0001102993-21-000084 | 10-Q | XBRL Viewer

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Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2021	May 04, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	000-30141
Entity Registrant Name	LIVEPERSON, INC.
Entity Central Index Key	0001102993
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3861628
Entity Address, Address Line One	475 Tenth Avenue, 5th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10018
City Area Code	212
Local Phone Number	609-4200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	LPSN
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		68,953,584

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
CURRENT ASSETS:
Cash and cash equivalents	$ 668,225	$ 654,152
Accounts receivable, net of allowances of $5,396 and $5,344 as of March 31, 2021 and December 31, 2020, respectively	92,263	80,423
Prepaid expenses and other current assets	19,965	14,236
Total current assets	780,453	748,811
Operating lease right of use asset	437	614
Property and equipment, net	111,314	106,055
Contract acquisition costs	40,855	41,021
Intangibles, net	11,058	10,927
Goodwill	95,087	95,192
Deferred tax assets	3,620	2,032
Other assets	1,713	1,780
Total assets	1,044,537	1,006,432
CURRENT LIABILITIES:
Accounts payable	13,626	14,115
Accrued expenses and other current liabilities	96,346	99,870
Deferred revenue	108,415	88,848
Operating lease liability	5,097	5,718
Total current liabilities	223,484	208,551
Deferred revenue, net of current portion	573	409
Convertible senior notes, net	547,159	538,432
Other liabilities	5,411	6,304
Operating lease liability, net of current portion	6,170	7,180
Deferred tax liability	1,723	1,622
Total liabilities	784,520	762,498
Commitments and contingencies (Note 11)
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.001 par value - 5,000,000 shares authorized, none issued	0	0
Common stock, $0.001 par value - 200,000,000 shares authorized, 71,351,202 and 70,264,265 shares issued, 68,641,372 and 67,554,435 shares outstanding as of March 31, 2021 and December 31, 2020, respectively	71	70
Additional paid-in capital	674,695	635,672
Treasury stock; 2,709,830 shares	(3)	(3)
Accumulated deficit	(413,080)	(391,885)
Accumulated other comprehensive (loss) income	(1,666)	80
Total stockholders’ equity	260,017	243,934
Total liabilities and stockholders’ equity	$ 1,044,537	$ 1,006,432

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 5,396	$ 5,344
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	5,000,000	5,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	200,000,000	200,000,000
Common stock, issued (in shares)	71,351,202	70,264,265
Common stock, outstanding (in shares)	68,641,372	67,554,435
Treasury stock (in shares)	2,709,830	2,709,830

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Revenue	$ 107,891	$ 78,088
Costs and expenses
Cost of revenue	33,519	22,820
Sales and marketing	36,953	42,680
General and administrative	14,486	16,469
Product development	33,455	25,716
Restructuring costs	2,732	3,190
Amortization of purchased intangibles	375	405
Total costs and expenses	121,520	111,280
Loss from operations	(13,629)	(33,192)
Other (expense) income, net
Interest expense, net	(9,129)	(2,791)
Other income (expense), net	712	(667)
Total other (expense) income, net	(8,417)	(3,458)
Loss before (benefit from) provision for income taxes	(22,046)	(36,649)
(Benefit from) provision for income taxes	(851)	352
Net loss	$ (21,195)	$ (37,001)
Net loss per share of common stock:
Basic net loss per common share (in dollars per share)	$ (0.31)	$ (0.57)
Diluted net loss per common share (in dollars per share)	$ (0.31)	$ (0.57)
Weighted-average shares used to compute net loss per share:
Weighted average shares outstanding used in basic net loss per common share calculation (in shares)	67,901,809	64,388,850
Weighted average shares outstanding used in diluted net loss per common share calculation (in shares)	67,901,809	64,388,850

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Stock-based compensation expense	$ 14,600	$ 14,700
Depreciation expense	6,605	5,538
Cost of revenue
Stock-based compensation expense	1,895	1,249
Depreciation expense	2,534	2,373
Amortization of purchased intangibles	1,175	284
Sales and marketing
Stock-based compensation expense	3,782	5,138
Depreciation expense	603	667
General and administrative
Stock-based compensation expense	2,650	2,727
Depreciation expense	60	105
Product development
Stock-based compensation expense	6,284	5,581
Depreciation expense	$ 3,408	$ 2,392

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net loss	$ (21,195)	$ (37,001)
Foreign currency translation adjustment	(1,746)	2,469
Comprehensive loss	$ (22,941)	$ (34,532)

- Definition

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

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Adjustment Accumulated Deficit
Beginning balance at Dec. 31, 2019	$ 148,535	$ 67	$ (3)	$ 436,557	$ (283,562)	$ (4,524)	$ (729)
Beginning balance (in shares) at Dec. 31, 2019		66,543,073	(2,709,830)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon exercise of stock options	1,955			1,955
Common stock issued upon exercise of stock options (in shares)		199,215
Common stock issued upon vesting of restricted stock units	0
Common stock issued upon vesting of restricted stock units (in shares)		203,690
Common stock as earn-out payment in connection with AdvantageTec Inc.	294	$ 1		293
Common stock as earnout payment in connection with AdvantageTec Inc. (in shares)		11,508
Stock-based compensation	9,519			9,519
Cash awards settled in shares of the Company's common stock	24,656			24,656
Bonus cash payment settled in shares of the Company's common stock (in shares)		991,905
Common stock issued under Employee Stock Purchase Plan	1,626			1,626
Common stock issued under Employee Stock Purchase Plan (in shares)		50,818
Net loss	(37,001)				(37,001)
Other comprehensive loss	(2,469)					(2,469)
Ending balance at Mar. 31, 2020	146,386	$ 68	$ (3)	474,606	(321,292)	(6,993)
Ending balance (in shares) at Mar. 31, 2020		68,000,209	(2,709,830)
Beginning balance at Dec. 31, 2020	243,934	$ 70	$ (3)	635,672	(391,885)	80
Beginning balance (in shares) at Dec. 31, 2020		70,264,265	2,709,830
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon exercise of stock options	$ 2,617			2,617
Common stock issued upon exercise of stock options (in shares)	209,000	209,185
Common stock issued upon vesting of restricted stock units	$ 0	$ 1		(1)
Common stock issued upon vesting of restricted stock units (in shares)		454,508
Stock-based compensation	9,225			9,225
Cash awards settled in shares of the Company's common stock	25,925			25,925
Bonus cash payment settled in shares of the Company's common stock (in shares)		400,700
Common stock issued under Employee Stock Purchase Plan	1,257			1,257
Common stock issued under Employee Stock Purchase Plan (in shares)		22,544
Net loss	(21,195)				(21,195)
Other comprehensive loss	(1,746)					(1,746)
Ending balance at Mar. 31, 2021	$ 260,017	$ 71	$ (3)	$ 674,695	$ (413,080)	$ (1,666)
Ending balance (in shares) at Mar. 31, 2021		71,351,202	2,709,830

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
OPERATING ACTIVITIES:
Net loss	$ (21,195,000)	$ (37,001,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense	14,611,000	14,695,000
Depreciation and amortization	6,605,000	5,538,000
Amortization of tenant allowance	0	(129,000)
Amortization of purchased intangibles and finance leases	1,550,000	689,000
Amortization of debt issuance costs	609,000	298,000
Accretion of debt discount on convertible senior notes	8,118,000	2,368,000
Changes in fair value of contingent consideration	0	(263,000)
Provision for doubtful accounts, net	801,000	615,000
Deferred income taxes	(1,595,000)	212,000
Changes in operating assets and liabilities:
Accounts receivable	(13,658,000)	24,112,000
Prepaid expenses and other current assets	(5,822,000)	(1,878,000)
Contract acquisition costs noncurrent	(436,000)	(2,445,000)
Other assets	47,000	(7,000)
Accounts payable	(1,920,000)	(3,412,000)
Accrued expenses and other current liabilities	17,208,000	2,987,000
Deferred revenue	21,642,000	(2,473,000)
Operating lease liabilities	(1,441,000)	390,000
Other liabilities	105,000	(3,000)
Net cash provided by operating activities	25,229,000	4,293,000
INVESTING ACTIVITIES:
Purchases of property and equipment, including capitalized software	(10,630,000)	(10,805,000)
Payments for intangible assets	(807,000)	(225,000)
Net cash used in investing activities	(11,437,000)	(11,030,000)
FINANCING ACTIVITIES:
Principal payments for financing leases	(859,000)	0
Proceeds from issuance of common stock in connection with the exercise of options and ESPP	3,874,000	3,098,000
Net cash provided by financing activities	3,015,000	3,098,000
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(2,734,000)	(1,405,000)
CHANGE IN CASH AND CASH EQUIVALENTS	14,073,000	(5,044,000)
CASH AND CASH EQUIVALENTS - Beginning of the period	654,152,000	176,523,000
CASH AND CASH EQUIVALENTS - End of the period	668,225,000	171,479,000
SUPPLEMENTAL DISCLOSURE OF OTHER CASH FLOW INFORMATION:
Cash paid for income taxes	329,000	1,337,000
Cash paid for interest	957	863
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchase of property and equipment recorded in accounts payable	1,530,000	1,408,000
Issuance of 11,508 shares of common stock as earn-out payment in connection with AdvantageTec Inc.	0	$ 294,000
Issuance of 11,508 shares of common stock as earnout payment in connection with AdvantageTec Inc. (shares)		11,508
Issuance of shares of common stock to settle cash awards	25,925,000	$ 24,656,000
Right of use assets obtained in exchange for operating lease liabilities	$ 0	$ 1,406,000

Description of Business and Basis of Presentation	3 Months Ended
Description of Business and Basis of Presentation	Mar. 31, 2021
Accounting Policies [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation LivePerson, Inc. (“LivePerson”, the “Company”, “we” or “us”) makes life easier for people and brands everywhere through trusted Conversational AI. Conversational AI allows humans and machines to interact using natural language, including speech or text. During the past decade, consumers have made mobile devices the center of their digital lives, and they have made mobile messaging the center of communication with friends, family and peers. This trend has been significantly accelerated by the COVID-19 pandemic and can now be viewed as a permanent, structural shift in consumer behavior. Our technology enables consumers to connect with businesses through these same preferred conversational interfaces, including Facebook Messenger, SMS, WhatsApp, Apple Business Chat, Google Rich Business Messenger and Alexa. These messaging conversations harness human agents, bots and Artificial Intelligence (AI) to power convenient, personalized and content-rich journeys across the entire consumer lifecycle, from discovery and research, to sales, service and support, and increasingly marketing, social, and brick and mortar engagements. For example, consumers can look up product info like ratings, images and pricing, search for stores, see product inventory, schedule appointments, apply for credit, approve repairs, and make purchases or payments - all without ever leaving the messaging channel. These AI and human-assisted conversational experiences constitute the Conversational Space, within which LivePerson has strategically developed one of the industry's largest ecosystems of messaging endpoints and use cases. The Conversational Cloud, our enterprise-class cloud-based platform, enables businesses to become conversational by securely deploying AI-powered messaging at scale for brands with tens of millions of customers and many thousands of agents. The Conversational Cloud powers conversations across each of a brand’s primary digital channels, including mobile apps, mobile and desktop web browsers, short message service (SMS), social media and third-party consumer messaging platforms. Brands can also use the Conversational Cloud to message consumers when they dial a 1-800 number instead of forcing them to navigate interactive voice response systems (IVRs) and wait on hold. Similarly, the Conversational Cloud can ingest traditional emails and convert them into messaging conversations, or embed messaging conversations directly into web advertisements, rather than redirect consumers to static website landing pages. Agents can manage all conversations with consumers through a single console interface, regardless of where the conversations originated. LivePerson's robust, cloud-based suite of rich messaging, real-time chat, AI and automation offerings features consumer and agent facing bots, intelligent routing and capacity mapping, real-time intent detection and analysis, queue prioritization, customer sentiment, analytics and reporting, content delivery, Payment Card Industry (PCI) compliance, cobrowsing and a sophisticated proactive targeting engine. An extensible application programming interface (API) stack facilitates a lower cost of ownership by facilitating robust integration into back-end systems, as well as enabling developers to build their own programs and services on top of the platform. More than 40 APIs and software development kits are available on the Conversational Cloud. For your reference: •Conversational AI: Conversational AI allows humans and machines to interact using natural language, including speech or text. •Conversational Space: In the Conversational Space, consumers message with brands on their own schedule, using natural language, to resolve their intents - all on their preferred messaging service. The core capabilities of the Conversational Space are voice and text-based interfaces, powered by AI and humans working together. Conversational Space is the simplest, most intuitive interface of all. •Conversational Cloud: LivePerson's enterprise-class, AI-powered Conversational Cloud platform empowers consumers to message their favorite brands, just as they do with friends and family. LivePerson’s Conversational AI offerings put the power of bot development, training, management and analysis into the hands of the contact center and its agents, the teams most familiar with how to structure sales and service conversations to drive successful outcomes. The platform enables what we call “the tango” of humans, AI and bots, whereby human agents act as bot managers, overseeing AI-powered conversations and seamlessly stepping into the flow when a personal touch is needed. Agents become ultra-efficient, leveraging the AI engine to serve up relevant content, define next-best actions and take over repetitive transactional work, so that the agent can focus on relationship building. By seamlessly integrating messaging with our proprietary Conversational AI, as well as third-party bots, the Conversational Cloud offers brands a comprehensive approach to scaling automations across their millions of customer conversations. Complementing our proprietary messaging and Conversational AI offerings are teams of technical, solutions and consulting professionals that have developed deep domain expertise in the implementation and optimization of conversational services across industries and messaging endpoints. We are a leading authority in the Conversational Space. LivePerson’s products, coupled with our domain knowledge, industry expertise and professional services, have been proven to maximize the effectiveness of the Conversational Space and deliver measurable return on investment. Certain of our customers have achieved the following advantages from our offerings: •the ability for each agent to manage as many as 40 messaging conversations at a time, as compared to one at a time for a voice agent and two to four at a time for a good chat agent. Adding AI and bots provides even greater scale to the number of conversations managed; •labor efficiency gains of at least two times that of voice agents, effectively cutting labor costs by at least 50%; •improving the overall customer experience, thereby fueling customer satisfaction score increases of up to 20 percentage points, and enhancing retention and loyalty; •more convenient, personalized and content-rich conversations that increase sales conversion by up to 20%, increase average order value and reduce abandonment; •more satisfied contact center agents, thereby reducing agent churn by up to 50%; •a valued connection with consumers via mobile devices, either through native applications, websites, text messages, or third-party messaging platforms; •leverage of spending that drives visitor traffic by increasing visitor conversions; •refinement and improvement of performance by understanding which initiatives deliver the highest rate of return; and •increased lead generation through a single platform that engages consumers through advertisements and listings on branded and third-party websites. As a “cloud computing” or software-as-a-service (SaaS) provider, LivePerson provides solutions on a hosted basis. This model offers significant benefits over premise-based software, including lower up-front costs, faster implementation, lower total cost of ownership, scalability, cost predictability, and simplified upgrades. Organizations that adopt a fully-hosted, multi-tenant architecture that is maintained by LivePerson eliminate the majority of the time, server infrastructure costs, and IT resources required to implement, maintain, and support traditional on-premise software. To further enhance our platform, in September 2020 LivePerson signed a partnership with Infosys, a leader in next-generation digital services and consulting. The Company is working with Infosys to transform our technology infrastructure on the public cloud, to build integrated solutions and a global practice around our Conversational Cloud to sell into their channels and global enterprise customer base, and to redefine how the world’s top brands communicate. More than 18,000 businesses, including HSBC, Orange, The Home Depot, and GM Financial use our conversational solutions to orchestrate humans and AI, at scale, and create a convenient, deeply personal relationship with their customers. LivePerson's consumer services offering is an online marketplace that connects independent service providers (Experts) who provide information and knowledge for a fee via mobile and online messaging with individual consumers (Users). Users seek assistance and advice in various categories including personal counseling and coaching, computers and programming, education and tutoring, spirituality and religion, and other topics. LivePerson was incorporated in the State of Delaware in November 1995 and the LivePerson service was introduced in November 1998. In April 2000, the Company completed an initial public offering and is currently traded on the NASDAQ Global Select Market and the Tel Aviv Stock Exchange. LivePerson is headquartered in New York City. In light of the COVID-19 pandemic and the Company’s strong performance working remotely, LivePerson has adopted an “employee-centric” workforce model that does not rely on traditional offices. Basis of Presentation The accompanying condensed consolidated financial statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 are unaudited. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the consolidated financial position of LivePerson as of March 31, 2021, and the consolidated results of operations, comprehensive loss and cash flows for the interim periods ended March 31, 2021 and 2020. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to these periods are unaudited. The results of operations for any interim period are not necessarily indicative of the results of operations for any other future interim period or for a full fiscal year. The condensed consolidated balance sheet as of December 31, 2020 has been derived from audited consolidated financial statements at that date. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2021. Principles of Consolidation The condensed consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates. Many of the Company’s estimates require increased judgment due to the significant volatility, uncertainty and economic disruption of the COVID-19 pandemic. The Company will continue to monitor the effects of the COVID-19 pandemic, and its estimates and judgments may change materially as new events occur or additional information becomes available. Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity”, which simplifies the accounting for convertible instruments by eliminating existing accounting models that require separation of a cash conversion or beneficial conversion feature from the host contract. Accordingly, a convertible debt instrument will be accounted as a single liability measured at its amortized cost and a convertible preferred stock will be accounted as a single equity instrument measured at its historical cost, as long as no other embedded features require bifurcation as derivatives and the convertible debt was not issued at a substantial premium. The ASU also simplifies the derivative scope exception for accounting for contracts in an entity's own equity by: •removing certain conditions required to meet the settlement criterion •clarifying that instruments that are not indexed to the issuer's own stock must be remeasured at fair value through earnings at each reporting period •clarifying the scope of reassessment guidance and disclosure requirements in Subtopic 815-40. The ASU also makes targeted improvements to the disclosure requirements for convertible instruments and earnings-per-share guidance. For SEC filers, excluding smaller reporting companies, the ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The ASU specifies that the guidance should be adopted as of the beginning of the annual fiscal year. The Company is assessing what impact ASU 2020-06 will have on its condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The new guidance is intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around franchise taxes, goodwill recognized for tax purposes, the allocation of current and deferred tax expenses among legal entities, among other minor changes. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company has adopted ASU 2019-12 in the first quarter of 2021 and determined that the ASU had no material impact on its condensed consolidated financial statements.

