Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 24, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'PEGA | ' |
Entity Registrant Name | 'PEGASYSTEMS INC | ' |
Entity Central Index Key | '0001013857 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 76,348,914 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $136,545 | $80,231 |
Marketable securities | 92,026 | 76,461 |
Total cash, cash equivalents, and marketable securities | 228,571 | 156,692 |
Trade accounts receivable, net of allowance of $1,589 and $1,997 | 103,439 | 165,641 |
Deferred income taxes | 12,328 | 12,336 |
Income taxes receivable | 11,949 | 4,392 |
Other current assets | 10,096 | 9,148 |
Total current assets | 366,383 | 348,209 |
Property and equipment, net | 28,881 | 28,957 |
Long-term deferred income taxes | 58,129 | 56,745 |
Long-term other assets | 2,882 | 2,526 |
Intangible assets, net | 47,880 | 56,574 |
Goodwill | 45,009 | 43,469 |
Total assets | 549,164 | 536,480 |
Current liabilities: | ' | ' |
Accounts payable | 8,060 | 3,671 |
Accrued expenses | 35,039 | 31,624 |
Accrued compensation and related expenses | 40,462 | 44,401 |
Deferred revenue | 128,259 | 110,690 |
Total current liabilities | 211,820 | 190,386 |
Income taxes payable | 20,951 | 21,269 |
Long-term deferred revenue | 20,645 | 34,196 |
Other long-term liabilities | 17,473 | 18,841 |
Total liabilities | 270,889 | 264,692 |
Stockholders' equity: | ' | ' |
Preferred stock, 1,000 shares authorized; no shares issued and outstanding | ' | ' |
Common stock, 200,000 shares and 100,000 shares authorized; 76,381 shares and 76,324 shares issued and outstanding | 764 | 764 |
Additional paid-in capital | 140,464 | 139,565 |
Retained earnings | 135,246 | 127,826 |
Accumulated other comprehensive income | 1,801 | 3,633 |
Total stockholders' equity | 278,275 | 271,788 |
Total liabilities and stockholders' equity | $549,164 | $536,480 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Allowance for sales credit memos | $1,589 | $1,997 | ||
Preferred stock, shares authorized | 1,000 | 1,000 | ||
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Common stock, shares authorized | 200,000 | 100,000 | ||
Common stock, shares issued | 76,381 | 76,324 | ||
Common stock, shares outstanding | 76,381 | [1] | 76,324 | [1] |
[1] | The number of common shares outstanding for all prior periods has been retroactively restated to reflect the Company's two-for-one common stock split effected in the form of a common stock dividend distributed on April 1, 2014. |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Revenue: | ' | ' | ' | ' | ||||
Software license | $48,292 | $44,802 | $154,918 | $128,217 | ||||
Maintenance | 47,281 | 37,979 | 137,555 | 112,238 | ||||
Services | 42,058 | 39,230 | 128,607 | 115,117 | ||||
Total revenue | 137,631 | 122,011 | 421,080 | 355,572 | ||||
Cost of revenue: | ' | ' | ' | ' | ||||
Software license | 1,076 | 1,592 | 3,832 | 4,751 | ||||
Maintenance | 5,385 | 3,599 | 15,093 | 11,106 | ||||
Services | 39,921 | 32,907 | 120,061 | 97,772 | ||||
Total cost of revenue | 46,382 | 38,098 | 138,986 | 113,629 | ||||
Gross profit | 91,249 | 83,913 | 282,094 | 241,943 | ||||
Operating expenses: | ' | ' | ' | ' | ||||
Selling and marketing | 48,623 | 42,663 | 150,772 | 127,279 | ||||
Research and development | 28,558 | 19,786 | 80,490 | 59,123 | ||||
General and administrative | 8,825 | 7,130 | 28,377 | 21,203 | ||||
Acquisition-related | 54 | 545 | 417 | 545 | ||||
Restructuring | 192 | ' | 192 | ' | ||||
Total operating expenses | 86,252 | 70,124 | 260,248 | 208,150 | ||||
Income from operations | 4,997 | 13,789 | 21,846 | 33,793 | ||||
Foreign currency transaction (loss) gain | -2,845 | 661 | -2,527 | -1,666 | ||||
Interest income, net | 181 | 123 | 468 | 376 | ||||
Other income (expense), net | 19 | -1,163 | -507 | -418 | ||||
Income (loss) before provision (benefit) for income taxes | 2,352 | 13,410 | 19,280 | 32,085 | ||||
Provision for income taxes | 470 | 4,700 | 6,129 | 9,603 | ||||
Net income | $1,882 | $8,710 | $13,151 | $22,482 | ||||
Earnings per share : | ' | ' | ' | ' | ||||
Basic | $0.02 | [1] | $0.11 | [1] | $0.17 | [1] | $0.30 | [1] |
Diluted | $0.02 | [1] | $0.11 | [1] | $0.17 | [1] | $0.29 | [1] |
Weighted-average number of common shares outstanding : | ' | ' | ' | ' | ||||
Basic | 76,351 | [1] | 75,910 | [1] | 76,312 | [1] | 75,900 | [1] |
Diluted | 78,653 | [1] | 78,158 | [1] | 78,531 | [1] | 77,744 | [1] |
Cash dividends declared per share | $0.03 | $0.02 | $0.08 | $0.05 | ||||
[1] | The number of common shares and per share amounts have been retroactively restated for all prior periods presented to reflect the Company's two-for-one common stock split effected in the form of a common stock dividend distributed on April 1, 2014. |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net income | $1,882 | $8,710 | $13,151 | $22,482 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Unrealized (loss) gain on securities, net of tax | -90 | 113 | -62 | -32 |
Foreign currency translation adjustments | -3,046 | 2,340 | -1,770 | -147 |
Total other comprehensive (loss) income | -3,136 | 2,453 | -1,832 | -179 |
Comprehensive (loss) income | ($1,254) | $11,163 | $11,319 | $22,303 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities: | ' | ' |
Net income | $13,151 | $22,482 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' |
Excess tax benefits from exercise or vesting of equity awards | -3,754 | -2,670 |
Deferred income taxes | -1,845 | -537 |
Depreciation and amortization | 17,167 | 14,173 |
Stock-based compensation expense | 13,721 | 9,713 |
Foreign currency transaction loss | 2,527 | 1,666 |
Other non-cash items | 939 | 2,736 |
Change in operating assets and liabilities: | ' | ' |
Trade accounts receivable | 59,049 | 42,611 |
Income taxes receivable and other current assets | -3,839 | 2,599 |
Accounts payable and accrued expenses | -1,448 | -5,762 |
Deferred revenue | 4,287 | -3,836 |
Other long-term assets and liabilities | -1,688 | 260 |
Cash provided by operating activities | 98,267 | 83,435 |
Investing activities: | ' | ' |
Purchase of marketable securities | -36,232 | -56,645 |
Matured and called marketable securities | 22,156 | 21,129 |
Payments for acquisitions, net of cash acquired | -2,600 | ' |
Investment in property and equipment | -5,809 | -4,158 |
Cash used in investing activities | -22,485 | -39,674 |
Financing activities: | ' | ' |
Issuance of common stock for share-based compensation plans | 629 | 970 |
Excess tax benefits from exercise or vesting of equity awards | 3,754 | 2,670 |
Dividend payments to shareholders | -4,581 | -2,281 |
Common stock repurchases for tax withholdings for net settlement of equity awards | -4,939 | -4,123 |
Common stock repurchases under share repurchase programs | -12,266 | -9,178 |
Cash used in financing activities | -17,403 | -11,942 |
Effect of exchange rate on cash and cash equivalents | -2,065 | -517 |
Net increase in cash and cash equivalents | 56,314 | 31,302 |
Cash and cash equivalents, beginning of period | 80,231 | 77,525 |
Cash and cash equivalents, end of period | $136,545 | $108,827 |
ACCOUNTING_POLICIES
ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2014 | |
ACCOUNTING POLICIES | ' |
1. ACCOUNTING POLICIES | |
Basis of Presentation | |
Pegasystems Inc. (together with its subsidiaries, “the Company”) has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S.”) for complete financial statements and should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2013. | |
In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited financial statements, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2014. | |
During the third quarter and nine months of 2014, the Company adjusted the purchase price allocation of its acquisition of Antenna Software, Inc. (together with its subsidiaries, “Antenna”) on October 9, 2013. As required by applicable business combination accounting rules, these adjustments were applied retrospectively. These revisions did not have any impact on the Company’s previously reported results of operations or cash flows. See Note 7 “Acquisitions” and Note 8 “Goodwill and Other Intangible Assets” for further discussion of these adjustments. |
NEW_ACCOUNTING_PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2014 | |
NEW ACCOUNTING PRONOUNCEMENTS | ' |
2. NEW ACCOUNTING PRONOUNCEMENTS | |
Revenue from Contracts with Customers: In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This ASU amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. This ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. This ASU also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. This ASU will be effective for the Company January 1, 2017. Management is currently assessing the impact the adoption of this ASU will have on the Company’s consolidated financial statements. |
