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Revenue and Other Information (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Product Information by Revenue Categories

The following table presents our revenue categories for the years ended December 31, 2019, 2018 and 2017 (in thousands):



	Year Ended December 31,
	2019		2018		2017
Core solutions	$	88,581	$	70,549	$	57,132
Value+ services	153,994		113,072		80,847
Other	13,437		6,450		5,824
Total revenue	$	256,012	$	190,071	$	143,803

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 15,813	$ 74,076
Investment securities—current	22,876	16,631
Accounts receivable, net	7,562	5,516
Prepaid expenses and other current assets	15,540	11,775
Total current assets	61,791	107,998
Investment securities—noncurrent	12,089	11,256
Property and equipment, net	14,744	6,871
Operating lease right-of-use assets	27,803	0
Capitalized software, net	30,023	20,485
Goodwill	58,425	15,548
Intangible assets, net	21,377	5,895
Deferred taxes	27,574	0
Other long-term assets	6,276	7,688
Total assets	260,102	175,741
Current liabilities
Accounts payable	1,927	1,481
Accrued employee expenses	17,758	12,377
Accrued expenses	10,833	8,281
Deferred revenue	4,586	3,414
Other current liabilities	11,139	1,447
Long-term debt, net—current portion	1,208	1,213
Total current liabilities	47,451	28,213
Operating lease liabilities	33,312
Long-term debt, net	47,375	48,602
Other long-term liabilities	14	7,080
Total liabilities	128,152	83,895
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding at December 31, 2019 and December 31, 2018	0	0
Additional paid-in capital	161,509	157,898
Accumulated other comprehensive income (loss)	33	(178)
Treasury stock, at cost, 371 Class A shares at December 31, 2019 and December 31, 2018	(21,562)	(21,562)
Accumulated deficit	(8,034)	(44,316)
Total stockholders’ equity	131,950	91,846
Total liabilities and stockholders’ equity	260,102	175,741
Class A common stock, $0.0001 par value, 250,000 shares authorized at December 31, 2019 and December 31, 2018; issued - 16,923 and 16,160, shares at December 31, 2019 and December 31, 2018, respectively; outstanding - 16,552 and 15,789 shares at December 31, 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 December 31, 2019 and December 31, 2018; 17,594 and 18,109 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively;
Stockholders’ equity:
Common stock	$ 2	$ 2

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 36,282	$ 19,967	$ 9,716
Other comprehensive income (loss):
Changes in unrealized gains (losses) on investment securities	211	31	(158)
Comprehensive income	$ 36,493	$ 19,998	$ 9,558

- Definition

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

+ References + Details

Goodwill and Intangible Assets - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 33,734	$ 13,169
Accumulated Amortization	(12,357)	(7,274)
Net Carrying Value	$ 21,377	$ 5,895
Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	6 years 2 months 12 days	7 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 3,070	$ 1,960
Accumulated Amortization	(1,296)	(728)
Net Carrying Value	$ 1,774	$ 1,232
Customer relationships \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years
Database
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 8,330	$ 3,620
Accumulated Amortization	(954)	(121)
Net Carrying Value	$ 7,376	$ 3,499
Database \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	10 years	10 years
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 10,541	$ 4,811
Accumulated Amortization	(6,074)	(4,506)
Net Carrying Value	$ 4,467	$ 305
Technology \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	8 years
Trademarks and trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 2,690	$ 1,300
Accumulated Amortization	(898)	(642)
Net Carrying Value	$ 1,792	$ 658
Trademarks and trade names \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	6 years	9 years
Partner relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 680	$ 680
Accumulated Amortization	(680)	(680)
Net Carrying Value	$ 0	$ 0
Partner relationships \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	3 years	3 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 7,400	$ 100
Accumulated Amortization	(1,484)	(44)
Net Carrying Value	$ 5,916	$ 56
Non-compete agreements \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	4 years
Domain names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 301	$ 273
Accumulated Amortization	(276)	(273)
Net Carrying Value	$ 25	$ 0
Domain names \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 252	$ 285
Accumulated Amortization	(225)	(233)
Net Carrying Value	$ 27	$ 52
Patents \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years
Backlog
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 470	$ 140
Accumulated Amortization	(470)	(47)
Net Carrying Value	$ 0	$ 93
Backlog \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	1 year	1 year

Income Taxes - Components of Income Taxes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current
Federal	$ 0	$ 0	$ 0
State and local	(15,000)	339,000	53,000
Current income tax expense	(15,000)	339,000	53,000
Deferred
Federal	(18,761,000)	65,000	(2,000)
State and local	(12,683,000)	16,000	7,000
Deferred income tax (benefit) expense	(31,444,000)	81,000	5,000
Total income tax provision (benefit)	$ (31,459,000)	$ 420,000	$ 58,000

Consolidated Statements of Cash Flows - Reconciliation - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 15,813	$ 74,076	$ 16,109
Restricted cash included in other assets	434	430	427
Total cash, cash equivalents and restricted cash	$ 16,247	$ 74,506	$ 16,536	$ 11,126

Stock-Based Compensation - Stock Option Activity (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Number of Shares
Options outstanding, beginning balance (shares)	1,513,000	1,513,000
Options granted (in shares)	0	0	0
Options exercised (shares)		(120,000)
Options canceled/forfeited (shares)		(51,000)
Options outstanding, ending balance (shares)		1,342,000	1,513,000
Options vested of expected to vest (shares)		1,342,000
Options exercisable (shares)		1,325,000
Weighted Average Exercise Price per Share
Options outstanding, beginning balance (usd per share)	$ 11.31	$ 11.31
Options granted (usd per share)		0
Options exercised (usd per share)		4.60
Options canceled/forfeited (usd per share)		13.41
Options outstanding, ending balance (usd per share)		11.84	$ 11.31
Options vested and expected to vest, weighted average exercise price (usd per share)		11.84
Options exercisable, weighted average exercise price (usd per share)		$ 11.93
Options outstanding, weighted average remaining contractual life (in years)		5 years 10 months 24 days	6 years 4 months 24 days
Options vested or expected to vest, weighted average remaining contractual life (in years)		5 years 1 month 6 days
Options exercisable, weighted average remaining contractual life (in years)		5 years 10 months 24 days

Retirement Plans (Details) - USD ($) $ in Millions	12 Months Ended
Retirement Plans (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Retirement Benefits [Abstract]
401k cash contributions	$ 2.5	$ 1.6	$ 0.8

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 26,387	$ 15,913
Less: Accumulated depreciation	(11,643)	(9,042)
Total property and equipment, net	14,744	6,871
Depreciation expense on property and equipment	3,100	2,400	$ 2,300
Data center and computer equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	7,983	6,854
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property and equipment	3,953	2,928
Office equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	1,141	798
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	6,192	5,254
Construction in process
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 7,118	$ 79

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Intangible assets consisted of the following at December 31, 2019 and 2018 (in thousands, except years):



	December 31, 2019
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	3,070	$	(1,296	)	$	1,774	5.0
Database	8,330		(954		)	7,376		10.0
Technology	10,541		(6,074		)	4,467		5.0
Trademarks and trade names	2,690		(898		)	1,792		6.0
Partner relationships	680		(680		)	—		3.0
Non-compete agreements	7,400		(1,484		)	5,916		5.0
Domain names	301		(276		)	25		5.0
Patents	252		(225		)	27		5.0
Backlog	470		(470		)	—		1.0
	$	33,734	$	(12,357	)	$	21,377	6.2



	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 and 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 totaled $5.3 million, $1.2 million and $1.4 million for the years ended December 31, 2019, 2018 and 2017, respectively. Future amortization expense with respect to intangible assets is estimated as follows (in thousands):



Years Ending December 31,
2020	$	4,642
2021	4,507
2022	4,445
2023	2,869
2024	1,373
Thereafter	3,541
Total amortization expense	$	21,377

Our goodwill balance is solely attributed to acquisitions. There have been no impairment charges recorded against goodwill. Goodwill recorded during the twelve months ended December 31, 2019, which related to the acquisition of Dynasty was attributed to our one reporting unit. 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	42,877
Goodwill at December 31, 2019	$	58,425

Stockholders' Equity - Preferred Stock and Share Repurchase Program (Details) - USD ($) $ in Thousands			12 Months Ended		15 Months Ended
	Feb. 20, 2019	Oct. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Jun. 25, 2015
Equity [Abstract]
Preferred stock, shares outstanding						0
Preferred stock, shares authorized						25,000,000
Number of shares authorized for repurchase	100,000,000.0
Repurchase of common stock	$ 8,400	$ 30,000		$ 21,562	$ 21,600
Number of shares repurchased during period (in shares)			370,751

Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 5,300	$ 1,200	$ 1,400
2020	4,642
2021	4,507
2022	4,445
2023	2,869
2024	1,373
Thereafter	3,541
Net Carrying Value	$ 21,377	$ 5,895

Stock-Based Compensation - Restricted Stock Units (Details) - RSUs and PSUs	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Number of Shares
Unvested, beginning balance (shares) \| shares	674,000
Granted (shares) \| shares	216,000
Vested (shares) \| shares	(198,000)
Forfeited (shares) \| shares	(46,000)
Unvested, ending balance (shares) \| shares	646,000
Weighted- Average Grant Date Fair Value per Share
Unvested, beginning balance (usd per share) \| $ / shares	$ 32.61
Granted (usd per share) \| $ / shares	89.10
Vested (usd per share) \| $ / shares	26.78
Forfeited (usd per share) \| $ / shares	43.97
Unvested, ending balance (usd per share) \| $ / shares	$ 52.42

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

The accompanying Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

The accompanying Consolidated Financial Statements include the operations of AppFolio, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Our investment in SecureDocs, Inc. (“SecureDocs”) is accounted for under the equity method of accounting as we have the ability to exert significant influence, but do not control and are not the primary beneficiary of the entity. Our investment in SecureDocs is not material and any income (loss) activity is not material individually or in the aggregate to our Consolidated Financial Statements for any period presented.

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 and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Assets and liabilities which are subject to judgment and use of estimates include the fair value of assets and liabilities assumed in business combinations, fair value of financial instruments, capitalized software costs, period of benefit associated with deferred costs, incremental borrowing rate used to measure operating lease liabilities, the recoverability of goodwill and long-lived assets, income taxes, useful lives associated with property and equipment and intangible assets, contingencies, and valuation and assumptions underlying stock-based compensation and other equity instruments. 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.

Segment Information

Our chief operating decision maker reviews financial information presented on an aggregated and consolidated basis, together with revenue information for our core solutions, Value+ and other service offerings, principally to make decisions about how to allocate resources and to measure our performance. Accordingly, management has determined that we have one reportable and operating segment.

Concentrations of Credit Risk

Financial instruments that potentially subject us to credit risk consist principally of cash, accounts receivable, investment securities and notes receivable. We maintain cash balances at financial institutions in excess of amounts insured by United States government agencies or payable by the United States government directly. We place our cash with high credit, quality financial institutions. We invest in investment securities with a minimum rating of A by Standard & Poor's or A-1 by Moody's and regularly monitor our investment security portfolio for changes in credit ratings.

Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

Level 1 - Quoted prices in active markets for identical assets or liabilities or funds.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash

We consider all highly liquid investments, readily convertible to cash, and which have a remaining maturity date of three months or less at the date of purchase, to be cash equivalents. Cash and cash equivalents are recorded at fair value and consist primarily of bank deposits and money market funds.

Restricted cash of $0.4 million at December 31, 2019 and 2018, is comprised of certificates of deposits relating to collateral requirements for customer automated clearing house and credit card chargebacks and minimum collateral requirements for our insurance services, which are recorded in other long-term assets.

Restricted Cash

Investment Securities

Our investment securities currently consist of corporate bonds, United States government agency securities ("Agency Securities") and treasury securities. We classify investment securities as available-for-sale at the time of purchase and reevaluate such classification at each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale investment securities are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. We classify our investments as current when the period of time between the reporting date and the contractual maturity is twelve months or less and as noncurrent when the period of time between the reporting date and the contractual maturity is more than twelve months.

We evaluate our investments to assess whether those with unrealized loss positions are other than temporarily impaired. We consider impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely we will sell the securities before the recovery of their cost basis. Declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the Consolidated Statements of Operations.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on historical loss experience, the number of days that receivables are past due, and an evaluation of the potential risk of loss associated with delinquent accounts. Accounts receivable considered uncollectible are charged against the allowance for doubtful accounts when identified. We do not have any off-balance sheet credit exposure related to our customers.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of assets. The estimated useful lives of our property and equipment are as follows:



Asset Type		Depreciation Period
Data center and computer equipment		3 years
Furniture and fixtures		7 years
Office equipment		2 to 5 years
Leasehold improvements		Shorter of remaining life of lease or asset life

Repair and maintenance costs are expensed as incurred. Renewals and improvements are capitalized. Assets disposed of or retired are removed from the cost and accumulated depreciation accounts and any resulting gain or loss is reflected in our results of operations.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in prepaid expenses and other current assets, operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our 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 received 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 twelve 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.