Revenue Recognition

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

The majority of the Company’s revenue is generated from monthly service revenues and related professional services from the sale of the LivePerson services. Revenues are recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. No single customer accounted for 10% or more of the Company’s total revenue for the three months ended March 31, 2021.

The Company determines revenue recognition through the following steps:

•identification of the contract, or contracts, with a customer;

•identification of the performance obligations in the contract;

•determination of the transaction price;

•allocation of the transaction price to the performance obligations in the contract; and

•recognition of revenue when, or as, the Company satisfies a performance obligation.

Total revenue of $107.9 million and $78.1 million was recognized during the three months ended March 31, 2021 and 2020, respectively.

Under Topic 606, the Company defers all incremental commission costs to obtain the contract (contract acquisition costs). The contract acquisition costs, which consist of prepaid sales commissions, have balances as of March 31, 2021 and December 31, 2020 of $40.9 million and $41.0 million, respectively. The Company amortizes these costs over the related period of benefit using the expected life of the customer contract, which the Company determines to be three to five years, which is consistent with the transfer to the customer of the services to which the asset relates. The Company classifies contract acquisition costs as long-term unless they have an original amortization period of one year or less.

Hosted Services- Business Revenue

Hosted Services- Business Revenue is reported at the amount that reflects the ultimate consideration expected to be received and primarily consists of fees that provide customers access to the Conversational Cloud, the Company’s enterprise-class, cloud-based platform. The Company has determined such access represents a stand-ready service provided continually throughout the contract term. As such, control and satisfaction of this stand-ready performance obligation is deemed to occur over time. The Company recognizes this revenue over time on a ratable basis over the contract term, beginning on the date that access to the Conversational Cloud platform is made available to the customer. The passage of time is deemed to be the most faithful depiction of the transfer of control of the services as the customer simultaneously receives and consumes the benefit provided by the Company’s performance. Subscription contracts are generally one year or longer in length, billed monthly, quarterly or annually in advance. There is no significant variable consideration related to these arrangements. Additionally, for certain of the Company’s larger customers, the Company may provide call center labor through an arrangement with one or more of several qualified vendors. For most of these customers, the Company passes the fee the Company incurs with the labor provider and its fee for the hosted services through to the Company’s customers in the form of a fixed fee for each order placed via the Company’s online engagement solutions. For these Gainshare (formerly “Pay for Performance”) arrangements in accordance with ASC-606, “Principal Agent Considerations,” the Company acts as a principal in a transaction if the Company controls the specified goods or services before they are transferred to the customer.

Professional Services Revenues

Professional Services Revenues primarily consists of fees for deployment and optimization services, as well as training delivered on an on-demand basis which is deemed to represent a distinct stand-ready performance obligation. Professional Services Revenues are reported at the amount that reflects the ultimate consideration the Company expects to receive in exchange for such services. Control for the majority of the Company Professional Services contracts passes over time to the customer and is recognized ratably over the contracted period, as the passage of time is deemed to be the most faithful depiction of the transfer of control. For certain deployment services, which are not deemed to represent a distinct performance obligation, revenue will be recognized in the same manner as the fee for access to the Conversational Cloud platform, and as such will be recognized on a straight-line basis over the contract term. For services billed on a fixed price basis, revenue is recognized over time based on the proportion performed using time and materials as the measure of progress toward complete satisfaction of the performance obligation. Professional service contracts are generally one year or longer in length, billed monthly, quarterly or annually in advance. There is no significant variable consideration related to these arrangements.

Remaining Performance Obligation

As of March 31, 2021, the aggregate amount of the total transaction price allocated in contracts with original duration of greater than one year to the remaining performance obligations was $330.6 million. Approximately 90% of the Company’s remaining performance obligations is expected to be recognized during the next 24 months, with the balance recognized thereafter. The aggregate balance of unsatisfied performance obligations represents contracted revenue that has not yet been recognized, and does not include contract amounts that are cancellable by the customer, amounts associated with optional renewal periods, and any amounts related to performance obligations, which are billed and recognized as they are delivered. The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less. Such remaining performance obligations represent unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606.

Contracts with Multiple Performance Obligations

Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the cloud applications sold, and the number and types of users within its contracts.

Hosted Services- Consumer Revenue

For revenue from the Company’s Consumer segment generated from online transactions between Experts and Users, revenue is recognized at an amount net of Expert fees in accordance with ASC 606, “Principal Agent Considerations,” primarily because the Expert is the primary obligor. The Company does not act as a principal in a transaction since the Company does not control the specified goods or services before they are transferred to the customer. Additionally, the Company performs as an agent without any risk of loss for collection, and is not involved in selecting the Expert or establishing the Expert’s fee. The Company collects a fee from the consumer and retains a portion of the fee, and then remits the balance to the Expert. Revenue from these transactions is recognized at the point in time when the transaction is complete and no significant performance obligations remain.

Deferred Revenues

The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance. The increase in the deferred revenue balance as of March 31, 2021 is primarily driven by cash payments received or due in advance of the Company’s performance obligations, partially offset by $46.7 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2020.

The following table presents deferred revenue by revenue source (amounts in thousands):


	Deferred Revenue
	As of March 31, 2021		As of December 31, 2020
Hosted services – Business	$	105,900	$	86,144
Hosted services – Consumer	875		835
Professional services – Business	1,640		1,869
Total deferred revenue - short term	$	108,415	$	88,848


Professional services – Business	573		409
Total deferred revenue - long term	$	573	$	409

Disaggregated Revenue

The following table presents the Company’s revenues disaggregated by revenue source (amounts in thousands):


	Three Months Ended
	March 31,
	2021		2020
Revenue:
Hosted services – Business	$	83,640	$	61,051
Hosted services – Consumer	9,011		6,240
Professional services	15,240		10,797
Total revenue	$	107,891	$	78,088

Revenue by Geographic Location

The following table presents the Company’s revenues attributable to domestic and foreign operations for the periods presented (amounts in thousands):


	Three Months Ended
	March 31,
	2021		2020
United States	$	68,782	$	48,549
Other Americas (1)	3,913		2,020
Total Americas	72,695		50,569
EMEA (2) (4)	21,760		19,491
APAC (3)	13,436		8,028
Total revenue	$	107,891	$	78,088

(1) Canada, Latin America and South America

(2) Europe, the Middle East and Africa (“EMEA”)

(3) Asia-Pacific (“APAC”)

(4) Includes revenues from the United Kingdom of $13.3 million and $12.6 million for the three months ended March 31, 2021 and 2020, respectively, and from the Netherlands of $1.3 million for the three months ended March 31, 2021 and 2020.

Information about Contract Balances

Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of the Company’s deferred revenue balance is related to Hosted Services - Business Revenue.

In some arrangements, the Company allows customers to pay for access to the Conversational Cloud over the term of the software license. The Company refers to these as subscription transactions. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables, anticipated to be invoiced in the next twelve months, are included in accounts receivable on the condensed consolidated balance sheet. Contract acquisition costs represent prepaid sales commissions. The opening and closing balances of the Company’s accounts receivable, unbilled receivables, contract acquisition costs and deferred revenues are as follows (amounts in thousands):


	Accounts Receivable		Unbilled Receivable		Contract Acquisition Costs noncurrent		Deferred Revenue (current)		Deferred Revenue (long term)
Opening Balance as of December 31, 2020	$	61,801	$	18,622	$	41,021	$	88,848	$	409
(Decrease) Increase, net	6,576		5,264		(166)		19,567		164
Ending Balance as of March 31, 2021	$	68,377	$	23,886	$	40,855	$	108,415	$	573

Accounts Receivable, Net

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities, which are included in accrued liabilities and other long-term liabilities) on the condensed consolidated balance sheet. Under the typical payment terms of the Company’s over time contracts, the customer pays the Company either performance-based payments or progress payments. Amounts billed and due from the Company’s customers are classified as receivables on the condensed consolidated balance sheet. Accounts receivable is presented net of an allowance for doubtful accounts and sales reserve of $5.4 million and $2.7 million as of March 31, 2021, respectively and $5.3 million and $3.4 million as of December 31, 2020, respectively.

An allowance for doubtful accounts is established to recognize expected credit losses on accounts receivable balances. Judgment is required in the estimation of the allowance and the Company evaluates the collectability of its accounts receivable based on a combination of factors. If the Company becomes aware of a customer’s inability to meet its financial obligations, a specific allowance is recorded to reduce the net receivable to the amount reasonably believed to be collectible from the customer. For all other customers, the Company uses an aging schedule and recognizes allowances for doubtful accounts based on the creditworthiness of the debtor, the age and status of outstanding receivables, the current business environment and the Company’s historical collection experience adjusted for current expectations for the customer or industry. Accounts receivable are written off against the allowance for uncollectible accounts when the Company determines amounts are no longer collectible.


	Three Months
Allowance for doubtful accounts (in thousands):	March 31, 2021
Balance at beginning of the year	$	5,344
Additions Charged to Costs and Expenses	801
Deductions/Write-offs	(749)
Balance as of March 31, 2021	$	5,396

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 12
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Section 50
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+ Details

Net Loss Per Share

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Net Loss Per Share

The Company calculates earnings per share (“EPS”) in accordance with the provisions of ASC 260-10. Under the guidance, basic EPS excludes dilution for common stock equivalents and is computed by dividing net income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. All options, warrants or other potentially dilutive instruments issued for nominal consideration are required to be included in the calculation of basic and diluted net income attributable to common stockholders. Diluted EPS is calculated using the treasury stock method and reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock.

Diluted net loss per share of common stock for the three months ended March 31, 2021 does not include the effect of 6,703,307 outstanding common stock awards, as the effect of their inclusion is anti-dilutive. Diluted net loss per share of common stock for the three months ended March 31, 2020 does not include the effect of 9,128,000 outstanding common stock awards, as the effect of their inclusion is anti-dilutive.

A reconciliation of shares used in calculating basic and diluted net loss per share follows:


	Three Months Ended
	March 31,
	2021	2020
Basic	67,901,809	64,388,850
Effect of assumed exercised options	—	—
Diluted	67,901,809	64,388,850

In December 2020, the Company issued $517.5 million aggregate principal amount of 0% Convertible Senior Notes due 2026 (“2026 Notes”) in a private placement, which amount includes $67.5 million aggregate principal amount of the 2026 Notes issued pursuant to the exercise in full by the initial purchasers of their option to purchase additional 2026 Notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of its outstanding 2026 Notes upon conversion in cash and any excess over the principal amount in shares of the Company’s common stock. The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the initial conversion price of $75.23 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest. Holders of the 2026 Notes may convert their 2026 Notes at their option at any time prior to the close of business on the business day immediately preceding August 15, 2026, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day as determined by the Company; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture governing the 2026 Notes) per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2026 Notes on each such trading day; (3) with respect to any Notes that LivePerson calls for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after August 15, 2026, holders may convert all or any portion of their 2026 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances.

In March 2019, the Company issued $230.0 million aggregate principal amount of 0.750% Convertible Senior Notes due 2024 (“2024 Notes” and, together with the 2026 Notes, the “Notes”) in a private placement, which amount includes $30.0 million aggregate principal amount of the 2024 Notes issued pursuant to the exercise in full by the initial purchasers of their option to purchase additional 2024 Notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of its outstanding 2024 Notes in cash and any excess over the principal amount in shares of the Company’s common stock. The Company uses the treasury stock method for calculating any potential

dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the initial conversion price of 130% of $38.58 per share for the 2024 Notes. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid interest. Holders of the 2024 Notes may convert their 2024 Notes at their option at any time prior to the close of business on the business day immediately preceding November 1, 2023, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2024 Notes on each applicable trading day as determined by the Company; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture governing the 2024 Notes) per $1,000 principal amount of 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2024 Notes on each such trading day; or (3) upon the occurrence of specified corporate events. On or after November 1, 2023, holders may convert all or any portion of their 2024 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances.

See Note 8 for a full description of the Notes.

