Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 14, 2019 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PEGA | ||
Entity Registrant Name | PEGASYSTEMS INC | ||
Entity Central Index Key | 1,013,857 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 78,442,648 | ||
Entity Public Float | $ 2.1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Current assets: | |||
Cash and cash equivalents | [1],[2] | $ 114,422 | $ 162,279 |
Marketable securities | [1] | 93,001 | 61,469 |
Total cash, cash equivalents, and marketable securities | [1] | 207,423 | 223,748 |
Accounts receivable | [1] | 180,872 | 222,735 |
Unbilled receivables | [1] | 172,656 | 160,084 |
Other current assets | [1] | 49,684 | 41,135 |
Total current assets | [1] | 610,635 | 647,702 |
Long-term unbilled receivables | [1] | 151,237 | 160,708 |
Goodwill | [1] | 72,858 | 72,952 |
Other long-term assets | [1] | 147,823 | 131,391 |
Total assets | [1] | 982,553 | 1,012,753 |
Current liabilities: | |||
Accounts payable | [1] | 16,487 | 17,370 |
Accrued expenses | [1] | 45,506 | 45,508 |
Accrued compensation and related expenses | [1] | 84,671 | 66,040 |
Deferred revenue | [1] | 185,145 | 165,850 |
Total current liabilities | [1] | 331,809 | 294,768 |
Deferred income tax liabilities | [1] | 6,939 | 38,463 |
Other long-term liabilities | [1] | 22,274 | 23,652 |
Total liabilities | [1] | 361,022 | 356,883 |
Commitments and Contingencies (Note 19) | [1] | ||
Stockholders’ equity: | |||
Preferred stock, $0.01 par value, 1,000 shares authorized; none issued | [1] | 0 | 0 |
Common stock, $0.01 par value, 200,000 shares authorized; 78,526 and 78,081 shares issued and outstanding at December 31, 2018 and 2017, respectively | [1] | 785 | 781 |
Additional paid-in capital | [1] | 123,205 | 152,097 |
Retained earnings | [1] | 510,863 | 509,697 |
Accumulated other comprehensive loss: | |||
Net unrealized loss on available-for-sale marketable securities, net of tax | [1] | (249) | (232) |
Foreign currency translation adjustments | [1] | (13,073) | (6,473) |
Total stockholders’ equity | [1],[3] | 621,531 | 655,870 |
Total liabilities and stockholders’ equity | [1] | $ 982,553 | $ 1,012,753 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value (dollars per share) | [1] | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | [1] | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | [1] | 0 | 0 |
Common stock, par value (dollars per share) | [1] | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | [1] | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | [1] | 78,526,000 | 78,081,000 |
Common stock, shares outstanding (shares) | [1] | 78,526,000 | 78,081,000 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Revenue | |||||||||||||||
Total revenue | $ 256,357 | $ 203,263 | $ 196,779 | $ 235,182 | $ 254,605 | $ 190,957 | $ 186,596 | $ 256,309 | $ 891,581 | [1] | $ 888,467 | [1] | $ 762,229 | [1] | |
Cost of revenue | |||||||||||||||
Total cost of revenue | [1] | 301,765 | 279,673 | 239,256 | |||||||||||
Gross profit | 178,446 | 128,840 | 122,962 | 159,568 | 180,628 | 121,226 | 118,721 | 188,219 | 589,816 | [1] | 608,794 | [1] | 522,973 | [1] | |
Operating expenses | |||||||||||||||
Selling and marketing | [1] | 373,495 | 300,578 | 277,927 | |||||||||||
Research and development | [1] | 181,710 | 162,886 | 145,548 | |||||||||||
General and administrative | [1] | 51,643 | 52,153 | 45,951 | |||||||||||
Acquisition-related | [1] | 0 | 0 | 2,903 | |||||||||||
Total operating expenses | [1] | 606,848 | 515,617 | 472,329 | |||||||||||
(Loss) income from operations | 15,453 | (17,258) | (23,163) | 7,936 | 38,518 | (2,301) | (8,947) | 65,907 | (17,032) | [1] | 93,177 | [1] | 50,644 | [1] | |
Foreign currency transaction gain (loss) | [1],[2] | 2,421 | (6,413) | 9,360 | |||||||||||
Interest income, net | [1] | 2,705 | 862 | 911 | |||||||||||
Other income (expense), net | [1] | 363 | (1,391) | (5,580) | |||||||||||
(Loss) income before (benefit) provision from income taxes | [1] | (11,543) | 86,235 | 55,335 | |||||||||||
(Benefit) provision from income taxes | [1] | (22,160) | (12,313) | 10,320 | |||||||||||
Net income | $ 16,413 | $ (7,587) | $ (10,409) | $ 12,200 | $ 40,595 | $ 1,288 | $ 3,702 | $ 52,963 | $ 10,617 | [1],[2],[3],[4] | $ 98,548 | [1],[2],[3],[4] | $ 45,015 | [1],[2],[3],[4] | |
Earnings per share: | |||||||||||||||
Basic (dollars per share) | $ 0.21 | $ (0.10) | $ (0.13) | $ 0.16 | $ 0.52 | $ 0.01 | $ 0.05 | $ 0.69 | $ 0.14 | [1] | $ 1.27 | [1] | $ 0.59 | [1] | |
Diluted (dollars per share) | $ 0.20 | $ (0.10) | $ (0.13) | $ 0.15 | $ 0.49 | $ 0.01 | $ 0.04 | $ 0.65 | $ 0.13 | [1] | $ 1.19 | [1] | $ 0.56 | [1] | |
Weighted-average number of common shares outstanding | |||||||||||||||
Basic (shares) | [1] | 78,564 | 77,431 | 76,343 | |||||||||||
Diluted (shares) | [1] | 83,064 | 82,832 | 79,732 | |||||||||||
Software license | |||||||||||||||
Revenue | |||||||||||||||
Total revenue | [1] | $ 288,119 | $ 339,294 | $ 297,284 | |||||||||||
Cost of revenue | |||||||||||||||
Total cost of revenue | [1] | 5,169 | 5,085 | 4,943 | |||||||||||
Maintenance | |||||||||||||||
Revenue | |||||||||||||||
Total revenue | [1] | 263,875 | 242,320 | 218,635 | |||||||||||
Cost of revenue | |||||||||||||||
Total cost of revenue | [1] | 24,565 | 27,905 | 25,505 | |||||||||||
Services | |||||||||||||||
Revenue | |||||||||||||||
Total revenue | [1] | 339,587 | 306,853 | 246,310 | |||||||||||
Cost of revenue | |||||||||||||||
Total cost of revenue | [1] | $ 272,031 | $ 246,683 | $ 208,808 | |||||||||||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||
[4] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income | [1],[2],[3],[4] | $ 10,617 | $ 98,548 | $ 45,015 |
Other comprehensive (loss) income, net of tax | ||||
Unrealized loss on available-for-sale marketable securities, net of tax | [1] | (17) | (63) | (19) |
Foreign currency translation adjustments | [1] | (6,600) | 9,559 | (12,675) |
Total other comprehensive (loss) income, net of tax | [1],[3] | (6,617) | 9,496 | (12,694) |
Comprehensive income | [1] | $ 4,000 | $ 108,044 | $ 32,321 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||
[4] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | |||
Balance, beginning of period (in shares) at Dec. 31, 2015 | [1] | 76,488 | ||||||
Balance, beginning of period at Dec. 31, 2015 | [1] | $ 526,987 | $ 765 | $ 145,418 | $ 384,311 | $ (3,507) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative-effect adjustment from adoption of ASU 2016-09 | [1] | 321 | 321 | |||||
Repurchase of common stock (in shares) | [1] | (1,078) | ||||||
Repurchase of common stock | [1] | (27,028) | $ (11) | (27,017) | ||||
Issuance of common stock for share-based compensation plans (in shares) | [1] | 1,161 | ||||||
Issuance of common stock for share-based compensation plans | [1] | (15,856) | $ 12 | (15,868) | ||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | [1] | 20 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | [1] | 562 | 562 | |||||
Stock-based compensation | [1] | 40,808 | 40,808 | |||||
Cash dividends declared ($0.12 per share) in the period ended December 31, 2018, Cash dividends declared ($0.12 per share) in the period ended December 31, 2017, Cash dividends declared ($0.12 per share) in the period ended December 31, 2016 | [1] | (9,175) | (9,175) | |||||
Other comprehensive loss | [1] | (12,694) | [2] | (12,694) | ||||
Net income | [1] | 45,015 | [2],[3],[4] | 45,015 | ||||
Balance, end of period (in shares) at Dec. 31, 2016 | [1] | 76,591 | ||||||
Balance, end of period at Dec. 31, 2016 | [1] | 548,940 | $ 766 | 143,903 | 420,472 | (16,201) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock (in shares) | [1] | (99) | ||||||
Repurchase of common stock | [1] | (4,493) | $ 0 | (4,493) | ||||
Issuance of common stock for share-based compensation plans (in shares) | [1] | 1,568 | ||||||
Issuance of common stock for share-based compensation plans | [1] | (41,627) | $ 15 | (41,642) | ||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | [1] | 21 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | [1] | 1,009 | 1,009 | |||||
Stock-based compensation | [1] | 53,320 | 53,320 | |||||
Cash dividends declared ($0.12 per share) in the period ended December 31, 2018, Cash dividends declared ($0.12 per share) in the period ended December 31, 2017, Cash dividends declared ($0.12 per share) in the period ended December 31, 2016 | [1] | (9,323) | (9,323) | |||||
Other comprehensive loss | [1] | 9,496 | [2] | 9,496 | ||||
Net income | [1] | $ 98,548 | [2],[3],[4] | 98,548 | ||||
Balance, end of period (in shares) at Dec. 31, 2017 | 78,081 | [5] | 78,081 | [1] | ||||
Balance, end of period at Dec. 31, 2017 | [1] | $ 655,870 | [5] | $ 781 | 152,097 | 509,697 | (6,705) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock (in shares) | [1] | (1,001) | ||||||
Repurchase of common stock | [1] | (55,275) | $ (10) | (55,265) | ||||
Issuance of common stock for share-based compensation plans (in shares) | [1] | 1,413 | ||||||
Issuance of common stock for share-based compensation plans | [1] | (39,361) | $ 14 | (39,375) | ||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | [1] | 33 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | [1] | 1,767 | 1,767 | |||||
Stock-based compensation | [1] | 63,981 | 63,981 | |||||
Cash dividends declared ($0.12 per share) in the period ended December 31, 2018, Cash dividends declared ($0.12 per share) in the period ended December 31, 2017, Cash dividends declared ($0.12 per share) in the period ended December 31, 2016 | [1] | (9,451) | (9,451) | |||||
Other comprehensive loss | [1] | (6,617) | [2] | (6,617) | ||||
Net income | [1] | $ 10,617 | [2],[3],[4] | 10,617 | ||||
Balance, end of period (in shares) at Dec. 31, 2018 | 78,526 | [5] | 78,526 | [1] | ||||
Balance, end of period at Dec. 31, 2018 | [1] | $ 621,531 | [5] | $ 785 | $ 123,205 | $ 510,863 | $ (13,322) | |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||||
[4] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||||
[5] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (dollars per share) | [1] | $ 0.12 | $ 0.12 | $ 0.12 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | [4] | Dec. 31, 2017USD ($) | [4] | Dec. 31, 2016USD ($) | [4] | |
Operating activities: | ||||||
Net income | $ 10,617 | [1],[2],[3] | $ 98,548 | [1],[2],[3] | $ 45,015 | [1],[2],[3] |
Adjustment to reconcile net income to cash provided by operating activities: | ||||||
Deferred income taxes | (30,898) | (2,780) | (4,398) | |||
Amortization of intangible assets and depreciation | 25,295 | 24,713 | 24,137 | |||
Amortization of deferred contract costs | 17,271 | 12,106 | 11,574 | |||
Amortization of investments | 1,596 | 1,381 | 1,862 | |||
Stock-based compensation expense | 63,862 | 53,313 | 40,821 | |||
Foreign currency transaction (gain) loss | (2,421) | [2] | 6,413 | [2] | (9,360) | [2] |
Other non-cash | (1,678) | (1,383) | (1,382) | |||
Change in operating assets and liabilities: | ||||||
Accounts receivable, unbilled revenue, and contract assets | 25,779 | (30,379) | (49,503) | |||
Income taxes receivable and other current assets | (6,068) | (13,393) | (10,818) | |||
Accounts payable, accrued compensation, and accrued expenses | 20,798 | 14,473 | 1,531 | |||
Deferred revenue | 28,951 | 14,636 | 2,639 | |||
Deferred contract costs | (44,036) | (18,738) | (12,497) | |||
Other long-term assets and liabilities | (4,712) | (675) | 253 | |||
Cash provided by operating activities | 104,356 | 158,235 | 39,874 | |||
Investing activities: | ||||||
Purchases of investments | (69,494) | (27,718) | (23,969) | |||
Proceeds from maturities and called investments | 33,991 | 26,997 | 22,788 | |||
Sales of investments | 0 | 0 | 62,210 | |||
Payments for acquisitions, net of cash acquired | (800) | (297) | (49,113) | |||
Investment in property and equipment | (11,893) | (13,741) | (19,088) | |||
Cash used in investing activities | (48,196) | (14,759) | (7,172) | |||
Financing activities: | ||||||
Dividend payments to shareholders | (9,432) | (9,277) | (9,174) | |||
Common stock repurchases for tax withholdings for net settlement of equity awards | (37,594) | (40,617) | (15,294) | |||
Common stock repurchases under stock repurchase program | (54,434) | (4,335) | (27,248) | |||
Cash used in financing activities | (101,460) | (54,229) | (51,716) | |||
Effect of exchange rate on cash and cash equivalents | (2,557) | 2,438 | (3,418) | |||
Net (decrease) increase in cash and cash equivalents | (47,857) | 91,685 | (22,432) | |||
Cash and cash equivalents, beginning of period | 162,279 | [5] | 70,594 | 93,026 | ||
Cash and cash equivalents, end of period | 114,422 | [5] | 162,279 | [5] | 70,594 | |
Supplemental disclosures: | ||||||
Income taxes paid (refunded) | 6,630 | (2,322) | 28,844 | |||
Non-cash investing and financing activity: | ||||||
Dividends payable | $ 2,363 | $ 2,344 | $ 2,298 | |||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||
[4] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||
[5] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Business The Company develops, markets, licenses, and supports customer engagement and digital process automation software applications in addition to the Pega Platform™ for clients that wish to build and extend their own applications. The Company provides consulting, training, support, and hosting services to facilitate the use of its software. Management estimates and reporting The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Accounts with reported amounts based on significant estimates and judgments include, but are not limited to, revenue, unbilled receivables, deferred revenue, deferred income taxes, deferred contract costs, income taxes payable, intangible assets, and goodwill. On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, using the full retrospective method which required that each prior reporting period presented be adjusted to reflect the application of this ASU. See "Note 2. Significant Accounting Policies" for additional information. Principles of consolidation The Company’s consolidated financial statements reflect Pegasystems Inc. and subsidiaries in which the Company holds a controlling financial interest. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Revenue The Company’s revenue is primarily derived from: • software license revenue from sales of the Company’s Pega Platform and software applications. Software licenses represent functional intellectual property and are delivered separately from maintenance and services. • maintenance revenue from client support including software upgrades (on a when and-if available basis), telephone support, and bug fixes or patches. • services revenue from cloud revenue, which is sales of the Company’s hosted Pega Platform and software applications, and consulting revenue, which is primarily related to new software license implementations, training, and reimbursable costs. Performance Obligations The Company’s software license and cloud arrangements often contain multiple performance obligations. For contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. Transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. If the transaction price contains discounts or the Company expects to provide a future price concession, these elements are considered when determining the transaction price prior to allocation. The Company’s policy is to exclude from the determination of transaction price sales and similar taxes collected from clients. The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of maintenance Consulting - time and materials Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting - fixed price Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. The Company utilizes the residual approach for performance obligations since the selling price is highly variable and stand-alone selling price is not discernible from past transactions or other observable evidence. Periodically, the Company reevaluates whether the residual approach remains appropriate. As required the Company evaluates its residual approach estimate compared to all available observable data in order to conclude the estimate is representative of its standalone selling price. If the contract grants the client the option to acquire additional products or services, the Company assesses whether the option represents a material right to the client that the client would not receive without entering into that contract. Discounts on options to purchase additional products and services that are in excess of discounts available to similar clients are accounted for as an additional performance obligation. Variable consideration The Company’s arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. In addition, the Company may provide pricing concessions to clients, a business practice that also gives rise to variable fees in contracts. The Company includes in the determination of total transaction price an estimate of variable fees if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company uses the expected value method to estimate variable consideration and the estimates are based on expected purchase volumes and the level of historical price concessions offered to clients. Significant financing components The Company generally does not intend to provide financing to its clients, as financing arrangements are not contemplated as part of the negotiated terms of contracts between the Company and its clients. Although there may be instances with an intervening period between the delivery of the license and the payment, typically in term license arrangements, the purpose of that timing difference is to align the client’s payment with the timing of the use of the software license or service. In certain circumstances, however, there are instances where the timing of revenue recognition differs from the timing of payment due to extended payment terms or fees that are non-proportional to the associated usage of software licenses. In these instances, the Company evaluates whether a significant financing component exists. This evaluation includes determining the difference between the consideration the client would have paid at the time the performance obligation was satisfied and the amount of consideration actually paid. Contracts that include a significant financing component are adjusted for the time value of money at the rate inherent in the contract, the client’s borrowing rate, or the Company’s incremental borrowing rate depending upon the recipient of the financing. During 2018, 2017 and 2016, significant financing components were not material. Contract modifications The Company assesses contract modifications to determine: • if the additional products and services are distinct from the products and services in the original arrangement; and • if the amount of consideration expected for the added products and services reflects the stand-alone selling price of those products and services. