SEC Info - Alteryx, Inc. - ‘10-K’ for 12/31/21

Incorporated by Reference

We have served as the Company’s auditor since 2019.

Alteryx, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except per share data)

Year Ended December 31,

2021

2020

2019

Revenue:

Subscription-based software license

i 203,960

i 237,035

i 229,194

PCS and services

i 332,175

i 258,273

i 188,716

Total revenue

i 536,135

i 495,308

i 417,910

Cost of revenue:

Subscription-based software license

i 4,967

i 5,125

i 3,923

PCS and services

i 50,786

i 38,714

i 35,228

Total cost of revenue

i 55,753

i 43,839

i 39,151

Gross profit

i 480,382

i 451,469

i 378,759

Operating expenses:

Research and development

i 132,420

i 101,117

i 69,100

Sales and marketing

i 334,480

i 252,820

i 191,735

General and administrative

i 149,747

i 101,439

i 79,943

Total operating expenses

i 616,647

i 455,376

i 340,778

Income (Loss) from operations

( i 136,265)

( i 3,907)

i 37,981

Interest expense

( i 39,208)

( i 38,119)

( i 21,844)

Other income (expense), net

( i 2,058)

i 14,382

i 10,434

Loss on induced conversion and debt extinguishment

i —

( i 1)

( i 20,507)

Income (Loss) before provision for (benefit of) income taxes

( i 177,531)

( i 27,645)

i 6,064

Provision for (benefit of) income taxes

i 2,150

( i 3,271)

( i 21,079)

Net income (loss)

( i 179,681)

( i 24,374)

i 27,143

Net income (loss) per share attributable to common stockholders, basic

( i 2.67)

( i 0.37)

i 0.43

Net income (loss) per share attributable to common stockholders, diluted

( i 2.67)

( i 0.37)

i 0.40

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic

i 67,191

i 66,058

i 63,424

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, diluted

i 67,191

i 66,058

i 68,661

Other comprehensive income (loss), net of tax:

Net unrealized holding gain (loss) on investments, net of tax

( i 3,374)

i 925

i 714

Foreign currency translation adjustments, net of tax

( i 667)

( i 892)

( i 1,669)

Other comprehensive income (loss), net of tax

( i 4,041)

i 33

( i 955)

Total comprehensive income (loss)

( i 183,722)

( i 24,341)

i 26,188

The accompanying notes are an integral part of these consolidated financial statements.

Alteryx, Inc.

Consolidated Balance Sheets

(in thousands, except par value)

As of December 31,

2021

2020

Assets

Current assets:

Cash and cash equivalents

i 152,375

i 171,891

Short-term investments

i 506,874

i 584,445

Accounts receivable, net

i 192,318

i 136,985

Prepaid expenses and other current assets

i 81,360

i 79,144

Total current assets

i 932,927

i 972,465

Property and equipment, net

i 71,270

i 40,645

Operating lease right-of use assets

i 102,681

i 62,508

Long-term investments

i 343,213

i 265,800

Goodwill

i 57,415

i 37,070

Intangible assets, net

i 21,737

i 16,191

Other assets

i 70,445

i 70,616

Total assets

i 1,599,688

i 1,465,295

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

i 8,086

i 5,340

Accrued payroll and payroll related liabilities

i 61,391

i 46,569

Accrued expenses and other current liabilities

i 53,917

i 34,987

Deferred revenue

i 208,154

i 108,664

Convertible senior notes, net

i 77,400

i 72,619

Total current liabilities

i 408,948

i 268,179

Convertible senior notes, net

i 686,016

i 657,501

Operating lease liabilities

i 78,784

i 53,860

Other liabilities

i 23,186

i 8,964

Total liabilities

i 1,196,934

i 988,504

Commitments and contingencies (Note 15)

Stockholders’ equity:

Preferred stock, $ i i 0.0001 / par value: i i 10,000 / shares authorized as of December 31, 2021 and December 31, 2020, respectively; i i i i no / / / shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

i —

Common stock, $ i i i i 0.0001 / / / par value: i i 500,000 / Class A shares authorized, i i 59,771 / and i i 58,634 / shares issued and outstanding, as of December 31, 2021 and December 31, 2020, respectively; i i 500,000 / Class B shares authorized, i i 7,763 / and i i 8,108 / shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

i 7

Additional paid-in capital

i 598,710

i 489,025

Accumulated deficit

( i 190,429)

( i 10,748)

Accumulated other comprehensive loss

( i 5,534)

( i 1,493)

Total stockholders’ equity

i 402,754

i 476,791

Total liabilities and stockholders’ equity

i 1,599,688

i 1,465,295

The accompanying notes are an integral part of these consolidated financial statements.

Alteryx, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands)

Common Stock

Additional
Paid-in
Capital

Retained Earnings (Accumulated
Deficit)

Accumulated
Other
Comprehensive
Income (Loss)

Total

Amount

Balances at December 31, 2018

i 61,579

i 6

i 315,291

( i 12,908)

( i 571)

i 301,818

Receipt of Section 16(b) disgorgement, net of tax effect

—

i 3,743

—

i 3,743

Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units

i 221

—

( i 10,643)

—

( i 10,643)

Exercise of stock options and issuance of shares in connection with employee stock purchase plan

i 1,534

—

i 20,156

—

i 20,156

Induced conversion on 2023 Notes, net of tax

i 2,190

i 1

( i 7,905)

—

( i 7,904)

Extinguishment of capped calls

( i 285)

—

i —

Stock-based compensation

—

i 33,125

—

i 33,125

Equity settled contingent consideration

i 21

—

i 750

—

i 750

Equity component of 2024 & 2026
Notes, net of issuance costs and tax

—

i 124,173

—

i 124,173

Purchase of capped calls, net of tax

—

( i 66,499)

—

( i 66,499)

Cumulative translation adjustment

—

( i 1,669)

Unrealized gain on investments

—

i 714

Net income

—

i 27,143

—

i 27,143

Balances at December 31, 2019

i 65,260

i 7

i 412,191

i 14,235

( i 1,526)

i 424,907

Cumulative effect of adoption of ASC 326

—

( i 609)

—

( i 609)

Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units

i 340

—

( i 21,276)

—

( i 21,276)

Exercise of stock options and issuance of shares in connection with employee stock purchase plan

i 1,142

—

i 23,195

—

i 23,195

Conversion on 2023 Notes, net of tax

i —

( i 1)

—

( i 1)

Stock-based compensation

—

i 74,916

—

i 74,916

Cumulative translation adjustment

—

( i 892)

Unrealized gain on investments

—

i 925

Net loss

—

( i 24,374)

—

( i 24,374)

Balances at December 31, 2020

i 66,742

i 7

i 489,025

( i 10,748)

( i 1,493)

i 476,791

Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units

i 514

—

( i 24,474)

—

( i 24,474)

Exercise of stock options and issuance of shares in connection with employee stock purchase plan

i 278

—

i 10,400

—

i 10,400

Stock-based compensation

—

i 123,759

—

i 123,759

Cumulative translation adjustment

—

( i 667)

Unrealized gain on investments

—

( i 3,374)

Net loss

—

( i 179,681)

—

( i 179,681)

Balances at December 31, 2021

i 67,534

i 7

i 598,710

( i 190,429)

( i 5,534)

i 402,754

The accompanying notes are an integral part of these consolidated financial statements.

Alteryx, Inc.

Consolidated Statements of Cash Flows

(in thousands)

Year Ended December 31,

2021

2020

2019

Cash flows from operating activities:

Net income (loss)

( i 179,681)

( i 24,374)

i 27,143

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

i 16,380

i 12,101

i 8,292

Non-cash operating lease cost

i 16,527

i 8,424

i 5,088

Stock-based compensation

i 124,065

i 74,916

i 33,125

Amortization (accretion) of discounts and premiums on investments, net

i 4,461

i 1,085

( i 3,030)

Amortization of debt discount and issuance costs

i 32,772

i 31,654

i 18,625

Deferred income taxes

i 634

( i 4,945)

( i 22,844)

Loss on induced conversion and debt extinguishment

i —

i 1

i 20,507

Other non-cash operating activities, net

i 893

i 618

( i 1,328)

Changes in operating assets and liabilities, net of effect of business acquisitions:

Accounts receivable

( i 56,917)

( i 7,368)

( i 35,325)

Deferred commissions

( i 12,350)

( i 7,323)

( i 20,461)

Prepaid expenses and other current assets and other assets

i 11,622

( i 16,502)

( i 34,971)

Accounts payable

i 2,584

( i 2,746)

i 2,319

Accrued payroll and payroll related liabilities

i 13,931

( i 7,547)

i 28,651

Accrued expenses, other current liabilities, operating lease liabilities, and other liabilities

( i 11,305)

( i 9,406)

i 8,091

Deferred revenue

i 99,543

i 26,194

i 310

Net cash provided by operating activities

i 63,159

i 74,782

i 34,192

Cash flows from investing activities:

Purchases of property and equipment

( i 32,768)

( i 26,358)

( i 11,453)

Cash paid in business acquisitions, net of cash acquired

( i 27,177)

i —

( i 40,949)

Purchases of investments

( i 905,544)

( i 1,141,598)

( i 602,703)

Sales and maturities of investments

i 898,604

i 856,110

i 377,974

Net cash used in investing activities

( i 66,885)

( i 311,846)

( i 277,131)

Cash flows from financing activities:

Proceeds from issuance of Notes, net of issuance costs

i —

i 783,321

Principal payments on 2023 Notes

i —

( i 11)

( i 145,241)

Purchase of capped calls

i —

( i 87,360)

Proceeds from receipt of Section 16(b) disgorgement

i —

i 4,918

Proceeds from exercise of stock options

i 10,400

i 23,125

i 20,156

Minimum tax withholding paid on behalf of employees for restricted stock units

( i 24,475)

( i 21,206)

( i 10,643)

Other financing activity

i —

( i 3,404)

( i 1,305)

Net cash provided by (used in) financing activities

( i 14,075)

( i 1,496)

i 563,846

Effect of exchange rate changes on cash and cash equivalents

( i 1,241)

i 801

( i 444)

Net increase (decrease) in cash, cash equivalents, and restricted cash

( i 19,042)

( i 237,759)

i 320,463

Cash, cash equivalents, and restricted cash—beginning of year

i 173,665

i 411,424

i 90,961

Cash, cash equivalents, and restricted cash—end of year

i 154,623

i 173,665

i 411,424

The accompanying notes are an integral part of these consolidated financial statements.

Alteryx, Inc.

Consolidated Statements of Cash Flows (Continued)

(in thousands)


	Year Ended December 31,
	2021		2020		2019
Supplemental disclosure of cash flow information:
Cash paid for interest	$	i 6,424	$	i 6,240	$	i 930
Cash paid for income taxes	$	i 2,148	$	i 2,198	$	i 1,630
Cash paid for amounts included in the measurement of operating lease liabilities	$	i 20,357	$	i 10,310	$	i 6,040
Supplemental disclosure of noncash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	i 57,461	$	i 43,568	$	i 13,312
Property and equipment recorded in accounts payable	$	i 7,996	$	i 3,983	$	i 2,002
Reduction of right-of-use assets due to remeasurement	$	( i 241)	$	( i 5,948)	$	i —
Consideration for business acquisition included in accrued expenses and other current liabilities and other liabilities	$	i 4,684	$	i —	$	i 3,000
Contingent consideration settled through issuance of common stock	$	i —	$	i —	$	i 750

The accompanying notes are an integral part of these consolidated financial statements.

Alteryx, Inc.

Notes to Consolidated Financial Statements

1. Organization and Nature of Operations

Alteryx, Inc. was initially organized in California in March 1997 as SRC, LLC, commenced principal operations in November 1997, changed its name to Alteryx, LLC in March 2010, and converted into a Delaware corporation in March 2011 under the name Alteryx, Inc. Alteryx, Inc. and its subsidiaries, or we, our, or us, are headquartered in Irvine, California.