MARKETABLE_SECURITIES
MARKETABLE SECURITIES | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
MARKETABLE SECURITIES | ' | ||||||||||||||||
3. MARKETABLE SECURITIES | |||||||||||||||||
(in thousands) | September 30, 2014 | ||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | ||||||||||||||
Cost | Gains | Losses | |||||||||||||||
Municipal bonds | $ | 35,595 | 68 | (4) | $ | 35,659 | |||||||||||
Corporate bonds | 53,483 | 25 | (83) | 53,425 | |||||||||||||
Certificates of deposit | 2,939 | 3 | — | 2,942 | |||||||||||||
$ | 92,017 | 96 | (87) | $ | 92,026 | ||||||||||||
(in thousands) | 31-Dec-13 | ||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | ||||||||||||||
Cost | Gains | Losses | |||||||||||||||
Municipal bonds | $ | 41,545 | 75 | (20) | $ | 41,600 | |||||||||||
Corporate bonds | 31,868 | 52 | (4) | 31,916 | |||||||||||||
Certificates of deposit | 2,948 | 1 | (4) | 2,945 | |||||||||||||
$ | 76,361 | 128 | (28) | $ | 76,461 | ||||||||||||
The Company considers debt securities 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 with unrealized gains and losses recorded as a component of accumulated other comprehensive income, net of related income taxes. | |||||||||||||||||
As of September 30, 2014, remaining maturities of marketable debt securities ranged from October 2014 to February 2017, with a weighted-average remaining maturity of approximately 13 months. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS | ' | ||||||||||||||||||||||||
4. DERIVATIVE INSTRUMENTS | |||||||||||||||||||||||||
The Company has historically used foreign currency forward contracts (“forward contracts”) to manage its exposure to changes in foreign currency denominated accounts receivable, intercompany payables and cash primarily held by the U.S. operating company. The Company is primarily exposed to fluctuations in the British pound, Euro, Australian dollar and Indian rupee relative to the U.S. dollar. | |||||||||||||||||||||||||
The forward contracts utilized by the Company are not designated as hedging instruments and as a result, the Company records the fair value of these contracts at the end of each reporting period in its consolidated balance sheet as other current assets for unrealized gains and accrued expenses for unrealized losses, with any fluctuations in the value of these contracts recognized in other income (expense), net, in its consolidated statement of operations. These forward contracts have terms of 90 days or less. | |||||||||||||||||||||||||
The Company is in the process of reassessing its hedging strategy and has not entered into any forward contracts since February 2014. As of September 30, 2014 and December 31, 2013, the Company did not have any forward contracts outstanding. | |||||||||||||||||||||||||
The Company entered into forward contracts with notional values as follows: | |||||||||||||||||||||||||
Notional Amount | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
Foreign currency (in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Euro | € | — | € | 28,500 | € | 21,900 | € | 61,000 | |||||||||||||||||
British pound | £ | — | £ | 26,000 | £ | 26,500 | £ | 59,500 | |||||||||||||||||
Australian dollar | A$ | — | A$ | 15,500 | A$ | 12,900 | A$ | 15,500 | |||||||||||||||||
Indian rupee | Rs | — | Rs | 460,000 | Rs | 204,000 | Rs | 460,000 | |||||||||||||||||
The total change in the fair value of the Company’s forward contracts recorded in other income (expense), net, was as follows: | |||||||||||||||||||||||||
Change in Fair Value in USD | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(Loss) included in other income (expense), net | $ | — | $ | (1,173) | $ | (532) | $ | (430) |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||
5. FAIR VALUE MEASUREMENTS | |||||||||||||
Assets Measured 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 observable inputs that are observable either directly or indirectly; and (Level 3) significant unobservable inputs in which there is little or no market data, which requires 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. On a recurring basis, the Company records its marketable securities at fair value. | |||||||||||||
The Company’s investments are all classified within Level 1 and Level 2 of the fair value hierarchy. The Company’s investments classified within Level 1 of the fair value hierarchy are valued using quoted market prices. The Company’s investments classified within Level 2 of the fair value hierarchy are valued based on matrix pricing compiled by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. | |||||||||||||
The fair value hierarchy of the Company’s cash equivalents and marketable securities at fair value is as follows: | |||||||||||||
Fair Value Measurements at Reporting | |||||||||||||
Date Using | |||||||||||||
(in thousands) | September 30, 2014 | Significant | |||||||||||
Other Observable | |||||||||||||
Quoted Prices in | Inputs (Level 2) | ||||||||||||
Active Markets | |||||||||||||
for Identical Assets | |||||||||||||
(Level 1) | |||||||||||||
Money market funds | $ | 4,722 | $ | 4,722 | $ | — | |||||||
Marketable securities: | |||||||||||||
Municipal bonds | $ | 35,659 | $ | 10,401 | $ | 25,258 | |||||||
Corporate bonds | 53,425 | 53,425 | — | ||||||||||
Certificates of deposit | 2,942 | — | 2,942 | ||||||||||
Total marketable securities | $ | 92,026 | $ | 63,826 | $ | 28,200 | |||||||
Fair Value Measurements at Reporting | |||||||||||||
Date Using | |||||||||||||
(in thousands) | December 31, 2013 | Quoted Prices in | Significant | ||||||||||
Active Markets for | Other Observable | ||||||||||||
Identical Assets | Inputs (Level 2) | ||||||||||||
(Level 1) | |||||||||||||
Money market funds | $ | 2,232 | $ | 2,232 | $ | — | |||||||
Marketable securities: | |||||||||||||
Municipal bonds | $ | 41,600 | $ | 10,569 | $ | 31,031 | |||||||
Corporate bonds | 31,916 | 31,916 | — | ||||||||||
Certificates of deposit | 2,945 | — | 2,945 | ||||||||||
Total marketable securities | $ | 76,461 | $ | 42,485 | $ | 33,976 | |||||||
Assets Measured at Fair Value on a Nonrecurring Basis | |||||||||||||
Assets recorded at fair value on a nonrecurring basis, such as property and equipment, and intangible assets, are recognized at fair value when they are impaired. During the nine months of 2014 and 2013, the Company did not recognize any impairments on its assets measured at fair value on a nonrecurring basis. |
TRADE_ACCOUNTS_RECEIVABLE_NET_
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | ' | ||||||||
6. TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | |||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Trade accounts receivable | $ | 79,717 | $ | 129,020 | |||||
Unbilled trade accounts receivable | 25,311 | 38,618 | |||||||
Total accounts receivable | 105,028 | 167,638 | |||||||
Allowance for sales credit memos | (1,589) | (1,997) | |||||||
$ | 103,439 | $ | 165,641 | ||||||
Unbilled trade accounts receivable primarily related to services revenue earned under time and material arrangements, and maintenance and license arrangements that had not been invoiced. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
ACQUISITIONS | ' | ||||||||
7. ACQUISITIONS | |||||||||
Profeatable | |||||||||
On July 1, 2014, the Company acquired all of the outstanding capital stock of Profeatable Corporation (“Profeatable”), the provider of Firefly co-browsing technology, based in Philadelphia, Pennsylvania, for $2.3 million in cash consideration, inclusive of $0.2 million in cash acquired, of which $1.1 million will be paid within one year from the acquisition date or earlier, based on the achievement of certain performance milestones. | |||||||||
MeshLabs | |||||||||
On April 28, 2014, the Company acquired the assets of MeshLabs Software Private Limited (“MeshLabs”), a provider of advanced text analytics and social engagement solutions based in Bangalore, India, for $0.8 million in cash consideration. | |||||||||
Antenna | |||||||||
On October 9, 2013, the Company acquired Antenna, a leading provider of mobile application development platforms. The Company acquired all of the outstanding capital stock of Antenna in a cash merger for $27.1 million, including the final working capital adjustment to the purchase price, which was paid by the Company in the first quarter of 2014. The total purchase price of $27.1 million included $4.2 million, which was deposited in escrow to secure the selling stockholders’ indemnification obligations to the Company. Under the merger agreement, this amount may be due to the former shareholders of Antenna in or before April 2015 less any amounts presented and approved for payment against the escrow. During the nine months of 2014, the Company incurred and recorded direct and incremental expenses associated with the transaction of $0.3 million, which were primarily professional fees. | |||||||||
