Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 22, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PEGA | |
Entity Registrant Name | PEGASYSTEMS INC | |
Entity Central Index Key | 1,013,857 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 76,308,871 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 92,180 | $ 93,026 |
Marketable securities | 101,733 | 126,052 |
Total cash, cash equivalents, and marketable securities | 193,913 | 219,078 |
Trade accounts receivable, net of allowance of $5,028 and $4,631 | 202,399 | 211,846 |
Deferred income taxes | 12,414 | 12,380 |
Income taxes receivable | 4,898 | 4,770 |
Other current assets | 23,199 | 10,791 |
Total current assets | 436,823 | 458,865 |
Property and equipment, net | 35,940 | 31,319 |
Long-term deferred income taxes | 52,536 | 53,350 |
Long-term other assets | 3,728 | 4,030 |
Intangible assets, net | 30,431 | 33,418 |
Goodwill | 46,724 | 46,776 |
Total assets | 606,182 | 627,758 |
Current liabilities: | ||
Accounts payable | 11,978 | 12,675 |
Accrued expenses | 46,062 | 42,768 |
Accrued compensation and related expenses | 32,472 | 55,872 |
Deferred revenue | 158,181 | 155,873 |
Total current liabilities | 248,693 | 267,188 |
Income taxes payable | 5,648 | 5,618 |
Long-term deferred revenue | 13,458 | 15,805 |
Other long-term liabilities | 15,879 | 16,288 |
Total liabilities | $ 283,678 | $ 304,899 |
Stockholders' equity: | ||
Preferred stock, 1,000 shares authorized; no shares issued and outstanding | ||
Common stock, 200,000 shares authorized; 76,385 shares and 76,488 shares issued and outstanding | $ 764 | $ 765 |
Additional paid-in capital | 138,075 | 145,418 |
Retained earnings | 186,893 | 180,183 |
Accumulated other comprehensive loss | (3,228) | (3,507) |
Total stockholders' equity | 322,504 | 322,859 |
Total liabilities and stockholders' equity | $ 606,182 | $ 627,758 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Allowance for sales credit memos | $ 5,028 | $ 4,631 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 76,385,000 | 76,488,000 |
Common stock, shares outstanding | 76,385,000 | 76,488,000 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Software license | $ 68,345 | $ 57,975 |
Maintenance | 52,975 | 48,752 |
Services | 57,538 | 47,191 |
Total revenue | 178,858 | 153,918 |
Cost of revenue: | ||
Software license | 1,021 | 1,076 |
Maintenance | 5,915 | 5,180 |
Services | 49,574 | 43,803 |
Total cost of revenue | 56,510 | 50,059 |
Gross profit | 122,348 | 103,859 |
Operating expenses: | ||
Selling and marketing | 61,078 | 55,735 |
Research and development | 34,920 | 29,844 |
General and administrative | 11,048 | 6,345 |
Acquisition-related | 919 | 26 |
Restructuring | 258 | |
Total operating expenses | 108,223 | 91,950 |
Income from operations | 14,125 | 11,909 |
Foreign currency transaction gain (loss) | 1,376 | (2,962) |
Interest income, net | 290 | 313 |
Other expense, net | (2,298) | |
Income before provision for income taxes | 13,493 | 9,260 |
Provision for income taxes | 4,488 | 3,325 |
Net income | $ 9,005 | $ 5,935 |
Earnings per share: | ||
Basic | $ 0.12 | $ 0.08 |
Diluted | $ 0.11 | $ 0.08 |
Weighted-average number of common shares outstanding | ||
Basic | 76,375 | 76,401 |
Diluted | 78,878 | 78,592 |
Cash dividends declared per share | $ 0.03 | $ 0.03 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net income | $ 9,005 | $ 5,935 |
Other comprehensive gain (loss), net: | ||
Unrealized gain on available-for-sale marketable securities, net of tax | 286 | 91 |
Foreign currency translation adjustments | (7) | (3,096) |
Total other comprehensive gain (loss), net | 279 | (3,005) |
Comprehensive income | $ 9,284 | $ 2,930 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities: | ||
Net income | $ 9,005 | $ 5,935 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Excess tax benefits from exercise or vesting of equity awards | (1,398) | (822) |
Deferred income taxes | 650 | (3) |
Depreciation and amortization | 5,466 | 5,624 |
Stock-based compensation expense | 8,935 | 6,269 |
Foreign currency transaction (gain) loss | (1,376) | 2,962 |
Other non-cash | 2,712 | 161 |
Change in operating assets and liabilities: | ||
Trade accounts receivable | 6,697 | (299) |
Income taxes receivable and other current assets | (201) | (4,403) |
Accounts payable and accrued expenses | (23,427) | (21,621) |
Deferred revenue | 1,129 | 33,919 |
Other long-term assets and liabilities | 450 | (201) |
Cash provided by operating activities | 8,642 | 27,521 |
Investing activities: | ||
Purchases of marketable securities | (8,193) | (18,120) |
Proceeds from maturities and called marketable securities | 15,890 | 16,549 |
Sales of marketable securities | 6,179 | |
Payments for acquisitions, net of cash acquired | (255) | (535) |
Investment in property and equipment | (4,251) | (3,275) |
Cash provided by (used in) investing activities | 9,370 | (5,381) |
Financing activities: | ||
Issuance of common stock for share-based compensation plans | 44 | 146 |
Excess tax benefits from exercise or vesting of equity awards | 1,398 | 822 |
Dividend payments to shareholders | (2,297) | (2,294) |
Common stock repurchases for tax withholdings for net settlement of equity awards | (5,682) | (2,584) |
Common stock repurchases under share repurchase programs | (11,887) | (2,427) |
Cash used in financing activities | (18,424) | (6,337) |
Effect of exchange rates on cash and cash equivalents | (434) | (2,908) |
Net (decrease) increase in cash and cash equivalents | (846) | 12,895 |
