated fair value of the $50.0 million term loan made available to us by Wells Fargo Bank, National Association, as administrative agent, and the lenders that are parties thereto ("Term Loan"), approximates its carrying value due to the variable interest rates. We consider the fair value of the Term Loan to be a Level 2 measurement as the Term Loan is not actively traded. We carry the Term Loan at face value less the unamortized discount on our Consolidated Balance Sheets. Refer to Note 8, Long-Term Debt of our Condensed Consolidated Financial Statements for more information about the Term Loan.

There were no changes to our valuation techniques used to measure financial asset and financial liability fair values on a recurring basis during the nine months ended September 30, 2019. The valuation techniques for the financial assets in the tables above are as follows:

Cash Equivalents

As of September 30, 2019 and December 31, 2018, cash equivalents include cash invested in money market funds with a maturity of three months or less. Fair value is based on market prices for identical assets.

Available-for-Sale Investment Securities

Our Level 2 securities were priced by a pricing vendor. The pricing vendor utilizes the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, other observable inputs like market transactions involving comparable securities are used.

Non-Recurring Fair Value Measurements

Certain assets, including goodwill, intangible assets and our note receivable with SecureDocs, are also subject to measurement at fair value on a non-recurring basis using Level 3 measurement, but only when they are deemed to be impaired as a result of an impairment review. For the nine months ended September 30, 2019 and 2018, no impairments were identified on those assets required to be measured at fair value on a non-recurring basis.

Internal-Use Software Development Costs

9 Months Ended

Sep. 30, 2019

Research and Development [Abstract]

Internal-Use Software Development Costs

Internal-use software development costs as of September 30, 2019 and December 31, 2018 were as follows (in thousands):



	September 30, 2019			December 31, 2018
Internal use software development costs, gross	$	75,307		$	58,237
Less: Accumulated amortization	(47,686		)	(37,752		)
Internal use software development costs, net	$	27,621		$	20,485

Capitalized software development costs for the three months ended September 30, 2019 and 2018 were $6.5 million and $3.6 million, respectively, and $17.1 million and $9.7 million for the nine months ended September 30, 2019 and 2018, respectively. Amortization expense with respect to software development costs totaled $3.6 million and $2.8 million for the three months ended September 30, 2019 and 2018, respectively, and $10.0 million and $8.1 million for the nine months ended September 30, 2019 and 2018, respectively.

Future amortization expense with respect to capitalized software development costs as of September 30, 2019 is estimated as follows (in thousands):



Years Ending December 31,
2019	$	3,710
2020	12,538
2021	8,652
2022	2,721
Total amortization expense	$	27,621

Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible assets consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands):



	September 30, 2019
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	3,070	$	(1,154	)	$	1,916	5.0
Database	8,330		(746		)	7,584		10.0
Technology	10,541		(5,682		)	4,859		5.0
Trademarks and trade names	2,690		(834		)	1,856		10.0
Partner relationships	680		(680		)	—		3.0
Non-compete agreements	7,440		(1,154		)	6,286		5.0
Domain names	301		(274		)	27		5.0
Patents	285		(252		)	33		5.0
Backlog	610		(493		)	117		1.0
	$	33,947	$	(11,269	)	$	22,678	6.4



	December 31, 2018
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	1,960	$	(728	)	$	1,232	5.0
Database	3,620		(121		)	3,499		10.0
Technology	4,811		(4,506		)	305		8.0
Trademarks & trade names	1,300		(642		)	658		9.0
Partner relationships	680		(680		)	—		3.0
Non-compete agreements	100		(44		)	56		4.0
Domain names	273		(273		)	—		5.0
Patents	285		(233		)	52		5.0
Backlog	140		(47		)	93		1.0
	$	13,169	$	(7,274	)	$	5,895	7.0

Amortization expense with respect to intangible assets for the three months ended September 30, 2019 and 2018 was $1.3 million and $0.3 million, respectively, and $4.0 million and $0.9 million for the nine months ended September 30, 2019 and 2018, respectively.

Future amortization expense with respect to intangible assets as of September 30, 2019 is estimated as follows (in thousands):



Years Ending December 31,
2019	$	1,301
2020	4,642
2021	4,507
2022	4,445
2023	2,869
Thereafter	4,914
Total amortization expense	$	22,678

Our goodwill balance is solely attributable to acquisitions. There have been no impairment charges recorded against goodwill. Goodwill recorded during the nine months ended September 30, 2019, which related to the acquisition of Dynasty was attributed to our one operating segment. The change in the carrying amount of goodwill is as follows (in thousands):



Goodwill at December 31, 2018	$	15,548
Goodwill from acquisition of Dynasty	42,844
Goodwill at September 30, 2019	$	58,392

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

We have operating leases for our corporate offices and data centers. Our leases have remaining lease terms ranging from one to nine years, with various term extensions available. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. We have lease agreements with lease and non-lease components, which we have elected to combine for all asset classes. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The total lease cost associated with our operating leases for the three and nine months ended September 30, 2019 was $1.3 million and $3.7 million, respectively.

Lease-related assets and liabilities were as follows at September 30, 2019 (in thousands):



Assets
Operating lease right-of-use assets	$	16,433

Liabilities
Other current liabilities	$	4,982
Operating lease liabilities	18,448
Total lease liabilities	$	23,430

Weighted-average remaining lease term (years)	6.3
Weighted-average discount rate	4.1		%

Supplemental cash flow information related to leases was as follows for the nine months ended September 30, 2019 (in thousands):



Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,595
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,505

Future minimum lease payments under non-cancellable leases as of September 30, 2019 were as follows (in thousands):



Years ending December 31,
2019	$	1,407
2020	5,840
2021	4,639
2022	3,136
2023	2,485
Thereafter	9,384
Total future minimum lease payments	26,891
Less: imputed interest	(3,461		)
Total	$	23,430

A summary of our future minimum payments for obligations under non-cancellable operating leases as of December 31, 2018 was as follows (in thousands):



Years Ending December 31,
2019	$	4,211
2020	4,889
2021	4,038
2022	2,717
2023	2,053
Thereafter	9,128
Total lease commitments	$	27,036

On January 22, 2019, we signed a new sublease for approximately 10,500 square feet of office space located at 130 Castilian Drive, Santa Barbara, California. The sublease is for 32 months commencing on April 1, 2019 and ending on November 30, 2021. The total commitment under this sublease is $0.5 million.

On January 28, 2019, we signed an amendment to our existing lease at 9201 Spectrum Center Boulevard in San Diego, California which increased the square footage leased by approximately 4,500 square feet. The total commitment under this lease extension is $0.2 million. All other terms and conditions of the original lease remain the same.

On April 1, 2019, we signed a new lease with Rose Studios, LLC to lease approximately 5,000 square feet of office space located at 215-221 Rose Avenue, Venice, California. The lease is for a five-year term commencing August 1, 2019 and ending on July 31, 2024. The total commitment under this lease is $2.0 million.

Long-Term Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Long-Term Debt

The following is a summary of our long-term debt at September 30, 2019 (in thousands):



Principal amounts due under term loan	$	49,063
Less: Debt financing costs	(178		)
Long-term debt, net of unamortized debt financing costs	48,885
Less: Current portion of long-term debt	(1,208		)
Total long-term debt, net of current portion	$	47,677

Scheduled principal payments for the Term Loan at September 30, 2019 are as follows (in thousands):



Years Ending December 31,
2019	$	313
2020	1,250
2021	2,500
2022	2,500
2023	42,500
Total principal payments	$	49,063

Credit Agreement

On December 24, 2018, we amended our credit agreement (Amendment Number Two to the Credit Agreement, or the "Second Amendment") with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent, and the lenders that are parties thereto (as amended, the "Credit Agreement"). Under the terms of the Second Amendment, the lenders made available to us a $50.0 million term loan (the "Term Loan") and increased the existing revolving line of credit from $25.0 million to $50.0 million ("Revolving Facility"). The maturity date of the Term Loan and Revolving Facility is December 24, 2023. In addition, the Second Amendment permits us to make certain restricted junior payments, including without limitation stock repurchases and enter into acquisitions in which we are the purchaser ("Acquisitions"), with no dollar cap on such Acquisitions, so long as we maintain certain specified liquidity requirements and leverage ratios.