The operations of Antenna are included in the Company’s operating results from the date of acquisition. Due to the integration of the products, sales force, and operations of Antenna, other than the maintenance and hosting revenue attributable to the recognition of the fair value of acquired deferred maintenance and hosting revenue, it is no longer feasible for the Company to identify revenue from new arrangements solely attributable to Antenna. | |||||||||
In the nine months of 2014, the Company made $6 million in purchase price adjustments to goodwill. These purchase price adjustments are also reflected retrospectively as of December 31, 2013 in the accompanying unaudited condensed consolidated balance sheet. | |||||||||
As of September 30, 2014, as a result of the purchase price allocation, the Company recognized $23.0 million of goodwill, which is primarily due to the expected synergies of the combined entities and the workforce in place. The goodwill created by the transaction is nondeductible for tax purposes. The Company recorded $37.2 million of deferred tax assets, a $27.7 million valuation allowance related to the Company’s determination it will not be able to utilize all of the acquired Antenna federal and foreign net operating losses due to various limitations and restrictions, and a $6.9 million deferred tax liability associated with the acquired intangibles, for a net deferred tax asset of $2.6 million. A summary of the final purchase price allocation for the acquisition of Antenna is as follows: | |||||||||
(in thousands) | |||||||||
Total purchase consideration: | |||||||||
Cash | $ | 27,141 | |||||||
Allocation of the purchase consideration: | |||||||||
Cash | $ | 783 | |||||||
Accounts receivable, net of allowance | 4,184 | ||||||||
Other assets | 3,951 | ||||||||
Property and equipment | 655 | ||||||||
Deferred tax assets, net | 2,638 | ||||||||
Identifiable intangible assets | 10,355 | ||||||||
Goodwill | 23,018 | ||||||||
Accounts payable | (1,396) | ||||||||
Accrued liabilities | (12,861) | ||||||||
Deferred revenue | (4,186) | ||||||||
Net assets acquired | $ | 27,141 | |||||||
The valuation of the assumed deferred revenue was based on the Company’s contractual commitment to provide post-contract customer support to Antenna clients and future contractual performance obligations under existing hosting arrangements. The fair value of this assumed liability was based on the estimated cost plus a reasonable margin to fulfill these service obligations. The majority of the deferred revenue was recognized in the 12 months following the acquisition. | |||||||||
The valuation of the acquired intangible assets is inherently subjective and relies on significant unobservable inputs. The Company used an income approach to value the acquired customer related, technology and trade name intangible assets. The non-compete assets were valued using the with-and-without method, a form of the income approach which considers the cash flow differentials under multiple scenarios with or without key executives. The valuation for each of these intangible assets was based on estimated projections of expected cash flows to be generated by the assets, discounted to the present value at discount rates commensurate with perceived risk. The valuation assumptions take into consideration the Company’s estimates of contract renewal, technology attrition and revenue growth projections. | |||||||||
The estimated fair values for specifically identifiable intangible assets acquired, by major asset class, are as follows: | |||||||||
(in thousands) | Weighted-average | ||||||||
amortization | |||||||||
period | |||||||||
(in years) | |||||||||
Customer related intangible assets | $ | 4,279 | 4 | ||||||
Technology | 3,656 | 3 | |||||||
Non-compete | 1,342 | 1 | |||||||
Trade name | 1,078 | 3 | |||||||
$ | 10,355 | 3.2 | |||||||
Pro forma Information | |||||||||
The following pro forma financial information presents the combined results of operations of the Company and Antenna as if the acquisition had occurred on January 1, 2012 after giving effect to certain pro forma adjustments. The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the Antenna acquisition, factually supportable, and expected to have a continuing impact on the Company. These pro forma adjustments include a net increase in amortization expense to eliminate historical amortization of Antenna intangible assets and to record amortization expense for the $10.4 million of acquired identifiable intangibles, a decrease in interest income as a result of the cash paid for the acquisition, and a decrease in interest expense as a result of the repayment of all Antenna outstanding debt in connection with the acquisition. The pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on January 1, 2012. | |||||||||
Pro Forma | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
(in thousands, except per share amounts) | September 30, 2013 | ||||||||
Revenue | $ | 131,301 | $ | 379,595 | |||||
Net income | $ | 9,750 | $ | 19,413 | |||||
Net income per basic share | $ | 0.13 | $ | 0.26 | |||||
Net income per diluted share | $ | 0.12 | $ | 0.25 | |||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||
8. GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||
Changes in the carrying amount of goodwill: | |||||||||||||||||
(in thousands) | 2014 | ||||||||||||||||
Balance as of January 1, | $ | 37,463 | |||||||||||||||
Purchase price adjustments to goodwill retroactively applied (1) | 6,006 | ||||||||||||||||
Goodwill acquired | 1,540 | ||||||||||||||||
Balance as of September 30, | $ | 45,009 | |||||||||||||||
(1) The purchase price adjustments identified during the nine months of 2014 have been retroactively applied as of December 31, 2013. | |||||||||||||||||
Intangible assets are recorded at cost and are amortized using the straight-line method over their estimated useful lives. | |||||||||||||||||
(in thousands) | Range of Useful Lives | Cost | Accumulated | Net Book | |||||||||||||
Amortization | Value | ||||||||||||||||
As of September 30, 2014 | |||||||||||||||||
Customer related intangibles | 4-9 years | $ | 48,634 | $ | -22,813 | $ | 25,821 | ||||||||||
Technology | 3-9 years | 48,342 | -27,539 | 20,803 | |||||||||||||
Other intangibles | 1-5 years | 5,361 | -4,105 | 1,256 | |||||||||||||
Total | $ | 102,337 | $ | -54,457 | $ | 47,880 | |||||||||||
Cost | Accumulated | Net Book | |||||||||||||||
Amortization | Value | ||||||||||||||||
As of December 31, 2013 | |||||||||||||||||
Customer related intangibles | 4-9 years | $ | 48,634 | $ | -18,317 | $ | 30,317 | ||||||||||
Technology | 3-9 years | 47,102 | -22,873 | 24,229 | |||||||||||||
Other intangibles | 1-5 years | 4,658 | -2,630 | 2,028 | |||||||||||||
Total | $ | 100,394 | $ | (43,820) | $ | 56,574 | |||||||||||
Amortization of intangibles was reflected in the Company’s unaudited condensed consolidated statements of operations as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of revenue | $ | 1,382 | $ | 1,540 | $ | 4,666 | $ | 4,622 | |||||||||
Selling and marketing | 1,501 | 1,232 | 4,496 | 3,696 | |||||||||||||
General and administrative | 574 | — | 1,475 | 4 | |||||||||||||
Total amortization expense | $ | 3,457 | $ | 2,772 | $ | 10,637 | $ | 8,322 | |||||||||
Amortization of intangibles is estimated to be recorded over their remaining useful lives as follows: | |||||||||||||||||
(in thousands) as of September 30, 2014 | Future estimated | ||||||||||||||||
amortization | |||||||||||||||||
expense | |||||||||||||||||
Remainder of 2014 | $ | 3,149 | |||||||||||||||
2015 | 12,073 | ||||||||||||||||
2016 | 11,386 | ||||||||||||||||
2017 | 9,688 | ||||||||||||||||
2018 | 8,688 | ||||||||||||||||
2019 | 2,896 | ||||||||||||||||
$ | 47,880 | ||||||||||||||||
ACCRUED_EXPENSES
ACCRUED EXPENSES | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
ACCRUED EXPENSES | ' | ||||||||
9. ACCRUED EXPENSES | |||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Partner commissions | $ | 1,592 | $ | 4,106 | |||||
Other taxes | 10,080 | 10,381 | |||||||
Employee reimbursable expenses | 2,378 | 1,539 | |||||||
Dividends payable | 2,293 | 1,145 | |||||||
Professional services contractor fees | 2,318 | 1,997 | |||||||
Self-insurance health and dental claims | 1,351 | 1,265 | |||||||
Professional fees | 1,860 | 2,868 | |||||||
Short-term deferred rent | 1,401 | 740 | |||||||
Income taxes payable | 733 | 1,450 | |||||||
Acquisition-related expenses and merger consideration | 1,259 | 902 | |||||||
Restructuring | 816 | 371 | |||||||
Marketing expenses and programs | 2,166 | 1,279 | |||||||
Purchased securities settled after period end | 2,997 | — | |||||||
Other | 3,795 | 3,581 | |||||||
$ | 35,039 | $ | 31,624 | ||||||
DEFERRED_REVENUE
DEFERRED REVENUE | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