Cash and cash equivalents, beginning of period | 93,026 | 114,585 |
Cash and cash equivalents, end of period | $ 92,180 | $ 127,480 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
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, 2015. 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 2016. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2016 | |
NEW ACCOUNTING PRONOUNCEMENTS | 2. NEW ACCOUNTING PRONOUNCEMENTS Recently issued accounting guidance : Improvements to Employee Share-Based Payment Accounting: Leases: Balance Sheet Classification of Deferred Taxes: Revenue from Contracts with Customers: Recently adopted accounting guidance: Simplifying the Accounting for Measurement-Period Adjustments: |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 3 Months Ended |
Mar. 31, 2016 | |
MARKETABLE SECURITIES | 3. MARKETABLE SECURITIES March 31, 2016 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Municipal bonds $ 50,156 $ 103 $ (10 ) $ 50,249 Corporate bonds 49,513 84 (15 ) 49,582 Certificates of deposit 1,901 1 — 1,902 $ 101,570 $ 188 $ (25 ) $ 101,733 December 31, 2015 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Municipal bonds $ 57,394 $ 7 $ (66 ) $ 57,335 Corporate bonds 66,960 2 (147 ) 66,815 Certificates of deposit 1,903 — (1 ) 1,902 $ 126,257 $ 9 $ (214 ) $ 126,052 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. Unrealized gains and losses considered to be other-than-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 unaudited condensed consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. As of March 31, 2016, the Company did not hold any investments with unrealized gains and losses that are considered to be other-than-temporary. As of March 31, 2016, remaining maturities of marketable debt securities ranged from June 2016 to January 2019, with a weighted-average remaining maturity of approximately 18 months. During the first quarter of 2016, the Company sold $10.1 million of marketable securities, which did not settle until April 2016 and are reflected in other current assets in the accompanying unaudited condensed consolidated balance sheets. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2016 | |
DERIVATIVE INSTRUMENTS | 4. DERIVATIVE INSTRUMENTS The Company uses foreign currency forward contracts (“forward contracts”) to hedge its exposure to fluctuations in foreign currency exchange rates associated with its foreign currency denominated cash, accounts receivable, and intercompany receivables and payables held by its U.S. operating company and United Kingdom subsidiary. The Company is primarily exposed to foreign currency exchange rate fluctuations in the U.S. dollar, the Euro, and the Australian dollar relative to the British pound and the Euro, the British pound, and the Indian rupee relative to the U.S. dollar. The forward contracts are not designated as hedging instruments. As a result, the Company records the fair value of these contracts at the end of each reporting period in the accompanying unaudited condensed consolidated balance sheets 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 expense, net, in the accompanying unaudited condensed consolidated statements of operations. The cash flows related to these forward contracts are classified as operating activities in the accompanying unaudited condensed consolidated statements of cash flows. The Company does not enter into any forward contracts for trading or speculative purposes. As of March 31, 2016 and December 31, 2015, the total notional amount of the Company’s outstanding forward contracts was $59.3 million and $32.3 million, respectively. The fair value of the Company’s outstanding forward contracts was as follows: March 31, 2016 December 31, 2015 (in thousands) Balance Sheet Fair Balance Sheet Fair Asset Derivatives Foreign currency forward contracts Other current assets $ 722 Other current assets $ 48 Liability Derivatives Foreign currency forward contracts Accrued expenses $ 447 Accrued expenses $ 1,052 The Company entered into forward contracts with notional values as follows: Notional Amount Three Months Ended March 31, Currency (in thousands) 2016 2015 Euro € 34,435 € — British pound £ 9,105 £ — Australian dollar A$ 36,275 A$ — Indian rupee Rs 968,500 Rs — United States dollar $ 48,820 $ — Three Months Ended (in thousands) 2016 2015 Loss from the change in the fair value of forward contracts included in other expense, net $ (2,297 ) $ — Foreign currency transaction gains (losses) from the remeasurement of foreign currency assets and liabilities $ 1,376 $ (2,962 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2016 | |
FAIR VALUE MEASUREMENTS | 5. FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company records its marketable securities and forward contracts 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 money market funds are classified within Level 1 of the fair value hierarchy. The Company’s investments 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 foreign currency forward contracts, which are all classified within Level 2 of the fair value hierarchy, are valued based on the notional amounts and rates under the contracts and observable market inputs such as currency exchange rates and credit risk. 