Capitalized Software Development Costs

Software development cost consist of certain payroll and stock compensation costs incurred to develop functionality of our internal-use software solutions. We capitalize certain software development costs for new offerings as well as significant upgrades and enhancements to our existing software solutions. Capitalized software development costs are amortized using the straight-line method over an estimated useful life of three years. We do not transfer ownership of our software, or lease our software, to third parties. We believe there are two key estimates within the capitalized software balance, which are the determination of the useful life of the software and the determination of the amounts to be capitalized.

We determined that a three year life is appropriate for our internal-use software based on our best estimate of the useful life of the internally developed software after considering factors such as continuous developments in the technology, obsolescence and anticipated life of the service offering before significant upgrades. Based on our prior experience, internally generated software will generally remain in use for a minimum of three years before being significantly replaced or modified to keep up with evolving customer and company needs. While we do not anticipate any significant changes to this three year estimate, a change in this estimate could produce a material impact on our financial statements.

We determine the amount of internal software costs to be capitalized based on the amount of time spent by our software engineers on projects. Costs associated with building or significantly enhancing our software solutions and new internally built software solutions are capitalized, while costs associated with planning new developments and maintaining our software solutions are expensed as incurred. There is judgment involved in estimating the stage of development as well as estimating time allocated to a particular project. A significant change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent periods.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Goodwill is tested for impairment at least annually at the reporting unit level or at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

We have the option to assess goodwill for possible impairment by performing a qualitative analysis to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent that the reporting unit’s carrying value exceeds its fair value.

We have one reporting unit and we test for goodwill impairment annually during the fourth quarter of the calendar year. Based on the assessment performed November 1, 2019, we determined it was unlikely that our reporting unit fair value was less than its carrying value and no quantitative impairment test assessment was required. There were no indicators that our goodwill has become impaired since that date, and as such, there was no impairment of goodwill as of November 1, 2019 or December 31, 2019.

No impairment losses were recorded for goodwill during the years ended December 31, 2019, 2018 and 2017.

Intangible assets primarily consist of acquired database and technology, non-compete agreements, customer and partner relationships, trademarks, domain names and patents, which are recorded at cost, less accumulated amortization. We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.

Impairment of Long-Lived Assets

We assess the recoverability of our long-lived assets when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable or that the useful lives of those assets are no longer appropriate. An impairment charge would be recognized when the carrying amount of a long-lived asset or asset group is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group.

Business Combinations

The results of a business acquired in a business combination are included in our Consolidated Financial Statements from the date of acquisition. We allocate the purchase price, including the fair value of contingent consideration, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill.

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 and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination.

Acquisition-related transaction costs are not included as a component of consideration transferred, but are accounted for as an operating expense in the period in which the costs are incurred.

Revenue Recognition

We generate revenue from our customers primarily for subscriptions to access our core solutions and Value+ services for our cloud-based software solutions. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. We enter into contracts that can include various combinations of services, which are generally capable of being distinct, distinct within the context of the contract, and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Refer to Note 14, Revenue and Other Information for the disaggregated breakdown of revenue between core solutions, Value+ services and other revenue.

Core Solutions

We charge our customers on a subscription basis for our core solutions. Our subscription fees are designed to scale to the size of our customers' businesses. Subscription fees for our core solutions are charged on a per-unit per-month basis for our property management software solution and on a per-user per-month basis for our legal software solution. Our customers do not have rights to the underlying software code of our solutions, and, accordingly, we recognize subscription revenue over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. The term of our core solutions subscription agreements typically ranges from one month to one year. We typically invoice our customers for subscription services in monthly or annual installments, in advance of the subscription period.

Value+ Services

We charge our customers on a subscription or usage basis for our Value+ services. Subscription-based fees are charged on a per-unit basis. We typically invoice our customers for subscription-based services in monthly installments, in advance of the subscription period. We recognize revenue for subscription-based services over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. Usage-based fees are charged on a flat rate per transaction basis with no minimum usage commitments. We recognize revenue for usage-based services in the period the service is rendered. We generally invoice our customers for usage-based services on a monthly basis for services rendered in the preceding month. In addition, some subscription or usage-based Value+ services, such as fees for electronic payment services, are paid by either our customers or clients of our customers at the time the services are rendered.

We work with third-party partners to provide certain of our Value+ services. For these Value+ services, we evaluate whether we are the principal, and report revenue on a gross basis, or the agent, and report revenue on a net basis. In this assessment we consider if we obtain control of the specified services before they are transferred to the customer, as well as other indicators such as whether we are the party primarily responsible for fulfillment, and whether we have discretion in establishing price.

Other Revenue

Other revenue include fees from one-time services related to the implementation of our software solutions and other recurring or one-time fees related to our customers who are not otherwise using our core solutions. This includes legacy customers of businesses we have acquired where the customers haven't migrated to our core solutions. The fees for implementation and data migration services are billed upon signing our core subscription contract and are not recognized until the core solution is accessible and fully functional for our customer's use. Other services are billed when the services rendered are completed and delivered to the customer or billed in advance and deferred over the subscription period.

Contracts with Multiple Performance Obligations

Many of our contracts with customers contain multiple performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment. We account for individual performance obligations separately if they are distinct. The performance obligations for these contracts include access and use of our core solutions, implementation services, and customer support. Access and use of our core solutions and implementation services are considered distinct.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis. Judgment is required to determine the standalone selling price for each distinct performance obligation. We typically have more than one standalone selling price for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we determine the standalone selling price based on our overall pricing objectives, taking into consideration customer demographics and other factors. Fees are fixed based on rates specified in the subscription agreements, which do not provide for any refunds or adjustments.

Deferred Revenue

We record deferred revenue when cash payments are received in advance of our performance. During the twelve months ended December 31, 2019 and 2018, we recognized $3.4 million and $7.1 million, respectively, that were included in the deferred revenue balances at December 31, 2018 and 2017, respectively.

Our payment terms vary by the type of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts do not include a significant financing component.

Practical Expedients

In determining the transaction price, we have applied the practical expedient which allows us not to adjust the consideration for the effects of the time value of money as long as the time between when we transfer the promised service to a customer and when a customer pays is one year or less.

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected term of one year or less.

We recognize revenue in proportion to the amount we have the right to invoice for certain core solutions and Value+ services revenue, as that amount corresponds directly with our performance completed to date.

Deferred Costs

Deferred costs, which primarily consist of sales commissions, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be three years. We typically do not pay commissions for contract renewals. We determined the period of benefit by taking into consideration our customer contract term, the useful life of our internal-use software, average customer life, and other factors. Amortization expense for the deferred costs is allocated based on the employee's department and included within sales and marketing expense in the accompanying Consolidated Statements of Operations. Prior to the adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09" or the "New Revenue Standard")

ASU 2014-09, our commissions were expensed as incurred.

Cost of Revenue

Cost of revenue consists of fees paid to third-party service providers associated with delivering certain of our Value+ services (including legal fees and costs associated with the delivery and provision of those services, as well as loss reserves and other costs associated with our legal liability to landlord insurance services), personnel-related costs (including salaries, incentive-based compensation, benefits, and stock-based compensation) for our employees focused on customer service and the support of our operations, platform infrastructure costs (such as data center operations and hosting-related costs), payment processing fees, and allocated shared costs. We typically allocate shared costs across our organization based on headcount within the applicable part of our organization. Cost of revenue excludes depreciation of property and equipment, and amortization of capitalized software development costs and intangible assets.

Sales and Marketing, General and Administrative

General and Administrative

General and administrative expense consists of personnel-related costs (including salaries, a majority of total incentive-based compensation, benefits, and stock-based compensation) for employees in our executive, finance, information technology, human resources, corporate development, legal and administrative organizations. In addition, general and administrative expense includes fees for third-party professional services (including audit, legal, tax, and consulting services), transaction costs related to business combinations, other corporate expenses, and allocated shared costs.

Sales and Marketing

Sales and marketing expense consists of personnel-related costs (including salaries, sales commissions, incentive-based compensation, benefits, and stock-based compensation) for our employees focused on sales and marketing, costs associated with sales and marketing activities, and allocated shared costs. Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral. Sales commissions and other incremental costs to acquire customers and grow adoption and utilization of our Value+ services by our new and existing customers are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be three years. We focus our sales and marketing efforts on generating awareness of our software solutions, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers.

Research and Product Development

Research and product development expense consists of personnel-related costs (including salaries, incentive-based compensation, benefits, and stock-based compensation) for our employees focused on research and product development, fees for third-party development resources, and allocated shared costs. Our research and product development efforts are focused on enhancing the ease of use and functionality of our existing software solutions by adding new core functionality, Value+ services and other improvements, as well as developing new products and services for new and existing markets. We capitalize the portion of our software development costs that meets the criteria for capitalization. Amortization of capitalized software development costs is included in depreciation and amortization expense.

Depreciation and Amortization

Depreciation and amortization expense includes depreciation of property and equipment, amortization of capitalized software development costs and amortization of intangible assets. We depreciate or amortize property and equipment, software development costs and intangible assets over their expected useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.

Stock-Based Compensation

We recognize stock-based compensation expense for stock-based awards granted to employees and directors that can be settled in shares of our common stock. We estimate the fair value of stock options and performance-based stock options ("PSOs"), using the Black-Scholes option-pricing model. We estimate the fair value of RSAs, RSUs and performance-based RSUs or PSU's based on the fair value of our common stock on the date of grant.

Stock Options

For the years ended December 31, 2019 and 2018, we did not grant time-based stock options or PSOs.

For the year ended December 31, 2017, we determined the fair value of awards using the Black-Scholes option-pricing model which requires the use of subjective assumptions. Key assumptions used in this model were (1) the fair value of the underlying ordinary shares, (2) the time period for which we expect the options will be outstanding (the expected term), (3) the expected volatility of our stock price, (4) the risk-free interest rate, and (5) the expected dividend yield. Expected term and expected volatility are the judgments that we believe are subjective in estimating fair value (and related share-based compensation expense) of our option awards.

For the year ended December 31, 2017, the expected term was determined using the simplified method, which is calculated as the midpoint of the stock option vesting term and the expiration date of the stock option. We considered historical average volatilities of publicly traded industry peers, in estimating expected volatility for options. Other assumptions used include risk-free interest rate and expected dividend yield. The risk-free interest rate is based on the yield for a U.S. Treasury security having a maturity similar to the expected term of the related option grant. This assumption was dependent on the assumed expected term. The dividend yield of 0% is based on us not paying or anticipating paying any cash dividends in the foreseeable future.

Restricted Stock Units

RSUs vest in equal tranches over four annual periods and are expensed on a straight-line basis over the vesting period. The shares underlying the RSU grants are not issued and outstanding until the applicable vesting date.

Performance-Based Equity Awards

Our PSOs and PSUs, include performance conditions that require us to estimate the probable outcome of the performance condition. This assessment is based on management's judgment using internally developed forecasts and assessed at each reporting period. Compensation cost is recorded if it is probable that the performance condition will be achieved. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSOs and PSUs that are probable of vesting. PSOs and PSUs will vest upon achievement of the relevant performance metric once such calculation is reviewed and approved by our Board of Directors.

Forfeiture Rate

We estimate a forfeiture rate to calculate our stock-based compensation expense for our stock-based awards. The forfeiture rate is based on an analysis of actual forfeitures. We will continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover, and other factors. Changes in the estimated forfeiture rate can have a significant impact on our stock-based compensation expense as the cumulative effect of adjusting the rate is recognized in the period the estimated forfeiture rate is changed. If a revised forfeiture rate is higher than the previously-estimated forfeiture rate, an adjustment is made that will result in a decrease to our stock-based compensation expense recognized in our Consolidated Financial Statements. If a revised forfeiture rate is lower than the previously-estimated forfeiture rate, an adjustment is made that will result in an increase to our stock-based compensation expense recognized in our Consolidated Financial Statements.

Income Taxes

We recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance, management considers the weighting of all available positive and negative evidence, which includes, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, future projections of profitability, and the duration of statutory carryforward periods.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in our Consolidated Financial Statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. We recognize interest and penalties accrued with respect to uncertain tax positions, if any, in our provision for income taxes in the Consolidated Statements of Operations.

Net Income (Loss) per Share

Basic net income per share includes no dilution and is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted net income per share by application of the treasury stock method. The calculation of diluted net income per share excludes all anti-dilutive common shares.

Recently Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued the New Revenue Standard, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The New Revenue Standard also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer.