Segment Information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Information

The Company accounts for its segment information in accordance with the provisions of ASC 280-10, “Segment Reporting.” ASC 280-10 establishes annual and interim reporting standards for operating segments of a company. ASC 280-10 requires disclosures of selected segment-related financial information about products, major customers, and geographic areas based on the Company’s internal accounting methods. The Company is organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment enables brands to leverage the Conversational Cloud’s sophisticated intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The Consumer segment facilitates online transactions between independent service providers (“Experts”) and individual consumers (“Users”) seeking information and knowledge for a fee via mobile and online messaging. Both segments currently generate their revenue primarily in the United States. The chief operating decision maker, who is the chief executive officer, evaluates performance, makes operating decisions, and allocates resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Company’s condensed consolidated financial statements which are described in the summary of Critical Accounting Policies and Estimates. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangibles to the segments, but it does not allocate product development expenses, general and administrative expenses, restructuring costs and income tax expense because management does not use this information to measure performance of the operating segments. There are currently no inter-segment sales.

Summarized financial information by segment for the three months ended March 31, 2021, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):


	Business		Consumer		Corporate		Consolidated
Revenue:
Hosted services – Business	$	83,640	$	—	$	—	$	83,640
Hosted services – Consumer	—		9,011		—		9,011
Professional services	15,240		—		—		15,240
Total revenue	98,880		9,011		—		107,891
Cost of revenue	31,610		1,909		—		33,519
Sales and marketing	30,203		6,750		—		36,953
Amortization of purchased intangibles	375		—		—		375
Unallocated corporate expenses	—		—		50,672		50,672
Operating income (loss)	$	36,692	$	352	$	(50,672)	$	(13,629)

Summarized financial information by segment for the three months ended March 31, 2020, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):


	Business		Consumer		Corporate		Consolidated
Revenue:
Hosted services – Business	$	61,051	$	—	$	—	$	61,051
Hosted services – Consumer	—		6,240		—		6,240
Professional services	10,797		—		—		10,797
Total revenue	71,848		6,240		—		78,088
Cost of revenue	21,345		1,475		—		22,820
Sales and marketing	37,469		5,211		—		42,680
Amortization of purchased intangibles	405		—		—		405
Unallocated corporate expenses	—		—		45,375		45,375
Operating income (loss)	$	12,629	$	(446)	$	(45,375)	$	(33,192)

Geographic Information

The Company is domiciled in the United States and has international operations around the globe. The following table presents the Company’s long-lived assets by geographic region as of the dates presented (amounts in thousands):


	March 31,		December 31,
	2021		2020
United States	$	207,165	$	202,275
Israel	18,672		16,657
Australia	13,494		13,792
Netherlands	7,962		8,301
Other (1)	16,791		16,596
Total long-lived assets	$	264,084	$	257,621

(1) United Kingdom, Germany, Japan, France, and Italy

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2021 are as follows (amounts in thousands):


	Business		Consumer		Consolidated
Balance as of December 31, 2020	$	87,168	$	8,024	$	95,192
Adjustments to goodwill:
Foreign exchange adjustment	(105)		—		(105)
Balance as of March 31, 2021	$	87,063	$	8,024	$	95,087

Intangible Assets

Intangible assets are summarized as follows (amounts in thousands):


	As of March 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	30,460	$	(27,183)	$	3,277	5.3 years
Customer relationships	16,974		(14,186)		2,788		8.4 years
Patents	5,876		(962)		4,914		13.2 years
Other	314		(235)		79		2.2 years
Total	$	53,624	$	(42,566)	$	11,058


	As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	30,499	$	(26,818)	$	3,681	5.4 years
Customer relationships	16,981		(13,982)		2,999		8.4 years
Patents	5,076		(908)		4,168		12.5 years
Other	314		(235)		79		2.2 years
Total	$	52,870	$	(41,943)	$	10,927

Amortization expense is calculated over the estimated useful life of the asset. Aggregate amortization expense for intangible assets was $1.6 million and $0.7 million for the three months ended March 31, 2021 and 2020, respectively. For the three months ended March 31, 2021 and 2020, respectively, a portion of this amortization is included in cost of revenue. Estimated amortization expense for the next five years is as follows (amounts in thousands):


	Estimated Amortization Expense
Remaining 2021	$	1,977
2022	2,266
2023	985
2024	784
2025	223
Thereafter	4,823
Total	$	11,058

Property and Equipment

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment

The following table presents the detail of property and equipment for the periods presented (amounts in thousands):


	March 31, 2021		December 31, 2020
Computer equipment and software	$	111,709	$	107,666

Internal-use software development costs	94,614		86,454
Finance lease right-of-use assets	9,157		10,045
	215,480		204,165
Less: accumulated depreciation	(104,166)		(98,110)
Total	$	111,314	$	106,055

Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2021

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

The following table presents the detail of accrued expenses and other current liabilities for the periods presented (amounts in thousands):


	March 31, 2021		December 31, 2020
Payroll and other employee related costs	$	27,299	$	39,820
Professional services and consulting and other vendor fees	48,477		38,796
Unrecognized tax benefits	2,032		2,039
Sales commissions	3,680		6,988

Restructuring (see Note 13)	4,914		4,732
Non Income Tax	2,232		2,954
Other	7,712		4,541
Total	$	96,346	$	99,870

Convertible Senior Notes and Capped Call Transactions

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Convertible Senior Notes and Capped Call Transactions

March 2019 Convertible Senior Notes

In March 2019, the Company issued $230.0 million aggregate principal amount of its 0.750% Convertible Senior Notes due 2024 in a private placement, which amount includes $30.0 million aggregate principal amount of such Notes issued pursuant to the exercise in full by the initial purchasers of their option to purchase additional “2024 Notes”. Interest on the Notes is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2019.

The 2024 Notes will mature on March 1, 2024, unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. The total net proceeds from the offering of the 2024 Notes, after deducting debt issuance costs, paid or payable by the Company, was approximately $221.4 million.

Each $1,000 in principal amount of the 2024 Notes is initially convertible into 25.9182 shares of the Company’s common stock par value $0.001, which is equivalent to an initial conversion price of approximately $38.58 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its 2024 Notes in connection with such a corporate event. The 2024 Notes are not redeemable prior to the maturity date of the 2024 Notes and no sinking fund is provided for the 2024 Notes. If the Company undergoes a fundamental change (as defined in the indenture governing the 2024 Notes) prior to the maturity date, holders may require the Company to repurchase for cash all or any portion of their Notes in principal amounts of $1,000 or a multiple thereof at a fundamental change repurchase price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Holders of the 2024 Notes may convert their 2024 Notes at their option at any time prior to the close of business on the business day immediately preceding November 1, 2023, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2024 Notes on each applicable trading day as determined by the Company; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture governing the 2024 Notes) per $1,000 principal amount of 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2024 Notes on each such trading day; or (3) upon the occurrence of specified corporate events. On or after November 1, 2023, holders may convert all or any portion of their 2024 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.

Upon conversion, it is the Company’s current intent to settle the principal amount of its outstanding 2024 Notes in cash and any excess over the principal amount in shares of the Company’s common stock.

During the quarter ended March 31, 2021, the conditions allowing holders of the 2024 Notes to convert were met and, thus, holders of the 2024 Notes maintain the option to convert their 2024 Notes during the quarter ending March 31, 2021.

The 2024 Notes are senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2024 Notes; equal in right of payment with the Company’s existing and future liabilities that are not so subordinated; effectively subordinated to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of current or future subsidiaries of the Company.

In accounting for the issuance of the 2024 Notes, the Company separated the 2024 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $52.9 million and was determined by deducting the fair value of the liability component from the par value of the 2024 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense at an effective interest rate over the contractual terms of the 2024 Notes.

In accounting for the transaction costs related to the 2024 Notes, the Company allocated the total amount incurred of approximately $8.6 million to the liability and equity components of the 2024 Notes based on the proportion of the proceeds

allocated to the debt and equity components. Issuance costs attributable to the liability component were approximately $6.6 million, were recorded as an additional debt discount and are amortized to interest expense using the effective interest method over the contractual term of the 2024 Notes. Issuance costs attributable to the equity component were approximately $2.0 million and recorded as a reduction of additional paid in capital in stockholders’ equity.

In connection with the offering of the 2024 Notes, the Company entered into privately-negotiated capped call option transactions with certain counterparties (the “2024 capped calls”). The 2024 capped calls each have an initial strike price of approximately $38.58 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2024 Notes. The 2024 capped calls have initial cap prices of $57.16 per share, subject to certain adjustment events. The 2024 capped calls cover, subject to anti-dilution adjustments, approximately 5.96 million shares of common stock. The 2024 capped calls are generally intended to reduce or offset the potential dilution to the common stock upon any conversion of the 2024 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The 2024 capped calls expire on March 1, 2024, subject to earlier exercise. The 2024 capped calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the 2024 capped calls are subject to certain specified additional disruption events that may give rise to a termination of the 2024 capped calls, including changes in law, failure to deliver, and hedging disruptions. The 2024 capped calls are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost of $23.2 million incurred to purchase the 2024 capped calls was recorded as a reduction to additional paid-in capital in the accompanying consolidated balance sheet.

The remaining term over which the March 2019 Convertible Senior Notes debt discount and debt issuance costs will be amortized is 2.9 years. The effective interest rate on the debt was 4.35% for the period ended March 31, 2021.

December 2020 Convertible Senior Notes

In December 2020, the Company issued $517.5 million aggregate principal amount of its 0% Convertible Senior Notes due 2026 (“2026 Notes” and, together with the 2024 Notes, the “Notes”) in a private placement, which amount includes $67.5 million aggregate principal amount of such Notes issued pursuant to the exercise in full by the initial purchasers of their option to purchase additional “2026 Notes”.

The 2026 Notes will mature on December 15, 2026, unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. The total net proceeds from the offering of the 2026 Notes, after deducting debt issuance costs, paid or payable by the Company, was approximately $505.3 million.

Each $1,000 in principal amount of the 2026 Notes is initially convertible into 13.2933 shares of the Company’s common stock par value $0.001, which is equivalent to an initial conversion price of approximately $75.23 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its 2026 Notes in connection with such a corporate event. The 2026 Notes are not redeemable prior to the maturity date of the 2026 Notes and no sinking fund is provided for the 2026 Notes. If the Company undergoes a fundamental change (as defined in the indenture governing the 2026 Notes) prior to the maturity date, holders may require the Company to repurchase for cash all or any portion of their Notes in principal amounts of $1,000 or a multiple thereof at a fundamental change repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid special interest to, but excluding, the fundamental change repurchase date.

Holders of the 2026 Notes may convert their 2026 Notes at their option at any time prior to the close of business on the business day immediately preceding August 15, 2026, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day as determined by the Company; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture governing the 2026 Notes) per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2026 Notes on each such trading day; (3) with respect to any Notes that LivePerson calls for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after August 15, 2026, holders may convert all or any portion of their 2026 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.

Upon conversion, it is the Company’s current intent to settle the principal amount of its outstanding 2026 Notes in cash and any excess in shares of the Company’s common stock.

During the three months ended March 31, 2021, the conditions allowing holders of the 2026 Notes to convert were not met.

The 2026 Notes are senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2026 Notes; equal in right of payment with the Company’s existing and future liabilities that are not so subordinated; effectively subordinated to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of current or future subsidiaries of the Company.

In accounting for the issuance of the 2026 Notes, the Company separated the 2026 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $162.5 million and was determined by deducting the fair value of the liability component from the par value of the 2026 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense at an effective interest rate over the contractual term of the 2026 Notes.

In accounting for the transaction costs related to the 2026 Notes, the Company allocated the total amount incurred of approximately $12.2 million to the liability and equity components of the 2026 Notes based on the proportion of the proceeds allocated to the debt and equity components. Issuance costs attributable to the liability component were approximately $8.5 million, were recorded as an additional debt discount and are amortized to interest expense using the effective interest method over the contractual terms of the 2026 Notes. Issuance costs attributable to the equity component were approximately $3.7 million and recorded as a reduction of additional paid in capital in stockholders’ equity.

In connection with the offering of the 2026 Notes, the Company entered into privately-negotiated capped call option transactions with certain counterparties (the “2026 capped calls”). The 2026 capped calls each have an initial strike price of approximately $75.23 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes. The 2026 capped calls have initial cap prices of $105.58 per share, subject to certain adjustment events. The 2026 capped calls cover, subject to anti-dilution adjustments, approximately 6.88 million shares of common stock. The 2026 capped calls are generally intended to reduce or offset the potential dilution to the common stock upon any conversion of the 2026 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The 2026 capped calls expire on December 15, 2026, subject to earlier exercise. The 2026 capped calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the 2026 capped calls are subject to certain specified additional disruption events that may give rise to a termination of the 2026 capped calls, including changes in law, failure to deliver, and hedging disruptions. The 2026 capped calls are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost of $46.1 million incurred to purchase the 2026 capped calls was recorded as a reduction to additional paid-in capital in the accompanying consolidated balance sheet.

The remaining term over which the December 2020 Convertible Senior Notes debt discount and debt issuance costs will be amortized is 5.7 years. The effective interest rate on the debt was 6.33% for the period ended March 31, 2021.

The net carrying amount of the liability component of the Notes was as follows (in thousands):


	As of March 31, 2021		As of December 31, 2020
Principal	$	747,500	$	747,500
Unamortized discount	(188,151)		(196,269)
Unamortized issuance costs	(12,190)		(12,799)
Net carrying amount	$	547,159	$	538,432

The net carrying amount of the equity component of the Notes was as follows (in thousands):


	As of March 31, 2021
Proceeds allocated to the conversion options (debt discount)	$	215,434
Issuance costs	(5,783)
Net carrying amount	$	209,651

The following table sets forth the interest expense recognized related to the Notes (in thousands):


	Three Months Ended March 31,
	2021		2020
Contractual interest expense	$	431	$	417
Amortization of issuance costs	609		298
Amortization of debt discount	8,118		2,368
Total interest expense	$	9,158	$	3,083

Interest expense of $9.2 million is reflected as a component of interest (expense) income, net in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2021.

Acquisitions	3 Months Ended
Acquisitions	Mar. 31, 2021
Business Combinations [Abstract]
Acquisitions	Acquisitions AdvantageTec Inc. In October 2018, the Company entered into a stock purchase agreement to acquire the outstanding equity interest of AdvantageTec Inc. (“AdvantageTec”), a leading provider of texting solutions for service departments of automotive dealerships that helps enable Conversational Commerce across the entire dealership, including both front end/variable operations (new and used vehicle sales) and back end/fixed operations (parts and services). The purchase agreement was for total consideration of approximately $11.2 million, which included approximately $6.0 million in cash, approximately $4.3 million in shares of common stock, and approximately $0.9 million of potential earn-out consideration in cash and shares of common stock. The earn-out was contingent upon achieving certain targeted financial, strategic and integration objectives and milestones and is included as part of the purchase price. During 2019, the Company recorded a $0.2 million fair value re-measurement adjustment and made payments of $0.5 million in earn-out consideration. The Company settled the remaining contingent earn-out of approximately $0.3 million in stock. During the three months ended March 31, 2021, there was an additional earn-out adjustment of approximately $0.1 million. The purchase price allocation resulted in approximately $9.1 million of goodwill and approximately $2.2 million of intangible assets. The goodwill will not be deductible for tax purposes. The intangible assets are being amortized over their expected period of benefit. A deferred tax liability for the identified intangibles has been recorded. AdvantageTec enhances the Company’s messaging platform available for the automotive industry and is included in the Company’s business segment.

Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company measures its cash equivalents at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

•Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

•Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

Financial Assets and Liabilities

The carrying amount of cash, accounts receivable, and accounts payable approximate their fair value due to their short-term nature. The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of March 31, 2021 and December 31, 2020, are summarized as follows (amounts in thousands).


	March 31, 2021								December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	518,212	$	—	$	—	$	518,212	$	328,195	$	—	$	—	$	328,195
Total assets	$	518,212	$	—	$	—	$	518,212	$	328,195	$	—	$	—	$	328,195

Liabilities:
Contingent earn-out	$	—	$	—	$	132	$	132	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	132	$	132	$	—	$	—	$	—	$	—

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions based on the best information available.

The Company’s money market funds are measured at fair value on a recurring basis based on quoted market prices in active markets and are classified as level 1 within the fair value hierarchy. The Company’s contingent earn-out liability is measured at fair value on a recurring basis and is classified as level 3 within the fair value hierarchy. On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived tangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. The Company uses an income approach and inputs that constitute level 3. During the third quarter of each year, the Company evaluates goodwill for impairment at the reporting unit level. The Company uses qualitative factors in accordance with ASU No. 2011-08 to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a goodwill impairment test. This measurement is classified based on level 3 input.

As of March 31, 2021, the fair value of the Notes, as further described in Note 8 above, was approximately $572 million. Management determines the fair value by utilizing an independent valuation specialist using the antithetic variable technique which is considered a level 2 fair value measurement.

The Company recorded a contingent earn-out of $2.4 million in December 2018 in connection with the acquisitions of Conversable, Inc. and AdvantageTec. The contingent earn-out is based on achieving certain targeted financial, strategic, and integration objectives. The unobservable inputs considered are probability factors and the time value of money. During the year ended December 31, 2020, the contingent earn-out decreased by $0.6 million due to a decrease in re-measurement to fair value of AdvantageTec, of approximately $0.3 million and payments of approximately $0.3 million in shares. During the three months ended March 31, 2021, the contingent earn-out increased by $0.1 million. See Note 9 for a full description of the AdvantageTec acquisition.

The changes in fair value of the level 3 liabilities are as follows (amounts in thousands):


	Contingent Earn-Out
	March 31, 2021		December 31, 2020
Balance, Beginning of period	$	—	$	557

AdvantageTec Inc. fair value adjustment (see Note 9)	132		(263)
Payments	—		(294)
Balance, End of period	$	132	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Contractual Obligations

The Company has entered into various non-cancelable operating lease agreements for certain of its offices and vehicles. The Company has also entered into various non-cancelable finance lease agreements for certain network equipment. The leases have initial lease terms ranging from 1 to 12 years. Payments due under the lease contracts include primarily fixed payments. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

The Company has evaluated its facility leases and determined which leases met the definition of the new standard in accordance with Topic 842. The Company also performed an evaluation of their other contracts with suppliers in accordance with Topic 842 and have determined that, except for the facilities, car, and network equipment leases described above, none of its supply contracts contain a lease. Further, the Company has made an accounting policy election to keep leases with a term of twelve months or less off the balance sheet. This policy applies to all classes of the underlying assets. The Company will recognize those lease payments and associated interest expense in the consolidated statement of operations evenly over the lease term.

The Company elected the “package of practical expedients,” which permits the Company not to reassess under ASC 842 its prior conclusions about lease identification, lease classification and initial direct costs. The Company also made a policy election not to separate non-lease components from lease components. Furthermore, the Company elected not to capitalize leases with a term of 12 months or less and not to recognize the lease expense for such leases generally on a straight-line basis over the lease term.

The determination of the discount rate used to calculate the present value of the right-of-use assets and lease liabilities depends on whether an interest rate is implicit in the lease or not. If a rate is implicit in the lease, that rate is used when calculating the present value of lease payments. If the rate is not readily determinable, which is generally the case for the Company, the Company’s incremental borrowing rate (“IBR”) as of the date of inception of the lease is used (for initial measurement, the IBR was determined as of the adoption date of the standard). The IBR is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The Company used a ratings benchmark report against its peers in the technology sector.

In connection with the leases, the Company recognized operating lease right-of-use assets of $0.4 million and $0.6 million and an aggregate lease liability of $11.3 million and $12.9 million in its condensed consolidated balance sheet as of March 31, 2021 and December 31, 2020, respectively.

The Company has operating and finance leases for its corporate offices and other service agreements. The Company’s leases have remaining lease terms of 1 to 5 years, some of which include options to extend. The Company’s lease expense for the three months ended March 31, 2021 and 2020, consisting entirely of operating leases, was approximately $1.9 million and $3.4 million, respectively.

On July 13, 2020, the Company announced its decision to transition to an employee-centric model under which employees will work remotely rather than in traditional offices. In connection with this decision, the Company abandoned 14 leases in its global portfolio of office leases during the twelve months ended December 31, 2020. As a result, the Company recognized accelerated amortization to fully reduce the carrying value of the associated right of use assets (“ROU assets”) between the decision date, which was determined to be July 13, 2020 and the cease use date. There were no changes to the accounting for the lease liabilities associated with the leased office spaces. Additionally, the Company recognized accelerated depreciation of fixed assets that were determined no longer to be of future economic benefit to the Company based on the decision to vacate the leased office space. Lease restructuring expenses of $24.3 million are included in restructuring costs in the condensed consolidated statements of operations for the twelve months ended December 31, 2020. The Company also incurred other non-recurring expenses of $5.1 million in restructuring costs in the condensed consolidated statements of operations for the twelve months ended December 31, 2020 associated with the transition to an employee-centric workforce model that does not rely on traditional offices. These expenses include termination penalties, moving expenses, storage expenses and incremental legal and consulting fees. The associated liability is presented on the condensed consolidated balance sheets within accrued expenses and other current liabilities as of March 31, 2021. Subsequent adjustments to these liabilities, including final settlement of the amounts, will be reflected in future period earnings.

The Company continues to actively assess its global lease portfolio. However, any additional de-recognition of ROU assets and incurrence of various one-time expenses in connection with early termination of additional leases are not expected to be material to the Company’s financial condition or results of operations.

Supplemental cash flow information related to leases for the quarters ended March 31, 2021 and 2020 are as follows (in thousands):


	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	387	$	1,986
Operating cash flows for finance leases	94		—
Financing cash flows for finance leases	859		—

The components of lease costs for the quarters ended March 31, 2021 and 2020 are as follows (in thousands):


	Three Months Ended March 31,
	2021		2020
Finance lease cost
Amortization of right-of-use assets	$	888	$	—
Interest	94		—
Operating lease cost	1,857		1,397
Total lease cost	2,839		1,397

Supplemental balance sheet information related to leases was as follows:


	As of March 31, 2021			As of December 31, 2020
Operating Leases	(in thousands, except lease term and discount rate)
Right-of-use asset, net	$	437		$	614

Current operating lease liability	5,097			5,718
Long term operating lease liability	6,170			7,180
Total operating lease liability	11,267			$	12,898

Finance Leases
Right-of-use asset, net	9,157			10,045

Current finance lease liability	3,524			3,488
Long term finance lease liability	5,280			6,176
Total finance lease liability	8,804			9,664

Weighted Average Remaining Lease Term
Operating leases	2.9 years			3.0 years
Finance leases	2.6 years			2.8 years

Weighted Average Discount Rate
Operating leases	7		%	7		%
Finance leases	4		%	4		%

Future minimum lease payments under non-cancellable operating and finance leases (with an initial or remaining lease terms in excess of one year) are as follows (amounts in thousands):


Quarter ending March 31, 2021:	Operating Leases		Finance Leases
2021 (remaining nine months for March 31, 2021)	$	4,669	$	2,861
2022	3,788		3,814
2023	1,953		2,572
2024	1,171		—
2025	636		—
Thereafter	265		—
Total minimum lease payments	12,482		9,247
Less: present value adjustment	(1,215)		(443)
Present value of lease liabilities	$	11,267	$	8,804

The timing and amounts of future minimum lease payments under non-cancellable operating leases in the above table may be subject to change as a result of the restructuring (see Note 13).

Employee Benefit Plans

In 2019, the Company’s 401(k) policy was changed to a Safe Harbor Plan, whereby the Company matches 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation. Furthermore, the match is immediately vested. Salaries and related expenses include $0.9 million of employer matching contributions for the three months ended March 31, 2021 and 2020.

Letters of Credit

As of March 31, 2021, the Company has a letter of credit totaling $0.6 million as a security deposit for the due performance by the Company of the terms and conditions of a supply contract. As a result of the Company’s transition to an employee-centric model, there were two draws against the Company’s letters of credit in the aggregate amount of $1.8 million in connection with exiting leases in Alpharetta, Georgia and Israel.

Non Income Tax Matters

The Company is in the process of finalizing its sales tax liability analysis for states in which it has economic nexus. During the first quarter of 2020, the Company determined it was probable the Company would be subject to sales tax liabilities plus applicable interest in these states and has estimated the potential exposure to range between $2.5 million to $6.3 million. The Company determined that its best estimate of what would be reasonably expected for the Company to settle the potential exposure was $2.5 million and accordingly, the Company accrued this amount with a corresponding charge to earnings as of March 31, 2020. As of March 31, 2021, there is a $2.0 million accrual balance.

COVID-19 Pandemic

In December 2019, a novel coronavirus disease (“COVID-19”) was first reported. On March 11, 2020, due to worldwide spread of the virus, the World Health Organization characterized COVID-19 as a pandemic. The COVID-19 global pandemic has resulted in a widespread health crisis, and the resulting impact on governments, businesses and individuals and actions taken by them in response to the situation have resulted in widespread economic disruptions, significantly affecting broader economies, financial markets, and overall demand for the Company’s products. The COVID-19 outbreak also has caused increased uncertainty in estimates and assumptions affecting the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities in the Company’s Condensed Consolidated Financial Statements as the extent and period of recovery from the COVID-19 outbreak and related economic disruption is difficult to forecast.

The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to, the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19. The accounting matters assessed included, but were not limited to, the Company’s allowance for credit losses and the carrying value of the goodwill and other long-lived assets. While there was not any significant impact to the operations of the Company, during the twelve months ended December 31, 2020, the Company moved to an employee-centric model under which employees will work remotely rather than in traditional offices due to concerns about COVID-19. As a result of this decision, the Company recognized accelerated amortization to fully reduce the carrying value of the associated ROU assets for 14 leases within its global lease portfolio, which is a material impact to the Company’s consolidated financial statements as of and for the twelve months ended December 31, 2020. Refer to earlier paragraphs of this Note 11 for a detailed discussion of the impacts of this lease restructuring.

The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in other material impacts to the Company’s consolidated financial statements in future reporting periods.

Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

As of March 31, 2021, there were 200,000,000 shares of common stock authorized, 71,351,202 shares issued, and 68,641,372 shares outstanding. As of December 31, 2020, there were 200,000,000 shares of common stock authorized, 70,264,265 shares issued and 67,554,435 shares outstanding. The par value for shares of common stock is $0.001 per share.

On November 12, 2019, the Company filed an amendment to its Certificate of Incorporation to authorize an additional 100,000,000 shares of common stock.

Preferred Stock

As of March 31, 2021 and December 31, 2020, there were 5,000,000 shares of preferred stock authorized, and zero shares issued and outstanding. The par value for shares of preferred stock is $0.001 per share.

Stock Repurchase Program

From 2012 through 2018, the Company had a stock repurchase program in place pursuant to which the Company was authorized to repurchase shares of its common stock, in the open market or privately negotiated transactions, at times and prices considered appropriate by the Board of Directors depending upon prevailing market conditions and other corporate considerations. The timing and actual number of shares repurchased depended on a variety of factors including the timing of open trading windows, price, corporate and regulatory requirements and other market conditions. The program was discontinued at the end of 2018. The Company may or may not enter into a new stock repurchase program in the future.

Stock-Based Compensation

The Company follows ASC 718-10, “Stock Compensation,” which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award with limited exceptions. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

The Company’s forfeiture rate assumptions, which estimate the share-based awards that will ultimately vest, requires judgment, and to the extent actual results or updated estimates differ from management's current estimates, such amounts will be recorded as a cumulative adjustment in the period of change and could be materially different from share-based compensation expense recorded in prior periods.

The per share weighted average fair value of stock options granted was $31.60 and $8.18 during the three months ended March 31, 2021 and 2020, respectively. The fair value of each option grant is estimated on the date of grant, adjusted for estimated forfeitures, using the Black-Scholes option-pricing model with the following weighted average assumptions:


	Three Months Ended March 31,
	2021	2020
Dividend yield	0.0%	0.0%
Risk-free interest rate	0.46%	0.66%
Expected life (in years)	5	5
Historical volatility	53.94%	46.50%

A description of the methods used in the significant assumptions used to estimate the fair value of stock-based compensation awards follows:

Dividend yield – The Company uses 0% as it has never issued dividends and does not anticipate issuing dividends in the near term.

Risk-free interest rate – The Company uses the market yield on U.S. Treasury securities at five years with constant maturity, representing the current expected life of stock options in years.

Expected life – The Company uses historical data to estimate the expected life of a stock option.

Historical volatility – The Company uses a trailing five year from grant date to determine volatility.

Stock Option Plans

During 1998, the Company established the Stock Option and Restricted Stock Purchase Plan (the “1998 Plan”). Under the 1998 Plan, the Board of Directors could issue incentive stock options or nonqualified stock options to purchase up to 5,850,000 shares of common stock. The 2000 Stock Incentive Plan (the “2000 Plan”) succeeded the 1998 Plan. Under the 2000 Plan, the options which had been outstanding under the 1998 Plan were incorporated in the 2000 Plan increasing the number of shares available for issuance under the plan by approximately 4,150,000, thereby reserving for issuance 10,000,000 shares of common stock in the aggregate.

The Company established the 2009 Stock Incentive Plan (the “2009 Plan”) as a successor to the 2000 Plan. Under the 2009 Plan, the options which had been outstanding under the 2000 Plan were incorporated into the 2009 Plan and the Company increased the number of shares available for issuance under the plan by 6,000,000. The Company amended the 2009 Plan (the “Amended 2009 Plan”) effective June 7, 2012. The Amended 2009 Plan increased the number of shares authorized for issuance

under the plan by an additional 4,250,000. On June 2, 2017, the Company’s Board of Directors amended and restated the Amended 2009 Plan effective April 30, 2017. The amended and restated plan increased the number of shares authorized for issuance under the plan by an additional 4,000,000.

On April 11, 2019, the Company’s Board of Directors adopted, and on June 6, 2019, the Company’s stockholders approved, the 2019 Stock Incentive Plan (“2019 Stock Incentive Plan”) to replace the Amended 2009 Plan, which was set to expire under its terms on June 9, 2019. Under the 2019 Stock Incentive Plan, the number of shares underlying options and other equity awards which remain outstanding, as well as the number of shares that remained available for grant, under the Amended 2009 Plan and under the Amended 2000 Plan were incorporated, as of June 6, 2019, into the 2019 Stock Incentive Plan. In addition, under the 2019 Stock Incentive Plan, 4,250,000 new shares were authorized for issuance.