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 Level 1 and Level 2 during the three months ended March 31, 2016. The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following: Fair Value Measurements at (in thousands) March 31, 2016 Level 1 Level 2 Fair Value Assets: Money market funds $ 6,273 $ 6,273 $ — Marketable securities: Municipal bonds $ 50,249 $ — $ 50,249 Corporate bonds 49,582 — 49,582 Certificates of deposit 1,902 — 1,902 Total marketable securities $ 101,733 $ — $ 101,733 Foreign currency forward contracts $ 722 $ — $ 722 Fair Value Liabilities: Foreign currency forward contracts $ 447 $ — $ 447 Fair Value Measurements at Reporting Date Using (in thousands) December 31, Level 1 Level 2 Fair Value Assets: Money market funds $ 573 $ 573 $ — Marketable securities: Municipal bonds $ 57,335 $ — $ 57,335 Corporate bonds 66,815 — 66,815 Certificates of deposit 1,902 — 1,902 Total marketable securities $ 126,052 $ — $ 126,052 Foreign currency forward contracts $ 48 $ — $ 48 Fair Value Liabilities: Foreign currency forward contracts $ 1,052 $ — $ 1,052 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 first three months of 2016 and 2015, 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 | 3 Months Ended |
Mar. 31, 2016 | |
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | 6. TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE Unbilled trade accounts receivable primarily relate to services earned under time and materials arrangements and to license, maintenance, and cloud arrangements that have commenced or been delivered in excess of scheduled invoicing. (in thousands) March 31, 2016 December 31, 2015 Trade accounts receivable $ 189,022 $ 190,820 Unbilled trade accounts receivable 18,405 25,657 Total accounts receivable 207,427 216,477 Allowance for sales credit memos (5,028 ) (4,631 ) $ 202,399 $ 211,846 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 7. GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents the changes in the carrying amount of goodwill: (in thousands) 2016 Balance as of January 1, $ 46,776 Translation adjustments (52 ) Balance as of March 31, $ 46,724 Intangible assets are recorded at cost and are amortized using the straight-line method over their estimated useful lives. (in thousands) Range of Cost Accumulated Amortization Net Book Value As of March 31, 2016 Customer related intangibles 4-9 years $ 49,519 $ (31,990 ) $ 17,529 Technology 3-9 years 48,342 (35,628 ) 12,714 Other intangibles 3 years 5,361 (5,173 ) 188 Total $ 103,222 $ (72,791 ) $ 30,431 (in thousands) Range of Useful Lives Cost Accumulated Amortization Net Book Value As of December 31, 2015 Customer related intangibles 4-9 years $ 49,546 $ (30,465 ) $ 19,081 Technology 3-9 years 48,342 (34,282 ) 14,060 Other intangibles 3 years 5,361 (5,084 ) 277 Total $ 103,249 $ (69,831 ) $ 33,418 Amortization expense of acquired intangibles is reflected in the Company’s unaudited condensed consolidated statements of operations as follows: Three Months Ended March 31, (in thousands) 2016 2015 Cost of revenue $ 1,346 $ 1,343 Selling and marketing 1,530 1,531 General and administrative 89 264 Total amortization expense $ 2,965 $ 3,138 Amortization of intangibles is estimated to be recorded over their remaining useful lives as follows: (in thousands) as of March 31, 2016 Future estimated Remainder of 2016 $ 8,562 2017 9,812 2018 8,812 2019 3,020 2020 and thereafter 225 $ 30,431 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2016 | |
ACCRUED EXPENSES | 8. ACCRUED EXPENSES (in thousands) March 31, December 31, Partner commissions $ 3,211 $ 3,319 Other taxes 9,803 10,070 Employee reimbursable expenses 2,626 1,426 Dividends payable 2,295 2,297 Professional services contractor fees 4,087 4,580 Self-insurance health and dental claims 2,265 2,129 Professional fees 4,202 2,937 Short-term deferred rent 1,617 1,600 Income taxes payable 2,826 5,464 Acquisition-related expenses and merger consideration 1,072 834 Restructuring 282 394 Marketing and sales program expenses 2,530 1,397 Cloud hosting expenses 1,425 1,370 Foreign currency forward contracts 447 1,052 Fixed assets in progress 4,314 1,632 Other 3,060 2,267 $ 46,062 $ 42,768 |
DEFERRED REVENUE
DEFERRED REVENUE | 3 Months Ended |
Mar. 31, 2016 | |
DEFERRED REVENUE | 9. DEFERRED REVENUE (in thousands) March 31, December 31, Software license $ 35,457 $ 40,886 Maintenance 102,780 95,262 Cloud 10,940 8,948 Services 9,004 10,777 Current deferred revenue 158,181 155,873 Software license 9,898 12,389 Maintenance and services 2,065 2,227 Cloud 1,495 1,189 Long-term deferred revenue 13,458 15,805 $ 171,639 $ 171,678 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2016 | |
STOCK-BASED COMPENSATION | 10. STOCK-BASED COMPENSATION The following table presents the stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of operations: Three Months Ended (in thousands) 2016 2015 Cost of revenues $ 2,680 $ 1,953 Operating expenses 6,255 4,316 Total stock-based compensation before tax $ 8,935 $ 6,269 Income tax benefit $ (2,605 ) $ (1,783 ) During the first three months of 2016, the Company issued approximately 415,000 shares of common stock to its employees under the Company’s share-based compensation plans. During the first three months of 2016, the Company granted approximately 1,336,000 restricted stock units (“RSUs”) and 1,808,000 non-qualified stock options to its employees with total fair values of approximately $32.5 million and $15.4 million, respectively. This includes approximately 220,000 RSUs which were granted in connection with the election by employees to receive 50% of their 2016 target incentive compensation under the Company’s Corporate Incentive Compensation Plan in the form of RSUs instead of cash. Stock-based compensation of approximately $4.7 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, treating each vesting tranche as if it were an individual grant. As of March 31, 2016, the Company had approximately $59.3 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 2.3 years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
