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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-Q
__________________
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2020
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _____ to _____
Commission file number 001-38600
__________________
TENABLE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
__________________
Delaware
 
47-5580846
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
7021 Columbia Gateway Drive, Suite 500, Columbia, Maryland, 21046
(Address of principal executive offices, including zip code)
(410) 872-0555
(Registrant’s telephone number, including area code)
__________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
TENB
The Nasdaq Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes         No     
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer
Non-accelerated filer
 
 
 
Emerging growth company
 
Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes         No   
The number of shares of the Registrant's common stock outstanding as of July 24, 2020 was 101,263,716.



TENABLE HOLDINGS, INC.
TABLE OF CONTENTS

 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2


PART I. FINANCIAL INFORMATION
Item 1.        Financial Statements
TENABLE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
 
June 30, 2020
 
December 31, 2019
(in thousands, except per share data)
(unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
136,467

 
$
74,363

Short-term investments
105,634

 
137,904

Accounts receivable (net of allowance for doubtful accounts of $297 and $764 at June 30, 2020 and December 31, 2019, respectively)
81,782

 
94,827

Deferred commissions
29,620

 
28,499

Prepaid expenses and other current assets
26,298

 
27,369

Total current assets
379,801

 
362,962

Property and equipment, net
35,144

 
26,847

Deferred commissions (net of current portion)
42,148

 
43,766

Operating lease right-of-use assets
40,476

 
42,847

Acquired intangible assets, net
14,350

 
15,508

Goodwill
54,138

 
54,138

Other assets
9,779

 
12,544

Total assets
$
575,836

 
$
558,612

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
429

 
$
1,732

Accrued expenses
7,909

 
8,436

Accrued compensation
31,360

 
36,634

Deferred revenue
274,953

 
274,348

Operating lease liabilities
5,347

 
5,209

Other current liabilities
783

 
1,284

Total current liabilities
320,781

 
327,643

Deferred revenue (net of current portion)
90,356

 
88,779

Operating lease liabilities (net of current portion)
48,678

 
40,663

Other liabilities
4,853

 
2,622

Total liabilities
464,668

 
459,707

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock (par value: $0.01; 500,000 shares authorized; 101,127 and 98,587 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively)
1,011

 
986

Additional paid-in capital
710,066

 
662,990

Accumulated other comprehensive income
149

 
50

Accumulated deficit
(600,058
)
 
(565,121
)
Total stockholders’ equity
111,168

 
98,905

Total liabilities and stockholders’ equity
$
575,836

 
$
558,612

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

3


TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands, except per share data)
2020
 
2019
 
2020
 
2019
Revenue
$
107,209

 
$
85,384

 
$
209,857

 
$
165,685

Cost of revenue
19,142

 
13,918

 
37,843

 
27,144

Gross profit
88,067


71,466

 
172,014

 
138,541

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
55,443

 
56,015

 
115,298

 
108,704

Research and development
25,310

 
21,698

 
52,141

 
43,633

General and administrative
17,879

 
15,987

 
36,812

 
31,123

Total operating expenses
98,632


93,700

 
204,251

 
183,460

Loss from operations
(10,565
)

(22,234
)
 
(32,237
)
 
(44,919
)
Interest income, net
455

 
1,594

 
1,189

 
3,150

Other expense, net
(298
)
 
(122
)
 
(1,258
)
 
(336
)
Loss before income taxes
(10,408
)

(20,762
)
 
(32,306
)
 
(42,105
)
Provision for income taxes
1,552

 
866

 
2,631

 
963

Net loss
$
(11,960
)

$
(21,628
)
 
$
(34,937
)
 
$
(43,068
)
 
 
 
 
 
 
 
 
Net loss per share, basic and diluted
$
(0.12
)
 
$
(0.23
)
 
$
(0.35
)
 
$
(0.45
)
Weighted-average shares used to compute net loss per share, basic and diluted
100,209

 
95,820

 
99,532

 
94,785

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

4


TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
2020
 
2019
 
2020
 
2019
Net loss
$
(11,960
)
 
$
(21,628
)
 
$
(34,937
)
 
$
(43,068
)
Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
Unrealized (losses) gains on available-for-sale securities
(14
)
 