The Alteryx Analytic Process Automation, or Alteryx APA, software platform unifies analytics, data science and business process automation in one self-service platform to accelerate digital transformation, deliver high-impact business outcomes, accelerate the democratization of data and rapidly upskill modern workforces. Data workers, regardless of technical acumen, are empowered to be curious and solve problems. With the Alteryx APA software platform, users can automate the full range of analytics, data science and processes, embed intelligent decision-making and actions, and empower their organization to enable top and bottom line impact, efficiency gains, and rapid upskilling.

2. Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

i Our consolidated financial statements are presented in accordance with accounting standards generally accepted in the United States of America, or U.S. GAAP, and include the accounts of Alteryx, Inc. and its wholly owned subsidiaries after elimination of intercompany transactions and balances.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions.

On an ongoing basis, our management evaluates these estimates and assumptions, including those related to determination of standalone selling prices of our products and services, income tax valuations, stock-based compensation, and goodwill and intangible assets valuations and recoverability. We base our estimates on historical data and experience, as well as various other factors that our management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities.

Concentration of Risk

Financial instruments, which subject us to concentrations of credit risk, consist primarily of cash and cash equivalents, investments, and trade accounts receivable. We maintain our cash and cash equivalents and investments with three major financial institutions and a portion of such balances exceed or are not subject to Federal Deposit Insurance Corporation, or FDIC, insurance limits.

We extend differing levels of credit to customers, do not require collateral deposits, and, when necessary, maintain reserves for potential credit losses based upon the expected collectability of accounts receivable. We manage credit risk related to our customers by following credit approval processes, establishing credit limits, performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures.

Accounts receivable include amounts due from customers with principal operations primarily in the United States.

No customers accounted for 10% or more of our accounts receivable balance or 10% or more of our revenue in any years presented.

Fair Value of Financial Instruments

We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:


			Level 1			Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.


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


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

The fair value of our money market funds was determined based on “Level 1” inputs.

The fair values of our certificates of deposit, commercial paper, U.S. Treasury and agency bonds, and corporate bonds were determined based on “Level 2” inputs. The valuation techniques used to measure the fair values of certificates of deposit and commercial paper included observable market-based inputs for similar assets, which primarily include yield curves and time-to-maturity factors. The valuation techniques used to measure the fair values of U.S. Treasury and agency bonds and corporate bonds included standard observable inputs, including reported trades, quoted market prices, matrix pricing, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets or benchmark securities and data provided by third parties as many of the bonds are not actively traded.

There were no marketable securities measured on a recurring basis in the “Level 3” category.

We have not elected the fair value option as prescribed by ASC 825, The Fair Value Option for Financial Assets and Financial Liabilities, for our financial assets and liabilities that are not otherwise required to be carried at fair value. Under ASC 820, Fair Value Measurements and Disclosures, or ASC 820, material financial assets and liabilities not carried at fair value, such as our Notes and accounts receivable and payable, are reported at their carrying values.

Cash and Cash Equivalents and Restricted Cash

i We consider cash and cash equivalents to include short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present an insignificant risk of changes in the value, including investments that mature within three months from the date of original purchase.

We had restricted cash of $ i 2.2 million and $ i 1.8 million as of December 31, 2021 and 2020, respectively. This balance, presented in other assets on the consolidated balance sheet, relates to amounts required to be restricted as to use by our letters of credit associated with our leases and by our credit card processor.

Investments in Marketable Securities

i Our investments consist of available-for-sale marketable securities, which are composed of fixed income securities, certificates of deposit, and money market funds. Our fixed income securities are predominantly high-grade corporate bonds, U.S. Treasury bonds, and U.S. Agency bonds. The classification of investments is determined at the time of purchase and reevaluated at each balance sheet date. Investments are stated at fair value and are classified as current or non-current based on the nature of the securities as well as their stated maturities. Unrealized gains and losses that are not associated with a credit loss are recognized in other comprehensive income in our consolidated balance sheets.

At each balance sheet date, we assess available-for-sale securities in an unrealized loss position to assess whether a decline in the fair value below the amortized cost basis (i.e., impairment) of an available-for-sale debt security is due to credit-related factors or noncredit-related factors. If it is determined that the unrealized losses are credit-related, we record the credit-related impairment as an allowance on the balance sheet with a corresponding adjustment in our consolidated statement of operations and comprehensive income (loss). Credit losses are limited to the amount by which the security’s amortized cost basis exceeds its fair value and both the allowance and the adjustment to net income can be reversed if conditions change. If the unrealized loss is determined not to be credit-related, the corresponding adjustment is made in accumulated other comprehensive income (loss) in our consolidated balance sheets.

Accounts Receivable, Allowance for Doubtful Accounts, and Sales Reserves

Our accounts receivable consists of amounts due from customers and are typically unsecured. Accounts receivable are recorded at the invoiced amount and are non-interest bearing.

The allowance for doubtful accounts is estimated and established by assessing individual accounts receivable over a specific age and dollar value, pooling all other receivables by similar risk characteristics, considering historical loss rates, adjusted for asset-specific characteristics, current conditions, or forecasts, and applying a loss rate to the amortized cost of the asset. Additions to the allowance are charged to general and administrative expenses or revenue in the consolidated statements of operations and comprehensive income (loss), or against deferred revenue in the consolidated balance sheets depending on the timing of the addition in relation to the contract term. Accounts receivable are written off against the allowance when an account balance is deemed uncollectible.

We estimate a sales reserve based upon the historical adjustments made to customer billings. Such reserve is recorded as a reduction of revenue and deferred revenue in the consolidated statements of operations and comprehensive income (loss) and balance sheets, respectively.

Assets Recognized from the Costs to Obtain a Contract with a Customer

i We record an asset for the incremental costs of obtaining a contract with a customer, which primarily consists of sales commissions and partner referral fees that are earned upon execution of contracts. We pay commissions for new product sales as well as for renewals of existing contracts, and partner referral fees only for new product sales. For customer contracts in which the commissions paid on new business and renewals are commensurate, we generally amortize these costs over the contractual term of the contract, consistent with the pattern of revenue recognition for each performance obligation. For customer contracts in which the commissions paid on new business and renewals are not commensurate and for partner referral fees, we amortize the costs on new business over an expected period of benefit, which we have determined to be approximately i four years. The expected period of benefit was determined by taking into consideration our customer contracts, the duration of our relationships with our customers and the useful life of our technology. In capitalizing and amortizing deferred commissions and partner referral fees, we have elected to apply a portfolio approach. We include amortization of this asset in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss). /

Royalties

We pay royalties associated with licensed third-party syndicated data sold with our platform and we recognize royalty expense to cost of revenue in our consolidated statements of operations and comprehensive income (loss) when incurred. For the years ended December 31, 2021, 2020, and 2019, we recognized royalty expense of approximately $ i 12.5 million, $ i 12.4 million, and $ i 12.2 million respectively.

Property and Equipment

Property and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. i Useful lives by asset category are as follows:


Computer equipment and software						i 3 years
Furniture and fixtures						i 3 to i 7 years
Leasehold improvement						Shorter of useful life or lease term

Repairs and maintenance costs are charged to expense as incurred. Upon the sale or retirement of property and equipment, the cost and the related accumulated depreciation or amortization are removed from the accounts, with any resulting gain or loss included in our consolidated statements of operations and comprehensive income (loss).

Intangible Assets

i Intangible assets consist primarily of acquired developed technology. We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives of four to i eight years, using the straight-line method, which approximates the pattern in which the economic benefits are consumed. /

Impairment of Long-Lived Assets

i We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be fully recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets.

Business Combinations

The results of businesses acquired in a business combination are included in our consolidated financial statements from the date of the acquisition. We allocate the purchase price, including the fair value of any non-cash and contingent consideration, to the identifiable assets and liabilities of the relevant acquired business at their acquisition date fair values. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill.

Contingent consideration payable in cash or a fixed dollar amount settleable in a variable number of shares is classified as a liability and recorded at fair value, with changes in fair value recorded in general and administrative expenses each period. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).

We perform valuations of assets acquired, liabilities assumed, and contingent consideration and allocate the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired, liabilities assumed, and contingent consideration requires us to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, the probability of achievement of specified milestones, and selection of comparable companies. We engage the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired, liabilities assumed, and contingent consideration in a business combination.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We test goodwill for impairment in accordance with the provisions of ASC 350, Intangibles – Goodwill and Other, or ASC 350. Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, unanticipated competition, loss of key personnel, significant changes in the use of the acquired assets or our strategy, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.

ASC 350 provides that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform an impairment test.

The impairment test involves comparing the estimated fair value of a reporting unit with its book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than book value, then an impairment loss is recognized in an amount equal to the amount that the book value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

We have i one reporting unit and we test for goodwill impairment annually during the fourth quarter of each calendar year using a quantitative assessment. At each of December 31, 2021 and 2020, we determined our goodwill was not impaired as our fair value significantly exceeded the carrying value of our net assets.

Revenue Recognition

Our revenue is derived from the licensing of subscription-based software, data subscription services, and professional services, including training and consulting services. The subscription-based license generally includes access to hosted services and software and post-contract support, or PCS, which provides the customer the right to receive when-and-if-available unspecified future updates, upgrades and enhancements, and technical product support. The core principle of ASC 606, Revenue from Contracts with Customers, or ASC 606, is to recognize revenue upon the transfer of goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled. In order to adhere to this core principle, we apply the following five-step approach:

•identify the contract with a customer;

•identify the performance obligations in the contract;

•determine the transaction price;

•allocate the transaction price to the performance obligations in the contract; and

•recognize revenue when (or as) we satisfy a performance obligation.

We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for goods or services we transfer to the customer.

Revenue is measured based on consideration specified in a contract with a customer, and excludes any taxes we collect concurrent with revenue-producing activities. Most of our contracts contain a fixed transaction price. Our subscription agreements typically range from i one to three years and are billed annually in advance with net payment terms of 60 days or less. The primary purpose of our payment and invoicing terms is to provide customers with predictable ways to purchase our software and services, and not to provide customers with financing.

Our contracts with customers typically contain multiple performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. Substantially all of our licenses are sold as subscription-based, on-premise, licenses and are bundled with maintenance and support, or PCS, and cloud-based offerings. In addition to our on-premise licenses, we sell subscriptions to third-party syndicated data and provide professional service offerings primarily related to trainings for our customers. We allocate the transaction price of the contract to each performance obligation using the relative standalone selling price, or SSP, of each distinct good or service in the contract. We determine estimates of SSP based on sales of goods and services sold on a standalone basis, our overall pricing strategies, market conditions, including the geographic locations in which the products are sold, the useful life of our products, and market data. We review the SSP for each of our performance obligations at least annually and update it when appropriate to ensure that the practices employed reflect our recent pricing experience and maximize the use of observable data.

We recognize revenue when we satisfy a performance obligation by transferring control of a good or service to a customer. Revenue related to our subscription-based licenses is recognized at a point in time when the platform is first made available to the customer, or the beginning of the subscription term, if later. Revenue related to PCS and data subscriptions is recognized ratably over the subscription terms. Professional services revenue is recognized when the services are provided to the customer, or when they expire. During 2021 we introduced, on a limited availability basis, Alteryx Designer Cloud and Alteryx Machine Learning. Revenue related to these cloud offerings was not material in 2021.

Contract Assets and Contract Liabilities

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. Contract assets are recorded as current if the invoice will be delivered to the customer within the succeeding 12-month period with the remaining recorded as long-term. Current contract assets are included in prepaid expenses and other current assets and long-term contract assets are included in other assets on our consolidated balance sheets.