DEFERRED REVENUE | ' | ||||||||
10. DEFERRED REVENUE | |||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Software license | $ | 44,470 | $ | 28,826 | |||||
Maintenance | 73,573 | 72,715 | |||||||
Cloud | 3,826 | 2,360 | |||||||
Services and other | 6,390 | 6,789 | |||||||
Current deferred revenue | 128,259 | 110,690 | |||||||
Software license | 20,227 | 32,727 | |||||||
Maintenance and services | 380 | 1,115 | |||||||
Cloud | 38 | 354 | |||||||
Long-term deferred revenue | 20,645 | 34,196 | |||||||
$ | 148,904 | $ | 144,886 | ||||||
ACCRUED_RESTRUCTURING_EXPENSES
ACCRUED RESTRUCTURING EXPENSES | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
ACCRUED RESTRUCTURING EXPENSES | ' | ||||||||
11. ACCRUED RESTRUCTURING | |||||||||
During the fourth quarter of 2013, in connection with the Company’s evaluation of its combined facilities with Antenna, the Company approved a plan to eliminate space within one facility. The Company ceased use of this space during the fourth quarter of 2013 and recognized $1.7 million of restructuring expenses. During the third quarter of 2014, the Company restructured the remaining space within the same facility, revised its restructuring estimate, and recognized $0.2 million in additional restructuring expense. These restructuring expenses represent future lease payments and demising costs, net of estimated sublease income for this space. The lease expires in 2021. | |||||||||
A summary of the restructuring activity is as follows: | |||||||||
(in thousands) | |||||||||
Balance as of December 31, 2013 | $ | 1,591 | |||||||
Restructuring expenses | 192 | ||||||||
Cash payments | (257) | ||||||||
Other | (128) | ||||||||
Balance as of September 30, 2014 | $ | 1,398 | |||||||
As of | As of | ||||||||
September 30, | December 31, | ||||||||
(in thousands) | 2014 | 2013 | |||||||
Reported as: | |||||||||
Accrued expenses | $ | 816 | $ | 371 | |||||
Other long-term liabilities | 582 | 1,220 | |||||||
$ | 1,398 | $ | 1,591 |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
STOCK-BASED COMPENSATION | ' | ||||||||||||||||
12. STOCK-BASED COMPENSATION | |||||||||||||||||
Stock-based compensation expense was reflected in the Company’s unaudited condensed consolidated statements of operations as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of services | $ | 1,418 | $ | 947 | $ | 3,816 | $ | 3,134 | |||||||||
Operating expenses | 3,850 | 2,053 | 9,905 | 6,579 | |||||||||||||
Total stock-based compensation before tax | $ | 5,268 | $ | 3,000 | $ | 13,721 | $ | 9,713 | |||||||||
Income tax benefit | (1,395) | (893) | (3,977) | (2,941) | |||||||||||||
On April 1, 2014, the Company effected a two-for-one stock split of the Company’s common stock in the form of a stock dividend. All shares of common stock and per share amounts in the Company’s unaudited condensed consolidated financial statements and in the accompanying notes for all prior periods presented have been restated to reflect the stock split, except for the number of authorized shares of common stock. | |||||||||||||||||
During the nine months of 2014, the Company issued approximately 635,000 shares to its employees and 29,000 shares to its non-employee directors under the Company’s share-based compensation plans. | |||||||||||||||||
During the nine months of 2014, the Company granted approximately 1,193,000 restricted stock units (“RSUs”) and 1,299,000 non-qualified stock options to its employees with total fair values of approximately $23.7 million and $9.9 million, respectively. Approximately 100,000 RSUs were issued in connection with the election by employees to receive 50% of their 2014 target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash. Stock-based compensation of approximately $2 million associated with this RSU grant will be recognized over a one-year period beginning on the grant date. | |||||||||||||||||
The Company recognizes stock based compensation on the accelerated recognition method, while treating each vesting tranche as if it were an individual grant. As of September 30, 2014, the Company had approximately $24.2 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to all unvested RSUs and unvested stock options that is expected to be recognized over a weighted-average period of 2.1 years. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
EARNINGS PER SHARE | ' | ||||||||||||||||
13. 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 options, RSUs, and warrants, using the treasury stock method and the average market price of the Company’s common stock during the applicable period. Certain shares related to some of the Company’s outstanding stock options and RSUs were excluded from the computation of diluted earnings per share because they were antidilutive in the periods presented, but could be dilutive in the future. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(in thousands, except per share amounts) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Basic (1) | |||||||||||||||||
Net income | $ | 1,882 | $ | 8,710 | $ | 13,151 | $ | 22,482 | |||||||||
Weighted-average common shares outstanding | 76,351 | 75,910 | 76,312 | 75,900 | |||||||||||||
Earnings per share, basic | $ | 0.02 | $ | 0.11 | $ | 0.17 | $ | 0.30 | |||||||||
Diluted (1) | |||||||||||||||||
Net income | $ | 1,882 | $ | 8,710 | $ | 13,151 | $ | 22,482 | |||||||||
Weighted-average common shares outstanding, basic | 76,351 | 75,910 | 76,312 | 75,900 | |||||||||||||
Weighted-average effect of dilutive securities: | |||||||||||||||||
Stock options | 1,730 | 1,826 | 1,754 | 1,458 | |||||||||||||
RSUs | 572 | 422 | 465 | 386 | |||||||||||||
Effect of assumed exercise of stock options, warrants and RSUs | 2,302 | 2,248 | 2,219 | 1,844 | |||||||||||||
Weighted-average common shares outstanding, diluted | 78,653 | 78,158 | 78,531 | 77,744 | |||||||||||||
Earnings per share, diluted | $ | 0.02 | $ | 0.11 | $ | 0.17 | $ | 0.29 | |||||||||
Outstanding options and RSUs excluded as impact would be antidilutive | 107 | 66 | 110 | 292 | |||||||||||||
-1 | The number of common shares and per share amounts have been retroactively restated for all prior periods presented to reflect the Company’s two-for-one common stock split effected in the form of a common stock dividend distributed on April 1, 2014. |
GEOGRAPHIC_INFORMATION_AND_MAJ
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | ' | ||||||||||||||||||||||||||||||||
14. GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | |||||||||||||||||||||||||||||||||
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 develops and licenses its software solutions and provides consulting services, maintenance, and training related to its software. The Company derives substantially all of its revenue from the sale and support of one group of similar products and services – software that provides business process solutions in the enterprise applications market. To assess performance, the Company’s CODM reviews financial information on a consolidated basis. The Company has one operating segment after completing the integration of Antenna’s operations. Therefore, the Company determined it has one reportable segment — Digital Enterprise Business Solutions. | |||||||||||||||||||||||||||||||||
The Company’s international revenue is from sales to clients based outside of the U.S. The Company derived its revenue from the following geographic areas: | |||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||
U.S. | $ | 77,792 | 57 % | $ | 59,034 | 49 % | $ | 230,220 | 55 % | $ | 189,489 | 53 % | |||||||||||||||||||||
Other Americas | 12,195 | 9 % | 4,208 | 3 % | 21,499 | 5 % | 14,419 | 4 % | |||||||||||||||||||||||||
United Kingdom | 19,098 | 14 % | 22,115 | 18 % | 72,655 | 17 % | 58,782 | 17 % | |||||||||||||||||||||||||
Other EMEA | 15,910 | 11 % | 24,910 | 20 % | 66,218 | 16 % | 66,538 | 19 % | |||||||||||||||||||||||||
Asia Pacific | 12,636 | 9 % | 11,744 | 10 % | 30,488 | 7 % | 26,344 | 7 % | |||||||||||||||||||||||||
$ | 137,631 | 100 % | $ | 122,011 | 100 % | $ | 421,080 | 100 % | $ | 355,572 | 100 % | ||||||||||||||||||||||
There were no clients accounting for 10% or more of the Company’s total revenue during the third quarter and nine months of 2014 and 2013. Clients accounting for 10% or more of the Company’s total outstanding trade receivables, net, are as follows: | |||||||||||||||||||||||||||||||||
As of | As of | ||||||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Trade receivables, net of allowance | $ | 103,439 | $ | 165,641 | |||||||||||||||||||||||||||||
Client A | n/a | 16 % |
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2014 | |
SUBSEQUENT EVENT | ' |
15. SUBSEQUENT EVENT | |