59

 
99

 
80

Other comprehensive (loss) income
(14
)
 
59

 
99

 
80

Comprehensive loss
$
(11,974
)
 
$
(21,569
)
 
$
(34,838
)
 
$
(42,988
)


5


TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
 
 
 
 
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Income
 
 
 
Total
Stockholders’
Equity
 
Common Stock
 
 
 
Accumulated Deficit
 
(in thousands)
Shares
 
Amount
 
 
 
 
Balance at March 31, 2020
100,003

 
$
1,000

 
$
687,311

 
$
163

 
$
(588,098
)
 
$
100,376

Exercise of stock options
959

 
10

 
6,986

 

 

 
6,996

Vesting of restricted stock units
165

 
1

 
(1
)
 

 

 

Stock-based compensation

 

 
15,770

 

 

 
15,770

Other comprehensive loss

 

 

 
(14
)
 

 
(14
)
Net loss

 

 

 

 
(11,960
)
 
(11,960
)
Balance at June 30, 2020
101,127

 
$
1,011

 
$
710,066

 
$
149

 
$
(600,058
)
 
$
111,168

 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2019
98,587

 
$
986

 
$
662,990

 
$
50

 
$
(565,121
)
 
$
98,905

Exercise of stock options
1,594

 
16

 
10,958

 

 

 
10,974

Vesting of restricted stock units
568

 
5

 
(5
)
 

 

 

Issuance of common stock under employee stock purchase plan
378

 
4

 
7,303

 

 

 
7,307

Stock-based compensation

 

 
28,820

 

 

 
28,820

Other comprehensive income

 

 

 
99

 

 
99

Net loss

 

 

 

 
(34,937
)
 
(34,937
)
Balance at June 30, 2020
101,127

 
$
1,011

 
$
710,066

 
$
149

 
$
(600,058
)
 
$
111,168

 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2019
96,203

 
$
962

 
$
614,774

 
$
21

 
$
(487,548
)
 
$
128,209

Exercise of stock options
604

 
6

 
2,843

 

 

 
2,849

Vesting of restricted stock units
1

 

 

 

 

 

Stock-based compensation

 

 
11,470

 

 

 
11,470

Other comprehensive income

 

 

 
59

 

 
59

Net loss

 

 

 

 
(21,628
)
 
(21,628
)
Balance at June 30, 2019
96,808

 
$
968

 
$
629,087

 
$
80

 
$
(509,176
)
 
$
120,959

 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
93,126

 
$
931

 
$
586,940

 
$

 
$
(466,108
)
 
$
121,763

Exercise of stock options
3,242

 
32

 
12,695

 

 

 
12,727

Vesting of restricted stock units
1

 

 

 

 

 

Issuance of common stock under employee stock purchase plan
439

 
5

 
8,574

 

 

 
8,579

Stock-based compensation

 

 
20,878

 

 

 
20,878

Other comprehensive income

 

 

 
80

 

 
80

Net loss

 

 

 

 
(43,068
)
 
(43,068
)
Balance at June 30, 2019
96,808

 
$
968

 
$
629,087

 
$
80

 
$
(509,176
)
 
$
120,959

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

6


TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Six Months Ended June 30,
(in thousands)
2020
 
2019
Cash flows from operating activities:
 
 
 
Net loss
$
(34,937
)
 
$
(43,068
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
5,268

 
3,089

Stock-based compensation
28,701

 
20,692

Other
606

 
(1,022
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
13,512

 
(658
)
Prepaid expenses and other current assets
1,058

 
1,673

Deferred commissions
497

 
(2,432
)
Other assets
13,177

 
(1,209
)
Accounts payable and accrued expenses
(3,023
)
 
5,646

Accrued compensation
(5,274
)
 
(3,092
)
Deferred revenue
2,182

 
17,430

Other current and noncurrent liabilities
(276
)
 
(46
)
Net cash provided by (used in) operating activities
21,491

 
(2,997
)
 
 
 
 
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(11,004
)
 
(5,335
)
Purchases of short-term investments
(91,908
)
 
(102,453
)
Sales and maturities of short-term investments
124,675

 
110,750

Net cash provided by investing activities
21,763

 
2,962

 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from loan agreement
2,000

 