EARNINGS PER SHARE | 11. 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 and RSUs, 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 anti-dilutive in the periods presented, but could be dilutive in the future. Three Months Ended (in thousands, except per share amounts) 2016 2015 Basic Net income $ 9,005 $ 5,935 Weighted-average common shares outstanding 76,375 76,401 Earnings per share, basic $ 0.12 $ 0.08 Diluted Net income $ 9,005 $ 5,935 Weighted-average common shares outstanding, basic 76,375 76,401 Weighted-average effect of dilutive securities: Stock options 1,444 1,510 RSUs 1,059 681 Effect of assumed exercise of stock options and RSUs 2,503 2,191 Weighted-average common shares outstanding, assuming dilution 78,878 78,592 Earnings per share, diluted $ 0.11 $ 0.08 Outstanding options and RSUs excluded as impact would be anti-dilutive 492 60 |
GEOGRAPHIC INFORMATION AND MAJO
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | 3 Months Ended |
Mar. 31, 2016 | |
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | 12. 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 strategic software applications and Pega 7 platform, and provides consulting services, maintenance, and training related to its offerings. 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, who is the chief executive officer, reviews financial information on a consolidated basis. Therefore, the Company determined it has one reportable segment — Digital Enterprise Business Solutions, and one reporting unit. The Company’s international revenue is from clients based outside of the U.S. The Company derived its revenue from the following geographic areas: Three Months Ended (Dollars in thousands) 2016 2015 U.S. $ 93,228 52 % $ 90,164 59 % Other Americas 25,559 14 % 12,296 8 % United Kingdom 24,355 14 % 20,227 13 % Other EMEA (1) 21,267 12 % 18,869 12 % Asia Pacific 14,449 8 % 12,362 8 % $ 178,858 100 % $ 153,918 100 % (1) Includes Europe, other than the United Kingdom, the Middle East and Africa (“Other EMEA”). Clients accounting for 10% or more of the Company’s total revenue were as follows: Three Months Ended (Dollars in thousands) 2016 2015 Total revenue $ 178,858 $ 153,918 Client A 10 % — % Clients accounting for 10% or more of the Company’s total outstanding trade receivables, net of allowance, were as follows: (Dollars in thousands) As of March 31, As of December 31, Trade receivables, net of allowances $ 202,399 $ 211,846 Client B — % 10 % |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 31, 2016 | |
SUBSEQUENT EVENT | 13. SUBSEQUENT EVENT On April 11, 2016, the Company acquired OpenSpan, Inc. (“OpenSpan”), a privately held software provider of robotic process automation and workforce analytics software, through the merger of a wholly-owned subsidiary of the Company with and into OpenSpan, with OpenSpan surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”). The Company paid a purchase price of $52.3 million in cash, subject to a customary post-closing adjustment based on the final determination of closing net working capital. $7.6 million of the purchase price was deposited in escrow for an 18-month period after the closing of the Merger as security for the indemnification obligations of the former securityholders of OpenSpan and as security for the post-closing adjustment obligations. In addition, $1.5 million of the purchase price is subject to a holdback and contingent on the achievement of certain revenue targets by June 30, 2016. The Company is in the process of preparing an allocation of the purchase price to the fair value of assets acquired and liabilities assumed, and currently expects that a substantial portion of the OpenSpan purchase price will ultimately be allocated to intangible assets, and that such assets are likely to include acquired core technology, customer related assets, and goodwill. During the first quarter of 2016, the Company incurred $0.9 million of direct and incremental expenses that were primarily legal and advisory fees and due diligence costs to affect the acquisition. The Company believes the acquisition will enable its and OpenSpan’s clients to experience the benefits of a fully-unified Customer Relationship Management (“CRM”) solution and to optimize their complex customer service representative processes by providing advanced robotic automation and workforce analytics capabilities to complement and enhance the Company’s CRM application suite and Business Process Management platform. |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Schedule of Available for Sale Securities Reconciliation | March 31, 2016 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Municipal bonds $ 50,156 $ 103 $ (10 ) $ 50,249 Corporate bonds 49,513 84 (15 ) 49,582 Certificates of deposit 1,901 1 — 1,902 $ 101,570 $ 188 $ (25 ) $ 101,733 December 31, 2015 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Municipal bonds $ 57,394 $ 7 $ (66 ) $ 57,335 Corporate bonds 66,960 2 (147 ) 66,815 Certificates of deposit 1,903 — (1 ) 1,902 $ 126,257 $ 9 $ (214 ) $ 126,052 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value of Company Outstanding Forward Contracts | The fair value of the Company’s outstanding forward contracts was as follows: March 31, 2016 December 31, 2015 (in thousands) Balance Sheet Fair Balance Sheet Fair Asset Derivatives Foreign currency forward contracts Other current assets $ 722 Other current assets $ 48 Liability Derivatives Foreign currency forward contracts Accrued expenses $ 447 Accrued expenses $ 1,052 |