On October 31, 2014, the Company acquired, Ultima IT (“Ultima”), a leading provider of consulting and services for developing strategic business applications, CRM and IT Infrastructure in the Turkish market, for $3.1 million in cash consideration, inclusive of $1.7 million in cash acquired. In addition, the Ultima shareholders are eligible to receive additional cash consideration based on the achievement of certain performance milestones through the end of 2016. | |
The Company believes the acquisition will reinforce its support network for existing and new clients in Turkey. |
MARKETABLE_SECURITIES_Tables
MARKETABLE SECURITIES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Schedule of Available for Sale Securities Reconciliation | ' | ||||||||||||||||
(in thousands) | September 30, 2014 | ||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | ||||||||||||||
Cost | Gains | Losses | |||||||||||||||
Municipal bonds | $ | 35,595 | 68 | (4) | $ | 35,659 | |||||||||||
Corporate bonds | 53,483 | 25 | (83) | 53,425 | |||||||||||||
Certificates of deposit | 2,939 | 3 | — | 2,942 | |||||||||||||
$ | 92,017 | 96 | (87) | $ | 92,026 | ||||||||||||
(in thousands) | 31-Dec-13 | ||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | ||||||||||||||
Cost | Gains | Losses | |||||||||||||||
Municipal bonds | $ | 41,545 | 75 | (20) | $ | 41,600 | |||||||||||
Corporate bonds | 31,868 | 52 | (4) | 31,916 | |||||||||||||
Certificates of deposit | 2,948 | 1 | (4) | 2,945 | |||||||||||||
$ | 76,361 | 128 | (28) | $ | 76,461 | ||||||||||||
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Forward Contracts with Notional Values | ' | ||||||||||||||||||||||||
The Company entered into forward contracts with notional values as follows: | |||||||||||||||||||||||||
Notional Amount | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
Foreign currency (in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Euro | € | — | € | 28,500 | € | 21,900 | € | 61,000 | |||||||||||||||||
British pound | £ | — | £ | 26,000 | £ | 26,500 | £ | 59,500 | |||||||||||||||||
Australian dollar | A$ | — | A$ | 15,500 | A$ | 12,900 | A$ | 15,500 | |||||||||||||||||
Indian rupee | Rs | — | Rs | 460,000 | Rs | 204,000 | Rs | 460,000 | |||||||||||||||||
Change in Fair Value of Forward Contracts Recorded in Other Income (Expense), Net | ' | ||||||||||||||||||||||||
The total change in the fair value of the Company’s forward contracts recorded in other income (expense), net, was as follows: | |||||||||||||||||||||||||
Change in Fair Value in USD | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(Loss) included in other income (expense), net | $ | — | $ | (1,173) | $ | (532) | $ | (430) |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Cash Equivalents and Marketable Securities at Fair Value | ' | ||||||||||||
The fair value hierarchy of the Company’s cash equivalents and marketable securities at fair value is as follows: | |||||||||||||
Fair Value Measurements at Reporting | |||||||||||||
Date Using | |||||||||||||
(in thousands) | September 30, 2014 | Significant | |||||||||||
Other Observable | |||||||||||||
Quoted Prices in | Inputs (Level 2) | ||||||||||||
Active Markets | |||||||||||||
for Identical Assets | |||||||||||||
(Level 1) | |||||||||||||
Money market funds | $ | 4,722 | $ | 4,722 | $ | — | |||||||
Marketable securities: | |||||||||||||
Municipal bonds | $ | 35,659 | $ | 10,401 | $ | 25,258 | |||||||
Corporate bonds | 53,425 | 53,425 | — | ||||||||||
Certificates of deposit | 2,942 | — | 2,942 | ||||||||||
Total marketable securities | $ | 92,026 | $ | 63,826 | $ | 28,200 | |||||||
Fair Value Measurements at Reporting | |||||||||||||
Date Using | |||||||||||||
(in thousands) | December 31, 2013 | Quoted Prices in | Significant | ||||||||||
Active Markets for | Other Observable | ||||||||||||
Identical Assets | Inputs (Level 2) | ||||||||||||
(Level 1) | |||||||||||||
Money market funds | $ | 2,232 | $ | 2,232 | $ | — | |||||||
Marketable securities: | |||||||||||||
Municipal bonds | $ | 41,600 | $ | 10,569 | $ | 31,031 | |||||||
Corporate bonds | 31,916 | 31,916 | — | ||||||||||
Certificates of deposit | 2,945 | — | 2,945 | ||||||||||
Total marketable securities | $ | 76,461 | $ | 42,485 | $ | 33,976 | |||||||
TRADE_ACCOUNTS_RECEIVABLE_NET_1
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Schedule of Trade Accounts Receivable | ' | ||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Trade accounts receivable | $ | 79,717 | $ | 129,020 | |||||
Unbilled trade accounts receivable | 25,311 | 38,618 | |||||||
Total accounts receivable | 105,028 | 167,638 | |||||||
Allowance for sales credit memos | (1,589) | (1,997) | |||||||
$ | 103,439 | $ | 165,641 | ||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Final Purchase Price Allocation for Acquisition | ' | ||||||||
A summary of the final purchase price allocation for the acquisition of Antenna is as follows: | |||||||||
(in thousands) | |||||||||
Total purchase consideration: | |||||||||
Cash | $ | 27,141 | |||||||
Allocation of the purchase consideration: | |||||||||
Cash | $ | 783 | |||||||
Accounts receivable, net of allowance | 4,184 | ||||||||
Other assets | 3,951 | ||||||||
Property and equipment | 655 | ||||||||
Deferred tax assets, net | 2,638 | ||||||||
Identifiable intangible assets | 10,355 | ||||||||
Goodwill | 23,018 | ||||||||
Accounts payable | (1,396) | ||||||||
Accrued liabilities | (12,861) | ||||||||
Deferred revenue | (4,186) | ||||||||
Net assets acquired | $ | 27,141 | |||||||
Schedule of Acquired Identifiable Intangible Assets Acquired | ' | ||||||||
The estimated fair values for specifically identifiable intangible assets acquired, by major asset class, are as follows: | |||||||||
(in thousands) | Weighted-average | ||||||||
amortization | |||||||||
period | |||||||||
(in years) | |||||||||
Customer related intangible assets | $ | 4,279 | 4 | ||||||
Technology | 3,656 | 3 | |||||||
Non-compete | 1,342 | 1 | |||||||
Trade name | 1,078 | 3 | |||||||
$ | 10,355 | 3.2 | |||||||
Proforma Financial Information | ' | ||||||||
The pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on January 1, 2012. | |||||||||
Pro Forma | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
(in thousands, except per share amounts) | September 30, 2013 | ||||||||
Revenue | $ | 131,301 | $ | 379,595 | |||||
Net income | $ | 9,750 | $ | 19,413 | |||||
Net income per basic share | $ | 0.13 | $ | 0.26 | |||||
Net income per diluted share | $ | 0.12 | $ | 0.25 | |||||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||||||||
Changes in the carrying amount of goodwill: | |||||||||||||||||
(in thousands) | 2014 | ||||||||||||||||
Balance as of January 1, | $ | 37,463 | |||||||||||||||
Purchase price adjustments to goodwill retroactively applied (1) | 6,006 | ||||||||||||||||
Goodwill acquired | 1,540 | ||||||||||||||||
Balance as of September 30, | $ | 45,009 | |||||||||||||||
(1) The purchase price adjustments identified during the nine months of 2014 have been retroactively applied as of December 31, 2013. | |||||||||||||||||
Schedule of Amortizable Intangible Assets | ' | ||||||||||||||||
Intangible assets are recorded at cost and are amortized using the straight-line method over their estimated useful lives. | |||||||||||||||||
(in thousands) | Range of Useful Lives | Cost | Accumulated | Net Book | |||||||||||||
Amortization | Value | ||||||||||||||||
As of September 30, 2014 | |||||||||||||||||
Customer related intangibles | 4-9 years | $ | 48,634 | $ | -22,813 | $ | 25,821 | ||||||||||
Technology | 3-9 years | 48,342 | -27,539 | 20,803 | |||||||||||||
Other intangibles | 1-5 years | 5,361 | -4,105 | 1,256 | |||||||||||||
Total | $ | 102,337 | $ | -54,457 | $ | 47,880 | |||||||||||
Cost | Accumulated | Net Book | |||||||||||||||
Amortization | Value | ||||||||||||||||
As of December 31, 2013 | |||||||||||||||||
Customer related intangibles | 4-9 years | $ | 48,634 | $ | -18,317 | $ | 30,317 | ||||||||||
Technology | 3-9 years | 47,102 | -22,873 | 24,229 | |||||||||||||
Other intangibles | 1-5 years | 4,658 | -2,630 | 2,028 | |||||||||||||
Total | $ | 100,394 | $ | (43,820) | $ | 56,574 | |||||||||||
Amortization Expense of Acquired Intangibles | ' | ||||||||||||||||
Amortization of intangibles was reflected in the Company’s unaudited condensed consolidated statements of operations as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of revenue | $ | 1,382 | $ | 1,540 | $ | 4,666 | $ | 4,622 | |||||||||
Selling and marketing | 1,501 | 1,232 | 4,496 | 3,696 | |||||||||||||
General and administrative | 574 | — | 1,475 | 4 | |||||||||||||
Total amortization expense | $ | 3,457 | $ | 2,772 | $ | 10,637 | $ | 8,322 | |||||||||
Estimated Future Amortization Expense | ' | ||||||||||||||||
Amortization of intangibles is estimated to be recorded over their remaining useful lives as follows: | |||||||||||||||||
(in thousands) as of September 30, 2014 | Future estimated | ||||||||||||||||
amortization | |||||||||||||||||