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract and is accounted for on either: • a prospective basis as a termination of the existing contract and the creation of a new contract; or • a cumulative catch-up basis. Deferred contract costs The Company recognizes an asset for the incremental costs of obtaining a client contract, primarily related to sales commissions, if the Company expects to benefit from those costs for more than one year . Deferred contract costs are allocated to each performance obligation within the contract and amortized over the expected benefit period of the related performance obligations. The expected benefit period is determined based on the length of the client contracts, client attrition rates, the underlying technology life-cycle, and the influence of the competitive marketplace in which the products and services are sold. Deferred costs for maintenance renewals and cloud arrangements are amortized over an average expected benefit period of five years . Deferred costs for software licenses and consulting are amortized over a period that is consistent with the pattern of transfer of control for the related products and services. Financial instruments The principal financial instruments held by the Company consist of cash equivalents, marketable securities, receivables, and accounts payable. The Company considers debt securities that are readily convertible to known amounts of cash with maturities of three months or less from the purchase date to be cash equivalents. Interest is recorded when earned. All of the Company’s investments are classified as available-for-sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated based upon the specific investment. See "Note 4. Receivables, Contract Assets, And Deferred Revenue" and "Note 11. Fair Value Measurements" for additional information. Property and equipment Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are three years for computer equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the term of the lease or the useful life of the asset. Repairs and maintenance costs are expensed as incurred. Internal-use software The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. The Company amortizes capitalized software costs generally over three to five years, commencing on the date the software is placed into service. Goodwill Goodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded. Goodwill is not amortized. The Company has a single reporting unit. The Company performed a qualitative assessment as of November 30, 2018 , 2017 , and 2016 , and concluded that there was no impairment since it was not more likely than not that the fair value of its reporting unit was less than its carrying value. Intangible and long-lived assets All of the Company’s intangible assets are amortized using the straight-line method over their estimated useful life. The Company evaluates its long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Impairment is assessed by comparing the undiscounted cash flows expected to be generated by the intangible asset to its carrying value. If impairment exists, the Company calculates the impairment by comparing the carrying value of the intangible asset to its fair value as determined by discounted expected cash flows. The Company did not have any impairments in the 2018 , 2017 , or 2016 . Business combinations The Company uses its best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. Research and development and software development costs Research and development costs are expensed as incurred. Capitalization of computer software developed for resale begins upon the establishment of technological feasibility, generally demonstrated by a working model or an operative version of the computer software product. Such costs have not been material to date, as technological feasibility is established within a short time frame from the software’s general availability and, as a result, no costs were capitalized in 2018 , 2017 , or 2016 . Stock-based compensation The Company recognizes stock-based compensation expense associated with equity awards based on the fair value of these awards at the grant date. Stock-based compensation is recognized over the requisite service period, which is generally the vesting period of the equity award and is adjusted each period for anticipated forfeitures. See "Note 13. Stock-Based Compensation" for discussion of the Company’s key assumptions included in determining the fair value of its equity awards at the grant date. Foreign currency translation and remeasurement The translation of assets and liabilities for the Company’s subsidiaries with functional currencies other than the U.S. dollar are made at period-end exchange rates. Revenue and expense accounts are translated at the average exchange rates during the period transactions occurred. The resulting translation adjustments are reflected in accumulated other comprehensive income. Realized and unrealized exchange gains or losses from transactions and remeasurement adjustments are reflected in foreign currency transaction gain (loss) in the accompanying consolidated statements of operations. Accounting for income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. Future realization of the Company’s deferred tax assets ultimately depends on the existence of sufficient taxable income within the available carryback or carryforward periods. Sources of taxable income include taxable income in prior carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income. The Company records a valuation allowance to reduce its deferred tax assets to an amount it believes is more-likely-than-not to be realized. Changes in the valuation allowance impacts income tax expense in the period of adjustment. The Company’s deferred tax valuation allowance requires significant judgment and uncertainties, including assumptions about future taxable income that are based on historical and projected information. The Company recognizes excess tax benefits when they are realized, as a reduction of the provision for income taxes. The Company assesses its income tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies liabilities for uncertain tax positions as non-current liabilities unless the uncertainty is expected to be resolved within one year. The Company classifies interest and penalties on uncertain tax positions as income tax expense. As a global company, the Company uses significant judgment to calculate and provide for income taxes in each of the tax jurisdictions in which it operates. In the ordinary course of the Company’s business, there are transactions and calculations undertaken whose ultimate tax outcome cannot be certain. Some of these uncertainties arise as a consequence of transfer pricing for transactions with the Company’s subsidiaries and nexus and tax credit estimates. In addition, the calculation of acquired tax attributes and the associated limitations are complex. See "Note 15. Income Taxes" for additional information. Advertising expense Advertising costs are expensed as incurred. Advertising costs were $6.9 million , $6.1 million , and $8.9 million during 2018 , 2017 , and 2016 , respectively. Revenue Standard Adopted On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and has adjusted prior periods to conform to the new standard. The most significant adoption impacts were: • Perpetual licenses with extended payment terms and term licenses - Revenue from perpetual licenses with extended payment terms and term licenses is now recognized when control is transferred to the client, which is defined as the point in time when the client can use and benefit from the license. Previously, the Company recognized revenue over the term of the agreements as payments became due or earlier if prepaid. Any unrecognized license revenue from these arrangements is recognized in the period that control transfers or as a cumulative adjustment to retained earnings as of January 1, 2016. Unbilled receivables in the Company’s consolidated balance sheets increased significantly upon adoption due to the revenue from term licenses being recognized prior to amounts being due, or prepaid, by clients and perpetual licenses with extended payment terms. • Allocation of future credits and significant discounts - Perpetual and term licenses are a separate performance obligation and the Company is now required to allocate any future credits and discounts to performance obligations in the arrangement based upon their relative stand-alone selling prices, determined using the residual approach. • Deferred contract costs - Sales incentive programs and other incremental costs to obtain a contract were previously expensed when incurred. ASC 340-40 requires these costs be recognized as an asset when incurred and expensed over the period of expected benefit, which is on average five years . This change primarily impacts the Company’s contracts related to multi-year cloud offerings, maintenance on term and perpetual licenses, and multi-year term and perpetual licenses with client usage rights that increase over time. For additional information on the Company’s accounting policies because of the adoption of ASC 606 and ASC 340-40 see "Note 2. Significant Accounting Policies" . The impact of the adoption of ASC 606 and ASC 340-40 on the Company’s consolidated balance sheet and consolidated statement of operations is: December 31, 2017 (in thousands) Previously Reported Adjustments As Adjusted Assets Accounts receivable, unbilled receivables, and contract assets $ 248,331 $ 135,402 $ 383,733 Long-term unbilled receivables — 160,708 160,708 Deferred income taxes 57,127 (42,887 ) 14,240 Deferred contract costs — 37,924 37,924 Other assets (1) 416,148 — 416,148 Total assets $ 721,606 $ 291,147 $ 1,012,753 Liabilities and stockholders’ equity Deferred revenue $ 195,073 $ (29,223 ) $ 165,850 Long-term deferred revenue 6,591 (2,885 ) 3,706 Deferred income tax liabilities — 38,463 38,463 Other liabilities (2) 148,864 — 148,864 Total liabilities 350,528 6,355 356,883 Foreign currency translation adjustments (3,494 ) (2,979 ) (6,473 ) Retained earnings 221,926 287,771 509,697 Other equity (3) 152,646 — 152,646 Total stockholders’ equity 371,078 284,792 655,870 Total liabilities and stockholders’ equity $ 721,606 $ 291,147 $ 1,012,753 (1) Includes cash, cash equivalents, marketable securities, income taxes receivable, other current assets, property and equipment, intangible assets, goodwill, and other long-term assets (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017). (2) Includes accounts payable, accrued expenses, accrued compensation, and related expenses, income taxes payable, and other long-term liabilities (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017). (3) Includes common stock, additional paid-in capital, and net unrealized loss on available-for-sale marketable securities (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017). 2017 2016 (in thousands, except per share amounts) Previously Reported Adjustments As Adjusted Previously Reported Adjustments As Adjusted Revenue: Software license $ 288,334 $ 50,960 $ 339,294 $ 279,995 $ 17,289 $ 297,284 Maintenance 244,347 (2,027 ) 242,320 220,336 (1,701 ) 218,635 Services 307,901 (1,048 ) 306,853 249,935 (3,625 ) 246,310 Total revenue 840,582 47,885 888,467 750,266 11,963 762,229 Cost of revenue: Software license 5,085 — 5,085 4,943 — 4,943 Maintenance 27,905 — 27,905 25,505 — 25,505 Services 246,683 — 246,683 208,808 — 208,808 Total cost of revenue 279,673 — 279,673 239,256 — 239,256 Gross profit 560,909 47,885 608,794 511,010 11,963 522,973 Operating expenses: Selling and marketing 307,210 (6,632 ) 300,578 278,849 (922 ) 277,927 Research and development 162,886 — 162,886 145,548 — 145,548 General and administrative 52,153 — 52,153 45,951 — 45,951 Acquisition-related — — — 2,903 — 2,903 Total operating expenses 522,249 (6,632 ) 515,617 473,251 (922 ) 472,329 Income from operations 38,660 54,517 93,177 37,759 12,885 50,644 Foreign currency transaction (loss) gain (900 ) (5,513 ) (6,413 ) 2,247 7,113 9,360 Interest income, net 731 131 862 776 135 911 Other expense, net (1,391 ) — (1,391 ) (5,580 ) — (5,580 ) Income before provision (benefit) for income taxes 37,100 49,135 86,235 35,202 20,133 55,335 Provision (benefit) for income taxes 4,166 (16,479 ) (12,313 ) 8,216 2,104 10,320 Net income $ 32,934 $ 65,614 $ 98,548 $ 26,986 $ 18,029 $ 45,015 Earnings per share: Basic $ 0.43 $ 1.27 $ 0.35 $ 0.59 Diluted $ 0.40 $ 1.19 $ 0.34 $ 0.56 Weighted-average number of common shares outstanding: Basic 77,431 77,431 76,343 76,343 Diluted 82,832 82,832 79,732 79,732 Adoption of ASC 606 and ASC 340-40 did not change the Company’s total cash provided by or used in operating, financing, or investing activities in the Company’s consolidated statements of cash flows for 2017 or 2016 . The Company recorded a cumulative-effect adjustment, as of January 1, 2016, to increase retained earnings by $204.1 million due to the adoption of ASC 606 and ASC 340-40 Accounting standards not yet adopted Standard Description Effective Date ASU No. 2016-02, “Leases (Topic 842)” This standard requires lessees to record most leases on their balance sheets. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either: (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company implemented a new lease management system, which included an assessment of the impact of the new guidance on the Company’s financial position and results of operation. The Company will use the effective date as the date of initial application. As part of adoption the Company does not expect to utilize the hindsight practical expedient but does expect to utilize the package of transition practical expedients available under the standard to not: 1. Reassess whether any expired or existing contracts are or contain leases. 2. Reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with Topic 840 will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with Topic 840 will be classified as finance leases). 3. Reassess initial direct costs for any existing leases. On adoption, the Company expects to recognize additional operating liabilities for the Company’s existing operating leases, principally composed of office leases, that are currently not recognized on the Company’s consolidated balance sheets with a corresponding right of use assets based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company does not expect a material impact to its results of operations from adoption. January 1, 2019 ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” This standard requires the measurement and recognition of expected credit losses for financial assets measured at amortized cost, including trade accounts receivable, upon initial recognition of that financial asset using a forward-looking expected loss model, rather than an incurred loss model for credit losses. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses when the fair value is below the amortized cost of the asset, removing the concept of “other-than-temporary” impairments. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. January 1, 2020 (1) (1) Early adoption is permitted |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | 3. MARKETABLE SECURITIES (in thousands) December 31, 2018 Amortized Unrealized Unrealized Fair Municipal bonds $ 44,802 $ 13 $ (110 ) $ 44,705 Corporate bonds 48,499 23 (226 ) 48,296 $ 93,301 $ 36 $ (336 ) $ 93,001 (in thousands) December 31, 2017 Amortized Unrealized Unrealized Fair Municipal bonds $ 32,996 $ — $ (148 ) $ 32,848 Corporate bonds 28,757 1 (137 ) 28,621 $ 61,753 $ 1 $ (285 ) $ 61,469 As of December 31, 2018 , the Company did not hold any investments with unrealized losses considered to be other than temporary. As of December 31, 2018 , remaining maturities of marketable debt securities ranged from January 2019 to August 2021, with a weighted-average remaining maturity of approximately 1.4 years . |
RECEIVABLES, CONTRACT ASSETS, A
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE | 4. RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE Receivables (in thousands) December 31, 2018 December 31, 2017 Accounts receivable $ 180,872 $ 222,735 Unbilled receivables 172,656 160,084 Long-term unbilled receivables 151,237 160,708 $ 504,765 $ 543,527 Unbilled receivables are the amounts due from clients where the only condition to the right of payment is the passage of time. As of December 31, 2018 and 2017 , the allowance for doubtful accounts was not material. Unbilled receivables are expected to be billed in the future as follows: (Dollars in thousands) December 31, 2018 1 Year or less $ 172,656 54 % 1-2 Years 95,013 29 % 2-5 Years 56,224 17 % $ 323,893 100 % Contract assets and deferred revenue (in thousands) December 31, 2018 December 31, 2017 Contract assets (1) $ 3,711 $ 914 Long-term contract assets (2) 2,543 — $ 6,254 $ 914 Deferred revenue $ 185,145 $ 165,850 Long-term deferred revenue (3) 5,344 3,706 $ 190,489 $ 169,556 (1) Included in other current assets. (2) Included in other long-term assets. (3) Included in other long-term liabilities. Contract assets occur when revenue recognized exceeds the amount billed to the client and the right to payment is subject to conditions other than the passage of time, such as the completion of a related performance obligation. Deferred revenue consists of billings and payments received in advance of revenue recognition. Contract assets and deferred revenue are netted at the contract level for each reporting period. There were no material impairments of contract assets for 2018 , 2017 , or 2016 . The change in deferred revenue in 2018 was primarily due to new billings in advance of revenue recognition, partially offset by $237.5 million of revenue recognized, excluding the impact of netting contract assets and deferred revenue at the contract level, during the period that was included in deferred revenue at December 31, 2017 . Major clients No client represented 10% or more of the Company’s total accounts receivable and unbilled receivables as of December 31, 2018 or December 31, 2017 . |
DEFERRED CONTRACT COSTS
DEFERRED CONTRACT COSTS | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