Contract liabilities, or deferred revenue, are recorded for amounts that are collected in advance of the satisfaction of performance obligations. These liabilities are classified as current if the performance obligation will be satisfied during the succeeding 12-month period and the remaining portion is recorded as non-current deferred revenue in our consolidated balance sheet.

Cost of Revenue

Cost of revenue is accounted for in accordance with ASC 705, Cost of Sales and Services, and consists of employee-related costs, including salaries and bonuses, stock-based compensation expense, and employee benefit costs associated with our customer support and professional services organizations, expenses related to hosting and operating our cloud infrastructure in a third-party data center, licenses of third-party syndicated data, amortization and impairment of acquired completed technology intangible assets, and related overhead expenses. Out-of-pocket travel costs related to the delivery of professional services are typically reimbursed by the customers and are accounted for as both revenue and cost of revenue in the period in which the cost is incurred.

Research and Development

i Research and development expense consists primarily of employee-related costs, including salaries and bonuses, stock-based compensation expense, and employee benefits costs, depreciation of equipment used in research and development for our research and development employees, third-party contractor costs, and related allocated overhead costs. Product development expenses, other than software development costs qualifying for capitalization, are expensed as incurred.

Software Development Costs

i Costs incurred in the development of new software products and enhancements to existing software products to be accounted for under software revenue recognition guidance are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased, or Marketed, or ASC 985-20. These costs, consisting primarily of salaries and related payroll costs, are expensed as incurred until technological feasibility has been established. After technological feasibility is established, costs are capitalized in accordance with ASC 985-20. Because our process for developing software is completed concurrently with the establishment of technological feasibility, no internally generated software development costs have been capitalized as of December 31, 2021 or December 31, 2020.

We account for costs to develop or obtain internal-use software and implementation costs incurred in hosting arrangements in accordance with ASC 350-40, Internal-Use Software, or ASC 350-40. We also account for costs of significant upgrades and enhancements resulting in additional functionality under ASC 350-40. These costs are primarily software purchased for internal-use, purchased software licenses, implementation costs, and development costs related to our hosted product, which is accessed by customers on a subscription basis. Costs incurred for maintenance, training, and minor modifications or enhancements are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three to i four years. 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. In 2021, we capitalized development costs related to internal-use software, principally the development of our cloud-based service offerings, of $ i 9.0 million, and those costs are included in construction in process in fixed assets on the consolidated balance sheets as of December 31, 2021. We placed these assets in service and began amortization upon the general availability release of our cloud-based service offerings in February 2022.

Convertible Senior Notes

i Our Notes (as defined in Note 9, Convertible Senior Notes, of these notes to our consolidated financial statements) are accounted for in accordance with ASC 470‑20, Debt with Conversion and Other Options, or ASC 470-20. Pursuant to ASC 470‑20, issuers of certain convertible debt instruments that have a net settlement feature and may be settled wholly or partially in cash upon conversion are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The carrying amount of the debt component for each series of our Notes was calculated by estimating the fair value of similar liabilities that do not have associated convertible features. The carrying amount of the equity component for each series of our Notes was determined by deducting the fair value of the debt component from their respective principal amounts. The difference between the principal amount of each series of our Notes and its respective fair value of debt component are amortized to interest expense over its respective terms using the effective interest method. The equity component, net of issuance costs and deferred tax effects, of each series of our Notes is presented within additional paid-in-capital in our consolidated balance sheet, and will not be remeasured as long as it continues to meet the requirements for equity classification. In accounting for the issuance costs related to our Notes, the allocation of issuance costs incurred between the debt and equity components was based on their relative values.

Leases

Under ASC 842, we determine if an arrangement is a lease at contract inception. Operating leases are included in operating lease right-of-use assets, accrued expenses and other current liabilities and operating lease liabilities in our consolidated balance sheets. Operating lease charges are recorded in cost of revenue and operating expenses in our consolidated statements of operations and comprehensive income (loss).

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. We do not separate lease and non-lease components for all underlying asset classes. As most of our leases do not provide a readily determinable implicit rate, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. We determine our incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the applicable country or region. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. The lease term includes options to extend or terminate when we are reasonably certain the option will be exercised. In general, we are not reasonably certain to exercise such options. We recognize lease expense for minimum lease payments on a straight-line basis over the lease term, while variable lease payments, such as common area maintenance, are recognized as incurred. We elected the practical expedient to not recognize operating lease right-of-use assets and operating lease liabilities that arise from short-term leases (i.e., leases with a term of 12 months or less).

Advertising Costs

i Advertising costs are expensed as incurred. We incurred advertising costs of approximately $ i 29.6 million, $ i 16.3 million, and $ i 17.8 million for the years ended December 31, 2021, 2020, and 2019, respectively. Such costs primarily relate to our annual user conferences, online, television, and print advertising, as well as sponsorship of public marketing and sporting events, and are reflected in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss). /

Stock-Based Compensation

i We recognize stock-based compensation expense in accordance with the provisions of ASC 718, Compensation—Stock Compensation, or ASC 718. ASC 718 requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors based on the grant date fair values of the awards. We use the Black-Scholes option-pricing method for valuing stock options and shares granted under the employee stock purchase plan. Restricted stock units, or RSUs, are valued based on the fair value of our common stock on the date of grant, less our expected dividend yield. For awards that vest solely based on continued service, the fair value of an award is recognized as an expense over the requisite service period on a straight-line basis. For awards that contain performance conditions, the fair value of an award is recognized based on the probability of the performance condition being met using the graded vesting method. Stock-based compensation expense is included in cost of revenue and operating expenses within our consolidated statements of operations and comprehensive income (loss) based on the classification of the individual earning the award.

The determination of the grant date fair value of stock-based awards is affected by the estimated fair value per share of our common stock as well as other highly subjective assumptions, including, but not limited to, the expected term of the stock-based awards, expected stock price volatility, risk-free interest rates, and expected dividends yields, which are estimated as follows:

•Expected term. We determine the expected term of the awards using the simplified method, which estimates the expected term based on the average of the vesting period and contractual term of the stock option.

•Expected volatility. We estimate the expected volatility based on our own historical volatility as well as the volatility of similar publicly held entities (referred to as “guideline companies”) over a period equivalent to the expected term of the awards. In evaluating the similarity of guideline companies to us, we considered factors such as industry, stage of life cycle, size, and financial leverage. We intend to continue to consistently apply this process using the same or similar guideline companies to estimate the expected volatility until sufficient historical information regarding the volatility of the share price of our common stock becomes available.

•Risk-free interest rate. The risk-free interest rate used to value our stock-based awards is based on the U.S. Treasury yield in effect at the time of grant for a period consistent with the expected term of the award.

•Estimated dividend yield. The expected dividend is assumed to be zero as we have never declared or paid any cash dividends and do not currently intend to declare dividends in the foreseeable future.

The assumptions used in calculating the fair value of stock-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change or we use different assumptions, stock-based compensation expense could be materially different in the future.

Foreign Currency Remeasurement, Translation, and Transactions

i The functional currency of our wholly owned subsidiaries is the currency of the primary economic environment in which the entity operates. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for nonmonetary accounts, with exchange differences on remeasurement included in other income (expense), net in our consolidated statements of operations and comprehensive income (loss). Our foreign subsidiaries that utilize foreign currency as their functional currency translate such currency into U.S. dollars using (i) the exchange rate on the balance sheet dates for assets and liabilities, (ii) the average exchange rates prevailing during the period for revenues and expenses, and (iii) historical exchange rates for equity. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive income (loss) within stockholder’s equity in the consolidated balance sheets.

Transactions denominated in currencies other than the U.S. dollar may result in transaction gains or losses at the end of the period and when the related receivable or payable is settled. Gains (losses) associated with fluctuations in foreign exchange rates were $( i 5.2) million, $ i 3.0 million, and $ i 1.0 million for the years ended December 31, 2021, 2020, and 2019, respectively, and are included in other income (expense) in our consolidated statements of operations and comprehensive income (loss).

Income Taxes

We apply the provisions of ASC 740, Income Taxes, or ASC 740. Under ASC 740, we account for our income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the bases used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates and laws that will be in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more likely than not that we will not realize those tax assets through future operations.

We also utilize the guidance in ASC 740 to account for uncertain tax positions. ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more likely than not to be realized and effectively settled. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately reflect actual outcomes. We recognize interest and penalties on unrecognized tax benefits as a component of benefit of income taxes in our consolidated statements of operations and comprehensive income (loss).

Net Income (Loss) Per Share Attributable to Common Stockholders

In periods in which we have net income, and a contingent event has been met, we apply the two-class method for calculating earnings per share. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Participating securities include our Notes. In periods in which we have net losses, we do not attribute losses to participating securities as they are not contractually obligated to share our losses.

Under the two-class method, basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income (loss) attributable to common stockholders is calculated as net income (loss) including current period convertible preferred stock accretion.

Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options, restricted stock units and convertible notes as computed under the treasury stock method. In periods in which we incurred a net loss, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocations, and calculating income taxes in interim periods. The standard also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill, allocating taxes to members of a consolidated group, and the recognition of deferred tax liabilities for outside basis differences. We adopted ASU 2019-12 prospectively as of the reporting period beginning January 1, 2021. Adoption of this update did not have a material impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, or ASU 2020-06, which simplifies the accounting for convertible instruments by removing certain separation models required under current U.S. GAAP, including the beneficial conversion feature and cash conversion models. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This guidance will be effective for us for annual reporting periods beginning after December 15, 2021 and for interim periods within those annual periods, and can be applied utilizing either a modified or full retrospective transition method. We currently account for our Notes (as defined and described in Note 9, Convertible Senior Notes) utilizing the cash conversion model. We intend to adopt this standard in the first quarter of 2022 under the modified transition method and expect that the adoption will have a material impact on our consolidated financial statements and related disclosures. For example, we currently anticipate that the guidance will result in the removal of the equity component related to our Notes of $ i 209.6 million; decrease our interest expense due to the removal of amortization component of the debt discount related to the equity component, which was $ i 29.6 million for the year ended December 31, 2021; and increase our weighted-average shares used to compute diluted net income (loss) per share due to the elimination of the treasury stock method. We are still evaluating the cumulative effect of the change on retained earnings and other components of equity for our opening balance adjustment. See Note 17, Basic and Diluted Net Income (Loss) Per Share, for discussion on the dilutive impact of contingent shares associated with our Notes.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. The Company is continuing to assess the timing of adoption and the potential impacts of ASU 2021-08, as it could have a material effect on our consolidated financial statements.

100

3. Revenue

Disaggregation of Revenue

The disaggregation of revenue by region was as follows (in thousands):

Year Ended December 31,

Revenue by region:

2021

2020

2019

United States

i 365,050

i 338,190

i 296,108

International

i 171,085

i 157,118

i 121,802

Total

i 536,135

i 495,308

i 417,910

Revenue attributable to the United Kingdom comprised i 10.2% and i 10.7% of the total revenue for the years ended December 31, 2021 and 2019, respectively. Other than the United Kingdom for the years ended December 31, 2021 and 2019, no other country outside the United States comprised more than 10% of revenue for any of the periods presented. Our operations outside the United States include sales offices in Australia, Canada, France, Germany, Japan, Singapore, the United Arab Emirates and the United Kingdom, and research and development centers in Australia, Ukraine and the Czech Republic. Revenue by location is determined by the billing address of the customer.

Revenue related to our subscription-based software licenses is recognized at a point in time when the platform is first made available to the customer, or the beginning of the subscription term, if later. Revenue related to post contract support, or PCS, service, and hosted services is recognized ratably over the subscription term, with the exception of professional services related to training services. Revenue related to professional services is recognized at a point in time as the services are performed, and represents less than i 5% of total revenue for all periods presented.