The Second Amendment also modifies certain financial covenants by, among other things, requiring us to maintain (i) an EBITDA to interest expense ratio of not less than 3.0 to 1.0, and (ii) a funded indebtedness to EBITDA ratio of not more than 3.5:1.0 (the "Required Leverage Ratio") (decreasing by 0.25 per year until the Required Leverage Ratio is 2.5 to 1.0); provided, however, that we are not required to maintain the foregoing ratios if our liquidity (sum of remaining borrowing capacity and available cash) has equaled or exceeded the greater of $20.0 million and 20% of the sum of the outstanding principal amount of the Term Loan and commitments under the Revolving Facility. If we enter into an Acquisition with a purchase price greater than or equal to $20.0 million, then the Required Leverage Ratio will be increased by 0.5 for the 12-month period immediately following the consummation of such Acquisition.

The Credit Agreement contains customary affirmative, negative and financial covenants. The affirmative covenants require us to, among other things, disclose financial and other information to the lenders, maintain our business and properties, and maintain adequate insurance. The negative covenants restrict us from, among other things, incurring additional indebtedness, prepaying certain types of indebtedness, encumbering or disposing of our assets, making fundamental changes to our corporate structure, and making certain dividends and distributions. At September 30, 2019, we were in compliance with the financial covenants under the Credit Agreement.

Under the terms of the Second Amendment, borrowings under the Credit Agreement bear interest at a fluctuating rate per annum equal to, at our option, (i) the adjusted London Interbank Offered Rate ("LIBOR") or (ii) an alternate base rate, in each case plus the applicable interest rate margin. The interest rate will fluctuate between adjusted LIBOR plus 1.5% per annum and adjusted LIBOR plus 2.0% per annum (or between the alternate base rate plus 0.5% per annum and the alternate base rate plus 1.0% per annum), based upon our leverage ratio. The average interest rate during the nine months ended September 30, 2019 was 4.0%.

Fees payable on the unused portion of the Revolving Facility are 25 basis points per annum, unless the average usage of the Revolving Facility is equal to or less than $30.0 million for the applicable period, in which case the fees on the unused portion of the Revolving Facility are 0.375% per annum.

At September 30, 2019 and December 31, 2018, there was no outstanding balance under the Revolving Facility.

Debt Financing Costs

As a result of the Second Amendment, we incurred $0.4 million in financing fees that were capitalized and will be amortized over the remaining life of the related debt, $0.2 million of which was related to the Term Loan and $0.2 million of which was related to the Revolving Facility. The Second Amendment is accounted for as a debt modification, and as a result, the unamortized deferred debt financing costs related to the Revolving Facility prior to the Second Amendment were added to the $0.2 million of deferred debt financing costs related to the Second Amendment and are amortized over the remaining life of the Revolving Facility.

Debt financing costs are deferred and amortized using the straight-line method, which approximates the effective interest method, for costs related to the Term Loan and the straight-line method for costs related to the Revolving Facility over the term of the debt arrangement; such amortization is included in interest expense in the Condensed Consolidated Statements of Operations. Amortization of deferred debt financing costs was $27,000 and $16,000 for the three months ended September 30, 2019 and 2018, respectively, and $81,000 and $48,000 for the nine months ended September 30, 2019 and 2018, respectively. At September 30, 2019 and December 31, 2018, the remaining unamortized deferred debt financing costs were $0.5 million, of which $0.2 million was offset against debt. At September 30, 2019 and December 31, 2018, $0.3 million of the remaining unamortized deferred debt financing costs were recorded in Prepaid expenses and other current assets and Other assets on the Condensed Consolidated Balance Sheets, as they pertained to the Revolving Facility.

Commitment and Contingencies	9 Months Ended
Commitment and Contingencies	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Liability to Landlord Insurance We have a wholly owned subsidiary, Terra Mar Insurance Company, Inc., which was established to provide our customers with the option to purchase legal liability to landlord insurance. If our customers choose to use this insurance service, they are issued an insurance policy underwritten by our third-party service provider. The policy has a limit of $100,000 per incident for each insured residence. We have entered into a reinsurance agreement with our third-party service provider and, as a result, we assume a 100% quota share of the legal liability to landlord insurance provided to our customers through our third-party service provider. We accrue for reported claims, and include an estimate of losses incurred but not reported by our property manager customers, in cost of revenue because we bear the risk related to all such claims. Our liability for reported claims and incurred but not reported claims as of September 30, 2019 and December 31, 2018 was $1.1 million and $0.6 million, respectively, and is included in Other current liabilities on the Condensed Consolidated Balance Sheets. Included in Prepaid expenses and other current assets as of September 30, 2019 and December 31, 2018, are $1.4 million and $1.8 million, respectively, of deposits held with a third party related to requirements to maintain collateral for this insurance service. Legal Proceedings In July 2019, we received a Request for Information ("RFI") from the Civil Rights Division (Housing and Civil Enforcement Section) of the U.S. Department of Justice ("DOJ") requesting certain information relating to our compliance with the Servicemembers Civil Relief Act in connection with our tenant screening Value+ service. We continue to fully cooperate with the DOJ, and do not presently have sufficient information to predict the outcome of, or any potential costs or penalties associated with, the DOJ investigation. In December 2018, we received a Civil Investigative Demand ("CID") from the Federal Trade Commission ("FTC") requesting certain information relating to our compliance with the Fair Credit Reporting Act ("FCRA") in connection with our tenant screening Value+ service. We continue to fully cooperate with the FTC, and do not presently have sufficient information to predict the outcome of, or any potential costs or penalties associated with, the FTC investigation. In addition, from time to time, we are involved in various other legal proceedings arising from or related to claims incident to the ordinary course of our business activities, including without limitation actions involving intellectual property, employment and contractual matters. Although the results of such legal proceedings and claims cannot be predicted with certainty, we believe that we are not currently a party to any such legal proceedings or claims which, if determined adversely to us, would, individually or taken together, have a material adverse effect on our business, operating results, financial condition or cash flows. Indemnification In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, vendors, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of any applicable agreements, services to be provided by us, or intellectual property infringement claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses and is indeterminable. We have never paid a material claim, nor have any legal claims been brought against us in connection with these indemnification arrangements. As of September 30, 2019 and December 31, 2018, we had not accrued a liability for these indemnification arrangements because we determined that the likelihood of incurring any payment obligation, in connection with these indemnification arrangements is not probable or reasonably possible and the amount or range of amounts of any such liability is not reasonably estimable.