We adopted the New Revenue Standard at January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed at that date. We recognized the cumulative effect of initially applying the New Revenue Standard as an adjustment to the opening balance of retained earnings.

The adoption of the New Revenue Standard did not have an impact on our revenues. It did, however, have a significant impact related to the deferral of incremental costs of obtaining contracts. Prior to the adoption of the New Revenue Standard, our commissions were expensed as incurred.

The cumulative effects of the changes made to our Consolidated Balance Sheet at January 1, 2018 for the adoption of the New Revenue Standard were as follows (in thousands):



	Balance at December 31, 2017			Adjustments		Balance at January 1, 2018
Assets
Prepaid expenses and other current assets	$	4,546		$	1,148	$	5,694
Other assets	1,238			1,816		3,054

Equity
Accumulated deficit	$	(67,247	)	$	2,964	$	(64,283	)

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 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 recast 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 Consolidated Balance Sheets, but did not have an impact on our Consolidated Statements of Operations or our 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 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. 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 adopted 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.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2020. We do not expect the adoption of ASU 2019-12 will have a material impact on our financial condition, results of operations, cash flows or disclosures.

Business Combinations - Pro Forma Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Business Combinations [Abstract]
Revenue	$ 256,047	$ 193,405	$ 146,859
Net income	$ 32,339	$ 5,937	$ 5,052

Stock-Based Compensation - Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options exercisable (shares)		1,325,000
Options exercisable, weighted average exercise price (usd per share)		$ 11.93
Options outstanding (shares)		1,342,000	1,513,000
Options granted (in shares)	0	0	0
Options canceled/forfeited (shares)		(51,000)
Intrinsic value of options exercised		$ 11.5	$ 7.5	$ 4.6
Intrinsic value of options outstanding		131.7
Intrinsic value of exercisable options		129.8
Instrinsic value of options		131.7
Excess tax benefit		$ 20.5	7.7	5.2
Early exercisable stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options exercisable (shares)		15,000
Options exercisable, weighted average exercise price (usd per share)		$ 5.64
Stock-based compensation expense, weighted average recognition period (in years)		5 years 1 month 6 days
Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense				$ 2.9
Employee Stock Options and Performance Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense, weighted average recognition period (in years)		10 months 24 days
Stock-based compensation expense		$ 0.6	$ 1.6
Compensation for unvested stock options		$ 0.1
2015 Stock Incentive Plan \| Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum term of stock options granted					10 years
2019 Performance Metric \| PSOs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	40,000
2019 Performance Metric \| PSOs \| PSUs to vest based on Employee Performance, maximum 150%
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percent of awards granted	110.00%
Percent of award target performance metric	50.00%
2019 Performance Metric \| PSOs \| PSUs to vest based on Employee performance, 80%
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percent of awards granted	115.00%
Percent of award target performance metric	50.00%
2019 Performance Metric, Targeted Free Cash Flow Performance Metric \| PSOs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percent of awards granted	150.00%
Percent of award target performance metric	100.00%
2017 Performance Metric, Targeted Free Cash Flow Performance Metric \| PSOs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSOs vested (in shares)	200,000
Percent of achievement of award target performance metric	120.00%
Class A common stock \| 2015 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares reserved for stock incentive plan		3,977,621			2,000,000

Retirement Plans	12 Months Ended
Retirement Plans	Dec. 31, 2019
Retirement Benefits [Abstract]
Retirement Plans	Retirement Plans We have a 401(k) retirement and savings plan made available to all employees. The 401(k) plan allows each participant to contribute up to an amount not to exceed an annual statutory maximum. We may, at our discretion, make matching contributions to the 401(k) plan. Cash contributions to the plan were $2.5 million, $1.6 million and $0.8 million, for the years ended December 31, 2019, 2018 and 2017, respectively.

Internal-Use Software Development Costs - Software Development Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Research and Development [Abstract]
Internal use software development costs, gross	$ 81,475	$ 58,237
Less: Accumulated amortization	(51,452)	(37,752)
Internal use software development costs, net	30,023	20,485
Capitalized software development costs during the period	23,600	13,800	$ 11,100
Amortization expense with respect to software development costs during the period	$ 14,000	$ 11,000	$ 9,000

Leases (Details) $ in Thousands		12 Months Ended
Leases (Details) $ in Thousands	Apr. 01, 2019 USD ($) ft²	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 06, 2019 USD ($)	Jan. 01, 2019 USD ($)	Jan. 01, 2018 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease cost				$ 5,100
Current portion of lease liabilities				2,826
Prepaid expenses and other current assets				15,540	$ 11,775			$ 11,458	$ 5,694
Operating rental expense					2,600	$ 2,100
Total commitment under lease				$ 36,138	$ 0			$ 20,056
Lessor, Operating Lease, Renewal Term				10 years
Venice California
Lessee, Lease, Description [Line Items]
Leased area (sq ft) \| ft²	5,000
Total commitment under lease	$ 2,000
Santa Barbara California
Lessee, Lease, Description [Line Items]
Total commitment under lease							$ 36,500
Lease term							12 years
Forecast
Lessee, Lease, Description [Line Items]
Payments for Tenant Improvements		$ 2,300	$ 5,500
Minimum
Lessee, Lease, Description [Line Items]
Lease term				1 year
Maximum
Lessee, Lease, Description [Line Items]
Lease term				12 years
Prepaid expenses and other current assets
Lessee, Lease, Description [Line Items]
Current portion of lease liabilities				$ 3,900

Leases - Schedule of Components of Lease expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Assets
Prepaid expenses and other current assets	$ 3,908
Operating lease right-of-use assets	27,803	$ 16,945	$ 0
Liabilities [Abstract]
Other current liabilities	2,826
Operating lease liabilities	33,312
Total lease liabilities	$ 36,138	$ 20,056	$ 0
Weighted-average remaining lease term (years)	10 years 7 months 6 days
Weighted-average discount rate	4.70%
Operating cash flows from operating leases	$ 5,007
Operating leases	$ 14,986

Investment Securities and Fair Value Measurements - Sales and Maturities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	$ 6	$ 4
Gross Realized Losses	(1)	(35)
Gross Proceeds from Sales	2,750	20,900	$ 15
Gross Proceeds from Maturities	15,660	32,819	$ 16,474
Amortization and accretion of premium and discount	600	1,000		$ 700
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	0	0
Gross Realized Losses	(1)	(11)
Gross Proceeds from Sales	2,750	6,624
Gross Proceeds from Maturities	11,350	19,307
Agency securities
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	6	4
Gross Realized Losses	0	(14)
Gross Proceeds from Sales	0	5,671
Gross Proceeds from Maturities	3,625	7,000
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		2,982
Treasury securities
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	0	0
Gross Realized Losses	0	(10)
Gross Proceeds from Sales	0	8,605
Gross Proceeds from Maturities	$ 685	$ 3,530

Commitment and Contingencies - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 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	$ 1,800,000	$ 600,000
Other current assets
Loss Contingencies [Line Items]
Deposits held with a third party related to insurance services collateral	$ 1,300,000	$ 1,800,000

Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax expense	$ (31,459,000)	$ 420,000	$ 58,000
Income tax benefit at the statutory rate	21.00%	21.00%	34.00%
State and local income taxes, net of federal benefit	(53.00%)	(3.00%)	(14.00%)
Stock-based compensation expense	(88.00%)	(7.00%)	(15.00%)
Meals and entertainment	7.00%	1.00%	2.00%
Change in valuation allowance	(475.00%)	(1.00%)	(60.00%)
Change in federal rate	0.00%	0.00%	74.00%
Research and development tax credits	(64.00%)	(9.00%)	(20.00%)
Provision for (benefit from) income taxes	(652.00%)	2.00%	1.00%

Commitment and Contingencies	12 Months Ended
Commitment and Contingencies	Dec. 31, 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 our insurance services, 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. Included in cost of revenue we accrue for reported claims, and an estimate of losses incurred but not reported by our property management customers, as we bear the risk related to claims. Our liability for reported claims and incurred but not reported claims at December 31, 2019 and 2018 was $1.8 million and $0.6 million, respectively, and is included in other current liabilities on the Consolidated Balance Sheets. Included in prepaid expenses and other current assets as of December 31, 2019 and 2018 are $1.3 million and $1.8 million, respectively, of deposits held with a third party related to requirements to maintain collateral for our insurance services. Legal Proceedings In July 2019, we received a Request for Information 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 from the Federal Trade Commission ("FTC") requesting certain information relating to our compliance with the Fair Credit Reporting Act 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 investigatory inquiries or legal proceedings arising from or related to matters incident to the ordinary course of our business activities, including actions with respect to intellectual property, employment, regulatory and contractual issues. Although the results of such investigatory inquiries and legal proceedings cannot be predicted with certainty, we believe that we are not currently a party to any investigatory inquiries or legal proceeding(s) 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, 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. At December 31, 2019 and 2018, we have not accrued a liability for these indemnification arrangements because we determined that the likelihood of incurring a payment obligation, if any, 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.

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 2,964,000
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 2,964,000

Property and Equipment

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consists of the following at December 31, 2019 and 2018 (in thousands):



	December 31,
	2019			2018
Data center and computer equipment	$	7,983		$	6,854
Furniture and fixtures	3,953			2,928
Office equipment	1,141			798
Leasehold improvements	6,192			5,254
Construction in process	7,118			79
Gross property and equipment	26,387			15,913
Less: Accumulated depreciation	(11,643		)	(9,042		)
Total property and equipment, net	$	14,744		$	6,871

Depreciation expense for property and equipment totaled $3.1 million, $2.4 million, and $2.3 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

For the year ended December 31, 2019, we recorded an income tax benefit of $31.5 million. 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 years ended December 31, 2018 and 2017, we recorded income tax expense of $420,000 and $58,000, respectively, associated with state taxes and the amortization of tax deductible goodwill that is not an available source of income to realize the deferred tax asset.

Our effective tax rate differs from the United States federal statutory rate of 21% primarily because, in years prior to 2019, our reported losses were offset by a valuation allowance due to uncertainty as to the realization of those losses while, in 2019, we released such valuation allowance. Set forth below is a reconciliation of the components that caused our provision for income taxes to differ from amounts computed by applying the United States federal statutory rate of 21% for the years ended December 31, 2019 and 2018, and 34% for the year ended December 31, 2017:



	Year Ended December 31,
	2019		2018		2017
Income tax benefit at the statutory rate	21	%	21	%	34	%
State and local income taxes, net of federal benefit	(53	)	(3	)	(14	)
Stock-based compensation expense	(88	)	(7	)	(15	)
Meals and entertainment	7		1		2
Change in valuation allowance	(475	)	(1	)	(60	)
Change in federal rate	—		—		74
Research and development tax credits	(64	)	(9	)	(20	)
Provision for (benefit from) income taxes	(652	)%	2	%	1	%

The provision for income tax consists of the following (in thousands):



	Year Ended December 31,
	2019			2018		2017
Current
Federal	$	—		$	—	$	—
State and local	(15		)	339		53
Current income tax expense	(15		)	339		53
Deferred
Federal	(18,761		)	65		(2		)
State and local	(12,683		)	16		7
Deferred income tax (benefit) expense	(31,444		)	81		5
Total income tax provision (benefit)	$	(31,459	)	$	420	$	58

The components of deferred tax assets (liabilities) were as follows (in thousands):



	December 31,
	2019			2018
Deferred income tax assets:
Net operating loss carryforwards	$	22,525		$	15,675
Research and development tax credits	17,700			11,907
Intangible assets	—			143
Stock-based compensation	2,895			2,203
Lease asset	8,291			—
Other	1,692			2,878
Gross deferred tax assets	53,103			32,806
Valuation allowance	—			(23,002		)
Deferred tax assets, net of valuation allowance	53,103			9,804
Deferred tax liabilities:
Property, equipment and software	(7,965		)	(5,464		)
Intangible assets	(3,767		)	—
Capitalized commissions	(2,492		)	(1,825		)
State taxes	(2,563		)	(1,935		)
Lease liability	(7,152		)	—
Other	(1,590		)	(739		)
Total deferred tax liabilities	(25,529		)	(9,963		)
Total net deferred tax assets (liabilities)	$	27,574		$	(159	)

At December 31, 2019, we had federal net operating loss carryforwards of $82.1 million, which will begin to expire in 2031. At December 31, 2019, we had state net operating loss carryforwards of $65.9 million, which will begin to expire in 2028. At December 31, 2019, we also had federal and state research and development credit carryforwards of $11.4 million and $10.8 million, respectively. The federal credit carryforwards will begin to expire in 2027, while the majority of state credits carryforwards apply indefinitely.

