$ 588,916

$ 454,086

$ 316,861

^[1]

36,300

24,811

17,609

552,616

429,275

299,252

Product, technology, and development

393,844

315,939

236,165

69,462

47,866

22,470

General and administrative

50,434

39,475

22,688

Depreciation and amortization

4,554

2,804

2,655

518,294

406,084

283,978

34,322

23,191

15,274

Other income (expense), net

Interest income

2,984

2,283

869

1,399

(306)

Total other income, net

4,383

2,293

563

38,705

25,484

15,837

(3,441)

(39,686)

2,638

Reconciliation of net income to net income attributable to common stockholders:

42,146

65,170

13,199

Net income attributable to participating securities

42,146

65,170

13,199

(6,098)

Net income attributable to common stockholders — basic

42,146

65,170

7,101

Net income attributable to participating securities

42,146

65,170

13,199

(5,829)

Net income attributable to common stockholders — diluted

$ 42,146

$ 65,170

$ 7,370

Net income per share attributable to common stockholders: (Note 11)

$ 0.38

$ 0.60

$ 0.13

Weighted–average number of shares of common stock used in computing net income per share attributable to common stockholders:

$ 0.37

$ 0.57

$ 0.12

111,450,443

108,833,028

55,835,265

113,431,850

113,364,712

60,637,584

[1]	Includes depreciation and amortization expense for the years ended December 31, 2019, 2018, and 2017 of $3,263 $2,225, and $1,140, respectively.

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 42,146	$ 65,170	$ 13,199
Other comprehensive (loss) income:
Foreign currency translation adjustment	(421)	(157)	258
Comprehensive income	$ 41,725	$ 65,013	$ 13,457

Organization and Business Description

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

+ References + Details

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Series A Preferred Stock	Series B Preferred Stock	Series C Preferred Stock	Series D Preferred Stock	Series E Preferred Stock	Class A Common Stock	Class B Common Stock	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Retained Earnings (Accumulated Deficit)
Beginning balance at Dec. 31, 2016	$ (67,972)								$ 14	$ 28	$ 3,714	$ (30)	$ (71,698)
Convertible preferred stock, Beginning balance, Shares at Dec. 31, 2016		2,824,703	2,938,486	1,550,612	1,673,105	1,107,202
Convertible preferred stock, Beginning balance at Dec. 31, 2016		$ 1,483	$ 2,295	$ 1,316	$ 67,872	$ 59,732
Beginning balance, Shares at Dec. 31, 2016									14,022,132	28,044,264
Net income	13,199												13,199
Stock–based compensation expense	5,204										5,204
Issuance of common stock upon exercise of stock options	398										398
Issuance of common stock upon exercise of stock options, Shares									92,944	181,840
Issuance of stock, net of issuance/offering costs	43,240								$ 3		43,237
Issuance of stock, net of issuance/offering costs, Shares									3,205,000
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares							0
Conversion of preferred and common stock	132,698								$ 61		132,637
Convertible preferred stock, Conversion of preferred stock, Shares		(2,824,703)	(2,938,486)	(1,550,612)	(1,673,105)	(1,107,202)
Convertible preferred stock, Conversion of preferred stock		$ (1,483)	$ (2,295)	$ (1,316)	$ (67,872)	$ (59,732)
Conversion of preferred and common stock, shares issued									60,564,678
Foreign currency translation adjustment	258											258
Ending balance at Dec. 31, 2017	127,025								$ 78	$ 28	185,190	228	(58,499)
Ending balance, Shares at Dec. 31, 2017									77,884,754	28,226,104
Net income	65,170												65,170
Stock–based compensation expense	21,284										21,284
Issuance of common stock upon exercise of stock options	3,632								$ 3		3,629
Issuance of common stock upon exercise of stock options, Shares									3,186,489	10,690
Issuance of common stock upon vesting of restricted stock units									$ 2		(2)
Issuance of common stock upon vesting of restricted stock units, Shares									1,781,201
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(25,885)										(25,885)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares							(658,931)		(658,931)
Cumulative adjustment from adoption of revenue recognition standard	3,042												3,042
Conversion of preferred and common stock									$ 7
Conversion of preferred and common stock, shares issued									7,534,710
Conversion of preferred and common stock, shares converted										(7,534,710)
Conversion of preferred and common stock, value										$ (7)
Foreign currency translation adjustment	(157)											(157)
Ending balance at Dec. 31, 2018	194,111								$ 90	$ 21	184,216	71	9,713
Ending balance, Shares at Dec. 31, 2018							89,728,223	20,702,084	89,728,223	20,702,084
Net income	42,146												42,146
Stock–based compensation expense	35,682										35,682
Issuance of common stock upon exercise of stock options	1,807										1,807
Issuance of common stock upon exercise of stock options, Shares									838,928
Issuance of common stock upon vesting of restricted stock units									$ 1		(1)
Issuance of common stock upon vesting of restricted stock units, Shares									1,317,736
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(16,470)										(16,470)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares							(452,678)		(452,678)
Conversion of preferred and common stock									$ 1
Conversion of preferred and common stock, shares issued									387,440
Conversion of preferred and common stock, shares converted										(387,440)
Conversion of preferred and common stock, value										$ (1)
Foreign currency translation adjustment	(421)											(421)
Ending balance at Dec. 31, 2019	$ 256,855								$ 92	$ 20	$ 205,234	$ (350)	$ 51,859
Ending balance, Shares at Dec. 31, 2019							91,819,649	20,314,644	91,819,649	20,314,644

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating Activities
Net income	$ 42,146	$ 65,170	$ 13,199
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,817	5,029	3,795
Currency (gain) loss on foreign denominated transactions	(690)	(190)	128
Deferred taxes	(3,734)	(39,040)	(1,117)
Provision for doubtful accounts	1,091	1,680	1,117
Stock–based compensation expense	34,301	20,794	5,028
Amortization of deferred contract costs	8,416	3,689
Changes in operating assets and liabilities:
Accounts receivable, net	(9,608)	(1,911)	(7,039)
Prepaid expenses, prepaid income taxes, and other assets	(378)	(11,753)	(2,287)
Deferred contracts costs	(15,979)	(12,987)
Accounts payable	4,268	9,345	6,244
Accrued expenses, accrued income taxes and other current liabilities	2,151	2,695	5,191
Deferred revenue	1,174	4,508	962
Deferred rent		4,289	227
Lease obligations	(1,468)
Other non–current liabilities	609	405	243
Net cash provided by operating activities	70,116	51,723	25,691
Investing Activities
Purchases of property and equipment	(11,205)	(5,956)	(5,157)
Capitalization of website development costs	(3,021)	(1,522)	(2,215)
Cash paid for acquisition	(19,139)
Investments in certificates of deposit	(177,808)	(212,800)	(50,000)
Maturities of certificates of deposit	188,916	140,000	44,774
Net cash used in investing activities	(22,257)	(80,278)	(12,598)
Financing Activities
Initial public offering proceeds			47,690
Payment of initial public offering costs		(1,142)	(3,308)
Proceeds from exercise of stock options	1,807	3,632	398
Financing cash flows from finance leases	(30)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(16,470)	(25,885)
Net cash (used in) provided by financing activities	(14,693)	(23,395)	44,780
Impact of foreign currency on cash, cash equivalents, and restricted cash	(1)	(44)	159
Net increase (decrease) in cash, cash equivalents, and restricted cash	33,165	(51,994)	58,032
Cash, cash equivalents, and restricted cash at beginning of period	37,558	89,552	31,520
Cash, cash equivalents, and restricted cash at end of period	70,723	37,558	89,552
Supplemental disclosure of cash flow information:
Cash paid for income taxes	300	2,308	4,393
Unpaid purchases of property and equipment	647	5,287	510
Unpaid initial public offering costs			1,142
Capitalized stock-based compensation expense in website development and internal-use software costs	1,381	$ 490	$ 176
Cash paid for operating lease liabilities	$ 10,906

Organization and Business Description

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

1. Organization and Business Description

CarGurus, Inc. (the “Company”), is a global, online automotive marketplace connecting buyers and sellers of new and used cars. Using proprietary technology, search algorithms, and innovative data analytics, the Company provides information and analysis that create a differentiated automotive search experience for consumers. The Company’s marketplace empowers users worldwide with unbiased third-party validation on pricing and dealer reputation, as well as other useful information that aids them in finding “Great Deals from Top-Rated Dealers.”

The Company is headquartered in Cambridge, Massachusetts and was incorporated in the State of Delaware on June 26, 2015. The Company operates principally in the United States and has also launched online marketplaces under the CarGurus brand in Canada, the United Kingdom, Germany, Italy, and Spain. The Company has subsidiaries in the United States, Canada, Ireland, and the United Kingdom. In the United Kingdom, the Company also operates the PistonHeads online marketplace as an independent brand.

On October 16, 2017, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 3,205,000 shares of its Class A common stock, including the full exercise by the underwriters of their option to purchase 705,000 shares of Class A common stock, at a public offering price of $16.00 per share for aggregate gross proceeds of $51.3 million. The Company received $43.2 million in net proceeds after deducting $3.6 million of underwriting discounts and commissions and $4.5 million in offering costs. In addition to shares of Class A common stock issued and sold by the Company, certain selling stockholders sold an aggregate of 7,605,000 shares of Class A common stock, including the full exercise by the underwriters of their option to purchase 705,000 shares of Class A common stock, as part of the IPO. Upon the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 20,188,226 shares of Class A common stock and 40,376,452 shares of Class B common stock. The 40,376,452 shares of Class B common stock subsequently converted into 40,376,452 shares of Class A common stock resulting in a total conversion of all outstanding shares of convertible preferred stock into 60,564,678 shares of Class A common stock. Subsequent to the closing of the IPO, there were no shares of convertible preferred stock outstanding.

The Company is subject to a number of risks and uncertainties common to companies in its and similar industries and stages of development including, but not limited to, rapid technological changes, competition from substitute products and services from larger companies, management of international activities, protection of proprietary rights, patent litigation, and dependence on key individuals.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the consolidated financial statements. The Company believes that a significant accounting policy is one that is both important to the portrayal of the Company’s financial condition and results, and requires management’s most difficult, subjective, or complex judgments, often as the result of the need to make estimates about the effect of matters that are inherently uncertain.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Due to the adoption of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), which is discussed further in this Note 2, the consolidated balance sheets and the consolidated statements of operations, comprehensive income, convertible preferred stock and stockholders’ equity (deficit), and cash flows for the years ended December 31, 2019 and 2018 are not comparative to prior years.

Due to the adoption of ASC Topic 842, Leases (“ASC 842”), which is discussed further in this Note 2, the consolidated balance sheet for the year ended December 31, 2019 is not comparative to prior years.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Subsequent Event Considerations

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure, other than those disclosed in Note 16 of these consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

Significant estimates relied upon in preparing these consolidated financial statements include revenue recognition and sales allowances, variable consideration, the valuation of goodwill and intangible assets, the expensing and capitalization of product, technology, and development costs for website development and internal‑use software, and the recoverability of the Company’s net deferred tax assets and related valuation allowance.

Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made.

Revenue Recognition

The Company derives its revenue from two primary sources: (1) marketplace subscription revenue, which consists primarily of Listings, and Dealer Display subscriptions, and (2) advertising and other revenue, which consists primarily of display advertising revenue from auto manufacturers and other auto‑related brand advertisers as well as partnerships with financing services companies.

Marketplace Subscription Revenue

The Company offers multiple types of marketplace Listings packages to its dealers through its platform: Restricted Listings (formerly referred to as Basic Listings), which is free; and various levels of Listings packages, which each require a paid subscription under a monthly, quarterly, semiannual, or annual subscription basis. Contractual subscriptions for customers generally auto-renew on a monthly basis and are cancellable by dealers with 30 days’ advance notice at the end of the committed term. The Company also offers all dealers on the its platform access to a Dealer Dashboard, which includes a performance summary, Dealer Insights tool, and user review management platform. Dealers subscribing to a paid Listings package also have access to the Pricing Tool and Market Analysis tool. The Pricing Tool and Market Analysis tool are available only to paying dealers. Subscription pricing is determined based on a dealer’s inventory size, region, and the Company’s assessment of the connections and Return on Investment (“ROI”) the platform will provide them.

Customers do not have the right to take possession of the Company’s software.

In addition to listing inventory in the Company’s marketplace and providing access to the Dealer Dashboard, the Company offers dealers subscribing to one of its Enhanced, Featured, or Featured Priority Listings packages other subscription advertising and customer acquisition products, including Dealer Display, pursuant to which dealers can buy display advertising that appears in the Company’s marketplace, and on other sites on the internet, and for which such advertisements can be targeted by the user’s geography, search history, CarGurus website activity (including showing users relevant vehicles from a dealer’s inventory that they have not yet discovered on the Company’s marketplace), and a number of other targeting factors, allowing dealers to increase their visibility with in-market consumers and drive qualified traffic for dealers.

Payment is typically due on first day of each calendar month and is recorded as accounts receivable or short-term deferred revenue when payment is received in advance of services being delivered to the customers.

Advertising and Other Revenue

Advertising and other revenue consists primarily of non-dealer display advertising revenue from auto manufacturers and other auto-related brand advertisers sold on a cost per thousand impressions (“CPM”) basis. An impression is an advertisement loaded on a web page. In addition to advertising sold on a CPM basis, the Company also has advertising sold on a cost per click basis. Auto manufacturers and other brand advertisers can execute advertising campaigns that are targeted across a wide variety of parameters, including demographic groups, behavioral characteristics, specific auto brands, categories such as Certified Pre-Owned, and segments such as hybrid vehicles. The Company does not provide minimum impression guarantees or other types of minimum guarantees in its contracts with customers. Pricing is primarily based on advertisement size and position on the Company’s websites and mobile applications, and fees are billed monthly in arrears. Unbilled accounts receivables relate to services rendered in the current period, but generally not invoiced until the subsequent period.

The Company sells advertising directly to auto manufacturers and other auto related brand advertisers, as well as indirectly through revenue sharing arrangements with advertising exchange partners. Company-sold advertising is not subject to revenue sharing arrangements. Company-sold advertising revenue is recognized based on the gross amount charged to the advertiser. Partner-sold advertising revenue is recognized based on the net amount of revenue received from the content partners.

Revenue from advertising sold directly by the Company is recorded on a gross basis because the Company is the principal in the arrangement, controls the ad placement and timing of the campaign, and establishes the selling price. The Company enters into contractual arrangements directly with advertisers and is directly responsible for the fulfillment of the contractual terms including any remedy for issues with such fulfillment.

Advertising revenue subject to revenue sharing agreements between the Company and advertising exchange partners is recognized based on the net amount of revenue received from the partner. The advertising partner is responsible for fulfillment, including the acceptability of the services delivered. In partner-sold advertising arrangements, the advertising partner has a direct contractual relationship with the advertiser. There is no contractual relationship between the Company and the advertiser for partner-sold transactions. When an advertising exchange partner sells advertisements, the partner is responsible for fulfilling the advertisements, and accordingly, the Company has determined the advertising partner is the principal in the arrangement. Additionally, for auction-based partner agreements, the Company has latitude in establishing the floor price, but the final price established by the exchange server is at market rates.

Customers are billed monthly in arrears and payment terms are generally thirty to sixty days from the date invoiced.

Advertising and other revenue also includes revenue from partnerships with certain financing services companies pursuant to which the Company enables eligible consumers on the Company’s United States website to pre-qualify for financing on cars from dealerships that offer financing through such companies. The Company’s revenues from these financing partnerships are based on a funded-loan basis.

Prior to adoption of ASC 606

The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer; (3) the collection of fees is reasonably assured; and (4) the amount of fees to be paid by the customer is fixed or determinable.

The Company recognizes marketplace subscription revenue on a monthly basis as revenue is earned and advertising and other revenue as impressions are delivered. Revenue is presented net of any taxes collected from customers.

The Company assesses arrangements with multiple deliverables under ASU No. 2009‑13, Revenue Recognition (Topic 605), Multiple‑Deliverable Revenue Arrangements — a Consensus of the FASB Emerging Issues Task Force. Pursuant to ASU 2009‑13, in order to treat deliverables in a multiple‑element arrangement as separate units of accounting, the deliverables must have stand‑alone value upon delivery. If the deliverables have stand‑alone value upon delivery, the Company accounts for each deliverable separately. The Company has concluded that each element in the arrangement has stand‑alone value as the individual services can be sold separately. In addition, there is no right of refund once a service has been delivered. Therefore, the Company has concluded that each element of the arrangement is a separate unit of accounting. While these arrangements are considered multiple element‑arrangements, the recognition of the units of accounting follow a consistent ratable recognition given the pattern over which services are provided.

The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its customers. Sales allowances relate primarily to credits issued for service interruption. In assessing the adequacy of the sales allowance, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments and credits and ultimate losses may vary from actual results which could be material to the financial statements; however, to date, actual sales allowances have been materially consistent with the Company’s estimates. Sales allowances are recorded as a reduction to revenue in the consolidated statements of operations.

Following adoption of ASC 606

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which modifies how all entities recognize revenue, and consolidates revenue recognition guidance into one ASC Topic (ASC Topic 606, Revenue from Contracts with Customers) (“ASC 606”). Since the Company ceased to be an emerging growth company as of December 31, 2018, the Company adopted the standard during the fourth quarter of 2018 and applied the modified retrospective method of adoption with a cumulative catch-up adjustment to the opening balance of retained earnings at January 1, 2018. Under this method, the Company applied the revised guidance for the year of adoption and applied ASC Topic 605, Revenue Recognition (“ASC 605”), in the prior years. As a result, the Company applied ASC 606 only to contracts that were not yet completed as of January 1, 2018. The Company recognized a cumulative catch-up adjustment to the opening balance of retained earnings at the effective date for contracts that still required performance by the Company at January 1, 2018. For contracts that were modified before the effective date, the Company exercised the use of the practical expedient and reflected the aggregate effect of all modifications when identifying performance obligations, determining the transaction price and allocating transaction price, which did not have a material effect on the adjustment to retained earnings.

ASC 606 outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps:

Identify the contract with a customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to performance obligations in the contract

Recognize revenue when or as the Company satisfies a performance obligation

Disaggregation of Revenue

The following table summarizes revenue from contracts with customers by revenue source for the years ended December 31, 2019, 2018 and 2017.

	2019		2018		2017
Revenue by Revenue Stream
Marketplace subscription revenue	$	526,043	$	405,780	$	282,664
Advertising and other revenue		62,873		48,306		34,197
Total	$	588,916	$	454,086	$	316,861

The Company provides disaggregation of revenue based on the marketplace subscription versus advertising and other revenue classification in the table above and based on geographic region (see Note 13) as it believes these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Marketplace Subscription Revenue

For dealer listings, the Company provides a single similar service each day for a period of time. Each time increment (i.e. day), rather than the underlying activities, is distinct and substantially the same and therefore the performance obligation of the Company is to provide a series of daily activities over the contract term. Similar to the dealer listings, the dealer display advertising is considered a promise to provide a single similar service each day. Each time increment is distinct and substantially the same and therefore the performance obligation of the Company is to provide a series of daily activities over the contract term.

Total consideration for marketplace subscription revenue is stated within the contracts. There are no contractual cash refund rights, but credits may be issued to a customer at the sole discretion of the Company. At an individual contract level, there is also no variable consideration, such as sales allowance, that needs to be included in the transaction price. However, at a portfolio level, the Company recognizes that there are times when there is a customer satisfaction issue or other circumstance that will lead to a credit. Due to the known possibility of future credits, a monthly sales allowance review is performed to defer revenue at a portfolio level for such future adjustments in the period of incurrence. The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its customers. In assessing the adequacy of the sales allowance, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments, credits and losses may vary from actual results which could lead to material adjustments to the financial statements. To date, actual sales allowances have been materially consistent with the Company’s estimates. Sales allowances are recorded as a reduction to revenue in the consolidated statements of operations.

Performance obligations are satisfied over time as the customer simultaneously receives and consumes the benefit of the service. Revenue is recognized ratably over the subscription period beginning on the date the Company starts providing services to the customer under the contract. Revenue is presented net of any taxes collected from customers.

Advertising and Other Revenue

For advertising revenue, the performance obligation is to publish the agreed upon campaign on the Company’s websites and load the related impressions.

Advertising contracts state the transaction price within the agreement with payment being based on the number of clicks or impressions delivered on the Company’s websites. Total consideration is based on output and deemed variable consideration constrained by an agreed upon delivery schedule. Additionally, there are generally no contractual cash refund rights. Certain contracts do contain the right for credits in situations in which impressions are not displayed in compliance with contractual specifications. At an individual contract level, the Company may give a credit for a customer satisfaction issue or other circumstance. Due to the known possibility of future credits, a monthly review is performed to defer revenue at an individual contract level for such future adjustments in the period of incurrence.

As consideration is driven by the number of impressions delivered on the CarGurus websites, the consideration for each period is allocated to the period in which the service was rendered.

Performance obligations for company-sold advertising revenue and partner-sold advertising revenue are satisfied over time as impressions are delivered. Revenue is recognized based on the total number of impressions delivered within the specified period. Revenue from advertising sold directly by the Company is recognized based on the gross amount charged to the advertiser and advertising revenue sold by partners is recognized based on the net amount of revenue received from the content partners. Revenue is presented net of any taxes collected from customers.

Other revenue includes revenue from contracts for which the performance obligation is a series of distinct services with the same level of effort daily. For these contracts, the Company estimates the value of the variable consideration in determining the transaction price and allocates it to the performance obligation. Revenue is estimated and recognized on a ratable basis over the contractual term. The Company reassesses the estimate of variable consideration at each reporting period.

Contracts with Multiple Performance Obligations

The Company periodically enters into arrangements that include Listings and Dealer Display within marketplace subscription revenue. These contracts include multiple promises that the Company evaluates to determine if the promises are separate performance obligations. Performance obligations are identified based on services to be transferred to a customer that are distinct within the context of the contractual terms. Once the performance obligations have been identified, the Company determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. If required, the transaction price is allocated to each performance obligation in the contract based on a relative standalone selling price (“SSP”) method as the performance obligation is being satisfied. For the Company’s arrangements that include Listings and Dealer Display, the performance obligations were satisfied over a consistent period of time and therefore the allocations did not impact the revenue recognized.

