false--12-31Q320190001310114P1Y10000000000.00010.0001100000000010000000009289500094599000927740009447800000P1Y0.0010.00120000000200000000000200000P3M 0001310114 2019-01-01 2019-09-30 0001310114 2019-10-24 0001310114 2018-12-31 0001310114 2019-09-30 0001310114 2019-07-01 2019-09-30 0001310114 2018-07-01 2018-09-30 0001310114 2018-01-01 2018-09-30 0001310114 us-gaap:CommonStockMember 2019-09-30 0001310114 us-gaap:RetainedEarningsMember 2019-03-31 0001310114 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001310114 us-gaap:CommonStockMember 2019-03-31 0001310114 us-gaap:TreasuryStockMember 2018-12-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001310114 us-gaap:TreasuryStockMember 2019-03-31 0001310114 2019-01-01 2019-03-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001310114 2019-04-01 2019-06-30 0001310114 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001310114 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001310114 2019-06-30 0001310114 us-gaap:CommonStockMember 2018-12-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001310114 us-gaap:RetainedEarningsMember 2019-06-30 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001310114 2019-03-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001310114 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001310114 us-gaap:TreasuryStockMember 2019-09-30 0001310114 us-gaap:CommonStockMember 2019-06-30 0001310114 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001310114 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001310114 us-gaap:RetainedEarningsMember 2018-12-31 0001310114 us-gaap:RetainedEarningsMember 2019-09-30 0001310114 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001310114 us-gaap:TreasuryStockMember 2019-06-30 0001310114 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001310114 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0001310114 2017-12-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001310114 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001310114 us-gaap:TreasuryStockMember 2018-03-31 0001310114 us-gaap:CommonStockMember 2018-07-01 2018-09-30 0001310114 us-gaap:RetainedEarningsMember 2018-07-01 2018-09-30 0001310114 us-gaap:TreasuryStockMember 2018-09-30 0001310114 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0001310114 us-gaap:CommonStockMember 2017-12-31 0001310114 us-gaap:CommonStockMember 2018-09-30 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0001310114 2018-01-01 2018-03-31 0001310114 2018-04-01 2018-06-30 0001310114 us-gaap:TreasuryStockMember 2017-12-31 0001310114 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0001310114 us-gaap:CommonStockMember 2018-06-30 0001310114 us-gaap:RetainedEarningsMember 2017-12-31 0001310114 2018-03-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001310114 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001310114 2018-06-30 0001310114 us-gaap:RetainedEarningsMember 2018-09-30 0001310114 us-gaap:RetainedEarningsMember 2018-03-31 0001310114 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001310114 us-gaap:CommonStockMember 2018-03-31 0001310114 us-gaap:TreasuryStockMember 2018-06-30 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-01 2018-09-30 0001310114 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0001310114 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0001310114 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 2018-09-30 0001310114 2018-09-30 0001310114 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001310114 us-gaap:RetainedEarningsMember 2018-06-30 0001310114 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 2019-09-30 0001310114 us-gaap:AccountingStandardsUpdate201409Member 2019-01-01 2019-09-30 0001310114 us-gaap:AccountingStandardsUpdate201409Member 2018-01-01 2018-09-30 0001310114 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001310114 srev:SeniorConvertibleNotesMember 2018-08-01 2018-08-01 0001310114 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel1Member 2018-12-31 0001310114 