Contract Assets and Contract Liabilities

As of December 31, 2021 and 2020, our contract assets are expected to be transferred to receivables within the next i 12 to i 24 months and, with respect to these contract assets, $ i 22.0 million and $ i 25.4 million, respectively, is included in prepaid expenses and other current assets, and $ i 20.5 million and $ i 37.2 million, respectively, is included in other assets on our consolidated balance sheet. There were i i no / impairments of contract assets during each of the years ended December 31, 2021 and 2020.

As of December 31, 2021 and 2020, we had deferred revenue of $ i 208.2 million and $ i 108.7 million, respectively, included in current deferred revenue and $ i 2.7 million and $ i 3.8 million, respectively, included in other liabilities on our consolidated balance sheet. During the years ended December 31, 2021 and 2020, we recognized $ i 108.7 million and $ i 83.9 million, respectively, of revenue related to amounts that were included in deferred revenue as of January 1, 2021 and 2020, respectively.

Assets Recognized from the Costs to Obtain our Contracts with Customers

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. This primarily consists of sales commissions and partner referral fees that are earned upon execution of the related contracts. We amortize these deferred commissions, which include partner referral fees, proportionate with related revenues over the benefit period.

101

A summary of the activity impacting our deferred commissions during the years ended December 31, 2021 and 2020 is presented below (in thousands):


	Year Ended December 31,
	2021		2020
Beginning balance	$	i 51,186	$	i 43,035

Additional deferred commissions(1)	i 66,738		i 46,109
Amortization of deferred commissions (2)	( i 47,604)		( i 38,751)
Effects of foreign currency translation	( i 503)		i 793
Ending balance	$	i 69,817	$	i 51,186

(1) Of the amount of additional commissions earned during the twelve months ended December 31, 2021, $ i 9.0 million is anticipated to be paid in shares of the Company’s Class A common stock in the three months ended March 31, 2022.

(2) Of the amount amortized from deferred commissions through December 31, 2021, $ i 2.2 million is anticipated to be paid in shares of the Company’s Class A common stock in the three months ended March 31, 2022 and is included in stock-based compensation.

As of December 31, 2021 and 2020, $ i 31.3 million and $ i 24.8 million, respectively, of our deferred commissions were expected to be amortized within the next 12 months, and therefore were included in prepaid expenses and other current assets. The remaining amount of our deferred commissions is included in other assets. There were i i no / impairments of assets related to deferred commissions during each of the years ended December 31, 2021 and 2020. There were no assets recognized related to the costs to fulfill contracts during each of the years ended December 31, 2021 and 2020 as these costs were not material.

Remaining Performance Obligations

Transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue on our consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of December 31, 2021 and 2020, we had an aggregate transaction price of $ i 476.3 million and $ i 484.3 million, respectively, allocated to unsatisfied performance obligations related primarily to PCS, cloud-based offerings, and subscriptions to third-party syndicated data. As of December 31, 2021 and 2020, we expect to recognize $ i 443.6 million and $ i 434.9 million, respectively, as revenue over the next i i 24 / months with the remaining amount recognized thereafter.

4. Business Combinations

Goodwill represents the excess of the purchase price consideration over the fair value of the underlying intangible assets and net liabilities assumed. We believe the amount of goodwill resulting from acquisitions during the years ended December 31, 2021 and 2019 are primarily attributable to expected synergies from an assembled workforce, increased development capabilities, offerings to customers, and enhanced opportunities for growth and innovation. There were no acquisitions in 2020.

Pro forma information and revenue and operating results of the companies acquired during the years ended December 31, 2021 and 2019 have not been presented as the impacts are not significant to our consolidated financial statements.

The consolidated financial statements include the results of operations of each acquisition commencing as of the acquisition date of the respective acquisition. Acquisition-related costs associated with the below acquisitions were $ i 5.5 million in 2021 and immaterial in 2020 and 2019, and are recorded in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).

2021 Acquisitions

Hyper Anna Pty. Ltd.

On October 6, 2021, we acquired i 100% of the outstanding equity of Hyper Anna Pty. Ltd., or Hyper Anna, pursuant to an Agreement for the Sale and Purchase of Shares, dated as of October 6, 2021, or the Hyper Anna Purchase Agreement. The acquisition was made to augment our research and development team and acquire certain developed technology.

The aggregate consideration payable in exchange for all of the outstanding equity interests in Hyper Anna, net of customary adjustments set forth in the Hyper Anna Purchase Agreement, was $ i 24.9 million in cash. This includes $ i 3.0 million and $ i 2.0 million of cash consideration held back for customary indemnification matters for a period of i 24 months and i 36 months, respectively, following the acquisition date.

102

In connection with the acquisition, we entered into employment agreements with certain employees from Hyper Anna, which include up to $ i 16.8 million in equity incentive awards based on continued employment over a period of i 36 months. As the awards are subject to the continued employment of the employees, they were excluded from the purchase consideration, and will be recognized as post-acquisition compensation.

The purchase consideration for the acquisition of $ i 24.9 million consisted of $ i 10.6 million in developed technology, which is tax deductible; $ i 10.5 million of goodwill; and $ i 3.8 million of net assets assumed.

We determined the fair value of the developed technology acquired using the multi-period excess earnings model, which is a variation of the income approach that estimates the value of the assets based on the present value of the incremental after-tax cash flow attributable only to the intangible assets. This model utilizes certain unobservable inputs classified as Level 3 measurements as defined by ASC 820, Fair Value Measurements and Disclosures, or ASC 820. Key inputs utilized in the models include a discount rate of i 29% and estimated revenue and expense forecasts. Based on the valuation model, we determined the fair value of the developed technology to be $ i 10.6 million with an amortization period of i 7 years.

Lore IO, Inc.

On October 21, 2021, we acquired i 100% of the outstanding equity of Lore IO, Inc., or Lore IO, pursuant to an Agreement and Plan of Merger, dated as of October 18, 2021, or the Lore IO Merger Agreement. The acquisition was made to augment our research and development team. The aggregate consideration payable in exchange for all of the outstanding equity interests of Lore IO was $ i 10.0 million in cash, subject to customary adjustments set forth in the Lore IO Merger Agreement.

In connection with the acquisition, we entered into employment agreements with certain employees from Lore IO, which include up to $ i 11.1 million in equity incentive awards based on continued employment over a period of i 36 months. As the awards are subject to the continued employment of the employees, they were excluded from the purchase consideration, and will be recognized as post-acquisition compensation.

The purchase consideration for the acquisition of $ i 10.0 million consisted of $ i 10.0 million of goodwill, which is not tax deductible, and immaterial net assets assumed.

2019 Acquisitions

Feature Labs, Inc.

On October 3, 2019, we acquired i 100% of the outstanding equity of Feature Labs, Inc., a Delaware corporation, or Feature Labs, pursuant to an Agreement and Plan of Merger, dated as of October 2, 2019, or the Feature Labs Merger Agreement. The acquisition was made to augment our machine learning capabilities and establish an engineering hub on the East Coast of the U.S. The aggregate consideration payable in exchange for all of the outstanding equity interests of Feature Labs was $ i 25.2 million in cash, subject to customary adjustments set forth in the Feature Labs Merger Agreement.

In connection with the acquisition, we entered into employment agreements with certain employees from Feature Labs, which include up to $ i 12.5 million in equity incentive awards based on continued employment over a period of i 48 months with respect to certain time-based equity incentive awards and continued employment and the achievement of certain milestones over a period of i 36 months with respect to certain performance-based equity incentive awards. As the awards are subject to the continued employment of the employees, they were excluded from the purchase consideration, and will be recognized as post-acquisition compensation.

The purchase consideration for the acquisition of $ i 25.2 million consisted of $ i 7.9 million in developed technology, $ i 18.0 million of goodwill, which was not tax deductible, and $ i 0.7 million of net liabilities assumed.

We determined the fair value of the developed technology acquired using the multi-period excess earnings model, which is a variation of the income approach that estimates the value of the assets based on the present value of the incremental after-tax cash flow attributable only to the intangible assets. This model utilizes certain unobservable inputs classified as Level 3 measurements as defined by ASC 820, Fair Value Measurements and Disclosures, or ASC 820. Key inputs utilized in the models include a discount rate of i 40% and estimated revenue and expense forecasts. Based on the valuation model, we determined the fair value of the developed technology to be $ i 7.9 million with an amortization period of i 7.0 years.

103

ClearStory Data Inc.

On April 4, 2019, we acquired i 100% of the outstanding equity of ClearStory Data Inc., a Delaware corporation, or ClearStory Data, pursuant to an Agreement and Plan of Merger, dated as of March 28, 2019, or the ClearStory Merger Agreement. The acquisition was made to augment our research and development team and acquire certain developed technology.

The aggregate consideration payable in exchange for all of the outstanding equity interests of ClearStory Data was $ i 19.6 million in cash, subject to customary adjustments set forth in the ClearStory Merger Agreement. The acquisition of ClearStory Data included $ i 3.0 million of cash consideration held back for customary indemnification matters for a period of i 18 months following the acquisition date. As of December 31, 2020, cash held back for customary indemnification matters had been released.

In connection with the acquisition, we entered into employment agreements with certain employees from ClearStory Data, which included up to $ i 6.0 million in aggregate cash payments based on the achievement of certain milestones over a period of i 24 months. As the awards were subject to the continued employment of the employees, they were excluded from the purchase consideration, and recognized as post-acquisition compensation.

The purchase consideration for the acquisition of $ i 19.6 million consisted of $ i 10.7 million in developed technology, $ i 9.5 million of goodwill, which is tax deductible, and $ i 0.6 million of net liabilities assumed.

We determined the fair value of the developed technology acquired using the replacement cost model which uses estimated costs to recreate the technology. This model utilizes certain unobservable inputs classified as Level 3 measurements as defined by ASC 820. Key inputs utilized in the models include a discount rate of i 20% and estimated costs to recreate the technology. Based on the valuation model, we determined the fair value of the developed technology to be $ i 10.7 million with an amortization period of i 4.0 years.

5. Fair Value Measurements

Instruments Measured at Fair Value on a Recurring Basis. i The following tables present our cash and cash equivalents' and investments’ costs, gross unrealized gains (losses), and fair value by major security type recorded as cash and cash equivalents or short-term or long-term investments (in thousands):

As of December 31, 2021

Cost

Net
Unrealized
Losses

Fair Value

Cash and
Cash
Equivalents

Short-term
Investments

Long-term
Investments

Cash

i 68,579

—

i 68,579

—

Level 1:

Money market funds

i 15,382

—

i 15,382

—

Subtotal

i 15,382

—

i 15,382

—

Level 2:

Commercial paper

i 308,250

( i 97)

i 308,153

i 68,414

i 239,739

i —

Certificates of deposit

i 3,500

( i 3)

i 3,497

i —

i 3,497

U.S. Treasury and agency bonds

i 459,960

( i 1,264)

i 458,696

i —

i 189,243

i 269,453

Corporate bonds

i 148,605

( i 450)

i 148,155

i —

i 77,892

i 70,263

Subtotal

i 920,315

( i 1,814)

i 918,501

i 68,414

i 506,874

i 343,213

Level 3

i —

Total

i 1,004,276

( i 1,814)

i 1,002,462

i 152,375

i 506,874

i 343,213

104

As of December 31, 2020

Cost

Net
Unrealized
Gains (Losses)

Fair Value

Cash and
Cash
Equivalents

Short-term
Investments

Long-term
Investments

Cash

i 88,991

—

i 88,991

—

Level 1:

Money market funds

i 35,010

—

i 35,010

—

Subtotal

i 35,010

—

i 35,010

—

Level 2:

Commercial paper

i 161,124

( i 8)

i 161,116

i 46,491

i 114,625

i —

Certificates of deposit

i 2,800

i —

i 2,800

i —

i 2,800

i —

U.S. Treasury and agency bonds

i 554,860

i 1,220

i 556,080

i 1,399

i 358,822

i 195,859

Corporate bonds

i 177,790

i 349

i 178,139

i —

i 108,198

i 69,941

Subtotal

i 896,574

i 1,561

i 898,135

i 47,890

i 584,445

i 265,800

Level 3

i —

Total

i 1,020,575

i 1,561

i 1,022,136

i 171,891

i 584,445

i 265,800

There were no transfers between Level 1, Level 2, or Level 3 securities during each of the years ended December 31, 2021 and 2020.