expense | |||||||||||||||||
Remainder of 2014 | $ | 3,149 | |||||||||||||||
2015 | 12,073 | ||||||||||||||||
2016 | 11,386 | ||||||||||||||||
2017 | 9,688 | ||||||||||||||||
2018 | 8,688 | ||||||||||||||||
2019 | 2,896 | ||||||||||||||||
$ | 47,880 | ||||||||||||||||
ACCRUED_EXPENSES_Tables
ACCRUED EXPENSES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Schedule of Accrued Expenses | ' | ||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Partner commissions | $ | 1,592 | $ | 4,106 | |||||
Other taxes | 10,080 | 10,381 | |||||||
Employee reimbursable expenses | 2,378 | 1,539 | |||||||
Dividends payable | 2,293 | 1,145 | |||||||
Professional services contractor fees | 2,318 | 1,997 | |||||||
Self-insurance health and dental claims | 1,351 | 1,265 | |||||||
Professional fees | 1,860 | 2,868 | |||||||
Short-term deferred rent | 1,401 | 740 | |||||||
Income taxes payable | 733 | 1,450 | |||||||
Acquisition-related expenses and merger consideration | 1,259 | 902 | |||||||
Restructuring | 816 | 371 | |||||||
Marketing expenses and programs | 2,166 | 1,279 | |||||||
Purchased securities settled after period end | 2,997 | — | |||||||
Other | 3,795 | 3,581 | |||||||
$ | 35,039 | $ | 31,624 | ||||||
DEFERRED_REVENUE_Tables
DEFERRED REVENUE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Schedule of Deferred Revenue | ' | ||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Software license | $ | 44,470 | $ | 28,826 | |||||
Maintenance | 73,573 | 72,715 | |||||||
Cloud | 3,826 | 2,360 | |||||||
Services and other | 6,390 | 6,789 | |||||||
Current deferred revenue | 128,259 | 110,690 | |||||||
Software license | 20,227 | 32,727 | |||||||
Maintenance and services | 380 | 1,115 | |||||||
Cloud | 38 | 354 | |||||||
Long-term deferred revenue | 20,645 | 34,196 | |||||||
$ | 148,904 | $ | 144,886 | ||||||
ACCRUED_RESTRUCTURING_EXPENSES1
ACCRUED RESTRUCTURING EXPENSES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Summary of Restructuring Activity | ' | ||||||||
A summary of the restructuring activity is as follows: | |||||||||
(in thousands) | |||||||||
Balance as of December 31, 2013 | $ | 1,591 | |||||||
Restructuring expenses | 192 | ||||||||
Cash payments | (257) | ||||||||
Other | (128) | ||||||||
Balance as of September 30, 2014 | $ | 1,398 | |||||||
Schedule of Restructuring Reserve | ' | ||||||||
As of | As of | ||||||||
September 30, | December 31, | ||||||||
(in thousands) | 2014 | 2013 | |||||||
Reported as: | |||||||||
Accrued expenses | $ | 816 | $ | 371 | |||||
Other long-term liabilities | 582 | 1,220 | |||||||
$ | 1,398 | $ | 1,591 | ||||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stock-Based Compensation Expense Included in Consolidated Statements of Operations | ' | ||||||||||||||||
Stock-based compensation expense was reflected in the Company’s unaudited condensed consolidated statements of operations as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of services | $ | 1,418 | $ | 947 | $ | 3,816 | $ | 3,134 | |||||||||
Operating expenses | 3,850 | 2,053 | 9,905 | 6,579 | |||||||||||||
Total stock-based compensation before tax | $ | 5,268 | $ | 3,000 | $ | 13,721 | $ | 9,713 | |||||||||
Income tax benefit | (1,395) | (893) | (3,977) | (2,941) |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Summary of Basic and Diluted Earnings (Loss) Per Share | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(in thousands, except per share amounts) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Basic (1) | |||||||||||||||||
Net income | $ | 1,882 | $ | 8,710 | $ | 13,151 | $ | 22,482 | |||||||||
Weighted-average common shares outstanding | 76,351 | 75,910 | 76,312 | 75,900 | |||||||||||||
Earnings per share, basic | $ | 0.02 | $ | 0.11 | $ | 0.17 | $ | 0.30 | |||||||||
Diluted (1) | |||||||||||||||||
Net income | $ | 1,882 | $ | 8,710 | $ | 13,151 | $ | 22,482 | |||||||||
Weighted-average common shares outstanding, basic | 76,351 | 75,910 | 76,312 | 75,900 | |||||||||||||
Weighted-average effect of dilutive securities: | |||||||||||||||||
Stock options | 1,730 | 1,826 | 1,754 | 1,458 | |||||||||||||
RSUs | 572 | 422 | 465 | 386 | |||||||||||||
Effect of assumed exercise of stock options, warrants and RSUs | 2,302 | 2,248 | 2,219 | 1,844 | |||||||||||||
Weighted-average common shares outstanding, diluted | 78,653 | 78,158 | 78,531 | 77,744 | |||||||||||||
Earnings per share, diluted | $ | 0.02 | $ | 0.11 | $ | 0.17 | $ | 0.29 | |||||||||
Outstanding options and RSUs excluded as impact would be antidilutive | 107 | 66 | 110 | 292 | |||||||||||||
-1 | The number of common shares and per share amounts have been retroactively restated for all prior periods presented to reflect the Company’s two-for-one common stock split effected in the form of a common stock dividend distributed on April 1, 2014. |
GEOGRAPHIC_INFORMATION_AND_MAJ1
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Revenue from International Clients by Geographic Area | ' | ||||||||||||||||||||||||||||||||
The Company’s international revenue is from sales to clients based outside of the U.S. The Company derived its revenue from the following geographic areas: | |||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||
U.S. | $ | 77,792 | 57 % | $ | 59,034 | 49 % | $ | 230,220 | 55 % | $ | 189,489 | 53 % | |||||||||||||||||||||
Other Americas | 12,195 | 9 % | 4,208 | 3 % | 21,499 | 5 % | 14,419 | 4 % | |||||||||||||||||||||||||
United Kingdom | 19,098 | 14 % | 22,115 | 18 % | 72,655 | 17 % | 58,782 | 17 % | |||||||||||||||||||||||||
Other EMEA | 15,910 | 11 % | 24,910 | 20 % | 66,218 | 16 % | 66,538 | 19 % | |||||||||||||||||||||||||
Asia Pacific | 12,636 | 9 % | 11,744 | 10 % | 30,488 | 7 % | 26,344 | 7 % | |||||||||||||||||||||||||
$ | 137,631 | 100 % | $ | 122,011 | 100 % | $ | 421,080 | 100 % | $ | 355,572 | 100 % | ||||||||||||||||||||||
Trade Receivables of Major Clients | ' | ||||||||||||||||||||||||||||||||
There were no clients accounting for 10% or more of the Company’s total revenue during the third quarter and nine months of 2014 and 2013. Clients accounting for 10% or more of the Company’s total outstanding trade receivables, net, are as follows: | |||||||||||||||||||||||||||||||||
As of | As of | ||||||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Trade receivables, net of allowance | $ | 103,439 | $ | 165,641 | |||||||||||||||||||||||||||||
Client A | n/a | 16 % |
Schedule_of_Marketable_Securit
Schedule of Marketable Securities (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | $92,017 | $76,361 |
Unrealized Gains | 96 | 128 |
Unrealized Losses | -87 | -28 |
Fair Value | 92,026 | 76,461 |
Municipal bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 35,595 | 41,545 |
Unrealized Gains | 68 | 75 |
Unrealized Losses | -4 | -20 |
Fair Value | 35,659 | 41,600 |
Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 53,483 | 31,868 |
Unrealized Gains | 25 | 52 |
Unrealized Losses | -83 | -4 |
Fair Value | 53,425 | 31,916 |
Certificates of Deposit | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 2,939 | 2,948 |
Unrealized Gains | 3 | 1 |
Unrealized Losses | ' | -4 |
Fair Value | $2,942 | $2,945 |
Marketable_Securities_Addition
Marketable Securities - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ' |
Weighted-average remaining maturity period of marketable debt securities, months | '13 months |
Minimum | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Remaining maturities of marketable debt securities | '2014-10 |
Maximum | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Remaining maturities of marketable debt securities | '2017-02 |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (Foreign Exchange Forward, USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Maximum | |||
Derivative [Line Items] | ' | ' | ' |
Term of derivative contracts | ' | ' | '90 days |
Derivative outstanding | $0 | $0 | ' |
Forward_Contracts_with_Notiona
Forward Contracts with Notional Values (Detail) (Forward Contracts) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Euro | Euro | Euro | Euro | British pound | British pound | British pound | British pound | Australian Dollar | Australian Dollar | Australian Dollar | Australian Dollar | Indian Rupees | Indian Rupees | Indian Rupees | Indian Rupees | |
EUR (€) | EUR (€) | EUR (€) | EUR (€) | GBP (£) | GBP (£) | GBP (£) | GBP (£) | AUD | AUD | AUD | AUD | INR | INR | INR | INR | |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount | ' | € 28,500 | € 21,900 | € 61,000 | ' | £ 26,000 | £ 26,500 | £ 59,500 | ' | 15,500 | 12,900 | 15,500 | ' | 460,000 | 204,000 | 460,000 |
Change_in_Fair_Value_of_Forwar
Change in Fair Value of Forward Contracts Recorded in Other Income (Expense), Net (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ' | ' |
(Loss) included in other income (expense), net | ' | ($1,173) | ($532) | ($430) |