On June 11, 2020, the Company’s Board of Directors adopted, and on June 17, 2020, the company’s stockholders approved, the amendments to the LivePerson, Inc. 2019 Stock Incentive Plan. In addition, under the 2019 Stock Incentive Plan, 3,000,000 new shares were authorized for issuance.

The number of shares authorized for issuance under the 2019 Stock Incentive Plan, the Amended 2009 Plan, and the 2000 Plan is 35,067,744 shares in the aggregate. Options to acquire common stock granted thereunder have 10-year terms. As of March 31, 2021, approximately 2.6 million shares of common stock remained available for issuance under the 2019 Stock Incentive Plan (taking into account all option exercises and other equity award settlements through March 31, 2021).

Employee Stock Purchase Plan

In June 2010, the Company’s stockholders approved the 2010 Employee Stock Purchase Plan with 1,000,000 shares of common stock initially reserved for issuance. Subject to stockholder approval, which was obtained on June 2, 2017, the Company’s Board of Directors amended and restated the 2010 Employee Stock Purchase Plan effective April 30, 2017. The amended and restated plan increased the number of shares authorized for issuance under the plan by an additional 1,000,000, thereby reserving for issuance 2,000,000 shares of common stock in the aggregate.

On April 11, 2019, the Company’s Board of Directors adopted, and on June 6, 2019, the Company’s stockholders approved, the 2019 Employee Stock Purchase Plan (the “2019 Employee Stock Purchase Plan”) to replace the Amended and Restated 2010 Employee Stock Purchase Plan which was set to expire under its terms in June 2020. There are 1,000,000 shares authorized and reserved for issuance under the 2019 Employee Stock Purchase Plan. As of March 31, 2021, approximately 0.8 million shares of common stock remain available for issuance under the 2019 Employee Stock Purchase Plan (taking into account all share purchases through March 31, 2021).

Inducement Plan

During January 2018, the Company established the Inducement Plan (the “2018 Plan”). Under the 2018 Plan, the Board of Directors can issue nonqualified stock options or other equity-based awards in respect of up to 1,500,000 shares of common stock. On April 25, 2018, the Company’s Board of Directors amended and restated the 2018 Plan (the “Amended 2018 Plan”). The Amended 2018 Plan increased the number of shares authorized for issuance under the plan by an additional 500,000 shares, and subsequently the Board of Directors approved and ratified, effective as of July 31, 2018, October 29, 2018 and February 13, 2019, increases of the number of shares authorized for issuance under the Amended 2018 Plan by 500,000, 250,000 and 618,048 shares, respectively, resulting in 3,368,048 shares of common stock in the aggregate being reserved for issuance pursuant to grants under the Amended 2018 Plan. As of March 31, 2021, approximately 1.2 million shares of common stock remained available for issuance under the Amended 2018 Plan (taking into account all option exercises and other equity award settlements through March 31, 2021).

Stock Option Activity

A summary of the Company’s stock option activity and weighted average exercise prices follows:


	Stock Option Activity			Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
	Options (in thousands)	Weighted Average Exercise Price
Balance outstanding at December 31, 2020	4,332	$	19.78	6.79	183,825
Granted	66
Exercised	(209)
Cancelled or expired	(15)
Balance outstanding at March 31, 2021	4,174	$	20.93	6.77	$	134,089
Options vested and expected to vest	1,245	$	26.28	8.04	$	33,613
Options exercisable at March 31, 2021	2,412	$	15.75	5.71	$	89,213

The total fair value of stock options exercised during the three months ended March 31, 2021 was approximately $1.2 million. As of March 31, 2021, there was approximately $17.6 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted average period of approximately 2.5 years.

Restricted Stock Unit Activity

A summary of the Company’s restricted stock units (“RSUs”) activity and weighted average exercise prices follows:


	Restricted Stock Unit Activity
	Number of Shares (in thousands)	Weighted Average Grant Date Fair Value (Per Share)		Aggregate Fair Value (in thousands)
Balance outstanding at December 31, 2020	2,950	$	27.00	$	183,781
Awarded	519
Vested	(855)
Forfeited	(87)
Non-vested and outstanding at March 31, 2021	2,527	$	29.67	$	133,461
Expected to vest	1,631	$	28.72	$	86,029

RSUs granted to employees generally vest over a three to four-year period or upon achievement of certain performance conditions. In accordance with ASU 2017-09, as of March 31, 2021, total unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested RSUs was approximately $65.7 million and the weighted-average remaining vesting period was 2.7 years.

For the three months ended March 31, 2021 and 2020, the Company accrued approximately $5.3 million and $3.7 million in cash awards, respectively to be settled in shares of the Company’s stock and recorded a corresponding expense, which is included as a component of stock-based compensation expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020, respectively.

Stock-based compensation expense recognized in the Company’s condensed consolidated statements of operations and cash flows was $14.6 million and $14.7 million for the three months ended March 31, 2021 and 2020, respectively.

Restructuring

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring

RestructuringIn response to the COVID-19 pandemic, the Company went through a re-evaluation of its real estate needs. In connection with this re-evaluation, and the success the Company has had working remotely, it was decided in July 2020 that the Company would significantly reduce the real estate space it leases. This decision resulted in the significant reduction of the real estate space the Company leases and the removal of the associated ROU assets. Furthermore, this resulted in various one-time

expenses in connection with the abandonment of the majority of the Company’s leased facilities. The lease restructuring costs noted below are a result of this transition to an employee-centric model.

On top of the lease restructuring costs, the Company went through a further restructuring related to costs associated with re-prioritizing and reallocating resources to focus on areas believed by management to show high growth potential.

The expenses associated with these restructuring events were approximately $2.7 million and $3.2 million during the three months ended March 31, 2021 and 2020, respectively. The Company expects to incur additional restructuring costs through December 31, 2021. The restructuring liability was approximately $4.9 million and $4.7 million as of March 31, 2021 and December 31, 2020, respectively. It is classified as accrued expenses and other current liabilities on the condensed consolidated balance sheets, as the liability is expected to be settled in the next 12 months.

The following table presents the detail of the liability for the Company’s restructuring charges for the periods presented (amounts in thousands):


	As of March 31, 2021		December 31, 2020
Balance, Beginning of the year	$	4,732	$	314
Lease restructuring costs	294		5,034
Severance and other compensation associated costs	2,438		5,090
Cash payments	(2,550)		(5,706)
Balance, End of period	$	4,914	$	4,732

The following table presents the detail of expenses for the Company’s restructuring charges for the three months ended March 31, 2021 (amounts in thousands):


	March 31,
	2021		2020
Lease restructuring costs:
ROU assets write down	$	—	$	—
Abandonment of property and equipment	—		—
Other lease restructuring costs	294		—
Total Lease restructuring costs	$	294	$	—

Severance and other compensation associated costs	$	2,438	$	3,190
Total restructuring costs	$	2,732	$	3,190

Legal Matters	3 Months Ended
Legal Matters	Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Legal Matters	Legal MattersThe Company previously filed an intellectual property suit against [24]7 Customer, Inc. (“[24]7”) in the Southern District of New York on March 6, 2014 seeking damages on the grounds that [24]7 reverse engineered and misappropriated the Company’s technology to develop competing products and misused the Company’s business information. On June 22, 2015, [24]7 Customer, Inc. filed suit against the Company in the Northern District of California alleging patent infringement. On December 7, 2015, [24]7 Customer Inc. filed a second patent infringement suit against the Company, also in the Northern District of California. On March 16, 2017, the New York case was voluntarily transferred and consolidated with the two California cases in the Northern District of California for all pre-trial purposes. Rulings by both the Court and the United States Patent Office in the Company’s favor have invalidated the majority of [24]7 patents that were asserted in the patent cases. Trial for the Company’s intellectual property and other claims asserted against [24]7 is set for May 24, 2021. Trial for [24]7’s patent infringement claims has been vacated, to be reset after the trial on the Company’s claims. The Company believes the claims filed by [24]7 are entirely without merit and intends to defend them vigorously. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where the Company assesses the likelihood of loss as probable. From time to time, the Company is involved in or subject to legal, administrative and regulatory proceedings, claims, demands and investigations arising in the ordinary course of business, including direct claims brought by or against the Company with respect to intellectual property, contracts, employment and other matters, as well as claims brought against the Company’s customers for whom the Company has a contractual indemnification obligation. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In addition, in the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosure related to such matter as appropriate and in compliance with ASC 450. The accruals or estimates, if any, resulting from the foregoing analysis, are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, the Company will, as applicable, adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made. From time to time, third parties assert claims against the Company regarding intellectual property rights, privacy issues and other matters arising in the ordinary course of business. Although the Company cannot be certain of the outcome of any litigation or the disposition of any claims, nor the amount of damages and exposure, if any, that the Company could incur, the Company currently believes that the final disposition of all existing matters will not have a material adverse effect on results of operations, financial condition or cash flows. In addition, in the ordinary course of business, the Company is also subject to periodic threats of lawsuits, investigations and claims. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred 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. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are expected to become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company includes interest accrued on the underpayment of income taxes in interest expense and penalties, if any, related to unrecognized tax benefits in general and administrative expenses. The Company recorded a valuation allowance against its U.S. deferred tax asset as it considered its cumulative loss in recent years as a significant piece of negative evidence. Since valuation allowances are evaluated on a jurisdiction by jurisdiction basis, the Company believes that the deferred tax assets related to LivePerson Australia, LivePerson UK, Kasamba Israel, LivePerson Japan and LivePerson Ltd. Israel are more likely than not to be realized as these jurisdictions have positive cumulative pre-tax book income after adjusting for permanent and one-time items. During the year ended December 31, 2020, there was an increase in the valuation recorded of $6.9 million. For the quarter ended March 31, 2021, the Company recorded a tax benefit of $0.9 million. This amount consisted of a tax provision for the period of $0.6 million on operating earnings for the period, and a tax benefit of $1.5 million related to the revision of estimates for uncertain tax benefits related to Kasamba Israel and Liveperson Ltd. Israel deferred tax assets. The Company had a valuation allowance on certain deferred tax assets for the years ended December 31, 2019 and December 31, 2020 of $48.5 million and $55.4 million, respectively. Inherent in the Company’s 2021 annual effective tax rate is an estimated increase in the valuation allowance of $20.7 million, all of which will be recorded as an expense. During 2020, an increase in the valuation allowance in the amount of $35.1 million was recorded as an expense and a decrease of $28.2 million related to convertible notes was charged to equity. In 2019, an increase in the valuation allowance in the amount of $25.0 million was recorded as an expense and a decrease of $6.7 million related to the issuance of convertible notes was charged to equity. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law making several changes to the Internal Revenue Code. The changes include, but are not limited to: increasing the limitation on the amount of deductible interest expense, allowing companies to carryback certain net operating losses, and increasing the amount of net operating loss carryforwards that corporations can use to offset taxable income. As a result of the CARES Act, the Company filed refund claims relating to prior years totaling $0.6 million.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Description of Business and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 are unaudited. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the consolidated financial position of LivePerson as of March 31, 2021, and the consolidated results of operations, comprehensive loss and cash flows for the interim periods ended March 31, 2021 and 2020. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to these periods are unaudited. The results of operations for any interim period are not necessarily indicative of the results of operations for any other future interim period or for a full fiscal year. The condensed consolidated balance sheet as of December 31, 2020 has been derived from audited consolidated financial statements at that date. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2021.
Principles of Consolidation	Principles of Consolidation The condensed consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates. Many of the Company’s estimates require increased judgment due to the significant volatility, uncertainty and economic disruption of the COVID-19 pandemic. The Company will continue to monitor the effects of the COVID-19 pandemic, and its estimates and judgments may change materially as new events occur or additional information becomes available.
Recently Issued Accounting Standards and Recently Adopted Accounting Pronouncements	Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity”, which simplifies the accounting for convertible instruments by eliminating existing accounting models that require separation of a cash conversion or beneficial conversion feature from the host contract. Accordingly, a convertible debt instrument will be accounted as a single liability measured at its amortized cost and a convertible preferred stock will be accounted as a single equity instrument measured at its historical cost, as long as no other embedded features require bifurcation as derivatives and the convertible debt was not issued at a substantial premium. The ASU also simplifies the derivative scope exception for accounting for contracts in an entity's own equity by: •removing certain conditions required to meet the settlement criterion •clarifying that instruments that are not indexed to the issuer's own stock must be remeasured at fair value through earnings at each reporting period •clarifying the scope of reassessment guidance and disclosure requirements in Subtopic 815-40. The ASU also makes targeted improvements to the disclosure requirements for convertible instruments and earnings-per-share guidance. For SEC filers, excluding smaller reporting companies, the ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The ASU specifies that the guidance should be adopted as of the beginning of the annual fiscal year. The Company is assessing what impact ASU 2020-06 will have on its condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The new guidance is intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around franchise taxes, goodwill recognized for tax purposes, the allocation of current and deferred tax expenses among legal entities, among other minor changes. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company has adopted ASU 2019-12 in the first quarter of 2021 and determined that the ASU had no material impact on its condensed consolidated financial statements.
Revenue Recognition	Revenue Recognition The majority of the Company’s revenue is generated from monthly service revenues and related professional services from the sale of the LivePerson services. Revenues are recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. No single customer accounted for 10% or more of the Company’s total revenue for the three months ended March 31, 2021. The Company determines revenue recognition through the following steps: •identification of the contract, or contracts, with a customer; •identification of the performance obligations in the contract; •determination of the transaction price; •allocation of the transaction price to the performance obligations in the contract; and •recognition of revenue when, or as, the Company satisfies a performance obligation. Total revenue of $107.9 million and $78.1 million was recognized during the three months ended March 31, 2021 and 2020, respectively. Under Topic 606, the Company defers all incremental commission costs to obtain the contract (contract acquisition costs). The contract acquisition costs, which consist of prepaid sales commissions, have balances as of March 31, 2021 and December 31, 2020 of $40.9 million and $41.0 million, respectively. The Company amortizes these costs over the related period of benefit using the expected life of the customer contract, which the Company determines to be three to five years, which is consistent with the transfer to the customer of the services to which the asset relates. The Company classifies contract acquisition costs as long-term unless they have an original amortization period of one year or less. Hosted Services- Business Revenue Hosted Services- Business Revenue is reported at the amount that reflects the ultimate consideration expected to be received and primarily consists of fees that provide customers access to the Conversational Cloud, the Company’s enterprise-class, cloud-based platform. The Company has determined such access represents a stand-ready service provided continually throughout the contract term. As such, control and satisfaction of this stand-ready performance obligation is deemed to occur over time. The Company recognizes this revenue over time on a ratable basis over the contract term, beginning on the date that access to the Conversational Cloud platform is made available to the customer. The passage of time is deemed to be the most faithful depiction of the transfer of control of the services as the customer simultaneously receives and consumes the benefit provided by the Company’s performance. Subscription contracts are generally one year or longer in length, billed monthly, quarterly or annually in advance. There is no significant variable consideration related to these arrangements. Additionally, for certain of the Company’s larger customers, the Company may provide call center labor through an arrangement with one or more of several qualified vendors. For most of these customers, the Company passes the fee the Company incurs with the labor provider and its fee for the hosted services through to the Company’s customers in the form of a fixed fee for each order placed via the Company’s online engagement solutions. For these Gainshare (formerly “Pay for Performance”) arrangements in accordance with ASC-606, “Principal Agent Considerations,” the Company acts as a principal in a transaction if the Company controls the specified goods or services before they are transferred to the customer. Professional Services Revenues Professional Services Revenues primarily consists of fees for deployment and optimization services, as well as training delivered on an on-demand basis which is deemed to represent a distinct stand-ready performance obligation. Professional Services Revenues are reported at the amount that reflects the ultimate consideration the Company expects to receive in exchange for such services. Control for the majority of the Company Professional Services contracts passes over time to the customer and is recognized ratably over the contracted period, as the passage of time is deemed to be the most faithful depiction of the transfer of control. For certain deployment services, which are not deemed to represent a distinct performance obligation, revenue will be recognized in the same manner as the fee for access to the Conversational Cloud platform, and as such will be recognized on a straight-line basis over the contract term. For services billed on a fixed price basis, revenue is recognized over time based on the proportion performed using time and materials as the measure of progress toward complete satisfaction of the performance obligation. Professional service contracts are generally one year or longer in length, billed monthly, quarterly or annually in advance. There is no significant variable consideration related to these arrangements. Remaining Performance Obligation As of March 31, 2021, the aggregate amount of the total transaction price allocated in contracts with original duration of greater than one year to the remaining performance obligations was $330.6 million. Approximately 90% of the Company’s remaining performance obligations is expected to be recognized during the next 24 months, with the balance recognized thereafter. The aggregate balance of unsatisfied performance obligations represents contracted revenue that has not yet been recognized, and does not include contract amounts that are cancellable by the customer, amounts associated with optional renewal periods, and any amounts related to performance obligations, which are billed and recognized as they are delivered. The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less. Such remaining performance obligations represent unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606. Contracts with Multiple Performance Obligations Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the cloud applications sold, and the number and types of users within its contracts. Hosted Services- Consumer Revenue For revenue from the Company’s Consumer segment generated from online transactions between Experts and Users, revenue is recognized at an amount net of Expert fees in accordance with ASC 606, “Principal Agent Considerations,” primarily because the Expert is the primary obligor. The Company does not act as a principal in a transaction since the Company does not control the specified goods or services before they are transferred to the customer. Additionally, the Company performs as an agent without any risk of loss for collection, and is not involved in selecting the Expert or establishing the Expert’s fee. The Company collects a fee from the consumer and retains a portion of the fee, and then remits the balance to the Expert. Revenue from these transactions is recognized at the point in time when the transaction is complete and no significant performance obligations remain. Deferred Revenues The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance. The increase in the deferred revenue balance as of March 31, 2021 is primarily driven by cash payments received or due in advance of the Company’s performance obligations, partially offset by $46.7 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2020.
Net Loss Per Share	Net Loss Per ShareThe Company calculates earnings per share (“EPS”) in accordance with the provisions of ASC 260-10. Under the guidance, basic EPS excludes dilution for common stock equivalents and is computed by dividing net income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. All options, warrants or other potentially dilutive instruments issued for nominal consideration are required to be included in the calculation of basic and diluted net income attributable to common stockholders. Diluted EPS is calculated using the treasury stock method and reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock.
Segment Information	The Company accounts for its segment information in accordance with the provisions of ASC 280-10, “Segment Reporting.” ASC 280-10 establishes annual and interim reporting standards for operating segments of a company. ASC 280-10 requires disclosures of selected segment-related financial information about products, major customers, and geographic areas based on the Company’s internal accounting methods. The Company is organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment enables brands to leverage the Conversational Cloud’s sophisticated intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The Consumer segment facilitates online transactions between independent service providers (“Experts”) and individual consumers (“Users”) seeking information and knowledge for a fee via mobile and online messaging. Both segments currently generate their revenue primarily in the United States. The chief operating decision maker, who is the chief executive officer, evaluates performance, makes operating decisions, and allocates resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Company’s condensed consolidated financial statements which are described in the summary of Critical Accounting Policies and Estimates. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangibles to the segments, but it does not allocate product development expenses, general and administrative expenses, restructuring costs and income tax expense because management does not use this information to measure performance of the operating segments. There are currently no inter-segment sales.
Stock-Based Compensation	Stock-Based Compensation The Company follows ASC 718-10, “Stock Compensation,” which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award with limited exceptions. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company’s forfeiture rate assumptions, which estimate the share-based awards that will ultimately vest, requires judgment, and to the extent actual results or updated estimates differ from management's current estimates, such amounts will be recorded as a cumulative adjustment in the period of change and could be materially different from share-based compensation expense recorded in prior periods.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130561-203045