Costs to Obtain a Contract

Commissions paid to sales representatives and payroll taxes are considered costs to obtain a contract. Under ASC 606, the costs to obtain a contract require capitalization and amortization of those costs over the period of benefit. Although the guidance specifies the accounting for an individual contract with a customer, as a practical expedient, the Company has opted to apply the guidance to a portfolio of contracts with similar characteristics. The Company has opted to apply another practical expedient to immediately expense the incremental cost of obtaining a contract when the underlying related asset would have been amortized over one year or less. As such, the Company applied this practical expedient to advertising contracts as the term is one year or less and these contracts do not renew automatically. The practical expedient is not applicable to marketplace subscription contracts as the period of benefit including renewals is anticipated to be greater than one year as commissions paid on contract renewals are not commensurate with the commissions paid on the initial contract. The assets are periodically assessed for impairment.

For marketplace subscription customers, the commissions paid on contracts with new customers, in addition to any commission amount related to incremental sales, are capitalized and amortized over the estimated benefit period of the customer relationship taking into account factors such as peer estimates of technology lives and customer lives as well as the Company's own historical data. Commissions paid that are not directly related to obtaining a new contract are expensed as incurred.

Additionally, the Company allocates employer payroll tax expense to the commission expense in proportion to the overall payroll taxes paid during the respective period. As such, capitalized payroll taxes are amortized in the same manner as the underlying capitalized commissions.

The assets recognized for costs to obtain a contract were $3,207, $12,505 and $20,058 as of January 1, 2018, December 31, 2018 and December 31, 2019, respectively. Amortization expense recognized during the years ended December 31, 2019 and 2018 related to costs to obtain a contract was $8,416 and $3,689, respectively.

Financial Statement Impact of Adopting ASC 606

The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made on the consolidated balance sheet as of January 1, 2018.

	As Reported			Adjustments						As Adjusted
	December 31, 2017			Marketplace Subscription Revenue			Costs to Obtain a Contract			January 1, 2018
Assets
Current assets:
Cash and cash equivalents	$	87,709								$	87,709
Investments		50,000									50,000
Accounts receivable, net		12,577			813						13,390
Prepaid expenses and prepaid income taxes		5,313									5,313
Deferred contract costs		—						1,424			1,424
Other current assets		1,605									1,605
Restricted cash		—									—
Total current assets		157,204			813			1,424			159,441
Property and equipment, net		16,563									16,563
Restricted cash		1,843									1,843
Deferred tax assets		825			(190	)		(635	)		—
Deferred contract costs, net of current portion		—						1,783			1,783
Other long–term assets		159									159
Total assets	$	176,594		$	623		$	2,572		$	179,789
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	23,908								$	23,908
Accrued expenses, accrued income taxes and other current liabilities		13,588									13,588
Deferred revenue		4,305									4,305
Deferred tax liabilities		—						153			153
Deferred rent		1,165									1,165
Total current liabilities		42,966			—			153			43,119
Deferred rent, net of current portion		5,648									5,648
Other non–current liabilities		955									955
Total liabilities		49,569			—			153			49,722
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—									—
Class A common stock		78									78
Class B common stock		28									28
Additional paid–in capital		185,190									185,190
Accumulated deficit		(58,499	)		623			2,419			(55,457	)
Accumulated other comprehensive income		228									228
Total stockholders’ equity		127,025			623			2,419			130,067
Total liabilities and stockholders’ equity	$	176,594		$	623		$	2,572		$	179,789

Marketplace Subscription Revenue

Under ASC 606, the Company’s accounting for contracts containing discounts resulted in accelerated revenue recognition. The cumulative impact of this change to the Company’s accounts receivable on January 1, 2018 was $813.

Costs to Obtain a Contract

As described above, under the new guidance, the capitalized commission expense is amortized over the estimated customer relationship period. The net impact of this change resulted in a $3,207 reduction to accumulated deficit for contracts that still require performance by the Company at the date of adoption.

Income Taxes

The adoption of ASC 606 primarily resulted in an acceleration of revenue and the reduction of expense, which in turn generated additional deferred tax liabilities that ultimately reduced the Company’s net deferred tax asset position. The cumulative impact resulted in a reduction to deferred tax assets of $978 which put the Company in a net deferred tax liability position on January 1, 2018.

Impact of New Revenue Guidance on Financial Statement Line Items

The following tables compare the reported consolidated balance sheet, statement of operations and cash flows, as of and for the year ended December 31, 2018, to the pro-forma amounts had the previous guidance been in effect.

	As of December 31, 2018
Balance Sheet	As Reported		Marketplace Subscription Revenue			Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Assets
Current assets:
Cash and cash equivalents	$	34,887							$	34,887
Investments		122,800								122,800
Accounts receivable, net		13,614		939						12,675
Prepaid income taxes and prepaid income taxes		10,144								10,144
Deferred contract costs		5,253					5,253			—
Other current assets		7,410								7,410
Restricted cash		750								750
Total current assets		194,858		939			5,253			188,666
Property and equipment, net		24,269								24,269
Restricted cash		1,921								1,921
Deferred tax assets		38,886		(227	)		(3,187	)		42,300
Deferred contract costs, net of current portion		7,252					7,252			—
Other long–term assets		1,104								1,104
Total assets	$	268,290	$	712		$	9,318		$	258,260
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	34,345							$	34,345
Accrued expenses, accrued income taxes and other current liabilities		18,654								18,654
Deferred revenue		8,811								8,811
Deferred rent		1,693								1,693
Total current liabilities		63,503		—			—			63,503
Deferred rent, net of current portion		9,395								9,395
Other non–current liabilities		1,281								1,281
Total liabilities		74,179		—			—			74,179
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—								—
Class A common stock		90								90
Class B common stock		21								21
Additional paid–in capital		184,216								184,216
Retained earnings (accumulated deficit)		9,713		712			9,318			(317	)
Accumulated other comprehensive income		71								71
Total stockholders’ equity		194,111		712			9,318			184,081
Total liabilities and stockholders’ equity	$	268,290	$	712		$	9,318		$	258,260

Total reported assets were $10,030 greater than the pro-forma balance sheet, which assumes the previous guidance remained in effect as of December 31, 2018. This was largely due to the impact of $12,505 related to costs to obtain a contract.

There were no changes to liabilities as of December 31, 2018 as a result of the adoption of ASC 606.

The following summarizes the significant changes on the Company’s consolidated statement of operations for the year ended December 31, 2018 as a result of the adoption of ASC 606 on January 1, 2018 compared to the pro-forma amounts had the Company continued to recognize revenue under ASC 605.

	Year Ended December 31, 2018
Statement of Operations	As Reported			Marketplace Subscription Revenue		Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Revenue	$	454,086		$	126				$	453,960
Cost of revenue		24,811								24,811
Gross profit		429,275			126		—			429,149
Operating expenses:
Sales and marketing		315,939					(9,298	)		325,237
Product, technology, and development		47,866								47,866
General and administrative		39,475								39,475
Depreciation and amortization		2,804								2,804
Total operating expenses		406,084			—		(9,298	)		415,382
Income from operations		23,191			126		9,298			13,767
Other income, net:
Interest income		2,283								2,283
Other income (expense)		10								10
Total other income, net		2,293			—		—			2,293
Income before income taxes		25,484			126		9,298			16,060
Provision for (Benefit from) income taxes		(39,686	)		37		2,399			(42,122	)
Net income	$	65,170		$	89	$	6,899		$	58,182
Basic	$	0.60		$	—	$	0.07		$	0.53
Diluted	$	0.57		$	—	$	0.06		$	0.51

The adoption of ASC 606 resulted in an increase to revenue of $126 during the year ended December 31, 2018 due to accelerated revenue recognition for contracts containing discounts. The adoption of ASC 606 also resulted in a $9,298 reduction in sales and marketing expense during the year ended December 31, 2018 as a result of capitalizing a portion of commission expense, which was previously expensed under the previous guidance. During the year ended December 31, 2018, the cumulative impact of these changes was a $9,424 increase in income from operations which resulted in a $2,436 reduction to the benefit from income taxes. Additionally, the adoption of ASC 606 resulted in the Company’s basic and diluted EPS for the year ended December 31, 2018 increasing $0.07 and $0.06, respectively.

The following summarizes the significant changes on the Company’s consolidated statement of cash flows for the year ended December 31, 2018 as a result of the adoption of ASC 606 on January 1, 2018 compared to the pro-forma amounts had the Company continued to recognize revenue under ASC 605.

	Year Ended December 31, 2018
Statement of Cash Flows	As Reported			Marketplace Subscription Revenue			Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Operating Activities
Net income	$	65,170		$	89		$	6,899		$	58,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,029									5,029
Currency (gain) loss on foreign denominated transactions		(190	)								(190	)
Deferred taxes		(39,040	)		37			2,399			(41,476	)
Provision for doubtful accounts		1,680									1,680
Stock–based compensation expense		20,794									20,794
Amortization of deferred contract costs		3,689						3,689			—
Changes in operating assets and liabilities:
Accounts receivable, net		(1,911	)		(126	)					(1,785	)
Prepaid expenses, prepaid income taxes, and other assets		(11,753	)								(11,753	)
Deferred contracts costs		(12,987	)					(12,987	)		—
Accounts payable		9,345									9,345
Accrued expenses, accrued income taxes and other current liabilities		2,695									2,695
Deferred revenue		4,508									4,508
Deferred rent		4,289									4,289
Other non–current liabilities		405									405
Net cash provided by operating activities	$	51,723		$	—		$	—		$	51,723

The adoption of ASC 606 had no impact on the Company’s cash flows from operations. The aforementioned impacts resulted in offsetting shifts in cash flows between net income and various working capital balances.

Contract Balances

The following tables summarize the opening and closing balances of receivables and contract assets from contracts with customers as of January 1, 2018, December 31, 2018 and December 31, 2019.

	Accounts Receivable, net		Contract Assets (current)		Contract Assets (non-current)
Balance at January 1, 2018	$	13,390	$	1,424	$	1,782
Balance at December 31, 2018		13,614		5,253		7,252
Balance at December 31, 2019		22,124		9,544		10,514

Revenue recognized during the year ended December 31, 2019 and 2018 from amounts included in deferred revenue at the beginning of the period was approximately $8,811 and $4,305, respectively.

Transaction Price Allocated to Future Performance Obligations

Topic 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of December 31, 2019.

For contracts with an original expected duration greater than one year, the aggregate amount of the transaction price allocated to the performance obligations that were unsatisfied as of December 31, 2019 is approximately $35.0 million, which the Company expects to recognize over the next twelve months.

For contracts with an original expected duration of one year or less, the Company has applied the practical expedient available under Topic 606 to not disclose the amount of transaction price allocated to unsatisfied performance obligations as of December 31, 2019. For performance obligations not satisfied as of December 31, 2019, and to which this expedient applies, the nature of the performance obligations, the variable consideration and any consideration from contracts with customers not included in the transaction price is consistent with performance obligations satisfied as of December 31, 2019. The remaining duration is less than one year.

From time to time, the Company may enter into contracts that include variable consideration, for which the Company estimates the value of the variable consideration in determining the transaction price and allocates it to the appropriate performance obligation(s). The Company reassesses any estimates of variable consideration at each reporting period.

Deferred Revenue

Deferred revenue primarily consists of payments received in advance of revenue recognition from the Company’s marketplace revenue and is recognized as the revenue recognition criteria are met. The Company generally invoices its customers monthly. Accordingly, the deferred revenue balances do not represent the total contract value of annual or multiyear subscription agreements. Deferred revenue that is expected to be recognized during the succeeding 12‑month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent in the consolidated balance sheets. All deferred revenue was recorded as current for all periods presented.

Cost of Revenue

Cost of revenue primarily consists of costs related to supporting and hosting the Company’s product offerings. These costs include salaries, benefits, incentive compensation and stock‑based compensation for the Company’s customer support team, and third‑party service provider costs such as data center and networking expenses, allocated overhead costs, depreciation and amortization expense associated with the Company’s property and equipment, and amortization of capitalized website development costs.

Concentration of Credit Risk

The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments, and trade accounts receivable.

The Company maintains its cash, cash equivalents, and investments principally with accredited financial institutions of high credit standing. Although the Company deposits its cash and investments with multiple financial institutions, its deposits, at times, may exceed governmental insured limits.

Credit risk with respect to accounts receivable is dispersed due to the large number of customers. The Company routinely assesses the creditworthiness of its customers. The Company generally has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable.

For the years ended December 31, 2019, 2018 and 2017, no individual customer accounted for more than 10% of total revenue.

As of December 31, 2019, one customer accounted for 18% of net accounts receivable. As of December 31, 2018, two customers accounted for 21% and 14% of net accounts receivable, respectively. No other individual customer accounted for more than 10% of net accounts receivable at December 31, 2019 or 2018.

Included in net accounts receivable at December 31, 2019 and 2018, is $8,880 and $5,814 of unbilled accounts receivables related to advertising customers billed within a quarter subsequent to services rendered.

Cash, Cash Equivalents, and Investments

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Investments not classified as cash equivalents with maturities less than one year from the balance sheet date are classified as short‑term investments, while investments with maturities in excess of one year from the balance sheet date are classified as long‑term investments. Management determines the appropriate classification of investments at the time of purchase, and re‑evaluates such determination at each balance sheet date.

Cash and cash equivalents primarily consist of cash on deposit with banks, and amounts held in interest‑bearing money market accounts. Cash equivalents are carried at cost, which approximates their fair market value.

The Company’s investment policy, which was approved by the Audit Committee of the Company’s board of directors (the “Board”), permits investments in fixed income securities, including U.S. government and agency securities, non‑U.S. government securities, money market instruments, commercial paper, certificates of deposit, corporate bonds, and asset‑backed securities.

As of December 31, 2019 and 2018, investments consisted of U.S. certificates of deposit (“CDs”) with remaining maturities of less than twelve months. The Company classifies CDs with readily determinable market values as held‑to‑maturity, because it is the Company’s intention to hold such investments until they mature. As such, investments were recorded at amortized cost at December 31, 2019 and 2018. The Company adjusts the cost of investments for amortization of premiums and accretion of discounts to maturity, if any. For the years ended December 31, 2019, 2018 and 2017, the Company did not have any premiums or discounts.

Realized gains and losses from sales of the Company’s investments are included in other income (expense), net. There were no realized gains or losses on investments for the years ended December 31, 2019, 2018 or 2017.

The Company reviews investments for other‑than‑temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. Other‑than‑temporary impairments of investments are recognized in the consolidated statements of operations if the Company has experienced a credit loss, has the intent to sell the investment, or if it is more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and duration of the impairment, and changes in value subsequent to the end of the period. As of December 31, 2019 and 2018, the Company determined that no other‑than‑temporary impairments were required to be recognized in the consolidated statements of operations.

Restricted Cash

At December 31, 2019 and 2018, restricted cash was $10,803 and $2,671, respectively, and primarily related to cash held at a financial institution in an interest‑bearing cash account as collateral for four letters of credit in 2019 and three letters of credit in 2018 related to the contractual provisions for the Company’s building leases.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded based on the amount due from the customer and do not generally bear interest. The Company offsets gross trade accounts receivable with an allowance for doubtful accounts. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable and is based upon historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss associated with specific accounts. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off‑balance sheet credit exposure related to its customers. Provisions for allowances for doubtful accounts are recorded in general and administrative expense.

Unbilled accounts receivables are recorded for services rendered in the current period, but generally not invoiced until the subsequent period.

The Company considers current economic trends when evaluating the adequacy of the allowance for doubtful accounts. If circumstances relating to specific customers change, or unanticipated changes occur in the general business environment, particularly as it affects auto dealers, the Company’s estimates of the recoverability of receivables could be further adjusted.

Below is a summary of the changes in the Company’s allowance for doubtful accounts for the years ended December 31, 2019, 2018, and 2017:

	Balance at Beginning of Period		Provision		Write–offs, net of recoveries			Balance at End of Period
Year ended December 31, 2019	$	479	$	1,091	$	(1,330	)	$	240
Year ended December 31, 2018		494		1,680		(1,695	)		479
Year ended December 31, 2017		164		1,117		(787	)		494

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization using the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset. The estimated useful lives of the Company’s property and equipment are as follows:

		Estimated Useful Life (In Years)
Capitalized equipment		3
Capitalized software		3
Capitalized website development		3
Furniture and fixtures		5
Leasehold improvements		Lesser of asset life or lease term

Expenditures for repairs and maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

Impairment of Long‑Lived Assets

The Company evaluates the recoverability of long‑lived assets, such as property and equipment and intangible assets, for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. During this review, the Company re‑evaluates the significant assumptions used in determining the original cost and estimated lives of long‑lived assets. Although the assumptions may vary from asset to asset, they generally include operating results, changes in the use of the asset, cash flows, and other indicators of value. Management then determines whether the remaining useful life continues to be appropriate, or whether there has been an impairment of long‑lived assets based primarily upon whether expected future undiscounted cash flows are sufficient to support the assets’ recovery. Recoverability of these assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

For the years ended December 31, 2019, 2018, and 2017, the Company did not identify any impairment of its long‑lived assets.

Business Combinations

Valuation of Acquired Assets and Liabilities

The Company measures all consideration transferred in a business combination at its acquisition-date fair value. Consideration transferred is determined by the acquisition-date fair value of assets transferred, liabilities assumed, including contingent consideration obligations, as applicable. The Company measures goodwill as the excess of the consideration transferred over the net of the acquisition-date amounts of assets acquired less liabilities assumed.

The Company makes significant assumptions and estimates in determining the fair value of the acquired assets and liabilities as of the acquisition date, especially the valuation of intangible assets and certain tax positions. The Company records estimates as of the acquisition date and reassess the estimates at each reporting period up to one year after the acquisition date. Changes in estimates made prior to finalization of purchase accounting are recorded to goodwill.

Intangible Assets

Intangible assets are recorded at their estimated fair value at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives on a straight-line basis. Amortization is recorded over the relevant estimated useful lives ranging from three to eleven years.

The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life.

Goodwill

Goodwill is recorded when consideration paid in a purchase acquisition exceeds the fair value of the net assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. Conditions that could trigger a more frequent impairment assessment include, but are not limited to, a significant adverse change in certain agreements, significant underperformance relative to historical or projected future operating results, an economic downturn affecting automotive marketplaces, increased competition, a significant reduction in our stock price for a sustained period or a reduction of our market capitalization relative to net book value.

The Company has determined that it had two reporting units, United States and International, as of and for the year ended December 31, 2019. The Company evaluates impairment annually on October 1 by comparing the estimated fair value of each reporting unit to its carrying value. The Company estimates fair value using a discounted cash flow model based on our most recent forecast at the time of its annual impairment test.

Capitalized Website Development and Internal-Use Software Costs

The Company capitalizes certain costs associated with the development of its websites and internal‑use software products after the preliminary project stage is complete and until the software is ready for its intended use. Research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance, and general and administrative or overhead costs are expensed as incurred. Capitalization begins when the preliminary project stage is complete, management authorizes and commits to the funding of the software project with the required authority, it is probable the project will be completed, the software will be used to perform the functions intended and certain functional and quality standards have been met. Qualified costs incurred during the operating stage of our software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality, while costs that cannot be separated between maintenance of, and minor upgrades and enhancements to, internal‑use software are expensed as incurred.

Capitalized website and software development costs are amortized on a straight‑line basis over their estimated useful life of three years beginning with the time when it is ready for intended use. Capitalized internal-use software costs are amortized on a straight‑line basis over their estimated useful life of the term of the hosting arrangement, taking into consideration several other factors such as, but not limited to, options to extend the hosting arrangement or options to terminate the hosting arrangement, beginning with the time when it is ready for intended use. Amounts amortized are presented through operating expense, rather than depreciation or amortization. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

During the years ended December 31, 2019 and 2018, the Company capitalized $4,176 and $2,012 of website development costs, respectively. The Company recorded amortization expense associated with its capitalized website development costs of $1,643, $1,508 and $812 for the years ended December 31, 2019, 2018, and 2017, respectively.

During the year ended December 31, 2019, the Company capitalized $2,615 and $616 of internal-use software in other non-current assets and in prepaid expenses and prepaid income taxes, respectively. The Company recorded amortization expense associated with its internal-use software of $132 for the year ended December 31, 2019.

Foreign Currency Translation

The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s foreign subsidiaries is the local currency of each subsidiary. All assets and liabilities in the balance sheets of entities whose functional currency is a currency other than the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: (1) asset and liability accounts at period‑end rates; (2) income statement accounts at weighted‑average exchange rates for the period; and (3) stockholders’ equity accounts at historical exchange rates. The resulting translation adjustments are excluded from net income and reflected as a separate component of stockholders’ equity (deficit). Foreign currency transaction gains and losses are included in net income for the period. The Company may periodically have certain intercompany foreign currency transactions that are deemed to be of a long‑term investment nature; exchange adjustments related to those transactions are made directly to a separate component of stockholders’ equity (deficit).

Income Taxes

The Company accounts for income taxes in accordance with the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions recognized in the consolidated financial statements by prescribing a more‑likely‑than‑not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Interest and penalties, if applicable, related to uncertain tax positions would be recognized as a component of income tax expense. The Company has no recorded liabilities for uncertain tax positions as of December 31, 2019 and 2018.

The Tax Cuts and Jobs Act subjects a U.S. shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. An entity can make an accounting policy election, per the FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, either to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI as a period cost in the year the tax is incurred.

Disclosure of Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, investments, accounts receivable, accounts payable, and accrued expenses, approximated their fair values at December 31, 2019 and 2018 due to the short‑term nature of these instruments.

The Company has evaluated the estimated fair value of financial instruments using available market information. The use of different market assumptions, estimation methodologies, or both, could have a significant effect on the estimated fair value amounts. See Note 4 for further discussion.

Stock‑Based Compensation

For stock‑based awards issued under the Company’s stock‑based compensation plans, which are more fully described in Note 10, the fair value of each award is determined on the date of grant. The Company recognizes compensation expense for service-based awards on a straight-line basis over the requisite service period for each separate vesting portion of the award, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date.