All long-term investments had maturities between one and i i two years / in duration as of December 31, 2021 and 2020.

We review our marketable securities on a regular basis to evaluate whether or not any security has experienced an impairment resulting from credit losses. We consider factors such as the financial condition and near-term prospects of the issuer and our intent to sell, as well as whether it is more likely than not we will be required to sell the investment before recovery of the investment’s amortized cost basis. We have determined that the gross unrealized losses of less than $ i i 1.9 / million with respect to our available-for-sale securities as of both December 31, 2021 and 2020 were due to changes in market rates, and we have determined the losses were not related to credit losses. These gross unrealized losses were classified in accumulated other comprehensive income (loss) in our consolidated balance sheets as of December 31, 2021 and 2020.

Interest income from our marketable securities was $ i 2.4 million, $ i 10.5 million, and $ i 9.2 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Instruments Not Recorded at Fair Value on a Recurring Basis. We estimate the fair value of our Notes carried at face value less unamortized discount and issuance costs quarterly for disclosure purposes. The estimated fair value of our Notes is determined by Level 2 inputs and is based on observable market data including prices for similar instruments. As of December 31, 2021 and 2020, the fair value of our Notes was $ i 857.3 million and $ i 1.1 billion, respectively. The carrying amounts of our cash, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities, approximate their current fair value because of their nature and relatively short maturity dates or durations.

Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis. See Note 4, Business Combinations, and Note 8, Goodwill and Intangible Assets, of these notes to our consolidated financial statements for fair value measurements of certain assets and liabilities recorded at fair value on a non-recurring basis. These include the fair value of assets acquired and liabilities assumed in a business acquisition, and goodwill and other long-lived assets when they are held for sale or determined to be impaired.

105

6. Allowance for Doubtful Accounts and Sales Reserves

The following table summarizes the changes in the allowance for doubtful accounts and sales reserve included in accounts receivable in our consolidated balance sheets (in thousands):

Year Ended December 31,

2021

2020

2019

Beginning balance

i 3,114

i 2,662

i 2,297

Provision

i 2,198

i 2,544

i 1,513

Recoveries

( i 709)

( i 1,225)

( i 600)

Charge-offs

( i 1,057)

( i 867)

( i 548)

Ending balance

i 3,546

i 3,114

i 2,662

The following table summarizes the changes in the allowance applied to our contract assets in our consolidated balance sheets (in thousands):

Year Ended December 31,

2021

2020

2019

Beginning balance

i 2,438

i 205

i 180

Adoption of new accounting standard - ASC 326

i —

i 609

i —

Provision

( i 817)

i 1,818

i 197

Recoveries

( i 53)

( i 110)

( i 172)

Charge-offs

( i 89)

( i 84)

i —

Ending balance

i 1,479

i 2,438

i 205

/ /

7. Property and Equipment

Property and equipment, net consisted of the following (in thousands):

Year Ended December 31,

2021

2020

Computer equipment & software

i 23,127

i 14,627

Furniture and fixtures

i 10,923

i 9,941

Leasehold improvements

i 25,353

i 22,006

Construction in process

i 37,289

i 8,618

i 96,692

i 55,192

Less: Accumulated depreciation and amortization

( i 25,422)

( i 14,547)

Total property and equipment, net

i 71,270

i 40,645

Depreciation and amortization expense for the years ended December 31, 2021, 2020, and 2019 was approximately $ i 11.4 million, $ i 8.1 million, and $ i 4.3 million, respectively.

106

8. Goodwill and Intangible Assets

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



Goodwill as of December 31, 2019	$	i 36,910

Effects of foreign currency translation	i 160
Goodwill as of December 31, 2020	$	i 37,070
Goodwill recorded in connection with acquisitions	i 20,452
Effects of foreign currency translation	( i 107)
Goodwill as of December 31, 2021	$	i 57,415

/ i

Intangible assets consisted of the following (in thousands, except years):

As of December 31, 2021

Remaining Weighted-Average
Useful
Life in Years

Gross Carrying
Value

Accumulated
Amortization

Net Carrying
Value

Customer Relationships

i 3.1

i 1,557

( i 862)

i 695

Completed Technology

i 5.1

i 32,337

( i 11,295)

i 21,042

i 33,894

( i 12,157)

i 21,737

As of December 31, 2020

Remaining Weighted-Average
Useful
Life in Years

Gross Carrying
Value

Accumulated
Amortization

Net Carrying
Value

Customer Relationships

i 4.1

i 1,652

( i 678)

i 974

Completed Technology

i 4.2

i 21,780

( i 6,563)

i 15,217

i 23,432

( i 7,241)

i 16,191

During the twelve months ended December 31, 2020, we recorded an impairment charge of $ i 2.0 million related to certain developed technology assets due to our strategic decision to discontinue further investment and enhancements in the standalone existing technology.

We classified intangible asset amortization expense in the accompanying consolidated statements of operations and comprehensive income (loss) as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Cost of revenue	$	i 4,742	$	i 3,758	$	i 3,801
Sales and marketing	i 229		i 212		i 221
Total	$	i 4,971	$	i 3,970	$	i 4,022

/ i

The following table presents our estimates of remaining amortization expense for each of the five succeeding fiscal years and thereafter for intangible assets at December 31, 2021 (in thousands):



2022	$	i 6,115
2023	i 4,123
2024	i 3,451
2025	i 2,883
2026	i 2,496
Thereafter	i 2,669
Total amortization expense	$	i 21,737

/ /

107

9. Convertible Senior Notes

The following table presents details of our convertible senior notes, which are further discussed below (original principal in thousands):

Month Issued

Maturity Date

Original Principal (including over-allotment)

Coupon Interest Rate

Effective Interest Rate

Conversion Rate

Initial Conversion Price

2023 Notes

May and June 2018

June 1, 2023

i 230,000

i 0.5

i 7.00

22.5572

i 44.33

2024 Notes

August 2019

August 1, 2024

i 400,000

i 0.5

i 4.96

5.2809

i 189.36

2026 Notes

August 2019

August 1, 2026

i 400,000

i 1.0

i 5.41

5.2809

i 189.36

As further defined and described below, the 2024 Notes and the 2026 Notes are together referred to as the 2024 & 2026 Notes, and the 2023 Notes and the 2024 & 2026 Notes are collectively referred to as the Notes.

In May and June 2018, we sold $ i 230.0 million aggregate principal amount of our i 0.50% Convertible Senior Notes due 2023, or the 2023 Notes, including the initial purchasers’ exercise in full of their option to purchase an additional $ i 30.0 million of the 2023 Notes, in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended, or the Act. The 2023 Notes are our senior, unsecured obligations, and interest is payable semi-annually in arrears on June 1 and December 1 of each year beginning December 1, 2018.

In August 2019, we sold $ i 400.0 million aggregate principal amount of our i 0.50% Convertible Senior Notes due 2024, or the 2024 Notes, and $ i 400.0 million aggregate principal amount of our i 1.00% Convertible Senior Notes due 2026, or the 2026 Notes, including the initial purchasers’ exercise in full of their options to purchase an additional $ i 50.0 million of the 2024 Notes and an additional $ i 50.0 million of the 2026 Notes, in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Act. The 2024 & 2026 Notes are our senior, unsecured obligations, and interest is payable semi-annually in arrears on February 1 and August 1 of each year beginning February 1, 2020.

Prior to the close of business on the business day immediately preceding March 1, 2023, or the 2023 Conversion Date, in the case of the 2023 Notes, or May 1, 2024, or the 2024 Conversion Date, in the case of the 2024 Notes, or May 1, 2026, or the 2026 Conversion Date, in the case of the 2026 Notes, the respective Notes are convertible at the option of holders only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the relevant maturity date. The applicable conversion rate is subject to customary adjustments for certain events as described in the applicable indenture between us and U.S. Bank National Association, as trustee, or, collectively, the Indentures. Upon conversion, the Notes may be settled in shares of our Class A common stock, cash or a combination of cash and shares of our Class A common stock, at our election. It is our current intent to settle the principal amount of the Notes with cash. During the year ended December 31, 2019, a portion of the 2023 Notes were exchanged, as further discussed below.

Prior to the close of business on the business day immediately preceding the applicable Conversion Date, the applicable series of Notes is convertible at the option of the holders under the following circumstances:

•during any calendar quarter commencing after the calendar quarter subsequent to the calendar quarter in which the applicable series of Notes was issued (and only during such calendar quarter), if the last reported sale price of our Class A common stock for at least i 20 trading days (whether or not consecutive) during a period of i 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to i 130% of the applicable conversion price of the applicable series of Notes on each applicable trading day;

•during the i five business day period after any i five consecutive trading day period in which the trading price per $1,000 principal amount of the applicable series of Notes for each day of that i five day consecutive trading day period was less than i 98% of the product of the last reported sale price of our Class A common stock and the applicable conversion rate of the applicable series of Notes on such applicable trading day; or

•upon the occurrence of specified corporate events described in the applicable Indenture.

108

For at least i 20 trading days during the period of i 30 consecutive trading days ending December 31, 2021, the last reported sale price of our Class A common stock was greater than or equal to i 130% of the conversion price of the 2023 Notes on each applicable trading day. As a result, the 2023 Notes are convertible at the option of the holders during the quarter ending March 31, 2022 and were classified as current liabilities on the consolidated balance sheet as of December 31, 2021. As of December 31, 2021, the if-converted value of the 2023 Notes exceeded its principal amount by $ i 30.9 million. As of December 31, 2021, the 2024 & 2026 Notes were not currently convertible.

We may not redeem any series of Notes prior to the relevant maturity date. Holders of any series of Notes have the right to require us to repurchase for cash all or a portion of their applicable series of Notes at 100% of its respective principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change as defined in the applicable Indenture for such series of Notes. We are also required to increase the conversion rate for holders who convert their Notes in connection with certain corporate events occurring prior to the relevant maturity date.

The Notes are our senior unsecured obligations and rank senior in right of payment to any of our indebtedness and other liabilities that are expressly subordinated in right of payment to the Notes, equal in right of payment among all series of Notes and to any other existing and future indebtedness and other liabilities that are not subordinated, effectively junior in right of payment to any of our secured indebtedness and other liabilities to the extent of the value of the assets securing such indebtedness and other liabilities, and structurally junior in right of payment to all of our existing and future indebtedness and other liabilities (including trade payables) of our current or future subsidiaries.

Capped Call Transactions

In connection with the pricing of the 2023 Notes, we entered into privately negotiated capped call transactions with an affiliate of one of the initial purchasers of the 2023 Notes and other financial institutions. In connection with the pricing of the 2024 & 2026 Notes, we entered into privately negotiated capped call transactions with other financial institutions. The capped call transactions are expected generally to reduce or offset potential dilution to holders of our common stock and/or offset the potential cash payments that we could be required to make in excess of the principal amount upon any conversion of the applicable series of Notes under certain circumstances, with such reduction and/or offset subject to a cap based on the cap price. Under the capped call transactions, we purchased capped call options that in the aggregate relate to the total number of shares of our Class A common stock underlying the applicable series of Notes, with an initial strike price of approximately $ i 44.33 per share in the case of the 2023 Notes, which corresponds to the initial conversion price of the 2023 Notes, and approximately $ i 189.36 per share in the case of the 2024 & 2026 Notes, which corresponds to the initial conversion price of each of the 2024 & 2026 Notes. Further, the capped call options are subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the applicable series of Notes, and have a cap price of $ i 62.22 per share in the case of the 2023 Notes, and $ i 315.60 per share in the case of the 2024 & 2026 Notes. The cost of the purchased capped calls of $ i 19.1 million in the case of the 2023 Notes and $ i 87.4 million in the case of the 2024 & 2026 Notes was recorded as a reduction to additional paid-in-capital.