Cash_Equivalents_and_Marketabl
Cash Equivalents and Marketable Securities at Fair Value (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Money market funds | $4,722 | $2,232 |
Total marketable securities | 92,026 | 76,461 |
Municipal bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | 35,659 | 41,600 |
Corporate bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | 53,425 | 31,916 |
Certificates of Deposit | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | 2,942 | 2,945 |
Quoted Prices In Active Markets For Identical Assets (Level 1) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Money market funds | 4,722 | 2,232 |
Total marketable securities | 63,826 | 42,485 |
Quoted Prices In Active Markets For Identical Assets (Level 1) | Municipal bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | 10,401 | 10,569 |
Quoted Prices In Active Markets For Identical Assets (Level 1) | Corporate bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | 53,425 | 31,916 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | 28,200 | 33,976 |
Significant Other Observable Inputs (Level 2) | Municipal bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | 25,258 | 31,031 |
Significant Other Observable Inputs (Level 2) | Certificates of Deposit | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total marketable securities | $2,942 | $2,945 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (Fair Value, Measurements, Nonrecurring, USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Fair Value, Measurements, Nonrecurring | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Impairments recognized on assets | $0 | $0 |
Schedule_of_Trade_Accounts_Rec
Schedule of Trade Accounts Receivable (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total accounts receivable | $105,028 | $167,638 |
Allowance for sales credit memos | -1,589 | -1,997 |
Total accounts receivable net | 103,439 | 165,641 |
Trade accounts receivable | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total accounts receivable | 79,717 | 129,020 |
Unbilled trade accounts receivable | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total accounts receivable | $25,311 | $38,618 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Oct. 09, 2013 | Sep. 30, 2014 | Oct. 09, 2013 | Jul. 01, 2014 | Jul. 01, 2014 | Apr. 28, 2014 | ||
Antenna | Antenna | Antenna | Profeatable | Profeatable | MeshLabs | |||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Purchase price of acquired company | ' | ' | ' | ' | ' | $27,100,000 | $27,141,000 | ' | $2,300,000 | ' | $800,000 | |
Cash acquired from acquisition | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | |
Consideration payable based on the achievement of certain performance milestones | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | |
Cash purchase price deposited in escrow | ' | ' | ' | ' | ' | ' | ' | 4,200,000 | ' | ' | ' | |
Acquisition-related costs | 54,000 | 545,000 | 417,000 | 545,000 | ' | ' | 300,000 | ' | ' | ' | ' | |
Purchase price adjustment against goodwill | ' | ' | 6,006,000 | [1] | ' | ' | ' | 6,000,000 | ' | ' | ' | ' |
Goodwill | 45,009,000 | ' | 45,009,000 | ' | 43,469,000 | ' | 23,018,000 | ' | ' | ' | ' | |
Deferred tax assets | ' | ' | ' | ' | ' | ' | 37,200,000 | ' | ' | ' | ' | |
Deferred tax assets, valuation allowance | ' | ' | ' | ' | ' | ' | 27,700,000 | ' | ' | ' | ' | |
Deferred tax liability | ' | ' | ' | ' | ' | ' | 6,900,000 | ' | ' | ' | ' | |
Deferred tax assets, net | ' | ' | ' | ' | ' | ' | 2,638,000 | ' | ' | ' | ' | |
Acquired identifiable intangibles | $10,355,000 | ' | $10,355,000 | ' | ' | ' | $10,355,000 | ' | ' | ' | ' | |
[1] | The purchase price adjustments identified during the nine months of 2014 have been retroactively applied as of December 31, 2013. |
Summary_of_Final_Purchase_Pric
Summary of Final Purchase Price Allocation for Acquisition (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 09, 2013 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | Antenna | Antenna | ||
Total purchase consideration: | ' | ' | ' | ' |
Cash | ' | ' | $27,100 | $27,141 |
Allocation of the purchase consideration: | ' | ' | ' | ' |
Cash | ' | ' | ' | 783 |
Accounts receivable, net of allowance | ' | ' | ' | 4,184 |
Other assets | ' | ' | ' | 3,951 |
Property and equipment | ' | ' | ' | 655 |
Deferred tax assets, net | ' | ' | ' | 2,638 |
Identifiable intangible assets | 10,355 | ' | ' | 10,355 |
Goodwill | 45,009 | 43,469 | ' | 23,018 |
Accounts payable | ' | ' | ' | -1,396 |
Accrued liabilities | ' | ' | ' | -12,861 |
Deferred revenue | ' | ' | ' | -4,186 |
Net assets acquired | ' | ' | ' | $27,141 |
Schedule_of_Identifiable_Intan
Schedule of Identifiable Intangible Assets Acquired, by Major Asset Class (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Value of acquired intangible assets | $10,355 |
Weighted-average amortization period | '3 years 2 months 12 days |
Customer-related intangible assets | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Value of acquired intangible assets | 4,279 |
Weighted-average amortization period | '4 years |
Technology | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Value of acquired intangible assets | 3,656 |
Weighted-average amortization period | '3 years |
Non-compete | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Value of acquired intangible assets | 1,342 |
Weighted-average amortization period | '1 year |
Trade name | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Value of acquired intangible assets | $1,078 |
Weighted-average amortization period | '3 years |
Pro_Forma_Financial_Informatio
Pro Forma Financial Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Business Acquisition [Line Items] | ' | ' |
Revenue | $131,301 | $379,595 |
Net income | $9,750 | $19,413 |
Net income per basic share | $0.13 | $0.26 |
Net income per diluted share | $0.12 | $0.25 |
Changes_in_Carrying_Amount_of_
Changes in Carrying Amount of Goodwill (Detail) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | |
Previously Reported | |||
Goodwill [Line Items] | ' | ' | |
Balance as of beginning of period | $43,469 | $37,463 | |
Purchase price adjustments to goodwill retroactively applied | 6,006 | [1] | ' |
Goodwill acquired | 1,540 | ' | |
Balance as of end of period | $45,009 | $37,463 | |
[1] | The purchase price adjustments identified during the nine months of 2014 have been retroactively applied as of December 31, 2013. |
Schedule_of_Amortizable_Intang
Schedule of Amortizable Intangible Asset (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 102,337 | 100,394 |
Accumulated Amortization | -54,457 | -43,820 |
Net book value | 47,880 | 56,574 |
Customer related intangibles | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 48,634 | 48,634 |
Accumulated Amortization | -22,813 | -18,317 |
Net book value | 25,821 | 30,317 |
Customer related intangibles | Minimum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Range of Useful Lives | '4 years | '4 years |
Customer related intangibles | Maximum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Range of Useful Lives | '9 years | '9 years |
Technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 48,342 | 47,102 |
Accumulated Amortization | -27,539 | -22,873 |
Net book value | 20,803 | 24,229 |
Technology | Minimum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Range of Useful Lives | '3 years | '3 years |
Technology | Maximum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Range of Useful Lives | '9 years | '9 years |
Other intangibles | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 5,361 | 4,658 |
Accumulated Amortization | -4,105 | -2,630 |
Net book value | 1,256 | 2,028 |
Other intangibles | Minimum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Range of Useful Lives | '1 year | '1 year |
Other intangibles | Maximum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Range of Useful Lives | '5 years | '5 years |
Amortization_Expense_of_Acquir
Amortization Expense of Acquired Intangibles (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Amortization expense: | ' | ' | ' | ' |
Total amortization expense | $3,457 | $2,772 | $10,637 | $8,322 |
Cost of revenue | ' | ' | ' | ' |
Amortization expense: | ' | ' | ' | ' |
Total amortization expense | 1,382 | 1,540 | 4,666 | 4,622 |
Selling and marketing | ' | ' | ' | ' |
Amortization expense: | ' | ' | ' | ' |
Total amortization expense | 1,501 | 1,232 | 4,496 | 3,696 |
General and administrative | ' | ' | ' | ' |
Amortization expense: | ' | ' | ' | ' |
Total amortization expense | $574 | ' | $1,475 | $4 |
Estimated_Future_Amortization_
Estimated Future Amortization Expense (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets [Line Items] | ' |
Remainder of 2014 | $3,149 |
2015 | 12,073 |
2016 | 11,386 |
2017 | 9,688 |
2018 | 8,688 |
2019 | 2,896 |