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130563-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130563-203045

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18823-107790

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130564-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

+ Details

- Definition

Disclosure of accounting policy for segment reporting.

+ References + Details

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Deferred Revenues and Contract Balances

The following table presents deferred revenue by revenue source (amounts in thousands):


	Deferred Revenue
	As of March 31, 2021		As of December 31, 2020
Hosted services – Business	$	105,900	$	86,144
Hosted services – Consumer	875		835
Professional services – Business	1,640		1,869
Total deferred revenue - short term	$	108,415	$	88,848


Professional services – Business	573		409
Total deferred revenue - long term	$	573	$	409

Schedule of Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by revenue source (amounts in thousands):


	Three Months Ended
	March 31,
	2021		2020
Revenue:
Hosted services – Business	$	83,640	$	61,051
Hosted services – Consumer	9,011		6,240
Professional services	15,240		10,797
Total revenue	$	107,891	$	78,088

Schedule of Revenue by Geographic Region

The following table presents the Company’s revenues attributable to domestic and foreign operations for the periods presented (amounts in thousands):


	Three Months Ended
	March 31,
	2021		2020
United States	$	68,782	$	48,549
Other Americas (1)	3,913		2,020
Total Americas	72,695		50,569
EMEA (2) (4)	21,760		19,491
APAC (3)	13,436		8,028
Total revenue	$	107,891	$	78,088

(1) Canada, Latin America and South America

(2) Europe, the Middle East and Africa (“EMEA”)

(3) Asia-Pacific (“APAC”)

Schedule Of Receivables, Contract Acquisition Costs, And Deferred Revenue

The opening and closing balances of the Company’s accounts receivable, unbilled receivables, contract acquisition costs and deferred revenues are as follows (amounts in thousands):


	Accounts Receivable		Unbilled Receivable		Contract Acquisition Costs noncurrent		Deferred Revenue (current)		Deferred Revenue (long term)
Opening Balance as of December 31, 2020	$	61,801	$	18,622	$	41,021	$	88,848	$	409
(Decrease) Increase, net	6,576		5,264		(166)		19,567		164
Ending Balance as of March 31, 2021	$	68,377	$	23,886	$	40,855	$	108,415	$	573

Schedule of Accounts Receivables, Contract Acquisition Costs, and Deferred Revenue

Accounts receivable are written off against the allowance for uncollectible accounts when the Company determines amounts are no longer collectible.


	Three Months
Allowance for doubtful accounts (in thousands):	March 31, 2021
Balance at beginning of the year	$	5,344
Additions Charged to Costs and Expenses	801
Deductions/Write-offs	(749)
Balance as of March 31, 2021	$	5,396

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Reconciliation of Shares Used in Calculating Basic and Diluted Earnings Per Share

A reconciliation of shares used in calculating basic and diluted net loss per share follows:


	Three Months Ended
	March 31,
	2021	2020
Basic	67,901,809	64,388,850
Effect of assumed exercised options	—	—
Diluted	67,901,809	64,388,850

Segment Information (Tables)

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Summary of Financial Information by Segment


	Business		Consumer		Corporate		Consolidated
Revenue:
Hosted services – Business	$	83,640	$	—	$	—	$	83,640
Hosted services – Consumer	—		9,011		—		9,011
Professional services	15,240		—		—		15,240
Total revenue	98,880		9,011		—		107,891
Cost of revenue	31,610		1,909		—		33,519
Sales and marketing	30,203		6,750		—		36,953
Amortization of purchased intangibles	375		—		—		375
Unallocated corporate expenses	—		—		50,672		50,672
Operating income (loss)	$	36,692	$	352	$	(50,672)	$	(13,629)


	Business		Consumer		Corporate		Consolidated
Revenue:
Hosted services – Business	$	61,051	$	—	$	—	$	61,051
Hosted services – Consumer	—		6,240		—		6,240
Professional services	10,797		—		—		10,797
Total revenue	71,848		6,240		—		78,088
Cost of revenue	21,345		1,475		—		22,820
Sales and marketing	37,469		5,211		—		42,680
Amortization of purchased intangibles	405		—		—		405
Unallocated corporate expenses	—		—		45,375		45,375
Operating income (loss)	$	12,629	$	(446)	$	(45,375)	$	(33,192)

Schedule of Long-Lived Assets by Geographic Region

The following table presents the Company’s long-lived assets by geographic region as of the dates presented (amounts in thousands):


	March 31,		December 31,
	2021		2020
United States	$	207,165	$	202,275
Israel	18,672		16,657
Australia	13,494		13,792
Netherlands	7,962		8,301
Other (1)	16,791		16,596
Total long-lived assets	$	264,084	$	257,621

(1) United Kingdom, Germany, Japan, France, and Italy

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2021 are as follows (amounts in thousands):


	Business		Consumer		Consolidated
Balance as of December 31, 2020	$	87,168	$	8,024	$	95,192
Adjustments to goodwill:
Foreign exchange adjustment	(105)		—		(105)
Balance as of March 31, 2021	$	87,063	$	8,024	$	95,087

Summary of Intangible Assets

Intangible assets are summarized as follows (amounts in thousands):


	As of March 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	30,460	$	(27,183)	$	3,277	5.3 years
Customer relationships	16,974		(14,186)		2,788		8.4 years
Patents	5,876		(962)		4,914		13.2 years
Other	314		(235)		79		2.2 years
Total	$	53,624	$	(42,566)	$	11,058


	As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	30,499	$	(26,818)	$	3,681	5.4 years
Customer relationships	16,981		(13,982)		2,999		8.4 years
Patents	5,076		(908)		4,168		12.5 years
Other	314		(235)		79		2.2 years
Total	$	52,870	$	(41,943)	$	10,927

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Estimated amortization expense for the next five years is as follows (amounts in thousands):


	Estimated Amortization Expense
Remaining 2021	$	1,977
2022	2,266
2023	985
2024	784
2025	223
Thereafter	4,823
Total	$	11,058

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

The following table presents the detail of property and equipment for the periods presented (amounts in thousands):


	March 31, 2021		December 31, 2020
Computer equipment and software	$	111,709	$	107,666

Internal-use software development costs	94,614		86,454
Finance lease right-of-use assets	9,157		10,045
	215,480		204,165
Less: accumulated depreciation	(104,166)		(98,110)
Total	$	111,314	$	106,055

Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

The following table presents the detail of accrued expenses and other current liabilities for the periods presented (amounts in thousands):


	March 31, 2021		December 31, 2020
Payroll and other employee related costs	$	27,299	$	39,820
Professional services and consulting and other vendor fees	48,477		38,796
Unrecognized tax benefits	2,032		2,039
Sales commissions	3,680		6,988

Restructuring (see Note 13)	4,914		4,732
Non Income Tax	2,232		2,954
Other	7,712		4,541
Total	$	96,346	$	99,870

Convertible Senior Notes and Capped Call Transactions (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Carrying Amount of Convertible Debt and Related Interest

The net carrying amount of the liability component of the Notes was as follows (in thousands):


	As of March 31, 2021		As of December 31, 2020
Principal	$	747,500	$	747,500
Unamortized discount	(188,151)		(196,269)
Unamortized issuance costs	(12,190)		(12,799)
Net carrying amount	$	547,159	$	538,432

The net carrying amount of the equity component of the Notes was as follows (in thousands):


	As of March 31, 2021
Proceeds allocated to the conversion options (debt discount)	$	215,434
Issuance costs	(5,783)
Net carrying amount	$	209,651

The following table sets forth the interest expense recognized related to the Notes (in thousands):


	Three Months Ended March 31,
	2021		2020
Contractual interest expense	$	431	$	417
Amortization of issuance costs	609		298
Amortization of debt discount	8,118		2,368
Total interest expense	$	9,158	$	3,083

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value


	March 31, 2021								December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	518,212	$	—	$	—	$	518,212	$	328,195	$	—	$	—	$	328,195
Total assets	$	518,212	$	—	$	—	$	518,212	$	328,195	$	—	$	—	$	328,195

Liabilities:
Contingent earn-out	$	—	$	—	$	132	$	132	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	132	$	132	$	—	$	—	$	—	$	—

Schedule of Changes in Fair Value of Level 3 Liabilities

The changes in fair value of the level 3 liabilities are as follows (amounts in thousands):


	Contingent Earn-Out
	March 31, 2021		December 31, 2020
Balance, Beginning of period	$	—	$	557

AdvantageTec Inc. fair value adjustment (see Note 9)	132		(263)
Payments	—		(294)
Balance, End of period	$	132	$	—

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Lease Information

Supplemental cash flow information related to leases for the quarters ended March 31, 2021 and 2020 are as follows (in thousands):


	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	387	$	1,986
Operating cash flows for finance leases	94		—
Financing cash flows for finance leases	859		—

The components of lease costs for the quarters ended March 31, 2021 and 2020 are as follows (in thousands):


	Three Months Ended March 31,
	2021		2020
Finance lease cost
Amortization of right-of-use assets	$	888	$	—
Interest	94		—
Operating lease cost	1,857		1,397
Total lease cost	2,839		1,397

Supplemental balance sheet information related to leases was as follows:


	As of March 31, 2021			As of December 31, 2020
Operating Leases	(in thousands, except lease term and discount rate)
Right-of-use asset, net	$	437		$	614

Current operating lease liability	5,097			5,718
Long term operating lease liability	6,170			7,180
Total operating lease liability	11,267			$	12,898

Finance Leases
Right-of-use asset, net	9,157			10,045

Current finance lease liability	3,524			3,488
Long term finance lease liability	5,280			6,176
Total finance lease liability	8,804			9,664

Weighted Average Remaining Lease Term
Operating leases	2.9 years			3.0 years
Finance leases	2.6 years			2.8 years

Weighted Average Discount Rate
Operating leases	7		%	7		%
Finance leases	4		%	4		%

Schedule of Future Minimum Lease Payments

Future minimum lease payments under non-cancellable operating and finance leases (with an initial or remaining lease terms in excess of one year) are as follows (amounts in thousands):


Quarter ending March 31, 2021:	Operating Leases		Finance Leases
2021 (remaining nine months for March 31, 2021)	$	4,669	$	2,861
2022	3,788		3,814
2023	1,953		2,572
2024	1,171		—
2025	636		—
Thereafter	265		—
Total minimum lease payments	12,482		9,247
Less: present value adjustment	(1,215)		(443)
Present value of lease liabilities	$	11,267	$	8,804

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Weighted Average Assumptions of Fair Value Options Using Black-Scholes Option-Pricing Model

The fair value of each option grant is estimated on the date of grant, adjusted for estimated forfeitures, using the Black-Scholes option-pricing model with the following weighted average assumptions:


	Three Months Ended March 31,
	2021	2020
Dividend yield	0.0%	0.0%
Risk-free interest rate	0.46%	0.66%
Expected life (in years)	5	5
Historical volatility	53.94%	46.50%

