Company Quick10K Filing
Zendesk
Price73.40 EPS-1
Shares111 P/E-61
MCap8,167 P/FCF143
Net Debt283 EBIT-133
TEV8,450 TEV/EBIT-64
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-05-04
10-K 2019-12-31 Filed 2020-02-13
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-02
10-K 2018-12-31 Filed 2019-02-14
10-Q 2018-09-30 Filed 2018-11-05
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-02-22
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-07
10-K 2016-12-31 Filed 2017-02-27
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-05
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-02-17
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-07
8-K 2020-07-27 Earnings, Officers, Regulation FD, Exhibits
8-K 2020-06-11
8-K 2020-06-10
8-K 2020-06-09
8-K 2020-05-19
8-K 2020-04-30
8-K 2020-02-06
8-K 2019-11-11
8-K 2019-10-24
8-K 2019-07-25
8-K 2019-05-29
8-K 2019-04-24
8-K 2019-04-02
8-K 2019-01-31
8-K 2018-10-30
8-K 2018-07-31
8-K 2018-05-22
8-K 2018-04-30
8-K 2018-04-03
8-K 2018-03-15
8-K 2018-03-14
8-K 2018-02-01

ZEN 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1. Overview and Basis of Presentation
Note 2. Business Combinations
Note 3. Financial Instruments
Note 4. Costs To Obtain Customer Contracts
Note 5. Property and Equipment
Note 6. Leases
Note 7. Goodwill and Acquired Intangible Assets
Note 8. Convertible Senior Notes
Note 9. Commitments and Contingencies
Note 10. Common Stock and Stockholders' Equity
Note 11. Deferred Revenue and Performance Obligations
Note 12. Net Loss per Share
Note 13. Income Taxes
Note 14. Geographic Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors.
Item 6. Exhibits
EX-31.1 zen10-qq22020exhibit311.htm
EX-31.2 zen10-qq22020exhibit312.htm
EX-32.1 zen10-qq22020exhibit321.htm

Zendesk Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
1.51.20.90.60.30.02014201620182020
Assets, Equity
0.30.20.10.1-0.0-0.12014201620182020
Rev, G Profit, Net Income
0.60.40.30.1-0.0-0.22014201620182020
Ops, Inv, Fin

zen-20200630
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Table of Contents
UNITED STATES  
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
(Mark One)
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: 001-36456
 
ZENDESK, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 26-4411091
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
  
1019 Market StreetSan FranciscoCalifornia94103
(Address of principal executive offices) (Zip Code)
 
 
Registrant’s telephone number, including area code: (415418-7506
Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareZENNew York Stock Exchange
 
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 (§ 232.405 of this chapter) 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 filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth 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).


Table of Contents
YesNo
As of July 30, 2020, there were 115,426,049 shares of the registrant’s common stock outstanding.



ZENDESK, INC.
TABLE OF CONTENTS
 
PART I — FINANCIAL INFORMATION
 
Item 1
 
 
 
 
 
Item 2
Item 3
Item 4
PART II — OTHER INFORMATION 
Item 1
Item 1A
Item 6
3

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “might,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

the effect of uncertainties related to the novel coronavirus and resulting COVID-19 disease pandemic on U.S. and global markets, our business, operations, revenue results, cash flow, operating expenses, demand for our solutions, sales cycles, customer retention, and our customers’ businesses;
worldwide economic conditions and their impact on information technology spending;
our ability to attract and retain customers to use our product and platform solutions;
our ability to optimize the pricing for our solutions;
our future financial performance, including our revenue, cost of revenue, gross profit, operating expenses, ability to generate positive cash flow, and ability to achieve and maintain profitability;
our ability to effectively manage our growth and future expenses;
our ability to understand how changes in worldwide economic conditions may affect businesses of organizations of varying sizes differently;
our ability to forecast retention of customers on contracts with monthly terms and customers who are small to midsized organizations;
the evolution of technology affecting our product and platform solutions, services, and markets;
our ability to securely maintain customer data;
our ability to prevent, mitigate, and respond effectively to both historical and future data breaches;
our ability to innovate and provide a superior customer experience;
our ability to successfully expand in our existing markets and into new markets;
the expenses and administrative workload associated with being a public company;
our ability to introduce and market new solutions and to integrate such solutions into our infrastructure;
the attraction and retention of qualified employees and key personnel;
our ability to comply with modified or new laws and regulations applying to our business, including privacy and data security regulations;
the sufficiency of our cash and cash equivalents and marketable securities to meet our liquidity needs;
our ability to service the interest on our convertible notes and repay such notes, if required;
our ability to maintain, protect, and enhance our intellectual property;
our ability to successfully integrate people, solutions, technology, and services following completion of acquisitions;
our ability to maintain and enhance our brand; and
our ability to adapt to and comply with upcoming and newly effective tax regulations.
We caution you that the foregoing list does not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
4