Principal payments under finance lease obligations
(8
)
 
(8
)
Proceeds from stock issued in connection with the employee stock purchase plan
7,307

 
8,579

Proceeds from the exercise of stock options
10,974

 
12,727

Net cash provided by financing activities
20,273

 
21,298

Effect of exchange rate changes on cash and cash equivalents and restricted cash
(1,463
)
 
(716
)
Net increase in cash and cash equivalents and restricted cash
62,064

 
20,547

Cash and cash equivalents and restricted cash at beginning of period
74,665

 
165,378

Cash and cash equivalents and restricted cash at end of period
$
136,729

 
$
185,925

 
 
 
 
Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
16

 
$
49

Cash paid for income taxes
2,728

 
1,111

Supplemental cash flow information related to leases:
 
 
 
Operating cash payments for operating leases
$
2,595

 
$
2,286

Supplemental disclosure of non-cash flow investing activities:
 
 
 
Construction in progress
$
1,199

 
$
611

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

7


TENABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Business and Summary of Significant Accounting Policies
Business Description
Tenable Holdings, Inc. (the “Company,” “we,” "us," or “our”) is a provider of Cyber Exposure solutions, which is a discipline for managing, measuring and comparing cybersecurity risk in the digital era. Our enterprise software platform enables broad visibility into an organization’s cyber exposure across the modern attack surface and deep insights that help organizations translate technical data into business insights to understand and reduce their cybersecurity risk.
Basis of Presentation
The accompanying consolidated financial statements include the accounts of Tenable Holdings, Inc. and our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) for interim financial information. The consolidated statements are unaudited and should be read in conjunction with the consolidated financial statements and related notes included in our 2019 Annual Report on Form 10-K ("10-K") filed with the Securities and Exchange Commission on February 28, 2020. The consolidated financial statements have been prepared on a basis consistent with the audited annual consolidated financial statements included in the 10-K and, in the opinion of management, include all adjustments of a normal recurring nature necessary to fairly state our financial position, our results of operations, and cash flows.
The results for the six months ended June 30, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020 or any other future period.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, the determination of the estimated economic life of perpetual licenses for revenue recognition, the estimated period of benefit for deferred commissions, the useful lives of long-lived assets, the fair value of acquired intangible assets, the valuation of stock-based compensation, including the estimated underlying fair value of our common stock prior to our IPO, the incremental borrowing rate for operating leases, and the valuation of deferred tax assets. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable. Actual results could differ significantly from these estimates.
Significant Accounting Policies
Our significant accounting policies are described in our 10-K. During the six months ended June 30, 2020, there were no material changes to our significant accounting policies other than those described below.
Recently Adopted Accounting Pronouncements
We adopted Accounting Standards Update ("ASU") No. 2016-13 — Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2020 using the modified retrospective approach. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements. The new standard replaces the previous incurred loss impairment methodology with a methodology that reflects current expected credit losses for financial assets, including trade receivables, which are not measured at fair value, through net income. Under the new standard, our allowance for doubtful accounts reflects our best estimate of expected future credit losses based on various factors, including our historical collection experience, age of accounts receivable balances, current conditions, reasonable and supportable forecasts of future economic conditions, as well as

8


other factors that may impact our ability to collect our accounts receivable. However, given the uncertainty caused by the COVID-19 pandemic or other factors, these estimates may change and future credit losses may differ from our estimates. Additionally, the new standard requires us to evaluate impairments of available-for-sale debt securities due to credit-related and non-credit-related factors. Identified credit-related impairments would be recognized as a charge in the statement of operations.
2. Revenue Recognition
Disaggregation of Revenue
The following table presents a summary of revenue:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
2020
 