Share Repurchase Program	9 Months Ended
Share Repurchase Program	Sep. 30, 2019
Equity [Abstract]
Share Repurchase Program	Share Repurchase Program On February 20, 2019, the Board of Directors authorized a $100.0 million Share Repurchase Program (the "Program") of our outstanding Class A Common Stock. Under the Program, share repurchases may be made from time to time, as directed by a Committee consisting of three Directors, in open market purchases or privately negotiated transactions at a repurchase price that the members of the Committee unanimously believe is below intrinsic value conservatively determined. The Program does not obligate us to repurchase any specific dollar amount or number of shares, there is no expiration date to the Program, and it may be modified, suspended or terminated at any time and for any reason. We did not repurchase any Class A Common Stock under the Program during the nine months ended September 30, 2019.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock Options

A summary of our stock option activity for the nine months ended September 30, 2019, is as follows (number of shares in thousands):



	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years
Options outstanding at December 31, 2018	1,513		$	11.31	6.4
Options granted	—		—
Options exercised	(46	)	5.57
Options cancelled/forfeited	(51	)	13.44
Options outstanding at September 30, 2019	1,416		$	11.43	6.0

Included in the options outstanding as of September 30, 2019 are 172,000 PSOs granted in 2017. Vesting of these PSOs is based on the achievement of pre-established performance targets for the year ending December 31, 2019 and continued employment throughout the performance period. Of these PSOs, 132,000 shares vest based on the achievement of a pre-established free cash flow performance target for the year ending December 31, 2019, assuming achievement of the performance metric at the maximum level, which is 150% of the performance target, resulting in a maximum payout of 100% of the initial target award. The remaining 40,000 PSOs have a pre-established adjusted gross margin target for the year ending December 31, 2019. PSOs tied to the gross margin performance target have two levels of vesting, with 50% vesting based on the achievement of 110% of the targeted amount and the remaining 50% vesting based on the achievement of 115% of the targeted amount.

During the nine months ended September 30, 2019, 200,000 PSOs vested based on the achievement of 120% of the pre-established free cash flow performance target for the year ended December 31, 2018.

We recognize expense for the PSOs based on the grant date fair value of the PSOs that we determine are probable of vesting. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSOs that are probable of vesting. Our stock-based compensation expense for stock options, including the PSOs, for the three months ended September 30, 2019 and 2018, was $0.1 million and $0.6 million, respectively, and $0.4 million and $1.2 million for the nine months ended September 30, 2019 and 2018, respectively.

The fair value of stock options is estimated on their date of grant using the Black-Scholes option-pricing model. No stock options were granted during the nine months ended September 30, 2019 and 2018.

At September 30, 2019, the total estimated remaining stock-based compensation expense for unvested stock options, including the PSOs, was $0.2 million, which is expected to be recognized over a weighted average period of 0.4 years.

Restricted Stock Units

A summary of activity in connection with our RSUs for the nine months ended September 30, 2019 is as follows (number of shares in thousands):



	Number of Shares		Weighted Average Grant Date Fair Value per Share
Unvested at December 31, 2018	674		$	32.61
Granted	148		80.35
Vested	(180	)	25.19
Forfeited	(39	)	43.74
Unvested at September 30, 2019	603		$	45.22

During the nine months ended September 30, 2019, we granted a total of 148,000 RSUs and PSUs: 136,000 RSUs are subject to time-based vesting in equal annual installments over four years; 6,000 PSUs vest based on the achievement of a pre-established consolidated net revenue growth target for the year ending December 31, 2021 and continued employment throughout the performance period; and 6,000 PSUs were granted and vested as a result of the achievement of a pre-established free cash flow performance target for the year ended December 31, 2018. The number of PSUs granted, as included in the above table, assumes achievement of the performance metric at 100% of the performance target. The actual number of shares to be issued at the end of the performance period will range from 0% to 100% of the initial target awards. Achievement of the performance target between 100% and 150% of the performance target will result in a performance based cash bonus payment between 100% and 165% of the initial target awards.

During the nine months ended September 30, 2019, 29,000 of the PSUs vested and an additional 6,000 PSUs were granted and vested based on the achievement of 120% of the pre-established free cash flow performance target for the year ended December 31, 2018.

Included in the unvested RSUs as of September 30, 2019 are 101,000 and 88,000 PSUs granted in 2018 and 2017, respectively. Of the PSUs granted in 2018, 54,000 vest based on the achievement of a pre-established consolidated net revenue growth target for the year ending December 31, 2020 and 47,000 vest based on the achievement of a pre-established consolidated net revenue growth target for the year ending December 31, 2021. Vesting of the PSUs granted in 2017 is based on the achievement of pre-established free cash flow performance targets for the year ending December 31, 2019, and continued employment throughout the performance period. The number of PSUs granted assumes achievement of the performance metric at 100% of the performance target. For the PSUs granted in 2018, the actual number of shares to be issued at the end of the performance period will range from 0% to 100% of the initial target awards. Achievement of the performance target between 100% and 150% of the performance target will result in a performance based cash bonus payment between 100% and 165% of the initial target awards. For the PSUs granted in 2017, the actual number of shares to be issued at the end of the performance period will range from 0% to 165% of the initial target award.

We recognize expense for the PSUs based on the grant date fair value of the PSUs that we determine are probable of vesting. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSUs that are probable of vesting. Our stock-based compensation expense for the RSUs and PSUs for the three months ended September 30, 2019 and 2018 was $2.5 million and $1.3 million, respectively, and $6.1 million and $3.7 million for the nine months ended September 30, 2019 and 2018, respectively.

As of September 30, 2019, the total estimated remaining stock-based compensation expense for the RSUs and PSUs was $17.3 million, which is expected to be recognized over a weighted average period of 2.0 years.

Restricted Stock Awards

A summary of activity in connection with our restricted stock awards for the nine months ended September 30, 2019, is as follows (number of shares in thousands):



	Number of Shares		Weighted Average Grant Date Fair Value per Share
Unvested at December 31, 2018	6		$	51.36
Granted	3		100.29
Vested	(6	)	51.36
Forfeited	—		—
Unvested at September 30, 2019	3		$	100.29

We have the right to repurchase any unvested restricted stock awards subject to certain conditions. Restricted stock awards vest over a four-year period for employees and a one-year period for non-employee directors. We recognized stock-based compensation expense for restricted stock awards of $0.1 million for each of the three months ended September 30, 2019 and 2018, and $0.2 million and $0.3 million for the nine months ended September 30, 2019 and 2018, respectively.

As of September 30, 2019, the total estimated remaining stock-based compensation expense for unvested restricted stock awards with a repurchasing right was $0.2 million which is expected to be recognized over a weighted average period of 0.7 years.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three and nine months ended September 30, 2019, we recorded an income tax benefit of $1.3 million and $26.9 million, respectively. The income tax benefit recorded during the three months ended September 30, 2019 was primarily due to the tax benefit associated with research and development tax credits. During the second quarter of 2019, the Company evaluated all available positive and negative evidence, including the Company's sustained profitability in 2018 and 2019, the impact of recent acquisitions and future projections of profitability. As a result, the Company determined that all of its deferred tax assets were more likely than not to be realized and reversed the valuation allowance against those deferred tax assets accordingly. For the three and nine months ended September 30, 2018, we recorded income tax expense of $183,000 and $252,000 on pre-tax income of $5.7 million and $17.6 million, respectively, for an effective tax rate of 3.2% and 1.4%, respectively. The income tax expense was based on our payments of state minimum and franchise taxes, and the amortization of tax deductible goodwill that is not an available source of income to realize the deferred tax asset.

Revenue and Other Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Revenue and Other Information

The following table presents our revenue categories for the three and nine months ended September 30, 2019 and 2018 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Core solutions	$	22,503	$	17,908	$	64,934	$	51,101
Value+ services	41,645		30,797		114,399		84,189
Other	3,787		1,421		9,317		4,416
Total revenue	$	67,935	$	50,126	$	188,650	$	139,706

During the nine months ended September 30, 2019 and 2018, we recognized $3.2 million and $6.7 million of revenue, respectively, that were included in the deferred revenue balances at December 31, 2018 and 2017, respectively.