The Internal Revenue Code of 1986, as amended (“IRC”), imposes substantial restrictions on the utilization of NOLs and other tax attributes in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use pre-change NOLs may be limited as prescribed under IRC Section 382. Events which may cause limitation in the amount of the NOLs and credits that we utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a rolling three-year period. We have undertaken an NOL/382 analysis and have determined that there are no limitations on the NOL carryforwards at December 31, 2019.

The change in the valuation allowance for the years ended December 31, 2019, 2018 and 2017 was as follows (in thousands):



	Year Ended December 31,
	2019			2018			2017
Valuation allowance, at beginning of year	$	23,002		$	23,827		$	29,417
Decrease in valuation allowance	(23,002		)	(825		)	(5,590		)
Valuation allowance, at end of year	$	—		$	23,002		$	23,827

The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands):



	Year Ended December 31,
	2019		2018		2017
Unrecognized tax benefit beginning of year	$	2,977	$	2,105	$	4,032
Decreases-tax positions in prior year	—		—		(2,210		)
Increases-tax positions in current year	1,444		872		283
Unrecognized tax benefit end of year	$	4,421	$	2,977	$	2,105

The unrecognized tax benefits are recorded as a reduction to the deferred tax assets.

At December 31, 2019 and 2018, we had no accrued interest and penalties related to uncertain income tax positions. We do not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

We are subject to taxation in the United States and various states. Due to the net operating loss carryforwards, our federal and state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception. We are not currently under audit by any taxing authorities.

Internal-Use Software Development Costs

12 Months Ended

Dec. 31, 2019

Research and Development [Abstract]

Internal-Use Software Development Costs

Internal-use software development costs were as follows (in thousands):



	December 31,
	2019			2018
Internal use software development costs, gross	$	81,475		$	58,237
Less: Accumulated amortization	(51,452		)	(37,752		)
Internal use software development costs, net	$	30,023		$	20,485

Capitalized software development costs were $23.6 million, $13.8 million and $11.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. Amortization expense with respect to software development costs totaled $14.0 million, $11.0 million and $9.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Future amortization expense with respect to capitalized software development costs at December 31, 2019 is estimated as follows (in thousands):



Years Ending December 31,
2020	$	14,578
2021	10,738
2022	4,691
2023	16
Total amortization expense	$	30,023

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefit beginning of year	$ 2,977,000	$ 2,105,000	$ 4,032,000
Decreases-tax positions in prior year	0	0	(2,210,000)
Increases-tax positions in current year	1,444,000	872,000	283,000
Unrecognized tax benefit end of year	4,421,000	2,977,000	$ 2,105,000
Income tax examination, penalties and interest accrued	$ 0	$ 0

Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill at December 31, 2018	$ 15,548
Goodwill from acquisition of Dynasty	42,877
Goodwill at December 31, 2019	$ 58,425

Summary of Significant Accounting Policies - Net (Income) Loss Schedule of Antidilutive Securities (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from net loss per share attributable to common stockholders	10	10	27
Unvested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from net loss per share attributable to common stockholders	10	10	21
Contingent Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from net loss per share attributable to common stockholders	0	0	6

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

21% for the years ended December 31, 2019 and 2018, and 34% for the year ended December 31, 2017:



	Year Ended December 31,
	2019		2018		2017
Income tax benefit at the statutory rate	21	%	21	%	34	%
State and local income taxes, net of federal benefit	(53	)	(3	)	(14	)
Stock-based compensation expense	(88	)	(7	)	(15	)
Meals and entertainment	7		1		2
Change in valuation allowance	(475	)	(1	)	(60	)
Change in federal rate	—		—		74
Research and development tax credits	(64	)	(9	)	(20	)
Provision for (benefit from) income taxes	(652	)%	2	%	1	%

Schedule of Components of Income Tax Expense (Benefit)

The provision for income tax consists of the following (in thousands):



	Year Ended December 31,
	2019			2018		2017
Current
Federal	$	—		$	—	$	—
State and local	(15		)	339		53
Current income tax expense	(15		)	339		53
Deferred
Federal	(18,761		)	65		(2		)
State and local	(12,683		)	16		7
Deferred income tax (benefit) expense	(31,444		)	81		5
Total income tax provision (benefit)	$	(31,459	)	$	420	$	58

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets (liabilities) were as follows (in thousands):



	December 31,
	2019			2018
Deferred income tax assets:
Net operating loss carryforwards	$	22,525		$	15,675
Research and development tax credits	17,700			11,907
Intangible assets	—			143
Stock-based compensation	2,895			2,203
Lease asset	8,291			—
Other	1,692			2,878
Gross deferred tax assets	53,103			32,806
Valuation allowance	—			(23,002		)
Deferred tax assets, net of valuation allowance	53,103			9,804
Deferred tax liabilities:
Property, equipment and software	(7,965		)	(5,464		)
Intangible assets	(3,767		)	—
Capitalized commissions	(2,492		)	(1,825		)
State taxes	(2,563		)	(1,935		)
Lease liability	(7,152		)	—
Other	(1,590		)	(739		)
Total deferred tax liabilities	(25,529		)	(9,963		)
Total net deferred tax assets (liabilities)	$	27,574		$	(159	)

Summary of Valuation Allowance

The change in the valuation allowance for the years ended December 31, 2019, 2018 and 2017 was as follows (in thousands):



	Year Ended December 31,
	2019			2018			2017
Valuation allowance, at beginning of year	$	23,002		$	23,827		$	29,417
Decrease in valuation allowance	(23,002		)	(825		)	(5,590		)
Valuation allowance, at end of year	$	—		$	23,002		$	23,827

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands):



	Year Ended December 31,
	2019		2018		2017
Unrecognized tax benefit beginning of year	$	2,977	$	2,105	$	4,032
Decreases-tax positions in prior year	—		—		(2,210		)
Increases-tax positions in current year	1,444		872		283
Unrecognized tax benefit end of year	$	4,421	$	2,977	$	2,105

Summary of Significant Accounting Policies Recently Adopted Accounting Pronouncements 2016-02 (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018
Assets
Prepaid expenses and other current assets	$ 15,540	$ 11,458	$ 11,775	$ 5,694
Operating lease right-of-use assets	27,803	16,945	0
Liabilities and Stockholders’ Equity
Other current liabilities	11,139	4,940	1,447
Operating lease liabilities	36,138	20,056	0
Other long-term liabilities	$ 14	159	$ 7,080
Accounting Standards Update 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)

Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2019	Feb. 14, 2020	Jun. 28, 2019
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 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
Title of each class	Class A common stock, par value $0.0001 per share
Trading Symbol	APPF
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
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
Entity Public Float			$ 1,786
Entity Central Index Key	0001433195
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		16,591,623
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		17,566,442

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Schedule of Components of Lease Expense

Lease-related assets and liabilities were as follows at December 31, 2019 (in thousands):



Assets
Prepaid expenses and other current assets	$	3,908
Operating lease right-of-use assets	27,803

Liabilities
Other current liabilities	$	2,826
Operating lease liabilities	33,312
Total lease liabilities	$	36,138

Weighted-average remaining lease term (years)	10.6
Weighted-average discount rate	4.7		%

Supplemental cash flow information related to leases was as follows for the twelve months ended December 31, 2019 (in thousands):



Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,007
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	14,986

Schedule of Mininum Lease Payments Under Leases

Future minimum lease payments under non-cancellable leases as of December 31, 2019 were as follows (in thousands):



Years ending December 31,
2020⁽¹⁾	$	472
2021⁽¹⁾	2,383
2022	4,085
2023	3,977
2024	3,908
Thereafter	29,590
Total future minimum lease payments	44,415
Less: imputed interest	(12,185		)
Total⁽²⁾	$	32,230

Schedule 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

Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

2015 Stock Incentive Plan

In conjunction with our IPO in 2015, our Board of Directors and stockholders adopted the 2015 Stock Incentive Plan (the "2015 Plan"). Upon adoption of the 2015 Plan, 2,000,000 shares of our Class A common stock were reserved and available for grant and issuance. On January 1 of each subsequent calendar year, the number of shares available for grant and issuance under the 2015 Plan increase by the lesser of (i) the number of shares of our Class A common stock subject to awards granted under the 2015 Plan during the preceding calendar year and (ii) such lesser number of shares of our Class A common stock determined by our Board of Directors. At December 31, 2019, we have reserved an aggregate of 3,977,621 shares of our Class A common stock for grant and issuance under the 2015 Plan. The number of shares of our Class A common stock is also subject to adjustment in the event of a recapitalization, stock split, reclassification, stock dividend or other change in our capitalization. The 2015 Plan authorizes the award of stock options, stock appreciation rights, RSAs, RSUs, performance awards and stock bonuses. The 2015 Plan provides for the grant of awards to our employees, directors, consultants and independent contractors, subject to certain exceptions. RSUs, PSUs, and RSAs have been issued during 2019 pursuant to the 2015 Plan.

Stock options may vest based on the passage of time or the achievement of performance conditions at the discretion of our compensation committee. Our compensation committee may provide for stock options to be exercised only as they vest or to be immediately exercisable with any shares issued on exercise being subject to our right of repurchase that lapses as the shares vest. The maximum term of stock options granted under the 2015 Plan is 10 years.

RSUs and PSUs represent the right on the part of the holder to receive shares of our Class A common stock at a specified date in the future or the achievement of performance conditions at the discretion of our compensation committee, subject to forfeiture of that right due to termination of employment. If an RSU or PSU has not been forfeited, then, on the specified date, we will deliver to the holder of the RSU or PSU shares of our Class A common stock.

2007 Stock Incentive Plan

On February 14, 2007, our Board of Directors adopted the 2007 Stock Incentive Plan (the “2007 Plan”) as an amendment and restatement to an original 2006 Equity Incentive Plan and was most recently amended in July 2014. Following our IPO, our Board of Directors determined not to make any further awards under the 2007 Plan. The 2007 Plan expired on February 14, 2017. The 2007 Plan will continue to govern outstanding awards granted under the 2007 Plan.

Stock Options

A summary of our stock option activity for the year ended December 31, 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	(120	)	4.60
Options cancelled/forfeited	(51	)	13.41
Options outstanding at December 31, 2019	1,342		$	11.84	5.9

At December 31, 2019:
Options vested and expected to vest	1,342		$	11.84	5.1
Options exercisable⁽¹⁾	1,325		$	11.93	5.9

⁽¹⁾Included in the options exercisable is 15,000 shares which have an early exercise option. The weighted average exercise price of these options is $5.64 per share and the weighted average contractual life in years is 5.1 years.

Included in the options outstanding as of December 31, 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 year ended December 31, 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 for the years ended December 31, 2019, 2018 and 2017 was $0.6 million, $1.6 million, and $2.9 million, 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 years ended December 31, 2019 and 2018.

At December 31, 2019, the total remaining stock-based compensation expense for unvested stock options was $0.1 million, which is expected to be recognized over a weighted average period of 0.9 years.

The total intrinsic value of options exercised in 2019, 2018 and 2017 was $11.5 million, $7.5 million, and $4.6 million, respectively. This intrinsic value represents the difference between the fair value of our common stock on the date of exercise and the exercise price of each option. Based on the fair value of our common stock at December 31, 2019, the total intrinsic value of all outstanding options was $131.7 million. The total intrinsic value of exercisable options at December 31, 2019 was $129.8 million. The total intrinsic value of options vested and expected to vest at December 31, 2019 was $131.7 million.

The excess tax benefit realized from option exercises during the years ended December 31, 2019, 2018 and 2017 was $20.5 million, $7.7 million and $5.2 million, respectively.

Restricted Stock Units

A summary of activity in connection with our RSUs for the year ended December 31, 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	216		89.10
Vested	(198	)	26.78
Forfeited	(46	)	43.97
Unvested at December 31, 2019	646		$	52.42

During the year ended December 31, 2019, we granted a total of 216,000 RSUs and PSUs: 173,000 RSUs vest annually over four years; 37,000 PSUs vest based on the achievement of a pre-established consolidated net revenue growth target for each of the years ending December 31, 2020, 2021 and 2022 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 targeted performance metric. 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 year ended December 31, 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 and PSUs at December 31, 2019 are 95,000 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 41,000 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 years ended December 31, 2019, 2018 and 2017, was $8.3 million, $5.5 million and $3.6 million, respectively.

At December 31, 2019, the total remaining stock-based compensation expense for these RSUs was $21.8 million, which is expected to be recognized over a weighted average period of 1.9 years.

Restricted Stock Awards

A summary of activity in connection with our RSAs for the year ended December 31, 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	5		105.88
Vested	(6	)	51.36
Forfeited	—		—
Unvested at December 31, 2019	5		$	105.88

We have the right to repurchase any unvested RSAs subject to certain conditions. RSAs vest over a four-year period for employees and over a one-year period for non-employee directors. For the years ended December 31, 2019, 2018 and 2017, we recognized stock-based compensation expense for RSAs of $0.3 million, $0.3 million and $0.4 million, respectively. During 2019, the grant date fair value of the shares vested was $0.3 million.