2019
 
2020
 
2019
Subscription revenue
$
92,010

 
$
69,370

 
$
178,400

 
$
134,107

Perpetual license and maintenance revenue
12,179

 
13,553

 
25,598

 
27,080

Professional services and other revenue
3,020

 
2,461

 
5,859

 
4,498

Revenue
$
107,209

 
$
85,384

 
$
209,857

 
$
165,685


Concentrations
We sell and market our products and services through our field sales force that works closely with our channel partners, which includes a network of distributors and resellers, in developing sales opportunities. We use a two-tiered channel model whereby we sell our products and services to our distributors, which in turn sell to resellers, which then sell to end-users. We derived 91% of revenue through our channel network in the three and six months ended June 30, 2020 and 90% of revenue in the three and six months ended June 30, 2019. One of our distributors accounted for 43% of revenue in each of the three and six months ended June 30, 2020 and 2019. That same distributor accounted for 40% of accounts receivable at June 30, 2020 and December 31, 2019.
Contract Balances
We generally bill our customers in advance and accounts receivable are recorded when we have the right to invoice the customer. Contract liabilities consist of deferred revenue and include customer billings and payments received in advance of performance under the contract. In the three months ended June 30, 2020 and 2019 and the six months ended June 30, 2020 and 2019, we recognized revenue of $99.5 million, $78.3 million, $175.0 million and $136.7 million, respectively, that was included in the deferred revenue balance at the beginning of each of the respective periods.
Remaining Performance Obligations
At June 30, 2020, the future estimated revenue related to unsatisfied performance obligations was $378.2 million, of which approximately 74% is expected to be recognized as revenue over the succeeding twelve months, and the remainder is expected to be recognized over the four years thereafter.
Deferred Commissions
The following summarizes the activity of deferred incremental costs of obtaining a contract:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
2020
 
2019
 
2020
 
2019
Beginning balance
$
70,742

 
$
59,811

 
$
72,265

 
$
59,434

Capitalization of contract acquisition costs
8,892

 
8,608

 
15,013

 
15,234

Amortization of deferred contract acquisition costs
(7,866
)
 
(6,553
)
 
(15,510
)
 
(12,802
)
Ending balance
$
71,768

 
$
61,866

 
$
71,768

 
$
61,866



9


3. Cash and Cash Equivalents and Short-Term Investments
The following tables summarize the amortized cost, unrealized gain and loss and estimated fair value of cash equivalents and short-term investments:
 
June 30, 2020
(in thousands)
Amortized Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
55,178

 
$

 
$

 
$
55,178

Total cash equivalents
$
55,178

 
$

 
$

 
$
55,178

 
 
 
 
 
 
 
 
Short-term investments:
 
 
 
 
 
 
 
Commercial paper
$
48,573

 
$

 
$

 
$
48,573

Corporate bonds
11,769

 
56

 

 
11,825

U.S. Treasury and agency obligations
45,143

 
93

 

 
45,236

Total short-term investments
$
105,485

 
$
149

 
$

 
$
105,634

 
December 31, 2019
(in thousands)
Amortized Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
13,588

 
$

 
$

 
$
13,588

Commercial paper
8,987

 

 

 
8,987

Total cash equivalents
$
22,575

 
$

 
$

 
$
22,575

 
 
 
 
 
 
 
 
Short-term investments:
 
 
 
 
 
 
 
Commercial paper
$
61,371

 
$

 
$

 
$
61,371

Corporate bonds
23,856

 
14

 
(1
)
 
23,869

U.S. Treasury and agency obligations
52,627

 
38

 
(1
)
 
52,664

Total short-term investments
$
137,854

 
$
52

 
$
(2
)
 
$
137,904


Gross unrealized losses were not material at June 30, 2020 and December 31, 2019, respectively. At June 30, 2020, we considered the extent to which any unrealized losses on our short-term investments were driven by credit risk and other factors, including market risk, and if it is more-likely-than-not that we would have to sell the security before the recovery of the amortized cost basis. Based on our assessment, we do not believe any unrealized losses represent credit losses at June 30, 2020.
At June 30, 2020, all of our short-term investments had maturities within the next twelve months.
4. Fair Value Measurements
We measure certain financial instruments at fair value using a fair value hierarchy. In the hierarchy, assets are classified based on the lowest level inputs used in valuation into the following categories:
Level 1 — Quoted prices in active markets for identical assets and liabilities;
Level 2 — Observable inputs including quoted market prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in inactive markets, or inputs that are corroborated by observable market data; and
Level 3 — Unobservable inputs.