Certain awards granted by the Company prior to the IPO were subject to service‑based vesting conditions and a performance‑based vesting condition achieved upon a liquidity event, defined as either a change of control or an initial public offering. The Securities and Exchange Commission’s declaration of effectiveness of the Company’s registration statement on Form S-1 on October 11, 2017 satisfied the liquidity event performance condition. Upon the achievement of the liquidity

event, the Company recorded previously unrecognized cumulative stock-based compensation expense of $2.5 million related to these awards. Although the performance-based vesting condition was satisfied, under the terms of the awards, the settlement of such vested RSUs and the issuance of common stock with respect to such vested RSUs occurred on April 10, 2018, one hundred eighty-one days after the satisfaction of the performance condition.

Given the absence of an active market for the Company’s common stock prior to the IPO, the Board was required to estimate the fair value of the Company’s common stock at the time of each grant of a stock‑based award. The Company believes that the members of its Board at all relevant times had sufficient business, finance or venture capital experience to make such estimates. The Company and the Board utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately‑Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that required judgment. These estimates and assumptions include a number of objective and subjective factors used to determine the value of the Company’s common stock at each grant date, including the following factors: (1) prices paid for the Company’s convertible preferred stock, which the Company had sold to outside investors in arm’s‑length transactions, and the rights, preferences, and privileges of the Company’s convertible preferred stock and common stock; (2) valuations performed by an independent valuation specialist; (3) the Company’s stage of development and revenue growth; (4) the fact that the grants of stock‑based awards involved illiquid securities in a private company; and (5) the likelihood of achieving a liquidity event for the common stock underlying the stock‑based awards, such as an IPO or sale of the Company, given prevailing market conditions.

The Company believes this methodology was reasonable based upon the Company’s internal peer company analyses, and further supported by arm’s‑length transactions involving the Company’s convertible preferred stock. As the Company’s common stock was not actively traded, the determination of fair value involved assumptions, judgments, and estimates. If different assumptions had been made, stock‑based compensation expense, consolidated net income, and consolidated net income per share could have been significantly different.

For RSUs issued under the Company’s stock‑based compensation plans prior to the IPO, the fair value of each grant was calculated based on the estimated fair value of the Company’s common stock on the date of grant. The Company estimated the fair value of most stock option awards on the date of grant using the Black‑Scholes option‑pricing model.

For RSUs granted subsequent to the IPO, the fair value is determined based on the closing price of the Company’s Class A common stock as reported on the Nasdaq Global Select Market on the date of grant.

The Company issues shares for stock option exercises and RSUs out of its shares available for issuance. No options were granted during the years ended December 31, 2019, 2018, and 2017.

The Company accounts for forfeitures when they occur. The tax effect of differences between tax deductions related to stock compensation and the corresponding financial statement expense compensation are recorded to tax expense. Excess tax benefits recognized on stock‑based compensation expense are classified as an operating activity in the consolidated statements of cash flows.

During 2019, 2018 and 2017, the Company recorded tax benefits of $11,115, $40,765 and $681, respectively, related to differences between tax deductions related to stock compensation and the corresponding financial statement expense compensation.

See Note 10 for a summary of the stock option and RSU activity for the year ended December 31, 2019.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense, which is included within sales and marketing expense in the consolidated statements of operations, was $287,107, $238,640, and $173,186 for the years ended December 31, 2019, 2018, and 2017, respectively.

Comprehensive Income

Comprehensive income is defined as the change in stockholders’ equity (deficit) of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources. Comprehensive income consists of net income and other comprehensive (loss) income, which includes certain changes in equity that are excluded from net income. Specifically, cumulative foreign currency translation adjustments are included in accumulated other comprehensive (loss) income. As of December 31, 2019 and 2018 accumulated other comprehensive (loss) income is presented separately on the consolidated balance sheets and consists entirely of cumulative foreign currency translation adjustments.

Contingent Liabilities

The Company has certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable; however, it discloses the range of such reasonably possible losses.

Recent Adopted Accounting Pronouncements

Lease Accounting

In February 2016, the FASB issued ASC 842, which requires a lessee to recognize most leases on the consolidated balance sheet but recognize expenses on the consolidated income statement in a manner similar to current practice. The update states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying assets for the lease term. The Company adopted ASC 842 as of January 1, 2019, using the additional transition method offered through ASU No. 2018-11. This approach provides a method for recording existing leases at the adoption date and recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

Lease Overview

The Company’s operating lease obligations consist of various leases for office space in: Boston, Massachusetts; Cambridge, Massachusetts; Detroit, Michigan; Los Angeles, California; Dublin, Ireland; and London, United Kingdom. The Detroit, Los Angeles and London leases are immaterial to the Company. The Company also has an operating lease obligation for data center space in Needham, Massachusetts.

On December 19, 2019, the Company entered into an operating lease for the lease of 273,595 square feet of office space in Boston, Massachusetts at 1001 Boylston Street. The lease provides for leasehold improvement incentives and provides for annual rent increases through the term of the lease. The “Commencement Date” of the lease term is the earlier to occur of (i) the date that is twelve months following the Delivery Date (as defined in the lease) and (ii) the date that the Company first occupies the premises for the normal conduct of business for the Permitted Use (as defined in the lease). The initial term will commence on the Commencement Date and expire on the date that is one hundred and eighty full calendar months after the Commencement Date (plus the partial month, if any, immediately following the Commencement Date). The lease provides for the option to terminate early under certain circumstances including if there is a material delay in construction (subject to the terms and conditions of the lease), and contains two Company options to extend the lease term (including for a portion of the office space thereunder) for an additional period of five years.

On August 30, 2019, the Company amended its operating lease agreement in Cambridge, Massachusetts at 55 Cambridge Parkway, which was originally entered into on March 11, 2016 and subsequently amended on July 30, 2016, for the lease of 51,923 square feet of office space. The 2019 amendment granted the Company an additional 36,689 square feet of office space and extended the non-cancellable lease term through 2025 for the office space currently occupied. The Company accounted for the additional 36,689 square feet of office space as a new lease as it provides an additional right-of-use asset that is not included in the original lease and the additional lease payments were determined to be commensurate with the standalone price of the additional space. The non-cancellable lease term of the additional space ends in 2025, with a portion ending in 2023. The term extension of the existing 51,923 square feet of office space was recorded as a lease modification within the consolidated balance sheet as of December 31, 2019. The lease, as amended, provides for (i) an option to extend the lease term with respect to a portion of the office space for an additional period of five years, (ii) leasehold improvement incentives and (iii) annual rent increases through the term of the lease.

On May 1, 2019, the Company entered into an operating lease in Needham, Massachusetts for the lease of data center space with a non-cancellable term through 2022 with automatic renewal for one year thereafter if not terminated. The lease provides for annual rent increases through the term of the lease.

On June 19, 2018, the Company entered into an operating lease in Cambridge, Massachusetts at 121 First Street for the lease of 48,393 square feet of office space with a non-cancellable lease term through 2033 with an option to extend the lease term for two additional periods of five years each. The lease provided for leasehold improvement incentives and provides for annual rent increases through the term of the lease. The Company subleases the fifth floor and records the sublease income in other income (expense), net within the consolidated income statement. The sublease income is immaterial as of December 31, 2019.

On September 26, 2017, the Company assumed an operating lease, which was entered into by the original lessee on August 12, 2013, for the lease of 13,345 square feet of office space in Dublin, Ireland at Styne House, Upper Hatch Street with a non-cancellable term through 2023. The lease provided for a rent increase at the end of year five of the original lease term.

On October 8, 2014, the Company entered into an operating lease in Cambridge, Massachusetts at 2 Canal Park for the lease of 48,059 square feet of office space with a non-cancellable lease term through 2022 with an option to extend the lease term for one additional period of five years. The lease provided for leasehold improvement incentives and provides for annual rent increases through the term of the lease.

The Company’s financing lease obligations consist of a lease for office equipment and are immaterial.

The leases in Boston Massachusetts and Cambridge, Massachusetts have associated letters of credit, which are recorded as restricted cash within the consolidated balance sheet. At December 31, 2019 and 2018, restricted cash was $10,803 and $2,671, respectively, and primarily related to cash held at a financial institution in an interest-bearing cash account as collateral for the letters of credit related to the contractual provisions for the Company’s building leases. At December 31, 2019 and 2018, portions of restricted cash were classified as a short-term asset and long-term asset. Additionally, the 121 First Street lease agreement has an associated security deposit, which is recorded in other non-current assets, net within the consolidated balance sheet.

Prior to adoption of ASC 842

Prior to the adoption of ASC 842, the Company categorized leases at their inception as either operating or capital leases. On certain lease arrangements, the Company may have received rent holidays or other incentives. The Company recognized lease costs on a straight‑line basis once it achieved control of the space, without regard to deferred payment terms, such as rent holidays, that deferred the commencement date of required payments or escalating payment amounts. The Company recorded the difference between required lease payments and rent expense as deferred rent. Additionally, incentives received were treated as a reduction of costs over the term of the agreement, as they were considered an inseparable part of the lease agreement.

As of December 31, 2018, the Company had deferred rent and rent incentives of $11,088, of which $1,693 and $9,395, respectively, are classified as a short‑term liability and a long‑term liability in the corresponding consolidated balance sheet. Rent expense related to the operating leases for the years ended December 31, 2018 and 2017 was $7,711 and $5,994, respectively.

Following adoption of ASC 842

Upon adoption of ASC 842, the Company elected the transition relief package, permitted within the standard, pursuant to which the Company did not reassess the classification of existing leases, whether any expired or existing contracts contain a lease, and whether existing leases have any initial direct costs. The Company also elected the practical expedient of not separating lease components from non-lease components for all leases. There was no cumulative-effective adjustment to the opening balance of retained earnings. The Company reviews all material contracts for embedded leases to determine if they have a right-of-use asset.

The Company recognizes rent expense on a straight-line basis over the lease period. The depreciable life of assets and leasehold improvement are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Variable lease payments that depend on an index or a rate are included in the lease payments and are measured using the prevailing index or rate at the measurement date. Variable lease payments not based on an index or a rate are excluded from lease payments and are expensed as incurred.

The Company also made an accounting policy election to not recognize a lease liability or right-of-use asset on its consolidated balance sheet for leases with an initial term of twelve months or less, and instead to recognize lease payments on the consolidated income statement on a straight-line basis over the lease term and variable lease payments that do not depend on an index or rate as expense in the period in which the achievement of the specified target that triggers the variable lease payments becomes probable.

Adoption of the new standard resulted in the recording of net lease assets and lease liabilities of $52,334 and $63,280, respectively, as of January 1, 2019. The standard did not materially impact the consolidated statement of cash flows and had no impact on the consolidated income statement.

During the years ended December 31, 2019 and 2018, the Company recognized $10,260 and $7,711, respectively, of lease costs for leases that have commenced. The Company allocates lease costs across all departments based on headcount in the respective location.

For leases commenced, as of December 31, 2019, the weighted average remaining lease term was 8.8 years and the weighted average discount rate was 5.2%. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. The Company estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term. The Company has no historical debt transactions and a collateralized rate is estimated based on a group of peer companies. The Company used the incremental borrowing rate on January 1, 2019 for leases that commenced prior to that date.

Future minimum lease payments as of December 31, 2019 are as follows:

Year Ending December 31,	Operating Lease Commitments
2020	$	12,201
2021		13,088
2022		13,016
2023		9,858
2024		8,835
Thereafter		34,423
Total lease payments		91,421
Less imputed interest		(21,822	)
Total	$	69,599

The chart above does not include options to extend lease terms that are not reasonably certain of being exercised or leases signed but not yet commenced as of December 31, 2019. Total estimated future minimum lease payments for leases signed but not yet commenced as of December 31, 2019, which includes 1001 Boylston Street and portions of 55 Cambridge Parkway, are estimated to be $317,837 and have expected commencement dates ranging from February 2020 to January 2022.

Stock-Based Compensation

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718) (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees. The amendments in this update state that an entity should apply the requirements of Topic 718 to non-employee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of

a contract accounted for under Topic 606. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company has assessed the impact of this guidance on its consolidated financial statements and does not deem it to be material. The Company adopted the guidance on January 1, 2019 prospectively.

Internal-Use Software

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new standard requires companies to amortize the capitalized implementation costs over the term of the hosting arrangement. Amounts amortized would be presented through operating expense, rather than depreciation or amortization. Accounting for the service component of a hosting arrangement remains unchanged. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted and an entity can elect to apply the new guidance on a prospective or retrospective basis. The Company adopted this standard effective January 1, 2019 and applied the guidance using a prospective transition method for each period presented.

Recent Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies and adopted by the Company on or prior to the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance to reduce complexity in certain areas, such as requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently assessing the impact that adopting this guidance will have on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance simplifies the accounting for goodwill impairment by eliminating Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new standard is effective beginning in January 2020, with early adoption permitted. The Company does not expect the impact of adopting this guidance to be material to its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 and its subsequent related updates establish a new forward-looking “expected loss model” that requires entities to estimate current expected credit losses on accounts receivable and financial instruments by using all practical and relevant information. The new standard and its subsequent related updates are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact that adopting this guidance will have on its consolidated financial statements, but does not expect it to be material.

Acquisitions

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Acquisitions

3. Acquisitions

On January 8, 2019, the Company, through CarGurus U.K. Limited, a company incorporated in England & Wales and a wholly owned subsidiary of CarGurus Ireland Limited, a company incorporated in Ireland and a wholly owned subsidiary of the Company (the “Purchaser”), completed its acquisition of PistonHeads, a U.K.-based automotive website (“PistonHeads”), by acquiring the entire issued share capital of Haymarket New4 Ltd., a company incorporated in England & Wales and now known as PistonHeads Holdco Limited (“NewCo”), from Haymarket Media Group Ltd., a company incorporated in England & Wales (the “Seller”), on the terms and subject to the conditions set forth in the Put and Call Option Agreement dated December 3, 2018, by and among the Purchaser, the Seller and Haymarket Group Limited, a company incorporated in England & Wales. The PistonHeads website hosts used car classifieds, articles and user forums. The Purchaser paid an aggregate of 15,000 GBP, or approximately $19,139, to acquire the business, inclusive of 1,000 GBP, or approximately $1,276, being held in escrow to secure post-closing claims, subject to the terms and conditions of an escrow agreement among the escrow agents, the Purchaser and the Seller. Upon completion of the acquisition, NewCo became a wholly owned subsidiary of the Purchaser. The business combination was intended to expand the Company’s consumer audience in the U.K. As of December 31, 2019, the Company has incurred total acquisition-related costs of $779 related to the transaction.

The acquisition has been accounted for as a business combination under the acquisition method and, accordingly, the total purchase price is allocated to the intangible assets and goodwill. Acquired tangible assets and assumed liabilities are immaterial. The following table presents the purchase price allocation recorded in the Company's consolidated balance sheet as of the acquisition date, which was finalized as of December 31, 2019:

	Estimated Fair Value at Date of Acquisition			Adjustment			Adjusted Fair Value at Date of Acquisition
Intangible assets ⁽¹⁾	$	4,466		$	—		$	4,466
Goodwill ⁽²⁾		15,521			(655	)		14,866
Deferred tax liabilities ⁽³⁾		(848	)		655			(193	)
Total purchase price	$	19,139		$	—		$	19,139

(1)	Identifiable definite-lived intangible assets were comprised of brand and customer relationships of $3,445 and $1,021, respectively, with estimated useful lives of 11 years and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives.

(2)

The goodwill represents the excess value of the purchase price over intangible assets acquired. The goodwill in this transaction is primarily attributable to future customer growth in the U.K. market as a result of acquiring an established platform and applying the Company’s technology to help improve the website experience on such platform; thus, helping to drive additional traffic to the PistonHeads website in the future. All goodwill is assigned to the International segment. The acquisition of PistonHeads was a stock acquisition and as a result, goodwill is not deductible for tax purposes.

(3)

The deferred tax liability corresponds to the acquired intangible assets which do not have tax basis. As the Company evaluated its purchasing price accounting, it determined to reduce the deferred tax liability which resulted in an adjustment to goodwill, which was recorded during the second quarter of 2019.

Actual and pro forma results for this acquisition have not been presented as the financial impact to the Company’s consolidated financial statements is not material.

Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments

4. Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments

ASC 820, Fair Value Measurements and Disclosures, establishes a three‑level valuation hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market‑based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1 — Quoted unadjusted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model‑derived valuations in which all observable inputs and significant value drivers are observable in active markets.

Level 3 — Model‑derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company.

The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at December 31, 2019 and 2018:

	December 31, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	29,196	$	—	$	—	$	29,196
Investments:
Certificates of deposit		—		111,692		—		111,692
Total	$	29,196	$	111,692	$	—	$	140,888

	December 31, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	24	$	—	$	—	$	24
Investments:
Certificates of deposit		—		122,800		—		122,800
Total	$	24	$	122,800	$	—	$	122,824

The Company measures eligible assets and liabilities at fair value with changes in value recognized in earnings. There were no liabilities that were measured at fair value as of December 31, 2019 and 2018. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets and did not elect the fair value option for any financial assets transacted during the year ended December 31, 2019 or the year ended December 31, 2018.

The following is a summary of cash, cash equivalents, and investments as of December 31, 2019 and 2018.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2019:
Cash and cash equivalents due in 90 days or less	$	59,920	$	—	$	—	$	59,920
Investments:
Certificates of deposit due in one year or less		111,692		—		—		111,692
Total cash, cash equivalents, and investments	$	171,612	$	—	$	—	$	171,612

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2018:
Cash and cash equivalents due in 90 days or less	$	34,887	$	—	$	—	$	34,887
Investments:
Certificates of deposit due in one year or less		122,800		—		—		122,800
Total cash, cash equivalents, and investments	$	157,687	$	—	$	—	$	157,687

Property and Equipment, Net

12 Months Ended

Dec. 31, 2019

Property Plant And Equipment [Abstract]

Property and Equipment, Net

5. Property and Equipment, Net

Property and equipment, net consists of the following:

	At December 31,
	2019			2018
Capitalized equipment	$	7,923		$	4,208
Capitalized software		181			252
Capitalized website development costs		11,083			6,907
Furniture and fixtures		6,809			4,584
Leasehold improvements		19,507			10,821
Construction in progress		524			8,971
Finance lease right-of-use assets		78			-
		46,105			35,743
Less accumulated depreciation and amortization		(18,155	)		(11,474	)
Property and equipment, net	$	27,950		$	24,269

Depreciation and amortization expense, excluding amortization of intangible assets, was $7,168, $5,029, and $3,795 for the years ended December 31, 2019, 2018, and 2017, respectively. The increase of $8,686 in leasehold improvements and the decrease of $8,447 in construction in progress at December 31, 2019 was primarily due to costs incurred to build out the Company’s new leased facility at 121 First Street in Cambridge, Massachusetts. The facility became occupied subsequent to December 31, 2018, at which time the assets ceased to be classified as construction in progress and became classified as leasehold improvement.

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

6. Goodwill and other intangible assets

Goodwill

The changes in the carrying value of goodwill were as follows:

Balance at December 31, 2018	$	—
Initial value of PistonHeads acquisition		15,521
Foreign currency translation adjustment		341
Purchase price adjustment ⁽¹⁾		(655	)
Balance at December 31, 2019	$	15,207

(1)	The purchase price adjustment corresponds to an adjustment for the deferred tax liability as a result of the Company’s evaluation of income tax treatment, which was recorded during the second quarter of 2019.

The Company did not have a goodwill balance prior to the closing of the PistonHeads acquisition on January 8, 2019. The Company tests goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company evaluated goodwill for impairment on October 1, 2019 and did not recognize an impairment charge.

Other Intangible Assets

Intangible assets as of December 31, 2019 consist of the following:

	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Brand		10.0	$	3,524	$	313	$	3,211
Customer relationships		2.0		1,045		336		709
Total			$	4,569	$	649	$	3,920

The Company did not have intangible assets prior to the closing of the PistonHeads acquisition on January 8, 2019. The Company recorded amortization expense related to intangible assets of $649 for the year ended December 31, 2019.

The estimated useful life of brand and customer relationships is 11 years and 3 years, respectively. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

Estimated amortization expense of intangible assets for future periods as of December 31, 2019, is as follows:

Year Ending December 31,	Amortization Expense
2020	$	671
2021		671
2022		328
2023		320
2024		320
2025 and thereafter		1,610
Total	$	3,920

Convertible Preferred Stock and Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Convertible Preferred Stock and Stockholders’ Equity

9. Convertible Preferred Stock and Stockholders’ Equity

On June 21, 2017, the Company amended and restated its Certificate of Incorporation pursuant to the Third Amended and Restated Certificate of Incorporation. Under the Third Amended and Restated Certificate of Incorporation, the total number of shares of all classes of stock which the Company had authority to issue was (i) 120,020,700 shares of Class A common stock, par value $0.001 per share, (ii) 80,013,800 shares of Class B common stock, par value $0.001 per share, and (iii) 11,091,782 shares of Preferred Stock, par value $0.001 per share, of which 3,333,000 shares were designated Series A Preferred Stock, 3,329,497 shares were designated Series B Preferred Stock, 1,648,978 shares were designated Series C Preferred Stock, 1,673,105 shares were designated Series D Preferred Stock, and 1,107,202 shares were designated Series E Preferred Stock. The Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, and Series E Preferred Stock are referred to collectively as the Preferred Stock.

Upon the effectiveness of the Third Amended and Restated Certificate of Incorporation, (i) each share of Class A common stock issued and outstanding was recapitalized, reclassified, and reconstituted into two fully paid and non‑assessable shares of outstanding Class A common stock and four fully paid and non‑assessable shares of outstanding Class B common stock, and (ii) each share of Class B common stock of the Company issued and outstanding was recapitalized, reclassified, and reconstituted into two fully paid and non‑assessable shares of outstanding Class A common stock and four fully paid and non‑assessable shares of outstanding Class B common stock.