Future estimated amortization expense, total | $47,880 |
Schedule_of_Accrued_Expenses_D
Schedule of Accrued Expenses (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued expenses | ' | ' |
Partner commissions | $1,592 | $4,106 |
Other taxes | 10,080 | 10,381 |
Employee reimbursable expenses | 2,378 | 1,539 |
Dividends payable | 2,293 | 1,145 |
Professional services contractor fees | 2,318 | 1,997 |
Self-insurance health and dental claims | 1,351 | 1,265 |
Professional fees | 1,860 | 2,868 |
Short-term deferred rent | 1,401 | 740 |
Income taxes payable | 733 | 1,450 |
Acquisition-related expenses and merger consideration | 1,259 | 902 |
Restructuring | 816 | 371 |
Marketing expenses and programs | 2,166 | 1,279 |
Purchased securities settled after period end | 2,997 | ' |
Other | 3,795 | 3,581 |
Total accrued expenses | $35,039 | $31,624 |
Schedule_of_Deferred_Revenue_D
Schedule of Deferred Revenue (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Revenue Arrangement [Line Items] | ' | ' |
Current deferred revenue | $128,259 | $110,690 |
Long-term deferred revenue | 20,645 | 34,196 |
Total deferred revenue | 148,904 | 144,886 |
Software license | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Current deferred revenue | 44,470 | 28,826 |
Long-term deferred revenue | 20,227 | 32,727 |
Maintenance | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Current deferred revenue | 73,573 | 72,715 |
Cloud | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Current deferred revenue | 3,826 | 2,360 |
Long-term deferred revenue | 38 | 354 |
Services and other | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Current deferred revenue | 6,390 | 6,789 |
Maintenance and services | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Long-term deferred revenue | $380 | $1,115 |
Recovered_Sheet1
Accrued Restructuring Expenses - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring costs | $192 | $1,700 | $192 |
Lease expiration date | ' | ' | '2021 |
Summary_of_Restructuring_Activ
Summary of Restructuring Activity (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring Reserve, Beginning Balance | ' | ' | $1,591 |
Restructuring expenses | 192 | 1,700 | 192 |
Cash payments | ' | ' | -257 |
Other | ' | ' | -128 |
Restructuring Reserve, Ending Balance | $1,398 | $1,591 | $1,398 |
Schedule_of_Restructuring_Rese
Schedule of Restructuring Reserve (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Restructuring Cost and Reserve [Line Items] | ' | ' |
Accrued expenses | $816 | $371 |
Other long-term liabilities | 582 | 1,220 |
Restructuring Reserve, Total | $1,398 | $1,591 |
Stock_Based_Compensation_Expen
Stock Based Compensation Expense Included in Consolidated Statements of Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation before tax | $5,268 | $3,000 | $13,721 | $9,713 |
Income tax benefit | -1,395 | -893 | -3,977 | -2,941 |
Cost of Services | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation before tax | 1,418 | 947 | 3,816 | 3,134 |
Operating Expenses | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation before tax | $3,850 | $2,053 | $9,905 | $6,579 |
Stock_Based_Compensation_Addit
Stock Based Compensation - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | Apr. 01, 2014 | Sep. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Common stock split, conversion ratio | 2 | 2 |
Unrecognized stock-based compensation expense | ' | $24.20 |
Weighted-average period of recognition of unrecognized stock-based compensation expense (in years) | ' | '2 years 1 month 6 days |
Employees | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Shares issued | ' | 635,000 |
Non-employee directors | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Shares issued | ' | 29,000 |
RSUs | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of shares granted | ' | 1,193,000 |
Fair value of shares granted | ' | 23.7 |
RSUs issued in connection with the election by employees to receive 50% of their 2014 target incentive compensation | ' | 100,000 |
Compensation percentage of target incentive compensation eligible to be elected and received by employees | ' | 50.00% |
Restricted stock compensation expense | ' | 2 |
Total stock-based compensation, period of recognition | ' | '1 year |
Nonqualified Stock Options | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Fair value of shares granted | ' | $9.90 |
Number of shares granted | ' | 1,299,000 |
Summary_of_Basic_and_Diluted_E
Summary of Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Earning per share reconciliation | ' | ' | ' | ' | ||||
Net income | $1,882 | $8,710 | $13,151 | $22,482 | ||||
Weighted-average common shares outstanding | 76,351 | [1] | 75,910 | [1] | 76,312 | [1] | 75,900 | [1] |
Earnings per share, basic | $0.02 | [1] | $0.11 | [1] | $0.17 | [1] | $0.30 | [1] |
Net income | $1,882 | $8,710 | $13,151 | $22,482 | ||||
Weighted-average common shares outstanding, basic | 76,351 | [1] | 75,910 | [1] | 76,312 | [1] | 75,900 | [1] |
Effect of assumed exercise of stock options, warrants and RSUs | 2,302 | [1] | 2,248 | [1] | 2,219 | [1] | 1,844 | [1] |
Weighted-average common shares outstanding, diluted | 78,653 | [1] | 78,158 | [1] | 78,531 | [1] | 77,744 | [1] |
Earnings per share, diluted | $0.02 | [1] | $0.11 | [1] | $0.17 | [1] | $0.29 | [1] |
Outstanding options and RSUs excluded as impact would be antidilutive | 107 | 66 | 110 | 292 | ||||
Stock Options | ' | ' | ' | ' | ||||
Earning per share reconciliation | ' | ' | ' | ' | ||||
Weighted-average effect of dilutive securities | 1,730 | [1] | 1,826 | [1] | 1,754 | [1] | 1,458 | [1] |
RSUs | ' | ' | ' | ' | ||||
Earning per share reconciliation | ' | ' | ' | ' | ||||
Weighted-average effect of dilutive securities | 572 | [1] | 422 | [1] | 465 | [1] | 386 | [1] |
[1] | The number of common shares and per share amounts have been retroactively restated for all prior periods presented to reflect the Company's two-for-one common stock split effected in the form of a common stock dividend distributed on April 1, 2014. |
Summary_of_Basic_and_Diluted_E1
Summary of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) | 0 Months Ended | 9 Months Ended |
Apr. 01, 2014 | Sep. 30, 2014 | |
Earnings Per Share Basic And Diluted [Line Items] | ' | ' |
Common stock split, conversion ratio | 2 | 2 |
Recovered_Sheet2
Geographic Information and Major Clients - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Segment | |
Geographic information and major clients | ' |
Number of operating segments | 1 |
Number of reportable segment, digital enterprise business solutions | 1 |
Clients accounting for 10% or more of total revenue | 'There were no clients accounting for 10% or more of the Company's total revenue during the third quarter and nine months of 2014 and 2013. |
Accounts Receivable | Minimum | ' |
Geographic information and major clients | ' |
Percentage of company outstanding trade receivables accounted by client | 10.00% |
Revenue_from_International_Cli
Revenue from International Clients by Geographic Areas (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Geographic revenue | $137,631 | $122,011 | $421,080 | $355,572 |
Geographic revenue percentage | 100.00% | 100.00% | 100.00% | 100.00% |
U.S. | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Geographic revenue | 77,792 | 59,034 | 230,220 | 189,489 |
Geographic revenue percentage | 57.00% | 49.00% | 55.00% | 53.00% |
Other Americas | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Geographic revenue | 12,195 | 4,208 | 21,499 | 14,419 |
Geographic revenue percentage | 9.00% | 3.00% | 5.00% | 4.00% |
United Kingdom | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Geographic revenue | 19,098 | 22,115 | 72,655 | 58,782 |
Geographic revenue percentage | 14.00% | 18.00% | 17.00% | 17.00% |
Other EMEA | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Geographic revenue | 15,910 | 24,910 | 66,218 | 66,538 |
Geographic revenue percentage | 11.00% | 20.00% | 16.00% | 19.00% |
Asia Pacific | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Geographic revenue | $12,636 | $11,744 | $30,488 | $26,344 |
Geographic revenue percentage | 9.00% | 10.00% | 7.00% | 7.00% |
Trade_Receivables_of_Major_Cli
Trade Receivables of Major Clients (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Accounts Receivable | ||
Client A | |||
Revenue, Major Customer [Line Items] | ' | ' | ' |
Trade receivables, net of allowance | $103,439 | $165,641 | ' |
Major clients percentage of trade receivables | ' | ' | 16.00% |
Subsequent_Event_Additional_In
Subsequent Event - Additional Information (Detail) (Subsequent Event, Ultima, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Oct. 31, 2014 |
Subsequent Event | Ultima | ' |
Subsequent Event [Line Items] | ' |
Business acquisition consideration | $3.10 |
Cash acquired from acquisition | $1.70 |