At December 31, 2019, the total remaining stock-based compensation expense for unvested RSAs was $0.4 million, which is expected to be recognized over a weighted average period of 0.8 years.

Revenue and Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Product Information [Line Items]
Revenue	$ 256,012	$ 190,071	$ 143,803
Core solutions
Product Information [Line Items]
Revenue	88,581	70,549	57,132
Value plus services
Product Information [Line Items]
Revenue	153,994	113,072	80,847
Other
Product Information [Line Items]
Revenue	$ 13,437	$ 6,450	$ 5,824

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Treasury stock, shares	371,000	371,000
Preferred Stock
Preferred stock, par value (usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A common stock
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	16,923,000	16,160,000
Common stock, shares outstanding	16,552,000	15,789,000
Class B common stock
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	17,594,000	18,109,000
Common stock, shares outstanding	17,594,000	18,109,000

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash from operating activities
Net income	$ 36,282	$ 19,967	$ 9,716
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	22,395	14,576	12,699
Amortization of operating lease right-of-use assets	4,130	0	0
Stock-based compensation	7,309	6,337	6,096
Deferred income taxes	(31,455)	0	0
Other	32	224	121
Changes in operating assets and liabilities:
Accounts receivable	(2,031)	(908)	(876)
Prepaid expenses and other current assets	(4,031)	(6,073)	(1,009)
Other assets	1,376	(4,447)	(84)
Accounts payable	511	614	(100)
Accrued employee expenses	4,542	1,219	3,243
Accrued expenses	55	3,281	271
Deferred revenue	1,193	(4,589)	(558)
Operating lease liabilities	(2,662)	0	0
Other liabilities	1,241	6,067	(148)
Net cash provided by operating activities	38,887	36,268	29,371
Cash from investing activities
Purchases of property, equipment and intangible assets	(8,084)	(2,102)	(2,214)
Additions to capitalized software	(20,998)	(12,304)	(10,455)
Purchases of investment securities	(25,198)	(29,516)	(26,648)
Sales of investment securities	2,750	20,900	15
Maturities of investment securities	15,660	32,819	16,474
Acquisition, net of cash acquired	(54,004)	(14,441)	0
Net cash used in investing activities	(89,874)	(4,644)	(22,828)
Cash from financing activities
Proceeds from stock option exercises	553	1,035	663
Tax withholding for net share settlement	(6,155)	(3,127)	(1,796)
Purchase of treasury stock	0	(21,562)	0
Proceeds from issuance of debt	2,169	50,138	118
Principal payments on debt	(3,419)	(138)	(118)
Payment of debt issuance costs	420	0	0
Net cash (used in) provided by financing activities	(7,272)	26,346	(1,133)
Net (decrease) increase in cash and cash equivalents	(58,259)	57,970	5,410
Cash, cash equivalents and restricted cash
Beginning of period	74,506	16,536	11,126
End of period	16,247	74,506	16,536
Supplemental disclosure of cash flow information
Cash paid for interest	2,169	118	182
Cash paid for income taxes	545	82	30
Noncash investing and financing activities
Purchases of property and equipment included in accounts payable and accrued expenses	3,447	518	21
Additions of capitalized software included in accrued and accrued employee expenses	1,187	825	374
Stock-based compensation capitalized for software development	1,844	1,087	759
Purchase consideration for acquisitions included in other current liabilities	5,977	0	0
Debt issuance and other financing costs accrued, not paid	$ 0	$ 371	$ 0

Summary of Significant Accounting Policies - Net Income per Share Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Weighted average common shares outstanding	34,020	34,139	33,876
Less: Weighted average unvested restricted shares subject to repurchase	4	11	27
Weighted average common shares outstanding; basic	34,016	34,128	33,849
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share	1,551	1,434	1,302
Weighted average common shares outstanding; diluted	35,567	35,562	35,151

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives of Property and Equipment

The estimated useful lives of our property and equipment are as follows:



Asset Type		Depreciation Period
Data center and computer equipment		3 years
Furniture and fixtures		7 years
Office equipment		2 to 5 years
Leasehold improvements		Shorter of remaining life of lease or asset life

Property and equipment consists of the following at December 31, 2019 and 2018 (in thousands):



	December 31,
	2019			2018
Data center and computer equipment	$	7,983		$	6,854
Furniture and fixtures	3,953			2,928
Office equipment	1,141			798
Leasehold improvements	6,192			5,254
Construction in process	7,118			79
Gross property and equipment	26,387			15,913
Less: Accumulated depreciation	(11,643		)	(9,042		)
Total property and equipment, net	$	14,744		$	6,871

Schedule of Weighted Average Number of Shares

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



	Year Ended December 31,
	2019	2018	2017
Weighted average common shares outstanding	34,020	34,139	33,876
Less: Weighted average unvested restricted shares subject to repurchase	4	11	27
Weighted average common shares outstanding; basic	34,016	34,128	33,849

Weighted average common shares outstanding; basic	34,016	34,128	33,849
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share	1,551	1,434	1,302
Weighted average common shares outstanding; diluted	35,567	35,562	35,151

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

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 share for the years ended December 31, 2019, 2018 and 2017 (in thousands):



	December 31,
	2019	2018	2017
Unvested restricted stock units	10	10	21
Contingent restricted stock units⁽¹⁾	—	—	6
Total shares excluded from diluted net income per common share	10	10	27

⁽¹⁾The reported shares are based on fixed price RSU commitments for which the number of shares has not been determined at the grant date. The number of shares have been determined by dividing the fixed price commitment to issue shares in the future by the closing price of our common stock at the applicable reporting period date.

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

The cumulative effect of the changes made to our 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

The cumulative effects of the changes made to our Consolidated Balance Sheet at January 1, 2018 for the adoption of the New Revenue Standard were as follows (in thousands):



	Balance at December 31, 2017			Adjustments		Balance at January 1, 2018
Assets
Prepaid expenses and other current assets	$	4,546		$	1,148	$	5,694
Other assets	1,238			1,816		3,054

Equity
Accumulated deficit	$	(67,247	)	$	2,964	$	(64,283	)

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Summary of Stock Option Activity

A summary of our stock option activity for the year ended December 31, 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	(120	)	4.60
Options cancelled/forfeited	(51	)	13.41
Options outstanding at December 31, 2019	1,342		$	11.84	5.9

At December 31, 2019:
Options vested and expected to vest	1,342		$	11.84	5.1
Options exercisable⁽¹⁾	1,325		$	11.93	5.9

Schedule of Restricted Stock Units Activity

A summary of activity in connection with our RSUs for the year ended December 31, 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	216		89.10
Vested	(198	)	26.78
Forfeited	(46	)	43.97
Unvested at December 31, 2019	646		$	52.42

Schedule of Restricted Stock Activity

A summary of activity in connection with our RSAs for the year ended December 31, 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	5		105.88
Vested	(6	)	51.36
Forfeited	—		—
Unvested at December 31, 2019	5		$	105.88

Long-term Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Long-term Debt

The following is a summary of our long-term debt at December 31, 2019 (in thousands):



Principal amounts due under term loan	$	48,750
Less: Debt financing costs	(167		)
Long-term debt, net of unamortized debt financing costs	48,583
Less: Current portion of long-term debt	(1,208		)
Total long-term debt, net of current portion	$	47,375

Scheduled principal payments for the Term Loan at December 31, 2019 are as follows (in thousands):



Years Ending December 31,
2020	$	1,250
2021	2,500
2022	2,500
2023	42,500
Total principal payments	$	48,750

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, as administrative agent, and the lenders that are parties thereto (as amended, the "Credit Agreement"). Under the terms of the Second Amendment, the lenders have made available to us a $50.0 million term loan (the "Term Loan") and have increased the existing $25.0 million Revolving Facility to $50.0 million. The maturity date of the Term Loan and Revolving Facility is December 24, 2023. In addition, we are now permitted 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 December 31, 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 will 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. Borrowings 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 twelve months ended December 31, 2019 was 3.9%.

Fees payable on the unused portion of the Revolving Facility will be 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 will be 0.375% per annum.

At December 31, 2019 and 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. Pursuant to GAAP, the Second Amendment is accounted for as a debt modification. 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 will be 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 Consolidated Statements of Operations. Amortization of deferred debt financing costs was not material for the years ended December 31, 2019, 2018 and 2017. At December 31, 2019 and 2018, the remaining unamortized deferred debt financing costs were $0.4 million and $0.5 million, of which, at December 31, 2019 and 2018, $0.2 million was offset against debt. At December 31, 2019 and 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 Consolidated Balance Sheets, as they pertained to the Revolving Facility.

(Tables)

12 Months Ended

Dec. 31, 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



	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	42,877		Indefinite
Other noncurrent assets	35
Total assets acquired	63,967

Accrued and other liabilities	48
Deferred tax liability, net	3,711
Total liabilities assumed	3,759
Purchase consideration	$	60,208

Schedule of Pro Forma Information

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



	Year Ended December 31,
	2019		2018		2017
Revenue	$	256,047	$	193,405	$	146,859
Net income	32,339		5,937		5,052

Leases

12 Months Ended

Dec. 31, 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 twelve years, some of which include options to extend the leases for up to 10 years. These options to extend have not been recognized as part of our operating lease ROU assets and lease liabilities as it is not reasonably certain that we will exercise these options. 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. The total lease cost associated with our operating leases for the twelve months ended December 31, 2019 was $5.1 million.

Lease-related assets and liabilities were as follows at December 31, 2019 (in thousands):



Assets
Prepaid expenses and other current assets	$	3,908
Operating lease right-of-use assets	27,803

Liabilities
Other current liabilities	$	2,826
Operating lease liabilities	33,312
Total lease liabilities	$	36,138

Weighted-average remaining lease term (years)	10.6
Weighted-average discount rate	4.7		%

Supplemental cash flow information related to leases was as follows for the twelve months ended December 31, 2019 (in thousands):



Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,007
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	14,986

Future minimum lease payments under non-cancellable leases as of December 31, 2019 were as follows (in thousands):



Years ending December 31,
2020⁽¹⁾	$	472
2021⁽¹⁾	2,383
2022	4,085
2023	3,977
2024	3,908
Thereafter	29,590
Total future minimum lease payments	44,415
Less: imputed interest	(12,185		)
Total⁽²⁾	$	32,230

⁽¹⁾Future minimum lease payments for the years ending December 31, 2020 and 2021 are presented net of tenant improvement allowances of $5.5 million and $2.3 million, respectively.

⁽²⁾Total future minimum lease payments include the current portion of lease liabilities recorded in prepaid expenses and other current assets of $3.9 million which relates to certain of the Company's leases for which the lease incentives to be received exceed the minimum lease payments to be paid over the next twelve months.

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

We recorded rent expense of $2.6 million and $2.1 million for the years ended December 31, 2018 and 2017, respectively.

On April 1, 2019, we signed a new lease with Rose Studios, LLC to lease approximately 5,000 square feet of office space located in Venice, California. The lease is for a five-year term commencing August 1, 2019 ending on July 31, 2024. The total commitment under this lease is$2.0 million for which the remaining amount due at December 31, 2019 is included in the maturities table above.

On December 6, 2019, we signed three new leases for certain premises located in the Castilian Technical Center at 50, 70, and 90 Castilian Drive in Santa Barbara, California. The leases replaced the Company's prior lease agreements with the previous landlord with respect to the premises. The leases commenced December 6, 2019 and are for a twelve-year term ending on February 29, 2032, with two consecutive five-year renewal periods, each at the Company's option. The total commitment under these lease agreements is $36.5 million for which the remaining amount due at December 31, 2019 is included in the maturities table above.