10


The following tables summarize assets that are measured at fair value on a recurring basis:
 
June 30, 2020
(in thousands)
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents
 
 
 
 
 
 
 
Money market funds
$
55,178

 
$

 
$

 
$
55,178

 
$
55,178

 
$

 
$

 
$
55,178

 
 
 
 
 
 
 
 
Short-term investments
 
 
 
 
 
 
 
Commercial paper
$

 
$
48,573

 
$

 
$
48,573

Corporate bonds

 
11,825

 

 
11,825

U.S. Treasury and agency obligations

 
45,236

 

 
45,236

 
$

 
$
105,634

 
$

 
$
105,634

 
December 31, 2019
(in thousands)
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents
 
 
 
 
 
 
 
Money market funds
$
13,588

 
$

 
$

 
$
13,588

Commercial paper

 
8,987

 

 
8,987

 
$
13,588

 
$
8,987

 
$

 
$
22,575

 
 
 
 
 
 
 
 
Short-term investments
 
 
 
 
 
 
 
Commercial paper
$

 
$
61,371

 
$

 
$
61,371

Corporate bonds

 
23,869

 

 
23,869

U.S. Treasury and agency obligations

 
52,664

 

 
52,664

 
$

 
$
137,904

 
$

 
$
137,904


We did not have any liabilities measured and recorded at fair value at June 30, 2020 or December 31, 2019.
5. Property and Equipment, Net
Property and equipment, net consisted of the following:
(in thousands)
June 30, 2020
 
December 31, 2019
Computer software and equipment
$
22,160

 
$
21,234

Furniture and fixtures
6,200

 
4,504

Leasehold improvements
25,093

 
16,953

Right-of-use assets under finance leases
1,583

 
1,866

Total
55,036

 
44,557

Less: accumulated depreciation and amortization
(19,892
)
 
(17,710
)
Property and equipment, net
$
35,144

 
$
26,847


Depreciation and amortization related to property and equipment was $2.0 million, $1.3 million, $4.0 million and $2.8 million in the three months ended June 30, 2020 and 2019 and the six months ended June 30, 2020 and 2019, respectively.

11


6. Goodwill and Acquired Intangible Assets
On December 2, 2019, we acquired Indegy, Ltd. We have not yet finalized the allocation of the purchase price, which may change as additional information becomes available related to any working capital adjustment and income taxes.
Acquired intangible assets subject to amortization are as follows:
 
June 30, 2020
 
December 31, 2019
(in thousands)
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Acquired technology
$
17,325

 
$
(3,117
)
 
$
14,208

 
$
17,325

 
$
(2,009
)
 
$
15,316

Trade name
200

 
(58
)
 
142

 
200

 
(8
)
 
192

 
$
17,525

 
$
(3,175
)
 
$
14,350

 
$
17,525

 
$
(2,017
)
 
$
15,508


Amortization of acquired intangible assets was $0.6 million, $0.1 million, $1.2 million and $0.3 million in the three months ended June 30, 2020 and 2019 and the six months ended June 30, 2020 and 2019, respectively.
At June 30, 2020, estimated future amortization of acquired intangible assets is as follows:
(in thousands)
 
Year ending December 31,
 
2020(1)
$
1,156

2021
2,306

2022
2,214

2023
2,214

2024
2,214

Thereafter
4,246

Total
$
14,350

_______________
(1)    Represents the six months ending December 31, 2020.
7. Leases
We have operating leases for office facilities and finance leases for computer and office equipment. The components of lease expense were as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
2020
 
2019
 
2020
 
2019
Operating lease cost
$
2,327

 
$
1,100

 
$
4,811

 
$
2,081

 
 
 
 
 
 
 
 
Finance lease cost
 
 
 
 
 
 
 
Amortization of ROU assets
$
76

 
$
155

 
$
186

 
$
308

Interest on lease liabilities
1

 
1

 
3

 
3

Total finance lease cost
$
77

 
$
156

 
$
189

 
$
311


Rent expense for short-term leases in the three and six months ended June 30, 2020 and 2019 was not material.