Further, upon the effectiveness of the Third Amended and Restated Certificate of Incorporation, the number of shares of common stock as to which each outstanding option to purchase common stock was exercisable for and each outstanding RSU was convertible into was adjusted such that upon exercise of outstanding stock options or vesting of outstanding RSUs, each holder would receive two fully paid and non‑assessable shares of Class A common stock and four fully paid and non‑assessable shares of Class B common stock in respect of each share of common stock previously underlying such option or RSU. The exercise price per share of common stock underlying each outstanding option was adjusted upon the effectiveness of the Third Amended and Restated Certificate of Incorporation to be one‑sixth of the exercise price per share in effect immediately prior to such adjustment and the fair market value per share of common stock issuable upon settlement of such RSU was adjusted to be one‑sixth of the fair market value per share in effect immediately prior to the recapitalization.

All share and per share data shown in the accompanying consolidated financial statements and related notes have been retroactively revised to reflect the share recapitalization.

On October 16, 2017, in connection with the closing of the IPO, all of the outstanding shares of Preferred Stock automatically converted into 20,188,226 shares of Class A common stock and 40,376,452 shares of Class B common stock. The 40,376,452 shares of Class B common stock subsequently converted into 40,376,452 shares of Class A common stock resulting in a total conversion of all outstanding shares of Preferred Stock into 60,564,678 shares of Class A common stock. Subsequent to the closing of the IPO, there were no shares of Preferred Stock outstanding.

Immediately following such conversion, the Company’s Fourth Amended and Restated Certificate of Incorporation became effective. Pursuant to the Fourth Amended and Restated Certificate of Incorporation, the Company is authorized to issue up to 500,000,000 shares of Class A common stock, 100,000,000 shares of Class B common stock, and 10,000,000 shares of Preferred Stock, all with a par value of $0.001 per share. As of December 31, 2019, the Preferred Stock is undesignated and no Preferred Stock is outstanding.

In addition, pursuant to the Fourth Amended and Restated Certificate of Incorporation, all shares of Class B common stock will automatically convert into shares of Class A common stock, on a share for share basis, upon the date falling after the first to occur of (1) the death of Langley Steinert, the Company’s Chief Executive Officer and Chairman, (2) his voluntary termination of all employment with the Company and service on the Company’s board of directors, or (3) the sum of the number of shares of capital stock held by Langley Steinert, by any Family Member of Langley Steinert, and by any Permitted Entity of Langley Steinert (as such terms are defined in the Fourth Amended and Restated Certificate of Incorporation), assuming the exercise and settlement in full of all outstanding options and convertible securities and calculated on an as-converted to Class A

common stock basis, being less than 9,091,484. Shares of Class B common stock will not automatically convert into shares of Class A common stock upon the termination of Mr. Steinert's status as an officer and director, unless such termination is either made voluntarily by Mr. Steinert or due to Mr. Steinert's death. Once converted into Class A common stock, the converted shares of Class B common stock will not be reissued. In addition, if all shares of Class B common stock are converted into Class A common stock, then any outstanding options or convertible securities with the right to purchase or acquire shares of Class B common stock shall become a right to purchase or acquire shares of Class A common stock.

Common Stock

Each share of Class A common stock entitles the holder to one vote for each share on all matters submitted to a vote of the Company’s stockholders at all meetings of stockholders and written actions in lieu of meetings. Each share of Class B common stock entitles the holder to ten votes for each share on all matters submitted to a vote of the Company’s stockholders at all meetings of stockholders and written actions in lieu of meetings.

Holders of common stock are entitled to receive dividends, when and if declared by the Board.

At December 31, 2019, each share of Class B common stock was convertible into one share of Class A common stock at the option of the holder at any time. Automatic conversion of each share of Class B common stock will occur upon the occurrence of certain events, as described in the Fourth Amended and Restated Certificate of Incorporation.

Upon the effectiveness of the Company’s Fourth Amended and Restated Certificate of Incorporation, additional terms of conversion and transfer were implemented as discussed above.

Preferred Stock

Prior to the Company’s IPO, at which time all shares of Preferred Stock were converted into shares of common stock, the Company’s Preferred Stock consisted of the following:

	Original Issue Price Per Share		Shares Authorized		Outstanding		Liquidation Amount		Carrying Value
Series A Preferred Stock	$	0.525053		3,333,000		2,824,703	$	1,483	$	1,483
Series B Preferred Stock	$	0.780899		3,329,497		2,938,486		2,295		2,295
Series C Preferred Stock	$	0.849012		1,648,978		1,550,612		1,316		1,316
Series D Preferred Stock	$	40.642989		1,673,105		1,673,105		68,000		67,872
Series E Preferred Stock	$	54.190650		1,107,202		1,107,202		60,000		59,732
				11,091,782		10,094,108	$	133,094	$	132,698

The holders of the Company’s Preferred Stock had certain voting and dividend rights, as well as liquidation preferences and conversion privileges. All rights, preferences, and privileges associated with the Preferred Stock were terminated at the time of the Company’s IPO in conjunction with the conversion of all outstanding shares of Preferred Stock into shares of common stock.

Stock-based Compensation

12 Months Ended

Dec. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

10. Stock‑based Compensation

Equity Incentive Plans

The Company’s Amended and Restated 2006 Equity Incentive Plan (the “2006 Plan”) provided for the issuance of non-qualified stock options, restricted stock and stock awards to the Company’s employees, officers, directors and consultants. The 2006 Plan authorized up to an aggregate of 3,444,668 shares of the Company's Class B common stock for such issuances. In conjunction with the effectiveness of the Company’s 2015 Equity Incentive Plan (the “2015 Plan”), the Board voted that no further stock options or other equity-based awards may be granted under the 2006 Plan.

In 2015, the Board first adopted the 2015 Plan, which became effective on June 26, 2015. The 2015 Plan provided for the issuance of incentive stock options, non-qualified stock options, restricted stock, stock awards and restricted stock units (“RSUs”) to employees, consultants and non-employee directors. As of the effective date of the 2015 Plan, up to 603,436 shares of common stock were authorized for issuance under the 2015 Plan. The 2015 Plan was amended and restated effective August 6, 2015 to permit the granting of RSUs under the 2015 Plan, remove Class B common stock from the pool

of shares available for issuance under the 2015 Plan and make certain other desired changes. The 2015 Plan was further amended and restated at October 15, 2015 to add a ten-year term and to make certain other desired changes.

The 2015 Plan was further amended and restated effective August 22, 2016 to merge the 2006 Plan into the 2015 Plan, to increase the number of shares of Class A common stock that may be issued under the 2015 Plan, and to lengthen the term of the 2015 Plan to expire on August 21, 2026. In addition, pursuant to this amendment and restatement of the 2015 Plan, prior to giving effect to the recapitalization that occurred on June 21, 2017, there were (i) 618,691 shares of Class A common stock, plus (ii) 802,562 shares of Class B common stock authorized under the 2015 Plan; provided, however, that (1) the number of shares of Class A common stock was increased, on a share for share basis, by the number of shares of Class B common stock that were (a) subject to outstanding options granted under the 2006 Plan that expired, terminated, or were cancelled for any reason without having been exercised, (b) surrendered in payment of the exercise price of outstanding options granted under the 2006 Plan or (c) withheld in satisfaction of tax withholding upon exercise of outstanding options granted under the 2006 Plan, and the number of shares of Class B common stock reserved under the amended and restated 2015 Plan was decreased, on a corresponding share for share basis, (2) no new awards of Class B common stock could be granted under the amended and restated 2015 Plan, and (3) except with respect to outstanding options granted under the 2006 Plan that were exercised on or after the date of the amendment and restatement, no Class B common stock could be issued under the 2015 Plan.

In connection with the recapitalization that occurred on June 21, 2017, the 2015 Plan was further amended and restated to account for each outstanding common stock option being adjusted such that each share of common stock underlying such option became two shares of Class A common stock and four shares of Class B common stock underlying such option, and each outstanding RSU being adjusted such that each share of common stock issuable upon settlement of such RSU became two shares of Class A common stock and four shares of Class B common stock issuable upon settlement of such RSU. Pursuant to the 2015 Plan as further amended in connection with the recapitalization, there were (i) 3,181,740 shares of Class A common stock and (ii) 5,161,644 shares of Class B common stock authorized for issuance under the 2015 Plan.

In connection with the IPO, in October 2017, the Board adopted, and the Company’s stockholders approved, the Omnibus Equity Compensation Plan (the “2017 Plan”) for the purpose of granting incentive stock options, non-qualified stock options, stock awards, stock units, other share-based awards and cash awards to employees, advisors and consultants to the Company and its subsidiaries and non-employee members of the Company’s board of directors. The 2017 Plan is the successor to the 2015 Plan. The 2017 Plan authorizes the issuance or transfer of the sum of: (i) 7,800,000 shares of the Company’s Class A common stock, plus (ii) the number of shares of our Class A common stock (up to 4,500,000 shares) equal to the sum of (x) the number of shares of Class A common stock and Class B common stock of the Company subject to outstanding awards under the 2015 Plan as of October 10, 2017 that terminate, expire or are cancelled, forfeited, exchanged, or surrendered on or after October 10, 2017 without having been exercised, vested, or paid prior to October 10, 2017, including shares tendered or withheld to satisfy tax withholding obligations with respect to outstanding grants under the Prior 2015 Plan, plus (y) the number of shares of Class A common stock reserved for issuance under the 2015 Plan that remain available for grant under the 2015 Plan as of the October 10, 2017. The aggregate number of shares of Class A common stock that may be issued or transferred under the 2017 Plan pursuant to incentive stock options will not exceed 12,300,000 shares of Class A common stock. Unless determined otherwise by the Compensation Committee of the Board, as of the first trading day of January of each calendar year during the term of the 2017 Plan (excluding any extensions), eligible beginning with calendar year 2019, an additional number of shares of Class A common stock will be added to the number of shares of the Company’s Class A common stock authorized to be issued or transferred under the 2017 Plan and the number of shares authorized to be issued or transferred pursuant to incentive stock options, equal to 4% of the total number of shares of our Class A common stock outstanding on the last trading day in December of the immediately preceding calendar year, or 6,000,000 shares, whichever is less, or such lesser amount as determined by the Board (the “Evergreen Increase”). The Compensation Committee of the Board determined to not effectuate the Evergreen Increase that was otherwise scheduled to have occurred on each of January 2, 2019 and January 2, 2020. In conjunction with the adoption of the 2017 Plan, options and RSUs outstanding under the 2015 Plan will remain outstanding but no additional grants will be made from the 2015 Plan.

At December 31, 2019, 5,889,929 shares of Class A common stock were available for issuance under the 2017 Plan.

Stock Options

The following is a summary of the stock option activity for all stock‑based compensation plans during the year ended December 31, 2019:

	Common Stock			Weighted- Average Exercise Price for Equity		Weighted- Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value⁽¹⁾
Outstanding, December 31, 2018		1,807,515		$	2.35	5.9		$	56,716
Granted		—			—
Exercised		(838,928	)	2.16					28,902
Forfeited and cancelled		(25,702	)	5.09
Outstanding, December 31, 2019		942,885		$	2.45		5.0	$	30,859
Options exercisable at December 31, 2019		913,197		$	2.31		5.0	$	30,016

⁽¹⁾

The aggregate intrinsic value as of December 31, 2019 and 2018 was calculated based on the positive difference, if any, between the estimated fair value of our common stock on December 31, 2019 and 2018, respectively, or the date of exercise, as appropriate, and the exercise price of the underlying options.

There were no options granted in the years ended December 31, 2019, 2018 and 2017.

The aggregate intrinsic value for options exercised during the years ended December 31, 2018 and 2017 was $111,227 and $2,238, respectively.

As of December 31, 2019, there was $16 of unrecognized stock‑based compensation expense related to unvested stock options, which is expected to be recognized over a weighted‑average period of 0.3 years.

Restricted Stock Units

The following is a summary of the RSU activity during the year ended December 31, 2019:

	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Unvested outstanding, December 31, 2018		2,973,002		$	26.06	$	100,279
Granted		1,811,208			39.07
Vested		(1,317,736	)		23.93
Forfeited		(383,173	)		31.70
Unvested outstanding, December 31, 2019		3,083,301		$	33.89	$	108,471

The weighted-average grant-date fair value of RSUs granted was $35.79 and $16.99 per share in 2018 and 2017, respectively.

RSUs that vested and settled during the year ended December 31, 2018 totaled 1,781,201, which included 1,087,279 and 693,922 RSUs that vested in 2018 and 2017, respectively. RSUs that vested prior to April 10, 2018 did not settle until the expiration of shareholder lock-up agreements on such date.

The total fair value of RSUs vested was $31,533, $15,994, and $2,505 in the years ended December 31, 2019, 2018 and 2017, respectively.

As of December 31, 2019, there was $92,700 of unrecognized stock‑based compensation expense related to unvested RSUs that is expected to be recognized over a weighted‑average period of 2.8 years.

Stock-based Compensation Expense

For the years ended December 31, 2019, 2018, and 2017, total stock‑based compensation expense was $34,301, $20,794, and $5,028, respectively. The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s consolidated statements of operations:

	Year Ended December 31,
	2019		2018		2017
Options	$	155	$	247	$	281
RSUs		34,146		20,547		4,747
Total stock-based compensation expense	$	34,301	$	20,794	$	5,028

	Year Ended December 31,
	2019		2018		2017
Cost of revenue	$	354	$	354	$	151
Sales and marketing expense		9,989		5,111		1,911
Product, technology, and development expense		15,159		9,865		1,637
General and administrative expense		8,799		5,464		1,329
Total stock-based compensation expense	$	34,301	$	20,794	$	5,028

Excluded from stock-based compensation expense is $1,381, $490, and $176 of capitalized software development costs and internal-use software costs in 2019, 2018 and 2017, respectively.

The income tax benefit from stock-based compensation expense was $2,953, $1,945, and $1,301 in the years ended December 31, 2019, 2018, and 2017, respectively.

During the years ended December 31, 2019 and 2018, the Company withheld 452,678, and 658,931 shares of Class A common stock, respectively, to satisfy employee tax withholding requirements and option costs due to net share settlements. No shares were withheld during the year ended December 31, 2017. The shares withheld return to the authorized, but unissued, pool under the 2017 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities and for option costs due to net share settlements were $16,470 and $25,885 for the years ended December 31, 2019 and 2018, respectively, and are reflected as a financing activity within the consolidated statements of cash flows.

Common Stock Reserved for Future Issuance

At December 31, 2019, the Company had reserved the following shares of voting common stock for future issuance:

Common stock options outstanding			942,885
Restricted stock units outstanding			3,083,301
Shares available for issuance under the 2017 Plan			5,889,929
Total shares of authorized common stock reserved for future issuance			9,916,115

Earnings Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

11. Earnings Per Share

Net income per share for the years ended December 31, 2019 and 2018 was computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. The Company computes the weighted-average number of common shares outstanding during the reporting period using the total number of shares of Class A common stock and Class B common stock outstanding as of the last day of the previous year end reporting period plus the weighted-average of any additional shares issued and outstanding during the reporting period.

Net income per share for the year ended December 31, 2017 was computed using the two-class method, which includes the weighted‑average number of shares of common stock outstanding during the period and other securities that participate in dividends (a participating security). For periods during the year ended December 31, 2017, the Company had convertible Preferred Stock outstanding. The Company considered the convertible Preferred Stock to be participating securities because they included rights to participate in dividends with the common stock. On October 16, 2017, in connection with the closing

of the IPO, all of the outstanding shares of convertible Preferred Stock automatically converted into 20,188,226 shares of Class A common stock and 40,376,452 shares of Class B common stock, the latter of which subsequently converted in full into shares of Class A common stock. As a result, there were no shares of Preferred Stock outstanding at the closing of the IPO and the Company has not issued any new shares of Preferred Stock since such closing.

Under the two‑class method, basic net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted‑average number of shares of common stock outstanding during the period. Diluted net income per share attributable to common stockholders is computed using the more dilutive of (1) the two‑class method or (2) the if‑converted method. The Company allocated net income first to preferred stockholders based on dividend rights under the Company’s certificate of incorporation that was in effect prior to the closing of the IPO and then to preferred and common stockholders based on ownership interests. Net losses are not allocated to preferred stockholders as they do not have an obligation to share in the Company’s net losses.

The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including on either the death or voluntary termination of the Company’s Chief Executive Officer. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one basis when computing net income per share. As a result, basic and diluted net income per share of Class A common stock and per share of Class B common stock are equivalent.

During the years ended December 31, 2019 and 2018, holders of Class B common stock converted 387,440 shares and 7,534,710 shares, respectively, of Class B common stock to Class A common stock.

Diluted net income per share gives effect to all potentially dilutive securities. Potential diluted securities for the years ended December 31, 2019, 2018 and 2017 consist of shares of common stock issuable upon the exercise of stock options and shares of common stock issuable upon the vesting of RSUs. Potential dilutive securities for the year ended December 31, 2017 also included shares of common stock issuable upon the conversion of the outstanding Preferred Stock. The dilutive effect of these common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method.

For the years ended December 31, 2019 and 2018, dilutive net income per share was calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period plus the dilutive impact of stock options and shares of common stock issuable upon the vesting of RSUs. For the year ended December 31, 2017, the two‑class method was used in the computation of diluted net income per share, which was equally as dilutive as the if-converted method.

The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share:

	Year Ended December 31,
	2019		2018		2017
Numerator:
Net income	$	42,146	$	65,170	$	13,199
Net income attributable to participating securities		—		—		(6,098	)
Net income attributable to common stockholders — basic	$	42,146	$	65,170	$	7,101
Net income	$	42,146	$	65,170	$	13,199
Net income attributable to participating securities		—		—		(5,829	)
Net income attributable to common stockholders — diluted	$	42,146	$	65,170	$	7,370
Denominator:
Weighted–average number of shares of common stock used in computing net income per share attributable to common stockholders — basic		111,450,443		108,833,028		55,835,265
Dilutive effect of share equivalents resulting from stock options		1,155,906		3,009,748		4,290,362
Dilutive effect of share equivalents resulting from unvested restricted stock units		825,501		1,521,936		511,957
Weighted–average number of shares of common stock used in computing net income per share — diluted		113,431,850		113,364,712		60,637,584
Net income per share attributable to common stockholders:
Basic	$	0.38	$	0.60	$	0.13
Diluted	$	0.37	$	0.57	$	0.12

The following potentially dilutive common stock equivalents have been excluded from the calculation of diluted weighted‑average shares outstanding for the years ended December 31, 2019, 2018, and 2017, as their effect would have been anti‑dilutive for the periods presented:

	Year Ended December 31,
	2019		2018		2017
Restricted stock units outstanding		1,144,287		126,816		829

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

The domestic and foreign components of income before income taxes are as follows:

	Year Ended December 31,
	2019		2018		2017
United States	$	37,476	$	24,426	$	15,543
Foreign		1,229		1,058		294
Income before income taxes	$	38,705	$	25,484	$	15,837

The (benefit from) provision for income taxes contained the following components:

	Year Ended December 31,
	2019			2018			2017
Current (benefit) provision:
Federal	$	—		$	(860	)	$	3,262
State		(220	)		92			431
Foreign		513			122			62
		293			(646	)		3,755
Deferred (benefit) provision:
Federal		(2,377	)		(27,675	)		(755	)
State		(1,306	)		(11,499	)		(343	)
Foreign		(51	)		134			(19	)
		(3,734	)		(39,040	)		(1,117	)
Income tax (benefit) provision	$	(3,441	)	$	(39,686	)	$	2,638

The Company's effective tax rates for the years ending December 31, 2019 and 2018 are less than the U.S. federal statutory rate due to excess tax deductions related to stock-based compensation awards and federal and state research and development credits. The Company’s effective tax rate for the year ending December 31, 2017 is less than the U.S. federal statutory rate primarily due to federal and state research and development credits, excess tax deductions related to stock-based compensation awards, and tax deductions for fees incurred during the IPO process.

	Year Ended December 31,
	2019			2018			2017
U.S. federal taxes at statutory rate		21.0	%		21.0	%		35.0	%
State taxes, net of federal benefit		0.2			(25.6	)		3.1
Nondeductible expenses		2.9			4.1			1.2
Tax deductible IPO costs		—			—			(9.3	)
Stock compensation		(22.0	)		(127.2	)		(4.4	)
Foreign rate differential		(0.3	)		(0.4	)		(0.4	)
Credits		(10.3	)		(28.4	)		(9.0	)
Other		(0.2	)		0.7			0.5
Total		(8.7	)%		(155.8	)%		16.7	%

The approximate income tax effect of each type of temporary difference and carryforward as of December 31, 2019 and 2018 is as follows:

	As of December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	35,977		$	34,450
Credit carryforwards		10,472			6,562
Stock-based compensation		2,953			1,945
Landlord allowance on leasehold improvements		—			1,908
Lease liability		17,965			—
Intangible Assets		62			—
Deferred rent		—			873
Accruals and reserves		1,185			1,074
		68,614			46,812
Valuation Allowance		(62	)		—
		68,552			46,812
Deferred tax liabilities:
Prepaid expenses		(1,523	)		(931	)
Deferred commissions		(5,100	)		(3,187	)
Right of use assets		(15,270	)		—
Unbilled revenue		—			(227	)
Fixed assets		(4,230	)		(3,581	)
		(26,123	)		(7,926	)
Net deferred tax assets	$	42,429		$	38,886

The Company uses the asset and liability method to account for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred income taxes are recognized for the future tax consequences of differences between the tax and financial accounting bases of assets and liabilities at each reporting period. Deferred income taxes are based on enacted tax laws and statutory tax rates applicable to the period in which these differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized.

The Company has provided an immaterial valuation allowance against its net deferred tax assets at December 31, 2019, but did not provided a valuation allowance against its net deferred tax assets at December 31, 2018. Based upon the level of historical U.S. earnings and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, with the exception of the deferred tax asset related to intangible assets in Ireland. The change in the valuation allowance for the year ended December 31, 2019 was $62.

As of December 31, 2019, the Company has federal and state net operating loss carryforwards of $136,771 and $114,459, respectively. The federal net operating losses carryforward indefinitely, subject to an annual limitation of 80% of taxable income. The state net operating losses, excluding Florida and Georgia which carryforward indefinitely, expire at various dates beginning in 2028. As of December 31, 2019, the Company has federal and state tax credit carryforwards of $6,507 and $5,018, respectively, available to reduce future tax liabilities that expire at various dates through 2039.