Our revenue is generated primarily from customers in the United States. All of our property and equipment is located in the United States.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Reclassifications

Leases

Use of Estimates

Net Income per Common Share

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

The cumulative effect of the changes made to our Condensed Consolidated Balance Sheet at January 1, 2019 for the adoption of the new lease standard was as follows (in thousands):



	Balance at December 31, 2018		Adjustments			Balance at January 1, 2019
Assets
Prepaid expenses and other current assets	$	11,775	$	(317	)	$	11,458
Operating lease right-of-use assets	—		16,945			16,945

Liabilities and Stockholders’ Equity
Other current liabilities	$	1,447	$	3,493		$	4,940
Operating lease liabilities	—		20,056			20,056
Other long-term liabilities	7,080		(6,921		)	159

Recent Accounting Pronouncements Not Yet Adopted

expect the adoption of ASU 2016-13 will have a material impact on our financial condition, results of operations, cash flows or disclosures.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Schedule of Weighted Average Number of Shares

The following table presents a reconciliation of the weighted average number of shares of our Class A and Class B common stock used to compute net income per common share (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Weighted average common shares outstanding	34,050	34,227	33,995	34,166
Less: Weighted average unvested restricted shares subject to repurchase	3	8	4	12
Weighted average common shares outstanding; basic	34,047	34,219	33,991	34,154
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share	1,374	1,391	1,415	1,370
Weighted average common shares outstanding; diluted	35,421	35,610	35,406	35,524

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Unvested restricted stock units	3	3	12	3
Contingent restricted stock units⁽¹⁾	—	1	—	1
Total shares excluded from diluted net income per common share	3	4	12	4

Schedule of Impact of Adoption of New Revenue Standard Impact on Financial Statements

The cumulative effect of the changes made to our Condensed Consolidated Balance Sheet at January 1, 2019 for the adoption of the new lease standard was as follows (in thousands):



	Balance at December 31, 2018		Adjustments			Balance at January 1, 2019
Assets
Prepaid expenses and other current assets	$	11,775	$	(317	)	$	11,458
Operating lease right-of-use assets	—		16,945			16,945

Liabilities and Stockholders’ Equity
Other current liabilities	$	1,447	$	3,493		$	4,940
Operating lease liabilities	—		20,056			20,056
Other long-term liabilities	7,080		(6,921		)	159

Business Combinations (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Schedule of Purchase Price Allocation

The following table summarizes the final purchase price allocation (in thousands) as well as the estimated useful lives of the acquired intangible assets over which they are amortized on a straight-line basis, as this approximates the pattern in which economic benefits are consumed:



	Amount (in thousands)		Estimated Useful Life (in years)
Net tangible assets	$	270
Identified intangible assets:
Customer relationships	1,170		5.0
Database	3,620		10.0
Trademark and trade name	370		10.0
Non-compete agreement	60		5.0
Backlog	140		1.0
Total intangible assets subject to amortization	5,360		8.6
Goodwill	8,811		Indefinite
Purchase consideration, paid in cash	$	14,441

The following table summarizes the preliminary purchase price allocation (in thousands) as well as the estimated useful lives of the acquired intangible assets over which they are amortized on a straight-line basis, as this approximates the pattern in which economic benefits are consumed:



	Amount (in thousands)		Estimated Useful Life (in years)
Total current assets	$	305
Identified intangible assets:
Technology	5,730		4.0
Database	4,710		10.0
Customer relationships	1,110		5.0
Backlog	470		1.0
Trademark & trade name	1,390		10.0
Non-compete agreement	7,340		5.0
Total intangible assets subject to amortization	20,750		6.0
Goodwill	42,844		Indefinite
Other noncurrent assets	35
Total assets acquired	63,934

Accrued and other liabilities	48
Deferred tax liability, net	3,678
Total liabilities assumed	3,726
Purchase consideration	$	60,208

Schedule of Pro Forma Information

The unaudited pro forma results are as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Revenue	$	67,935	$	51,125	$	188,685	$	142,733
Net income	$	4,978	$	2,201	$	27,911	$	10,970

Net income per common share:
Basic	$	0.15	$	0.06	$	0.82	$	0.32
Diluted	$	0.14	$	0.06	$	0.79	$	0.31

Investment Securities and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Available-for-sale Securities

Investment securities classified as available-for-sale consisted of the following at September 30, 2019 and December 31, 2018 (in thousands):



	September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	12,606	$	31	$	(9	)	$	12,628
Agency securities	5,556		15		—			5,571
Treasury securities	6,853		2		(1		)	6,854
Total available-for-sale investment securities	$	25,015	$	48	$	(10	)	$	25,053



	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	23,720	$	—	$	(163	)	$	23,557
Agency securities	4,345		4		(19		)	4,330
Total available-for-sale investment securities	$	28,065	$	4	$	(182	)	$	27,887

Available-for-sale Investments, by Remaining Contract Maturity

The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands):



	September 30, 2019				December 31, 2018
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	20,326	$	20,355	$	16,738	$	16,631
Due after one year through three years	4,689		4,698		11,327		11,256
Total available-for-sale investment securities	$	25,015	$	25,053	$	28,065	$	27,887

Schedule of Sales, Calls, and Maturities

During the nine months ended September 30, 2019 and 2018, we had sales and maturities (which include calls) of investment securities, as follows (in thousands):



	Nine Months Ended September 30, 2019
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(1	)	$	2,750	$	8,350
Agency securities	—		—			—		2,650
Treasury securities	—		—			—		—
Total sales and maturities (including calls) of investment securities	$	—	$	(1	)	$	2,750	$	11,000



	Nine Months Ended September 30, 2018
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(1	)	$	—	$	16,457
Agency securities	—		—			—		6,000
Certificates of deposit	—		—			—		2,490
Treasury securities	—		—			701		3,530
Total sales and maturities (including calls) of investment securities	$	—	$	(1	)	$	701	$	28,477

Fair Value, Assets Measured on Recurring Basis

The following tables summarize our financial assets measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 by level within the fair value hierarchy (in thousands):



	September 30, 2019
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	116	$	—	$	—	$	116
Available-for-sale investment securities:
Corporate bonds	—		12,628		—		12,628
Agency securities	—		5,571		—		5,571
Treasury securities	6,854		—		—		6,854
Total	$	6,970	$	18,199	$	—	$	25,169



	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	10,694	$	—	$	—	$	10,694
Available-for-sale investment securities:
Corporate bonds	—		23,557		—		23,557
Agency securities	—		4,330		—		4,330
Total	$	10,694	$	27,887	$	—	$	38,581

Internal-Use Software Development Costs (Tables)

9 Months Ended

Sep. 30, 2019

Research and Development [Abstract]

Schedule of Capitalized Computer Software

Internal-use software development costs as of September 30, 2019 and December 31, 2018 were as follows (in thousands):



	September 30, 2019			December 31, 2018
Internal use software development costs, gross	$	75,307		$	58,237
Less: Accumulated amortization	(47,686		)	(37,752		)
Internal use software development costs, net	$	27,621		$	20,485

Schedule of Capitalized Computer Software Future Amortization Expense

Future amortization expense with respect to capitalized software development costs as of September 30, 2019 is estimated as follows (in thousands):



Years Ending December 31,
2019	$	3,710
2020	12,538
2021	8,652
2022	2,721
Total amortization expense	$	27,621

Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands):