Forward Contracts with Notional Values | The Company entered into forward contracts with notional values as follows: Notional Amount Three Months Ended March 31, Currency (in thousands) 2016 2015 Euro € 34,435 € — British pound £ 9,105 £ — Australian dollar A$ 36,275 A$ — Indian rupee Rs 968,500 Rs — United States dollar $ 48,820 $ — |
Change in Fair Value of Forward Contracts | Three Months Ended (in thousands) 2016 2015 Loss from the change in the fair value of forward contracts included in other expense, net $ (2,297 ) $ — Foreign currency transaction gains (losses) from the remeasurement of foreign currency assets and liabilities $ 1,376 $ (2,962 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Assets and Liabilities Measured at Fair Value | The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following: Fair Value Measurements at (in thousands) March 31, 2016 Level 1 Level 2 Fair Value Assets: Money market funds $ 6,273 $ 6,273 $ — Marketable securities: Municipal bonds $ 50,249 $ — $ 50,249 Corporate bonds 49,582 — 49,582 Certificates of deposit 1,902 — 1,902 Total marketable securities $ 101,733 $ — $ 101,733 Foreign currency forward contracts $ 722 $ — $ 722 Fair Value Liabilities: Foreign currency forward contracts $ 447 $ — $ 447 Fair Value Measurements at Reporting Date Using (in thousands) December 31, Level 1 Level 2 Fair Value Assets: Money market funds $ 573 $ 573 $ — Marketable securities: Municipal bonds $ 57,335 $ — $ 57,335 Corporate bonds 66,815 — 66,815 Certificates of deposit 1,902 — 1,902 Total marketable securities $ 126,052 $ — $ 126,052 Foreign currency forward contracts $ 48 $ — $ 48 Fair Value Liabilities: Foreign currency forward contracts $ 1,052 $ — $ 1,052 |
TRADE ACCOUNTS RECEIVABLE, NE23
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Schedule of Trade Accounts Receivable | Unbilled trade accounts receivable primarily relate to services earned under time and materials arrangements and to license, maintenance, and cloud arrangements that have commenced or been delivered in excess of scheduled invoicing. (in thousands) March 31, 2016 December 31, 2015 Trade accounts receivable $ 189,022 $ 190,820 Unbilled trade accounts receivable 18,405 25,657 Total accounts receivable 207,427 216,477 Allowance for sales credit memos (5,028 ) (4,631 ) $ 202,399 $ 211,846 |
GOODWILL AND OTHER INTANGIBLE24
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Changes in Carrying Amount of Goodwill | The following table presents the changes in the carrying amount of goodwill: (in thousands) 2016 Balance as of January 1, $ 46,776 Translation adjustments (52 ) Balance as of March 31, $ 46,724 |
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 Cost Accumulated Amortization Net Book Value As of March 31, 2016 Customer related intangibles 4-9 years $ 49,519 $ (31,990 ) $ 17,529 Technology 3-9 years 48,342 (35,628 ) 12,714 Other intangibles 3 years 5,361 (5,173 ) 188 Total $ 103,222 $ (72,791 ) $ 30,431 (in thousands) Range of Useful Lives Cost Accumulated Amortization Net Book Value As of December 31, 2015 Customer related intangibles 4-9 years $ 49,546 $ (30,465 ) $ 19,081 Technology 3-9 years 48,342 (34,282 ) 14,060 Other intangibles 3 years 5,361 (5,084 ) 277 Total $ 103,249 $ (69,831 ) $ 33,418 |
Amortization Expense of Acquired Intangibles | Amortization expense of acquired intangibles is reflected in the Company’s unaudited condensed consolidated statements of operations as follows: Three Months Ended March 31, (in thousands) 2016 2015 Cost of revenue $ 1,346 $ 1,343 Selling and marketing 1,530 1,531 General and administrative 89 264 Total amortization expense $ 2,965 $ 3,138 |
Estimated Future Amortization Expense | Amortization of intangibles is estimated to be recorded over their remaining useful lives as follows: (in thousands) as of March 31, 2016 Future estimated Remainder of 2016 $ 8,562 2017 9,812 2018 8,812 2019 3,020 2020 and thereafter 225 $ 30,431 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Schedule of Accrued Expenses | (in thousands) March 31, December 31, Partner commissions $ 3,211 $ 3,319 Other taxes 9,803 10,070 Employee reimbursable expenses 2,626 1,426 Dividends payable 2,295 2,297 Professional services contractor fees 4,087 4,580 Self-insurance health and dental claims 2,265 2,129 Professional fees 4,202 2,937 Short-term deferred rent 1,617 1,600 Income taxes payable 2,826 5,464 Acquisition-related expenses and merger consideration 1,072 834 Restructuring 282 394 Marketing and sales program expenses 2,530 1,397 Cloud hosting expenses 1,425 1,370 Foreign currency forward contracts 447 1,052 Fixed assets in progress 4,314 1,632 Other 3,060 2,267 $ 46,062 $ 42,768 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Schedule of Deferred Revenue | (in thousands) March 31, December 31, Software license $ 35,457 $ 40,886 Maintenance 102,780 95,262 Cloud 10,940 8,948 Services 9,004 10,777 Current deferred revenue 158,181 155,873 Software license 9,898 12,389 Maintenance and services 2,065 2,227 Cloud 1,495 1,189 Long-term deferred revenue 