Utilization of the net operating losses and tax credit carryforwards, respectively, may be subject to an annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Code, or Section 382, as well as similar state provisions. Ownership changes may limit the amount of net operating losses or tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of five percent stockholders in the stock of a corporation by more than 50% in the aggregate over a three-year period.

At December 31, 2019 and 2018, the Company had no recorded liabilities for uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions.

The Company permanently reinvests the earnings, if any, of its foreign subsidiaries and, therefore, does not provide for U.S. income taxes that could result from the distribution of those earnings to the U.S. parent. As of December 31, 2019, the amount of unrecognized deferred U.S. taxes on these earnings would be immaterial.

The Company and its subsidiaries are subject to various U.S. federal, state, and foreign income taxes. The Company is currently not subject to examination under the statute of limitations by the Internal Revenue Service and state jurisdictions for the tax years of 2015 and prior. The Company is currently open to examination in its foreign jurisdictions for tax years 2017 and after. In 2018, the Internal Revenue Service commenced a federal income tax audit with respect to the Company’s 2016 tax year, which was concluded in October 2019 for an immaterial amount. In 2019, the Internal Revenue Service commenced a federal employment tax audit with respect to the 2018, 2017 and 2016 calendar years, which is still open.

Segment and Geographic Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment and Geographic Information

13. Segment and Geographic Information

The Company has two reportable segments, United States and International. Segment information is presented in the same manner as the Company’s chief operating decision maker, or CODM, reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews revenue and operating income (loss) for each reportable segment as a proxy for the operating performance of the Company’s United States and International operations. The Company’s Chief Executive Officer is the CODM on behalf of both reportable segments.

The United States segment derives revenues from marketplace subscriptions, advertising services, and other revenues from customers within the United States. The International segment derives revenues from marketplace subscriptions, advertising services, and other revenues from customers outside of the United States. A majority of the Company’s operational overhead expenses, including technology and personnel costs, and other general and administrative costs associated with running the Company’s business, are incurred in the United States and not allocated to the International segment. Assets and costs discretely incurred by reportable segments, including depreciation and amortization, are included in the calculation of reportable segment income (loss) from operations. Segment operating income (loss) does not reflect the transfer pricing adjustments related to the Company’s foreign subsidiaries, which are recorded for statutory reporting purposes. Asset information is assessed and reviewed on a global basis.

Information regarding the Company’s operations by segment and geographical area is presented as follows:

	Year Ended December 31,
	2019		2018		2017
Segment revenue:
United States	$	555,007	$	437,166	$	307,472
International		33,909		16,920		9,389
Total revenue	$	588,916	$	454,086	$	316,861

	Year Ended December 31,
	2019			2018			2017
Segment income (loss) from operations:
United States	$	73,872		$	58,387		$	41,586
International		(39,550	)		(35,196	)		(26,312	)
Total income from operations	$	34,322		$	23,191		$	15,274

As of December 31, 2019, total assets held outside of the United States were $32,528, primarily attributable to $15,207 of goodwill and $3,920 of intangible assets. As of December 31, 2018, total assets held outside the United States were not material.

Quarterly Financial Results (Unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Data [Abstract]

Quarterly Financial Results (unaudited)

15. Quarterly Financial Results (unaudited)

The following table presents certain unaudited quarterly financial information for the eight quarters in the period ended December 31, 2019. This information has been prepared on the same basis as the audited financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the unaudited quarterly results of operations set forth herein.

	Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Year ended December 31, 2019
Revenue	$	158,153	$	150,462	$	145,031	$	135,270
Cost of revenue		10,560		9,392		8,628		7,720
Gross profit		147,593		141,070		136,403		127,550
Income from operations		13,635		9,704		3,548		7,435
Net income		13,171		10,384		6,007		12,584
Basic net income per share⁽¹⁾	$	0.12	$	0.09	$	0.05	$	0.11
Diluted net income per share ⁽¹⁾	$	0.12	$	0.09	$	0.05	$	0.11
Year Ended December 31, 2018
Revenue	$	126,090	$	119,125	$	110,296	$	98,575
Cost of revenue		6,871		6,412		5,959		5,569
Gross profit		119,219		112,713		104,337		93,006
Income from operations		6,902		5,877		3,953		6,459
Net income		12,450		13,882		33,343		5,495
Basic net income per share⁽¹⁾	$	0.11	$	0.13	$	0.31	$	0.05
Diluted net income per share ⁽¹⁾	$	0.11	$	0.12	$	0.29	$	0.05

(1)	The amounts were computed independently for each quarter, and the sum of the quarters may not total the annual amounts.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Subsequent Event Considerations

Use of Estimates

Revenue Recognition

Marketplace Subscription Revenue

Customers do not have the right to take possession of the Company’s software.

Advertising and Other Revenue

Customers are billed monthly in arrears and payment terms are generally thirty to sixty days from the date invoiced.

Prior to adoption of ASC 606

Following adoption of ASC 606

Identify the contract with a customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to performance obligations in the contract

Recognize revenue when or as the Company satisfies a performance obligation

Disaggregation of Revenue

The following table summarizes revenue from contracts with customers by revenue source for the years ended December 31, 2019, 2018 and 2017.

	2019		2018		2017
Revenue by Revenue Stream
Marketplace subscription revenue	$	526,043	$	405,780	$	282,664
Advertising and other revenue		62,873		48,306		34,197
Total	$	588,916	$	454,086	$	316,861

Marketplace Subscription Revenue

Advertising and Other Revenue

For advertising revenue, the performance obligation is to publish the agreed upon campaign on the Company’s websites and load the related impressions.

As consideration is driven by the number of impressions delivered on the CarGurus websites, the consideration for each period is allocated to the period in which the service was rendered.

Contracts with Multiple Performance Obligations

Costs to Obtain a Contract

Financial Statement Impact of Adopting ASC 606

	As Reported			Adjustments						As Adjusted
	December 31, 2017			Marketplace Subscription Revenue			Costs to Obtain a Contract			January 1, 2018
Assets
Current assets:
Cash and cash equivalents	$	87,709								$	87,709
Investments		50,000									50,000
Accounts receivable, net		12,577			813						13,390
Prepaid expenses and prepaid income taxes		5,313									5,313
Deferred contract costs		—						1,424			1,424
Other current assets		1,605									1,605
Restricted cash		—									—
Total current assets		157,204			813			1,424			159,441
Property and equipment, net		16,563									16,563
Restricted cash		1,843									1,843
Deferred tax assets		825			(190	)		(635	)		—
Deferred contract costs, net of current portion		—						1,783			1,783
Other long–term assets		159									159
Total assets	$	176,594		$	623		$	2,572		$	179,789
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	23,908								$	23,908
Accrued expenses, accrued income taxes and other current liabilities		13,588									13,588
Deferred revenue		4,305									4,305
Deferred tax liabilities		—						153			153
Deferred rent		1,165									1,165
Total current liabilities		42,966			—			153			43,119
Deferred rent, net of current portion		5,648									5,648
Other non–current liabilities		955									955
Total liabilities		49,569			—			153			49,722
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—									—
Class A common stock		78									78
Class B common stock		28									28
Additional paid–in capital		185,190									185,190
Accumulated deficit		(58,499	)		623			2,419			(55,457	)
Accumulated other comprehensive income		228									228
Total stockholders’ equity		127,025			623			2,419			130,067
Total liabilities and stockholders’ equity	$	176,594		$	623		$	2,572		$	179,789

Marketplace Subscription Revenue

Costs to Obtain a Contract

Income Taxes

Impact of New Revenue Guidance on Financial Statement Line Items

	As of December 31, 2018
Balance Sheet	As Reported		Marketplace Subscription Revenue			Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Assets
Current assets:
Cash and cash equivalents	$	34,887							$	34,887
Investments		122,800								122,800
Accounts receivable, net		13,614		939						12,675
Prepaid income taxes and prepaid income taxes		10,144								10,144
Deferred contract costs		5,253					5,253			—
Other current assets		7,410								7,410
Restricted cash		750								750
Total current assets		194,858		939			5,253			188,666
Property and equipment, net		24,269								24,269
Restricted cash		1,921								1,921
Deferred tax assets		38,886		(227	)		(3,187	)		42,300
Deferred contract costs, net of current portion		7,252					7,252			—
Other long–term assets		1,104								1,104
Total assets	$	268,290	$	712		$	9,318		$	258,260
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	34,345							$	34,345
Accrued expenses, accrued income taxes and other current liabilities		18,654								18,654
Deferred revenue		8,811								8,811
Deferred rent		1,693								1,693
Total current liabilities		63,503		—			—			63,503
Deferred rent, net of current portion		9,395								9,395
Other non–current liabilities		1,281								1,281
Total liabilities		74,179		—			—			74,179
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—								—
Class A common stock		90								90
Class B common stock		21								21
Additional paid–in capital		184,216								184,216
Retained earnings (accumulated deficit)		9,713		712			9,318			(317	)
Accumulated other comprehensive income		71								71
Total stockholders’ equity		194,111		712			9,318			184,081
Total liabilities and stockholders’ equity	$	268,290	$	712		$	9,318		$	258,260

There were no changes to liabilities as of December 31, 2018 as a result of the adoption of ASC 606.

	Year Ended December 31, 2018
Statement of Operations	As Reported			Marketplace Subscription Revenue		Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Revenue	$	454,086		$	126				$	453,960
Cost of revenue		24,811								24,811
Gross profit		429,275			126		—			429,149
Operating expenses:
Sales and marketing		315,939					(9,298	)		325,237
Product, technology, and development		47,866								47,866
General and administrative		39,475								39,475
Depreciation and amortization		2,804								2,804
Total operating expenses		406,084			—		(9,298	)		415,382
Income from operations		23,191			126		9,298			13,767
Other income, net:
Interest income		2,283								2,283
Other income (expense)		10								10
Total other income, net		2,293			—		—			2,293
Income before income taxes		25,484			126		9,298			16,060
Provision for (Benefit from) income taxes		(39,686	)		37		2,399			(42,122	)
Net income	$	65,170		$	89	$	6,899		$	58,182
Basic	$	0.60		$	—	$	0.07		$	0.53
Diluted	$	0.57		$	—	$	0.06		$	0.51

	Year Ended December 31, 2018
Statement of Cash Flows	As Reported			Marketplace Subscription Revenue			Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Operating Activities
Net income	$	65,170		$	89		$	6,899		$	58,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,029									5,029
Currency (gain) loss on foreign denominated transactions		(190	)								(190	)
Deferred taxes		(39,040	)		37			2,399			(41,476	)
Provision for doubtful accounts		1,680									1,680
Stock–based compensation expense		20,794									20,794
Amortization of deferred contract costs		3,689						3,689			—
Changes in operating assets and liabilities:
Accounts receivable, net		(1,911	)		(126	)					(1,785	)
Prepaid expenses, prepaid income taxes, and other assets		(11,753	)								(11,753	)
Deferred contracts costs		(12,987	)					(12,987	)		—
Accounts payable		9,345									9,345
Accrued expenses, accrued income taxes and other current liabilities		2,695									2,695
Deferred revenue		4,508									4,508
Deferred rent		4,289									4,289
Other non–current liabilities		405									405
Net cash provided by operating activities	$	51,723		$	—		$	—		$	51,723

Contract Balances

The following tables summarize the opening and closing balances of receivables and contract assets from contracts with customers as of January 1, 2018, December 31, 2018 and December 31, 2019.

	Accounts Receivable, net		Contract Assets (current)		Contract Assets (non-current)
Balance at January 1, 2018	$	13,390	$	1,424	$	1,782
Balance at December 31, 2018		13,614		5,253		7,252
Balance at December 31, 2019		22,124		9,544		10,514

Revenue recognized during the year ended December 31, 2019 and 2018 from amounts included in deferred revenue at the beginning of the period was approximately $8,811 and $4,305, respectively.

Transaction Price Allocated to Future Performance Obligations

Topic 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of December 31, 2019.

Deferred Revenue

Cost of Revenue

Concentration of Credit Risk

For the years ended December 31, 2019, 2018 and 2017, no individual customer accounted for more than 10% of total revenue.

Cash, Cash Equivalents, and Investments

Restricted Cash

Accounts Receivable and Allowance for Doubtful Accounts

Unbilled accounts receivables are recorded for services rendered in the current period, but generally not invoiced until the subsequent period.

Below is a summary of the changes in the Company’s allowance for doubtful accounts for the years ended December 31, 2019, 2018, and 2017:

	Balance at Beginning of Period		Provision		Write–offs, net of recoveries			Balance at End of Period
Year ended December 31, 2019	$	479	$	1,091	$	(1,330	)	$	240
Year ended December 31, 2018		494		1,680		(1,695	)		479
Year ended December 31, 2017		164		1,117		(787	)		494

Property and Equipment

		Estimated Useful Life (In Years)
Capitalized equipment		3
Capitalized software		3
Capitalized website development		3
Furniture and fixtures		5
Leasehold improvements		Lesser of asset life or lease term

Expenditures for repairs and maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

Impairment of Long-Lived Assets

Impairment of Long‑Lived Assets

For the years ended December 31, 2019, 2018, and 2017, the Company did not identify any impairment of its long‑lived assets.

Business Combinations

Valuation of Acquired Assets and Liabilities

Intangible Assets

Goodwill

Capitalized Website Development and Internal-Use Software Costs

Foreign Currency Translation

Income Taxes

Disclosure of Fair Value of Financial Instruments

Level 1 — Quoted unadjusted prices for identical instruments in active markets.

Level 3 — Model‑derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company.

Stock-Based Compensation

Stock‑Based Compensation

The Company issues shares for stock option exercises and RSUs out of its shares available for issuance. No options were granted during the years ended December 31, 2019, 2018, and 2017.

See Note 10 for a summary of the stock option and RSU activity for the year ended December 31, 2019.

Stock-Based Compensation

Advertising Costs

Comprehensive Income

Contingent Liabilities

Recent Adopted Accounting Pronouncements

Lease Accounting

Lease Overview

The Company’s financing lease obligations consist of a lease for office equipment and are immaterial.

Prior to adoption of ASC 842

Following adoption of ASC 842

Future minimum lease payments as of December 31, 2019 are as follows:

Year Ending December 31,	Operating Lease Commitments
2020	$	12,201
2021		13,088
2022		13,016
2023		9,858
2024		8,835
Thereafter		34,423
Total lease payments		91,421
Less imputed interest		(21,822	)
Total	$	69,599

Stock-Based Compensation

Internal-Use Software

Recent Accounting Pronouncements Not Yet Adopted

Lease Accounting

Recent Adopted Accounting Pronouncements

Lease Accounting

Lease Overview

The Company’s financing lease obligations consist of a lease for office equipment and are immaterial.

Prior to adoption of ASC 842

Following adoption of ASC 842

Future minimum lease payments as of December 31, 2019 are as follows:

Year Ending December 31,	Operating Lease Commitments
2020	$	12,201
2021		13,088
2022		13,016
2023		9,858
2024		8,835
Thereafter		34,423
Total lease payments		91,421
Less imputed interest		(21,822	)
Total	$	69,599

Internal-Use Software

Goodwill and Other Intangible Assets

The Company tests goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company evaluated goodwill for impairment on October 1, 2019 and did not recognize an impairment charge. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

Earnings Per Share

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Revenue from Contracts with Customers by Revenue

The following table summarizes revenue from contracts with customers by revenue source for the years ended December 31, 2019, 2018 and 2017.

	2019		2018		2017
Revenue by Revenue Stream
Marketplace subscription revenue	$	526,043	$	405,780	$	282,664
Advertising and other revenue		62,873		48,306		34,197
Total	$	588,916	$	454,086	$	316,861

Summary of Opening and Closing Balances of Receivables and Contract Assets From Contracts with Customers

The following tables summarize the opening and closing balances of receivables and contract assets from contracts with customers as of January 1, 2018, December 31, 2018 and December 31, 2019.

	Accounts Receivable, net		Contract Assets (current)		Contract Assets (non-current)
Balance at January 1, 2018	$	13,390	$	1,424	$	1,782
Balance at December 31, 2018		13,614		5,253		7,252
Balance at December 31, 2019		22,124		9,544		10,514

Summary of Changes in Allowance for Doubtful Accounts

Below is a summary of the changes in the Company’s allowance for doubtful accounts for the years ended December 31, 2019, 2018, and 2017:

	Balance at Beginning of Period		Provision		Write–offs, net of recoveries			Balance at End of Period
Year ended December 31, 2019	$	479	$	1,091	$	(1,330	)	$	240
Year ended December 31, 2018		494		1,680		(1,695	)		479
Year ended December 31, 2017		164		1,117		(787	)		494

Schedule of Estimated Useful Lives of Property and Equipment

The estimated useful lives of the Company’s property and equipment are as follows:

		Estimated Useful Life (In Years)
Capitalized equipment		3
Capitalized software		3
Capitalized website development		3
Furniture and fixtures		5
Leasehold improvements		Lesser of asset life or lease term

Summary of Future Minimum Lease Payments

Future minimum lease payments as of December 31, 2019 are as follows:

Year Ending December 31,	Operating Lease Commitments
2020	$	12,201
2021		13,088
2022		13,016
2023		9,858
2024		8,835
Thereafter		34,423
Total lease payments		91,421
Less imputed interest		(21,822	)
Total	$	69,599

ASC 606

Summary of Impact of New Revenue Guidance on Financial Statement

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made on the consolidated balance sheet as of January 1, 2018.

	As Reported			Adjustments						As Adjusted
	December 31, 2017			Marketplace Subscription Revenue			Costs to Obtain a Contract			January 1, 2018
Assets
Current assets:
Cash and cash equivalents	$	87,709								$	87,709
Investments		50,000									50,000
Accounts receivable, net		12,577			813						13,390
Prepaid expenses and prepaid income taxes		5,313									5,313
Deferred contract costs		—						1,424			1,424
Other current assets		1,605									1,605
Restricted cash		—									—
Total current assets		157,204			813			1,424			159,441
Property and equipment, net		16,563									16,563
Restricted cash		1,843									1,843
Deferred tax assets		825			(190	)		(635	)		—
Deferred contract costs, net of current portion		—						1,783			1,783
Other long–term assets		159									159
Total assets	$	176,594		$	623		$	2,572		$	179,789
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	23,908								$	23,908
Accrued expenses, accrued income taxes and other current liabilities		13,588									13,588
Deferred revenue		4,305									4,305
Deferred tax liabilities		—						153			153
Deferred rent		1,165									1,165
Total current liabilities		42,966			—			153			43,119
Deferred rent, net of current portion		5,648									5,648
Other non–current liabilities		955									955
Total liabilities		49,569			—			153			49,722
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—									—
Class A common stock		78									78
Class B common stock		28									28
Additional paid–in capital		185,190									185,190
Accumulated deficit		(58,499	)		623			2,419			(55,457	)
Accumulated other comprehensive income		228									228
Total stockholders’ equity		127,025			623			2,419			130,067
Total liabilities and stockholders’ equity	$	176,594		$	623		$	2,572		$	179,789

	As of December 31, 2018
Balance Sheet	As Reported		Marketplace Subscription Revenue			Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Assets
Current assets:
Cash and cash equivalents	$	34,887							$	34,887
Investments		122,800								122,800
Accounts receivable, net		13,614		939						12,675
Prepaid income taxes and prepaid income taxes		10,144								10,144
Deferred contract costs		5,253					5,253			—
Other current assets		7,410								7,410
Restricted cash		750								750
Total current assets		194,858		939			5,253			188,666
Property and equipment, net		24,269								24,269
Restricted cash		1,921								1,921
Deferred tax assets		38,886		(227	)		(3,187	)		42,300
Deferred contract costs, net of current portion		7,252					7,252			—
Other long–term assets		1,104								1,104
Total assets	$	268,290	$	712		$	9,318		$	258,260
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	34,345							$	34,345
Accrued expenses, accrued income taxes and other current liabilities		18,654								18,654
Deferred revenue		8,811								8,811
Deferred rent		1,693								1,693
Total current liabilities		63,503		—			—			63,503
Deferred rent, net of current portion		9,395								9,395
Other non–current liabilities		1,281								1,281
Total liabilities		74,179		—			—			74,179
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—								—
Class A common stock		90								90
Class B common stock		21								21
Additional paid–in capital		184,216								184,216
Retained earnings (accumulated deficit)		9,713		712			9,318			(317	)
Accumulated other comprehensive income		71								71
Total stockholders’ equity		194,111		712			9,318			184,081
Total liabilities and stockholders’ equity	$	268,290	$	712		$	9,318		$	258,260

	Year Ended December 31, 2018
Statement of Operations	As Reported			Marketplace Subscription Revenue		Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Revenue	$	454,086		$	126				$	453,960
Cost of revenue		24,811								24,811
Gross profit		429,275			126		—			429,149
Operating expenses:
Sales and marketing		315,939					(9,298	)		325,237
Product, technology, and development		47,866								47,866
General and administrative		39,475								39,475
Depreciation and amortization		2,804								2,804
Total operating expenses		406,084			—		(9,298	)		415,382
Income from operations		23,191			126		9,298			13,767
Other income, net:
Interest income		2,283								2,283
Other income (expense)		10								10
Total other income, net		2,293			—		—			2,293
Income before income taxes		25,484			126		9,298			16,060
Provision for (Benefit from) income taxes		(39,686	)		37		2,399			(42,122	)
Net income	$	65,170		$	89	$	6,899		$	58,182
Basic	$	0.60		$	—	$	0.07		$	0.53
Diluted	$	0.57		$	—	$	0.06		$	0.51

	Year Ended December 31, 2018
Statement of Cash Flows	As Reported			Marketplace Subscription Revenue			Costs to Obtain a Contract			Pro forma as if the previous accounting guidance was in effect
Operating Activities
Net income	$	65,170		$	89		$	6,899		$	58,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,029									5,029
Currency (gain) loss on foreign denominated transactions		(190	)								(190	)
Deferred taxes		(39,040	)		37			2,399			(41,476	)
Provision for doubtful accounts		1,680									1,680
Stock–based compensation expense		20,794									20,794
Amortization of deferred contract costs		3,689						3,689			—
Changes in operating assets and liabilities:
Accounts receivable, net		(1,911	)		(126	)					(1,785	)
Prepaid expenses, prepaid income taxes, and other assets		(11,753	)								(11,753	)
Deferred contracts costs		(12,987	)					(12,987	)		—
Accounts payable		9,345									9,345
Accrued expenses, accrued income taxes and other current liabilities		2,695									2,695
Deferred revenue		4,508									4,508
Deferred rent		4,289									4,289
Other non–current liabilities		405									405
Net cash provided by operating activities	$	51,723		$	—		$	—		$	51,723

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Summary of Purchase Price Allocation

The following table presents the purchase price allocation recorded in the Company's consolidated balance sheet as of the acquisition date, which was finalized as of December 31, 2019:

	Estimated Fair Value at Date of Acquisition			Adjustment			Adjusted Fair Value at Date of Acquisition
Intangible assets ⁽¹⁾	$	4,466		$	—		$	4,466
Goodwill ⁽²⁾		15,521			(655	)		14,866
Deferred tax liabilities ⁽³⁾		(848	)		655			(193	)
Total purchase price	$	19,139		$	—		$	19,139

(1)	Identifiable definite-lived intangible assets were comprised of brand and customer relationships of $3,445 and $1,021, respectively, with estimated useful lives of 11 years and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives.