Summary of Stock Option Activity and Weighted Average Exercise Prices

A summary of the Company’s stock option activity and weighted average exercise prices follows:


	Stock Option Activity			Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
	Options (in thousands)	Weighted Average Exercise Price
Balance outstanding at December 31, 2020	4,332	$	19.78	6.79	183,825
Granted	66
Exercised	(209)
Cancelled or expired	(15)
Balance outstanding at March 31, 2021	4,174	$	20.93	6.77	$	134,089
Options vested and expected to vest	1,245	$	26.28	8.04	$	33,613
Options exercisable at March 31, 2021	2,412	$	15.75	5.71	$	89,213

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity

A summary of the Company’s restricted stock units (“RSUs”) activity and weighted average exercise prices follows:


	Restricted Stock Unit Activity
	Number of Shares (in thousands)	Weighted Average Grant Date Fair Value (Per Share)		Aggregate Fair Value (in thousands)
Balance outstanding at December 31, 2020	2,950	$	27.00	$	183,781
Awarded	519
Vested	(855)
Forfeited	(87)
Non-vested and outstanding at March 31, 2021	2,527	$	29.67	$	133,461
Expected to vest	1,631	$	28.72	$	86,029

Restructuring (Tables)

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The following table presents the detail of the liability for the Company’s restructuring charges for the periods presented (amounts in thousands):


	As of March 31, 2021		December 31, 2020
Balance, Beginning of the year	$	4,732	$	314
Lease restructuring costs	294		5,034
Severance and other compensation associated costs	2,438		5,090
Cash payments	(2,550)		(5,706)
Balance, End of period	$	4,914	$	4,732

The following table presents the detail of expenses for the Company’s restructuring charges for the three months ended March 31, 2021 (amounts in thousands):


	March 31,
	2021		2020
Lease restructuring costs:
ROU assets write down	$	—	$	—
Abandonment of property and equipment	—		—
Other lease restructuring costs	294		—
Total Lease restructuring costs	$	294	$	—

Severance and other compensation associated costs	$	2,438	$	3,190
Total restructuring costs	$	2,732	$	3,190

Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Total revenue	$ 107,891	$ 78,088
Contract acquisition costs	40,900		$ 41,000
Remaining performance obligation	$ 330,600
Percentage of remaining performance obligations to be recognized over next 24 months	90.00%
Recognition of deferred revenue	$ 46,700
Accounts for doubtful accounts	5,396		5,344
Sales reserve	$ 2,700		$ 3,400
Minimum
Disaggregation of Revenue [Line Items]
Amortization period for contract acquisition costs (in years)	3 years
Maximum
Disaggregation of Revenue [Line Items]
Amortization period for contract acquisition costs (in years)	5 years

Revenue Recognition - Deferred Revenue (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Disaggregation of Revenue [Line Items]
Total deferred revenue - short term	$ 108,415	$ 88,848
Total deferred revenue - long term	573	409
Hosted Services - Business
Disaggregation of Revenue [Line Items]
Total deferred revenue - short term	105,900	86,144
Hosted Services - Consumer
Disaggregation of Revenue [Line Items]
Total deferred revenue - short term	875	835
Professional Services
Disaggregation of Revenue [Line Items]
Total deferred revenue - short term	1,640	1,869
Total deferred revenue - long term	$ 573	$ 409

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Total revenue	$ 107,891	$ 78,088
Hosted Services - Business
Disaggregation of Revenue [Line Items]
Total revenue	83,640	61,051
Hosted Services - Consumer
Disaggregation of Revenue [Line Items]
Total revenue	9,011	6,240
Professional Services
Disaggregation of Revenue [Line Items]
Total revenue	$ 15,240	$ 10,797

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue Recognition - Revenue by Geographic Location (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2021

Mar. 31, 2020

Disaggregation of Revenue [Line Items]

Total revenue

$ 107,891

$ 78,088

United States

Disaggregation of Revenue [Line Items]

Total revenue

68,782

48,549

Other Americas

Disaggregation of Revenue [Line Items]

Total revenue

^[1]

3,913

2,020

Total Americas

Disaggregation of Revenue [Line Items]

Total revenue

72,695

50,569

EMEA

Disaggregation of Revenue [Line Items]

Total revenue

^[2],[3]

21,760

19,491

APAC

Disaggregation of Revenue [Line Items]

Total revenue

^[4]

13,436

8,028

United Kingdom

Disaggregation of Revenue [Line Items]

Total revenue

13,300

$ 12,600

Netherlands

Disaggregation of Revenue [Line Items]

Total revenue

$ 1,300

[1]	Canada, Latin America and South America
[2]	Europe, the Middle East and Africa (“EMEA”)
[3]	Includes revenues from the United Kingdom of $13.3 million and $12.6 million for the three months ended March 31, 2021 and 2020, respectively, and from the Netherlands of $1.3 million for the three months ended March 31, 2021 and 2020.
[4]	Asia-Pacific (“APAC”)

- Definition

+ References

+ Details

Revenue Recognition - Receivables and Deferred Revenue (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Contract Balances [Roll Forward]
Accounts receivable, opening balance	$ 80,423
Accounts receivable, ending balance	92,263
Contract acquisition costs noncurrent, opening balance	41,021
Contract acquisition costs noncurrent, increase (decrease), net	(166)
Contract acquisition costs noncurrent, ending balance	40,855
Deferred revenue (current), opening balance	88,848
Deferred revenue (current), increase (decrease), net	19,567
Deferred revenue (current), ending balance	108,415
Deferred revenue (long-term), opening balance	409
Deferred revenue (long-term), increase (decrease), net	164
Deferred revenue (long-term), ending balance	573
Billed receivable
Contract Balances [Roll Forward]
Accounts receivable, opening balance	61,801
Accounts receivable, increase (decrease), net	6,576
Accounts receivable, ending balance	68,377
Unbilled receivable
Contract Balances [Roll Forward]
Accounts receivable, opening balance	18,622
Accounts receivable, increase (decrease), net	5,264
Accounts receivable, ending balance	$ 23,886

Revenue Recognition - Accounts Receivable (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Allowance for Doubtful Accounts
Beginning balance	$ 5,344
Additions Charged to Costs and Expenses	801	$ 615
Deductions/Write-offs	(749)
Ending balance	$ 5,396

Net Loss Per Share - Narrative (Details) - shares	3 Months Ended
Net Loss Per Share - Narrative (Details) - shares	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Anti-dilutive common stock awards not included in earnings per share calculation (in shares)	6,703,307	9,128,000

Net Loss Per Share - Reconciliation of Shares Used in Calculating Basic and Diluted Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Basic (in shares)	67,901,809	64,388,850
Effect of assumed exercised options (in shares)	0
Diluted (in shares)	67,901,809	64,388,850

Net Loss Per Share - Convertible Notes (Details) - Convertible Debt	1 Months Ended
	Dec. 31, 2020 USD ($) day $ / shares	Mar. 31, 2019 USD ($) day $ / shares	Sep. 30, 2019 USD ($)
2026 Notes
Debt Instrument [Line Items]
Aggregate principal	$ 517,500,000
Aggregate principal from exercise in full of over-allotment options	$ 67,500,000
Convertible debt conversion price (in dollars per share) \| $ / shares	$ 75.23
Debt instrument, unit of principal for conversion	$ 1,000
Threshold trading days in consideration of note conversion \| day	20
Threshold consecutive trading days in analysis of conversion price \| day	30
Threshold percentage of stock price if converted	130.00%
Threshold for five day period, product of sale price of common stock and conversion rate of notes	98.00%
2024 Notes
Debt Instrument [Line Items]
Aggregate principal		$ 230,000,000.0	$ 230,000,000.0
Aggregate principal from exercise in full of over-allotment options		$ 30,000,000.0	$ 30,000,000.0
Convertible debt conversion price (in dollars per share) \| $ / shares		$ 38.58
Debt instrument, unit of principal for conversion		$ 1,000
Threshold trading days in consideration of note conversion \| day		20
Threshold consecutive trading days in analysis of conversion price \| day		30
Threshold percentage of stock price if converted		130.00%
Threshold for five day period, product of sale price of common stock and conversion rate of notes		98.00%
Debt instrument stated rate (percent)		0.75%	0.75%

Segment Information - Narrative (Details)	3 Months Ended
Segment Information - Narrative (Details)	Mar. 31, 2021 segment
Segment Reporting [Abstract]
Number of operating segments	2

Segment Information - Financial Information by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Total revenue	$ 107,891	$ 78,088
Cost of revenue	33,519	22,820
Sales and marketing	36,953	42,680
Amortization of purchased intangibles	375	405
Unallocated corporate expenses	50,672	45,375
Loss from operations	(13,629)	(33,192)
Corporate
Segment Reporting Information [Line Items]
Unallocated corporate expenses	50,672	45,375
Loss from operations	(50,672)	(45,375)
Business \| Operating Segments
Segment Reporting Information [Line Items]
Total revenue	98,880	71,848
Cost of revenue	31,610	21,345
Sales and marketing	30,203	37,469
Amortization of purchased intangibles	375	405
Loss from operations	36,692	12,629
Consumer \| Operating Segments
Segment Reporting Information [Line Items]
Total revenue	9,011	6,240
Cost of revenue	1,909	1,475
Sales and marketing	6,750	5,211
Loss from operations	352	(446)
Hosted Services - Business
Segment Reporting Information [Line Items]
Total revenue	83,640	61,051
Hosted Services - Business \| Business \| Operating Segments
Segment Reporting Information [Line Items]
Total revenue	83,640	61,051
Hosted Services - Consumer
Segment Reporting Information [Line Items]
Total revenue	9,011	6,240
Hosted Services - Consumer \| Consumer \| Operating Segments
Segment Reporting Information [Line Items]
Total revenue	9,011	6,240
Professional Services
Segment Reporting Information [Line Items]
Total revenue	15,240	10,797
Professional Services \| Business \| Operating Segments
Segment Reporting Information [Line Items]
Total revenue	$ 15,240	$ 10,797

Segment Information - Long-Lived Assets by Geographic Region (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Total long-lived assets	$ 264,084	$ 257,621
United States
Segment Reporting Information [Line Items]
Total long-lived assets	207,165	202,275
Israel
Segment Reporting Information [Line Items]
Total long-lived assets	18,672	16,657
Australia
Segment Reporting Information [Line Items]
Total long-lived assets	13,494	13,792
Netherlands
Segment Reporting Information [Line Items]
Total long-lived assets	7,962	8,301
Other
Segment Reporting Information [Line Items]
Total long-lived assets	$ 16,791	$ 16,596

Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 95,192
Foreign exchange adjustment	(105)
Goodwill, ending balance	95,087
Business
Goodwill [Roll Forward]
Goodwill, beginning balance	87,168
Foreign exchange adjustment	(105)
Goodwill, ending balance	87,063
Consumer
Goodwill [Roll Forward]
Goodwill, beginning balance	8,024
Foreign exchange adjustment	0
Goodwill, ending balance	$ 8,024

Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 53,624	$ 52,870
Accumulated Amortization	(42,566)	(41,943)
Total	11,058	10,927
Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	30,460	30,499
Accumulated Amortization	(27,183)	(26,818)
Total	$ 3,277	$ 3,681
Weighted Average Amortization Period	5 years 3 months 18 days	5 years 4 months 24 days
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 16,974	$ 16,981
Accumulated Amortization	(14,186)	(13,982)
Total	$ 2,788	$ 2,999
Weighted Average Amortization Period	8 years 4 months 24 days	8 years 4 months 24 days
Patents
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 5,876	$ 5,076
Accumulated Amortization	(962)	(908)
Total	$ 4,914	$ 4,168
Weighted Average Amortization Period	13 years 2 months 12 days	12 years 6 months
Other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 314	$ 314
Accumulated Amortization	(235)	(235)
Total	$ 79	$ 79
Weighted Average Amortization Period	2 years 2 months 12 days	2 years 2 months 12 days

Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1.6	$ 0.7

Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Estimated Amortization Expense
Remaining 2021	$ 1,977
2022	2,266
2023	985
2024	784
2025	223
Thereafter	4,823
Total	$ 11,058	$ 10,927

Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Property and Equipment, Net
Finance lease right-of-use assets	$ 9,157	$ 10,045
Property and equipment and finance lease, gross	215,480	204,165
Less: accumulated depreciation	(104,166)	(98,110)
Total	111,314	106,055
Computer equipment and software
Property and Equipment, Net
Property and equipment gross	111,709	107,666
Internal-use software development costs
Property and Equipment, Net
Property and equipment gross	$ 94,614	$ 86,454

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Payroll and other employee related costs	$ 27,299	$ 39,820
Professional services and consulting and other vendor fees	48,477	38,796
Unrecognized tax benefits	2,032	2,039
Sales commissions	3,680	6,988
Restructuring	4,914	4,732	$ 314
Non Income Tax	2,232	2,954
Other	7,712	4,541
Total	$ 96,346	$ 99,870

Convertible Senior Notes and Capped Call Transactions - Narrative (Details) $ / shares in Units, shares in Thousands	1 Months Ended		3 Months Ended	12 Months Ended
	Dec. 31, 2020 USD ($) day $ / shares shares	Mar. 31, 2019 USD ($) equity_instrument day $ / shares shares	Mar. 31, 2021 USD ($) $ / shares	Dec. 31, 2020 USD ($) $ / shares	Sep. 30, 2019 USD ($)
Debt Instrument [Line Items]
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Number of shares of common stock covered by called caps (shares) \| shares	6,880	5,960
Reduction to additional paid-in-capital related to called caps	$ 46,100,000	$ 23,200,000
Adjustments to additional paid in capital related to issuance costs attributable to equity component				$ 3,700,000
2024 Notes
Debt Instrument [Line Items]
Carry amount of equity component of convertible notes		52,900,000
Total deferred issuance costs		8,600,000
Debt issuance costs attributable to liability		6,600,000
Adjustments to additional paid in capital related to issuance costs attributable to equity component		$ 2,000,000.0
2026 Notes
Debt Instrument [Line Items]
Carry amount of equity component of convertible notes	162,500,000			162,500,000
Total deferred issuance costs	12,200,000			12,200,000
Debt issuance costs attributable to liability	$ 8,500,000			$ 8,500,000
Capped calls
Debt Instrument [Line Items]
Capped caps initial strike price (in dollars per share) \| $ / shares	$ 75.23	$ 38.58		$ 75.23
Capped caps initial cap price (in dollars per share) \| $ / shares	$ 105.58	$ 57.16		$ 105.58
Convertible Debt
Debt Instrument [Line Items]
Interest expense			$ 9,200,000
Convertible Debt \| 2024 Notes
Debt Instrument [Line Items]
Aggregate principal		$ 230,000,000.0			$ 230,000,000.0
Debt instrument stated rate (percent)		0.75%			0.75%
Aggregate principal from exercise in full of over-allotment options		$ 30,000,000.0			$ 30,000,000.0
Proceeds from debt offering, net of debt issuance costs		221,400,000
Debt instrument, unit of principal for conversion		$ 1,000
Number of shares per convertible note \| equity_instrument		25.9182
Convertible debt conversion price (in dollars per share) \| $ / shares		$ 38.58
Percentage of principal amount paid if repurchase due to fundamental change (percent)		100.00%
Threshold trading days in consideration of note conversion \| day		20
Threshold consecutive trading days in analysis of conversion price \| day		30
Threshold percentage of stock price if converted		130.00%
Threshold for five day period, product of sale price of common stock and conversion rate of notes		98.00%
Remaining amortization period for debt discount and debt issuance costs			2 years 10 months 24 days
Effective interest rate (percent)			4.35%
Convertible Debt \| 2026 Notes
Debt Instrument [Line Items]
Aggregate principal	$ 517,500,000			$ 517,500,000
Aggregate principal from exercise in full of over-allotment options	67,500,000			67,500,000
Proceeds from debt offering, net of debt issuance costs				505,300,000
Debt instrument, unit of principal for conversion	$ 1,000			$ 1,000
Number of shares per convertible note	13.2933
Convertible debt conversion price (in dollars per share) \| $ / shares	$ 75.23			$ 75.23
Percentage of principal amount paid if repurchase due to fundamental change (percent)	100.00%
Threshold trading days in consideration of note conversion \| day	20
Threshold consecutive trading days in analysis of conversion price \| day	30
Threshold percentage of stock price if converted	130.00%
Threshold for five day period, product of sale price of common stock and conversion rate of notes	98.00%
Remaining amortization period for debt discount and debt issuance costs			5 years 8 months 12 days
Effective interest rate (percent)			6.33%