13,458 15,805 $ 171,639 $ 171,678 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation Expense Included in Consolidated Statements of Operations | The following table presents the stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of operations: Three Months Ended (in thousands) 2016 2015 Cost of revenues $ 2,680 $ 1,953 Operating expenses 6,255 4,316 Total stock-based compensation before tax $ 8,935 $ 6,269 Income tax benefit $ (2,605 ) $ (1,783 ) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Basic and Diluted Earnings (Loss) Per Share | Three Months Ended (in thousands, except per share amounts) 2016 2015 Basic Net income $ 9,005 $ 5,935 Weighted-average common shares outstanding 76,375 76,401 Earnings per share, basic $ 0.12 $ 0.08 Diluted Net income $ 9,005 $ 5,935 Weighted-average common shares outstanding, basic 76,375 76,401 Weighted-average effect of dilutive securities: Stock options 1,444 1,510 RSUs 1,059 681 Effect of assumed exercise of stock options and RSUs 2,503 2,191 Weighted-average common shares outstanding, assuming dilution 78,878 78,592 Earnings per share, diluted $ 0.11 $ 0.08 Outstanding options and RSUs excluded as impact would be anti-dilutive 492 60 |
GEOGRAPHIC INFORMATION AND MA29
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Revenue by Geographic Area | The Company’s international revenue is from clients based outside of the U.S. The Company derived its revenue from the following geographic areas: Three Months Ended (Dollars in thousands) 2016 2015 U.S. $ 93,228 52 % $ 90,164 59 % Other Americas 25,559 14 % 12,296 8 % United Kingdom 24,355 14 % 20,227 13 % Other EMEA (1) 21,267 12 % 18,869 12 % Asia Pacific 14,449 8 % 12,362 8 % $ 178,858 100 % $ 153,918 100 % (1) Includes Europe, other than the United Kingdom, the Middle East and Africa (“Other EMEA”). |
Total Revenue of Major Clients | Clients accounting for 10% or more of the Company’s total revenue were as follows: Three Months Ended (Dollars in thousands) 2016 2015 Total revenue $ 178,858 $ 153,918 Client A 10 % — % |
Trade Receivables of Major Clients | Clients accounting for 10% or more of the Company’s total outstanding trade receivables, net of allowance, were as follows: (Dollars in thousands) As of March 31, As of December 31, Trade receivables, net of allowances $ 202,399 $ 211,846 Client B — % 10 % |
Schedule of Marketable Securiti
Schedule of Marketable Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 101,570 | $ 126,257 |
Unrealized Gains | 188 | 9 |
Unrealized Losses | (25) | (214) |
Fair Value | 101,733 | 126,052 |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 50,156 | 57,394 |
Unrealized Gains | 103 | 7 |
Unrealized Losses | (10) | (66) |
Fair Value | 50,249 | 57,335 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 49,513 | 66,960 |
Unrealized Gains | 84 | 2 |
Unrealized Losses | (15) | (147) |
Fair Value | 49,582 | 66,815 |
Certificates of Deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,901 | 1,903 |
Unrealized Gains | 1 | |
Unrealized Losses | (1) | |
Fair Value | $ 1,902 | $ 1,902 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Weighted-average remaining maturity period of marketable debt securities, months | 18 months | |
Marketable securities | $ 101,733 | $ 126,052 |
Securities Sold, Not yet Settled | Other current assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable securities | $ 10,100 | |
Marketable securities, settlement date | 2016-04 | |
Minimum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Remaining maturities of marketable debt securities | 2016-06 | |
Maximum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Remaining maturities of marketable debt securities | 2019-01 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Foreign Exchange Forward | ||
Derivative [Line Items] | ||
Notional amount | $ 59.3 | $ 32.3 |
Fair Value of Company Outstandi
Fair Value of Company Outstanding Forward Contracts (Detail) - Foreign Exchange Forward - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accrued expenses | ||
Derivative [Line Items] | ||
Liability Derivatives | $ 447 | $ 1,052 |
Other current assets | ||
Derivative [Line Items] | ||
Asset Derivatives | $ 722 | $ 48 |
Forward Contracts with Notional
Forward Contracts with Notional Values (Detail) - 3 months ended Mar. 31, 2016 - Forward Contracts € in Thousands, ₨ in Thousands, £ in Thousands, AUD in Thousands, $ in Thousands | USD ($) | GBP (£) | AUD | INR (₨) | EUR (€) |
Euro Member Countries, Euros | |||||
Derivative [Line Items] | |||||
Notional amount | € | € 34,435 | ||||
British Pounds | |||||
Derivative [Line Items] | |||||
Notional amount | £ | £ 9,105 | ||||
Australian Dollar | |||||
Derivative [Line Items] | |||||
Notional amount | AUD | AUD 36,275 | ||||
Indian Rupees | |||||
Derivative [Line Items] | |||||
Notional amount | ₨ | ₨ 968,500 | ||||
United States of America, Dollars | |||||
Derivative [Line Items] | |||||
Notional amount | $ | $ 48,820 |
Change in Fair Value of Forward
Change in Fair Value of Forward Contracts (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Loss from the change in the fair value of forward contracts included in other expense, net | $ (2,297) | |
Foreign currency transaction gains (losses) from the remeasurement of foreign currency assets and liabilities | $ 1,376 | $ (2,962) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amount of Significant transfers between Level 1 and Level 2 | $ 0 | |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairments recognized on assets | $ 0 | $ 0 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets | ||