Revenue and Other Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Revenue and Other Information

The following table presents our revenue categories for the years ended December 31, 2019, 2018 and 2017 (in thousands):



	Year Ended December 31,
	2019		2018		2017
Core solutions	$	88,581	$	70,549	$	57,132
Value+ services	153,994		113,072		80,847
Other	13,437		6,450		5,824
Total revenue	$	256,012	$	190,071	$	143,803

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

Consolidated Statements of Operations - USD ($) shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Revenue	$ 256,012,000	$ 190,071,000	$ 143,803,000
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	101,642,000	73,549,000	55,283,000
Sales and marketing	51,528,000	33,288,000	28,709,000
Research and product development	39,508,000	24,111,000	16,578,000
General and administrative	34,478,000	24,891,000	21,199,000
Depreciation and amortization	22,395,000	14,576,000	12,699,000
Total costs and operating expenses	249,551,000	170,415,000	134,468,000
Income from operations	6,461,000	19,656,000	9,335,000
Other income (expense), net	16,000	(56,000)	(96,000)
Interest income (expense), net	(1,654,000)	787,000	535,000
Income before provision for (benefit from) income taxes	4,823,000	20,387,000	9,774,000
Provision for (benefit from) income taxes	(31,459,000)	420,000	58,000
Net income	$ 36,282,000	$ 19,967,000	$ 9,716,000
Net income per common share:
Basic (in usd per share)	$ 1.07	$ 0.59	$ 0.29
Diluted (in usd per share)	$ 1.02	$ 0.56	$ 0.28
Weighted average common shares outstanding:
Basic (in shares)	34,016	34,128	33,849
Diluted (in shares)	35,567	35,562	35,151

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

Income Taxes - Changes in Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Changes In Valuation Allowance [Roll Forward]
Valuation allowance, at beginning of year	$ 23,002	$ 23,827	$ 29,417
Decrease in valuation allowance	(23,002)	(825)	(5,590)
Valuation allowance, at end of year	$ 0	$ 23,002	$ 23,827

Stock-Based Compensation - Restricted Stock Units Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	216,000
Shares vested	198,000
Stock-based compensation expense	$ 8.3	$ 5.5	$ 3.6
Remaining stock-based compensation expense for unvested shares, not yet recognized	$ 21.8
Stock-based compensation expense, weighted average recognition period (in years)	1 year 10 months 24 days
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	173,000
Vesting period	4 years
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	37,000
Percent of award target performance metric	100.00%
Shares vested	29,000
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 award target performance metric	0.00%
PSUs \| Minimum \| PSUs to vest based on Employee Performance, maximum 150%
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	100.00%
Performance-based cash bonus payment, percent	100.00%
PSUs \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	100.00%
PSUs \| Maximum \| PSUs to vest based on Employee Performance, maximum 150%
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	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]
Granted (shares)	6,000
PSUs \| 2016 Performance Metric
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	6,000
Unvested RSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	5,000
Shares vested	6,000
Stock-based compensation expense	$ 0.3	$ 0.3	$ 0.4
Remaining stock-based compensation expense for unvested shares, not yet recognized	$ 0.4
Stock-based compensation expense, weighted average recognition period (in years)	9 months 18 days
Fair value of shares vested	$ 0.3
Unvested RSAs \| Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Unvested RSAs \| Non-Employee Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Performance Stock Units Granted in 2018 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	95,000
Percent of award target performance metric	100.00%
Performance Stock Units Granted in 2018 [Member] \| PSUs to vest based on Employee Performance, maximum 150%
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested	54,000
Performance Stock Units Granted in 2018 [Member] \| Share-based Payment Arrangement, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested	41,000
Performance Stock Units Granted in 2018 [Member] \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	0.00%
Share-Based Compensation Arrangements By Share-Based Payment Award, Percent Of Cash Bonus Payment On Initial Targets	100.00%
Performance Stock Units Granted in 2018 [Member] \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	100.00%
Share-Based Compensation Arrangements By Share-Based Payment Award, Percent Of Cash Bonus Payment On Initial Targets	165.00%
Performance Stock Units Granted in 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	88,000
Performance Stock Units Granted in 2017 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	0.00%
Performance Stock Units Granted in 2017 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	165.00%
Performance Stock Units Granted in 2019 [Member] \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	100.00%
Performance Stock Units Granted in 2019 [Member] \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	150.00%

Stockholders' Equity	12 Months Ended
Stockholders' Equity	Dec. 31, 2019
Equity [Abstract]
Stockholders' Equity	Stockholders’ Equity Amended and Restated Certificate of Incorporation Upon the effectiveness of our Amended and Restated Certificate of Incorporation on June 25, 2015, the number of shares of capital stock that is authorized to be issued was increased to 325,000,000 shares, of which 250,000,000 shares are Class A common stock, 50,000,000 shares are Class B common stock and 25,000,000 are undesignated preferred stock. The Class A common stock, Class B common stock and preferred stock have a par value of $0.0001 per share. At December 31, 2019, there were 16,552,000 shares of Class A common stock outstanding, 17,594,000 shares of Class B common stock outstanding and no preferred shares outstanding. Class A Common Stock and Class B Common Stock Except for voting rights, or as otherwise required by applicable law, the shares of our Class A common stock and Class B common stock have the same powers, preferences and rights and rank equally, share ratably and are identical in all respects as to all matters. The rights and preferences are as follows: Dividend Rights. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of outstanding shares of our Class A common stock and Class B common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our Board of Directors may determine. Voting Rights. The holders of our Class A common stock are entitled to one vote per share, and holders of our Class B common stock are entitled to 10 votes per share. The holders of our Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, unless otherwise required by Delaware law or our amended and restated certificate of incorporation. Delaware law could require either holders of our Class A common stock or holders of our Class B common stock to vote separately. In addition, our amended and restated certificate of incorporation requires the approval of the holders of at least a majority of the outstanding shares of our Class B common stock, voting as a separate class to approve a change-in-control transaction. Conversion. Upon the closing of our initial public offering ("IPO"), all shares of our convertible preferred stock and common stock held prior to the offering were converted into shares of Class B common stock. Currently, each share of our Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock. In addition, each share of our Class B common stock will convert into one share of our Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our amended and restated certificate of incorporation, including, without limitation, (i) a transfer by a partnership or limited liability company that was a registered holder of our Class B common stock at the “effective time,” as defined in our amended and restated certificate of incorporation, to a partner or member thereof at the effective time or (ii) a transfer to a “qualified recipient,” as defined in our amended and restated certificate of incorporation. All the outstanding shares of our Class B common stock will convert automatically into shares of our Class A common stock upon the date when the number of outstanding shares of our Class B common stock represents less than 10% of all outstanding shares of our Class A common stock and Class B common stock. Once converted into our Class A common stock, our Class B common stock may not be reissued. Right to Receive Liquidation Distributions. Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our Class A common stock and Class B common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock. Preferred Stock Effective upon the filing of our amended and restated certificate of incorporation in June 2015, no shares of preferred stock were outstanding because all outstanding shares of our convertible preferred stock converted into our Class B common stock. Pursuant to the terms of our amended and restated certificate of incorporation, our Board of Directors will be authorized, subject to limitations prescribed by Delaware law, to issue up to 25,000,000 shares of our preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further action by our stockholders. The number of authorized shares of any series of preferred stock may be increased or decreased, but not below the number of shares of that series then outstanding, by the affirmative vote of the holders of a majority of the voting power of our outstanding capital stock entitled to vote thereon, or such other vote as may be required by the certificate of designation establishing the series. Share Repurchase Program On February 20, 2019, the Board of Directors (the "Board") 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 year ended December 31, 2019. In October 2018, our Board authorized a $30.0 million Share Repurchase Program of its outstanding Class A Common Stock. Pursuant to this program, the Company has repurchased 370,751 shares for an aggregate purchase price of $21.6 million. The balance of $8.4 million remaining under the October authorization is included within the $100.0 million Share Repurchase Program authorized on February 20, 2019.

Long-term Debt - Summary of Long-tem Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Principal amounts due under term loan	$ 48,750
Less: Current portion of long-term debt	(1,208)	$ (1,213)
Total long-term debt, net of current portion	47,375	$ 48,602
Term Loan \| Credit Facility
Debt Instrument [Line Items]
Principal amounts due under term loan	48,750
Less: Debt financing costs	167
Long-term debt, net of unamortized debt financing costs	48,583
Less: Current portion of long-term debt	(1,208)
Total long-term debt, net of current portion	$ 47,375

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

The estimated useful lives of our property and equipment are as follows:



Asset Type		Depreciation Period
Data center and computer equipment		3 years
Furniture and fixtures		7 years
Office equipment		2 to 5 years
Leasehold improvements		Shorter of remaining life of lease or asset life

Property and equipment consists of the following at December 31, 2019 and 2018 (in thousands):



	December 31,
	2019			2018
Data center and computer equipment	$	7,983		$	6,854
Furniture and fixtures	3,953			2,928
Office equipment	1,141			798
Leasehold improvements	6,192			5,254
Construction in process	7,118			79
Gross property and equipment	26,387			15,913
Less: Accumulated depreciation	(11,643		)	(9,042		)
Total property and equipment, net	$	14,744		$	6,871

Nature of Business	12 Months Ended
Nature of Business	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	Nature of Business AppFolio, Inc.'s (“we,” "us" or "our") mission is to revolutionize vertical industry businesses by providing great software and services. Today we offer industry-specific, cloud-based business software solutions, services and data analytics to the real estate market, which represents over 90% of our revenue, and, to a lesser extent, to the legal market. Our real estate software solutions provide our property management 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. Although specific functionality varies by product, our core solutions address common business operations and interactions of businesses in our targeted verticals. In addition to our core solutions, we offer a range of optional, but often business-critical, Value+ services. Our Value+ services are built to enhance, automate and streamline property management processes and support workflows essential to our customers' businesses. We also provide software solutions to the legal market that enable law firms to administer their practice and manage their caseloads more efficiently by centralizing case details in a single system of record and system of engagement. The significant majority of our customers in the real estate market use our property management solutions. Our property management customers include third-party property managers and owner-operators who manage single- and mutli- family residences, community associations, commercial properties, and 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.

Business Combinations

12 Months Ended

Dec. 31, 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, 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, was released to the stockholders of Dynasty on January 10, 2020 in accordance with the terms of the purchase agreement. The Holdback Amount is recorded in other current liabilities on the Consolidated Balance Sheet as of December 31, 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 and comparable companies, estimates of future revenue and cash flows, discount rates, and the software decay rate and database ramp up rate. 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)
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	42,877		Indefinite
Other noncurrent assets	35
Total assets acquired	63,967

Accrued and other liabilities	48
Deferred tax liability, net	3,711
Total liabilities assumed	3,759
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 Consolidated Statements of Operations for the Year Ended December 31, 2019. Revenue and net loss attributable to Dynasty in the period from the acquisition date of January 7, 2019 through December 31, 2019, was $2.8 million and $9.2 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. The results of operations of WegoWise since the acquisition are included in our Consolidated Statements of Operations for the year ended December 31, 2018. Revenue and net loss attributable to WegoWise, in the period from the acquisition date of August 31, 2018 through December 31, 2018, were $0.4 million and $1.4 million, respectively.

Pro Forma Results of Operations

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):



	Year Ended December 31,
	2019		2018		2017
Revenue	$	256,047	$	193,405	$	146,859
Net income	32,339		5,937		5,052

Long-term Debt (Details)		12 Months Ended
Long-term Debt (Details)	Dec. 24, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Oct. 09, 2015 USD ($)
Debt Instrument [Line Items]
Capitalized deferred financing costs	$ 400,000
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
Debt Instrument, Interest Rate During Period		3.90%
Capitalized deferred financing costs		$ 400,000	$ 500,000
Credit Facility \| Federal Funds Rate \| Minimum
Debt Instrument [Line Items]
Variable rate, basis spread percent	0.50%
Credit Facility \| Federal Funds Rate \| Maximum
Debt Instrument [Line Items]
Variable rate, basis spread percent	1.00%
Credit Facility \| LIBOR \| Minimum
Debt Instrument [Line Items]
Variable rate, basis spread percent	1.50%
Credit Facility \| LIBOR \| Maximum
Debt Instrument [Line Items]
Variable rate, basis spread percent	2.00%
Credit Facility \| Term Loan
Debt Instrument [Line Items]
Line of credit	$ 50,000,000.0
Capitalized deferred financing costs	200,000	200,000	200,000
Credit Facility \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit		$ 0	0
Maximum borrowing capacity	$ 50,000,000.0
Commitment fee percentage	25.00%
Commitment fee, usage threshold for 37.5 basis points commitment fee, percentage	$ 30,000,000.0
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		0.375%
Capitalized deferred financing costs	$ 200,000
Credit Facility \| Revolving Credit Facility \| Wells Fargo
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 25,000,000.0
Other Assets
Debt Instrument [Line Items]
Capitalized deferred financing costs		$ 300,000	$ 300,000

Investment Securities and Fair Value Measurements - Investment Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 34,920	$ 28,065
Gross Unrealized Gains	47	4
Gross Unrealized Losses	(2)	(182)
Estimated Fair Value	$ 34,965	$ 27,887
Investment contractual maturities	36 months	36 months
Amortized cost, due in one year or less	$ 22,846	$ 16,738
Estimated fair value, due in one year or less	22,876	16,631
Amortized cost, due after one year through three years	12,074	11,327
Estimated fair value, due after one year through three years	12,089	11,256
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	9,597	23,720
Gross Unrealized Gains	18	0
Gross Unrealized Losses	(1)	(163)
Estimated Fair Value	9,614	23,557
Agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	11,101	4,345
Gross Unrealized Gains	17	4
Gross Unrealized Losses	0	(19)
Estimated Fair Value	11,118	$ 4,330
US Treasury Securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	14,222
Gross Unrealized Gains	12
Gross Unrealized Losses	(1)
Estimated Fair Value	$ 14,233