We elected to integrate the applicable capped call options with the applicable series of Notes for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $ i 19.1 million gross cost of the purchased capped calls in the case of the 2023 Notes and the $ i 87.4 million gross cost of the purchased capped calls in the case of the 2024 & 2026 Notes will be deductible for income tax purposes as original discount interest over the term of the 2023 Notes and the applicable series of the 2024 & 2026 Notes, respectively. We recorded deferred tax assets of $ i 4.6 million with respect to the 2023 Notes and $ i 20.9 million with respect to the 2024 & 2026 Notes, which represent the tax benefit of these deductions with an offsetting entry to additional paid-in capital.

In connection with the exchange agreements discussed below, we terminated a corresponding portion of the existing capped call transactions that we entered into in connection with the issuance of the 2023 Notes, which resulted in the net share settlement and our receipt and retirement of i 285,466 shares of Class A common stock.

Exchange and Conversion of 2023 Notes

In connection with the issuance of the 2024 & 2026 Notes discussed above, we entered into exchange agreements with certain holders of our outstanding 2023 Notes and, using a portion of the net proceeds from the issuance of the 2024 & 2026 Notes, we exchanged $ i 145.2 million principal amount, together with accrued and unpaid interest thereon, of the 2023 Notes for aggregate consideration of $ i 145.4 million in cash, representing the principal and accrued interest of the exchanged 2023 Notes, and i 2.2 million shares of Class A common stock.

109

The exchange agreements were accounted for as an induced conversion, resulting from the issuance of shares of Class A common stock in excess of the shares that would have been issuable under the terms of the original 2023 Notes.

This exchange resulted in a loss on induced conversion and debt extinguishment of $ i 20.5 million, consisting of (i) a $ i 8.2 million market premium representing the excess of the fair value of the total consideration delivered over the fair value of the Class A common stock issuable for the principal amount exchanged pursuant to the original conversion terms and (ii) $ i 12.3 million representing the difference between the fair value and the carrying value, net of unamortized issuance costs, of the liability component of the exchanged 2023 Notes.

In the twelve months ended December 31, 2020, we received immaterial requests for conversion with respect to the 2023 Notes, but did not receive additional requests for conversion during the twelve months ended December 31, 2021. As of the date of this filing, we have received no additional requests for conversion.

The Notes consisted of the following (in thousands):

As of December 31, 2021

As of December 31, 2020

2023 Notes

2024 Notes

2026 Notes

2023 Notes

2024 Notes

2026 Notes

Liability:

Principal

i 84,748

i 400,000

i 84,748

i 400,000

Less: debt discount and issuance costs, net of amortization

( i 7,348)

( i 42,941)

( i 71,043)

( i 12,129)

( i 58,148)

( i 84,351)

Net carrying amount

i 77,400

i 357,059

i 328,957

i 72,619

i 341,852

i 315,649

Equity, net of issuance costs

i 46,473

i 69,749

i 93,380

i 46,473

i 69,749

i 93,380

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

Year Ended December 31,

2021

2020

Contractual interest expense

i 6,424

Amortization of debt issuance costs and discount

i 32,772

i 31,654

Total

i 39,196

i 38,078

The following table sets forth future contractual obligations of contractual interest and principal related to the Notes (in thousands):

Payments Due by Period

Total

Less Than 1 Year

1 to 3 Years

3 to 5 Years

More Than 5 Years

Notes and related interest

i 911,384

i 6,424

i 496,960

i 408,000

i —

10. Accrued Payroll and Payroll-Related Liabilities

Accrued payroll and payroll-related liabilities included accrued commissions and bonuses as follows (in thousands):


	As of December 31,
	2021		2020
Accrued commissions	$	i 16,827	$	i 11,793
Accrued bonuses	$	i 20,729	$	i 15,046

/ /

110

11. Stockholders’ Equity

Dual Class Common Stock Structure

In February 2017, we implemented a dual class common stock structure in which each then existing share of common stock converted into a share of Class B common stock and we also authorized a new class of common stock, the Class A common stock. The Class A common stock is entitled to i one vote per share and the Class B common stock is entitled to i ten votes per share. The Class A common stock and Class B common stock have the same dividend and liquidation rights, and the Class B common stock converts to Class A common stock at any time at the option of the holder, or automatically upon the date that is the earliest of (i) the date specified by a vote of the holders of at least 66 2/3% of the outstanding shares of Class B common stock, (ii) March 29, 2027, and (iii) the date that the total number of shares of Class B common stock outstanding cease to represent at least i 10% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding. In addition, each share of Class B common stock will convert automatically into i one share of Class A common stock upon any transfer, except for certain permitted transfers described in our restated certificate of incorporation, or the Restated Certificate. Upon the creation of the dual class common stock structure all outstanding options to purchase common stock became options to purchase an equivalent number of shares of Class B common stock, and all RSUs became RSUs for an equivalent number of shares of Class B common stock.

Upon the effectiveness of the Restated Certificate in March 2017, the number of shares of capital stock that were authorized to be issued consisted of i 500,000,000 shares of Class A common stock, $ i 0.0001 par value per share, i 500,000,000 shares of Class B common stock, $ i 0.0001 par value per share, and i 10,000,000 shares of undesignated preferred stock, $ i 0.0001 par value per share.

Preferred Stock

Our board of directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications, limitations, or restrictions, in each case without further vote or action by our stockholders. As of December 31, 2021, i no shares of preferred stock were outstanding.

12. Equity Awards

Amended and Restated 2013 Stock Plan

We granted options and RSUs under our Amended and Restated 2013 Stock Plan, or 2013 Plan, until March 22, 2017, when the plan was terminated in connection with our IPO. Accordingly, i no shares are available for future issuance under the 2013 Plan following the IPO. The 2013 Plan continues to govern outstanding equity awards granted thereunder.

2017 Equity Incentive Plan

In February 2017, our board of directors adopted, and our stockholders approved, the 2017 Equity Incentive Plan, or 2017 Plan. The 2017 Plan became effective on March 22, 2017 and is the successor plan to the 2013 Plan. Under the 2017 Plan, we initially reserved (i) i 5.1 million shares of Class A common stock for future issuance and (ii) i 0.5 million shares of Class A common stock equal to the number of Class B shares reserved but not issued under the 2013 Plan as of the effective date of the 2017 Plan. The number of shares of Class A common stock reserved for issuance under our 2017 Plan will increase automatically on the first day of January of each of 2018 through 2027 by the lesser of (a) i 5% of the total outstanding shares of our Class A and Class B common stock as of the immediately preceding December 31 and (b) the number of shares determined by our board of directors. The share reserve may also increase to the extent that outstanding awards under our 2013 Plan expire or terminate. As of December 31, 2021, an aggregate of i 12.4 million shares of Class A common stock were reserved for issuance under the 2017 Plan.

111

2017 Employee Stock Purchase Plan

In February 2017, our board of directors adopted, and our stockholders approved, the 2017 Employee Stock Purchase Plan, or 2017 ESPP. The 2017 ESPP became effective on March 23, 2017. Under the 2017 ESPP, we reserved i 1.1 million shares of Class A common stock for future issuance. The number of shares of Class A common stock reserved for issuance under our 2017 ESPP will increase automatically on the first day of January of each of 2018 through 2027 by the lesser of (a) i 1% of the total outstanding shares of our Class A and Class B common stock as of the immediately preceding December 31 and (b) the number of shares determined by our board of directors. The aggregate number of shares issued over the term of the 2017 ESPP may not exceed i 11,000,000 shares of Class A common stock.

Under the 2017 ESPP, eligible employees are allowed to purchase shares of our Class A common stock at a discount through payroll deductions of up to i 15% of their eligible compensation, subject to plan limitations. Except for the first offering period, which began on the date our Registration Statement on Form S-1 covering the initial public offering of our shares of Class A common stock was declared effective by the SEC, purchase periods are approximately i six months in duration starting on the first trading date on or after February 15th and August 15th of each year. Participants are able to purchase shares of our Class A common stock at i 85% of the lower of its fair market value on (i) the first day of the purchase period or on (ii) the purchase date, which is the last day of the purchase period.

In 2021, employees purchased i 0.1 million shares of Class A common stock at an average price per share of $ i 76.65. As of December 31, 2021, i 3.2 million shares of Class A common stock were available for future issuance under the 2017 ESPP.

Stock Options

Stock options generally vest over a period of three to i four years and expire i ten years from the date of grant. Unvested stock options will generally be forfeited in case of a termination of employment or service before the satisfaction of the vesting schedule. Vested stock options generally expire three months after termination of employment.

Stock option activity, excluding activity related to the ESPP, during the year ended December 31, 2021 consisted of the following (in thousands, except weighted-average information):

Options
Outstanding

Weighted-
Average
Exercise
Price

Aggregate Intrinsic Value

Weighted-Average Remaining Contractual Term (Years)

Options outstanding at December 31, 2020

i 2,071

i 60.22

i 138,942

i 7.0

Granted

i 303

i 87.52

Exercised

( i 189)

i 19.02

i 14,027

Cancelled/forfeited

( i 177)

i 96.05

Options outstanding at December 31, 2021

i 2,008

i 65.05

i 45,785

i 6.5

Exercisable

i 1,405

i 43.88

i 45,556

i 5.5

Vested and expected to vest December 31, 2021

i 2,008

i 65.05

i 45,785

i 6.5

The total intrinsic value of options exercised in the years ended December 31, 2020 and 2019 was $ i 118.6 million and $ i 115.4 million, respectively. The weighted-average exercise price of options granted in the years ended December 31, 2020 and 2019 was $ i 139.88 and $ i 80.88, respectively.

As of December 31, 2021, there was $ i 26.3 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of i 1.8 years.

112

Valuation Assumptions

i i

The following table presents the weighted-average assumptions used for stock options granted under our 2017 Equity Incentive Plan and for shares of our Class A common stock issued under our ESPP for each of the years indicated:

Stock Options

Employee Stock Purchase Plan

2021

2020

2019

2021

2020

2019

Expected term (in years)

i 5.8

i 0.5

Estimated volatility

i 56

i 48

i 38

i 55

i 78

i 56

Risk-free interest rate

i 1

i 2

i —

i 1

i 2

Estimated dividend yield

i —

Weighted average fair value

i 45.20

i 62.37

i 32.20

i 27.42

i 48.07

i 30.02

/ /

Restricted Stock Units

RSUs granted under the 2017 Plan generally vest over a period of three to i four years and expire i ten years from the date of grant. RSUs will generally be forfeited in case of a termination of employment or service before the satisfaction of the vesting schedule. From time to time, we also grant performance-based RSUs, or PRSUs. PRSUs have the same characteristics as our RSUs, but contain one or more performance-based metrics that must be met prior to vesting. The following disclosures related to RSU activity include the impact of PRSUs. i RSU activity during the year ended December 31, 2021 consisted of the following (in thousands, except weighted-average information):

Awards
Outstanding

Weighted-
Average
Grant Date
Fair Value

Aggregate Intrinsic Value

RSUs outstanding at December 31, 2020

i 1,960

i 105.04

i 238,764

Granted

i 3,347

i 79.62

Vested

( i 782)

i 96.13

i 70,374

Cancelled/forfeited

( i 832)

i 97.32

RSUs outstanding at December 31, 2021

i 3,693

i 85.64

i 223,448

RSUs expected to vest at December 31, 2021

i 3,693

i 85.64

i 223,448

The total intrinsic value of RSUs vested in the years ended December 31, 2020 and 2019 was $ i 62.5 million and $ i 30.2 million, respectively. The weighted-average grant date fair value of RSUs granted in the years ended December 31, 2020 and 2019 was $ i 132.89 and $ i 90.00, respectively.