Table of Contents
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.
5

Table of Contents
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
ZENDESK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and shares)
 
 June 30,
2020
December 31,
2019
(Unaudited)
Assets  
Current assets:  
Cash and cash equivalents$700,457  $196,591  
Marketable securities296,829  286,958  
Accounts receivable, net of allowance for doubtful accounts of $7,914 and $2,846 as of June 30, 2020 and December 31, 2019, respectively
143,017  127,808  
Deferred costs40,939  35,619  
Prepaid expenses and other current assets50,210  45,847  
Total current assets1,231,452  692,823  
Marketable securities, noncurrent303,861  361,948  
Property and equipment, net102,601  102,090  
Deferred costs, noncurrent38,192  35,230  
Lease right-of-use assets93,523  89,983  
Goodwill and intangible assets, net201,804  206,883  
Other assets24,585  25,632  
Total assets$1,996,018  $1,514,589  
Liabilities and stockholders’ equity  
Current liabilities:  
Accounts payable$13,793  $38,376  
Accrued liabilities35,904  36,347  
Accrued compensation and related benefits64,270  61,512  
Deferred revenue314,179  320,642  
Lease liabilities23,309  21,804  
Total current liabilities451,455  478,681  
Convertible senior notes, net1,043,365  483,464  
Deferred revenue, noncurrent1,934  3,320  
Lease liabilities, noncurrent83,495  83,478  
Other liabilities5,460  7,662  
Total liabilities1,585,709  1,056,605  
Commitments and contingencies (Note 9)
Stockholders’ equity:  
Preferred stock    
Common stock1,151  1,130  
Additional paid-in capital1,212,469  1,155,044  
Accumulated other comprehensive income2,834  591  
Accumulated deficit(806,145) (698,781) 
Total stockholders’ equity410,309  457,984  
Total liabilities and stockholders’ equity$1,996,018  $1,514,589  
See Notes to Condensed Consolidated Financial Statements.
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ZENDESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Revenue$246,664  $194,583  $484,140  $376,068  
Cost of revenue (1)
61,515  57,670  121,217  113,324  
Gross profit185,149  136,913  362,923  262,744  
Operating expenses (1):     
Research and development59,003  50,510  119,424  97,301  
Sales and marketing121,397  94,746  245,707  186,447  
General and administrative36,247  43,019  70,573  74,271  
Total operating expenses216,647  188,275  435,704  358,019  
Operating loss(31,498) (51,362) (72,781) (95,275) 
Other expense, net:
Interest expense(8,086) (6,614) (14,973) (13,158) 
Loss on early extinguishment of debt(25,950)   (25,950)   
Interest and other income, net2,166  4,026  9,068  10,196  
Total other expense, net(31,870) (2,588) (31,855) (2,962) 
Loss before provision for income taxes(63,368) (53,950) (104,636) (98,237) 
Provision for income taxes1,288  591  2,804  1,024  
Net loss$(64,656) $(54,541) $(107,440) $(99,261) 
Net loss per share, basic and diluted$(0.56) $(0.50) $(0.94) $(0.91) 
Weighted-average shares used to compute net loss per share, basic and diluted114,600  109,986  114,069  109,312  
(1) Includes share-based compensation expense as follows:
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Cost of revenue$5,187  $5,246  $10,246  $10,183  
Research and development12,529  11,911  25,155  23,548  
Sales and marketing17,573  13,575  34,132  25,973  
General and administrative8,423  13,019  16,261  20,704  
 

See Notes to Condensed Consolidated Financial Statements.