12


Supplemental information related to leases was as follows:
 
June 30, 2020
 
December 31, 2019
Operating leases
 
 
 
Weighted average remaining lease term
10.3 years
 
10.0 years
Weighted average discount rate
5.7%
 
5.8%
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
2020
 
2019
 
2020
 
2019
ROU assets obtained in exchange for lease obligations
 
 
 
 
 
 
 
Operating leases
$
704

 
$

 
$
704

 
$
2,198

Finance leases

 

 

 
11


In the three and six months ended June 30, 2020, we received proceeds from lease incentives of $8.6 million.
Maturities of operating lease liabilities at June 30, 2020 were as follows:
(in thousands)
 
Year ending December 31,
 
2020(1)
$
2,558

2021
7,195

2022
7,300

2023
6,997

2024
7,151

Thereafter
50,952

Total lease payments
82,153

Less: Imputed interest
(22,521
)
Less: Tenant incentives
(5,607
)
Total
$
54,025

_______________
(1)    Represents the six months ending December 31, 2020.
8. Debt
There were no amounts outstanding under our $25.0 million revolving credit facility (“2017 Credit Facility”) with Silicon Valley Bank ("SVB") in the six months ended June 30, 2020 and 2019.
In July 2020, the maturity date of the 2017 Credit Facility was extended to August 3, 2020. In April 2020, the 2017 Credit Facility was amended to increase the maximum amount of letters of credit that may be issued from $5.0 million to $6.5 million. At June 30, 2020, our borrowing capacity was reduced by $5.5 million related to standby letters of credit.
In July 2020, we entered into a new $45.0 million senior secured credit facility (“2020 Credit Facility”) with SVB in connection with the expiration of the 2017 Credit Facility. The 2020 Credit Facility bears interest at either LIBOR plus 2%, with a 1% LIBOR floor, or the ABR plus 1%, and terminates on July 24, 2022. A commitment fee of 0.35% per annum is payable quarterly in arrears based on the unused portion. The 2020 Credit Facility includes a $45.0 million uncommitted expansion and has a financial covenant requiring a minimum consolidated quick ratio of at least 1.5:1.0 on the last day of any quarter.

13


9. Stock-Based Compensation
Under the evergreen provision in our 2018 Equity Incentive Plan ("2018 Plan"), in January 2020 we reserved an additional 4,929,361 shares of our common stock for issuance. At June 30, 2020, there were 17,500,941 shares available for grant under the 2018 Plan.
Stock-based compensation expense included in the consolidated statements of operations was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
2020
 
2019
 
2020
 
2019
Cost of revenue
$
830

 
$
742

 
$
1,577

 
$
1,394

Sales and marketing
5,375

 
4,215

 
9,871

 
7,581

Research and development
3,893

 
2,441

 
6,841

 
4,471

General and administrative
5,568

 
3,975

 
10,412

 
7,246

Total stock-based compensation expense
$
15,666

 
$
11,373

 
$
28,701

 
$
20,692


At June 30, 2020, the unrecognized stock-based compensation expense related to unvested restricted stock units was $127.9 million, which is expected to be recognized over an estimated remaining weighted average period of 3.2 years.
At June 30, 2020, the unrecognized stock-based compensation expense related to outstanding stock options was $17.0 million, which is expected to be recognized over an estimated remaining weighted average period of 1.7 years.
At June 30, 2020, the unrecognized stock-based compensation expense related to unvested awards of restricted stock was $0.8 million, which is expected to be recognized over an estimated remaining period of 0.5 years.
Restricted Stock and Restricted Stock Units
A summary of our restricted stock and restricted stock units activity is presented below:
 
Restricted Stock
 
Restricted Stock Units
(in thousands, except for per share data)
Number
of Shares
 
Weighted
Average
Grant Date Fair Value
 
Number
of Shares
 
Weighted
Average
Grant Date Fair Value
Unvested balance at December 31, 2019
495

 
$
4.25

 
2,894

 
$
26.34

Granted

 

 
3,372

 
27.86

Vested
(198
)
 
4.25

 
(569
)
 
29.04

Forfeited

 

 
(261
)
 
25.71

Unvested balance at June 30, 2020
297

 
4.25

 
5,436

 
27.03



14


Stock Options
A summary of our stock option activity is presented below:
(in thousands, except for exercise prices and years)