DEFERRED CONTRACT COSTS | 5. DEFERRED CONTRACT COSTS December 31, (in thousands) 2018 2017 Deferred contract costs (1) (2) $ 64,367 $ 37,924 (1) Included in other long-term assets. (2) The increase in deferred contract costs is primarily due to revenue shift in favor of the Company’s cloud offerings, which results in a greater portion of contract costs being deferred than for license arrangements. Amortization of deferred contract costs was as follows: (in thousands) 2018 2017 2016 Amortization of deferred contract costs (1) $ 17,271 $ 12,106 $ 11,574 (1) Included in selling and marketing expenses. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 6. PROPERTY AND EQUIPMENT (in thousands) December 31, 2018 2017 Leasehold improvements $ 39,216 $ 38,650 Computer equipment 25,285 23,783 Furniture and fixtures 8,517 8,517 Computer software purchased 7,578 6,690 Computer software developed for internal use 16,463 12,596 Fixed assets in progress 1,173 2,167 98,232 92,403 Less: accumulated depreciation (61,597 ) (52,044 ) $ 36,635 $ 40,359 Depreciation expense was approximately $13.9 million , $12.4 million , and $11.2 million for 2018 , 2017 , and 2016 , respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table presents the changes in the carrying amount of goodwill: (in thousands) 2018 2017 Balance as of January 1, $ 72,952 $ 73,164 Purchase price adjustments to goodwill — (354 ) Translation adjustments (94 ) 142 Balance as of December 31, $ 72,858 $ 72,952 As discussed in "Note 8. Segment Information" the Company operates in one operating segment and has one reporting unit. Intangibles Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives as follows: December 31, 2018 (in thousands) Useful Lives Cost Accumulated Net Book Value (1) Client-related intangibles 4-10 years $ 63,115 $ (51,224 ) $ 11,891 Technology 2-10 years 59,742 (50,398 ) 9,344 Other 1 - 5 years 5,361 (5,361 ) — $ 128,218 $ (106,983 ) $ 21,235 (1) Included in other long-term assets. December 31, 2017 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related intangibles 4-10 years $ 63,164 $ (44,835 ) $ 18,329 Technology 3-10 years 58,942 (45,372 ) 13,570 Other 1 - 5 years 5,361 (5,361 ) — $ 127,467 $ (95,568 ) $ 31,899 (1) Included in other long-term assets. Intangibles amortization was reflected in the Company’s consolidated statements of operations as follows: (in thousands) 2018 2017 2016 Cost of revenue $ 5,027 $ 5,103 $ 5,986 Selling and marketing 6,416 7,235 7,145 General and administrative — — 277 $ 11,443 $ 12,338 $ 13,408 Future estimated amortization expense related to intangible assets: (in thousands) December 31, 2018 2019 $ 5,946 2020 2,950 2021 2,627 2022 2,537 2023 and thereafter 7,175 $ 21,235 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 8. SEGMENT INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company derives substantially all of its revenue from the sale and support of one group of similar products and services – software that provides case management, business process management, and real-time decisioning solutions to improve customer engagement and operational excellence in the enterprise applications market. To assess performance, the Company’s CODM, who is the chief executive officer, reviews financial information on a consolidated basis. Therefore, the Company determined it has one operating segment and one reporting unit. Long-lived assets related to the Company’s U.S. and international operations were: (Dollars in thousands) December 31, 2018 2017 U.S. $ 26,392 72 % $ 27,590 68 % India 3,843 10 % 6,703 17 % International, other 6,400 18 % 6,066 15 % $ 36,635 100 % $ 40,359 100 % |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | 9. ACCRUED EXPENSES (in thousands) December 31, 2018 2017 Outside professional services $ 10,367 $ 14,468 Income and other taxes 10,387 7,420 Marketing and sales program expenses 5,860 6,444 Dividends payable 2,363 2,344 Employee-related expenses 3,536 4,065 Other 12,993 10,767 $ 45,506 $ 45,508 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 10. STOCKHOLDERS’ EQUITY Preferred stock The Company has 1 million authorized shares of preferred stock. The Board of Directors has the authority to issue the shares of preferred stock in one or more series, to establish the number of shares to be included in each series, and to determine the designation, powers, preferences, and rights of the shares of each series and the qualifications, limitations, or restrictions thereof, without any further vote or action by the stockholders. The issuance of preferred stock could decrease the amount of earnings and assets available for distribution to holders of common stock, and may have the effect of delaying, deferring, or defeating a change in control of the Company. The Company had not issued any shares of preferred stock through December 31, 2018 . Common stock The Company has 200 million authorized shares of common stock, $0.01 par value per share, of which 78.5 million shares were issued and outstanding at December 31, 2018 . Dividends declared (per share) 2018 2017 2016 Dividends Declared $ 0.12 $ 0.12 $ 0.12 Dividend payments (in thousands) 2018 2017 2016 Dividend payments to shareholders $ 9,432 $ 9,277 $ 9,174 It is the Company’s current intention to pay a quarterly cash dividend of $0.03 per share, however, the Board of Directors may terminate or modify this dividend program at any time without prior notice. Stock repurchases (in thousands) 2018 2017 2016 Shares Amount Shares Amount Shares Amount Authorization remaining, beginning of period $ 34,892 $ 39,385 $ 40,534 Authorizations $ 27,003 $ — $ 25,879 Repurchases paid 980 $ (54,276 ) 96 $ (4,335 ) 1,078 $ (27,028 ) Repurchases unsettled 21 $ (999 ) 3 $ (158 ) — $ — Authorization remaining, end of period $ 6,620 $ 34,892 $ 39,385 On June 21, 2018, the Company announced that its Board of Directors extended the expiration date of the current stock repurchase program to June 30, 2019 and increased the amount of common stock the Company is authorized to repurchase to $50 million between June 15, 2018 and June 30, 2019 (the “Current Program”). Under the Current Program, purchases may be made from time to time on the open market or in privately negotiated transactions. Shares may be repurchased in such amounts as market conditions warrant, subject to regulatory and other considerations. The Company has established a pre-arranged stock repurchase plan, intended to comply with the requirements of Rule 10b5-1 under the Exchange Act, and Rule 10b-18 under the Exchange Act (the “10b5-1 Plan”). All stock repurchases under the Current Program during closed trading window periods will be made pursuant to the 10b5-1 Plan. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS Assets and liabilities measured at fair value on a recurring basis The Company records its cash equivalents, marketable securities, and investments in privately-held companies at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: • Level 1 - observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2 - significant other inputs that are observable either directly or indirectly; and • Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company’s cash equivalents are composed of money market funds and time deposits, which are classified within Level 1 and Level 2, respectively, in the fair value hierarchy. The Company’s marketable securities, which are classified within Level 2 of the fair value hierarchy, are valued based on a market approach using quoted prices, when available, or matrix pricing compiled by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. The Company’s investments in privately-held companies are classified within Level 3 of the fair value hierarchy and are valued using model-based techniques, including option pricing models and discounted cash flow models. If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. There were no transfers between levels during 2018 , 2017 , or 2016 . The Company’s assets and liabilities measured at fair value on a recurring basis were: December 31, 2018 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 10,155 $ 10,000 $ — $ 20,155 Marketable securities: Municipal bonds $ — $ 44,705 $ — $ 44,705 Corporate bonds — 48,296 — 48,296 Total marketable securities $ — $ 93,001 $ — $ 93,001 Investments in privately-held companies (1) $ — $ — $ 3,390 $ 3,390 (1) Included in other long-term assets. December 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 2,720 $ 40,051 $ — $ 42,771 Marketable securities: Municipal bonds $ — $ 32,848 $ — $ 32,848 Corporate bonds — 28,621 — 28,621 Total marketable securities $ — $ 61,469 $ — $ 61,469 Investments in privately-held companies (1) $ — $ — $ 1,030 $ 1,030 (1) Included in other long-term assets. For certain other financial instruments, including accounts receivable, unbilled receivables, and accounts payable, the carrying value approximates fair value due to the relatively short maturity of these items. Assets measured at fair value on a nonrecurring basis Assets recorded at fair value on a nonrecurring basis, including property and equipment and intangible assets, are recognized at fair value when they are impaired. The Company did not recognize any impairments on its assets measured at fair value on a nonrecurring basis during 2018 , 2017 , or 2016 . Credit risk In addition to receivables, the Company is potentially subject to concentrations of credit risk from the Company’s cash, cash equivalents, and marketable securities. The Company’s cash and cash equivalents are generally held with large, diverse financial institutions worldwide to reduce the credit risk exposure. Investment policies have been implemented that limit purchases of marketable debt securities to investment-grade securities. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
REVENUE | 12. REVENUE Revenue streams (in thousands) 2018 2017 2016 Perpetual license $ 109,863 $ 132,883 $ 145,053 Term license 178,256 206,411 152,231 Revenue recognized at a point in time 288,119 339,294 297,284 Maintenance 263,875 242,320 218,635 Cloud 82,627 51,097 40,647 Consulting 256,960 255,756 205,663 Revenue recognized over time 603,462 549,173 464,945 Total revenue $ 891,581 $ 888,467 $ 762,229 (in thousands) 2018 2017 2016 Term license $ 178,256 $ 206,411 $ 152,231 Cloud 82,627 51,097 40,647 Maintenance 263,875 242,320 218,635 Subscription (1) 524,758 499,828 411,513 Perpetual license 109,863 132,883 145,053 Consulting 256,960 255,756 205,663 Total revenue $ 891,581 $ 888,467 $ 762,229 (1) Subscription revenue reflects client arrangements (term license, cloud, and maintenance) which are subject to renewal. There were no material changes in the Company’s estimate of variable fees during 2018 , 2017 , or 2016 . During 2018 , 2017 , and 2016 , revenue recognized related to performance obligations delivered in previous periods was not material. Geographic revenue (Dollars in thousands) 2018 2017 2016 U.S. $ 469,987 52 % $ 505,415 56 % $ 447,673 59 % Other Americas 53,239 6 % 41,467 5 % 41,607 5 % U.K. 95,628 11 % 97,000 11 % 98,624 13 % Other EMEA (1) 147,248 17 % 138,752 16 % 97,113 13 % Asia-Pacific 125,479 14 % 105,833 12 % 77,212 10 % Total revenue $ 891,581 100 % $ 888,467 100 % $ 762,229 100 % (1) Includes Europe (excluding the U.K.), the Middle East, and Africa. Remaining performance obligations Revenue for the remaining performance obligations on existing contracts is expected to be recognized as follows : December 31, 2018 (Dollars in thousands) Perpetual license Term license Maintenance Cloud Consulting Total 1 year or less $ 14,665 $ 72,378 $ 192,274 $ 103,354 $ 17,235 $ 399,906 63 % 1-2 years 2,343 10,355 10,436 80,214 2,810 106,158 17 % 2-3 years 1,661 1,414 3,644 61,906 940 69,565 11 % Greater than 3 years — 233 1,560 53,343 208 55,344 9 % $ 18,669 $ 84,380 $ 207,914 $ 298,817 $ 21,193 $ 630,973 100 % Major clients Clients accounting for 10% or more of the Company’s total revenue were: (Dollars in thousands) 2018 2017 2016 Total revenue $ 891,581 $ 888,467 $ 762,229 Client A * 10 % * *Client accounted for less than 10% of total revenue. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 13. STOCK-BASED COMPENSATION The following table presents the stock-based compensation expense included in the Company’s consolidated statements of operations: (in thousands) 2018 2017 2016 Cost of revenues $ 16,862 $ 14,573 $ 11,459 Selling and marketing 23,237 15,720 12,464 Research and development 15,274 13,618 10,043 General and administrative 8,489 9,402 6,513 Acquisition-related — — 342 $ 63,862 $ 53,313 $ 40,821 Income tax benefit $ (13,383 ) $ (12,113 ) $ (12,198 ) The Company periodically grants stock options and restricted stock units (“RSUs”) for a fixed number of shares upon vesting to employees and non-employee Directors. Most of the Company’s stock-based compensation arrangements generally vest over five years with 20% vesting after one year and the remaining 80% vesting in equal quarterly installments over the remaining four years. The Company’s stock options have a ten -year term. The Company recognizes stock-based compensation using the accelerated attribution method, treating each vesting tranche as if it were an individual grant. The amount of stock-based compensation recognized during a period is based on the value of the awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the Company recognizes the actual expense over the vesting period only for the shares that vest. Employees may elect to receive 50% of their target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash. If elected by an employee, the equity amount is equal in value on the date of grant to 50% of his or her target incentive opportunity, based on the employee’s base salary. The number of RSUs granted is determined by dividing 50% of the employee’s target incentive opportunity by 85% of the closing price of its common stock on the grant date, less the present value of expected dividends during the vesting period. If elected, the award vests 100% on the CICP payout date of the following year for all participants. Vesting is conditioned upon the performance conditions of the CICP and on continued employment; if threshold funding does not occur, the RSUs will not vest. The Company considers vesting to be probable on the grant date and recognizes the associated stock-based compensation expense over the requisite service period beginning, on the grant date and ending on the vesting date. The Company grants awards that allow for the settlement of vested stock options and RSUs on a net share basis (“net settled awards”). With net settled awards, the employee does not surrender any cash or shares upon exercise. Rather, the Company withholds the number of shares to cover the exercise price (in the case of stock options) and the minimum statutory tax withholding obligations (in the case of stock options and RSUs) from the shares that would otherwise be issued upon exercise or settlement. The exercise of stock options and settlement of RSUs on a net share basis results in fewer shares issued by the Company. Share-based compensation plans: 2004 Long-Term Incentive Plan (as amended and restated) In 2004, the Company adopted the 2004 Long-Term Incentive Plan (as amended and restated, the “2004 Plan”) to provide employees, non-employee Directors, and consultants with opportunities to purchase stock through incentive stock options and non-qualified stock options. Subsequent amendments to the plan increased the number of shares authorized for issuance under the plan to 30 million , extended the term of the plan to 2026, and limited annual compensation to any non-employee Director to $0.5 million . As of December 31, 2018 , approximately 9.6 million shares were subject to outstanding options and stock-based awards under the 2004 Plan. 2006 Employee Stock Purchase Plan In 2006, the Company adopted the 2006 Employee Stock Purchase Plan (the “2006 ESPP”) pursuant to which the Company’s employees are entitled to purchase up to an aggregate of 1 million shares of common stock, at a price equal to at least 85% of the fair market value of the Company’s common stock on either the commencement date or completion date for offerings under the plan, whichever is less, or such higher price as the Company’s Board of Directors may establish from time to time. Until the Company’s Board of Directors determines otherwise, the Board has set the purchase price at 95% of the fair market value on the completion date of the offering period. As a result, the 2006 ESPP is non-compensatory and is tax qualified. Therefore, as of December 31, 2018 , no compensation expense related to shares issued under the plan had been recognized. In October 2012, the Company’s Board of Directors amended the term of the 2006 ESPP such that it will continue until there are no shares remaining to be issued under the plan or until the plan is terminated by the Board of Directors, whichever occurs first. As of December 31, 2018 , approximately 0.4 million shares had been issued thereunder. Shares available for issuance As of December 31, 2018 , there were approximately 8.3 million shares available for issuance for future equity grants under the Company’s stock plans, consisting of approximately 7.7 million shares under the 2004 Plan and approximately 0.6 million shares under the 2006 ESPP. Grant activity During 2018 , the Company issued approximately 1.4 million shares to its employees and directors under the Company’s share-based compensation plans. Stock options The Company estimates the fair value of stock options using a Black-Scholes option valuation model. Key inputs used to estimate the fair value of stock options include the exercise price of the award, expected term of the option, expected volatility of the Company’s common stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield. The exercise price for stock options is greater than or equal to the fair market value of the shares at the grant date. The weighted-average grant-date fair value for stock options granted in 2018 , 2017 , and 2016 , was $18.03 , $13.79 , and $8.31 per share, respectively. The weighted-average assumptions used in the Black-Scholes option valuation model are: 2018 2017 2016 Expected annual volatility (1) 34 % 35 % 40 % Expected term in years (2) 4.5 4.5 4.4 Risk-free interest rate (3) 2.6 % 1.9 % 1.2 % Expected annual dividend yield (4) 0.4 % 0.5 % 0.6 % (1) The expected annual volatility for each grant is determined based on the average of historical daily price changes of the Company’s common stock over a period which approximates the expected option term. (2) The expected option term for each grant is determined based on the historical exercise behavior of employees and post-vesting employment termination behavior. (3) The risk-free interest rate is based on the yield of U.S. Treasury securities with a maturity that is commensurate with the expected option term at the time of grant. (4) The expected annual dividend yield is based on the weighted-average of the dividend yield assumptions used for options granted during the applicable period. The following table summarizes the combined stock option activity under the Company’s stock option plans for 2018 : Shares (in thousands) Weighted-average Exercise Price Weighted-average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Options outstanding as of January 1, 2018 7,130 $ 26.10 Granted 1,705 58.42 Exercised (1,422 ) 20.88 Forfeited (442 ) 35.50 Options outstanding as of December 31, 2018 6,971 $ 34.47 Vested and expected to vest as December 31, 2018 5,841 $ 33.23 7.0 $ 99,999 Exercisable as of December 31, 2018 2,893 $ 22.16 5.7 $ 74,650 The aggregate intrinsic value of stock options exercised (i.e., the difference between the market price at exercise and the price paid by the employee at exercise) in 2018 , 2017 , and 2016 was $56.8 million , $62.6 million , and $19.9 million , respectively. The aggregate intrinsic value of stock options outstanding and exercisable as of December 31, 2018 is based on the difference between the closing price of the Company’s stock of $47.83 and the exercise price of the applicable stock options. As of December 31, 2018 , the Company had unrecognized stock-based compensation expense related to the unvested portion of stock options of approximately $21.1 million that is expected to be recognized as expense over a weighted-average period of approximately 2.3 years. RSUs RSUs deliver to the recipient a right to receive a specified number of shares of the Company’s common stock upon vesting. The Company values its RSUs at the fair value of its common stock on the grant date, which is the closing price of its common stock on the grant date, less the present value of expected dividends during the vesting period, as the recipient is not entitled to dividends during the requisite service period. The weighted-average grant-date fair value for RSUs granted in 2018 , 2017 , and 2016 was $58.52 , $46.07 , and $25.54 , respectively. The following table summarizes the combined RSU activity for all grants, including the CICP, under the 2004 Plan for 2018 : Shares Weighted- Aggregate Nonvested as of January 1, 2018 2,901 $ 31.97 Granted 1,212 58.52 Vested (1,144 ) 31.88 Forfeited (318 ) 36.74 Nonvested as of December 31, 2018 2,651 $ 43.69 $ 126,781 Expected to vest as of December 31, 2018 1,938 $ 44.83 $ 92,661 The fair value of RSUs vested in 2018 , 2017 , and 2016 was $66.5 million , $59.0 million , and $29.2 million , respectively. The aggregate intrinsic value of RSUs outstanding and expected to vest as of December 31, 2018 is based on the closing price of the Company’s stock of $47.83 on December 31, 2018 . As of December 31, 2018 , the Company had approximately $42.3 million of unrecognized stock-based compensation expense related to all unvested RSUs that is expected to be recognized as expense over a weighted-average period of approximately 2.1 years . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | 14. EMPLOYEE BENEFIT PLANS The Company sponsors defined contribution plans for qualifying employees, including a 401(k) plan in the United States to which the Company makes discretionary matching contributions. The following expenses related to defined contribution plans were recorded in the Company’s consolidated statements of operations: (in thousands) 2018 2017 2016 U.S. 401(k) Plan $ 5,506 $ 5,003 $ 4,510 International Plans 11,101 9,096 7,635 $ 16,607 $ 14,099 $ 12,145 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 15. INCOME TAXES The components of (loss) income before (benefit) provision from income taxes are: (in thousands) 2018 2017 2016 Domestic $ (27,494 ) $ 57,493 $ 39,559 Foreign 15,951 28,742 15,776 (Loss) income before (benefit) provision from income taxes $ (11,543 ) $ 86,235 $ 55,335 The components of the provision for income taxes are: (in thousands) 2018 2017 2016 Current: Federal $ (1,862 ) $ (18,109 ) $ 7,389 State 287 97 3,081 Foreign 10,313 8,479 4,248 Total current provision (benefit) 8,738 (9,533 ) 14,718 Deferred: Federal (18,939 ) (2,049 ) (1,125 ) State (3,702 ) (214 ) (466 ) Foreign (8,257 ) (517 ) (2,807 ) Total deferred benefit (30,898 ) (2,780 ) (4,398 ) (Benefit) provision from income taxes $ (22,160 ) $ (12,313 ) $ 10,320 The effective income tax rate differed from the statutory federal income tax rate due to the following (1) : 2018 2017 2016 Statutory federal income tax rate 21.0 % 35.0 % 35.0 % Valuation allowance (4.4 )% 0.5 % 0.2 % Transaction costs — % — % 0.7 % State income taxes, net of federal benefit and tax credits 28.9 % (0.5 )% 2.5 % Permanent differences (11.2 )% 1.1 % 1.4 % GILTI, FDII, and BEAT (3.5 )% — % — % Federal research and experimentation credits 60.6 % (3.9 )% (1.5 )% Tax effects of foreign activities 3.5 % (0.9 )% (5.6 )% Tax-exempt income 1.2 % (0.1 )% (0.2 )% Provision to return adjustments (2.2 )% (2.1 )% — % Non-deductible compensation (8.9 )% 2.1 % 4.0 % Expiration of statutes and changes in estimates 4.5 % 0.3 % (1.2 )% Excess tax benefits related to share-based compensation 117.3 % (28.4 )% (12.8 )% Domestic Production Activities — % — % (2.0 )% Deferred tax asset adjustment (14.2 )% (17.9 )% (0.3 )% Other (0.6 )% 0.5 % (1.5 )% Effective income tax rate 192.0 % (14.3 )% 18.7 % (1) In periods of loss before incomes taxes, income tax benefits are reflected as a positive in this table. Tax Reform Act On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Reform Act”). The Tax Reform Act makes significant changes in the U.S. tax code including the following: • reduction of the corporate federal income tax rate from 35% to 21%; • repeal of the domestic manufacturing deduction; • repeal of the corporate alternative minimum tax; • a one-time transition tax on accumulated foreign earnings (if any); • a move to a territorial tax system; and • acceleration of business asset expensing. The Tax Reform Act provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits through December 31, 2017. The Company has concluded that it is not be subject to the one-time transition tax due to our foreign subsidiaries being in a net accumulated deficit position. The Company completed its accounting for the tax effects of enactment of the Tax Reform Act recording a final net benefit amount of $14.2 million pertaining to the enactment of the Tax Reform Act and the impact of the reduction of the tax rates on our deferred tax attributes; all of which was recorded in 2017 as a component of tax expense. Beginning in 2018, the Company was subject to immaterial incremental U.S. tax resulting from global intangible low taxed income (“GILTI”) inclusions. Companies must make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI in the year the tax is incurred as a period cost. Deferred income taxes Significant components of net deferred tax assets and liabilities are: December 31, (in thousands) 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 40,736 $ 52,311 Accruals and reserves 17,576 14,668 Software revenue — — Depreciation 2,874 2,558 Tax credit carryforwards 14,896 13,056 Other 176 52 Total deferred tax assets 76,258 82,645 Valuation allowances (27,954 ) (27,994 ) Total net deferred tax assets 48,304 54,651 Deferred tax liabilities: Software revenue (36,510 ) (70,347 ) Intangibles (5,748 ) (8,527 ) Total deferred tax liabilities (42,258 ) (78,874 ) Deferred income taxes $ 6,046 $ (24,223 ) The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. This determination requires significant judgment, including assumptions about future taxable income that are based on historical and projected information. In 2018, there was no material change in the valuation allowance. At December 31, 2018 the Company’s net operating losses and credit carryforwards are: (in thousands) Federal State Net operating losses (1) $ 81,206 $ 2,210 Net operating losses due to acquisitions $ 81,206 $ 665 Credit carryforwards (2) $ 7,480 $ 1,937 Credit carryforwards due to acquisitions $ 640 $ 324 (1) Excludes federal and state net operating losses of $60.2 million and $0.8 million , respectively, and federal and state tax credits of $0.1 million and $7.4 million , respectively, that the Company expects will expire unutilized, (2) Carryforward losses and credits expire between 2019 and 2037 except for $0.9 million of state credits that have an unlimited carryforward period. At December 31, 2018 , the Company had foreign net operating losses of $46.1 million , all of which the Company expects will expire unutilized. The Company’s India subsidiary is a development center in an area designated as a Special Economic Zone (“SEZ”) and is entitled to a tax holiday in India. The tax holiday reduces or eliminates income tax in India. The tax holiday in the Hyderabad SEZ expired in March of 2018 and the tax holiday in the Bangalore SEZ is scheduled to expire in 2022. For 2017 and 2016 , the effect of the income tax holiday was to reduce the Company’s provision for income taxes by approximately $1.3 million , and $1 million , respectively. Uncertain tax benefits and other considerations A rollforward of the Company’s gross unrecognized tax benefits is: (in thousands) 2018 2017 2016 Balance as of January 1, $ 19,150 $ 22,671 $ 23,972 Additions based on tax positions related to the current year 978 452 80 Additions for tax positions of prior years 174 238 110 Additions for acquired uncertain tax benefits — — 387 Reductions for change in U.S. federal tax rate — (2,424 ) — Reductions for tax positions of prior years (2,145 ) (1,500 ) (1,541 ) Reductions for a lapse of the applicable statute of limitations — (287 ) (337 ) Balance as of December 31, $ 18,157 $ 19,150 $ 22,671 As of December 31, 2018 , the Company had approximately $18.2 million of total unrecognized tax benefits, which would decrease the Company’s effective tax rate if recognized. The $2.1 million reduction for tax positions of prior years primarily relate to the settlement of a foreign uncertain tax position. The Company expects that the changes in the unrecognized benefits within the next twelve months will be approximately $0.5 million due to a lapse of applicable statute of limitations. The Company files income tax returns in the U.S. and in foreign jurisdictions. The Company has no tax returns under examination by the Internal Revenue Service or state taxing authorities as of December 31, 2018 . However, certain foreign jurisdictions are auditing the Company’s income tax returns for periods ranging from 2010 through 2014. The Company does not expect the results of these audits to have a material effect on the Company’s financial condition, results of operations, or cash flows. With few exceptions, the statute of limitations remains open in all jurisdictions for the tax years 2014 to the present. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 16. EARNINGS PER SHARE Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period, plus the dilutive effect of outstanding stock options and RSUs, using the treasury stock method. In periods of loss, all stock options and RSUs are excluded from the weighted-average number of common shares, as their inclusion would be anti-dilutive. (in thousands, except per share amounts) 2018 2017 2016 Basic Net income $ 10,617 $ 98,548 $ 45,015 Weighted-average common shares outstanding 78,564 77,431 76,343 Earnings per share, basic $ 0.14 $ 1.27 $ 0.59 Diluted Net income $ 10,617 $ 98,548 $ 45,015 Weighted-average effect of dilutive securities: Stock options 2,891 3,471 2,025 RSUs 1,609 1,930 1,364 Effect of dilutive securities 4,500 5,401 3,389 Weighted-average common shares outstanding, assuming dilution 83,064 82,832 79,732 Earnings per share, diluted $ 0.13 $ 1.19 $ 0.56 Outstanding anti-dilutive stock options and RSUs (1) 188 221 322 (1) Certain outstanding stock options and RSUs were excluded from the computation of diluted earnings per share because they were anti-dilutive in the period presented. These awards may be dilutive in the future. |
SELECTED QUARTERLY INFORMATION
SELECTED QUARTERLY INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY INFORMATION (UNAUDITED) | 17. SELECTED QUARTERLY INFORMATION (UNAUDITED) (in thousands, except per share amounts) 2018 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenue $ 235,182 $ 196,779 $ 203,263 $ 256,357 Gross profit $ 159,568 $ 122,962 $ 128,840 $ 178,446 Income (loss) from operations $ 7,936 $ (23,163 ) $ (17,258 ) $ 15,453 Net income (loss) $ 12,200 $ (10,409 ) $ (7,587 ) $ 16,413 Earnings (loss) per share: Basic $ 0.16 $ (0.13 ) $ (0.10 ) $ 0.21 Diluted $ 0.15 $ (0.13 ) $ (0.10 ) $ 0.20 (in thousands, except per share amounts) 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenue $ 256,309 $ 186,596 $ 190,957 $ 254,605 Gross profit $ 188,219 $ 118,721 $ 121,226 $ 180,628 Income (loss) from operations $ 65,907 $ (8,947 ) $ (2,301 ) $ 38,518 Net income $ 52,963 $ 3,702 $ 1,288 $ 40,595 Earnings per share: Basic $ 0.69 $ 0.05 $ 0.01 $ 0.52 Diluted $ 0.65 $ 0.04 $ 0.01 $ 0.49 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 18. ACQUISITIONS On April 11, 2016, the Company acquired OpenSpan, Inc., a privately held software provider of robotic process automation and workforce analytics software for $48.8 million in cash, net of $1.8 million in cash acquired. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 19. COMMITMENTS AND CONTINGENCIES Commitments The Company leases space for its offices under noncancellable operating leases that expire at various dates through 2023. As of December 31, 2018 , the Company’s future minimum rental payments required under operating leases with noncancellable terms in excess of one year were: (in thousands) Operating Leases (1) 2019 $ 15,993 2020 14,807 2021 13,262 2022 12,279 2023 and thereafter 11,084 $ 67,425 (1) Operating leases include future minimum rent payments, net of estimated sublease income for facilities that the Company has vacated pursuant to its restructuring activities. Rent expense under operating leases is recognized on a straight-line basis to account for scheduled rent increases and landlord tenant allowances. In connection with the Company’s amended lease for its corporate headquarters dated November 11, 2014, the Company has a landlord tenant allowance totaling approximately $9.4 million , all of which was used and reimbursed to the Company as of December 31, 2016 and will be amortized as a reduction to rent expense on a straight-line basis over the term of the lease. Total rent expense under operating leases was approximately $14.9 million , $14.7 million , and $13.4 million for 2018 , 2017 and 2016 , respectively. Contingencies The Company is a party in various contractual disputes, litigation and potential claims arising in the ordinary course of business. The Company does not believe that the resolution of these matters will have a material adverse effect on its financial position or results of operations. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Management estimates and reporting | Management estimates and reporting The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Accounts with reported amounts based on significant estimates and judgments include, but are not limited to, revenue, unbilled receivables, deferred revenue, deferred income taxes, deferred contract costs, income taxes payable, intangible assets, and goodwill. |
Principles of consolidation | Principles of consolidation The Company’s consolidated financial statements reflect Pegasystems Inc. and subsidiaries in which the Company holds a controlling financial interest. |
Revenue and deferred contract costs | Revenue The Company’s revenue is primarily derived from: • software license revenue from sales of the Company’s Pega Platform and software applications. Software licenses represent functional intellectual property and are delivered separately from maintenance and services. • maintenance revenue from client support including software upgrades (on a when and-if available basis), telephone support, and bug fixes or patches. • services revenue from cloud revenue, which is sales of the Company’s hosted Pega Platform and software applications, and consulting revenue, which is primarily related to new software license implementations, training, and reimbursable costs. Performance Obligations The Company’s software license and cloud arrangements often contain multiple performance obligations. For contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. Transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. If the transaction price contains discounts or the Company expects to provide a future price concession, these elements are considered when determining the transaction price prior to allocation. The Company’s policy is to exclude from the determination of transaction price sales and similar taxes collected from clients. The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of maintenance Consulting - time and materials Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting - fixed price Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. The Company utilizes the residual approach for performance obligations since the selling price is highly variable and stand-alone selling price is not discernible from past transactions or other observable evidence. Periodically, the Company reevaluates whether the residual approach remains appropriate. As required the Company evaluates its residual approach estimate compared to all available observable data in order to conclude the estimate is representative of its standalone selling price. If the contract grants the client the option to acquire additional products or services, the Company assesses whether the option represents a material right to the client that the client would not receive without entering into that contract. Discounts on options to purchase additional products and services that are in excess of discounts available to similar clients are accounted for as an additional performance obligation. Variable consideration The Company’s arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. In addition, the Company may provide pricing concessions to clients, a business practice that also gives rise to variable fees in contracts. The Company includes in the determination of total transaction price an estimate of variable fees if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company uses the expected value method to estimate variable consideration and the estimates are based on expected purchase volumes and the level of historical price concessions offered to clients. Significant financing components The Company generally does not intend to provide financing to its clients, as financing arrangements are not contemplated as part of the negotiated terms of contracts between the Company and its clients. Although there may be instances with an intervening period between the delivery of the license and the payment, typically in term license arrangements, the purpose of that timing difference is to align the client’s payment with the timing of the use of the software license or service. In certain circumstances, however, there are instances where the timing of revenue recognition differs from the timing of payment due to extended payment terms or fees that are non-proportional to the associated usage of software licenses. In these instances, the Company evaluates whether a significant financing component exists. This evaluation includes determining the difference between the consideration the client would have paid at the time the performance obligation was satisfied and the amount of consideration actually paid. Contracts that include a significant financing component are adjusted for the time value of money at the rate inherent in the contract, the client’s borrowing rate, or the Company’s incremental borrowing rate depending upon the recipient of the financing. During 2018, 2017 and 2016, significant financing components were not material. Contract modifications The Company assesses contract modifications to determine: • if the additional products and services are distinct from the products and services in the original arrangement; and • if the amount of consideration expected for the added products and services reflects the stand-alone selling price of those products and services. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract and is accounted for on either: • a prospective basis as a termination of the existing contract and the creation of a new contract; or • a cumulative catch-up basis. Deferred contract costs The Company recognizes an asset for the incremental costs of obtaining a client contract, primarily related to sales commissions, if the Company expects to benefit from those costs for more than one year . Deferred contract costs are allocated to each performance obligation within the contract and amortized over the expected benefit period of the related performance obligations. The expected benefit period is determined based on the length of the client contracts, client attrition rates, the underlying technology life-cycle, and the influence of the competitive marketplace in which the products and services are sold. Deferred costs for maintenance renewals and cloud arrangements are amortized over an average expected benefit period of five years . Deferred costs for software licenses and consulting are amortized over a period that is consistent with the pattern of transfer of control for the related products and services. Revenue Standard Adopted On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and has adjusted prior periods to conform to the new standard. The most significant adoption impacts were: • Perpetual licenses with extended payment terms and term licenses - Revenue from perpetual licenses with extended payment terms and term licenses is now recognized when control is transferred to the client, which is defined as the point in time when the client can use and benefit from the license. Previously, the Company recognized revenue over the term of the agreements as payments became due or earlier if prepaid. Any unrecognized license revenue from these arrangements is recognized in the period that control transfers or as a cumulative adjustment to retained earnings as of January 1, 2016. Unbilled receivables in the Company’s consolidated balance sheets increased significantly upon adoption due to the revenue from term licenses being recognized prior to amounts being due, or prepaid, by clients and perpetual licenses with extended payment terms. • Allocation of future credits and significant discounts - Perpetual and term licenses are a separate performance obligation and the Company is now required to allocate any future credits and discounts to performance obligations in the arrangement based upon their relative stand-alone selling prices, determined using the residual approach. • Deferred contract costs - Sales incentive programs and other incremental costs to obtain a contract were previously expensed when incurred. ASC 340-40 requires these costs be recognized as an asset when incurred and expensed over the period of expected benefit, which is on average five years . This change primarily impacts the Company’s contracts related to multi-year cloud offerings, maintenance on term and perpetual licenses, and multi-year term and perpetual licenses with client usage rights that increase over time. For additional information on the Company’s accounting policies because of the adoption of ASC 606 and ASC 340-40 see "Note 2. Significant Accounting Policies" . |