	September 30, 2019
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	3,070	$	(1,154	)	$	1,916	5.0
Database	8,330		(746		)	7,584		10.0
Technology	10,541		(5,682		)	4,859		5.0
Trademarks and trade names	2,690		(834		)	1,856		10.0
Partner relationships	680		(680		)	—		3.0
Non-compete agreements	7,440		(1,154		)	6,286		5.0
Domain names	301		(274		)	27		5.0
Patents	285		(252		)	33		5.0
Backlog	610		(493		)	117		1.0
	$	33,947	$	(11,269	)	$	22,678	6.4



	December 31, 2018
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	1,960	$	(728	)	$	1,232	5.0
Database	3,620		(121		)	3,499		10.0
Technology	4,811		(4,506		)	305		8.0
Trademarks & trade names	1,300		(642		)	658		9.0
Partner relationships	680		(680		)	—		3.0
Non-compete agreements	100		(44		)	56		4.0
Domain names	273		(273		)	—		5.0
Patents	285		(233		)	52		5.0
Backlog	140		(47		)	93		1.0
	$	13,169	$	(7,274	)	$	5,895	7.0

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Future amortization expense with respect to intangible assets as of September 30, 2019 is estimated as follows (in thousands):



Years Ending December 31,
2019	$	1,301
2020	4,642
2021	4,507
2022	4,445
2023	2,869
Thereafter	4,914
Total amortization expense	$	22,678

Schedule of Goodwill

The change in the carrying amount of goodwill is as follows (in thousands):



Goodwill at December 31, 2018	$	15,548
Goodwill from acquisition of Dynasty	42,844
Goodwill at September 30, 2019	$	58,392

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of Components of Lease Expense

Lease-related assets and liabilities were as follows at September 30, 2019 (in thousands):



Assets
Operating lease right-of-use assets	$	16,433

Liabilities
Other current liabilities	$	4,982
Operating lease liabilities	18,448
Total lease liabilities	$	23,430

Weighted-average remaining lease term (years)	6.3
Weighted-average discount rate	4.1		%

Supplemental cash flow information related to leases was as follows for the nine months ended September 30, 2019 (in thousands):



Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,595
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,505

Schedule of Minimum Lease Payments Under Leases

Future minimum lease payments under non-cancellable leases as of September 30, 2019 were as follows (in thousands):



Years ending December 31,
2019	$	1,407
2020	5,840
2021	4,639
2022	3,136
2023	2,485
Thereafter	9,384
Total future minimum lease payments	26,891
Less: imputed interest	(3,461		)
Total	$	23,430

Summary of Future Minimum Payments for Obligations

A summary of our future minimum payments for obligations under non-cancellable operating leases as of December 31, 2018 was as follows (in thousands):



Years Ending December 31,
2019	$	4,211
2020	4,889
2021	4,038
2022	2,717
2023	2,053
Thereafter	9,128
Total lease commitments	$	27,036

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Summary of Long-term Debt

The following is a summary of our long-term debt at September 30, 2019 (in thousands):



Principal amounts due under term loan	$	49,063
Less: Debt financing costs	(178		)
Long-term debt, net of unamortized debt financing costs	48,885
Less: Current portion of long-term debt	(1,208		)
Total long-term debt, net of current portion	$	47,677

Schedule of Principal payments for Term Loan

Scheduled principal payments for the Term Loan at September 30, 2019 are as follows (in thousands):



Years Ending December 31,
2019	$	313
2020	1,250
2021	2,500
2022	2,500
2023	42,500
Total principal payments	$	49,063

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.4-08.(e),(f))
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Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Summary of Stock Option Activity

A summary of our stock option activity for the nine months ended September 30, 2019, is as follows (number of shares in thousands):



	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years
Options outstanding at December 31, 2018	1,513		$	11.31	6.4
Options granted	—		—
Options exercised	(46	)	5.57
Options cancelled/forfeited	(51	)	13.44
Options outstanding at September 30, 2019	1,416		$	11.43	6.0

Schedule of Restricted Stock Units Activity

A summary of activity in connection with our RSUs for the nine months ended September 30, 2019 is as follows (number of shares in thousands):



	Number of Shares		Weighted Average Grant Date Fair Value per Share
Unvested at December 31, 2018	674		$	32.61
Granted	148		80.35
Vested	(180	)	25.19
Forfeited	(39	)	43.74
Unvested at September 30, 2019	603		$	45.22

Schedule of Restricted Stock Awards Activity

A summary of activity in connection with our restricted stock awards for the nine months ended September 30, 2019, is as follows (number of shares in thousands):



	Number of Shares		Weighted Average Grant Date Fair Value per Share
Unvested at December 31, 2018	6		$	51.36
Granted	3		100.29
Vested	(6	)	51.36
Forfeited	—		—
Unvested at September 30, 2019	3		$	100.29

Revenue and Other Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Schedule of Product Information by Revenue Categories

The following table presents our revenue categories for the three and nine months ended September 30, 2019 and 2018 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Core solutions	$	22,503	$	17,908	$	64,934	$	51,101
Value+ services	41,645		30,797		114,399		84,189
Other	3,787		1,421		9,317		4,416
Total revenue	$	67,935	$	50,126	$	188,650	$	139,706

Summary of Significant Accounting Policies - Net Income per Share Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average common shares outstanding (in shares)	34,050	34,227	33,995	34,166
Less: Weighted average unvested restricted shares subject to repurchase (in shares)	3	8	4	12
Weighted average common shares outstanding; basic (in shares)	34,047	34,219	33,991	34,154
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share (in shares)	1,374	1,391	1,415	1,370
Weighted average common shares outstanding; diluted (in shares)	35,421	35,610	35,406	35,524
Shares excluded from net loss per share computation (in shares)	3	4	12	4
PSUs and PSOs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from net loss per share computation (in shares)			361	503

Summary of Significant Accounting Policies - Net (Income) Loss Schedule of Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted net income per common share (in shares)	3	4	12	4
Unvested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted net income per common share (in shares)	3	3	12	3
Contingent restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted net income per common share (in shares)	0	1	0	1

Summary of Significant Accounting Policies - Impact of Adoption of New Revenue Standard on the Condensed Consolidated Balance Sheet and Statement of Operations (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Assets
Prepaid expenses and other current assets	$ 16,150	$ 11,458	$ 11,775
Operating lease right-of-use assets	16,433	16,945	0
Liabilities and Stockholders’ Equity
Other current liabilities	13,093	4,940	1,447
Operating lease liabilities	23,430	20,056	0
Other long-term liabilities	$ 16	159	$ 7,080
ASU 2016-02
Assets
Prepaid expenses and other current assets		(317)
Operating lease right-of-use assets		16,945
Liabilities and Stockholders’ Equity
Other current liabilities		3,493
Operating lease liabilities		20,056
Other long-term liabilities		$ (6,921)

Business Combinations - Narrative (Details) - USD ($) $ in Thousands			3 Months Ended	9 Months Ended
	Jan. 07, 2019	Aug. 31, 2018	Sep. 30, 2019	Sep. 30, 2019
Dynasty
Business Acquisition [Line Items]
Percentage of voting equity interest	100.00%
Total purchase consideration	$ 60,200
Amount retained to satisfy adjustments	6,000
Transaction costs	$ 291
Revenue			$ 800	$ 2,000
Net loss			2,500	6,600
Dynasty \| Technology
Business Acquisition [Line Items]
Decrease to deferred tax liability			100
Decrease to goodwill			100
Working capital adjustment			22
WegoWise
Business Acquisition [Line Items]
Total purchase consideration		$ 14,400
Transaction costs			$ 240	$ 240

Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Jan. 07, 2019	Aug. 31, 2018	Sep. 30, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill			$ 58,392	$ 15,548
Dynasty
Business Acquisition [Line Items]
Net tangible assets	$ 305
Identified intangible assets	20,750
Goodwill	42,844
Other noncurrent assets	35
Total assets acquired	$ 63,934
Estimated Useful Life (in years)	6 years
Accrued and other liabilities	$ 48
Deferred tax liability, net	3,678
Total liabilities assumed	3,726
Purchase consideration	60,208
Dynasty \| Technology
Business Acquisition [Line Items]
Identified intangible assets	$ 5,730
Estimated Useful Life (in years)	4 years
Dynasty \| Database
Business Acquisition [Line Items]
Identified intangible assets	$ 4,710
Estimated Useful Life (in years)	10 years
Dynasty \| Customer relationships
Business Acquisition [Line Items]
Identified intangible assets	$ 1,110
Estimated Useful Life (in years)	5 years
Dynasty \| Backlog
Business Acquisition [Line Items]
Identified intangible assets	$ 470
Estimated Useful Life (in years)	1 year
Dynasty \| Trademark and trade name
Business Acquisition [Line Items]
Identified intangible assets	$ 1,390
Estimated Useful Life (in years)	10 years
Dynasty \| Non-compete agreement
Business Acquisition [Line Items]
Identified intangible assets	$ 7,340
Estimated Useful Life (in years)	5 years
WegoWise
Business Acquisition [Line Items]
Net tangible assets		$ 270
Identified intangible assets		5,360
Goodwill		$ 8,811
Estimated Useful Life (in years)		8 years 7 months 6 days
Purchase consideration		$ 14,441
WegoWise \| Database
Business Acquisition [Line Items]
Identified intangible assets		$ 3,620
Estimated Useful Life (in years)		10 years
WegoWise \| Customer relationships
Business Acquisition [Line Items]
Identified intangible assets		$ 1,170
Estimated Useful Life (in years)		5 years
WegoWise \| Backlog
Business Acquisition [Line Items]
Identified intangible assets		$ 140
Estimated Useful Life (in years)		1 year
WegoWise \| Trademark and trade name
Business Acquisition [Line Items]
Identified intangible assets		$ 370
Estimated Useful Life (in years)		10 years
WegoWise \| Non-compete agreement
Business Acquisition [Line Items]
Identified intangible assets		$ 60
Estimated Useful Life (in years)		5 years

Business Combinations - Pro Forma Information (Details) - WegoWise - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Business Acquisition [Line Items]
Revenue	$ 67,935	$ 51,125	$ 188,685	$ 142,733
Net income	$ 4,978	$ 2,201	$ 27,911	$ 10,970
Net income per common share:
Basic (in dollars per share)	$ 0.15	$ 0.06	$ 0.82	$ 0.32
Diluted (in dollars per share)	$ 0.14	$ 0.06	$ 0.79	$ 0.31

Investment Securities and Fair Value Measurements - Schedule of Available-for-sale Securities (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investment securities	$ 25,015	$ 28,065
Gross Unrealized Gains	48	4
Gross Unrealized Losses	(10)	(182)
Estimated Fair Value	$ 25,053	$ 27,887
Maximum contractual maturity period	36 months	36 months
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investment securities	$ 12,606	$ 23,720
Gross Unrealized Gains	31	0
Gross Unrealized Losses	(9)	(163)
Estimated Fair Value	12,628	23,557
Agency securities
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investment securities	5,556	4,345
Gross Unrealized Gains	15	4
Gross Unrealized Losses	0	(19)
Estimated Fair Value	5,571	$ 4,330
Treasury securities
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investment securities	6,853
Gross Unrealized Gains	2
Gross Unrealized Losses	(1)
Estimated Fair Value	$ 6,854

Investment Securities and Fair Value Measurements - Available-for-sale Investments, by Remaining Contract Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Amortized Cost
Due in 1 year or less	$ 20,326	$ 16,738
Due after 1 year through 3 years	4,689	11,327
Total available-for-sale investment securities	25,015	28,065
Estimated Fair Value
Due in one year or less	20,355	16,631
Due after one year through three years	4,698	11,256
Total available-for-sale investment securities	$ 25,053	$ 27,887

Investment Securities and Fair Value Measurements - Schedule of Sales, Calls and Maturities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains			$ 0	$ 0
Gross Realized Losses			(1)	(1)
Gross Proceeds from Sales			2,750	701
Gross Proceeds from Maturities			11,000	28,477
Interest income, net of amortization and accretion of premium and discount	$ 100	$ 300	500	800
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains			0	0
Gross Realized Losses			(1)	(1)
Gross Proceeds from Sales			2,750	0
Gross Proceeds from Maturities			8,350	16,457
Agency securities
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains			0	0
Gross Realized Losses			0	0
Gross Proceeds from Sales			0	0
Gross Proceeds from Maturities			2,650	6,000
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains				0
Gross Realized Losses				0
Gross Proceeds from Sales				0
Gross Proceeds from Maturities				2,490
Treasury securities
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains			0	0
Gross Realized Losses			0	0
Gross Proceeds from Sales			0	701
Gross Proceeds from Maturities			$ 0	$ 3,530

Investment Securities and Fair Value Measurements - Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	$ 25,053	$ 27,887
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	12,628	23,557
Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	5,571	4,330
Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	6,854
Level 2 \| Credit Facility \| Term Loan \| Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Line of credit, amount outstanding	50,000
Fair value, recurring measurements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	25,169	38,581
Fair value, recurring measurements \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	12,628	23,557
Fair value, recurring measurements \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	5,571	4,330
Fair value, recurring measurements \| Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	6,854
Fair value, recurring measurements \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	116	10,694
Fair value, recurring measurements \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	6,970	10,694
Fair value, recurring measurements \| Level 1 \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	0	0
Fair value, recurring measurements \| Level 1 \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	0	0
Fair value, recurring measurements \| Level 1 \| Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	6,854
Fair value, recurring measurements \| Level 1 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	116	10,694
Fair value, recurring measurements \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	18,199	27,887
Fair value, recurring measurements \| Level 2 \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	12,628	23,557
Fair value, recurring measurements \| Level 2 \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	5,571	4,330
Fair value, recurring measurements \| Level 2 \| Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	0
Fair value, recurring measurements \| Level 2 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Fair value, recurring measurements \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Fair value, recurring measurements \| Level 3 \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	0	0
Fair value, recurring measurements \| Level 3 \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	0	0
Fair value, recurring measurements \| Level 3 \| Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale investment securities	0
Fair value, recurring measurements \| Level 3 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	$ 0

Internal-Use Software Development Costs - Capitalized Computer Software (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Research and Development [Abstract]
Internal use software development costs, gross	$ 75,307	$ 58,237
Less: Accumulated amortization	(47,686)	(37,752)
Internal use software development costs, net	$ 27,621	$ 20,485

Internal-Use Software Development Costs - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Research and Development [Abstract]
Capitalized software development costs	$ 6.5	$ 3.6	$ 17.1	$ 9.7
Amortization expense	$ 3.6	$ 2.8	$ 10.0	$ 8.1

Internal-Use Software Development Costs - Capitalized Computer Software Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Years Ending December 31,
2019	$ 3,710
2020	12,538
2021	8,652
2022	2,721
Internal use software development costs, net	$ 27,621	$ 20,485