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel1Member 2019-09-30 0001310114 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:BaseRateMember 2018-07-01 2018-07-31 0001310114 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2018-07-01 2018-07-31 0001310114 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-09-30 0001310114 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:FederalFundsEffectiveSwapRateMember 2018-07-01 2018-07-31 0001310114 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2018-07-31 0001310114 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:EurodollarMember 2018-07-01 2018-07-31 0001310114 srt:MaximumMember 2019-01-01 2019-09-30 0001310114 srt:MaximumMember 2019-09-30 0001310114 srt:MinimumMember 2019-09-30 0001310114 srt:MinimumMember 2019-01-01 2019-09-30 0001310114 srev:SarahPattonetalv.ServiceSourceDelawareIncMember us-gaap:PendingLitigationMember 2016-08-23 2016-08-23 0001310114 us-gaap:MoneyMarketFundsMember us-gaap:LetterOfCreditMember 2019-09-30 0001310114 us-gaap:FixedPriceContractMember 2019-01-01 2019-09-30 0001310114 us-gaap:TimeAndMaterialsContractMember 2019-07-01 2019-09-30 0001310114 us-gaap:FixedPriceContractMember 2018-07-01 2018-09-30 0001310114 us-gaap:TimeAndMaterialsContractMember 2018-07-01 2018-09-30 0001310114 us-gaap:TimeAndMaterialsContractMember 2019-01-01 2019-09-30 0001310114 us-gaap:FixedPriceContractMember 2018-01-01 2018-09-30 0001310114 us-gaap:TimeAndMaterialsContractMember 2018-01-01 2018-09-30 0001310114 us-gaap:FixedPriceContractMember 2019-07-01 2019-09-30 0001310114 us-gaap:AccountingStandardsUpdate201409Member 2018-01-01 2018-12-31 0001310114 2018-01-01 2018-12-31 0001310114 us-gaap:AccountingStandardsUpdate201409Member 2018-12-31 0001310114 us-gaap:AccountingStandardsUpdate201409Member 2018-07-01 2018-09-30 0001310114 srev:SellingServicesMember 2019-09-30 0001310114 srev:AfterAdoptionofNewRevenueGuidanceMember 2018-07-01 2018-09-30 0001310114 srev:AfterAdoptionofNewRevenueGuidanceMember 2019-01-01 2019-09-30 0001310114 us-gaap:AccountingStandardsUpdate201409Member 2019-07-01 2019-09-30 0001310114 srev:SellingServicesMember 2019-10-01 2019-09-30 0001310114 srev:AfterAdoptionofNewRevenueGuidanceMember 2019-07-01 2019-09-30 0001310114 srev:ProfessionalServicesMember 2018-07-01 2018-09-30 0001310114 srev:SellingServicesMember 2019-07-01 2019-09-30 0001310114 srev:ProfessionalServicesMember 2019-07-01 2019-09-30 0001310114 srev:SellingServicesMember 2018-01-01 2018-09-30 0001310114 srev:ProfessionalServicesMember 2018-01-01 2018-09-30 0001310114 srev:SellingServicesMember 2018-07-01 2018-09-30 0001310114 srev:SellingServicesMember 2019-01-01 2019-09-30 0001310114 srev:ProfessionalServicesMember 2019-01-01 2019-09-30 0001310114 srev:NorthAmericaAndLatinAmericaMember 2019-01-01 2019-09-30 0001310114 srev:NorthAmericaAndLatinAmericaMember 2018-01-01 2018-09-30 0001310114 srt:AsiaPacificMember 2018-01-01 2018-09-30 0001310114 us-gaap:EMEAMember 2018-01-01 2018-09-30 0001310114 us-gaap:EMEAMember 2019-01-01 2019-09-30 0001310114 srt:AsiaPacificMember 2019-01-01 2019-09-30 0001310114 srt:AsiaPacificMember 2019-07-01 2019-09-30 0001310114 us-gaap:EMEAMember 2018-07-01 2018-09-30 0001310114 srev:NorthAmericaAndLatinAmericaMember 2019-07-01 2019-09-30 0001310114 srev:NorthAmericaAndLatinAmericaMember 2018-07-01 2018-09-30 0001310114 us-gaap:EMEAMember 2019-07-01 2019-09-30 0001310114 srt:AsiaPacificMember 2018-07-01 2018-09-30 0001310114 srev:AfterAdoptionofNewRevenueGuidanceMember 2018-01-01 2018-09-30 0001310114 us-gaap:EmployeeStockOptionMember srev:The2011EquityIncentivePlanMember 2019-09-30 0001310114 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-09-30 0001310114 us-gaap:EmployeeStockOptionMember srev:The2011EquityIncentivePlanMember 2019-01-01 2019-09-30 0001310114 srev:RestrictedStockUnitsandPerformanceBasedRestrictedStockUnitsMember srev:The2011EquityIncentivePlanMember 2019-01-01 2019-09-30 0001310114 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-09-30 0001310114 