Financial instruments | Financial instruments The principal financial instruments held by the Company consist of cash equivalents, marketable securities, receivables, and accounts payable. The Company considers debt securities that are readily convertible to known amounts of cash with maturities of three months or less from the purchase date to be cash equivalents. Interest is recorded when earned. All of the Company’s investments are classified as available-for-sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated based upon the specific investment. See "Note 4. Receivables, Contract Assets, And Deferred Revenue" and "Note 11. Fair Value Measurements" for additional information. |
Property and equipment | Property and equipment Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are three years for computer equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the term of the lease or the useful life of the asset. Repairs and maintenance costs are expensed as incurred. |
Internal-use software | Internal-use software The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. The Company amortizes capitalized software costs generally over three to five years, commencing on the date the software is placed into service. |
Goodwill | Goodwill Goodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded. Goodwill is not amortized. The Company has a single reporting unit. The Company performed a qualitative assessment as of November 30, 2018 , 2017 , and 2016 , and concluded that there was no impairment since it was not more likely than not that the fair value of its reporting unit was less than its carrying value. |
Intangible and long-lived assets | Intangible and long-lived assets All of the Company’s intangible assets are amortized using the straight-line method over their estimated useful life. The Company evaluates its long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Impairment is assessed by comparing the undiscounted cash flows expected to be generated by the intangible asset to its carrying value. If impairment exists, the Company calculates the impairment by comparing the carrying value of the intangible asset to its fair value as determined by discounted expected cash flows. |
Business combinations | Business combinations The Company uses its best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. |
Research and development and software development costs | Research and development and software development costs Research and development costs are expensed as incurred. Capitalization of computer software developed for resale begins upon the establishment of technological feasibility, generally demonstrated by a working model or an operative version of the computer software product. Such costs have not been material to date, as technological feasibility is established within a short time frame from the software’s general availability and, as a result, no costs were capitalized in 2018 , 2017 , or 2016 . |
Stock-based compensation | Stock-based compensation The Company recognizes stock-based compensation expense associated with equity awards based on the fair value of these awards at the grant date. Stock-based compensation is recognized over the requisite service period, which is generally the vesting period of the equity award and is adjusted each period for anticipated forfeitures. See "Note 13. Stock-Based Compensation" for discussion of the Company’s key assumptions included in determining the fair value of its equity awards at the grant date. |
Foreign currency translation and remeasurement | Foreign currency translation and remeasurement The translation of assets and liabilities for the Company’s subsidiaries with functional currencies other than the U.S. dollar are made at period-end exchange rates. Revenue and expense accounts are translated at the average exchange rates during the period transactions occurred. The resulting translation adjustments are reflected in accumulated other comprehensive income. Realized and unrealized exchange gains or losses from transactions and remeasurement adjustments are reflected in foreign currency transaction gain (loss) in the accompanying consolidated statements of operations. |
Accounting for income taxes | Accounting for income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. Future realization of the Company’s deferred tax assets ultimately depends on the existence of sufficient taxable income within the available carryback or carryforward periods. Sources of taxable income include taxable income in prior carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income. The Company records a valuation allowance to reduce its deferred tax assets to an amount it believes is more-likely-than-not to be realized. Changes in the valuation allowance impacts income tax expense in the period of adjustment. The Company’s deferred tax valuation allowance requires significant judgment and uncertainties, including assumptions about future taxable income that are based on historical and projected information. The Company recognizes excess tax benefits when they are realized, as a reduction of the provision for income taxes. The Company assesses its income tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies liabilities for uncertain tax positions as non-current liabilities unless the uncertainty is expected to be resolved within one year. The Company classifies interest and penalties on uncertain tax positions as income tax expense. As a global company, the Company uses significant judgment to calculate and provide for income taxes in each of the tax jurisdictions in which it operates. In the ordinary course of the Company’s business, there are transactions and calculations undertaken whose ultimate tax outcome cannot be certain. Some of these uncertainties arise as a consequence of transfer pricing for transactions with the Company’s subsidiaries and nexus and tax credit estimates. In addition, the calculation of acquired tax attributes and the associated limitations are complex. See "Note 15. Income Taxes" for additional information. |
Advertising expense | Advertising expense Advertising costs are expensed as incurred. |
Accounting standards not yet adopted | Accounting standards not yet adopted Standard Description Effective Date ASU No. 2016-02, “Leases (Topic 842)” This standard requires lessees to record most leases on their balance sheets. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either: (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company implemented a new lease management system, which included an assessment of the impact of the new guidance on the Company’s financial position and results of operation. The Company will use the effective date as the date of initial application. As part of adoption the Company does not expect to utilize the hindsight practical expedient but does expect to utilize the package of transition practical expedients available under the standard to not: 1. Reassess whether any expired or existing contracts are or contain leases. 2. Reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with Topic 840 will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with Topic 840 will be classified as finance leases). 3. Reassess initial direct costs for any existing leases. On adoption, the Company expects to recognize additional operating liabilities for the Company’s existing operating leases, principally composed of office leases, that are currently not recognized on the Company’s consolidated balance sheets with a corresponding right of use assets based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company does not expect a material impact to its results of operations from adoption. January 1, 2019 ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” This standard requires the measurement and recognition of expected credit losses for financial assets measured at amortized cost, including trade accounts receivable, upon initial recognition of that financial asset using a forward-looking expected loss model, rather than an incurred loss model for credit losses. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses when the fair value is below the amortized cost of the asset, removing the concept of “other-than-temporary” impairments. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. January 1, 2020 (1) (1) Early adoption is permitted |
Assets and liabilities measured at fair value on a recurring basis | The Company records its cash equivalents, marketable securities, and investments in privately-held companies at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: • Level 1 - observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2 - significant other inputs that are observable either directly or indirectly; and • Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company’s cash equivalents are composed of money market funds and time deposits, which are classified within Level 1 and Level 2, respectively, in the fair value hierarchy. The Company’s marketable securities, which are classified within Level 2 of the fair value hierarchy, are valued based on a market approach using quoted prices, when available, or matrix pricing compiled by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. The Company’s investments in privately-held companies are classified within Level 3 of the fair value hierarchy and are valued using model-based techniques, including option pricing models and discounted cash flow models. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Performance Obligations | The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of maintenance Consulting - time and materials Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting - fixed price Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. Revenue for the remaining performance obligations on existing contracts is expected to be recognized as follows : December 31, 2018 (Dollars in thousands) Perpetual license Term license Maintenance Cloud Consulting Total 1 year or less $ 14,665 $ 72,378 $ 192,274 $ 103,354 $ 17,235 $ 399,906 63 % 1-2 years 2,343 10,355 10,436 80,214 2,810 106,158 17 % 2-3 years 1,661 1,414 3,644 61,906 940 69,565 11 % Greater than 3 years — 233 1,560 53,343 208 55,344 9 % $ 18,669 $ 84,380 $ 207,914 $ 298,817 $ 21,193 $ 630,973 100 % |
Schedule of the Impact of New Accounting Standards and Accounting Standards Not Yet Adopted | The impact of the adoption of ASC 606 and ASC 340-40 on the Company’s consolidated balance sheet and consolidated statement of operations is: December 31, 2017 (in thousands) Previously Reported Adjustments As Adjusted Assets Accounts receivable, unbilled receivables, and contract assets $ 248,331 $ 135,402 $ 383,733 Long-term unbilled receivables — 160,708 160,708 Deferred income taxes 57,127 (42,887 ) 14,240 Deferred contract costs — 37,924 37,924 Other assets (1) 416,148 — 416,148 Total assets $ 721,606 $ 291,147 $ 1,012,753 Liabilities and stockholders’ equity Deferred revenue $ 195,073 $ (29,223 ) $ 165,850 Long-term deferred revenue 6,591 (2,885 ) 3,706 Deferred income tax liabilities — 38,463 38,463 Other liabilities (2) 148,864 — 148,864 Total liabilities 350,528 6,355 356,883 Foreign currency translation adjustments (3,494 ) (2,979 ) (6,473 ) Retained earnings 221,926 287,771 509,697 Other equity (3) 152,646 — 152,646 Total stockholders’ equity 371,078 284,792 655,870 Total liabilities and stockholders’ equity $ 721,606 $ 291,147 $ 1,012,753 (1) Includes cash, cash equivalents, marketable securities, income taxes receivable, other current assets, property and equipment, intangible assets, goodwill, and other long-term assets (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017). (2) Includes accounts payable, accrued expenses, accrued compensation, and related expenses, income taxes payable, and other long-term liabilities (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017). (3) Includes common stock, additional paid-in capital, and net unrealized loss on available-for-sale marketable securities (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017). 2017 2016 (in thousands, except per share amounts) Previously Reported Adjustments As Adjusted Previously Reported Adjustments As Adjusted Revenue: Software license $ 288,334 $ 50,960 $ 339,294 $ 279,995 $ 17,289 $ 297,284 Maintenance 244,347 (2,027 ) 242,320 220,336 (1,701 ) 218,635 Services 307,901 (1,048 ) 306,853 249,935 (3,625 ) 246,310 Total revenue 840,582 47,885 888,467 750,266 11,963 762,229 Cost of revenue: Software license 5,085 — 5,085 4,943 — 4,943 Maintenance 27,905 — 27,905 25,505 — 25,505 Services 246,683 — 246,683 208,808 — 208,808 Total cost of revenue 279,673 — 279,673 239,256 — 239,256 Gross profit 560,909 47,885 608,794 511,010 11,963 522,973 Operating expenses: Selling and marketing 307,210 (6,632 ) 300,578 278,849 (922 ) 277,927 Research and development 162,886 — 162,886 145,548 — 145,548 General and administrative 52,153 — 52,153 45,951 — 45,951 Acquisition-related — — — 2,903 — 2,903 Total operating expenses 522,249 (6,632 ) 515,617 473,251 (922 ) 472,329 Income from operations 38,660 54,517 93,177 37,759 12,885 50,644 Foreign currency transaction (loss) gain (900 ) (5,513 ) (6,413 ) 2,247 7,113 9,360 Interest income, net 731 131 862 776 135 911 Other expense, net (1,391 ) — (1,391 ) (5,580 ) — (5,580 ) Income before provision (benefit) for income taxes 37,100 49,135 86,235 35,202 20,133 55,335 Provision (benefit) for income taxes 4,166 (16,479 ) (12,313 ) 8,216 2,104 10,320 Net income $ 32,934 $ 65,614 $ 98,548 $ 26,986 $ 18,029 $ 45,015 Earnings per share: Basic $ 0.43 $ 1.27 $ 0.35 $ 0.59 Diluted $ 0.40 $ 1.19 $ 0.34 $ 0.56 Weighted-average number of common shares outstanding: Basic 77,431 77,431 76,343 76,343 Diluted 82,832 82,832 79,732 79,732 Accounting standards not yet adopted Standard Description Effective Date ASU No. 2016-02, “Leases (Topic 842)” This standard requires lessees to record most leases on their balance sheets. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either: (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company implemented a new lease management system, which included an assessment of the impact of the new guidance on the Company’s financial position and results of operation. The Company will use the effective date as the date of initial application. As part of adoption the Company does not expect to utilize the hindsight practical expedient but does expect to utilize the package of transition practical expedients available under the standard to not: 1. Reassess whether any expired or existing contracts are or contain leases. 2. Reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with Topic 840 will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with Topic 840 will be classified as finance leases). 3. Reassess initial direct costs for any existing leases. On adoption, the Company expects to recognize additional operating liabilities for the Company’s existing operating leases, principally composed of office leases, that are currently not recognized on the Company’s consolidated balance sheets with a corresponding right of use assets based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company does not expect a material impact to its results of operations from adoption. January 1, 2019 ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” This standard requires the measurement and recognition of expected credit losses for financial assets measured at amortized cost, including trade accounts receivable, upon initial recognition of that financial asset using a forward-looking expected loss model, rather than an incurred loss model for credit losses. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses when the fair value is below the amortized cost of the asset, removing the concept of “other-than-temporary” impairments. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. January 1, 2020 (1) (1) Early adoption is permitted |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Securities | (in thousands) December 31, 2018 Amortized Unrealized Unrealized Fair Municipal bonds $ 44,802 $ 13 $ (110 ) $ 44,705 Corporate bonds 48,499 23 (226 ) 48,296 $ 93,301 $ 36 $ (336 ) $ 93,001 (in thousands) December 31, 2017 Amortized Unrealized Unrealized Fair Municipal bonds $ 32,996 $ — $ (148 ) $ 32,848 Corporate bonds 28,757 1 (137 ) 28,621 $ 61,753 $ 1 $ (285 ) $ 61,469 |
RECEIVABLES, CONTRACT ASSETS,_2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Summary of Receivable | Receivables (in thousands) December 31, 2018 December 31, 2017 Accounts receivable $ 180,872 $ 222,735 Unbilled receivables 172,656 160,084 Long-term unbilled receivables 151,237 160,708 $ 504,765 $ 543,527 |
Summary of Unbilled Receivables | Unbilled receivables are expected to be billed in the future as follows: (Dollars in thousands) December 31, 2018 1 Year or less $ 172,656 54 % 1-2 Years 95,013 29 % 2-5 Years 56,224 17 % $ 323,893 100 % |
Summary of Contract Assets and Deferred Revenue | Contract assets and deferred revenue (in thousands) December 31, 2018 December 31, 2017 Contract assets (1) $ 3,711 $ 914 Long-term contract assets (2) 2,543 — $ 6,254 $ 914 Deferred revenue $ 185,145 $ 165,850 Long-term deferred revenue (3) 5,344 3,706 $ 190,489 $ 169,556 (1) Included in other current assets. (2) Included in other long-term assets. (3) Included in other long-term liabilities. |
DEFERRED CONTRACT COSTS (Tables
DEFERRED CONTRACT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Impairment of Deferred Contract Costs | December 31, (in thousands) 2018 2017 Deferred contract costs (1) (2) $ 64,367 $ 37,924 (1) Included in other long-term assets. (2) The increase in deferred contract costs is primarily due to revenue shift in favor of the Company’s cloud offerings, which results in a greater portion of contract costs being deferred than for license arrangements. |
Schedule of Amortization of Deferred Contract Costs | Amortization of deferred contract costs was as follows: (in thousands) 2018 2017 2016 Amortization of deferred contract costs (1) $ 17,271 $ 12,106 $ 11,574 (1) Included in selling and marketing expenses. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | (in thousands) December 31, 2018 2017 Leasehold improvements $ 39,216 $ 38,650 Computer equipment 25,285 23,783 Furniture and fixtures 8,517 8,517 Computer software purchased 7,578 6,690 Computer software developed for internal use 16,463 12,596 Fixed assets in progress 1,173 2,167 98,232 92,403 Less: accumulated depreciation (61,597 ) (52,044 ) $ 36,635 $ 40,359 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The following table presents the changes in the carrying amount of goodwill: (in thousands) 2018 2017 Balance as of January 1, $ 72,952 $ 73,164 Purchase price adjustments to goodwill — (354 ) Translation adjustments (94 ) 142 Balance as of December 31, $ 72,858 $ 72,952 |