During the year ended December 31, 2021, in addition to our RSU grants to new hires and annual refresh grants to existing employees, we granted PRSUs, to certain executives with a grant date fair value of $ i 17.0 million. These PRSUs will vest in two tranches upon the achievement of certain ARR targets or will otherwise be forfeited on December 31, 2022 if the targets are not met. As of December 31, 2021, the PRSU performance criteria had not yet been met, but the expense is being recognized over the implicit service period. As of December 31, 2021, total unrecognized compensation expense related to unvested RSUs was approximately $ i 241.1 million, which is expected to be recognized over a weighted-average period of i 2.2 years.

We classified stock-based compensation expense in the accompanying consolidated statements of operations and comprehensive income (loss) as follows (in thousands):

Year Ended December 31,

2021

2020

2019

Cost of revenue

i 6,421

i 2,550

i 1,634

Research and development

i 28,903

i 18,388

i 6,954

Sales and marketing

i 40,519

i 28,463

i 12,659

General and administrative

i 48,222

i 25,515

i 11,878

Total

i 124,065

i 74,916

i 33,125

113

13. Retirement Plan

We established a savings plan that qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code of 1986, as amended, or the Code, for the benefit of our employees. Our contributions to the savings plan are discretionary and vest immediately. We contributed approximately $ i 7.7 million, $ i 6.2 million and $ i 3.9 million to the savings plan for the years ended December 31, 2021, 2020, and 2019, respectively.

14. Leases

We have various non-cancelable operating leases for our corporate offices in California, Colorado, Massachusetts, Michigan, New York, and Texas in the United States and Australia, Canada, the Czech Republic, France, Germany, Japan, Singapore, Ukraine, the United Arab Emirates and the United Kingdom. These leases expire at various times through 2029. Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate.

The table below presents lease-related assets and liabilities recorded on the consolidated balance sheet (in thousands):

As of December 31,

Classification

2021

2020

Assets

Operating lease right-of-use assets

i 102,681

i 62,508

Liabilities

Operating lease liabilities (current)

Accrued expenses and other current liabilities

i 19,954

i 11,471

Operating lease liabilities (noncurrent)

Operating lease liabilities

i 78,784

i 53,860

Total lease liabilities

i 98,738

i 65,331

Lease Costs

The following lease costs were included in our consolidated statements of operations and comprehensive income (loss) (in thousands):

Year Ended December 31,

2021

2020

Operating lease cost

i 20,575

i 11,150

Short-term lease cost

i 118

i 1,451

Variable lease cost

i 4,820

i 3,993

Total lease cost

i 25,513

i 16,594

Supplemental Information

The table below presents supplemental balance sheet information related to operating leases:

Year Ended December 31,

2021

2020

Weighted-average remaining lease term (in years)

i 5.3

i 5.7

Weighted-average discount rate

i 4.57

i 5.03

In October 2019, we entered into a new operating lease agreement for space located in Irvine, California that replaced our existing corporate headquarters in February 2022. We currently expect that we will cease use of our existing corporate headquarters by or in the second quarter of 2022. It is management’s current intent to sublease our existing headquarters. As of December 31, 2021, operating lease liabilities related to our existing corporate headquarters were approximately $ i 10.1 million.

114

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years, and total of the remaining years, to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2021 (in thousands):



2022	$	i 24,008
2023	i 20,987
2024	i 19,567
2025	i 19,082
2026	i 15,898

Thereafter	i 11,918
Total minimum lease payments	$	i 111,460
Less imputed interest	( i 12,722)
Present value of future minimum lease payments	$	i 98,738
Less current obligations under leases (1)	( i 19,954)
Long-term lease obligations	$	i 78,784

(1) Included in accrued expenses and other current liabilities in our consolidated balance sheets.

15. Commitments and Contingencies

In the ordinary course of business, we enter into purchase orders with vendors for the purchase of goods and services including non-cancelable agreements for software licenses, royalty agreements, advertising and other marketing activities. Our minimum purchase obligations as of December 31, 2021 were as follows (in thousands):


2022	$	i 67,357
2023	i 16,445
2024	i 6,079
2025	i 1,509
2026	i —
Thereafter	i —
Total minimum payments	$	i 91,390

Indemnification

In the ordinary course of business, we enter into agreements in which we may agree to indemnify other parties with respect to certain matters, including losses resulting from claims of intellectual property infringement, damages to property or persons, business losses, or other liabilities. In addition, we have entered into indemnification agreements with our directors, executive officers, and certain other employees that will require us to indemnify them against liabilities that may arise by reason of their status or service as directors, officers, or employees. The term of these indemnification agreements with our directors, executive officers, and other employees, are generally perpetual after execution of the agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited; however, we maintain insurance that reduces our exposure and enables us to recover a portion of any future amounts paid. As of each of December 31, 2021 and December 31, 2020, we have i i no / t accrued a liability for indemnification provisions we agree to in the ordinary course of business or with our directors, executive officers and certain other employees pursuant to indemnification agreements because the likelihood of incurring a payment obligation, if any, in connection with these arrangements is not probable or reasonably estimable.

Litigation

From time to time, we may be involved in lawsuits, claims, investigations, and proceedings, consisting of intellectual property, commercial, employment, and other matters, which arise in the ordinary course of business. We are not currently party to any material legal proceedings or claims, nor are we aware of any pending or threatened legal proceedings or claims that could have a material adverse effect on our business, operating results, cash flows, or financial condition should such legal proceedings or claims be resolved unfavorably.

115

In 2020, i three putative securities class action lawsuits were filed against us and certain of our executive officers in U.S. federal court relating to alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Rule 10b-5 promulgated thereunder: (1) Smith v. Alteryx, Inc., Case No. 8:20-cv-01540 (CD Cal.), filed on August 19, 2020; (2) Chau v. Alteryx, Inc., Case No. 8:20-cv-01886 (CD Cal.), filed on September 30, 2020; and (3) Lalgudi v. Alteryx, Inc., Case No. 8:20-cv-01910 (CD Cal.), filed on October 2, 2020. On November 13, 2020, lead plaintiffs were appointed, or the Lead Plaintiffs, and the three cases were consolidated into one action, In re Alteryx, Inc. Securities Litigation, Case No. 8:20-cv-01540 (C.D. Cal). On January 28, 2021, a first amended complaint was filed asserting claims on behalf of persons and entities that purchased or otherwise acquired our securities between February 13, 2020 and August 7, 2020. Lead Plaintiffs alleged that such persons and entities were harmed as a result of certain alleged false or misleading statements, or omissions, made by us and certain of our executive officers. On March 19, 2021, we filed a motion to dismiss the consolidated complaint, which the Court granted in its entirety on June 17, 2021. The Court entered final judgment in our favor on August 3, 2021.

Warranty

We provide an assurance-type warranty to customers that our platform will operate substantially in accordance with its specifications. Historically, no significant costs have been incurred related to product warranties and none are expected in the future and, as such, i no accruals for product warranty costs have been made.

16. Income Taxes

The components of income (loss) before benefit of income taxes were as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Domestic	$	( i 152,252)	$	( i 32,569)	$	i 9,259
Foreign	( i 25,279)		i 4,924		( i 3,195)
Total	$	( i 177,531)	$	( i 27,645)	$	i 6,064

/ i

The components of the provision for (benefit of) income taxes were as follows (in thousands):

Year Ended December 31,

2021

2020

2019

Current:

Federal

i —

( i 375)

State

i 348

i 248

i 158

Foreign

i 229

i 327

i 1,176

Total current income tax expense

i 577

i 575

i 959

Deferred:

Federal

i 1,472

( i 2,617)

( i 18,684)

State

i —

( i 958)

( i 3,406)

Foreign

i 101

( i 271)

i 52

Total deferred income tax benefit:

i 1,573

( i 3,846)

( i 22,038)

Total

i 2,150

( i 3,271)

( i 21,079)

/ /

116

The following table reconciles our provision for (benefit of) income taxes at the statutory rate to that at the effective tax rate, using a U.S. federal statutory tax rate of 21% for each of 2021, 2020, and 2019 (in thousands):

Year Ended December 31,

2021

2020

2019

Income tax at federal statutory rate

( i 37,281)

( i 5,806)

i 1,273

Increase/(decrease) in tax resulting from:

State income tax expense, net of federal

( i 4,574)

( i 3,105)

( i 2,567)

Foreign rate differential

i 847

i 47

i 789

Stock-based compensation

i 5,563

( i 16,852)

( i 20,913)

Change in valuation allowance

i 42,246

i 24,363

i 18,129

Meals and entertainment

i 464

i 764

i 658

Research credits

( i 5,070)

( i 4,677)

( i 3,177)

Tax basis step-up due to internal reorganization

i —

( i 15,321)

Other

( i 45)

i 1,995

i 50

Total benefit of income taxes

i 2,150

( i 3,271)

( i 21,079)

/ i

The following table shows the significant components of deferred income tax assets (liabilities) (in thousands):

As of December 31,

2021

2020

Deferred tax assets:

Deferred revenue

i —

i 923

Net operating losses

i 55,763

i 20,147

Accruals and reserves

i 5,070

i 5,513

Research & other credits

i 25,209

i 17,770

Intangibles

i 12,559

i 10,570

Operating lease liabilities

i 22,011

i 14,475

Effect of Section 163(j) on interest expense

i 11,550

i 6,696

Stock-based compensation

i 21,322

i 14,376

Other

i 167

i —

Total deferred tax assets

i 153,651

i 90,470

Less valuation allowance

( i 89,298)

( i 44,046)

Net deferred tax assets

i 64,353

i 46,424

Deferred tax liabilities:

Operating lease right-of-use assets

( i 22,810)

( i 13,831)

Deferred commissions

( i 12,789)

( i 10,213)

Convertible senior notes

( i 14,121)

( i 16,990)

Effects of ASC 606 adoption

i —

( i 4,343)

Other

i —

( i 776)

Capitalized software development costs

( i 2,176)

i —

Deferred Revenue

( i 11,211)

i —

Total deferred tax liabilities

( i 63,107)

( i 46,153)

Net deferred tax assets

i 1,246

i 271

117

We record a valuation allowance against our deferred tax assets if and to the extent it is more likely than not that we will not recover our deferred tax assets. In evaluating the need for a valuation allowance, we weight all relevant positive and negative evidence, including among other factors, historical financial performance, forecasts of income over the applicable carryforward periods, and our market environment, with each piece weighted based on its reliability. As of December 31, 2021, we had insufficient objective positive evidence that we will generate sufficient future pre-tax income to overcome the negative evidence of cumulative losses. Accordingly, we continue to record a full valuation allowance against our net U.S. and U.K. deferred tax assets as of December 31, 2021.

The following table shows the changes in our valuation allowance (in thousands):

Year Ended December 31,

2021

2020

2019

Beginning balance

i 44,046

i 19,683

i 1,138

Increase in valuation allowance due to Lore IO acquisition

i 3,006

i —

Increase in valuation allowance due to internal reorganization

i —

i 15,321

Other increase in valuation allowance

i 42,246

i 24,363

i 3,224

Ending balance

i 89,298

i 44,046

i 19,683

In 2019, through an internal reorganization, our U.K. subsidiary acquired foreign exploitation rights to intellectual property from two other of our subsidiaries. The U.K. subsidiary acquired the rights for their fair market value and that amount became the U.K. tax basis in such rights, which exceeds their carrying amount under U.S. GAAP. Accordingly, we recorded a deferred tax asset for the excess of U.K. tax basis over the U.S. GAAP carrying amount. Based on cumulative U.K. losses, we have concluded it was more likely than not that we would not realize our U.K. deferred tax asset, and accordingly, we have recorded a full valuation allowance against it.