Internal-Use Software Development Costs (Tables)

12 Months Ended

Dec. 31, 2019

Research and Development [Abstract]

Schedule of Capitalized Computer Software

Internal-use software development costs were as follows (in thousands):



	December 31,
	2019			2018
Internal use software development costs, gross	$	81,475		$	58,237
Less: Accumulated amortization	(51,452		)	(37,752		)
Internal use software development costs, net	$	30,023		$	20,485

Scheduled of Future Amortization Expense

Future amortization expense with respect to capitalized software development costs at December 31, 2019 is estimated as follows (in thousands):



Years Ending December 31,
2020	$	14,578
2021	10,738
2022	4,691
2023	16
Total amortization expense	$	30,023

Leases - Schedule of Minimum Lease payments Under Leases (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Leases [Abstract]
2020	$ 472
2021	2,383
2022	4,085
2023	3,977
2024	3,908
Thereafter	29,590
Total future minimum lease payments	44,415
Less: imputed interest	12,185
Total commitment under lease	$ 32,230

Investment Securities and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Available-for-sale Securities

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



	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	9,597	$	18	$	(1	)	$	9,614
Agency securities	11,101		17		—			11,118
Treasury securities	14,222		12		(1		)	14,233
Total available-for-sale investment securities	$	34,920	$	47	$	(2	)	$	34,965



	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

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



	December 31, 2019				December 31, 2018
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	22,846	$	22,876	$	16,738	$	16,631
Due after one year through three years	12,074		12,089		11,327		11,256
Total available-for-sale investment securities	$	34,920	$	34,965	$	28,065	$	27,887

Schedule of Sales and Maturities

During the years ended December 31, 2019 and 2018, we had sales and maturities (which include calls) of investment securities, as follows (in thousands):



	Year Ended December 31, 2019
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(1	)	$	2,750	$	11,350
Agency securities	6		—			—		3,625
Treasury securities	—		—			—		685
	$	6	$	(1	)	$	2,750	$	15,660



	Year Ended December 31, 2018
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(11	)	$	6,624	$	19,307
Agency securities	4		(14		)	5,671		7,000
Certificates of deposit	—		—			—		2,982
Treasury securities	—		(10		)	8,605		3,530
	$	4	$	(35	)	$	20,900	$	32,819

Fair Value, Assets Measured on Recurring Basis

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



	December 31, 2019
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	337	$	—	$	—	$	337
Available-for-sale investment securities:
Corporate bonds	—		9,614		—		9,614
Agency securities	—		11,118		—		11,118
Treasury securities	14,233		—		—		14,233
Total	$	14,570	$	20,732	$	—	$	35,302



	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

Fair Value, Liabilities Measured on Recurring Basis

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



	December 31, 2019
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	337	$	—	$	—	$	337
Available-for-sale investment securities:
Corporate bonds	—		9,614		—		9,614
Agency securities	—		11,118		—		11,118
Treasury securities	14,233		—		—		14,233
Total	$	14,570	$	20,732	$	—	$	35,302



	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

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common stock Class A common stock	Common stock Class B common stock	Additional paid-in capital	Accumulated other comprehensive loss	Treasury Stock	Accumulated deficit
Beginning balance (shares) at Dec. 31, 2016		11,691,000	22,028,000
Beginning balance at Dec. 31, 2016	$ 69,682	$ 1	$ 3	$ 146,692	$ (51)	$ 0	$ (76,963)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (shares)		165,000
Exercise of stock options	663			663
Stock-based compensation	6,618			6,618
Vesting of restricted stock units, net of shares withheld for taxes (shares)		88,000
Vesting of restricted stock units, net of shares withheld for taxes	(1,559)			(1,559)
Vesting of early exercised shares	117			117
Conversion of Class B stock to Class A stock (shares)		2,926,000	(2,926,000)
Conversion of Class B stock to Class A stock	0
Issuance of restricted stock awards (shares)		9,000
Issuance of restricted stock awards	0
Other comprehensive income (loss)	(158)				(158)
Net income	9,716						9,716
Ending balance (shares) at Dec. 31, 2017		14,879,000	19,102,000
Ending balance at Dec. 31, 2017	85,079	$ 1	$ 3	152,531	(209)	0	(67,247)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (shares)		170,000
Exercise of stock options	1,035			1,035
Stock-based compensation	7,187			7,187
Vesting of restricted stock units, net of shares withheld for taxes (shares)		113,000
Vesting of restricted stock units, net of shares withheld for taxes	(2,890)			(2,890)
Vesting of early exercised shares	35			35
Conversion of Class B stock to Class A stock (shares)		993,000	(993,000)
Conversion of Class B stock to Class A stock	0	$ 1	$ (1)
Issuance of restricted stock awards (shares)		5,000
Issuance of restricted stock awards	0
Other comprehensive income (loss)	31				31
Repurchase of common stock (shares)		(371,000)
Repurchase of common stock	(21,562)					(21,562)
Net income	19,967						19,967
Ending balance (shares) at Dec. 31, 2018		15,789,000	18,109,000
Ending 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 (shares)	120,000	120,000	0
Exercise of stock options	$ 553			553
Stock-based compensation	8,985			8,985
Vesting of restricted stock units, net of shares withheld for taxes (shares)		123,000
Vesting of restricted stock units, net of shares withheld for taxes	(5,933)			(5,933)
Vesting of early exercised shares	6			6
Conversion of Class B stock to Class A stock (shares)		515,000	(515,000)
Conversion of Class B stock to Class A stock	0
Issuance of restricted stock awards (shares)		5,000
Issuance of restricted stock awards	0
Other comprehensive income (loss)	$ 211				211
Repurchase of common stock (shares)	(370,751)
Net income	$ 36,282						36,282
Ending balance (shares) at Dec. 31, 2019		16,552,000	17,594,000
Ending balance at Dec. 31, 2019	$ 131,950	$ 2	$ 2	$ 161,509	$ 33	$ (21,562)	$ (8,034)

Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements 2014-09 (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Prepaid expenses and other current assets	$ 15,540	$ 11,458	$ 11,775	$ 5,694
Other long-term assets	6,276		7,688	3,054
Accumulated deficit	$ (8,034)		$ (44,316)	(64,283)
Calculated under Revenue Guidance in Effect before Topic 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Prepaid expenses and other current assets					$ 4,546
Other long-term assets					1,238
Accumulated deficit					$ (67,247)
Difference between Revenue Guidance in Effect before and after Topic 606 \| Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Prepaid expenses and other current assets				1,148
Other long-term assets				1,816
Accumulated deficit				$ 2,964

Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Summary of Long-term Debt

The following is a summary of our long-term debt at December 31, 2019 (in thousands):



Principal amounts due under term loan	$	48,750
Less: Debt financing costs	(167		)
Long-term debt, net of unamortized debt financing costs	48,583
Less: Current portion of long-term debt	(1,208		)
Total long-term debt, net of current portion	$	47,375

Schedule of Principal payments for Term Loan

Scheduled principal payments for the Term Loan at December 31, 2019 are as follows (in thousands):



Years Ending December 31,
2020	$	1,250
2021	2,500
2022	2,500
2023	42,500
Total principal payments	$	48,750

- 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-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
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-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
-SubTopic 30
-Section 55
-Paragraph 8
-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

(Details) - USD ($)		12 Months Ended
(Details) - USD ($)	Jan. 07, 2019	Dec. 31, 2019	Aug. 31, 2018
Dynasty Marketplace, Inc.
Business Acquisition [Line Items]
Percentage of voting equity interest	100.00%
Total purchase consideration	$ 60,200,000
Amount retained to satisfy adjustments	6,000,000.0
Acquisition costs	291,000
Revenue from acquiree		$ 2,800,000
Net income (loss) from acquiree		(9,200,000)
Purchase consideration	$ 60,208,000
WegoWise, Inc.
Business Acquisition [Line Items]
Acquisition costs		240,000
Revenue from acquiree		400,000
Net income (loss) from acquiree		$ 1,400,000
Purchase consideration			$ 14,441,000

Stockholders' Equity - Class A Common Stock and Class B Common Stock, Reverse Stock Split (Details)	12 Months Ended
	Dec. 31, 2019 vote
Common Class B To Common Class A
Class of Stock [Line Items]
Number of shares to be issued per share upon conversion	1
Number of shares to be issued per share upon automatic conversion	1
Automatic conversion threshold as a percent of Class B common stock	10.00%
Class A common stock
Class of Stock [Line Items]
Common stock, number of votes	1
Class B common stock
Class of Stock [Line Items]
Common stock, number of votes	10

Summary of Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Dec. 31, 2019 USD ($) operating_segment reporting_unit shares	Dec. 31, 2018 USD ($) operating_segment shares	Dec. 31, 2017 USD ($) shares
Accounting Policies [Abstract]
Number of operating segments \| operating_segment	1
Number of reportable segments \| operating_segment		1
Restricted cash included in other assets	$ 434,000	$ 430,000	$ 427,000
Finite-Lived Intangible Assets [Line Items]
Impairment charges related to the identified long-lived assets	0	0	0
Deferred revenue recognized during the period	3,400,000	7,100,000
Deferred costs	9,500,000	7,200,000
Deferred costs, current	4,800,000	3,200,000
Deferred costs, noncurrent	4,600,000	4,000,000.0
Amortization expense	4,200,000	2,000,000.0
Advertising expense	$ 5,800,000	$ 4,500,000	$ 3,600,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount \| shares	10,000	10,000	27,000
Goodwill, Impairment Loss, Net of Tax	$ 0	$ 0	$ 0
Options to purchase common stock
Finite-Lived Intangible Assets [Line Items]
Dividend yield	$ 0
Unvested restricted stock units
Finite-Lived Intangible Assets [Line Items]
Vesting period	4 years
Capitalized Software Development Costs
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives (in years)	3 years
Goodwill
Finite-Lived Intangible Assets [Line Items]
Number of reporting units \| reporting_unit	1
Performance Shares
Finite-Lived Intangible Assets [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount \| shares	187,000	358,000	548,000

Internal-Use Software Development Costs - Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2020	$ 14,578
2021	10,738
2022	4,691
2023	16
Internal use software development costs, net	$ 30,023	$ 20,485

Long-term Debt - Schedule of Principal Payments for Term Loan (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Debt Disclosure [Abstract]
2020	$ 1,250
2021	2,500
2022	2,500
2023	42,500
Total principal payments	$ 48,750

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

The accompanying Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

Use of Estimates

Segment Information

Concentrations of Credit Risk

Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base. No individual customer represented 10% or more of accounts receivable at December 31, 2019 and 2018 or revenue for the years ended December 31, 2019, 2018 and 2017.

Fair Value Measurements

Level 1 - Quoted prices in active markets for identical assets or liabilities or funds.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Cash, Cash Equivalents and Restricted Cash

Investment Securities

Accounts Receivable

Property and Equipment



Asset Type		Depreciation Period
Data center and computer equipment		3 years
Furniture and fixtures		7 years
Office equipment		2 to 5 years
Leasehold improvements		Shorter of remaining life of lease or asset life

Leases

Capitalized Software Development Costs

Goodwill and Intangible Assets

No impairment losses were recorded for goodwill during the years ended December 31, 2019, 2018 and 2017.

Impairment of Long-Lived Assets

Business Combinations

Acquisition-related transaction costs are not included as a component of consideration transferred, but are accounted for as an operating expense in the period in which the costs are incurred.

Revenue Recognition

Core Solutions

Value+ Services

Other Revenue

Contracts with Multiple Performance Obligations

Deferred Revenue

Practical Expedients

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected term of one year or less.

Deferred Costs

ASU 2014-09, our commissions were expensed as incurred.

Deferred costs were $9.5 million and $7.2 million at December 31, 2019 and 2018, respectively, of which $4.8 million and $3.2 million, respectively, are included in prepaid expenses and other current assets and $4.6 million and $4.0 million, respectively, are included in other assets in the accompanying Consolidated Balance Sheets. Amortization expense for deferred costs was $4.2 million and $2.0 million for the years ended December 31, 2019 and 2018, respectively. For the years ended December 31, 2019 and 2018, no impairments were identified in relation to the costs capitalized for the periods presented.

Cost of Revenue

Sales and Marketing

Research and Product Development

General and Administrative

Depreciation and Amortization

Stock-Based Compensation

Stock Options

For the years ended December 31, 2019 and 2018, we did not grant time-based stock options or PSOs.