Schedule of Amortizable Intangible Assets | Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives as follows: December 31, 2018 (in thousands) Useful Lives Cost Accumulated Net Book Value (1) Client-related intangibles 4-10 years $ 63,115 $ (51,224 ) $ 11,891 Technology 2-10 years 59,742 (50,398 ) 9,344 Other 1 - 5 years 5,361 (5,361 ) — $ 128,218 $ (106,983 ) $ 21,235 (1) Included in other long-term assets. December 31, 2017 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related intangibles 4-10 years $ 63,164 $ (44,835 ) $ 18,329 Technology 3-10 years 58,942 (45,372 ) 13,570 Other 1 - 5 years 5,361 (5,361 ) — $ 127,467 $ (95,568 ) $ 31,899 (1) Included in other long-term assets. |
Amortization Expense of Acquired Intangibles | Intangibles amortization was reflected in the Company’s consolidated statements of operations as follows: (in thousands) 2018 2017 2016 Cost of revenue $ 5,027 $ 5,103 $ 5,986 Selling and marketing 6,416 7,235 7,145 General and administrative — — 277 $ 11,443 $ 12,338 $ 13,408 |
Estimated Future Amortization Expense Related to Intangible Assets | Future estimated amortization expense related to intangible assets: (in thousands) December 31, 2018 2019 $ 5,946 2020 2,950 2021 2,627 2022 2,537 2023 and thereafter 7,175 $ 21,235 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Long-Lived Assets by Geographic Area | Long-lived assets related to the Company’s U.S. and international operations were: (Dollars in thousands) December 31, 2018 2017 U.S. $ 26,392 72 % $ 27,590 68 % India 3,843 10 % 6,703 17 % International, other 6,400 18 % 6,066 15 % $ 36,635 100 % $ 40,359 100 % |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | (in thousands) December 31, 2018 2017 Outside professional services $ 10,367 $ 14,468 Income and other taxes 10,387 7,420 Marketing and sales program expenses 5,860 6,444 Dividends payable 2,363 2,344 Employee-related expenses 3,536 4,065 Other 12,993 10,767 $ 45,506 $ 45,508 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Dividends Declared and Dividend Payments | (in thousands) 2018 2017 2016 Dividend payments to shareholders $ 9,432 $ 9,277 $ 9,174 (per share) 2018 2017 2016 Dividends Declared $ 0.12 $ 0.12 $ 0.12 |
Summary of Repurchase Activity under Repurchase Programs | (in thousands) 2018 2017 2016 Shares Amount Shares Amount Shares Amount Authorization remaining, beginning of period $ 34,892 $ 39,385 $ 40,534 Authorizations $ 27,003 $ — $ 25,879 Repurchases paid 980 $ (54,276 ) 96 $ (4,335 ) 1,078 $ (27,028 ) Repurchases unsettled 21 $ (999 ) 3 $ (158 ) — $ — Authorization remaining, end of period $ 6,620 $ 34,892 $ 39,385 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The Company’s assets and liabilities measured at fair value on a recurring basis were: December 31, 2018 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 10,155 $ 10,000 $ — $ 20,155 Marketable securities: Municipal bonds $ — $ 44,705 $ — $ 44,705 Corporate bonds — 48,296 — 48,296 Total marketable securities $ — $ 93,001 $ — $ 93,001 Investments in privately-held companies (1) $ — $ — $ 3,390 $ 3,390 (1) Included in other long-term assets. December 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 2,720 $ 40,051 $ — $ 42,771 Marketable securities: Municipal bonds $ — $ 32,848 $ — $ 32,848 Corporate bonds — 28,621 — 28,621 Total marketable securities $ — $ 61,469 $ — $ 61,469 Investments in privately-held companies (1) $ — $ — $ 1,030 $ 1,030 (1) Included in other long-term assets. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Disaggregation of Revenue | (in thousands) 2018 2017 2016 Perpetual license $ 109,863 $ 132,883 $ 145,053 Term license 178,256 206,411 152,231 Revenue recognized at a point in time 288,119 339,294 297,284 Maintenance 263,875 242,320 218,635 Cloud 82,627 51,097 40,647 Consulting 256,960 255,756 205,663 Revenue recognized over time 603,462 549,173 464,945 Total revenue $ 891,581 $ 888,467 $ 762,229 (in thousands) 2018 2017 2016 Term license $ 178,256 $ 206,411 $ 152,231 Cloud 82,627 51,097 40,647 Maintenance 263,875 242,320 218,635 Subscription (1) 524,758 499,828 411,513 Perpetual license 109,863 132,883 145,053 Consulting 256,960 255,756 205,663 Total revenue $ 891,581 $ 888,467 $ 762,229 (1) Subscription revenue reflects client arrangements (term license, cloud, and maintenance) which are subject to renewal. |
Revenue by Geographic Area | (Dollars in thousands) 2018 2017 2016 U.S. $ 469,987 52 % $ 505,415 56 % $ 447,673 59 % Other Americas 53,239 6 % 41,467 5 % 41,607 5 % U.K. 95,628 11 % 97,000 11 % 98,624 13 % Other EMEA (1) 147,248 17 % 138,752 16 % 97,113 13 % Asia-Pacific 125,479 14 % 105,833 12 % 77,212 10 % Total revenue $ 891,581 100 % $ 888,467 100 % $ 762,229 100 % (1) Includes Europe (excluding the U.K.), the Middle East, and Africa. |
Remaining Performance Obligations on Existing Contracts | The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of maintenance Consulting - time and materials Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting - fixed price Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. Revenue for the remaining performance obligations on existing contracts is expected to be recognized as follows : December 31, 2018 (Dollars in thousands) Perpetual license Term license Maintenance Cloud Consulting Total 1 year or less $ 14,665 $ 72,378 $ 192,274 $ 103,354 $ 17,235 $ 399,906 63 % 1-2 years 2,343 10,355 10,436 80,214 2,810 106,158 17 % 2-3 years 1,661 1,414 3,644 61,906 940 69,565 11 % Greater than 3 years — 233 1,560 53,343 208 55,344 9 % $ 18,669 $ 84,380 $ 207,914 $ 298,817 $ 21,193 $ 630,973 100 % |
Schedule of Clients Accounting for a Percentage of Total Revenue | Clients accounting for 10% or more of the Company’s total revenue were: (Dollars in thousands) 2018 2017 2016 Total revenue $ 891,581 $ 888,467 $ 762,229 Client A * 10 % * *Client accounted for less than 10% of total revenue. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense Included in Consolidated Statements of Operations | The following table presents the stock-based compensation expense included in the Company’s consolidated statements of operations: (in thousands) 2018 2017 2016 Cost of revenues $ 16,862 $ 14,573 $ 11,459 Selling and marketing 23,237 15,720 12,464 Research and development 15,274 13,618 10,043 General and administrative 8,489 9,402 6,513 Acquisition-related — — 342 $ 63,862 $ 53,313 $ 40,821 Income tax benefit $ (13,383 ) $ (12,113 ) $ (12,198 ) |
Weighted-Average Assumptions Used in Black-Scholes Option Valuation Model | The weighted-average assumptions used in the Black-Scholes option valuation model are: 2018 2017 2016 Expected annual volatility (1) 34 % 35 % 40 % Expected term in years (2) 4.5 4.5 4.4 Risk-free interest rate (3) 2.6 % 1.9 % 1.2 % Expected annual dividend yield (4) 0.4 % 0.5 % 0.6 % (1) The expected annual volatility for each grant is determined based on the average of historical daily price changes of the Company’s common stock over a period which approximates the expected option term. (2) The expected option term for each grant is determined based on the historical exercise behavior of employees and post-vesting employment termination behavior. (3) The risk-free interest rate is based on the yield of U.S. Treasury securities with a maturity that is commensurate with the expected option term at the time of grant. (4) The expected annual dividend yield is based on the weighted-average of the dividend yield assumptions used for options granted during the applicable period. |
Combined Stock Option Activity | The following table summarizes the combined stock option activity under the Company’s stock option plans for 2018 : Shares (in thousands) Weighted-average Exercise Price Weighted-average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Options outstanding as of January 1, 2018 7,130 $ 26.10 Granted 1,705 58.42 Exercised (1,422 ) 20.88 Forfeited (442 ) 35.50 Options outstanding as of December 31, 2018 6,971 $ 34.47 Vested and expected to vest as December 31, 2018 5,841 $ 33.23 7.0 $ 99,999 Exercisable as of December 31, 2018 2,893 $ 22.16 5.7 $ 74,650 |
Combined Restricted Stock Units Activity | The following table summarizes the combined RSU activity for all grants, including the CICP, under the 2004 Plan for 2018 : Shares Weighted- Aggregate Nonvested as of January 1, 2018 2,901 $ 31.97 Granted 1,212 58.52 Vested (1,144 ) 31.88 Forfeited (318 ) 36.74 Nonvested as of December 31, 2018 2,651 $ 43.69 $ 126,781 Expected to vest as of December 31, 2018 1,938 $ 44.83 $ 92,661 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Postemployment Benefits [Abstract] | |
Summary of Defined Contribution Plans Expenses | The following expenses related to defined contribution plans were recorded in the Company’s consolidated statements of operations: (in thousands) 2018 2017 2016 U.S. 401(k) Plan $ 5,506 $ 5,003 $ 4,510 International Plans 11,101 9,096 7,635 $ 16,607 $ 14,099 $ 12,145 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of (Loss) Income before (Benefit) Provision from Income Taxes | The components of (loss) income before (benefit) provision from income taxes are: (in thousands) 2018 2017 2016 Domestic $ (27,494 ) $ 57,493 $ 39,559 Foreign 15,951 28,742 15,776 (Loss) income before (benefit) provision from income taxes $ (11,543 ) $ 86,235 $ 55,335 |
Components of Provision for Income Taxes | The components of the provision for income taxes are: (in thousands) 2018 2017 2016 Current: Federal $ (1,862 ) $ (18,109 ) $ 7,389 State 287 97 3,081 Foreign 10,313 8,479 4,248 Total current provision (benefit) 8,738 (9,533 ) 14,718 Deferred: Federal (18,939 ) (2,049 ) (1,125 ) State (3,702 ) (214 ) (466 ) Foreign (8,257 ) (517 ) (2,807 ) Total deferred benefit (30,898 ) (2,780 ) (4,398 ) (Benefit) provision from income taxes $ (22,160 ) $ (12,313 ) $ 10,320 |
Reconciliation of Effective Income Tax Rate from Statutory Federal Income Tax Rate | The effective income tax rate differed from the statutory federal income tax rate due to the following (1) : 2018 2017 2016 Statutory federal income tax rate 21.0 % 35.0 % 35.0 % Valuation allowance (4.4 )% 0.5 % 0.2 % Transaction costs — % — % 0.7 % State income taxes, net of federal benefit and tax credits 28.9 % (0.5 )% 2.5 % Permanent differences (11.2 )% 1.1 % 1.4 % GILTI, FDII, and BEAT (3.5 )% — % — % Federal research and experimentation credits 60.6 % (3.9 )% (1.5 )% Tax effects of foreign activities 3.5 % (0.9 )% (5.6 )% Tax-exempt income 1.2 % (0.1 )% (0.2 )% Provision to return adjustments (2.2 )% (2.1 )% — % Non-deductible compensation (8.9 )% 2.1 % 4.0 % Expiration of statutes and changes in estimates 4.5 % 0.3 % (1.2 )% Excess tax benefits related to share-based compensation 117.3 % (28.4 )% (12.8 )% Domestic Production Activities — % — % (2.0 )% Deferred tax asset adjustment (14.2 )% (17.9 )% (0.3 )% Other (0.6 )% 0.5 % (1.5 )% Effective income tax rate 192.0 % (14.3 )% 18.7 % (1) In periods of loss before incomes taxes, income tax benefits are reflected as a positive in this table. |
Components of Net Deferred Tax Assets and Liabilities | Significant components of net deferred tax assets and liabilities are: December 31, (in thousands) 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 40,736 $ 52,311 Accruals and reserves 17,576 14,668 Software revenue — — Depreciation 2,874 2,558 Tax credit carryforwards 14,896 13,056 Other 176 52 Total deferred tax assets 76,258 82,645 Valuation allowances (27,954 ) (27,994 ) Total net deferred tax assets 48,304 54,651 Deferred tax liabilities: Software revenue (36,510 ) (70,347 ) Intangibles (5,748 ) (8,527 ) Total deferred tax liabilities (42,258 ) (78,874 ) Deferred income taxes $ 6,046 $ (24,223 ) |
Summary of Operating Loss Carryforwards | At December 31, 2018 the Company’s net operating losses and credit carryforwards are: (in thousands) Federal State Net operating losses (1) $ 81,206 $ 2,210 Net operating losses due to acquisitions $ 81,206 $ 665 Credit carryforwards (2) $ 7,480 $ 1,937 Credit carryforwards due to acquisitions $ 640 $ 324 (1) Excludes federal and state net operating losses of $60.2 million and $0.8 million , respectively, and federal and state tax credits of $0.1 million and $7.4 million , respectively, that the Company expects will expire unutilized, (2) Carryforward losses and credits expire between 2019 and 2037 except for $0.9 million of state credits that have an unlimited carryforward period. |
Summary of Credit Carryforwards | At December 31, 2018 the Company’s net operating losses and credit carryforwards are: (in thousands) Federal State Net operating losses (1) $ 81,206 $ 2,210 Net operating losses due to acquisitions $ 81,206 $ 665 Credit carryforwards (2) $ 7,480 $ 1,937 Credit carryforwards due to acquisitions $ 640 $ 324 (1) Excludes federal and state net operating losses of $60.2 million and $0.8 million , respectively, and federal and state tax credits of $0.1 million and $7.4 million , respectively, that the Company expects will expire unutilized, (2) Carryforward losses and credits expire between 2019 and 2037 except for $0.9 million of state credits that have an unlimited carryforward period. |
Reconciliation of Beginning and Ending Balances of Gross Unrecognized Tax Benefits | A rollforward of the Company’s gross unrecognized tax benefits is: (in thousands) 2018 2017 2016 Balance as of January 1, $ 19,150 $ 22,671 $ 23,972 Additions based on tax positions related to the current year 978 452 80 Additions for tax positions of prior years 174 238 110 Additions for acquired uncertain tax benefits — — 387 Reductions for change in U.S. federal tax rate — (2,424 ) — Reductions for tax positions of prior years (2,145 ) (1,500 ) (1,541 ) Reductions for a lapse of the applicable statute of limitations — (287 ) (337 ) Balance as of December 31, $ 18,157 $ 19,150 $ 22,671 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Share | (in thousands, except per share amounts) 2018 2017 2016 Basic Net income $ 10,617 $ 98,548 $ 45,015 Weighted-average common shares outstanding 78,564 77,431 76,343 Earnings per share, basic $ 0.14 $ 1.27 $ 0.59 Diluted Net income $ 10,617 $ 98,548 $ 45,015 Weighted-average effect of dilutive securities: Stock options 2,891 3,471 2,025 RSUs 1,609 1,930 1,364 Effect of dilutive securities 4,500 5,401 3,389 Weighted-average common shares outstanding, assuming dilution 83,064 82,832 79,732 Earnings per share, diluted $ 0.13 $ 1.19 $ 0.56 Outstanding anti-dilutive stock options and RSUs (1) 188 221 322 (1) Certain outstanding stock options and RSUs were excluded from the computation of diluted earnings per share because they were anti-dilutive in the period presented. These awards may be dilutive in the future. |
SELECTED QUARTERLY INFORMATIO_2
SELECTED QUARTERLY INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Selected Quarterly Information | (in thousands, except per share amounts) 2018 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenue $ 235,182 $ 196,779 $ 203,263 $ 256,357 Gross profit $ 159,568 $ 122,962 $ 128,840 $ 178,446 Income (loss) from operations $ 7,936 $ (23,163 ) $ (17,258 ) $ 15,453 Net income (loss) $ 12,200 $ (10,409 ) $ (7,587 ) $ 16,413 Earnings (loss) per share: Basic $ 0.16 $ (0.13 ) $ (0.10 ) $ 0.21 Diluted $ 0.15 $ (0.13 ) $ (0.10 ) $ 0.20 (in thousands, except per share amounts) 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenue $ 256,309 $ 186,596 $ 190,957 $ 254,605 Gross profit $ 188,219 $ 118,721 $ 121,226 $ 180,628 Income (loss) from operations $ 65,907 $ (8,947 ) $ (2,301 ) $ 38,518 Net income $ 52,963 $ 3,702 $ 1,288 $ 40,595 Earnings per share: Basic $ 0.69 $ 0.05 $ 0.01 $ 0.52 Diluted $ 0.65 $ 0.04 $ 0.01 $ 0.49 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments for Operating Leases | As of December 31, 2018 , the Company’s future minimum rental payments required under operating leases with noncancellable terms in excess of one year were: (in thousands) Operating Leases (1) 2019 $ 15,993 2020 14,807 2021 13,262 2022 12,279 2023 and thereafter 11,084 $ 67,425 (1) Operating leases include future minimum rent payments, net of estimated sublease income for facilities that the Company has vacated pursuant to its restructuring activities. |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||||||
Amortization period for deferred contract costs | 5 years | |||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | |||
Impairment charges recorded | $ 0 | $ 0 | $ 0 | |||
More-likely-than-not benefit likelihood percentage being realized upon ultimate settlement with taxing authority resulting from sustainability of tax examination | 50.00% | |||||
Advertising costs | $ 6,900,000 | $ 6,100,000 | $ 8,900,000 | |||
Computer Equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives | 3 years | |||||
Furniture and Fixtures | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives | 5 years | |||||
Minimum | Internal Use Software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of capitalized software | 3 years | |||||
Maximum | Internal Use Software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of capitalized software | 5 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Revenue Standard Adopted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jan. 01, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Amortization period for deferred contract costs | 5 years | ||||||||||||||||||
Assets | |||||||||||||||||||
Accounts receivable, unbilled receivables, and contract assets | $ 383,733 | $ 383,733 | |||||||||||||||||
Long-term unbilled receivables | [1] | $ 151,237 | 160,708 | $ 151,237 | 160,708 | ||||||||||||||
Deferred income taxes | 14,240 | 14,240 | |||||||||||||||||
Deferred contract costs | 37,924 | 37,924 | |||||||||||||||||
Other assets | 416,148 | 416,148 | |||||||||||||||||
Total assets | [1] | 982,553 | 1,012,753 | 982,553 | 1,012,753 | ||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Deferred revenue | [1] | 185,145 | 165,850 | 185,145 | 165,850 | ||||||||||||||
Long-term deferred revenue | 3,706 | 3,706 | |||||||||||||||||
Deferred income tax liabilities | [1] | 6,939 | 38,463 | 6,939 | 38,463 | ||||||||||||||
Other liabilities | 148,864 | 148,864 | |||||||||||||||||
Total liabilities | [1] | 361,022 | 356,883 | 361,022 | 356,883 | ||||||||||||||
Foreign currency translation adjustments | [1] | (13,073) | (6,473) | (13,073) | (6,473) | ||||||||||||||
Retained earnings | [1] | 510,863 | 509,697 | 510,863 | 509,697 | ||||||||||||||
Other equity | 152,646 | 152,646 | |||||||||||||||||
Total stockholders’ equity | [2] | 621,531 | [1] | 655,870 | [1] | 621,531 | [1] | 655,870 | [1] | $ 548,940 | $ 526,987 | ||||||||
Total liabilities and stockholders’ equity | [1] | 982,553 | 1,012,753 | 982,553 | 1,012,753 | ||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | 256,357 | $ 203,263 | $ 196,779 | $ 235,182 | 254,605 | $ 190,957 | $ 186,596 | $ 256,309 | 891,581 | [3] | 888,467 | [3] | 762,229 | [3] | |||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | [3] | 301,765 | 279,673 | 239,256 | |||||||||||||||
Gross profit | 178,446 | 128,840 | 122,962 | 159,568 | 180,628 | 121,226 | 118,721 | 188,219 | 589,816 | [3] | 608,794 | [3] | 522,973 | [3] | |||||
Operating expenses | |||||||||||||||||||
Selling and marketing | [3] | 373,495 | 300,578 | 277,927 | |||||||||||||||
Research and development | [3] | 181,710 | 162,886 | 145,548 | |||||||||||||||
General and administrative | [3] | 51,643 | 52,153 | 45,951 | |||||||||||||||
Acquisition-related | [3] | 0 | 0 | 2,903 | |||||||||||||||
Total operating expenses | [3] | 606,848 | 515,617 | 472,329 | |||||||||||||||
(Loss) income from operations | 15,453 | (17,258) | (23,163) | 7,936 | 38,518 | (2,301) | (8,947) | 65,907 | (17,032) | [3] | 93,177 | [3] | 50,644 | [3] | |||||
Foreign currency transaction gain (loss) | [3],[4] | 2,421 | (6,413) | 9,360 | |||||||||||||||
Interest income, net | [3] | 2,705 | 862 | 911 | |||||||||||||||
Other income (expense), net | [3] | 363 | (1,391) | (5,580) | |||||||||||||||