(2)

(3)

Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis

The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at December 31, 2019 and 2018:

	December 31, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	29,196	$	—	$	—	$	29,196
Investments:
Certificates of deposit		—		111,692		—		111,692
Total	$	29,196	$	111,692	$	—	$	140,888

	December 31, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	24	$	—	$	—	$	24
Investments:
Certificates of deposit		—		122,800		—		122,800
Total	$	24	$	122,800	$	—	$	122,824

Schedule of Cash, Cash Equivalents, and Investments

The following is a summary of cash, cash equivalents, and investments as of December 31, 2019 and 2018.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2019:
Cash and cash equivalents due in 90 days or less	$	59,920	$	—	$	—	$	59,920
Investments:
Certificates of deposit due in one year or less		111,692		—		—		111,692
Total cash, cash equivalents, and investments	$	171,612	$	—	$	—	$	171,612

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2018:
Cash and cash equivalents due in 90 days or less	$	34,887	$	—	$	—	$	34,887
Investments:
Certificates of deposit due in one year or less		122,800		—		—		122,800
Total cash, cash equivalents, and investments	$	157,687	$	—	$	—	$	157,687

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2019

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following:

	At December 31,
	2019			2018
Capitalized equipment	$	7,923		$	4,208
Capitalized software		181			252
Capitalized website development costs		11,083			6,907
Furniture and fixtures		6,809			4,584
Leasehold improvements		19,507			10,821
Construction in progress		524			8,971
Finance lease right-of-use assets		78			-
		46,105			35,743
Less accumulated depreciation and amortization		(18,155	)		(11,474	)
Property and equipment, net	$	27,950		$	24,269

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Carrying Value of Goodwill

The changes in the carrying value of goodwill were as follows:

Balance at December 31, 2018	$	—
Initial value of PistonHeads acquisition		15,521
Foreign currency translation adjustment		341
Purchase price adjustment ⁽¹⁾		(655	)
Balance at December 31, 2019	$	15,207

(1)	The purchase price adjustment corresponds to an adjustment for the deferred tax liability as a result of the Company’s evaluation of income tax treatment, which was recorded during the second quarter of 2019.

Summary of Other Intangible Assets

Intangible assets as of December 31, 2019 consist of the following:

	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Brand		10.0	$	3,524	$	313	$	3,211
Customer relationships		2.0		1,045		336		709
Total			$	4,569	$	649	$	3,920

Summary of Estimated Amortization Expense of Intangible Assets

Estimated amortization expense of intangible assets for future periods as of December 31, 2019, is as follows:

Year Ending December 31,	Amortization Expense
2020	$	671
2021		671
2022		328
2023		320
2024		320
2025 and thereafter		1,610
Total	$	3,920

Convertible Preferred Stock and Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Summary of Preferred Stock

Prior to the Company’s IPO, at which time all shares of Preferred Stock were converted into shares of common stock, the Company’s Preferred Stock consisted of the following:

	Original Issue Price Per Share		Shares Authorized		Outstanding		Liquidation Amount		Carrying Value
Series A Preferred Stock	$	0.525053		3,333,000		2,824,703	$	1,483	$	1,483
Series B Preferred Stock	$	0.780899		3,329,497		2,938,486		2,295		2,295
Series C Preferred Stock	$	0.849012		1,648,978		1,550,612		1,316		1,316
Series D Preferred Stock	$	40.642989		1,673,105		1,673,105		68,000		67,872
Series E Preferred Stock	$	54.190650		1,107,202		1,107,202		60,000		59,732
				11,091,782		10,094,108	$	133,094	$	132,698

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity

The following is a summary of the stock option activity for all stock‑based compensation plans during the year ended December 31, 2019:

	Common Stock			Weighted- Average Exercise Price for Equity		Weighted- Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value⁽¹⁾
Outstanding, December 31, 2018		1,807,515		$	2.35	5.9		$	56,716
Granted		—			—
Exercised		(838,928	)	2.16					28,902
Forfeited and cancelled		(25,702	)	5.09
Outstanding, December 31, 2019		942,885		$	2.45		5.0	$	30,859
Options exercisable at December 31, 2019		913,197		$	2.31		5.0	$	30,016

⁽¹⁾

Summary of Restricted Stock Unit Activity

The following is a summary of the RSU activity during the year ended December 31, 2019:

	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Unvested outstanding, December 31, 2018		2,973,002		$	26.06	$	100,279
Granted		1,811,208			39.07
Vested		(1,317,736	)		23.93
Forfeited		(383,173	)		31.70
Unvested outstanding, December 31, 2019		3,083,301		$	33.89	$	108,471

Summary of Stock-based Compensation Expense by Award Type

	Year Ended December 31,
	2019		2018		2017
Options	$	155	$	247	$	281
RSUs		34,146		20,547		4,747
Total stock-based compensation expense	$	34,301	$	20,794	$	5,028

Summary of Allocation of Stock-based Compensation Expense

	Year Ended December 31,
	2019		2018		2017
Cost of revenue	$	354	$	354	$	151
Sales and marketing expense		9,989		5,111		1,911
Product, technology, and development expense		15,159		9,865		1,637
General and administrative expense		8,799		5,464		1,329
Total stock-based compensation expense	$	34,301	$	20,794	$	5,028

Summary of Shares of Common Stock Reserved for Future Issuance

At December 31, 2019, the Company had reserved the following shares of voting common stock for future issuance:

Common stock options outstanding			942,885
Restricted stock units outstanding			3,083,301
Shares available for issuance under the 2017 Plan			5,889,929
Total shares of authorized common stock reserved for future issuance			9,916,115

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income Per Share

The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share:

	Year Ended December 31,
	2019		2018		2017
Numerator:
Net income	$	42,146	$	65,170	$	13,199
Net income attributable to participating securities		—		—		(6,098	)
Net income attributable to common stockholders — basic	$	42,146	$	65,170	$	7,101
Net income	$	42,146	$	65,170	$	13,199
Net income attributable to participating securities		—		—		(5,829	)
Net income attributable to common stockholders — diluted	$	42,146	$	65,170	$	7,370
Denominator:
Weighted–average number of shares of common stock used in computing net income per share attributable to common stockholders — basic		111,450,443		108,833,028		55,835,265
Dilutive effect of share equivalents resulting from stock options		1,155,906		3,009,748		4,290,362
Dilutive effect of share equivalents resulting from unvested restricted stock units		825,501		1,521,936		511,957
Weighted–average number of shares of common stock used in computing net income per share — diluted		113,431,850		113,364,712		60,637,584
Net income per share attributable to common stockholders:
Basic	$	0.38	$	0.60	$	0.13
Diluted	$	0.37	$	0.57	$	0.12

Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding

	Year Ended December 31,
	2019		2018		2017
Restricted stock units outstanding		1,144,287		126,816		829

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Domestic and Foreign Components of Income Before Income Taxes

The domestic and foreign components of income before income taxes are as follows:

	Year Ended December 31,
	2019		2018		2017
United States	$	37,476	$	24,426	$	15,543
Foreign		1,229		1,058		294
Income before income taxes	$	38,705	$	25,484	$	15,837

Schedule of (Benefit From) Provision for Income Taxes

The (benefit from) provision for income taxes contained the following components:

	Year Ended December 31,
	2019			2018			2017
Current (benefit) provision:
Federal	$	—		$	(860	)	$	3,262
State		(220	)		92			431
Foreign		513			122			62
		293			(646	)		3,755
Deferred (benefit) provision:
Federal		(2,377	)		(27,675	)		(755	)
State		(1,306	)		(11,499	)		(343	)
Foreign		(51	)		134			(19	)
		(3,734	)		(39,040	)		(1,117	)
Income tax (benefit) provision	$	(3,441	)	$	(39,686	)	$	2,638

Schedule of Effective Tax Rates Less than US Federal Statutory Rate Primarily Due to Excess Tax Deductions

	Year Ended December 31,
	2019			2018			2017
U.S. federal taxes at statutory rate		21.0	%		21.0	%		35.0	%
State taxes, net of federal benefit		0.2			(25.6	)		3.1
Nondeductible expenses		2.9			4.1			1.2
Tax deductible IPO costs		—			—			(9.3	)
Stock compensation		(22.0	)		(127.2	)		(4.4	)
Foreign rate differential		(0.3	)		(0.4	)		(0.4	)
Credits		(10.3	)		(28.4	)		(9.0	)
Other		(0.2	)		0.7			0.5
Total		(8.7	)%		(155.8	)%		16.7	%

Schedule of Income Tax Effect of Each Type of Temporary Difference and Carryforward

The approximate income tax effect of each type of temporary difference and carryforward as of December 31, 2019 and 2018 is as follows:

	As of December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	35,977		$	34,450
Credit carryforwards		10,472			6,562
Stock-based compensation		2,953			1,945
Landlord allowance on leasehold improvements		—			1,908
Lease liability		17,965			—
Intangible Assets		62			—
Deferred rent		—			873
Accruals and reserves		1,185			1,074
		68,614			46,812
Valuation Allowance		(62	)		—
		68,552			46,812
Deferred tax liabilities:
Prepaid expenses		(1,523	)		(931	)
Deferred commissions		(5,100	)		(3,187	)
Right of use assets		(15,270	)		—
Unbilled revenue		—			(227	)
Fixed assets		(4,230	)		(3,581	)
		(26,123	)		(7,926	)
Net deferred tax assets	$	42,429		$	38,886

Segment and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Summary of Operations by Segment and Geographical Area

Information regarding the Company’s operations by segment and geographical area is presented as follows:

	Year Ended December 31,
	2019		2018		2017
Segment revenue:
United States	$	555,007	$	437,166	$	307,472
International		33,909		16,920		9,389
Total revenue	$	588,916	$	454,086	$	316,861

	Year Ended December 31,
	2019			2018			2017
Segment income (loss) from operations:
United States	$	73,872		$	58,387		$	41,586
International		(39,550	)		(35,196	)		(26,312	)
Total income from operations	$	34,322		$	23,191		$	15,274

Quarterly Financial Results (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Data [Abstract]

Schedule of Unaudited Quarterly Financial Information

	Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Year ended December 31, 2019
Revenue	$	158,153	$	150,462	$	145,031	$	135,270
Cost of revenue		10,560		9,392		8,628		7,720
Gross profit		147,593		141,070		136,403		127,550
Income from operations		13,635		9,704		3,548		7,435
Net income		13,171		10,384		6,007		12,584
Basic net income per share⁽¹⁾	$	0.12	$	0.09	$	0.05	$	0.11
Diluted net income per share ⁽¹⁾	$	0.12	$	0.09	$	0.05	$	0.11
Year Ended December 31, 2018
Revenue	$	126,090	$	119,125	$	110,296	$	98,575
Cost of revenue		6,871		6,412		5,959		5,569
Gross profit		119,219		112,713		104,337		93,006
Income from operations		6,902		5,877		3,953		6,459
Net income		12,450		13,882		33,343		5,495
Basic net income per share⁽¹⁾	$	0.11	$	0.13	$	0.31	$	0.05
Diluted net income per share ⁽¹⁾	$	0.11	$	0.12	$	0.29	$	0.05

(1)	The amounts were computed independently for each quarter, and the sum of the quarters may not total the annual amounts.

Organization and Business Description - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Oct. 16, 2017	Dec. 31, 2019	Dec. 31, 2017	Dec. 31, 2018
Organization And Business Description [Line Items]
State of incorporation		DE
Date of incorporation		Jun. 26, 2015
Issuance of stock, net of issuance/offering costs			$ 43,240
Net proceeds received after deducting underwriting discounts and commissions and offering costs			$ 47,690
Conversion of convertible securities into shares of common stock	9,091,484
Preferred stock, shares outstanding	0	0		0
Class A Common Stock
Organization And Business Description [Line Items]
Conversion of convertible securities into shares of common stock	60,564,678
Class A Common Stock \| Selling Shareholders
Organization And Business Description [Line Items]
Issuance of stock, net of issuance/offering costs, Shares	7,605,000
Class A Common Stock \| Subsequent Conversion
Organization And Business Description [Line Items]
Conversion of convertible securities into shares of common stock	40,376,452
Class B Common Stock
Organization And Business Description [Line Items]
Conversion of convertible securities into shares of common stock	40,376,452
IPO
Organization And Business Description [Line Items]
Preferred stock, shares outstanding	0
IPO \| Class A Common Stock
Organization And Business Description [Line Items]
Issuance of stock, net of issuance/offering costs, Shares	3,205,000
Number of shares issued for services	705,000
Offering price per share	$ 16.00
Issuance of stock, net of issuance/offering costs	$ 51,300
Net proceeds received after deducting underwriting discounts and commissions and offering costs	43,200
Underwriting discounts and commissions	3,600
Stock issuance costs	$ 4,500
Conversion of convertible securities into shares of common stock	20,188,226
IPO \| Convertible Preferred Stock
Organization And Business Description [Line Items]
Preferred stock, shares outstanding	0

Summary of Significant Accounting Policies - Additional Information (Details)

3 Months Ended

12 Months Ended

Dec. 19, 2019

ft²

May 01, 2019

Aug. 12, 2013

ft²

Dec. 31, 2019

USD ($)

$ / shares

Sep. 30, 2019

USD ($)

$ / shares

Jun. 30, 2019

USD ($)

$ / shares

Mar. 31, 2019

USD ($)

$ / shares

Dec. 31, 2018

USD ($)

$ / shares

Sep. 30, 2018

USD ($)

$ / shares

Jun. 30, 2018

USD ($)

$ / shares

Mar. 31, 2018

USD ($)

$ / shares

Dec. 31, 2019

USD ($)

Customer

ReportingUnit

$ / shares

Dec. 31, 2018

USD ($)

Customer

$ / shares

Dec. 31, 2017

USD ($)

Customer

$ / shares

Aug. 30, 2019

ft²

Jan. 01, 2019

USD ($)

Jun. 19, 2018

ft²

Jan. 01, 2018

USD ($)

Oct. 11, 2017

USD ($)

Jul. 30, 2016

ft²

Oct. 08, 2014

ft²

Summary Of Significant Accounting Policies [Line Items]

Payment of revenue, performance obligation, description of payment terms

thirty to sixty

Costs to obtain a contract

$ 20,058,000

$ 12,505,000

$ 20,058,000

$ 12,505,000

$ 3,207,000

Amortization of deferred contract costs

8,416,000

3,689,000

Accounts receivable, net

22,124,000

13,614,000

22,124,000

13,614,000

$ 12,577,000

13,390,000

(51,859,000)

(9,713,000)

(51,859,000)

(9,713,000)

58,499,000

Assets

393,623,000

268,290,000

393,623,000

268,290,000

176,594,000

Liabilities

136,768,000

74,179,000

136,768,000

74,179,000

49,569,000

$ 158,153,000

$ 150,462,000

$ 145,031,000

$ 135,270,000

$ 126,090,000

$ 119,125,000

$ 110,296,000

$ 98,575,000

588,916,000

454,086,000

316,861,000

393,844,000

315,939,000

236,165,000

38,705,000

25,484,000

15,837,000

Basic net income per share | $ / shares

$ (3,441,000)

$ (39,686,000)

$ 2,638,000

$ 0.12

^[1]

$ 0.09

^[1]

$ 0.05

^[1]

$ 0.11

^[1]

$ 0.11

^[1]

$ 0.13

^[1]

$ 0.31

^[1]

$ 0.05

^[1]

$ 0.38

$ 0.60

$ 0.13

Diluted net income per share | $ / shares

$ 0.12

^[1]

$ 0.09

^[1]

$ 0.05

^[1]

$ 0.11

^[1]

$ 0.11

^[1]

$ 0.12

^[1]

$ 0.29

^[1]

$ 0.05

^[1]

$ 0.37

$ 0.57

$ 0.12

Revenue recognized

$ 8,811,000

$ 4,305,000

Performance obligation unsatisfied

$ 35,000,000.0

Description of significant off-balance sheet risk

The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.

Amortization (accretion) of premiums or discounts

$ 0

Realized gains or losses on investments

$ 0

Other than temporary impairments recognized in statements of operations

Restricted cash

10,803,000

$ 2,671,000

10,803,000

2,671,000

Impairment of long lived assets

$ 0

Number of reporting units | ReportingUnit

Liabilities for uncertain tax positions

$ 0

Unrecognized stock-based compensation expense related to stock-based awards

$ 2,500,000

Options granted during period | shares

Advertising expense

$ 287,107,000

$ 238,640,000

$ 173,186,000

Deferred rent and rent incentives, current

1,693,000

1,165,000

Deferred rent and rent incentives, noncurrent

9,395,000

5,648,000

Rent expense

7,711,000

5,994,000

Cumulative adjustment from adoption of revenue recognition standard

3,042,000

Net lease assets

59,986,000

Lease liabilities

$ 69,599,000

69,599,000

Lease costs

$ 10,260,000

7,711,000

Weighted average remaining lease term

8 years 9 months 18 days

Weighted average discount rate

5.20%

Future minimum lease payments for leases signed but not yet commenced

$ 317,837,000

Boston, Massachusetts at 1001 Boylston Street

Summary Of Significant Accounting Policies [Line Items]

Lessee, operating lease, existence of option to terminate

273,595

true

Lessee, operating lease, option to terminate

The “Commencement Date” of the lease term is the earlier to occur of (i) the date that is twelve months following the Delivery Date (as defined in the lease) and (ii) the date that the Company first occupies the premises for the normal conduct of business for the Permitted Use (as defined in the lease). The initial term will commence on the Commencement Date and expire on the date that is one hundred and eighty full calendar months after the Commencement Date (plus the partial month, if any, immediately following the Commencement Date). The lease provides for the option to terminate early under certain circumstances including if there is a material delay in construction (subject to the terms and conditions of the lease), and contains two Company options to extend the lease term (including for a portion of the office space thereunder) for an additional period of five years.

Cambridge, Massachusetts at 55 Cambridge Parkway

contains two Company options to extend the lease term (including for a portion of the office space thereunder) for an additional period of five years

Summary Of Significant Accounting Policies [Line Items]

36,689

51,923

Summary Of Significant Accounting Policies [Line Items]

option to extend the lease term with respect to a portion of the office space for an additional period of five years

Needham, Massachusetts

Lessee, operating lease, existence of option to terminate

true

Lessee, operating lease, renewal term

1 year

Cambridge, Massachusetts at 121 First Street

Summary Of Significant Accounting Policies [Line Items]

48,393

Summary Of Significant Accounting Policies [Line Items]

option to extend the lease term for two additional periods of five years each.

Dublin, Ireland

Operating lease, rent increasing year

13,345

5 years

Cambridge, Massachusetts at 2 Canal Park

Summary Of Significant Accounting Policies [Line Items]

48,059

Website and Software Development Costs

option to extend the lease term for one additional period of five years.

Summary Of Significant Accounting Policies [Line Items]

Software and website development costs capitalized

4,176,000

2,012,000

$ 4,176,000

2,012,000

Amortization expense

$ 1,643,000

$ 1,508,000

$ 812,000

Estimated useful life

3 years

Internal Use Software

Summary Of Significant Accounting Policies [Line Items]

Amortization expense

$ 132,000

Estimated useful life

3 years

Internal Use Software | Other Non-Current Assets

Summary Of Significant Accounting Policies [Line Items]

Software and website development costs capitalized

2,615,000

$ 2,615,000

Internal Use Software | Prepaid Expenses and Prepaid Income Taxes

Summary Of Significant Accounting Policies [Line Items]

Software and website development costs capitalized

616,000

$ 616,000

Minimum

Summary Of Significant Accounting Policies [Line Items]

Estimated useful lives

3 years

Maximum

Summary Of Significant Accounting Policies [Line Items]

Maturity of certificates of deposit, description

As of December 31, 2019 and 2018, investments consisted of U.S. certificates of deposit (“CDs”) with remaining maturities of less than twelve months.