srev:RestrictedStockUnitsandPerformanceBasedRestrictedStockUnitsMember 2019-01-01 2019-09-30 0001310114 srev:RestrictedStockUnitsandPerformanceBasedRestrictedStockUnitsMember 2019-09-30 0001310114 srev:RestrictedStockUnitsandPerformanceBasedRestrictedStockUnitsMember srev:The2011EquityIncentivePlanMember 2019-09-30 0001310114 us-gaap:ResearchAndDevelopmentExpenseMember 2019-07-01 2019-09-30 0001310114 us-gaap:GeneralAndAdministrativeExpenseMember 2018-01-01 2018-09-30 0001310114 us-gaap:CostOfSalesMember 2019-01-01 2019-09-30 0001310114 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-09-30 0001310114 us-gaap:SellingAndMarketingExpenseMember 2018-07-01 2018-09-30 0001310114 us-gaap:ResearchAndDevelopmentExpenseMember 2018-01-01 2018-09-30 0001310114 us-gaap:CostOfSalesMember 2018-01-01 2018-09-30 0001310114 us-gaap:GeneralAndAdministrativeExpenseMember 2019-07-01 2019-09-30 0001310114 us-gaap:ResearchAndDevelopmentExpenseMember 2018-07-01 2018-09-30 0001310114 us-gaap:CostOfSalesMember 2018-07-01 2018-09-30 0001310114 us-gaap:SellingAndMarketingExpenseMember 2018-01-01 2018-09-30 0001310114 us-gaap:SellingAndMarketingExpenseMember 2019-07-01 2019-09-30 0001310114 us-gaap:GeneralAndAdministrativeExpenseMember 2018-07-01 2018-09-30 0001310114 us-gaap:CostOfSalesMember 2019-07-01 2019-09-30 0001310114 us-gaap:SellingAndMarketingExpenseMember 2019-01-01 2019-09-30 0001310114 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-09-30 0001310114 srev:RestrictedStockUnitsandPerformanceBasedRestrictedStockUnitsMember 2018-12-31 0001310114 us-gaap:EmployeeStockOptionMember 2018-12-31 0001310114 us-gaap:EmployeeStockOptionMember 2019-09-30 0001310114 srev:May2017RestructuringEffortMember 2017-01-01 2017-12-31 0001310114 us-gaap:FacilityClosingMember srev:May2017RestructuringEffortMember 2017-12-31 0001310114 srev:May2017RestructuringEffortMember 2018-01-01 2018-12-31 0001310114 us-gaap:FacilityClosingMember srev:May2017RestructuringEffortMember 2019-01-01 2019-09-30 0001310114 srev:May2017RestructuringEffortMember 2017-12-31 0001310114 srev:May2017RestructuringEffortMember 2019-01-01 2019-09-30 0001310114 us-gaap:FacilityClosingMember srev:May2017RestructuringEffortMember 2016-12-31 0001310114 us-gaap:ContractTerminationMember srev:May2017RestructuringEffortMember 2017-12-31 0001310114 us-gaap:ContractTerminationMember srev:May2017RestructuringEffortMember 2018-01-01 2018-12-31 0001310114 us-gaap:EmployeeSeveranceMember srev:May2017RestructuringEffortMember 2017-12-31 0001310114 us-gaap:FacilityClosingMember srev:May2017RestructuringEffortMember 2017-01-01 2017-12-31 0001310114 us-gaap:EmployeeSeveranceMember srev:May2017RestructuringEffortMember 2017-01-01 2017-12-31 0001310114 us-gaap:ContractTerminationMember srev:May2017RestructuringEffortMember 2017-01-01 2017-12-31 0001310114 us-gaap:ContractTerminationMember srev:May2017RestructuringEffortMember 2016-12-31 0001310114 srev:May2017RestructuringEffortMember 2019-09-30 0001310114 srev:May2017RestructuringEffortMember 2018-12-31 0001310114 us-gaap:ContractTerminationMember srev:May2017RestructuringEffortMember 2019-01-01 2019-09-30 0001310114 us-gaap:EmployeeSeveranceMember srev:May2017RestructuringEffortMember 2018-01-01 2018-12-31 0001310114 us-gaap:FacilityClosingMember srev:May2017RestructuringEffortMember 2018-01-01 2018-12-31 0001310114 us-gaap:EmployeeSeveranceMember srev:May2017RestructuringEffortMember 2016-12-31 0001310114 us-gaap:EmployeeSeveranceMember srev:May2017RestructuringEffortMember 2019-01-01 2019-09-30 0001310114 us-gaap:EmployeeSeveranceMember srev:May2017RestructuringEffortMember 2018-12-31 0001310114 us-gaap:FacilityClosingMember srev:May2017RestructuringEffortMember 2019-09-30 0001310114 us-gaap:EmployeeSeveranceMember srev:May2017RestructuringEffortMember 2019-09-30 0001310114 us-gaap:FacilityClosingMember srev:May2017RestructuringEffortMember 2018-12-31 0001310114 us-gaap:ContractTerminationMember srev:May2017RestructuringEffortMember 2018-12-31 0001310114 us-gaap:ContractTerminationMember srev:May2017RestructuringEffortMember 