(Loss) income before (benefit) provision from income taxes | [3] | (11,543) | 86,235 | 55,335 | |||||||||||||||
(Benefit) provision from income taxes | [3] | (22,160) | (12,313) | 10,320 | |||||||||||||||
Net income | $ 16,413 | $ (7,587) | $ (10,409) | $ 12,200 | $ 40,595 | $ 1,288 | $ 3,702 | $ 52,963 | $ 10,617 | [2],[3],[4],[5] | $ 98,548 | [2],[3],[4],[5] | $ 45,015 | [2],[3],[4],[5] | |||||
Earnings per share: | |||||||||||||||||||
Basic (dollars per share) | $ 0.21 | $ (0.10) | $ (0.13) | $ 0.16 | $ 0.52 | $ 0.01 | $ 0.05 | $ 0.69 | $ 0.14 | [3] | $ 1.27 | [3] | $ 0.59 | [3] | |||||
Diluted (dollars per share) | $ 0.20 | $ (0.10) | $ (0.13) | $ 0.15 | $ 0.49 | $ 0.01 | $ 0.04 | $ 0.65 | $ 0.13 | [3] | $ 1.19 | [3] | $ 0.56 | [3] | |||||
Weighted-average number of common shares outstanding: | |||||||||||||||||||
Basic (shares) | [3] | 78,564 | 77,431 | 76,343 | |||||||||||||||
Diluted (shares) | [3] | 83,064 | 82,832 | 79,732 | |||||||||||||||
Cumulative-effect adjustment to increase retained earnings | $ 204,100 | $ 321 | [2] | ||||||||||||||||
Previously Reported | Accounting Standards Update 2014-09 | |||||||||||||||||||
Assets | |||||||||||||||||||
Accounts receivable, unbilled receivables, and contract assets | $ 248,331 | $ 248,331 | |||||||||||||||||
Long-term unbilled receivables | 0 | 0 | |||||||||||||||||
Deferred income taxes | 57,127 | 57,127 | |||||||||||||||||
Deferred contract costs | 0 | 0 | |||||||||||||||||
Other assets | 416,148 | 416,148 | |||||||||||||||||
Total assets | 721,606 | 721,606 | |||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Deferred revenue | 195,073 | 195,073 | |||||||||||||||||
Long-term deferred revenue | 6,591 | 6,591 | |||||||||||||||||
Deferred income tax liabilities | 0 | 0 | |||||||||||||||||
Other liabilities | 148,864 | 148,864 | |||||||||||||||||
Total liabilities | 350,528 | 350,528 | |||||||||||||||||
Foreign currency translation adjustments | (3,494) | (3,494) | |||||||||||||||||
Retained earnings | 221,926 | 221,926 | |||||||||||||||||
Other equity | 152,646 | 152,646 | |||||||||||||||||
Total stockholders’ equity | 371,078 | 371,078 | |||||||||||||||||
Total liabilities and stockholders’ equity | 721,606 | 721,606 | |||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | 840,582 | 750,266 | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | 279,673 | 239,256 | |||||||||||||||||
Gross profit | 560,909 | 511,010 | |||||||||||||||||
Operating expenses | |||||||||||||||||||
Selling and marketing | 307,210 | 278,849 | |||||||||||||||||
Research and development | 162,886 | 145,548 | |||||||||||||||||
General and administrative | 52,153 | 45,951 | |||||||||||||||||
Acquisition-related | 0 | 2,903 | |||||||||||||||||
Total operating expenses | 522,249 | 473,251 | |||||||||||||||||
(Loss) income from operations | 38,660 | 37,759 | |||||||||||||||||
Foreign currency transaction gain (loss) | (900) | 2,247 | |||||||||||||||||
Interest income, net | 731 | 776 | |||||||||||||||||
Other income (expense), net | (1,391) | (5,580) | |||||||||||||||||
(Loss) income before (benefit) provision from income taxes | 37,100 | 35,202 | |||||||||||||||||
(Benefit) provision from income taxes | 4,166 | 8,216 | |||||||||||||||||
Net income | $ 32,934 | $ 26,986 | |||||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic (dollars per share) | $ 0.43 | $ 0.35 | |||||||||||||||||
Diluted (dollars per share) | $ 0.40 | $ 0.34 | |||||||||||||||||
Weighted-average number of common shares outstanding: | |||||||||||||||||||
Basic (shares) | 77,431 | 76,343 | |||||||||||||||||
Diluted (shares) | 82,832 | 79,732 | |||||||||||||||||
Adjustments | Accounting Standards Update 2014-09 | |||||||||||||||||||
Assets | |||||||||||||||||||
Accounts receivable, unbilled receivables, and contract assets | 135,402 | $ 135,402 | |||||||||||||||||
Long-term unbilled receivables | 160,708 | 160,708 | |||||||||||||||||
Deferred income taxes | (42,887) | (42,887) | |||||||||||||||||
Deferred contract costs | 37,924 | 37,924 | |||||||||||||||||
Other assets | 0 | 0 | |||||||||||||||||
Total assets | 291,147 | 291,147 | |||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Deferred revenue | (29,223) | (29,223) | |||||||||||||||||
Long-term deferred revenue | (2,885) | (2,885) | |||||||||||||||||
Deferred income tax liabilities | 38,463 | 38,463 | |||||||||||||||||
Other liabilities | 0 | 0 | |||||||||||||||||
Total liabilities | 6,355 | 6,355 | |||||||||||||||||
Foreign currency translation adjustments | (2,979) | (2,979) | |||||||||||||||||
Retained earnings | 287,771 | 287,771 | |||||||||||||||||
Other equity | 0 | 0 | |||||||||||||||||
Total stockholders’ equity | 284,792 | 284,792 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ 291,147 | 291,147 | |||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | 47,885 | $ 11,963 | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | 0 | 0 | |||||||||||||||||
Gross profit | 47,885 | 11,963 | |||||||||||||||||
Operating expenses | |||||||||||||||||||
Selling and marketing | (6,632) | (922) | |||||||||||||||||
Research and development | 0 | 0 | |||||||||||||||||
General and administrative | 0 | 0 | |||||||||||||||||
Acquisition-related | 0 | 0 | |||||||||||||||||
Total operating expenses | (6,632) | (922) | |||||||||||||||||
(Loss) income from operations | 54,517 | 12,885 | |||||||||||||||||
Foreign currency transaction gain (loss) | (5,513) | 7,113 | |||||||||||||||||
Interest income, net | 131 | 135 | |||||||||||||||||
Other income (expense), net | 0 | 0 | |||||||||||||||||
(Loss) income before (benefit) provision from income taxes | 49,135 | 20,133 | |||||||||||||||||
(Benefit) provision from income taxes | (16,479) | 2,104 | |||||||||||||||||
Net income | 65,614 | 18,029 | |||||||||||||||||
Software license | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | [3] | $ 288,119 | 339,294 | 297,284 | |||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | [3] | 5,169 | 5,085 | 4,943 | |||||||||||||||
Software license | Previously Reported | Accounting Standards Update 2014-09 | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | 288,334 | 279,995 | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | 5,085 | 4,943 | |||||||||||||||||
Software license | Adjustments | Accounting Standards Update 2014-09 | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | 50,960 | 17,289 | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | 0 | 0 | |||||||||||||||||
Maintenance | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | [3] | 263,875 | 242,320 | 218,635 | |||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | [3] | 24,565 | 27,905 | 25,505 | |||||||||||||||
Maintenance | Previously Reported | Accounting Standards Update 2014-09 | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | 244,347 | 220,336 | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | 27,905 | 25,505 | |||||||||||||||||
Maintenance | Adjustments | Accounting Standards Update 2014-09 | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | (2,027) | (1,701) | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | 0 | 0 | |||||||||||||||||
Services | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | [3] | 339,587 | 306,853 | 246,310 | |||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | [3] | $ 272,031 | 246,683 | 208,808 | |||||||||||||||
Services | Previously Reported | Accounting Standards Update 2014-09 | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | 307,901 | 249,935 | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | 246,683 | 208,808 | |||||||||||||||||
Services | Adjustments | Accounting Standards Update 2014-09 | |||||||||||||||||||
Revenue | |||||||||||||||||||
Total revenue | (1,048) | (3,625) | |||||||||||||||||
Cost of revenue | |||||||||||||||||||
Total cost of revenue | $ 0 | $ 0 | |||||||||||||||||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||||||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||||||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||||||
[4] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||||||
[5] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 93,301,000 | $ 61,753,000 |
Unrealized Gains | 36,000 | 1,000 |
Unrealized Losses | (336,000) | (285,000) |
Fair Value | 93,001,000 | 61,469,000 |
Investments with other than temporary unrealized losses | $ 0 | |
Marketable debt security weighted-average remaining maturity | 1 year 5 months | |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 44,802,000 | 32,996,000 |
Unrealized Gains | 13,000 | 0 |
Unrealized Losses | (110,000) | (148,000) |
Fair Value | 44,705,000 | 32,848,000 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 48,499,000 | 28,757,000 |
Unrealized Gains | 23,000 | 1,000 |
Unrealized Losses | (226,000) | (137,000) |
Fair Value | $ 48,296,000 | $ 28,621,000 |
RECEIVABLES, CONTRACT ASSETS,_3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
Accounts receivable | [1] | $ 180,872 | $ 222,735 |
Unbilled receivables | [1] | 172,656 | 160,084 |
Long-term unbilled receivables | [1] | 151,237 | 160,708 |
Total receivables | $ 504,765 | $ 543,527 | |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
RECEIVABLES, CONTRACT ASSETS,_4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Unbilled Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
1 Year or less | [1] | $ 172,656 | $ 160,084 |
1-2 Years | 95,013 | ||
2-5 Years | 56,224 | ||
Total | $ 323,893 | ||
Percentage of unbilled receivables, 1 Year or Less | 54.00% | ||
Percentage of unbilled receivables, 1-2 Years | 29.00% | ||
Percentage of unbilled receivables, 2-5 Years | 17.00% | ||
Total percentage of unbilled receivables | 100.00% | ||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
RECEIVABLES, CONTRACT ASSETS,_5
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Contract Assets and Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
Contract assets | $ 3,711 | $ 914 | |
Long-term contract assets | 2,543 | 0 | |
Total contract assets | 6,254 | 914 | |
Deferred revenue | [1] | 185,145 | 165,850 |
Long-term deferred revenue | 5,344 | 3,706 | |
Total deferred revenue | $ 190,489 | $ 169,556 | |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
RECEIVABLES, CONTRACT ASSETS,_6
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Receivables [Abstract] | |
Revenue recognized | $ 237.5 |
DEFERRED CONTRACT COSTS - Sched
DEFERRED CONTRACT COSTS - Schedule of Impairment of Deferred Contract Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred contract costs | $ 64,367 | $ 37,924 |
DEFERRED CONTRACT COSTS - Sch_2
DEFERRED CONTRACT COSTS - Schedule of Amortization of Deferred Contract Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Amortization of deferred contract costs | [1] | $ 17,271 | $ 12,106 | $ 11,574 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
PROPERTY AND EQUIPMENT - Compon
PROPERTY AND EQUIPMENT - Components of Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 98,232 | $ 92,403 |
Less: accumulated depreciation | (61,597) | (52,044) |
Property and equipment, net | 36,635 | 40,359 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 39,216 | 38,650 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 25,285 | 23,783 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,517 | 8,517 |
Computer software purchased | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,578 | 6,690 |
Computer software developed for internal use | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,463 | 12,596 |
Fixed assets in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,173 | $ 2,167 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 13.9 | $ 12.4 | $ 11.2 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Goodwill [Roll Forward] | ||||
Balance as of January 1, | $ 72,952 | [1] | $ 73,164 | |
Purchase price adjustments to goodwill | 0 | (354) | ||
Translation adjustments | (94) | 142 | ||
Balance as of December 31, | [1] | $ 72,858 | $ 72,952 | |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | $ 128,218 | $ 127,467 |
Accumulated Amortization | (106,983) | (95,568) |
Net Book Value | 21,235 | 31,899 |
Client-related intangibles | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 63,115 | 63,164 |
Accumulated Amortization | (51,224) | (44,835) |
Net Book Value | 11,891 | 18,329 |
Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 59,742 | 58,942 |
Accumulated Amortization | (50,398) | (45,372) |
Net Book Value | 9,344 | 13,570 |
Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 5,361 | 5,361 |
Accumulated Amortization | (5,361) | (5,361) |
Net Book Value | $ 0 | $ 0 |
Minimum | Client-related intangibles | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 4 years | 4 years |
Minimum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 3 years | 3 years |
Minimum | Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 1 year | |
Maximum | Client-related intangibles | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 10 years | 10 years |
Maximum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 10 years | 10 years |
Maximum | Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 5 years |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense of Acquired Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization expense | $ 11,443 | $ 12,338 | $ 13,408 |
Cost of revenue | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization expense | 5,027 | 5,103 | 5,986 |
Selling and marketing | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization expense | 6,416 | 7,235 | 7,145 |
General and administrative | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization expense | $ 0 | $ 0 | $ 277 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Future Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Future estimated amortization expense, 2019 | $ 5,946 | |
Future estimated amortization expense, 2020 | 2,950 | |
Future estimated amortization expense, 2021 | 2,627 | |
Future estimated amortization expense, 2022 | 2,537 | |
Future estimated amortization expense, 2023 and thereafter | 7,175 | |
Net Book Value | $ 21,235 | $ 31,899 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018segmentunit | |
Segment Reporting [Abstract] | |
Number of operating segments | segment | 1 |
Number of reporting units | unit | 1 |
SEGMENT INFORMATION - Long Live
SEGMENT INFORMATION - Long Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | $ 36,635 | $ 40,359 |
Long-lived assets percentage | 100.00% | 100.00% |
U.S. | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | $ 26,392 | $ 27,590 |
Long-lived assets percentage | 72.00% | 68.00% |
India | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | $ 3,843 | $ 6,703 |
Long-lived assets percentage | 10.00% | 17.00% |
International, other | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | $ 6,400 | $ 6,066 |
Long-lived assets percentage | 18.00% | 15.00% |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Payables and Accruals [Abstract] | ||||
Outside professional services | $ 10,367 | $ 14,468 | ||
Income and other taxes | 10,387 | 7,420 | ||
Marketing and sales program expenses | 5,860 | 6,444 | ||
Dividends payable | [1] | 2,363 | 2,344 | $ 2,298 |
Employee-related expenses | 3,536 | 4,065 | ||
Other | 12,993 | 10,767 | ||
Accrued expenses | [2] | $ 45,506 | $ 45,508 | |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Equity [Abstract] | |||
Preferred stock, shares authorized (shares) | [1] | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | [1] | 0 | 0 |
Common stock, shares authorized (shares) | [1] | 200,000,000 | 200,000,000 |
Common stock, par value (dollars per share) | [1] | $ 0.01 | $ 0.01 |
Common stock, shares outstanding (shares) | [1] | 78,526,000 | 78,081,000 |
Common stock, shares issued (shares) | [1] | 78,526,000 | 78,081,000 |
Quarterly cash dividend intended to pay (dollars per share) | $ 0.03 | ||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
STOCKHOLDERS' EQUITY - Summary
STOCKHOLDERS' EQUITY - Summary of Dividends Declared (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Equity [Abstract] | ||||
Dividends declared (dollars per share) | [1] | $ 0.12 | $ 0.12 | $ 0.12 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
STOCKHOLDERS' EQUITY STOCKHOLDE
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - Summary of Dividends Paid (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Equity [Abstract] | ||||
Dividend payments to shareholders | [1] | $ 9,432 | $ 9,277 | $ 9,174 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
STOCKHOLDERS' EQUITY - Stock Re
STOCKHOLDERS' EQUITY - Stock Repurchases (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 21, 2018 | |
Equity [Abstract] | ||||
Repurchases paid (in shares) | 980,000 | 96,000 | 1,078,000 | |
Repurchases unsettled (in shares) | 21,000 | 3,000 | 0 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount [Roll Forward] | ||||
Authorization remaining, beginning of period | $ 34,892,000 | $ 39,385,000 | $ 40,534,000 | |
Authorizations | 27,003,000 | 0 | 25,879,000 | |
Repurchases paid | (54,276,000) | (4,335,000) | (27,028,000) | |
Repurchases unsettled | (999,000) | (158,000) | 0 | |
Authorization remaining, end of period | $ 6,620,000 | $ 34,892,000 | $ 39,385,000 | |
Amount authorized under share repurchase program | $ 50,000,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets: | ||
Total marketable securities | $ 93,001 | $ 61,469 |
Level 1 | ||
Fair Value Assets: | ||
Total marketable securities | 0 | 0 |
Level 2 | ||
Fair Value Assets: | ||
Total marketable securities | 93,001 | 61,469 |
Level 3 | ||
Fair Value Assets: | ||
Total marketable securities | 0 | 0 |
Cash equivalents and Money market funds | ||
Fair Value Assets: | ||
Cash equivalents and Money market funds | 20,155 | 42,771 |
Cash equivalents and Money market funds | Level 1 | ||
Fair Value Assets: | ||
Cash equivalents and Money market funds | 10,155 | 2,720 |
Cash equivalents and Money market funds | Level 2 | ||
Fair Value Assets: | ||
Cash equivalents and Money market funds | 10,000 | 40,051 |
Cash equivalents and Money market funds | Level 3 | ||
Fair Value Assets: | ||
Cash equivalents and Money market funds | 0 | 0 |
Municipal bonds | ||
Fair Value Assets: | ||
Total marketable securities | 44,705 | 32,848 |
Municipal bonds | Level 1 | ||
Fair Value Assets: | ||
Total marketable securities | 0 | |
Municipal bonds | Level 2 | ||
Fair Value Assets: | ||
Total marketable securities | 32,848 | |
Municipal bonds | Level 3 | ||
Fair Value Assets: | ||
Total marketable securities | 0 | |
Corporate bonds | ||
Fair Value Assets: | ||
Total marketable securities | 48,296 | 28,621 |
Corporate bonds | Level 1 | ||
Fair Value Assets: | ||
Total marketable securities | 0 | 0 |
Corporate bonds | Level 2 | ||
Fair Value Assets: | ||
Total marketable securities | 48,296 | 28,621 |
Corporate bonds | Level 3 | ||
Fair Value Assets: | ||
Total marketable securities | 0 | |
Investments in privately-held companies | ||
Fair Value Assets: | ||
Investments in privately-held companies | 3,390 | 1,030 |
Investments in privately-held companies | Level 1 | ||
Fair Value Assets: | ||
Investments in privately-held companies | 0 | 0 |
Investments in privately-held companies | Level 2 | ||
Fair Value Assets: | ||
Investments in privately-held companies | $ 0 | 0 |
Investments in privately-held companies | Level 3 | ||
Fair Value Assets: | ||
Investments in privately-held companies | $ 1,030 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | $ 256,357 | $ 203,263 | $ 196,779 | $ 235,182 | $ 254,605 | $ 190,957 | $ 186,596 | $ 256,309 | $ 891,581 | [1] | $ 888,467 | [1] | $ 762,229 | [1] | |
Perpetual license | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 109,863 | 132,883 | 145,053 | ||||||||||||
Term license | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 178,256 | 206,411 | 152,231 | ||||||||||||