On October 21, 2021, we acquired all of the outstanding shares of Lore IO, Inc., or Lore IO. At the time of acquisition, Lore IO had tax attributes related to net operating losses and research and development credits, which resulted in the increase in our valuation allowance as shown in the table above.

On October 6, 2021, we acquired all of the outstanding shares of Hyper Anna Pty. Ltd., or Hyper Anna. We did not record a valuation allowance with respect to this acquisition as Hyper Anna consolidates into our Australian entity, Alteryx ANZ Holdings Pty. Ltd., which operates as a cost-plus entity whose future income will most likely absorb net operating losses, which do not expire in Australia.

As of December 31, 2021, we had U.S. federal, U.S. state, U.K., and Australia income tax net operating loss carryforwards of approximately $ i 120.4 million, $ i 74.3 million, $ i 153.9 million, and $ i 4.0 million, respectively. The U.S. federal and state net operating losses will begin to expire in 2035 and 2024, respectively, unless previously utilized. The U.K. and Australia net operating losses can be carried forward indefinitely.

Under Sections 382 and 383 of the Code, annual use of our net operating loss carryforwards and tax credits may be limited if a cumulative change in ownership of more than 50% occurs within a three-year period. We determined that ownership changes occurred in 2015 and 2019, which limit the future annual use of our net operating loss carryforwards and tax credits, but neither of which permanently disallows any of those tax attributes.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was signed into law. The CARES Act includes tax provisions applicable to businesses, such as net operating losses, enhanced interest deductibility, optional deferral of deposits of payroll taxes and a refundable employee retention payroll tax credit. We have determined that these provisions did not have a material impact on our consolidated financial statements for 2020 or 2021.

We have not accrued U.S. state income taxes or foreign withholding taxes on the earnings of our foreign subsidiaries, as these amounts are intended to be indefinitely reinvested in operations outside the United States. As of December 31, 2021, there were immaterial cumulative amounts of undistributed earnings at our foreign subsidiaries.

We are subject to taxation in the United States and various states and international jurisdictions. Our U.S. federal tax returns are open for examination for tax years 2018 and forward, and our state tax returns are open for examination for tax years 2015 and forward. Our tax returns for international jurisdictions are open for examination for tax years 2017 and forward. However, net operating loss and other tax attribute carryforwards utilized in subsequent years continue to be subject to

118

examination by the tax authorities until the year to which the net operating loss and/or other tax attributes are carried forward is no longer subject to examination. Neither we nor any of our subsidiaries are currently under examination from tax authorities in the jurisdictions in which we do business.

At December 31, 2021, we had approximately $ i 8.9 million of unrecognized tax benefits. If fully recognized, $ i 5.3 million of the unrecognized tax benefits would reduce our net operating losses. In the next 12 months, we do not expect our unrecognized tax benefits to decrease. Accrued interest related to our uncertain tax positions was not material at December 31, 2021.

The following table shows the activity in gross unrecognized tax benefits (in thousands):

Year Ended December 31,

2021

2020

2019

Balance at beginning of year

i 8,520

i 7,556

i 6,234

Additions based on tax position related to the current year

i 344

i 652

i 1,322

Additions for tax positions of prior years

i —

i 312

i —

Balance at end of year

i 8,864

i 8,520

i 7,556

17. Basic and Diluted Net Income (Loss) Per Share

The following table presents the computation of net income (loss) per share (in thousand, except per share amounts):

Year Ended December 31,

2021

2020

2019

Numerator:

Net income (loss) attributable to common stockholders

( i 179,681)

( i 24,374)

i 27,143

Denominator:

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic

i 67,191

i 66,058

i 63,424

Effect of dilutive securities:

Convertible senior notes

i —

i 1,975

Employee stock awards

i —

i 3,259

Contingently-issuable shares

i —

i 3

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, diluted

i 67,191

i 66,058

i 68,661

Net income (loss) per share attributable to common stockholders, basic

( i 2.67)

( i 0.37)

i 0.43

Net income (loss) per share attributable to common stockholders, diluted

( i 2.67)

( i 0.37)

i 0.40

/ i

The following weighted-average equivalent shares of common stock, excluding the impact of the treasury stock method, were excluded from the diluted net income (loss) per share calculation because their inclusion would have been anti-dilutive (in thousands):

Year Ended December 31,

2021

2020

2019

Stock awards(1)

i 4,876

i 4,053

i 209

Convertible senior notes

i 6,137

i 1,644

Total shares excluded from net income (loss) per share

i 11,013

i 10,190

i 1,853

(1) The table above does not include i 234,018 PRSUs because, as of December 31, 2021, the performance criteria had not yet been met for these contingently-issuable shares.

/ /

119

It is our current intent to settle the principal amount of each series of the Notes with cash, and therefore, we use the treasury stock method for calculating any potential dilutive effect of the conversion options on diluted net income (loss) per share. The conversion options may have a dilutive impact on net income per share of common stock when the average market price per share of our Class A common stock for a given period exceeds the initial conversion price of the 2023 Notes and 2024 & 2026 Notes of $ i 44.33 and $ i 189.36 per share, respectively.

18. Segment and Geographic Information

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, or CODM, who is our chief executive officer, in deciding how to allocate resources and assess our financial and operational performance. Our CODM evaluates our financial information and resources and assesses the performance of these resources on a consolidated and aggregated basis. As a result, we have determined that our business operates in a single operating segment.

Long-lived assets classified by geographic location were as follows (in thousands):

As of December 31,

Long-lived assets:

2021

2020

United States

i 151,514

i 84,055

Other countries

i 22,437

i 19,098

Total

i 173,951

i 103,153

/ /

19. Subsequent Events

On February 7, 2022, we acquired i 100% of the outstanding equity of Trifacta, Inc., or Trifacta, pursuant to an Agreement and Plan of Merger dated January 6, 2022, or the Trifacta Merger Agreement. The aggregate consideration payable in exchange for all of the outstanding equity interests of Trifacta was approximately $ i 400.0 million in cash, subject to customary adjustments set forth in the Trifacta Merger Agreement. In addition to the purchase price, we entered into share-based compensation agreements with certain employees of Trifacta, with a value of approximately $ i 75.0 million in the aggregate. Given the timing of the completion of the acquisition, we are currently in the process of valuing the assets acquired and liabilities assumed in the acquisition. As a result, we are unable to provide the amounts recognized as part of the acquisition date for the major classes of assets acquired and liabilities assumed and other disclosures.


Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Reporting.

None.


Item 9A.			Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of December 31, 2021. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2021 that our disclosure controls and procedures were effective at the reasonable assurance level.

120

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of its evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2021. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Deloitte and Touche LLP, an independent registered public accounting firm, as stated in its report which is included in Part II, Item 8 of this Annual Report.

Changes in Internal Control over Financial Reporting

We continue to monitor the effect of the COVID-19 pandemic on our internal controls to minimize the impact on their design and operating effectiveness. There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

121

PART III

Item 10. Directors, Executive Officers, and Corporate Governance.

The information required by this item, including information relating to compliance with Section 16(a) of the Exchange Act, will be included in our Definitive Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC, within 120 days of the fiscal year ended December 31, 2021, and is incorporated herein by reference.

Item 11. Executive Compensation.

The information required by this item will be included in our Definitive Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2021, and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

122

PART IV

Item 15. Exhibits and Financial Statement Schedules.

The following documents are filed as part of this Annual Report:


1			Financial Statements

Our consolidated financial statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8, of this Annual Report.


2			Financial Statement Schedules

All financial statement schedules have been omitted because they are not required or are not applicable, or the required information is shown in our consolidated financial statements or the notes thereto.


3			Exhibits

Exhibit
Number

Exhibit Title

Filed
Herewith

Form

File No.

Exhibit

Filing Date

3.1

Restated Certificate of Incorporation.

10-Q

Amended and Restated Bylaws.

3.1

May 11, 2017

3.2

8-K

Form of Class A common stock certificate.

3.1

May 5, 2020

4.1

S-1/A

Second Amended and Restated Investors’ Rights Agreement by and among the Registrant and certain security holders of the Registrant, dated September 24, 2015, as amended.

4.1

March 13, 2017

4.2

S-1

333-220342

4.2

September 5, 2017

4.3

Indenture dated May 18, 2018 between Alteryx, Inc. and U.S. Bank National Association.

8-K

Indenture, with respect to the 2024 Notes, dated August 12, 2019 between Alteryx, Inc. and U.S. Bank National Association.

4.1

May 18, 2018

4.4

8-K

Indenture, with respect to the 2026 Notes, dated August 12, 2019 between Alteryx, Inc. and U.S. Bank National Association.

4.1

August 12, 2019

4.5

8-K

Description of Class A Common Stock Registered Under Section 12 of the Securities Exchange Act of 1934, as amended.

4.2

August 12, 2019

4.6

10.1*

Form of Indemnity Agreement.

S-1

10.1

Amended and Restated 2013 Stock Plan and forms of award agreements.

10.2*

S-1

10.2

2017 Equity Incentive Plan and forms of award agreements.

10.3*

S-1

10.3

2017 Employee Stock Purchase Plan and form of subscription agreement.

10.4*

S-1

10.4

Alteryx 202 1 Discretionary Bonus Plan.

10.5*

10.6*

Offer Letter by and between the Registrant and Mark Anderson.

10-K

Amended and Restated Offer Letter by and between the Registrant and Kevin Rubin.

10.18

February 12, 2021

10.7*

10-K

Offer Letter by and between the Registrant and Paula Hansen.

10.10

March 1, 2019

10.8*

123

Exhibit
Number

Exhibit Title

Incorporated by Reference

Filed
Herewith

Form

File No.

Exhibit

Filing Date

10.9*

Offer Letter by and between the Registrant and Suresh Vittal.

10.10*

Offer Letter by and between the Registrant and Dean Darwin.

10.11*

Offer Letter by and between the Registrant and Scott Davidson.

10-K

Lease between the Registrant and Irvine Spectrum Terrace I LLC, dated October 14, 2019.

10.10

February 14, 2020

10.12

10-K

Form of Severance and Change in Control Agreement.

10.17

February 14, 2020

10.13*

10-Q

Consent of Deloitte & Touche, LLP, independent registered public accounting firm.

10.10

May 7, 2020

21.1

List of Subsidiaries.

23.1

24.1

Power of Attorney (included on signature pages to Annual Report).

31.1

Certification of Mark Anderson, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Kevin Rubin, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1#

Certification of Mark Anderson, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2#

Certification of Kevin Rubin, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File - the cover page from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 is formatted in Inline XBRL.

124


*			Indicates a management contract or compensatory plan.


#			This certification is deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

125

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

Alteryx, Inc.

Date:

By:

/s/ Mark Anderson

Mark Anderson
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Mark Anderson and Kevin Rubin, and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

126

Name

Title

Date

/s/ Mark Anderson

Chief Executive Officer and Director
(Principal Executive Officer)

Mark Anderson

/s/ Kevin Rubin

Chief Financial Officer
(Principal Financial Officer)

Kevin Rubin

/s/ Chris Natali

Chief Accounting Officer
(Principal Accounting Officer)

Chris Natali

/s/ Dean A. Stoecker

Executive Chairman and Chairman of the Board of Directors

Dean A. Stoecker

/s/ Charles R. Cory

Director

Charles R. Cory

/s/ Jeffrey L. Horing

Director

Jeffrey L. Horing

/s/ Anjali Joshi

Director

Anjali Joshi

/s/ Timothy I. Maudlin

Director

Timothy I. Maudlin

/s/ CeCelia Morken

Director

CeCelia Morken

/s/ Eileen M. Schloss

Director

Eileen M. Schloss

/s/ Daniel J. Warmenhoven

Director