Total marketable securities | $ 101,733 | $ 126,052 |
Foreign currency forward contracts | ||
Fair Value Liabilities | ||
Foreign currency forward contracts | 447 | 1,052 |
Fair Value Assets | ||
Foreign currency forward contracts | 722 | 48 |
Money Market Funds | ||
Fair Value Assets | ||
Money market funds | 6,273 | 573 |
Municipal bonds | ||
Fair Value Assets | ||
Total marketable securities | 50,249 | 57,335 |
Corporate bonds | ||
Fair Value Assets | ||
Total marketable securities | 49,582 | 66,815 |
Certificates of Deposit | ||
Fair Value Assets | ||
Total marketable securities | 1,902 | 1,902 |
Level 1 | Money Market Funds | ||
Fair Value Assets | ||
Money market funds | 6,273 | 573 |
Level 2 | ||
Fair Value Assets | ||
Total marketable securities | 101,733 | 126,052 |
Level 2 | Foreign currency forward contracts | ||
Fair Value Liabilities | ||
Foreign currency forward contracts | 447 | 1,052 |
Fair Value Assets | ||
Foreign currency forward contracts | 722 | 48 |
Level 2 | Municipal bonds | ||
Fair Value Assets | ||
Total marketable securities | 50,249 | 57,335 |
Level 2 | Corporate bonds | ||
Fair Value Assets | ||
Total marketable securities | 49,582 | 66,815 |
Level 2 | Certificates of Deposit | ||
Fair Value Assets | ||
Total marketable securities | $ 1,902 | $ 1,902 |
Schedule of Trade Accounts Rece
Schedule of Trade Accounts Receivable (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 207,427 | $ 216,477 |
Allowance for sales credit memos | (5,028) | (4,631) |
Total accounts receivable net | 202,399 | 211,846 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 189,022 | 190,820 |
Unbilled trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 18,405 | $ 25,657 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill [Line Items] | |
Balance as of January 1, | $ 46,776 |
Translation adjustments | (52) |
Balance as of March 31, | $ 46,724 |
Schedule of Amortizable Intangi
Schedule of Amortizable Intangible Asset (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets [Line Items] | ||
Cost | $ 103,222 | $ 103,249 |
Accumulated Amortization | (72,791) | (69,831) |
Net Book Value | 30,431 | 33,418 |
Customer related intangibles | ||
Intangible Assets [Line Items] | ||
Cost | 49,519 | 49,546 |
Accumulated Amortization | (31,990) | (30,465) |
Net Book Value | 17,529 | 19,081 |
Technology | ||
Intangible Assets [Line Items] | ||
Cost | 48,342 | 48,342 |
Accumulated Amortization | (35,628) | (34,282) |
Net Book Value | $ 12,714 | $ 14,060 |
Other intangibles | ||
Intangible Assets [Line Items] | ||
Range of Useful Lives | 3 years | 3 years |
Cost | $ 5,361 | $ 5,361 |
Accumulated Amortization | (5,173) | (5,084) |
Net Book Value | $ 188 | $ 277 |
Minimum | Customer related intangibles | ||
Intangible Assets [Line Items] | ||
Range of Useful Lives | 4 years | 4 years |
Minimum | Technology | ||
Intangible Assets [Line Items] | ||
Range of Useful Lives | 3 years | 3 years |
Maximum | Customer related intangibles | ||
Intangible Assets [Line Items] | ||
Range of Useful Lives | 9 years | 9 years |
Maximum | Technology | ||
Intangible Assets [Line Items] | ||
Range of Useful Lives | 9 years | 9 years |
Amortization Expense of Acquire
Amortization Expense of Acquired Intangibles (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total amortization expense | $ 2,965 | $ 3,138 |
Cost of revenue | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total amortization expense | 1,346 | 1,343 |
Selling and marketing | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total amortization expense | 1,530 | 1,531 |
General and administrative | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total amortization expense | $ 89 | $ 264 |
Estimated Future Amortization E
Estimated Future Amortization Expense (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Intangible Assets [Line Items] | ||
Remainder of 2016 | $ 8,562 | |
2,017 | 9,812 | |
2,018 | 8,812 | |
2,019 | 3,020 | |
2020 and thereafter | 225 | |
Net Book Value | $ 30,431 | $ 33,418 |
Schedule of Accrued Expenses (D
Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accrued expenses | ||
Partner commissions | $ 3,211 | $ 3,319 |
Other taxes | 9,803 | 10,070 |
Employee reimbursable expenses | 2,626 | 1,426 |
Dividends payable | 2,295 | 2,297 |
Professional services contractor fees | 4,087 | 4,580 |
Self-insurance health and dental claims | 2,265 | 2,129 |
Professional fees | 4,202 | 2,937 |
Short-term deferred rent | 1,617 | 1,600 |
Income taxes payable | 2,826 | 5,464 |
Acquisition-related expenses and merger consideration | 1,072 | 834 |
Restructuring | 282 | 394 |
Marketing and sales program expenses | 2,530 | 1,397 |
Cloud hosting expenses | 1,425 | 1,370 |
Foreign currency forward contracts | 447 | 1,052 |
Fixed assets in progress | 4,314 | 1,632 |
Other | 3,060 | 2,267 |
Total accrued expenses | $ 46,062 | $ 42,768 |
Schedule of Deferred Revenue (D
Schedule of Deferred Revenue (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | $ 158,181 | $ 155,873 |
Long-term deferred revenue | 13,458 | 15,805 |
Total deferred revenue | 171,639 | 171,678 |
Software license | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 35,457 | 40,886 |
Long-term deferred revenue | 9,898 | 12,389 |
Maintenance | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 102,780 | 95,262 |
Cloud | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 10,940 | 8,948 |
