Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 24, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
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 | 76,327,875 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 66,383 | $ 93,026 |
Marketable securities | 63,347 | 126,052 |
Total cash, cash equivalents, and marketable securities | 129,730 | 219,078 |
Trade accounts receivable, net of allowance of $4,564 and $4,631 | 208,562 | 211,846 |
Deferred income taxes | 12,409 | 12,380 |
Income taxes receivable | 13,639 | 4,770 |
Other current assets | 14,319 | 10,791 |
Total current assets | 378,659 | 458,865 |
Property and equipment, net | 39,343 | 31,319 |
Long-term deferred income taxes | 53,905 | 53,350 |
Long-term other assets | 3,755 | 4,030 |
Intangible assets, net | 47,462 | 33,418 |
Goodwill | 73,871 | 46,776 |
Total assets | 596,995 | 627,758 |
Current liabilities: | ||
Accounts payable | 8,824 | 12,675 |
Accrued expenses | 36,370 | 42,768 |
Accrued compensation and related expenses | 52,070 | 55,872 |
Deferred revenue | 140,458 | 155,873 |
Total current liabilities | 237,722 | 267,188 |
Income taxes payable | 5,253 | 5,618 |
Long-term deferred revenue | 10,228 | 15,805 |
Other long-term liabilities | 16,372 | 16,288 |
Total liabilities | 269,575 | 304,899 |
Stockholders' equity: | ||
Preferred stock, 1,000 shares authorized; no shares issued and outstanding | ||
Common stock, 200,000 shares authorized; 76,284 shares and 76,488 shares issued and outstanding | 763 | 765 |
Additional paid-in capital | 143,020 | 145,418 |
Retained earnings | 188,376 | 180,183 |
Accumulated other comprehensive loss | (4,739) | (3,507) |
Total stockholders' equity | 327,420 | 322,859 |
Total liabilities and stockholders' equity | $ 596,995 | $ 627,758 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Allowance for sales credit memos | $ 4,564 | $ 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 | 76,284,000 | 76,488,000 |
Common stock, shares outstanding | 76,284,000 | 76,488,000 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Software license | $ 68,833 | $ 58,948 | $ 207,849 | $ 180,420 |
Maintenance | 55,038 | 52,285 | 163,174 | 150,366 |
Services | 58,931 | 51,170 | 179,633 | 147,554 |
Total revenue | 182,802 | 162,403 | 550,656 | 478,340 |
Cost of revenue: | ||||
Software license | 1,313 | 1,000 | 3,646 | 3,106 |
Maintenance | 6,659 | 5,644 | 18,889 | 16,300 |
Services | 52,465 | 48,797 | 154,512 | 140,875 |
Total cost of revenue | 60,437 | 55,441 | 177,047 | 160,281 |
Gross profit | 122,365 | 106,962 | 373,609 | 318,059 |
Operating expenses: | ||||
Selling and marketing | 67,032 | 53,640 | 202,126 | 169,764 |
Research and development | 38,036 | 33,032 | 108,530 | 94,248 |
General and administrative | 11,725 | 9,579 | 34,067 | 26,138 |
Acquisition-related | 74 | 2,616 | 39 | |
Restructuring | 287 | |||
Total operating expenses | 116,867 | 96,251 | 347,626 | 290,189 |
Income from operations | 5,498 | 10,711 | 25,983 | 27,870 |
Foreign currency transaction gain (loss) | 1,082 | (412) | 2,764 | (4,342) |
Interest income, net | 172 | 278 | 650 | 807 |
Other expense, net | (1,237) | (331) | (4,891) | (328) |
Income before provision for income taxes | 5,515 | 10,246 | 24,506 | 24,007 |
Provision for income taxes | 3,097 | 3,921 | 9,436 | 8,643 |
Net income | $ 2,418 | $ 6,325 | $ 15,070 | $ 15,364 |
Earnings per share: | ||||
Basic | $ 0.03 | $ 0.08 | $ 0.20 | $ 0.20 |
Diluted | $ 0.03 | $ 0.08 | $ 0.19 | $ 0.19 |
Weighted-average number of common shares outstanding | ||||
Basic | 76,278 | 76,534 | 76,323 | 76,521 |
Diluted | 79,082 | 79,174 | 78,976 | 78,906 |
Cash dividends declared per share | $ 0.03 | $ 0.03 | $ 0.09 | $ 0.09 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net income | $ 2,418 | $ 6,325 | $ 15,070 | $ 15,364 |
Other comprehensive loss, net: | ||||
Unrealized (loss) gain on available-for-sale marketable securities, net of tax | (174) | 162 | 168 | 167 |
Foreign currency translation adjustments | (169) | (928) | (1,400) | (2,262) |
Total other comprehensive loss, net | (343) | (766) | (1,232) | (2,095) |
Comprehensive income | $ 2,075 | $ 5,559 | $ 13,838 | $ 13,269 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities: | ||
Net income | $ 15,070 | $ 15,364 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Excess tax benefits from exercise or vesting of equity awards | (3,160) | (4,661) |
Deferred income taxes | (2,841) | (2,889) |
Depreciation and amortization | 17,896 | 17,570 |
Stock-based compensation expense | 30,634 | 23,005 |
Foreign currency transaction (gain) loss | (2,764) | 4,342 |
Other non-cash | 153 | 1,129 |
Change in operating assets and liabilities: | ||
Trade accounts receivable | 3,940 | 21,969 |
Income taxes receivable and other current assets | (8,737) | (8,670) |
Accounts payable and accrued expenses | (16,678) | (4,108) |
Deferred revenue | (17,698) | (6,925) |
Other long-term assets and liabilities | 1,581 | (1,198) |
Cash provided by operating activities | 17,396 | 54,928 |
Investing activities: | ||
Purchases of marketable securities | (22,614) | (66,946) |
Proceeds from maturities and called marketable securities | 21,838 | 33,916 |
Sales of marketable securities | 62,283 | 1,915 |