Convertible Senior Notes and Capped Call Transactions - Carrying Amount and Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Interest Expense:
Amortization of issuance costs	$ 609	$ 298
Amortization of debt discount	8,118	2,368
Convertible Debt
Interest Expense:
Total interest expense	9,200
Convertible Debt \| Convertible Senior Notes
Carrying Amount of Liability Component:
Principal	747,500		$ 747,500
Unamortized discount	(188,151)		(196,269)
Unamortized issuance costs	(12,190)		(12,799)
Net carrying amount	547,159		$ 538,432
Carrying Amount of Equity Component:
Proceeds allocated to the conversion options (debt discount)	215,434
Issuance costs	(5,783)
Net carrying amount	209,651
Interest Expense:
Contractual interest expense	431	417
Amortization of issuance costs	609	298
Amortization of debt discount	8,118	2,368
Total interest expense	$ 9,158	$ 3,083

Acquisitions (Details) - AdvantageTec - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Oct. 31, 2018	Dec. 31, 2019	Mar. 31, 2021
Business Acquisition [Line Items]
Aggregate purchase price	$ 11.2
Cash payment in acquisition	6.0
Equity consideration in acquisition	4.3
Potential earn-out consideration payments based on achieving targets	0.9
Re-measurement to fair value increase (decrease)		$ 0.2
Payments related to contingent consideration		0.5
Contingent earn-out settled in stock		$ 0.3
Contingent earn out liability			$ 0.1
Goodwill acquired in acquisition	9.1
Intangible assets acquired	$ 2.2

Fair Value Measurements - Financial Assets and Liabilities (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Assets:
Total assets	$ 518,212	$ 328,195
Liabilities:
Total liabilities	132	0
Money market funds
Assets:
Money market funds	518,212	328,195
Contingent earn-out
Liabilities:
Contingent earn-out	132	0
Level 1
Assets:
Total assets	518,212	328,195
Liabilities:
Total liabilities	0	0
Level 1 \| Money market funds
Assets:
Money market funds	518,212	328,195
Level 1 \| Contingent earn-out
Liabilities:
Contingent earn-out	0	0
Level 2
Assets:
Total assets	0	0
Liabilities:
Total liabilities	0	0
Level 2 \| Money market funds
Assets:
Money market funds	0	0
Level 2 \| Contingent earn-out
Liabilities:
Contingent earn-out	0	0
Level 3
Assets:
Total assets	0	0
Liabilities:
Total liabilities	132	0
Level 3 \| Money market funds
Assets:
Money market funds	0	0
Level 3 \| Contingent earn-out
Liabilities:
Contingent earn-out	$ 132	$ 0

Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Recurring \| Convertible senior note
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Convertible senior note net	$ 572,000
Conversable, Inc. and AdvntageTec
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent earn-out					$ 2,400
AdvantageTec
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Re-measurement to fair value increase (decrease)				$ 200
Contingent earn-out
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent earn-out increase (decrease)	100		$ (600)
Equity issued as payment for contingent consideration			300
Payment related to contingent consideration	0	$ 294
Contingent earn-out \| AdvantageTec
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Re-measurement to fair value increase (decrease)	$ 132	$ (263)	$ (300)

Fair Value Measurements - Changes in Fair Value of Level 3 Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
AdvantageTec
Change in Fair Value of Level 3 Liabilities
Fair value adjustment				$ 200
Contingent earn-out
Change in Fair Value of Level 3 Liabilities
Beginning balance	$ 0	$ 557	$ 557
Payments	0	(294)
Ending balance	132		0	$ 557
Contingent earn-out \| AdvantageTec
Change in Fair Value of Level 3 Liabilities
Fair value adjustment	$ 132	$ (263)	$ (300)

Commitments and Contingencies - Leases Narrative (Details)	3 Months Ended
	Mar. 31, 2021 USD ($) lease	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease right of use asset	$ 437,000		$ 614,000
Present value of lease liabilities	11,267,000		$ 12,898,000
Rental expense for operating leases	$ 1,900,000	$ 3,400,000
Number of leases abandoned \| lease	14
Transition to employee-centric model
Lessee, Lease, Description [Line Items]
Lease restructuring expenses	$ 24,300,000
Other non-recurring expenses	$ 5,100,000
Minimum
Lessee, Lease, Description [Line Items]
Initial lease term	1 year
Operating leases remaining lease term	1 year
Finance leases remaining lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Initial lease term	12 years
Operating leases remaining lease term	5 years
Finance leases remaining lease term	5 years

Commitments and Contingencies - Supplemental Cash Flow Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Operating cash flows for operating leases	$ 387,000	$ 1,986,000
Operating cash flows for finance leases	94,000	0
Financing cash flows for finance leases	$ 859,000	$ 0

Commitments and Contingencies - Components of Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Components of Lease Costs
Amortization of right-of-use assets	$ 888	$ 0
Interest	94	0
Operating lease cost	1,857	1,397
Total lease cost	$ 2,839	$ 1,397

Commitments and Contingencies - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Operating Leases
Operating lease right-of-use asset	$ 437	$ 614
Current operating lease liability	5,097	5,718
Long term operating lease liability	6,170	7,180
Total operating lease liability	$ 11,267	$ 12,898
Operating leases, weighted average remaining lease term (in years)	2 years 10 months 24 days	3 years
Operating leases, weighted average discount rate (percent)	7.00%	7.00%
Finance Leases
Right-of-use asset, net	$ 9,157	$ 10,045
Current finance lease liability	3,524	3,488
Long term finance lease liability	5,280	6,176
Total finance lease liability	$ 8,804	$ 9,664
Finance leases, weighted average remaining lease term (in years)	2 years 7 months 6 days	2 years 9 months 18 days
Finance leases, weighted average discount rate (percent)	4.00%	4.00%

Commitments and Contingencies - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Operating Leases Future Minimum Lease Payments
2021 (remaining nine months for March 31, 2021)	$ 4,669
2022	3,788
2023	1,953
2024	1,171
2025	636
Thereafter	265
Total minimum lease payments	12,482
Less: present value adjustment	(1,215)
Present value of lease liabilities	11,267	$ 12,898
Finance Leases Future Minimum Lease Payments
2021 (remaining nine months for March 31, 2021)	2,861
2022	3,814
2023	2,572
2024	0
Thereafter	0
Finance Lease Liability Payment Due After Year Four	0
Total minimum lease payments	9,247
Less: present value adjustment	(443)
Present value of lease liabilities	$ 8,804	$ 9,664

Commitments and Contingencies - Employee Benefit Plans, Letters of Credit, and Non-Income Related Taxes (Details) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) segment
Other Commitments [Line Items]
Employer matching contributions	$ 0.9	$ 0.9
Estimated sales tax liability, including interest, minimum		2.5
Estimated sales tax liability, including interest, maximum		6.3
Accrued sales tax, including interest	2.0	$ 2.5
Letter of Credit
Other Commitments [Line Items]
Number of draws \| segment			2
Proceeds from amounts drawn against letters of credit			$ 1.8
Letter of Credit \| LOC for Security Deposit
Other Commitments [Line Items]
Letters of Credit Outstanding, Amount	$ 0.6
Match Step One
Other Commitments [Line Items]
Employer matching contribution, percent of match	100.00%
Employer matching contribution percent of eligible compensation	3.00%
Match Step Two
Other Commitments [Line Items]
Employer matching contribution, percent of match	50.00%
Employer matching contribution percent of eligible compensation	2.00%

Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions									3 Months Ended		7 Months Ended	12 Months Ended
	Jun. 11, 2020	Apr. 11, 2019	Feb. 13, 2019	Oct. 29, 2018	Jul. 31, 2018	Apr. 25, 2018	Apr. 30, 2017	Jun. 07, 2012	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2009	Dec. 31, 2000	Dec. 31, 2020	Nov. 12, 2019	Mar. 31, 2019	Jan. 31, 2018	Jun. 30, 2010	Dec. 31, 1998
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Common stock, authorized (in shares)									200,000,000					200,000,000	100,000,000
Common stock, issued (in shares)									71,351,202					70,264,265
Common stock, outstanding (in shares)									68,641,372					67,554,435
Common stock, par value (in dollars per share)									$ 0.001					$ 0.001		$ 0.001
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, authorized (in shares)									5,000,000					5,000,000
Preferred stock, issued (in shares)									0					0
Preferred stock, shares outstanding (in shares)									0					0
Preferred stock, par value (in dollars per share)									$ 0.001					$ 0.001
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Per share weighed average fair value of stock options granted during the period (in dollars per share)									$ 31.60	$ 8.18
Dividend yield (percent)									0.00%	0.00%
Expected life (in years)									5 years	5 years
Period used to determine volatility									5 years
Fair value of stock options exercised									$ 1.2
Accrual for cash awards									5.3	$ 3.7
Stock-based compensation expense									$ 14.6	$ 14.7
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average recognition period of unrecognized compensation cost									2 years 6 months
Incentive Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to novested share-based compensation arrangements									$ 17.6
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to nonvested share-based compensation arrangements									$ 65.7
Weighted average recognition period of unrecognized compensation cost									2 years 8 months 12 days
1998 Plan \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for issuance (up to)																			5,850,000
2000 Plan \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for issuance (up to)													10,000,000
Increase in number of shares of common stock available for issuance													4,150,000
2009 Plan \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in number of shares of common stock available for issuance												6,000,000
2009 Plan, Amended \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for issuance (up to)		35,067,744
Options term (in years)									10 years
Increase in number of shares of common stock available for issuance	3,000,000	4,250,000					4,000,000	4,250,000
Shares reserved for future issuance									2,600,000
2010 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for issuance (up to)							2,000,000											1,000,000
Increase in number of shares of common stock available for issuance							1,000,000
Shares reserved for future issuance									800,000
Two Thousand Nineteen Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in number of shares of common stock available for issuance											1,000,000
2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for issuance (up to)														3,368,048			1,500,000
Increase in number of shares of common stock available for issuance			618,048	250,000	500,000	500,000
2018 Plan \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance									1,200,000
Minimum \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period									3 years
Maximum \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period									4 years

Stockholders' Equity - Weighted Average Assumptions of Fair Value Options Using Black-Scholes Option-Pricing Model (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Option-Pricing Model Weighted Average Assumptions
Dividend yield (percent)	0.00%	0.00%
Risk-free interest rate (percent)	0.46%	0.66%
Expected life (in years)	5 years	5 years
Historical volatility (percent)	53.94%	46.50%

Stockholders' Equity - Summary of Stock Option Activity and Weighted Average Exercise Prices (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Options
Beginning balance (in shares)	4,332
Granted (in shares)	66
Exercised (in shares)	(209)
Cancelled or expired (in shares)	(15)
Ending balance (in shares)	4,174	4,332
Options vested and expected to vest (in shares)	1,245
Options exercisable at end of period (in shares)	2,412
Weighted Average Exercise Price
Beginning balance (in dollars per share)	$ 19.78
Granted (in dollars per share)
Exercised (in dollars per share)
Cancelled or expired (in dollars per share)
Ending balance (in dollars per share)	20.93	$ 19.78
Options vested and expected to vest (in dollars per share)	26.28
Options exercisable at end of period (in dollars per share)	$ 15.75
Weighted Average Remaining Contractual Term (in years)
Weighted average remaining contract term, Options outstanding	6 years 9 months 7 days	6 years 9 months 14 days
Weighted average remaining contract term, Options vested and expected to vest	8 years 14 days
Weighted average remaining contract term, Options exercisable	5 years 8 months 15 days
Aggregate Intrinsic Value
Aggregate intrinsic value, Options outstanding	$ 134,089	$ 183,825
Aggregate intrinsic value, Options vested and expected to vest	33,613
Aggregate intrinsic value, Options exercisable	$ 89,213

Stockholders' Equity - Summary of Restricted Stock Unit Activity and Weighted Average Exercise Price (Details) - RSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Number of Shares (in thousands)
Beginning balance outstanding (in shares)	2,950
Awarded (in shares)	519
Released (in shares)	(855)
Forfeited (in shares)	(87)
Non-vested and outstanding at end of period (in shares)	2,527
Expected to vest (in shares)	1,631
Weighted Average Grant Date Fair Value (usd per share)
Beginning balance outstanding (in dollars per share)	$ 27.00
Awarded (in dollars per share)
Released (in dollars per share)
Forfeited (in dollars per share)
Non-vested and outstanding at end of period (in dollars per share)	29.67
Expected to vest (in dollars per share)	$ 28.72
Aggregate Fair Value (in thousands)
Aggregate fair value, Non-vested and outstanding	$ 133,461	$ 183,781
Aggregate fair value, Expected to vest	$ 86,029

Restructuring - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Restructuring and Related Activities [Abstract]
Restructuring expense	$ 2,732	$ 3,190
Restructuring liability	$ 4,914		$ 4,732	$ 314

Restructuring - Restructuring Liability (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Restructuring Reserve [Roll Forward]
Balance, Beginning of the year	$ 4,732	$ 314
Lease restructuring costs	294	5,034
Severance and other compensation associated costs	2,438	5,090
Cash payments	(2,550)	(5,706)
Balance, End of period	$ 4,914	$ 4,732

Restructuring - Restructuring Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 2,732	$ 3,190
Lease restructuring costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	294	0
ROU assets write down
Restructuring Cost and Reserve [Line Items]
Restructuring costs	0	0
Abandonment of property and equipment
Restructuring Cost and Reserve [Line Items]
Restructuring costs	0	0
Other lease restructuring costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	294	0
Severance and other compensation associated costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 2,438	$ 3,190

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Income Tax Contingency [Line Items]
(Benefit from) provision for income taxes	$ (851)	$ 352
Income tax provision on operating income	600
Income tax benefit from settlement of uncertain tax benefits	(1,500)
Valuation allowance			$ 55,400	$ 48,500
Increase in valuation allowance recorded as an expense	$ 20,700		35,100	25,000
Decrease in valuation allowance charged to equity			28,200	$ 6,700
Income tax benefit recognized as result of CARES Act			600
Foreign Tax Authority
Income Tax Contingency [Line Items]
Increase in valuation recorded			$ 6,900