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ZENDESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Net loss$(64,656) $(54,541) $(107,440) $(99,261) 
Other comprehensive income, before tax:    
Net unrealized gain on available-for-sale investments7,573  2,291  4,178  5,633  
Net unrealized gain (loss) on derivative instruments6,112  1,452  (1,236) 2,576  
Other comprehensive income, before tax13,685  3,743  2,942  8,209  
Tax effect(699) (641) (699) (1,713) 
Other comprehensive income, net of tax12,986  3,102  2,243  6,496  
Comprehensive loss$(51,670) $(51,439) $(105,197) $(92,765) 
See Notes to Condensed Consolidated Financial Statements.

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Table of Contents
ZENDESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 Three Months Ended June 30, 2020Three Months Ended June 30, 2019
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated DeficitTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances at beginning of period113,976  $1,139  $1,200,521  $(10,152) $(741,565) $449,943  109,260  $1,092  $994,031  $(2,330) $(573,848) $418,945  
Issuance of common stock upon exercise of stock options159  2  5,101  —  —  5,103  250  2  4,770  —  —  4,772  
Issuance of common stock for settlement of RSUs and PRSUs698  7  (2,248) —  —  (2,241) 814  8  (2,671) —  —  (2,663) 
Issuance of common stock in connection with employee stock purchase plan353  4  19,948  —  —  19,952  374  4  15,308  —  —  15,312  
Share-based compensation—  —  44,670  —  —  44,670  —  —  42,050  —  —  42,050  
Equity component of 2025 convertible senior notes—  —  216,026  —  —  216,026  —  —  —  —  —  —  
Purchase of capped calls related to 2025 convertible senior notes—  —  (129,950) —  —  (129,950) —  —  —  —  —  —  
Equity component of partial repurchase of 2023 convertible senior notes—  —  (224,639) —  —  (224,639) —  —  —  —  —  —  
Proceeds from capped calls related to 2023 convertible senior notes—  —  83,040  —  —  83,040  —  —  —  —  —  —  
Other comprehensive income, net of tax—  —  —  12,986  —  12,986  —  —  —  3,102  —  3,102  
Net loss—  —  —  —  (64,656) (64,656) —  —  —  —  (54,541) (54,541) 
Other—  —  —  —  76  76  —  —  —  —  —  —  
Balances at end of period115,186  $1,151  $1,212,469  $2,834  $(806,145) $410,309  110,698  $1,106  $1,053,488  $772  $(628,389) $426,977  


Six Months Ended June 30, 2020Six Months Ended June 30, 2019
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive Income
Accumulated
Deficit
Total
Stockholders’
Equity
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated DeficitTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances at beginning of period113,081  $1,130  $1,155,044  $591  $(698,781) $457,984  108,037  $1,080  $950,693  $(5,724) $(529,128) $416,921  
Issuance of common stock upon exercise of stock options334  3  9,099  —  —  9,102  626  5  13,204  —  —  13,209  
Issuance of common stock for settlement of RSUs and PRSUs1,418  14  (4,152) —  —  (4,138) 1,661  17  (5,096) —  —  (5,079) 
Issuance of common stock in connection with employee stock purchase plan353  4  19,948  —  —  19,952  374  4  15,308  —  —  15,312  
Share-based compensation—  —  88,053  —  —  88,053  —  —  79,379  —  —  79,379  
Equity component of 2025 convertible senior notes—  —  216,026  —  —  216,026  —  —  —  —  —  —  
Purchase of capped calls related to 2025 convertible senior notes—  —  (129,950) —  —  (129,950) —  —  —  —  —  —  
Equity component of partial repurchase of 2023 convertible senior notes—  —  (224,639) —  —  (224,639) —  —  —  —  —  —  
Proceeds from capped calls related to 2023 convertible senior notes—  —  83,040  —  —  83,040  —  —  —  —  —  —  
Other comprehensive income, net of tax—  —  —  2,243  —  2,243  —  —  —  6,496  —  6,496  
Net loss—  —  —  —