2019-09-30 0001310114 srev:May2017RestructuringEffortMember 2016-12-31 0001310114 us-gaap:EmployeeSeveranceMember srev:RestructuringEffort2019Member 2018-12-31 0001310114 srev:RestructuringEffort2019Member 2019-01-01 2019-09-30 0001310114 srev:RestructuringEffort2019Member 2019-09-30 0001310114 us-gaap:ContractTerminationMember srev:RestructuringEffort2019Member 2019-01-01 2019-09-30 0001310114 us-gaap:ContractTerminationMember srev:RestructuringEffort2019Member 2018-12-31 0001310114 us-gaap:EmployeeSeveranceMember srev:RestructuringEffort2019Member 2019-01-01 2019-09-30 0001310114 us-gaap:EmployeeSeveranceMember srev:RestructuringEffort2019Member 2019-09-30 0001310114 us-gaap:ContractTerminationMember srev:RestructuringEffort2019Member 2019-09-30 0001310114 srev:RestructuringEffort2019Member 2018-12-31 0001310114 2017-05-01 2017-05-31 srev:facility srev:debt_instrument srev:location srev:language iso4217:USD xbrli:shares iso4217:USD xbrli:shares srev:plaintiff xbrli:pure
As of October 24, 2019, 94,495,042 shares of common stock of ServiceSource International, Inc. were outstanding.
Common stock; $0.0001 par value; 1,000,000 shares authorized; 94,599 shares issued and 94,478 shares outstanding as of September 30, 2019; 92,895 shares issued and 92,774 shares outstanding as of December 31, 2018
Certain items on the Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 have been reclassified to conform to the current year presentation. These reclassifications did not affect the Company's Consolidated Balance Sheet as of December 31, 2018 or the Company's Consolidated Statements of Operations, Consolidated Statements of Comprehensive Loss or Consolidated Statements of Stockholders' Equity for the nine months ended September 30, 2018.
In June 2016, the Financial Accounting Standard Board ("FASB") issued an Accounting Standard Update ("ASU") that amends the measurement of credit losses on financial instruments and requires measurement and recognition of expected versus incurred credit losses for financial assets held. In November 2018, the FASB issued an update to this ASU clarifying receivables arising from operating leases are accounted for using the lease guidance in Accounting Standards Codification Topic 842 Leases ("ASC 842"), and not as financial instruments. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, with early adoption permitted. This standard will apply to the Company's accounts receivables and contract assets. Based on our current analysis the Company does not expect the adoption to have a material impact on its Consolidated Financial Statements as credit losses associated from trade receivables have historically been insignificant. The Company will adopt this standard effective January 1, 2020.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and requires significant additional disclosures about the amount, timing, and uncertainty of cash flows from leases. Substantially all leases, including current operating leases, will be recognized by lessees on their balance sheet as a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 initially required entities to adopt the standard using a modified retrospective transition method. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provide transition practical expedients allowing companies to adopt the new standard with a cumulative effect adjustment as of the beginning of the year of adoption with prior year comparative financial information and disclosures remaining as previously reported. The Company adopted this standard effective January 1, 2019 and elected the package of practical expedients, accounting for leases with contractual terms less than 12 months as short-term leases and the transition relief option to apply legacy GAAP to periods prior to the standard’s effective date. Upon initial adoption of the standard, the Company recorded a $29.5 million right-of-use asset ("ROU") and a $32.1 million operating lease liability to the Consolidated Balance Sheets as of January 1, 2019.