Intangible Assets and Goodwill - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 33,947		$ 33,947		$ 13,169
Accumulated Amortization	(11,269)		(11,269)		(7,274)
Net Carrying Value	22,678		22,678		$ 5,895
Amortization expense	1,300	$ 300	$ 4,000	$ 900
Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			6 years 4 months 24 days		7 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	3,070		$ 3,070		$ 1,960
Accumulated Amortization	(1,154)		(1,154)		(728)
Net Carrying Value	1,916		$ 1,916		$ 1,232
Customer relationships \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			5 years		5 years
Database
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	8,330		$ 8,330		$ 3,620
Accumulated Amortization	(746)		(746)		(121)
Net Carrying Value	7,584		$ 7,584		$ 3,499
Database \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			10 years		10 years
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	10,541		$ 10,541		$ 4,811
Accumulated Amortization	(5,682)		(5,682)		(4,506)
Net Carrying Value	4,859		$ 4,859		$ 305
Technology \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			5 years		8 years
Trademarks and trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	2,690		$ 2,690		$ 1,300
Accumulated Amortization	(834)		(834)		(642)
Net Carrying Value	1,856		$ 1,856		$ 658
Trademarks and trade names \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			10 years		9 years
Partner relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	680		$ 680		$ 680
Accumulated Amortization	(680)		(680)		(680)
Net Carrying Value	0		$ 0		$ 0
Partner relationships \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			3 years		3 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	7,440		$ 7,440		$ 100
Accumulated Amortization	(1,154)		(1,154)		(44)
Net Carrying Value	6,286		$ 6,286		$ 56
Non-compete agreements \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			5 years		4 years
Domain names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	301		$ 301		$ 273
Accumulated Amortization	(274)		(274)		(273)
Net Carrying Value	27		$ 27		$ 0
Domain names \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			5 years		5 years
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	285		$ 285		$ 285
Accumulated Amortization	(252)		(252)		(233)
Net Carrying Value	33		$ 33		$ 52
Patents \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			5 years		5 years
Backlog
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	610		$ 610		$ 140
Accumulated Amortization	(493)		(493)		(47)
Net Carrying Value	$ 117		$ 117		$ 93
Backlog \| Weighted Average Useful Life in Years
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life			1 year		1 year

Intangible Assets and Goodwill - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2019	$ 1,301
2020	4,642
2021	4,507
2022	4,445
2023	2,869
Thereafter	4,914
Net Carrying Value	$ 22,678	$ 5,895

Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) operating_segment
Goodwill and Intangible Assets Disclosure [Abstract]
Number of operating segments \| operating_segment	1
Goodwill [Roll Forward]
Beginning balance	$ 15,548
Goodwill from acquisition of Dynasty	42,844
Ending balance	$ 58,392

Leases - Narrative (Details) $ in Thousands				3 Months Ended	9 Months Ended
Leases - Narrative (Details) $ in Thousands	Apr. 01, 2019 USD ($) ft²	Jan. 28, 2019 USD ($) ft²	Jan. 22, 2019 USD ($) ft²	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)
Lessee, Lease, Description [Line Items]
Total lease cost associated with operating leases				$ 1,300	$ 3,700
Total commitment under lease				$ 23,430	$ 23,430	$ 20,056	$ 0
130 Castilian Drive Santa Barbara, California
Lessee, Lease, Description [Line Items]
Lease term			32 months
Leased area (sq ft) \| ft²			10,500
Total commitment under lease			$ 500
9201 Spectrum Center Boulevard in San Diego, California
Lessee, Lease, Description [Line Items]
Leased area (sq ft) \| ft²		4,500
Total commitment under lease		$ 200
215-221 Rose Avenue, Venice, California
Lessee, Lease, Description [Line Items]
Lease term	5 years
Leased area (sq ft) \| ft²	5,000
Total commitment under lease	$ 2,000
Minimum
Lessee, Lease, Description [Line Items]
Lease term				1 year	1 year
Term of leases not yet commenced				2 years	2 years
Maximum
Lessee, Lease, Description [Line Items]
Lease term				9 years	9 years
Term of leases not yet commenced				5 years	5 years

Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases [Abstract]
Operating lease right-of-use assets	$ 16,433	$ 16,945	$ 0
Other current liabilities	4,982
Operating lease liabilities	18,448
Total lease liabilities	$ 23,430	$ 20,056	$ 0
Weighted-average remaining lease term (years)	6 years 3 months 18 days
Weighted-average discount rate	4.10%
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases	$ 3,595
Right-of-use assets obtained in exchange for lease obligations: Operating leases	$ 2,505

Leases - Schedule of Minimum Lease Payments Under Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Years ending December 31,
2019	$ 1,407
2020	5,840
2021	4,639
2022	3,136
2023	2,485
Thereafter	9,384
Total future minimum lease payments	26,891
Less: imputed interest	(3,461)
Total commitment under lease	$ 23,430	$ 20,056	$ 0

Leases - Summary of Future Minimum Payments for Obligations (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Years Ending December 31,
2019	$ 4,211
2020	4,889
2021	4,038
2022	2,717
2023	2,053
Thereafter	9,128
Total lease commitments	$ 27,036

Long-Term Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Less: Current portion of long-term debt	$ (1,208)	$ (1,213)
Total long-term debt, net of current portion	47,677	$ 48,602
Term Loan \| Credit Facility
Debt Instrument [Line Items]
Principal amounts due under term loan	49,063
Less: Debt financing costs	(178)
Long-term debt, net of unamortized debt financing costs	48,885
Less: Current portion of long-term debt	(1,208)
Total long-term debt, net of current portion	$ 47,677

Long-Term Debt - Schedule of Principal Payments for Term Loan (Details) - Term Loan - Credit Facility $ in Thousands	Sep. 30, 2019 USD ($)
Debt Instrument [Line Items]
2019	$ 313
2020	1,250
2021	2,500
2022	2,500
2023	42,500
Total principal payments	$ 49,063

Long-Term Debt - Narrative (Details)		3 Months Ended		9 Months Ended
Long-Term Debt - Narrative (Details)	Dec. 24, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 23, 2018 USD ($)
Other Assets
Debt Instrument [Line Items]
Capitalized deferred financing costs		$ 300,000		$ 300,000		$ 300,000
Credit Facility
Debt Instrument [Line Items]
EBITDA to interest expense ratio	3.0
Funded indebtedness to EBITDA ratio	3.5
Annual decrease in required leverage ratio	0.25
Required leverage ratio	2.5
Floor plus 20% of the sum of the combined outstanding principal amounts	$ 20,000,000.0
Acquisition purchase price floor for 0.5 increase in required leverage ratio for 12 month period following the close date	20,000,000.0
Average interest rate				4.00%
Capitalized deferred financing costs	$ 400,000
Credit Facility \| Minimum \| LIBOR
Debt Instrument [Line Items]
Variable rate, basis spread percent	1.50%
Credit Facility \| Minimum \| Federal Funds Rate
Debt Instrument [Line Items]
Variable rate, basis spread percent	0.50%
Credit Facility \| Maximum \| LIBOR
Debt Instrument [Line Items]
Variable rate, basis spread percent	2.00%
Credit Facility \| Maximum \| Federal Funds Rate
Debt Instrument [Line Items]
Variable rate, basis spread percent	1.00%
Credit Facility \| Term Loan
Debt Instrument [Line Items]
Line of credit, amount outstanding	$ 50,000,000.0
Capitalized deferred financing costs	$ 200,000	500,000		$ 500,000		200,000
Amortization of deferred debt financing costs		27,000	$ 16,000	81,000	$ 48,000
Credit Facility \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit, amount outstanding		$ 0		$ 0		$ 0
Commitment fee percentage	0.25%
Commitment fee	$ 30,000,000.0
Unused portion of the Revolving Facility, percentage	0.375%
Capitalized deferred financing costs	$ 200,000
Credit Facility \| Wells Fargo \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 50,000,000.0						$ 25,000,000.0