Maintenance | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | [1] | 263,875 | 242,320 | 218,635 | |||||||||||
Subscription | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 524,758 | 499,828 | 411,513 | ||||||||||||
Cloud | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 82,627 | 51,097 | 40,647 | ||||||||||||
Consulting | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 256,960 | 255,756 | 205,663 | ||||||||||||
Revenue recognized at a point in time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 288,119 | 339,294 | 297,284 | ||||||||||||
Revenue recognized at a point in time | Perpetual license | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 109,863 | 132,883 | 145,053 | ||||||||||||
Revenue recognized at a point in time | Term license | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 178,256 | 206,411 | 152,231 | ||||||||||||
Revenue recognized over time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 603,462 | 549,173 | 464,945 | ||||||||||||
Revenue recognized over time | Maintenance | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 263,875 | 242,320 | 218,635 | ||||||||||||
Revenue recognized over time | Cloud | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | 82,627 | 51,097 | 40,647 | ||||||||||||
Revenue recognized over time | Consulting | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Total revenue | $ 256,960 | $ 255,756 | $ 205,663 | ||||||||||||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
REVENUE - Revenue by Geographic
REVENUE - Revenue by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Geographic revenue | $ 256,357 | $ 203,263 | $ 196,779 | $ 235,182 | $ 254,605 | $ 190,957 | $ 186,596 | $ 256,309 | $ 891,581 | [1] | $ 888,467 | [1] | $ 762,229 | [1] |
Geographic revenue percentage | 100.00% | 100.00% | 100.00% | |||||||||||
U.S. | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Geographic revenue | $ 469,987 | $ 505,415 | $ 447,673 | |||||||||||
Geographic revenue percentage | 52.00% | 56.00% | 59.00% | |||||||||||
Other Americas | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Geographic revenue | $ 53,239 | $ 41,467 | $ 41,607 | |||||||||||
Geographic revenue percentage | 6.00% | 5.00% | 5.00% | |||||||||||
U.K. | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Geographic revenue | $ 95,628 | $ 97,000 | $ 98,624 | |||||||||||
Geographic revenue percentage | 11.00% | 11.00% | 13.00% | |||||||||||
Other EMEA | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Geographic revenue | $ 147,248 | $ 138,752 | $ 97,113 | |||||||||||
Geographic revenue percentage | 17.00% | 16.00% | 13.00% | |||||||||||
Asia-Pacific | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Geographic revenue | $ 125,479 | $ 105,833 | $ 77,212 | |||||||||||
Geographic revenue percentage | 14.00% | 12.00% | 10.00% | |||||||||||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
REVENUE - Revenue for Remaining
REVENUE - Revenue for Remaining Performance Obligations Expected to be Recognized (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Disaggregation of Revenue [Line Items] | |
1 year or less | $ 399,906 |
1 year or less, percentage | 63.00% |
1-2 years | $ 106,158 |
1-2 years, percentage | 17.00% |
2-3 years | $ 69,565 |
2-3 years, percentage | 11.00% |
Greater than 3 years | $ 55,344 |
Greater than 3 years, percentage | 9.00% |
Total | $ 630,973 |
Total percentage | 100.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | |
Perpetual license | |
Disaggregation of Revenue [Line Items] | |
1 year or less | $ 14,665 |
1-2 years | 2,343 |
2-3 years | 1,661 |
Greater than 3 years | 0 |
Total | 18,669 |
Term license | |
Disaggregation of Revenue [Line Items] | |
1 year or less | 72,378 |
1-2 years | 10,355 |
2-3 years | 1,414 |
Greater than 3 years | 233 |
Total | 84,380 |
Maintenance | |
Disaggregation of Revenue [Line Items] | |
1 year or less | 192,274 |
1-2 years | 10,436 |
2-3 years | 3,644 |
Greater than 3 years | 1,560 |
Total | 207,914 |
Cloud | |
Disaggregation of Revenue [Line Items] | |
1 year or less | 103,354 |
1-2 years | 80,214 |
2-3 years | 61,906 |
Greater than 3 years | 53,343 |
Total | 298,817 |
Consulting | |
Disaggregation of Revenue [Line Items] | |
1 year or less | 17,235 |
1-2 years | 2,810 |
2-3 years | 940 |
Greater than 3 years | 208 |
Total | $ 21,193 |
REVENUE - Customers Accounting
REVENUE - Customers Accounting for a Percentage of Total Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | [1] | Dec. 31, 2017 | Dec. 31, 2016 | [1] | ||
Revenue from Contract with Customer [Abstract] | ||||||||||||||
Total revenue | $ 256,357 | $ 203,263 | $ 196,779 | $ 235,182 | $ 254,605 | $ 190,957 | $ 186,596 | $ 256,309 | $ 891,581 | $ 888,467 | [1] | $ 762,229 | ||
Concentration risk, percentage | 10.00% | |||||||||||||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
STOCK-BASED COMPENSATION - Expe
STOCK-BASED COMPENSATION - Expense Included in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | [1] | $ 63,862 | $ 53,313 | $ 40,821 |
Acquisition-related | [2] | 0 | 0 | 2,903 |
Income tax benefit | (13,383) | (12,113) | (12,198) | |
Cost of revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 16,862 | 14,573 | 11,459 | |
Selling and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 23,237 | 15,720 | 12,464 | |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 15,274 | 13,618 | 10,043 | |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 8,489 | 9,402 | 6,513 | |
Acquisition-related | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Acquisition-related | $ 0 | $ 0 | $ 342 | |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2006 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 5 years | |||
Shares available for issuance (shares) | 8,300,000 | |||
Shares exercised (shares) | 1,422,000 | |||
Closing price of company stock (dollars per share) | $ 47.83 | |||
Vesting one year from the grant date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 1 year | |||
Vesting rights percentage | 20.00% | |||
Vesting in quarterly installments over the remaining four years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Vesting rights percentage | 80.00% | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 10 years | |||
Weighted-average grant date fair value of options granted (dollars per share) | $ 18.03 | $ 13.79 | $ 8.31 | |
Intrinsic value of stock options exercised | $ 56,800,000 | $ 62,600,000 | $ 19,900,000 | |
Unrecognized stock-based compensation expense, unvested stock options | $ 21,100,000 | |||
Weighted-average period of expense recognition | 2 years 4 months | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense, unvested stock options | $ 42,300,000 | |||
Weighted-average period of expense recognition | 2 years 1 month | |||
Weighted-average grant date fair value of shares granted (dollars per share) | $ 58.52 | $ 46.07 | $ 25.54 | |
Fair value of shares vested | $ 66,500,000 | $ 59,000,000 | $ 29,200,000 | |
Corporate Incentive Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rights percentage | 100.00% | |||
Percentage of closing price of common stock | 85.00% | |||
Corporate Incentive Compensation Plan | RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation percentage of target incentive compensation eligible to be elected and received by employees | 50.00% | |||
2004 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (shares) | 30,000,000 | |||
Number of shares subject to outstanding options and awards (shares) | 9,600,000 | |||
Shares available for issuance (shares) | 7,700,000 | |||
2004 Long-Term Incentive Plan | RSUs | Non-employee directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual limited compensation | $ 500,000 | |||
2006 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (shares) | 1,000,000 | |||
Percentage of fair market value of company stock | 85.00% | |||
Purchase price percentage of fair market value | 95.00% | |||
Compensation expense recognized | $ 0 | |||
Shares issued (shares) | 400,000 | |||
Shares available for issuance (shares) | 600,000 |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted Average Assumptions used in Black Scholes Option Valuation Model (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected annual volatility | 34.00% | 35.00% | 40.00% |
Expected term in years | 4 years 6 months | 4 years 6 months | 4 years 4 months 24 days |
Risk-free interest rate | 2.60% | 1.90% | 1.20% |
Expected annual dividend yield | 0.40% | 0.50% | 0.60% |
STOCK-BASED COMPENSATION - Comb
STOCK-BASED COMPENSATION - Combined Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Shares | |
Options outstanding, beginning of period (shares) | shares | 7,130 |
Granted (shares) | shares | 1,705 |
Exercised (shares) | shares | (1,422) |
Forfeited (shares) | shares | (442) |
Options outstanding, end of period (shares) | shares | 6,971 |
Vested and expected to vest (shares) | shares | 5,841 |
Exercisable (shares) | shares | 2,893 |
Weighted-average Exercise Price | |
Options outstanding, beginning of period (dollars per share) | $ / shares | $ 26.10 |
Granted (dollars per share) | $ / shares | 58.42 |
Exercised (dollars per share) | $ / shares | 20.88 |
Forfeited (dollars per share) | $ / shares | 35.50 |
Options outstanding, end of period (dollars per share) | $ / shares | 34.47 |
Vested and expected to vest (dollars per share) | $ / shares | 33.23 |
Exercisable (dollars per share) | $ / shares | $ 22.16 |
Weighted-average remaining contractual term | |
Vested and expected to vest | 7 years |
Exercisable | 5 years 8 months 12 days |
Aggregate intrinsic value | |
Vested and expected to vest | $ | $ 99,999 |
Exercisable | $ | $ 74,650 |
STOCK-BASED COMPENSATION - Co_2
STOCK-BASED COMPENSATION - Combined Restricted Stock Units Activity (Details) - RSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | |||
Nonvested, beginning of period (shares) | 2,901 | ||
Granted (shares) | 1,212 | ||
Vested (shares) | (1,144) | ||
Forfeited (shares) | (318) | ||
Nonvested, end of period (shares) | 2,651 | 2,901 | |
Expected to vest (shares) | 1,938 | ||
Weighted- Average Grant-Date Fair Value | |||
Nonvested, beginning of period (dollars per share) | $ 31.97 | ||
Granted (dollars per share) | 58.52 | $ 46.07 | $ 25.54 |
Vested (dollars per share) | 31.88 | ||
Forfeited (dollars per share) | 36.74 | ||
Nonvested, end of period (dollars per share) | 43.69 | $ 31.97 | |
Expected to vest (dollars per share) | $ 44.83 | ||
Aggregate Intrinsic Value | |||
Nonvested | $ 126,781 | ||
Expected to vest | $ 92,661 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | $ 16,607 | $ 14,099 | $ 12,145 |
U.S. 401(k) Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | 5,506 | 5,003 | 4,510 |
International Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | $ 11,101 | $ 9,096 | $ 7,635 |
INCOME TAXES - Components of (L
INCOME TAXES - Components of (Loss) Income before (Benefits) Provisions from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Tax Disclosure [Abstract] | ||||
Domestic | $ (27,494) | $ 57,493 | $ 39,559 | |
Foreign | 15,951 | 28,742 | 15,776 | |
(Loss) income before (benefit) provision from income taxes | [1] | $ (11,543) | $ 86,235 | $ 55,335 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
INCOME TAXES - Components of Pr
INCOME TAXES - Components of Provisions for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Current: | ||||
Federal | $ (1,862) | $ (18,109) | $ 7,389 | |
State | 287 | 97 | 3,081 | |
Foreign | 10,313 | 8,479 | 4,248 | |
Total current provision (benefit) | 8,738 | (9,533) | 14,718 | |
Deferred: | ||||
Federal | (18,939) | (2,049) | (1,125) | |
State | (3,702) | (214) | (466) | |
Foreign | (8,257) | (517) | (2,807) | |
Total deferred benefit | [1] | (30,898) | (2,780) | (4,398) |
(Benefit) provision from income taxes | [2] | $ (22,160) | $ (12,313) | $ 10,320 |
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Effective Income Tax Rate from Statutory Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% |
Valuation allowance | (4.40%) | 0.50% | 0.20% |
Transaction costs | 0.00% | 0.00% | 0.70% |
State income taxes, net of federal benefit and tax credits | 28.90% | (0.50%) | 2.50% |
Permanent differences | (11.20%) | 1.10% | 1.40% |
GILTI, FDII, and BEAT | (3.50%) | 0.00% | 0.00% |
Federal research and experimentation credits | 60.60% | (3.90%) | (1.50%) |
Tax effects of foreign activities | 3.50% | (0.90%) | (5.60%) |
Tax-exempt income | 1.20% | (0.10%) | (0.20%) |
Provision to return adjustments | (2.20%) | (2.10%) | 0.00% |
Non-deductible compensation | (8.90%) | 2.10% | 4.00% |
Expiration of statutes and changes in estimates | 4.50% | 0.30% | (1.20%) |
Excess tax benefits related to share-based compensation | 117.30% | (28.40%) | (12.80%) |
Domestic Production Activities | (0.00%) | (0.00%) | (2.00%) |
Deferred tax asset adjustment | (14.20%) | (17.90%) | (0.30%) |
Other | (0.60%) | 0.50% | (1.50%) |
Effective income tax rate | 192.00% | (14.30%) | 18.70% |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Contingency [Line Items] | ||||
Additional income tax expense | $ 14,200 | |||
Reduction of income tax provision due to tax holidays | 1,300 | $ 1,000 | ||
Unrecognized tax benefits | $ 18,157 | $ 19,150 | $ 22,671 | $ 23,972 |
Expected changes in unrecognized tax benefits in next 12 months that would reduce effective tax rate | 500 | |||
Change In Benefits Recorded Against Deferred Tax Items | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits that would decrease effective tax rate if recognized | 2,100 | |||
Federal | ||||
Income Tax Contingency [Line Items] | ||||
Tax credits expected to expire unused | 100 | |||
State | ||||
Income Tax Contingency [Line Items] | ||||
Tax credits expected to expire unused | 7,400 | |||
Foreign | ||||
Income Tax Contingency [Line Items] | ||||
Tax credits expected to expire unused | $ 46,100 |
INCOME TAXES - Components of Ne
INCOME TAXES - Components of Net Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 40,736 | $ 52,311 |
Accruals and reserves | 17,576 | 14,668 |
Software revenue | 0 | 0 |
Depreciation | 2,874 | 2,558 |
Tax credit carryforwards | 14,896 | 13,056 |
Other | 176 | 52 |
Total deferred tax assets | 76,258 | 82,645 |
Valuation allowances | (27,954) | (27,994) |
Total net deferred tax assets | 48,304 | 54,651 |
Deferred tax liabilities: | ||
Software revenue | (36,510) | (70,347) |
Intangibles | (5,748) | (8,527) |
Total deferred tax liabilities | (42,258) | (78,874) |
Deferred income taxes | $ 6,046 | |
Deferred income taxes | $ (24,223) |
INCOME TAXES - Net Operating Lo
INCOME TAXES - Net Operating Losses and Credit Carryforwards (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Loss Carryforwards [Line Items] | |
Carryforwards with unlimited carryforward period | $ 900 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses | 81,206 |
Credit carryforwards | 7,480 |
Net operating losses expected to expire unused | 60,200 |
Tax credits expected to expire unused | 100 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses | 2,210 |
Credit carryforwards | 1,937 |
Net operating losses expected to expire unused | 800 |
Tax credits expected to expire unused | 7,400 |
OpenSpan, Inc. | Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses | 81,206 |
Credit carryforwards | 640 |
OpenSpan, Inc. | State | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses | 665 |
Credit carryforwards | $ 324 |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of Beginning and Ending Balances of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of period | $ 19,150 | $ 22,671 | $ 23,972 |
Additions based on tax positions related to the current year | 978 | 452 | 80 |
Additions for tax positions of prior years | 174 | 238 | 110 |
Additions for acquired uncertain tax benefits | 0 | 0 | 387 |
Reductions for change in U.S. federal tax rate | 0 | (2,424) | 0 |
Reductions for tax positions of prior years | (2,145) | (1,500) | (1,541) |
Reductions for a lapse of the applicable statute of limitations | 0 | (287) | (337) |
Balance at end of period | $ 18,157 | $ 19,150 | $ 22,671 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||
Net income | $ 16,413 | $ (7,587) | $ (10,409) | $ 12,200 | $ 40,595 | $ 1,288 | $ 3,702 | $ 52,963 | $ 10,617 | [1],[2],[3],[4] | $ 98,548 | [1],[2],[3],[4] | $ 45,015 | [1],[2],[3],[4] | |
Weighted-average common shares outstanding (shares) | [2] | 78,564 | 77,431 | 76,343 | |||||||||||
Earnings per share, basic (dollars per share) | $ 0.21 | $ (0.10) | $ (0.13) | $ 0.16 | $ 0.52 | $ 0.01 | $ 0.05 | $ 0.69 | $ 0.14 | [2] | $ 1.27 | [2] | $ 0.59 | [2] | |
Effective of dilutive securities (shares) | 4,500 | 5,401 | 3,389 | ||||||||||||
Weighted - average common shares outstanding, assuming dilution (shares) | [2] | 83,064 | 82,832 | 79,732 | |||||||||||
Earnings per share, diluted (dollars per share) | $ 0.20 | $ (0.10) | $ (0.13) | $ 0.15 | $ 0.49 | $ 0.01 | $ 0.04 | $ 0.65 | $ 0.13 | [2] | $ 1.19 | [2] | $ 0.56 | [2] | |
Outstanding anti-dilutive stock options and RSUs (shares) | 188 | 221 | 322 | ||||||||||||
Stock options | |||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||
Weighted-average effect of dilutive securities (shares) | 2,891 | 3,471 | 2,025 | ||||||||||||
RSUs | |||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||
Weighted-average effect of dilutive securities (shares) | 1,609 | 1,930 | 1,364 | ||||||||||||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | ||||||||||||||
[4] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
SELECTED QUARTERLY INFORMATIO_3
SELECTED QUARTERLY INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | [1] | Dec. 31, 2017 | [1] | Dec. 31, 2016 | [1] | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Total revenue | $ 256,357 | $ 203,263 | $ 196,779 | $ 235,182 | $ 254,605 | $ 190,957 | $ 186,596 | $ 256,309 | $ 891,581 | $ 888,467 | $ 762,229 | |||
Gross profit | 178,446 | 128,840 | 122,962 | 159,568 | 180,628 | 121,226 | 118,721 | 188,219 | 589,816 | 608,794 | 522,973 | |||
Income (loss) from operations | 15,453 | (17,258) | (23,163) | 7,936 | 38,518 | (2,301) | (8,947) | 65,907 | (17,032) | 93,177 | 50,644 | |||
Net income (loss) | $ 16,413 | $ (7,587) | $ (10,409) | $ 12,200 | $ 40,595 | $ 1,288 | $ 3,702 | $ 52,963 | $ 10,617 | [2],[3],[4] | $ 98,548 | [2],[3],[4] | $ 45,015 | [2],[3],[4] |
Earnings (loss) per share: | ||||||||||||||
Basic (dollars per share) | $ 0.21 | $ (0.10) | $ (0.13) | $ 0.16 | $ 0.52 | $ 0.01 | $ 0.05 | $ 0.69 | $ 0.14 | $ 1.27 | $ 0.59 | |||
Diluted (dollars per share) | $ 0.20 | $ (0.10) | $ (0.13) | $ 0.15 | $ 0.49 | $ 0.01 | $ 0.04 | $ 0.65 | $ 0.13 | $ 1.19 | $ 0.56 | |||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||||||||||
[2] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||||||||||
[3] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. | |||||||||||||
[4] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Apr. 11, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||
Purchase price of acquired company | [1] | $ 800 | $ 297 | $ 49,113 | |
OpenSpan, Inc. | |||||
Business Acquisition [Line Items] | |||||
Purchase price of acquired company | $ 48,800 | ||||
Cash acquired from acquisition | $ 1,800 | ||||
[1] | On January 1, 2018, the Company adopted the ASC 606 revenue recognition standard and adjusted prior periods to conform. See "Note 2. Significant Accounting Policies" for additional information. |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 15,993 |
2,020 | 14,807 |
2,021 | 13,262 |
2,022 | 12,279 |
2023 and thereafter | 11,084 |
Total future minimum rental payments for operating leases | $ 67,425 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Tenant allowance | $ 9.4 | ||
Rent expense under operating leases | $ 14.9 | $ 14.7 | $ 13.4 |