In August 2018, the FASB issued ASU 2018-15, cloud computing implementation costs, that provides guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the new standard. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, with early adoption permitted. The Company early adopted this standard effective January 1, 2019 and the effects of this standard were applied prospectively to eligible costs incurred on or after January 1, 2019. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.
At the inception of a contract, the Company determines whether the contract is or contains a lease. ROU assets represent the Company's right to use an underlying asset over the lease term and lease liabilities represent our remaining payment obligation under the lease. ROU assets and liabilities are recognized upon the lease commencement based on the present value of lease payments over the lease term. ROU assets are adjusted for any prepaid or accrued lease payments and unamortized lease incentives or initial direct costs. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate, the variable interest rate on the revolving line of credit (the “Revolver”), and other information available at the lease commencement in determining the present value of lease payments. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain it will exercise the option. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense and sublease income is recognized on a straight-line basis over the lease term.
The Company follows a three-tier fair value hierarchy, which is described in detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. There were no transfers between levels during the nine months ended September 30, 2019 and 2018.
Short-term investments consist of readily marketable debt securities with a remaining maturity of more than three months from the time of purchase. The Company liquidated its investment securities during the first half of 2018 to repay the $150.0 million convertible notes that matured August 1, 2018. Based on the Company’s decision to sell these investment securities, an other-than-temporary impairment occurred and a $2.0 million impairment loss was recorded in the Consolidated Statements of Operations for the nine months ended September 30, 2018.
The Company recognized realized gains from the sale of available-for-sale securities of $0.03 million and losses of $0.2 million from the sale of available-for-sale securities for the nine months ended September 30, 2018. No realized gains or losses were recognized for the three months ended September 30, 2018. Gains and losses on available-for-sale securities are recorded in "Interest and other expense, net" in the Consolidated Statements of Operations.
The Company had restricted cash in "Other assets" in the Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 of $2.3 million and $1.2 million, respectively. Restricted cash is classified within Level 1.
In July 2018, the Company entered into a $40.0 million senior secured Revolver that allows us to borrow against our domestic receivables as defined in the credit agreement. The Revolver matures July 2021 and bears interest at a variable rate per annum based on the greater of the prime rate, the Federal Funds rate plus 0.50% or the one-month LIBOR rate plus 1.00%, plus, in each case, a margin of 1.00% for base rate borrowings or 2.00% for Eurodollar borrowings. As of September 30, 2019, the Company did not have any borrowings outstanding on the Revolver and therefore has no future obligations.
The obligations under the credit agreement are secured by substantially all assets of the borrowers and certain of their subsidiaries, including pledges of equity in certain of the Company’s subsidiaries. The Revolver has covenants with which the Company was in compliance as of September 30, 2019 and December 31, 2018.
Discounts and premiums to the principal amounts are included in the carrying value of debt and amortized to "Interest and other expense, net" over the remaining life of the underlying debt. Unamortized debt issuance costs related to the Revolver were $0.1 million and $0.2 million as of September 30, 2019 and December 31, 2018, respectively. The amortization of all premiums and discounts related to the convertible notes that matured August 2018 was $0.8 million and $5.3 million for the three and nine months ended September 30, 2018, respectively.
Interest expense related to the amortization of debt issuance costs, interest expense associated with the Company's debt obligations and accretion of the Company's debt discount was $0.04 million and $1.1 million for the three months ended September 30, 2019 and 2018, respectively, and $0.1 million and $7.1 million for the nine months ended September 30, 2019 and 2018, respectively.
The Company has operating leases for office space and finance leases for certain equipment under non-cancelable agreements with various expiration dates through April 2030. Certain office leases include the option to extend the term between one to seven years and certain office leases include the option to terminate the lease upon written notice within one to eight years after lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
In July 2019, the Company entered into a sublease with a third-party for its San Francisco office space leased during 2018 through the remaining term of the lease, November 30, 2023. In January 2018, the Company entered into a sublease with a third-party for its San Francisco office space leased during 2015 through the remaining term of the lease, November 30, 2022. The Company recognizes rent expense and sublease income on a straight-line basis over the lease period and accrues for rent expense and sublease income incurred but not paid.