Long-term deferred revenue | 1,495 | 1,189 |
Services | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 9,004 | 10,777 |
Maintenance and services | ||
Deferred Revenue Arrangement [Line Items] | ||
Long-term deferred revenue | $ 2,065 | $ 2,227 |
Stock Based Compensation Expens
Stock Based Compensation Expense Included in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation before tax | $ 8,935 | $ 6,269 |
Income tax benefit | (2,605) | (1,783) |
Cost of revenue | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation before tax | 2,680 | 1,953 |
Operating Expenses | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation before tax | $ 6,255 | $ 4,316 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ | $ 59.3 |
Weighted-average period of recognition of unrecognized stock-based compensation expense (in years) | 2 years 3 months 18 days |
Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued | shares | 415,000 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted, RSUs | shares | 1,336,000 |
Fair value of shares granted | $ | $ 32.5 |
RSUs granted in connection with the 2016 CICP | shares | 220,000 |
Percentage of target incentive compensation eligible to be elected and received by employees in the form of RSUs | 50.00% |
Restricted stock compensation expense | $ | $ 4.7 |
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 | $ | $ 15.4 |
Number of shares granted, options | shares | 1,808,000 |
Summary of Basic and Diluted Ea
Summary of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earning per share reconciliation | ||
Net income | $ 9,005 | $ 5,935 |
Weighted-average common shares outstanding | 76,375 | 76,401 |
Earnings per share, basic | $ 0.12 | $ 0.08 |
Net income | $ 9,005 | $ 5,935 |
Weighted-average common shares outstanding | 76,375 | 76,401 |
Effect of assumed exercise of stock options and RSUs | 2,503 | 2,191 |
Weighted-average common shares outstanding, assuming dilution | 78,878 | 78,592 |
Earnings per share, diluted | $ 0.11 | $ 0.08 |
Outstanding options, warrants and RSUs excluded as impact would be antidilutive | 492 | 60 |
Stock Options | ||
Earning per share reconciliation | ||
Weighted-average effect of dilutive securities | 1,444 | 1,510 |
RSUs | ||
Earning per share reconciliation | ||
Weighted-average effect of dilutive securities | 1,059 | 681 |
Geographic Information and Ma48
Geographic Information and Major Clients - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2016UnitSegment | Mar. 31, 2015 | |
Geographic information and major clients | ||
Number of reportable segment, digital enterprise business solutions | Segment | 1 | |
Number of reporting unit | Unit | 1 | |
Credit Concentration Risk | Total Revenue | Minimum | ||
Geographic information and major clients | ||
Concentration risk, percentage | 10.00% | 10.00% |
Credit Concentration Risk | Accounts receivable | Minimum | ||
Geographic information and major clients | ||
Concentration risk, percentage | 10.00% | 10.00% |
Revenue from International Clie
Revenue from International Clients by Geographic Areas (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Geographic revenue | $ 178,858 | $ 153,918 | |
Geographic revenue percentage | 100.00% | 100.00% | |
U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Geographic revenue | $ 93,228 | $ 90,164 | |
Geographic revenue percentage | 52.00% | 59.00% | |
Other Americas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Geographic revenue | $ 25,559 | $ 12,296 | |
Geographic revenue percentage | 14.00% | 8.00% | |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Geographic revenue | $ 24,355 | $ 20,227 | |
Geographic revenue percentage | 14.00% | 13.00% | |
Other EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Geographic revenue | [1] | $ 21,267 | $ 18,869 |
Geographic revenue percentage | [1] | 12.00% | 12.00% |
Asia Pacific | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Geographic revenue | $ 14,449 | $ 12,362 | |
Geographic revenue percentage | 8.00% | 8.00% | |
[1] | Includes Europe, other than the United Kingdom, the Middle East and Africa ("Other EMEA"). |
Total Revenue of Major Clients
Total Revenue of Major Clients (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue, Major Customer [Line Items] | ||
Total revenue | $ 178,858 | $ 153,918 |
Credit Concentration Risk | Total Revenue | Client A | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 10.00% |
Trade Receivables of Major Clie
Trade Receivables of Major Clients (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Mar. 31, 2016 | |
Revenue, Major Customer [Line Items] | ||
Trade receivables, net of allowance | $ 211,846 | $ 202,399 |
Credit Concentration Risk | Accounts receivable | Client B | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 10.00% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands | Apr. 11, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Subsequent Event [Line Items] | |||
Direct and incremental expenses | $ 919 | $ 26 | |
OpenSpan | |||
Subsequent Event [Line Items] | |||
Direct and incremental expenses | $ 919 | ||
Subsequent Event | OpenSpan | |||
Subsequent Event [Line Items] | |||
Purchase price of acquired company | $ 52,300 | ||
Escrow deposit | $ 7,600 | ||
Deposited in escrow period | 18 months | ||
Amount of purchase price subject to holdback and contingent on achievement of revenue targets | $ 1,500 | ||
Contingent consideration, measurement date for achievement of revenue targets | Jun. 30, 2016 |