Restricted Stock Units

Performance-Based Equity Awards

Forfeiture Rate

Income Taxes

Net Income per Share

The net income per common share was the same for our Class A and Class B common shares 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 our weighted average number of Class A and Class B common shares used to compute net income per share (in thousands):



	Year Ended December 31,
	2019	2018	2017
Weighted average common shares outstanding	34,020	34,139	33,876
Less: Weighted average unvested restricted shares subject to repurchase	4	11	27
Weighted average common shares outstanding; basic	34,016	34,128	33,849

Weighted average common shares outstanding; basic	34,016	34,128	33,849
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share	1,551	1,434	1,302
Weighted average common shares outstanding; diluted	35,567	35,562	35,151

Approximately 187,000, 358,000 and 548,000 shares of PSOs and PSUs are not included in the computations of diluted and anti-dilutive shares for the years ended December 31, 2019, 2018 and 2017, respectively, as they are considered contingently issuable upon the satisfaction of pre-defined performance measures and their respective performance measures have not been met.



	December 31,
	2019	2018	2017
Unvested restricted stock units	10	10	21
Contingent restricted stock units⁽¹⁾	—	—	6
Total shares excluded from diluted net income per common share	10	10	27

Recently Adopted Accounting Pronouncements

The cumulative effects of the changes made to our Consolidated Balance Sheet at January 1, 2018 for the adoption of the New Revenue Standard were as follows (in thousands):



	Balance at December 31, 2017			Adjustments		Balance at January 1, 2018
Assets
Prepaid expenses and other current assets	$	4,546		$	1,148	$	5,694
Other assets	1,238			1,816		3,054

Equity
Accumulated deficit	$	(67,247	)	$	2,964	$	(64,283	)

The cumulative effect of the changes made to our 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

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2019
Data center and computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	7 years
Office equipment \| Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	2 years
Office equipment \| Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years

Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	0	0	0
Weighted average exercise price (dollars per share)		$ 0

Stockholders' Equity - Amended and Restated Certificate of Incorporation (Details) - $ / shares	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jun. 25, 2015
Class of Stock [Line Items]
Capital stock, shares authorized					325,000,000
Preferred stock, shares authorized					25,000,000
Preferred stock, shares outstanding					0
Class A common stock
Class of Stock [Line Items]
Common stock, shares authorized	250,000,000	250,000,000
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Class B common stock
Class of Stock [Line Items]
Common stock, shares authorized	50,000,000	50,000,000
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Common stock \| Class A common stock
Class of Stock [Line Items]
Common stock, shares authorized					250,000,000
Common stock, par value (usd per share)					$ 0.0001
Common stock, shares outstanding	16,552,000	15,789,000	14,879,000	11,691,000
Common stock \| Class B common stock
Class of Stock [Line Items]
Common stock, shares authorized					50,000,000
Common stock, par value (usd per share)					$ 0.0001
Common stock, shares outstanding	17,594,000	18,109,000	19,102,000	22,028,000
Preferred Stock
Class of Stock [Line Items]
Preferred stock, shares authorized					25,000,000
Preferred stock, shares outstanding	0

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets consisted of the following at December 31, 2019 and 2018 (in thousands, except years):



	December 31, 2019
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	3,070	$	(1,296	)	$	1,774	5.0
Database	8,330		(954		)	7,376		10.0
Technology	10,541		(6,074		)	4,467		5.0
Trademarks and trade names	2,690		(898		)	1,792		6.0
Partner relationships	680		(680		)	—		3.0
Non-compete agreements	7,400		(1,484		)	5,916		5.0
Domain names	301		(276		)	25		5.0
Patents	252		(225		)	27		5.0
Backlog	470		(470		)	—		1.0
	$	33,734	$	(12,357	)	$	21,377	6.2



	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 and 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 Amortization Expense

mortization expense with respect to intangible assets is estimated as follows (in thousands):



Years Ending December 31,
2020	$	4,642
2021	4,507
2022	4,445
2023	2,869
2024	1,373
Thereafter	3,541
Total amortization expense	$	21,377

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	42,877
Goodwill at December 31, 2019	$	58,425

Investment Securities and Fair Value Measurements

12 Months Ended

Dec. 31, 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 December 31, 2019 and 2018 (in thousands):



	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	9,597	$	18	$	(1	)	$	9,614
Agency securities	11,101		17		—			11,118
Treasury securities	14,222		12		(1		)	14,233
Total available-for-sale investment securities	$	34,920	$	47	$	(2	)	$	34,965



	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 December 31, 2019, the unrealized losses on investment securities which have been in a net loss position for twelve 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 a recovery of the cost basis.



	December 31, 2019				December 31, 2018
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	22,846	$	22,876	$	16,738	$	16,631
Due after one year through three years	12,074		12,089		11,327		11,256
Total available-for-sale investment securities	$	34,920	$	34,965	$	28,065	$	27,887

During the years ended December 31, 2019 and 2018, we had sales and maturities (which include calls) of investment securities, as follows (in thousands):



	Year Ended December 31, 2019
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(1	)	$	2,750	$	11,350
Agency securities	6		—			—		3,625
Treasury securities	—		—			—		685
	$	6	$	(1	)	$	2,750	$	15,660



	Year Ended December 31, 2018
	Gross Realized Gains		Gross Realized Losses			Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(11	)	$	6,624	$	19,307
Agency securities	4		(14		)	5,671		7,000
Certificates of deposit	—		—			—		2,982
Treasury securities	—		(10		)	8,605		3,530
	$	4	$	(35	)	$	20,900	$	32,819

For the years ended December 31, 2019, 2018 and 2017 we received interest income net of the amortization and accretion of the premium and discount of $0.6 million, $1.0 million, and $0.7 million, 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 presents our financial assets and liabilities measured at fair value on a recurring basis at December 31, 2019 and 2018, by level within the fair value hierarchy (in thousands):



	December 31, 2019
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	337	$	—	$	—	$	337
Available-for-sale investment securities:
Corporate bonds	—		9,614		—		9,614
Agency securities	—		11,118		—		11,118
Treasury securities	14,233		—		—		14,233
Total	$	14,570	$	20,732	$	—	$	35,302



	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 term loan made available to us by Wells Fargo Bank, National Association ("Wells Fargo"), 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 9, Long-Term Debt of our Consolidated Financial Statements for more information about the Term Loan.

There were no changes to our valuation techniques used to measure asset and liability fair values on a recurring basis during the year ended December 31, 2019. The valuation techniques for the items in the table above are as follows:

Cash Equivalents

At December 31, 2019 and 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 years ended December 31, 2019, 2018 and 2017, no impairments were identified on those assets required to be measured at fair value on a non-recurring basis.

Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Jan. 07, 2019	Aug. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill			$ 58,425	$ 15,548
Dynasty Marketplace, Inc.
Business Acquisition [Line Items]
Net tangible assets	$ 305
Identified intangible assets	$ 20,750
Estimated Useful Life (in years)	6 years
Goodwill	$ 42,877
Other noncurrent assets	35
Total assets acquired	63,967
Accrued and other liabilities	48
Deferred tax liability, net	3,711
Total liabilities assumed	3,759
Purchase consideration	60,208
Dynasty Marketplace, Inc. \| Software Development
Business Acquisition [Line Items]
Identified intangible assets	$ 5,730
Estimated Useful Life (in years)	4 years
Dynasty Marketplace, Inc. \| Database Rights
Business Acquisition [Line Items]
Identified intangible assets	$ 4,710
Estimated Useful Life (in years)	10 years
Dynasty Marketplace, Inc. \| Customer Relationships
Business Acquisition [Line Items]
Identified intangible assets	$ 1,110
Estimated Useful Life (in years)	5 years
Dynasty Marketplace, Inc. \| Order or Production Backlog
Business Acquisition [Line Items]
Identified intangible assets	$ 470
Estimated Useful Life (in years)	1 year
Dynasty Marketplace, Inc. \| Trademarks and Trade Names
Business Acquisition [Line Items]
Identified intangible assets	$ 1,390
Estimated Useful Life (in years)	10 years
Dynasty Marketplace, Inc. \| Noncompete Agreements
Business Acquisition [Line Items]
Identified intangible assets	$ 7,340
Estimated Useful Life (in years)	5 years
WegoWise, Inc.
Business Acquisition [Line Items]
Net tangible assets		$ 270
Identified intangible assets		$ 5,360
Estimated Useful Life (in years)		8 years 7 months 6 days
Goodwill		$ 8,811
Purchase consideration		14,441
WegoWise, Inc. \| Database Rights
Business Acquisition [Line Items]
Identified intangible assets		$ 3,620
Estimated Useful Life (in years)		10 years
WegoWise, Inc. \| Customer Relationships
Business Acquisition [Line Items]
Identified intangible assets		$ 1,170
Estimated Useful Life (in years)		5 years
WegoWise, Inc. \| Order or Production Backlog
Business Acquisition [Line Items]
Identified intangible assets		$ 140
Estimated Useful Life (in years)		1 year
WegoWise, Inc. \| Trademarks and Trade Names
Business Acquisition [Line Items]
Identified intangible assets		$ 370
Estimated Useful Life (in years)		10 years
WegoWise, Inc. \| Noncompete Agreements
Business Acquisition [Line Items]
Identified intangible assets		$ 60
Estimated Useful Life (in years)		5 years

Income Taxes - Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred income tax assets:
Net operating loss carryforwards	$ 22,525	$ 15,675
Research and development tax credits	17,700	11,907
Intangible assets	0	143
Stock-based compensation	2,895	2,203
Lease asset	8,291
Other	1,692	2,878
Gross deferred tax assets	53,103	32,806
Valuation allowance	0	(23,002)	$ (23,827)	$ (29,417)
Deferred tax assets, net of valuation allowance	53,103	9,804
Deferred tax liabilities:
Property, equipment and software	(7,965)	(5,464)
Intangible assets	(3,767)	0
Capitalized commissions	(2,492)	(1,825)
State taxes	(2,563)	(1,935)
Lease liability	(7,152)
Other	(1,590)	(739)
Total deferred tax liabilities	(25,529)	(9,963)
Total net deferred tax liabilities	$ 27,574
Total net deferred tax liabilities		$ (159)
Operating Loss Carryforwards [Line Items]
Income tax benefit at the statutory rate	21.00%	21.00%	34.00%
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 82,100
Federal \| Research Tax Credit Carryforward
Operating Loss Carryforwards [Line Items]
Credit carryforwards	11,400
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	65,900
State \| Research Tax Credit Carryforward
Operating Loss Carryforwards [Line Items]
Credit carryforwards	$ 10,800

Stock-Based Compensation - Restricted Stock Awards (Details) - RSAs shares in Thousands	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Number of Shares
Unvested, beginning balance (shares) \| shares	6
Granted (shares) \| shares	5
Vested (shares) \| shares	(6)
Forfeited (shares) \| shares	0
Unvested, ending balance (shares) \| shares	5
Weighted- Average Grant Date Fair Value per Share
Unvested, beginning balance (usd per share) \| $ / shares	$ 51.36
Granted (usd per share) \| $ / shares	105.88
Vested (usd per share) \| $ / shares	51.36
Forfeited (usd per share) \| $ / shares	0
Unvested, ending balance (usd per share) \| $ / shares	$ 105.88

Investment Securities and Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	$ 34,965	$ 27,887
Corporate bonds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	9,614	23,557
Agency securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	11,118	4,330
US Treasury Securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	14,233
Fair value, measurements, recurring
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total	35,302	38,581
Fair value, measurements, recurring \| Corporate bonds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	9,614		$ 23,557
Fair value, measurements, recurring \| Agency securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	11,118		4,330
Fair value, measurements, recurring \| US Treasury Securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	14,233
Fair value, measurements, recurring \| Money market funds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Cash equivalents:	337		$ 10,694
Fair value, measurements, recurring \| Level 1
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total	14,570	10,694
Fair value, measurements, recurring \| Level 1 \| Corporate bonds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	0	0
Fair value, measurements, recurring \| Level 1 \| Agency securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	0	0
Fair value, measurements, recurring \| Level 1 \| US Treasury Securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	14,233
Fair value, measurements, recurring \| Level 1 \| Money market funds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Cash equivalents:	337	10,694
Fair value, measurements, recurring \| Level 2
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total	20,732	27,887
Fair value, measurements, recurring \| Level 2 \| Corporate bonds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	9,614	23,557
Fair value, measurements, recurring \| Level 2 \| Agency securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	11,118	4,330
Fair value, measurements, recurring \| Level 2 \| US Treasury Securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	0
Fair value, measurements, recurring \| Level 2 \| Money market funds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Cash equivalents:	0	0
Fair value, measurements, recurring \| Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total	0	0
Fair value, measurements, recurring \| Level 3 \| Corporate bonds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	0	0
Fair value, measurements, recurring \| Level 3 \| Agency securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	0	0
Fair value, measurements, recurring \| Level 3 \| US Treasury Securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Available-for-sale investment securities:	0
Fair value, measurements, recurring \| Level 3 \| Money market funds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Cash equivalents:	$ 0	$ 0