Rent expense for the three and nine months ended September 30, 2018 was $3.1 million and $8.9 million, respectively. Sublease income for the three and nine months ended September 30, 2018 was $0.5 million and $1.1 million, respectively.
Less: tenant improvements reimbursement
The Company is subject to various legal proceedings and claims arising in the ordinary course of our business, including the cases discussed below. Although the results of litigation and claims cannot be predicted with certainty, the Company is currently not aware of any litigation or threats of litigation in which the final outcome could have a material adverse effect on our business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. The Company records a contingent liability when it is probable that a loss has been incurred and the amount is reasonably estimable in accordance with accounting for contingencies. As of September 30, 2019 and December 31, 2018, the Company accrued a $0.2 million and $3.8 million, respectively, reserve relating to our potential liability for currently pending disputes, reflected in "Other current liabilities" in the Consolidated Balance Sheets.
On August 23, 2016, the United States District Court for the Middle District of Tennessee granted conditional class certification in a lawsuit originally filed on September 21, 2015 by three former senior sales representatives. The lawsuit, Sarah Patton, et al v. ServiceSource Delaware, Inc., asserts a claim under the Fair Labor Standards Act alleging that certain non-exempt employees in our Nashville location were not paid for all hours worked and were not properly paid for overtime hours worked. The complaint also asserts claims under Tennessee state law for breach of contract and unjust enrichment. A settlement of all claims was reached. The Company anticipates settlement payments will be completed by the end of 2019.
Once the Company obtains a client contract, the timing of satisfying performance obligations and the receipt of client consideration can be different and will give rise to contract assets and contract liabilities. As of September 30, 2019 and December 31, 2018, the contract asset balance totaled $0.1 million and $0.2 million, respectively, and the contract liability balance totaled $0.3 million and $0.9 million, respectively. Contract assets and contract liabilities are reflected in "Prepaid expenses and other", "Other assets" and "Other current liabilities" in the Consolidated Balance Sheets.
The Company maintains contracts with fixed consideration that are generally with long-standing client relationships and typically renew annually. Assuming none of the Company’s current contracts with fixed consideration are renewed, we estimate receiving approximately $56.0 million in future selling services fixed consideration as of September 30, 2019. Professional services revenues from fixed consideration are based on proportional performance which is typically concluded within 90 days of contract execution. The Company typically bills professional services upfront upon obtaining a client contract. As of September 30, 2019, we estimate $1.0 million in professional services fixed consideration revenue to be recognized through the remainder of 2019.
Certain commissions paid to the Company's sales team upon obtaining a client contract are incremental and recoverable, and capitalized as contract acquisition costs. Under the transition guidance, the Company recorded a $3.3 million contract acquisition asset and corresponding offset to the opening accumulated deficit balance related to previously expensed sales commissions. The Company expensed $1.5 million of the $3.3 million of contract acquisition asset during 2018 and will expense the remainder of the asset over the next five years as follows: $0.1 million remaining in 2019, $0.6 million in 2020 and $0.3 million in 2021 and beyond. The Company recorded $0.3 million and $0.8 million, respectively, in amortization expense for the three and nine months ended September 30, 2019 and $0.3 million and $1.2 million, respectively, of amortization for the three and nine months ended September 30, 2018 related to amounts capitalized upon the adoption of ASC 606.
Subsequent to the adoption of ASC 606, the Company capitalized an additional $0.3 million and $1.1 million as of September 30, 2019 and December 31, 2018, respectively, of sales commissions as contract acquisition costs related to contracts obtained during the period. The Company recorded amortization expense of $0.1 million and $0.5 million, respectively, for the three and nine months ended September 30, 2019 and $0.1 million for the three and nine months ended September 30, 2018 related to the amounts capitalized. As of September 30, 2019, the weighted-average remaining amortization period related to these capitalized costs was approximately 2.4 years.
Impairment recognized on contract costs was insignificant for the three and nine months ended September 30, 2019 and 2018.