Maturity period of certificates of deposit

12 months

Business acquisition valuation period

1 year

Estimated useful lives

11 years

Sales Revenue, Net | Concentration of Credit Risk

Summary Of Significant Accounting Policies [Line Items]

Concentration of credit risk, percentage

10.00%

Number of major customers | Customer

Net Accounts Receivable | Advertising Customers

Summary Of Significant Accounting Policies [Line Items]

Unbilled accounts receivables

$ 8,880,000

5,814,000

$ 8,880,000

$ 5,814,000

Net Accounts Receivable | Concentration of Credit Risk

Summary Of Significant Accounting Policies [Line Items]

Number of major customers | Customer

Net Accounts Receivable | Concentration of Credit Risk | Customer One

Summary Of Significant Accounting Policies [Line Items]

Concentration of credit risk, percentage

18.00%

21.00%

Net Accounts Receivable | Concentration of Credit Risk | Customer Two

Summary Of Significant Accounting Policies [Line Items]

Concentration of credit risk, percentage

14.00%

Commission Contract | Restatement Adjustment

Summary Of Significant Accounting Policies [Line Items]

Marketplace Subscription Revenue

3,207,000

Summary Of Significant Accounting Policies [Line Items]

Summary Of Significant Accounting Policies [Line Items]

$ 526,043,000

$ 405,780,000

$ 282,664,000

ASC 606

Accounts receivable, net

13,390,000

Deferred rent and rent incentives, current

55,457,000

Assets

179,789,000

Liabilities

49,722,000

1,165,000

Deferred rent and rent incentives, noncurrent

5,648,000

ASC 606 | Adjustments

Summary Of Significant Accounting Policies [Line Items]

Costs to obtain a contract

12,505,000

Reduction to deferred tax assets

978,000

10,030,000

126,000

(9,298,000)

9,424,000

Basic net income per share | $ / shares

$ 2,436,000

$ 0.07

Diluted net income per share | $ / shares

$ 0.06

ASC 606 | Marketplace Subscription Revenue | Adjustments

Summary Of Significant Accounting Policies [Line Items]

Accounts receivable, net

939,000

$ 939,000

813,000

(712,000)

(623,000)

Assets

712,000

$ 623,000

126,000

126,000

Accounting Standards Update 2016-09

37,000

Summary Of Significant Accounting Policies [Line Items]

Summary Of Significant Accounting Policies [Line Items]

(11,115,000)

(40,765,000)

$ (681,000)

ASC 842

Deferred rent and rent incentives

11,088,000

Deferred rent and rent incentives, current

1,693,000

Deferred rent and rent incentives, noncurrent

$ 9,395,000

Cumulative adjustment from adoption of revenue recognition standard

$ 0

Net lease assets

$ 52,334,000

Lease liabilities

$ 63,280,000

[1]	The amounts were computed independently for each quarter, and the sum of the quarters may not total the annual amounts.

Summary of Significant Accounting Policies - Summary of Adjustments in Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 59,920	$ 34,887		$ 87,709
Investments	111,692	122,800		50,000
Accounts receivable, net	22,124	13,614	$ 13,390	12,577
Prepaid expenses and prepaid income taxes	10,452	10,144		5,313
Deferred contract costs	9,544	5,253	1,424
Other current assets	4,972	7,410		1,605
Restricted cash	250	750
Total current assets	218,954	194,858		157,204
Property and equipment, net	27,950	24,269		16,563
Restricted cash	10,553	1,921		1,843
Deferred tax assets	42,713	38,886		825
Deferred contract costs, net of current portion	10,514	7,252	1,782
Other non-current assets	3,826	1,104		159
Total assets	393,623	268,290		176,594
Current liabilities:
Accounts payable	36,731	34,345		23,908
Accrued expenses, accrued income taxes and other current liabilities	18,262	18,654		13,588
Deferred revenue	9,984	8,811		4,305
Deferred rent		1,693		1,165
Total current liabilities	73,758	63,503		42,966
Deferred rent		9,395		5,648
Other non–current liabilities	1,908	1,281		955
Total liabilities	136,768	74,179		49,569
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock
Additional paid–in capital	205,234	184,216		185,190
Retained earnings	51,859	9,713		(58,499)
Accumulated other comprehensive (loss) income	(350)	71		228
Total stockholders’ equity	256,855	194,111		127,025	$ (67,972)
Total liabilities and stockholders’ equity	393,623	268,290		176,594
ASC 606
Current assets:
Cash and cash equivalents			87,709
Investments			50,000
Accounts receivable, net			13,390
Prepaid expenses and prepaid income taxes			5,313
Deferred contract costs			1,424
Other current assets			1,605
Total current assets			159,441
Property and equipment, net			16,563
Restricted cash			1,843
Deferred contract costs, net of current portion			1,783
Other non-current assets			159
Total assets			179,789
Current liabilities:
Accounts payable			23,908
Accrued expenses, accrued income taxes and other current liabilities			13,588
Deferred revenue			4,305
Deferred tax liabilities			153
Deferred rent			1,165
Total current liabilities			43,119
Deferred rent			5,648
Other non–current liabilities			955
Total liabilities			49,722
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock
Additional paid–in capital			185,190
Retained earnings			(55,457)
Accumulated other comprehensive (loss) income			228
Total stockholders’ equity			130,067
Total liabilities and stockholders’ equity			179,789
Adjustments \| ASC 606
Current assets:
Total assets		10,030
Current liabilities:
Total liabilities		0
Adjustments \| ASC 606 \| Marketplace Subscription Revenue
Current assets:
Accounts receivable, net		939	813
Total current assets		939	813
Deferred tax assets		(227)	(190)
Total assets		712	623
Current liabilities:
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock
Retained earnings		712	623
Total stockholders’ equity		712	623
Total liabilities and stockholders’ equity		712	623
Adjustments \| ASC 606 \| Costs To Obtain a Contract
Current assets:
Deferred contract costs		5,253	1,424
Total current assets		5,253	1,424
Deferred tax assets		(3,187)	(635)
Deferred contract costs, net of current portion		7,252	1,783
Total assets		9,318	2,572
Current liabilities:
Deferred tax liabilities			153
Total current liabilities			153
Total liabilities			153
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock
Retained earnings		9,318	2,419
Total stockholders’ equity		9,318	2,419
Total liabilities and stockholders’ equity		9,318	2,572
Class A Common Stock
Stockholders’ equity:
Common stock	92	90		78
Class A Common Stock \| ASC 606
Stockholders’ equity:
Common stock			78
Class B Common Stock
Stockholders’ equity:
Common stock	$ 20	$ 21		$ 28
Class B Common Stock \| ASC 606
Stockholders’ equity:
Common stock			$ 28

Summary of Significant Accounting Policies - Summary of Compare the Reported Consolidated Balance Sheet to Pro-forma Amounts had Previous Guidance Been in Effect (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 59,920	$ 34,887		$ 87,709
Investments	111,692	122,800		50,000
Accounts receivable, net	22,124	13,614	$ 13,390	12,577
Prepaid expenses and prepaid income taxes	10,452	10,144		5,313
Deferred contract costs	9,544	5,253	1,424
Other current assets	4,972	7,410		1,605
Restricted cash	250	750
Total current assets	218,954	194,858		157,204
Property and equipment, net	27,950	24,269		16,563
Restricted cash	10,553	1,921		1,843
Deferred tax assets	42,713	38,886		825
Deferred contract costs, net of current portion	10,514	7,252	1,782
Other non-current assets	3,826	1,104		159
Total assets	393,623	268,290		176,594
Current liabilities:
Accounts payable	36,731	34,345		23,908
Accrued expenses, accrued income taxes and other current liabilities	18,262	18,654		13,588
Deferred revenue	9,984	8,811		4,305
Deferred rent		1,693		1,165
Total current liabilities	73,758	63,503		42,966
Deferred rent		9,395		5,648
Other non–current liabilities	1,908	1,281		955
Total liabilities	136,768	74,179		49,569
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Additional paid–in capital	205,234	184,216		185,190
Retained earnings	51,859	9,713		(58,499)
Accumulated other comprehensive (loss) income	(350)	71		228
Total stockholders’ equity	256,855	194,111		127,025	$ (67,972)
Total liabilities and stockholders’ equity	393,623	268,290		176,594
ASC 606
Current assets:
Cash and cash equivalents			87,709
Investments			50,000
Accounts receivable, net			13,390
Prepaid expenses and prepaid income taxes			5,313
Deferred contract costs			1,424
Other current assets			1,605
Total current assets			159,441
Property and equipment, net			16,563
Restricted cash			1,843
Deferred contract costs, net of current portion			1,783
Other non-current assets			159
Total assets			179,789
Current liabilities:
Accounts payable			23,908
Accrued expenses, accrued income taxes and other current liabilities			13,588
Deferred revenue			4,305
Deferred rent			1,165
Total current liabilities			43,119
Deferred rent			5,648
Other non–current liabilities			955
Total liabilities			49,722
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Additional paid–in capital			185,190
Retained earnings			(55,457)
Accumulated other comprehensive (loss) income			228
Total stockholders’ equity			130,067
Total liabilities and stockholders’ equity			179,789
Adjustments \| ASC 606
Current assets:
Total assets		10,030
Current liabilities:
Total liabilities		0
Adjustments \| ASC 606 \| Marketplace Subscription Revenue
Current assets:
Accounts receivable, net		939	813
Total current assets		939	813
Deferred tax assets		(227)	(190)
Total assets		712	623
Current liabilities:
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Retained earnings		712	623
Total stockholders’ equity		712	623
Total liabilities and stockholders’ equity		712	623
Adjustments \| ASC 606 \| Costs To Obtain a Contract
Current assets:
Deferred contract costs		5,253	1,424
Total current assets		5,253	1,424
Deferred tax assets		(3,187)	(635)
Deferred contract costs, net of current portion		7,252	1,783
Total assets		9,318	2,572
Current liabilities:
Total current liabilities			153
Total liabilities			153
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Retained earnings		9,318	2,419
Total stockholders’ equity		9,318	2,419
Total liabilities and stockholders’ equity		9,318	2,572
Pro Forma as if the Previous Accounting Guidance was in Effect \| ASC 606
Current assets:
Cash and cash equivalents		34,887
Investments		122,800
Accounts receivable, net		12,675
Prepaid expenses and prepaid income taxes		10,144
Other current assets		7,410
Restricted cash		750
Total current assets		188,666
Property and equipment, net		24,269
Restricted cash		1,921
Deferred tax assets		42,300
Other non-current assets		1,104
Total assets		258,260
Current liabilities:
Accounts payable		34,345
Accrued expenses, accrued income taxes and other current liabilities		18,654
Deferred revenue		8,811
Deferred rent		1,693
Total current liabilities		63,503
Deferred rent		9,395
Other non–current liabilities		1,281
Total liabilities		74,179
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Additional paid–in capital		184,216
Retained earnings		(317)
Accumulated other comprehensive (loss) income		71
Total stockholders’ equity		184,081
Total liabilities and stockholders’ equity		258,260
Class A Common Stock
Stockholders’ equity:
Common stock	92	90		78
Class A Common Stock \| ASC 606
Stockholders’ equity:
Common stock			78
Class A Common Stock \| Pro Forma as if the Previous Accounting Guidance was in Effect \| ASC 606
Stockholders’ equity:
Common stock		90
Class B Common Stock
Stockholders’ equity:
Common stock	$ 20	21		$ 28
Class B Common Stock \| ASC 606
Stockholders’ equity:
Common stock			$ 28
Class B Common Stock \| Pro Forma as if the Previous Accounting Guidance was in Effect \| ASC 606
Stockholders’ equity:
Common stock		$ 21

Summary of Significant Accounting Policies - Summary of Changes on Consolidated Statement of Operations as a Result of Adoption of ASC 606 (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Summary Of Significant Accounting Policies [Line Items]

$ 158,153

$ 150,462

$ 145,031

$ 135,270

$ 126,090

$ 119,125

$ 110,296

$ 98,575

$ 588,916

$ 454,086

$ 316,861

10,560

9,392

8,628

7,720

6,871

6,412

5,959

5,569

36,300

^[1]

24,811

^[1]

17,609

^[1]

147,593

141,070

136,403

127,550

119,219

112,713

104,337

93,006

552,616

429,275

299,252

Product, technology, and development

393,844

315,939

236,165

69,462

47,866

22,470

General and administrative

50,434

39,475

22,688

Depreciation and amortization

4,554

2,804

2,655

518,294

406,084

283,978

13,635

9,704

3,548

7,435

6,902

5,877

3,953

6,459

34,322

23,191

15,274

Other income (expense), net

Interest income

2,984

2,283

869

1,399

(306)

Total other income, net

4,383

2,293

563

38,705

25,484

15,837

(3,441)

(39,686)

2,638

$ 13,171

$ 10,384

$ 6,007

$ 12,584

$ 12,450

$ 13,882

$ 33,343

$ 5,495

$ 42,146

$ 65,170

$ 13,199

$ 0.12

^[2]

$ 0.09

^[2]

$ 0.05

^[2]

$ 0.11

^[2]

$ 0.11

^[2]

$ 0.13

^[2]

$ 0.31

^[2]

$ 0.05

^[2]

$ 0.38

$ 0.60

$ 0.13

Marketplace Subscription Revenue

$ 0.12

^[2]

$ 0.09

^[2]

$ 0.05

^[2]

$ 0.11

^[2]

$ 0.11

^[2]

$ 0.12

^[2]

$ 0.29

^[2]

$ 0.05

^[2]

$ 0.37

$ 0.57

$ 0.12

Summary Of Significant Accounting Policies [Line Items]

Summary Of Significant Accounting Policies [Line Items]

$ 526,043

$ 405,780

$ 282,664

Adjustments | ASC 606

126

(9,298)

9,424

$ 2,436

$ 0.07

Adjustments | ASC 606 | Costs To Obtain a Contract

$ 0.06

$ (9,298)

(9,298)

9,298

9,298

2,399

$ 6,899

$ 0.07

Adjustments | ASC 606 | Marketplace Subscription Revenue

$ 0.06

Summary Of Significant Accounting Policies [Line Items]

$ 126

126

126

126

Pro Forma as if the Previous Accounting Guidance was in Effect | ASC 606

Summary Of Significant Accounting Policies [Line Items]

453,960

24,811

429,149

Product, technology, and development

325,237

47,866

General and administrative

39,475

Depreciation and amortization

2,804

415,382

13,767

Other income (expense), net

Interest income

2,283

Total other income, net

2,293

16,060

(42,122)

$ 58,182

$ 0.53

PistonHeads Holdco Limited

$ 0.51

[1]	Includes depreciation and amortization expense for the years ended December 31, 2019, 2018, and 2017 of $3,263 $2,225, and $1,140, respectively.
[2]	The amounts were computed independently for each quarter, and the sum of the quarters may not total the annual amounts.

Summary of Significant Accounting Policies - Summary of Changes on Consolidated Statement of Cash Flows as a Result of Adoption of ASC 606 (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating Activities
Net income	$ 42,146	$ 65,170	$ 13,199
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,817	5,029	3,795
Currency (gain) loss on foreign denominated transactions	(690)	(190)	128
Deferred taxes	(3,734)	(39,040)	(1,117)
Provision for doubtful accounts	1,091	1,680	1,117
Stock–based compensation expense	34,301	20,794	5,028
Amortization of deferred contract costs	8,416	3,689
Changes in operating assets and liabilities:
Accounts receivable, net	(9,608)	(1,911)	(7,039)
Prepaid expenses, prepaid income taxes, and other assets	(378)	(11,753)	(2,287)
Deferred contracts costs	(15,979)	(12,987)
Accounts payable	4,268	9,345	6,244
Accrued expenses, accrued income taxes and other current liabilities	2,151	2,695	5,191
Deferred revenue	1,174	4,508	962
Deferred rent		4,289	227
Other non–current liabilities	609	405	243
Net cash provided by operating activities	$ 70,116	51,723	$ 25,691
Adjustments \| ASC 606 \| Costs To Obtain a Contract
Operating Activities
Net income		6,899
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes		2,399
Amortization of deferred contract costs		3,689
Changes in operating assets and liabilities:
Deferred contracts costs		(12,987)
Adjustments \| ASC 606 \| Marketplace Subscription Revenue
Operating Activities
Net income		89
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes		37
Changes in operating assets and liabilities:
Accounts receivable, net		(126)
Pro Forma as if the Previous Accounting Guidance was in Effect \| ASC 606
Operating Activities
Net income		58,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,029
Currency (gain) loss on foreign denominated transactions		(190)
Deferred taxes		(41,476)
Provision for doubtful accounts		1,680
Stock–based compensation expense		20,794
Changes in operating assets and liabilities:
Accounts receivable, net		(1,785)
Prepaid expenses, prepaid income taxes, and other assets		(11,753)
Accounts payable		9,345
Accrued expenses, accrued income taxes and other current liabilities		2,695
Deferred revenue		4,508
Deferred rent		4,289
Other non–current liabilities		405
Net cash provided by operating activities		$ 51,723

Summary of Significant Accounting Policies - Summary of Opening and Closing Balances of Receivables and Contract Assets From Contracts with Customers (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Accounts Receivable, net	$ 22,124	$ 13,614	$ 13,390	$ 12,577
Contract Assets(current)	9,544	5,253	1,424
Contract Assets(non-current)	$ 10,514	$ 7,252	$ 1,782

Summary of Significant Accounting Policies - Summary of Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Operating Lease Commitments
2020	$ 12,201
2021	13,088
2022	13,016
2023	9,858
2024	8,835
Thereafter	34,423
Total lease payments	91,421
Less imputed interest	(21,822)
Total	$ 69,599

Acquisitions - Additional Information (Details) £ in Thousands, $ in Thousands			12 Months Ended
	Jan. 08, 2019 USD ($)	Jan. 08, 2019 GBP (£)	Dec. 31, 2019 USD ($)
Business Acquisition [Line Items]
Payments to acquire business			$ 19,139
PistonHeads Holdco Limited \| United Kingdom \| Put and Call Option Agreement
Business Acquisition [Line Items]
Payments to acquire business	$ 19,139	£ 15,000
Acquisition-related costs incurred			$ 779
Business acquisition completed date	Jan. 08, 2019	Jan. 08, 2019
PistonHeads Holdco Limited \| United Kingdom \| Escrow Agreement
Business Acquisition [Line Items]
Payments to acquire business	$ 1,276	£ 1,000

Acquisitions - Summary of Purchase Price Allocation (Details) - USD ($)
$ in Thousands

12 Months Ended

Jan. 08, 2019

Dec. 31, 2019

Business Acquisition [Line Items]

Goodwill

$ 15,207

Goodwill, Adjustment

^[1]

$ 655

Business Acquisition [Line Items]

Intangible assets, Estimated fair value

^[2]

$ 4,466

Goodwill

^[3]

15,521

Deferred tax liabilities, Estimated Fair Value

^[4]

(848)

Total purchase price, Estimated fair value

19,139

Goodwill, Adjustment

^[3]

(655)

Deferred tax liabilities, Adjustment

^[4]

655

Intangible assets, Adjusted fair value

^[2]

4,466

Goodwill, Adjusted fair value

^[3]

14,866

Deferred tax liabilities, Adjusted fair value

^[4]

(193)

Total purchase price , Adjusted fair value

$ 19,139

[1]	The purchase price adjustment corresponds to an adjustment for the deferred tax liability as a result of the Company’s evaluation of income tax treatment, which was recorded during the second quarter of 2019.
[2]	Identifiable definite-lived intangible assets were comprised of brand and customer relationships of $3,445 and $1,021, respectively, with estimated useful lives of 11 years and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives.
[3]	The goodwill represents the excess value of the purchase price over intangible assets acquired. The goodwill in this transaction is primarily attributable to future customer growth in the U.K. market as a result of acquiring an established platform and applying the Company’s technology to help improve the website experience on such platform; thus, helping to drive additional traffic to the PistonHeads website in the future. All goodwill is assigned to the International segment. The acquisition of PistonHeads was a stock acquisition and as a result, goodwill is not deductible for tax purposes.
[4]	The deferred tax liability corresponds to the acquired intangible assets which do not have tax basis. As the Company evaluated its purchasing price accounting, it determined to reduce the deferred tax liability which resulted in an adjustment to goodwill, which was recorded during the second quarter of 2019.

Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments - Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	$ 59,920	$ 34,887
Investments:	111,692	122,800	$ 50,000
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments:	$ 111,692	$ 122,800
Debt Securities, Held-to-maturity, Type [Extensible List]	us-gaap:CertificatesOfDepositMember	us-gaap:CertificatesOfDepositMember
Total	$ 140,888	$ 122,824
Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	29,196	24
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments:	$ 111,692	$ 122,800
Debt Securities, Held-to-maturity, Type [Extensible List]	us-gaap:CertificatesOfDepositMember	us-gaap:CertificatesOfDepositMember
Total	$ 111,692	$ 122,800
Fair Value, Measurements, Recurring \| Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	29,196	24
Fair Value, Measurements, Recurring \| Money Market Funds \| Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	$ 29,196	$ 24

Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments - Schedule of Cash, Cash Equivalents, and Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Cash and cash equivalents due in 90 days or less, Amortized Cost	$ 59,920	$ 34,887	$ 87,709
Certificates of deposit due in one year or less, Amortized Cost	111,692	122,800
Total cash, cash equivalents, and investments, Amortized Cost	171,612	157,687
Cash and cash equivalents due in 90 days or less, Estimated Fair Value	59,920	34,887
Certificates of deposit due in one year or less, Estimated Fair Value	111,692	122,800
Total cash, cash equivalents, and investments, Estimated Fair Value	$ 171,612	$ 157,687

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 46,105	$ 35,743
Less accumulated depreciation and amortization	(18,155)	(11,474)
Property and equipment, net	27,950	24,269	$ 16,563
Capitalized Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	7,923	4,208
Capitalized Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	181	252
Capitalized Website Development Costs
Property Plant And Equipment [Line Items]
Property and equipment, gross	11,083	6,907
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	6,809	4,584
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	19,507	10,821
Construction in Progress
Property Plant And Equipment [Line Items]
Property and equipment, gross	524	$ 8,971
Finance Lease Right-of-use Assets
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 78

Goodwill and Other Intangible Assets - Summary of Changes in Carrying Value of Goodwill (Details)
$ in Thousands

12 Months Ended

Dec. 31, 2019

USD ($)

Goodwill And Intangible Assets Disclosure [Abstract]

Initial value of PistonHeads acquisition

$ 15,521

Foreign currency translation adjustment

341

Purchase price adjustment

(655)

^[1]

Balance at December 31, 2019

$ 15,207

[1]	The purchase price adjustment corresponds to an adjustment for the deferred tax liability as a result of the Company’s evaluation of income tax treatment, which was recorded during the second quarter of 2019.