Commitment and Contingencies (Details) - USD ($)	9 Months Ended
Commitment and Contingencies (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Loss Contingencies [Line Items]
Per incident policy limit	$ 100,000
Quota share of tenant liability insurance provided, percent	100.00%
Other current liabilities
Loss Contingencies [Line Items]
Liability for reported claims and claims incurred but not reported	$ 1,100,000	$ 600,000
Other current assets
Loss Contingencies [Line Items]
Deposits held with a third party related to insurance services collateral	$ 1,400,000	$ 1,800,000

Share Repurchase Program (Details) - USD ($)	9 Months Ended
Share Repurchase Program (Details) - USD ($)	Sep. 30, 2019	Feb. 20, 2019
Equity [Abstract]
Share repurchase program, authorized amount		$ 100,000,000.0
Repurchases during period (in shares)	0

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Number of Shares
Options outstanding, beginning balance (in shares)			1,513,000
Options granted (in shares)			0	0
Options exercised (in shares)			(46,000)
Options cancelled/forfeited (in shares)			(51,000)
Options outstanding, ending balance (in shares)	1,416,000		1,416,000		1,513,000
Weighted Average Exercise Price per Share
Options outstanding, weighted average exercise price, beginning balance (in dollars per share)			$ 11.31
Options granted, weighted average exercise price (in dollars per share)			0
Options exercised, weighted average exercise price (in dollars per share)			5.57
Options cancelled/forfeited, weighted average exercise price (in dollars per share)			13.44
Options outstanding, weighted average exercise price, ending balance (in dollars per share)	$ 11.43		$ 11.43		$ 11.31
Weighted average remaining contractual life, in years			6 years		6 years 4 months 24 days
Stock Options and PSOs
Weighted Average Exercise Price per Share
Stock-based compensation expense	$ 0.1	$ 0.6	$ 0.4	$ 1.2
PSOs \| 2019 and 2018 Performance Metric Granted in 2017
Number of Shares
Options outstanding, ending balance (in shares)	172,000		172,000
PSOs \| 2019 Performance Metric, Targeted Free Cash Flow Performance Metric
Number of Shares
Options granted (in shares)			132,000
Weighted Average Exercise Price per Share
Percent of targeted awards that will vest	150.00%		150.00%
Percent of targeted performance metric	100.00%		100.00%
PSOs \| 2019 Performance Metric, Adjusted Gross Margin Target
Number of Shares
Options granted (in shares)			40,000
PSOs \| 2019 Performance Metric, Adjusted Gross Margin Target \| Vesting Tranche One
Weighted Average Exercise Price per Share
Percent of targeted awards that will vest	110.00%		110.00%
Percent of targeted performance metric	50.00%		50.00%
PSOs \| 2019 Performance Metric, Adjusted Gross Margin Target \| Vesting Tranche Two
Weighted Average Exercise Price per Share
Percent of targeted awards that will vest	115.00%		115.00%
Percent of targeted performance metric	50.00%		50.00%
PSOs \| 2017 Performance Metric, Targeted Free Cash Flow Performance Metric
Weighted Average Exercise Price per Share
Share-based compensation options vested (in shares)			200,000
Percent of achievement of award target performance metric	120.00%		120.00%

Stock-Based Compensation - Valuation Assumptions (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	0	0
Stock Options and PSOs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining stock-based compensation expense for unvested options, not yet recognized	$ 0.2
Stock-based compensation expense, weighted average recognition period	4 months 24 days

Stock-Based Compensation - Restricted Stock Units Activity (Details) - RSUs and PSUs shares in Thousands	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Number of Shares
Unvested, beginning balance (in shares) \| shares	674
Granted (in shares) \| shares	148
Vested (in shares) \| shares	(180)
Forfeited (in shares) \| shares	(39)
Unvested, ending balance (in shares) \| shares	603
Weighted- Average Grant Date Fair Value per Share
Unvested, beginning balance (in dollars per share) \| $ / shares	$ 32.61
Granted (in dollars per share) \| $ / shares	80.35
Vested (in dollars per share) \| $ / shares	25.19
Forfeited (in dollars per share) \| $ / shares	43.74
Unvested, ending balance (in dollars per share) \| $ / shares	$ 45.22

Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			148
Share-based compensation options vested in period (in shares)			180
Stock-based compensation expense	$ 2.5	$ 1.3	$ 6.1	$ 3.7
Remaining stock-based compensation expense for unvested shares, not yet recognized	$ 17.3		$ 17.3
Stock-based compensation expense, weighted average recognition period			2 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			136
Vesting period			4 years
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			6
Percent of targeted performance metric	100.00%		100.00%
Share-based compensation options vested in period (in shares)			29
Percent of achievement of award target performance metric					120.00%
PSUs \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	0.00%		0.00%
PSUs \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	100.00%		100.00%
PSUs \| Vesting Tranche One \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	100.00%		100.00%
Performance based cash bonus payment percent			100.00%
PSUs \| Vesting Tranche One \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	150.00%		150.00%
Performance based cash bonus payment percent			165.00%
PSUs \| 2017 Performance Metric
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			6
PSUs \| 2016 Performance Metric
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			6
PSUs Granted in 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			101
Percent of targeted performance metric	100.00%		100.00%
PSUs Granted in 2018 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	0.00%		0.00%
Percent of cash bonus payments on initial targets, percent			100.00%
PSUs Granted in 2018 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	100.00%		100.00%
Percent of cash bonus payments on initial targets, percent			165.00%
PSUs Granted in 2018 \| Vesting Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation options vested in period (in shares)			54
PSUs Granted in 2018 \| Vesting Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation options vested in period (in shares)			47
PSUs Granted in 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			88
PSUs Granted in 2017 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	0.00%		0.00%
PSUs Granted in 2017 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	165.00%		165.00%
PSUs Granted in 2019 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	100.00%		100.00%
PSUs Granted in 2019 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of targeted performance metric	150.00%		150.00%

Stock-Based Compensation - Restricted Stock Awards (Details) - Restricted Stock Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Number of Shares
Unvested, beginning balance (in shares)			6
Granted (in shares)			3
Vested (in shares)			(6)
Forfeited (in shares)			0
Unvested, ending balance (in shares)	3		3
Weighted Average Grant Date Fair Value per Share
Unvested, beginning balance (in dollars per share)			$ 51.36
Granted (in dollars per share)			100.29
Vested (in dollars per share)			51.36
Forfeited (in dollars per share)			0
Unvested, ending balance (in dollars per share)	$ 100.29		$ 100.29
Stock-based compensation expense	$ 0.1	$ 0.1	$ 0.2	$ 0.3
Remaining stock-based compensation expense for unvested shares, not yet recognized	$ 0.2		$ 0.2
Stock-based compensation expense, weighted average recognition period			8 months 12 days
Employee
Weighted Average Grant Date Fair Value per Share
Vesting period			4 years
Non-Employee Director
Weighted Average Grant Date Fair Value per Share
Vesting period			1 year

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (1,255)	$ 183	$ (26,874)	$ 252
Pre-tax income	$ 3,723	$ 5,707	$ 4,980	$ 17,570
Effective tax rate		3.20%		1.40%

Revenue and Other Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 67,935	$ 50,126	$ 188,650	$ 139,706
Revenue recognized in deferred revenue			3,200	6,700
Core solutions
Disaggregation of Revenue [Line Items]
Revenue	22,503	17,908	64,934	51,101
Value plus services
Disaggregation of Revenue [Line Items]
Revenue	41,645	30,797	114,399	84,189
Other
Disaggregation of Revenue [Line Items]
Revenue	$ 3,787	$ 1,421	$ 9,317	$ 4,416

Label	Element	Value
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	$ 431,000
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	$ 428,000