Goodwill and Other Intangible Assets - Summary of Other Intangible Assets (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 4,569
Accumulated Amortization	649
Net Carrying Amount	$ 3,920
Brand
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	10 years
Gross Carrying Amount	$ 3,524
Accumulated Amortization	313
Net Carrying Amount	$ 3,211
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	2 years
Gross Carrying Amount	$ 1,045
Accumulated Amortization	336
Net Carrying Amount	$ 709

Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2019
Goodwill [Line Items]
Amortization expense of intangible assets		$ 649,000
Goodwill impairment	$ 0
Brand
Goodwill [Line Items]
Estimated useful life		11 years
Customer Relationships
Goodwill [Line Items]
Estimated useful life		3 years

Goodwill and Other Intangible Assets - Summary of Estimated Amortization Expense of Intangible Assets (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2020	$ 671
2021	671
2022	328
2023	320
2024	320
2025 and thereafter	1,610
Net Carrying Amount	$ 3,920

Convertible Preferred Stock and Stockholders' Equity - Additional Information (Details) - $ / shares			12 Months Ended
	Oct. 16, 2017	Jun. 21, 2017	Dec. 31, 2019	Dec. 31, 2018	Oct. 11, 2017
Class Of Stock [Line Items]
Preferred stock, shares authorized	10,000,000	11,091,782			11,091,782
Preferred stock, par value	$ 0.001	$ 0.001
Percentage of common stock exercise price adjusted		0.167%
Percentage of common stock fair value adjusted prior to recapitalization		0.167%
Common stock exercise feature			the number of shares of common stock as to which each outstanding option to purchase common stock was exercisable for and each outstanding RSU was convertible into was adjusted such that upon exercise of outstanding stock options or vesting of outstanding RSUs, each holder would receive two fully paid and non‑assessable shares of Class A common stock and four fully paid and non‑assessable shares of Class B common stock in respect of each share of common stock previously underlying such option or RSU
Conversion of convertible securities into shares of common stock	9,091,484
Preferred stock, shares outstanding	0		0	0
IPO
Class Of Stock [Line Items]
Preferred stock, shares outstanding	0
Class A Common Stock
Class Of Stock [Line Items]
Common stock, shares authorized	500,000,000	120,020,700	500,000,000	500,000,000
Common stock, par value	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Common stock conversion terms			each share of Class A common stock issued and outstanding was recapitalized, reclassified, and reconstituted into two fully paid and non‑assessable shares of outstanding Class A common stock and four fully paid and non‑assessable shares of outstanding Class B common stock
Number of shares issued upon exercise of outstanding stock options or vesting of outstanding RSUs		2
Conversion of convertible securities into shares of common stock	60,564,678
Class A Common Stock \| IPO
Class Of Stock [Line Items]
Conversion of convertible securities into shares of common stock	20,188,226
Class A Common Stock \| Class A Common Stock Recapitalized, Reclassified And Reconstituted [Member]
Class Of Stock [Line Items]
Common stock issued in conversion		2
Class A Common Stock \| Class B Common Stock Recapitalized, Reclassified And Reconstituted [Member]
Class Of Stock [Line Items]
Common stock issued in conversion		2
Class A Common Stock \| Subsequent Conversion
Class Of Stock [Line Items]
Conversion of convertible securities into shares of common stock	40,376,452
Class B Common Stock
Class Of Stock [Line Items]
Common stock, shares authorized	100,000,000	80,013,800	100,000,000	100,000,000
Common stock, par value	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Common stock conversion terms			each share of Class B common stock of the Company issued and outstanding was recapitalized, reclassified, and reconstituted into two fully paid and non‑assessable shares of outstanding Class A common stock and four fully paid and non‑assessable shares of outstanding Class B common stock
Number of shares issued upon exercise of outstanding stock options or vesting of outstanding RSUs		4
Conversion of convertible securities into shares of common stock	40,376,452
Class B Common Stock \| Class A Common Stock Recapitalized, Reclassified And Reconstituted [Member]
Class Of Stock [Line Items]
Common stock issued in conversion		4
Class B Common Stock \| Class B Common Stock Recapitalized, Reclassified And Reconstituted [Member]
Class Of Stock [Line Items]
Common stock issued in conversion		4
Series A Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized		3,333,000			3,333,000
Series B Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized		3,329,497			3,329,497
Series D Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized		1,673,105			1,673,105
Series C Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized		1,648,978			1,648,978
Series E Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized		1,107,202			1,107,202

Convertible Preferred Stock and Stockholders' Equity - Common Stock - Additional Information (Details)	12 Months Ended
	Dec. 31, 2019 Vote shares	Dec. 31, 2018 shares
Class Of Stock [Line Items]
Common stock conversion feature	Each share of Class B common stock entitles the holder to ten votes for each share on all matters submitted to a vote of the Company’s stockholders at all meetings of stockholders and written actions in lieu of meetings.
Class A Common Stock
Class Of Stock [Line Items]
Number of votes entitled to stockholders per share \| Vote	1
Conversion of stock \| shares	387,440	7,534,710
Class B Common Stock
Class Of Stock [Line Items]
Number of votes entitled to stockholders per share \| Vote	10
Class of share converted to another class	one share of Class A common stock
Conversion of stock \| shares	1

Convertible Preferred Stock and Stockholders' Equity - Summary of Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	Oct. 16, 2017	Oct. 11, 2017	Jun. 21, 2017	Dec. 31, 2016
Temporary Equity [Line Items]
Shares Authorized	10,000,000	11,091,782	11,091,782
Outstanding		10,094,108
Liquidation Amount		$ 133,094
Carrying Value		$ 132,698
Series A Preferred Stock
Temporary Equity [Line Items]
Original Issue Price Per Share		$ 0.525053
Shares Authorized		3,333,000	3,333,000
Outstanding		2,824,703		2,824,703
Liquidation Amount		$ 1,483
Carrying Value		$ 1,483		$ 1,483
Series B Preferred Stock
Temporary Equity [Line Items]
Original Issue Price Per Share		$ 0.780899
Shares Authorized		3,329,497	3,329,497
Outstanding		2,938,486		2,938,486
Liquidation Amount		$ 2,295
Carrying Value		$ 2,295		$ 2,295
Series C Preferred Stock
Temporary Equity [Line Items]
Original Issue Price Per Share		$ 0.849012
Shares Authorized		1,648,978	1,648,978
Outstanding		1,550,612		1,550,612
Liquidation Amount		$ 1,316
Carrying Value		$ 1,316		$ 1,316
Series D Preferred Stock
Temporary Equity [Line Items]
Original Issue Price Per Share		$ 40.642989
Shares Authorized		1,673,105	1,673,105
Outstanding		1,673,105		1,673,105
Liquidation Amount		$ 68,000
Carrying Value		$ 67,872		$ 67,872
Series E Preferred Stock
Temporary Equity [Line Items]
Original Issue Price Per Share		$ 54.190650
Shares Authorized		1,107,202	1,107,202
Outstanding		1,107,202		1,107,202
Liquidation Amount		$ 60,000
Carrying Value		$ 59,732		$ 59,732

Stock-based Compensation - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Aug. 22, 2016

Aug. 15, 2015

Jun. 26, 2015

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Oct. 16, 2017

Oct. 11, 2017

Jun. 21, 2017

Dec. 31, 2006

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of options granted in period

Unrecognized stock-based compensation expense related to RSUs

$ 2,500

Total stock-based compensation expense

$ 34,301

$ 20,794

$ 5,028

Capitalized software development costs and internal-use software costs excluded from stock-based compensation expense

1,381

490

176

Income tax benefit from stock-based compensation expense

2,953

1,945

$ 1,301

Total payments for employees' tax obligations to taxing authorities due to net share settlements

$ 16,470

$ 25,885

Stock Options

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of options granted in period

Aggregate intrinsic value for options exercised

$ 28,902

^[1]

$ 111,227

$ 2,238

Unrecognized stock-based compensation expense related to stock options

$ 16

Unrecognized stock-based compensation expense, expected period for recognition

3 months 18 days

Total stock-based compensation expense

$ 155

$ 247

$ 281

RSUs

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of RSUs granted in period

1,811,208

Unrecognized stock-based compensation expense, expected period for recognition

2 years 9 months 18 days

Weighted average grant date fair value of RSUs granted

$ 39.07

$ 35.79

$ 16.99

Number of RSUs vested and settled during period

1,781,201

Number of RSUs vested in period

1,317,736

1,087,279

693,922

Total fair value of RSUs vested

$ 31,533

$ 15,994

$ 2,505

Unrecognized stock-based compensation expense related to RSUs

92,700

Total stock-based compensation expense

$ 34,146

$ 20,547

$ 4,747

Class A Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Employee tax withholding requirements and option costs due to net share settlement

452,678

658,931

2006 Plan

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Stock options, granted

Number of RSUs granted in period

2006 Plan | Class B Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

3,444,668

2015 Plan

Term of authorized shares

603,436

10 years

Award expiration date

Aug. 21, 2026

Equity Incentive Plan, plan modification, description and terms

(1) the number of shares of Class A common stock was increased, on a share for share basis, by the number of shares of Class B common stock that were (a) subject to outstanding options granted under the 2006 Plan that expired, terminated, or were cancelled for any reason without having been exercised, (b) surrendered in payment of the exercise price of outstanding options granted under the 2006 Plan or (c) withheld in satisfaction of tax withholding upon exercise of outstanding options granted under the 2006 Plan, and the number of shares of Class B common stock reserved under the amended and restated 2015 Plan was decreased, on a corresponding share for share basis, (2) no new awards of Class B common stock could be granted under the amended and restated 2015 Plan, and (3) except with respect to outstanding options granted under the 2006 Plan that were exercised on or after the date of the amendment and restatement, no Class B common stock could be issued under the 2015 Plan.

2015 Plan | Class B Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of additional shares authorized

5,161,644

802,562

2015 Plan | Class B Common Stock | Stock Options

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

2015 Plan | Class B Common Stock | RSUs

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

2015 Plan | Class A Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of additional shares authorized

3,181,740

618,691

2015 Plan | Class A Common Stock | Stock Options

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

2015 Plan | Class A Common Stock | RSUs

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

2017 Plan

Number of additional shares authorized

6,000,000

Equity incentive plan, issuance of additional shares, description and terms

Unless determined otherwise by the Compensation Committee of the Board, as of the first trading day of January of each calendar year during the term of the 2017 Plan (excluding any extensions), eligible beginning with calendar year 2019, an additional number of shares of Class A common stock will be added to the number of shares of the Company’s Class A common stock authorized to be issued or transferred under the 2017 Plan and the number of shares authorized to be issued or transferred pursuant to incentive stock options, equal to 4% of the total number of shares of our Class A common stock outstanding on the last trading day in December of the immediately preceding calendar year, or 6,000,000 shares, whichever is less, or such lesser amount as determined by the Board (the “Evergreen Increase”). The Compensation Committee of the Board determined to not effectuate the Evergreen Increase that was otherwise scheduled to have occurred on each of January 2, 2019 and January 2, 2020.

2017 Plan | Class A Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Equity incentive plan, additional shares authorized percentage

4.00%

Number of shares available for issuance during period

5,889,929

2017 Plan | Class A Common Stock | Maximum

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

2017 Plan | Class A Common Stock | Awarded Under 2017 Plan

12,300,000

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

2017 Plan | Class A Common Stock | Awarded Under 2015 Plan

7,800,000

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Options granted during period

4,500,000

[1]

Stock-based Compensation - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Common Stock

Stock Options

Common Stock

Outstanding, Beginning balance

1,807,515

Options granted during period

Exercised

(838,928)

Forfeited and cancelled

(25,702)

Outstanding, Ending balance

942,885

1,807,515

Weighted-Average Exercise Price for Equity

913,197

Outstanding, Beginning balance

$ 2.35

Exercised

2.16

Forfeited and cancelled

5.09

Outstanding, Ending balance

2.45

$ 2.35

Weighted-Average Remaining Contractual Life (In Years)

$ 2.31

Outstanding

5 years

5 years 10 months 24 days

Outstanding, Beginning balance

5 years

Aggregate Intrinsic Value

^[1]

$ 56,716

Exercised

28,902

^[1]

$ 111,227

$ 2,238

Outstanding, Ending balance

^[1]

30,859

$ 56,716

^[1]

$ 30,016

[1]

Stock-based Compensation - Summary of Restricted Stock Unit Activity (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of Shares
Unvested outstanding, beginning balance	2,973,002
Granted	1,811,208
Vested	(1,317,736)	(1,087,279)	(693,922)
Forfeited	(383,173)
Unvested outstanding, ending balance	3,083,301	2,973,002
Weighted-Average Grant Date Fair Value
Unvested outstanding, beginning balance	$ 26.06
Granted	39.07	$ 35.79	$ 16.99
Vested	23.93
Forfeited	31.70
Unvested outstanding, ending balance	$ 33.89	$ 26.06
Aggregate Intrinsic Value
Unvested outstanding, beginning balance	$ 100,279
Unvested outstanding, ending balance	$ 108,471	$ 100,279

Earnings Per Share - Additional Information (Details)		12 Months Ended
Earnings Per Share - Additional Information (Details)	Oct. 16, 2017 shares	Dec. 31, 2019 Vote shares	Dec. 31, 2018 shares
Earnings Per Share Basic [Line Items]
Convertible preferred stock, terms of conversion		On October 16, 2017, in connection with the closing
Conversion of preferred stock	9,091,484
Preferred stock, shares outstanding	0	0	0
Conversion of stock, description		Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including on either the death or voluntary termination of the Company’s Chief Executive Officer.
Undistributed earnings ratio used to calculate allocation to class of stock		100.00%
IPO
Earnings Per Share Basic [Line Items]
Preferred stock, shares outstanding	0
Class A Common Stock
Earnings Per Share Basic [Line Items]
Conversion of preferred stock	60,564,678
Right to voting		one vote per share
Number of votes entitled to stockholders per share \| Vote		1
Conversion of stock		387,440	7,534,710
Class A Common Stock \| IPO
Earnings Per Share Basic [Line Items]
Conversion of preferred stock	20,188,226
Class B Common Stock
Earnings Per Share Basic [Line Items]
Conversion of preferred stock	40,376,452
Right to voting		ten votes per share
Number of votes entitled to stockholders per share \| Vote		10
Class of share converted to another class		one share of Class A common stock
Conversion of stock		1

Earnings Per Share - Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Numerator:

Net income attributable to participating securities

$ 13,171

$ 10,384

$ 6,007

$ 12,584

$ 12,450

$ 13,882

$ 33,343

$ 5,495

$ 42,146

$ 65,170

$ 13,199

(6,098)

Net income attributable to common stockholders — basic

42,146

65,170

7,101

Net income attributable to participating securities

(5,829)

Net income attributable to common stockholders — diluted

$ 42,146

$ 65,170

$ 7,370

Denominator:

Weighted–average number of shares of common stock used in computing net income per share attributable to common stockholders — basic

111,450,443

108,833,028

55,835,265

Dilutive effect of share equivalents resulting from stock options

1,155,906

3,009,748

4,290,362

Dilutive effect of share equivalents resulting from unvested restricted stock units

825,501

1,521,936

511,957

Weighted–average number of shares of common stock used in computing net income per share — diluted

113,431,850

113,364,712

60,637,584

Net income per share attributable to common stockholders:

$ 0.12

^[1]

$ 0.09

^[1]

$ 0.05

^[1]

$ 0.11

^[1]

$ 0.11

^[1]

$ 0.13

^[1]

$ 0.31

^[1]

$ 0.05

^[1]

$ 0.38

$ 0.60

$ 0.13

$ 0.12

^[1]

$ 0.09

^[1]

$ 0.05

^[1]

$ 0.11

^[1]

$ 0.11

^[1]

$ 0.12

^[1]

$ 0.29

^[1]

$ 0.05

^[1]

$ 0.37

$ 0.57

$ 0.12

[1]	The amounts were computed independently for each quarter, and the sum of the quarters may not total the annual amounts.

Income Taxes - Schedule of Domestic and Foreign Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments [Abstract]
United States	$ 37,476	$ 24,426	$ 15,543
Foreign	1,229	1,058	294
Income before income taxes	$ 38,705	$ 25,484	$ 15,837

Income Taxes - Schedule of (Benefit From) Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current (benefit) provision:
Federal		$ (860)	$ 3,262
State	$ (220)	92	431
Foreign	513	122	62
Current (benefit) provision	293	(646)	3,755
Deferred (benefit) provision:
Federal	(2,377)	(27,675)	(755)
State	(1,306)	(11,499)	(343)
Foreign	(51)	134	(19)
Deferred (benefit) provision	(3,734)	(39,040)	(1,117)
Income tax (benefit) provision	$ (3,441)	$ (39,686)	$ 2,638

Income Taxes - Schedule of Effective Tax Rates Less than US Federal Statutory Rate Primarily Due to Excess Tax Deductions (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract]
U.S. federal taxes at statutory rate	21.00%	21.00%	35.00%
State taxes, net of federal benefit	0.20%	(25.60%)	3.10%
Nondeductible expenses	2.90%	4.10%	1.20%
Tax deductible IPO costs			(9.30%)
Stock compensation	(22.00%)	(127.20%)	(4.40%)
Foreign rate differential	(0.30%)	(0.40%)	(0.40%)
Credits	(10.30%)	(28.40%)	(9.00%)
Other	(0.20%)	0.70%	0.50%
Total	(8.70%)	(155.80%)	16.70%

Income Taxes - Schedule of Income Tax Effect of Each Type of Temporary Difference and Carryforward (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Net operating loss carryforwards	$ 35,977	$ 34,450
Credit carryforwards	10,472	6,562
Stock-based compensation	2,953	1,945
Landlord allowance on leasehold improvements		1,908
Lease liability	17,965
Intangible Assets	62
Deferred rent		873
Accruals and reserves	1,185	1,074
Deferred tax assets	68,614	46,812
Valuation Allowance	(62)
Valuation Allowance, net	68,552	46,812
Deferred tax liabilities:
Prepaid expenses	(1,523)	(931)
Deferred commissions	(5,100)	(3,187)
Right of use assets	(15,270)
Unbilled revenue		(227)
Fixed assets	(4,230)	(3,581)
Deferred tax liability	(26,123)	(7,926)
Net deferred tax assets	$ 42,429	$ 38,886

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Line Items]
Change in valuation allowance	$ 62,000
Deferred tax assets, federal net operating loss carryforwards	136,771,000
Deferred tax assets, state net operating loss carryforwards	$ 114,459,000
Percentage of annual limitation of taxable income	80.00%
State net operating loss carryforward, expiration year	2028
Tax credit carryforward, expiration year	2039
Liabilities for uncertain tax positions	$ 0	$ 0
Accrued interest or penalties related to uncertain tax positions	0	$ 0
Federal
Income Tax Disclosure [Line Items]
Tax credit carryforwards	6,507,000
State
Income Tax Disclosure [Line Items]
Tax credit carryforwards	$ 5,018,000
Internal Revenue Service (IRS)
Income Tax Disclosure [Line Items]
Tax credit carryforward limitations on use, cumulative ownership change, period	3 years
Tax credit carryforward, limitations on use	an ownership change, as defined by Section 382, results from transactions that increase the ownership of five percent stockholders in the stock of a corporation by more than 50% in the aggregate over a three-year period.
Internal Revenue Service (IRS) \| Minimum
Income Tax Disclosure [Line Items]
Tax credit carryforward limitations on use, cumulative ownership change percentage	5.00%
Internal Revenue Service (IRS) \| Maximum
Income Tax Disclosure [Line Items]
Tax credit carryforward limitations on use, cumulative ownership change percentage	50.00%
Internal Revenue Service (IRS) \| Federal
Income Tax Disclosure [Line Items]
Income tax examination year under examination	2017
Closed tax year	2015
Internal Revenue Service (IRS) \| State
Income Tax Disclosure [Line Items]
Closed tax year	2015
UK Revenue Agency \| Foreign
Income Tax Disclosure [Line Items]
Open tax year	2016
Canada Revenue Agency \| Foreign
Income Tax Disclosure [Line Items]
Open tax year	2016
Revenue Commissioners, Ireland \| Foreign
Income Tax Disclosure [Line Items]
Open tax year	2016

Segment and Geographic Information - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) Segment	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| Segment	2
Assets	$ 393,623	$ 268,290	$ 176,594
Goodwill	15,207
Intangible assets	3,920
International
Segment Reporting Information [Line Items]
Assets	32,528
Goodwill	15,207
Intangible assets	$ 3,920

Quarterly Financial Results (Unaudited) - Schedule of Unaudited Quarterly Financial Information (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Quarterly Financial Data [Abstract]

$ 158,153

$ 150,462

$ 145,031

$ 135,270

$ 126,090

$ 119,125

$ 110,296

$ 98,575

$ 588,916

$ 454,086

$ 316,861

10,560

9,392

8,628

7,720

6,871

6,412

5,959

5,569

36,300

^[1]

24,811

^[1]

17,609

^[1]

147,593

141,070

136,403

127,550

119,219

112,713

104,337

93,006

552,616

429,275

299,252

13,635

9,704

3,548

7,435

6,902

5,877

3,953

6,459

34,322

23,191

15,274

Basic net income per share

$ 13,171

$ 10,384

$ 6,007

$ 12,584

$ 12,450

$ 13,882

$ 33,343

$ 5,495

$ 42,146

$ 65,170

$ 13,199

$ 0.12

^[2]

$ 0.09

^[2]

$ 0.05

^[2]

$ 0.11

^[2]

$ 0.11

^[2]

$ 0.13

^[2]

$ 0.31

^[2]

$ 0.05

^[2]

$ 0.38

$ 0.60

$ 0.13

Diluted net income per share

$ 0.12

^[2]

$ 0.09

^[2]

$ 0.05

^[2]

$ 0.11

^[2]

$ 0.11

^[2]

$ 0.12

^[2]

$ 0.29

^[2]

$ 0.05

^[2]

$ 0.37

$ 0.57

$ 0.12

[1]	Includes depreciation and amortization expense for the years ended December 31, 2019, 2018, and 2017 of $3,263 $2,225, and $1,140, respectively.
[2]	The amounts were computed independently for each quarter, and the sum of the quarters may not total the annual amounts.

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=116637232&loc=SL114874131-224263

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=117326831&loc=d3e1337-109256

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=117327953&loc=d3e4984-109258

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=116634182&loc=SL114868664-224227

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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