Payments for acquisitions, net of cash acquired | (49,113) | (1,671) |
Investment in property and equipment | (15,253) | (9,950) |
Cash used in investing activities | (2,859) | (42,736) |
Financing activities: | ||
Issuance of common stock for share-based compensation plans | 393 | 722 |
Excess tax benefits from exercise or vesting of equity awards | 3,160 | 4,661 |
Dividend payments to shareholders | (6,883) | (6,896) |
Common stock repurchases for tax withholdings for net settlement of equity awards | (10,791) | (7,149) |
Common stock repurchases under share repurchase programs | (25,750) | (17,000) |
Cash used in financing activities | (39,871) | (25,662) |
Effect of exchange rates on cash and cash equivalents | (1,309) | (3,837) |
Net decrease in cash and cash equivalents | (26,643) | (17,307) |
Cash and cash equivalents, beginning of period | 93,026 | 114,585 |
Cash and cash equivalents, end of period | $ 66,383 | $ 97,278 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended |
Sep. 30, 2016 | |
NEW ACCOUNTING PRONOUNCEMENTS | 2. NEW ACCOUNTING PRONOUNCEMENTS Measurement of Credit Losses on Financial Instruments: Improvements to Employee Share-Based Payment Accounting: Leases: Balance Sheet Classification of Deferred Taxes: Revenue from Contracts with Customers: |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2016 | |
MARKETABLE SECURITIES | 3. MARKETABLE SECURITIES September 30, 2016 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Municipal bonds $ 35,717 $ 34 $ (24 ) $ 35,727 Corporate bonds 26,655 30 (16 ) 26,669 Certificates of deposit 950 1 — 951 $ 63,322 $ 65 $ (40 ) $ 63,347 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 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 September 30, 2016, the Company did not hold any investments with unrealized losses that are considered to be other-than-temporary. As of September 30, 2016, remaining maturities of marketable debt securities ranged from October 2016 to August 2019, with a weighted-average remaining maturity of approximately 16 months. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 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. parent company and United Kingdom (“U.K.”) 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 and the Indian rupee relative to the U.S. dollar. At the end of June 2016, the U.K. held a referendum in which U.K. voters approved an exit from the European Union (the “E.U.”), commonly referred to as “Brexit”. The announcement of Brexit resulted in a sharp decline in the value of the British pound, as compared to the U.S. dollar and other currencies. This decline primarily resulted in foreign currency transaction gains from the remeasurement of foreign currency denominated cash and accounts receivable held by the Company’s U.K. subsidiary with corresponding losses on the Company’s forward contracts included in other expense, net. 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 September 30, 2016 and December 31, 2015, the total notional amount of the Company’s outstanding forward contracts was $106.6 million and $32.3 million, respectively. The fair value of the Company’s outstanding forward contracts was as follows: September 30, 2016 December 31, 2015 (in thousands) Recorded In: Fair Value Recorded In: Fair Value Asset Derivatives Foreign currency forward contracts Other current assets $ 354 Other current assets $ 48 Liability Derivatives Foreign currency forward contracts Accrued expenses $ 393 Accrued expenses $ 1,052 The Company had forward contracts outstanding with total notional values as follows: As of September 30, Currency (in thousands) 2016 2015 Euro € 21,810 € 15,900 British pound £ 5,919 £ 1,300 Australian dollar A$ 19,515 A$ 11,500 Indian rupee Rs — Rs 300,000 United States dollar $ 59,450 $ 23,300 Three Months Ended September 30, Nine Months Ended (in thousands) 2016 2015 2016 2015 Loss from the change in the fair value of forward contracts included in other expense, net $ (1,237 ) $ (319 ) $ (4,955 ) $ (319 ) Foreign currency transaction gain (loss) from the remeasurement of foreign currency assets and liabilities $ 1,082 $ (412 ) $ 2,764 $ (4,342 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 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) September 30, Level 1 Level 2 Fair Value Assets: Money market funds $ 481 $ 481 $ — Marketable securities: Municipal bonds $ 35,727 $ — $ 35,727 Corporate bonds 26,669 — 26,669 Certificates of deposit 951 — 951 Total marketable securities $ 63,347 $ — $ 63,347 Foreign currency forward contracts $ 354 $ — $ 354 Fair Value Liabilities: Foreign currency forward contracts $ 393 $ — $ 393 Fair Value Measurements at (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 nine 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 | 9 Months Ended |
Sep. 30, 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) September 30, 2016 December 31, 2015 Trade accounts receivable $ 178,846 $ 190,820 Unbilled trade accounts receivable 34,280 25,657 Total accounts receivable 213,126 216,477 Allowance for sales credit memos (4,564 ) (4,631 ) $ 208,562 $ 211,846 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 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 Goodwill acquired during the year 27,311 Currency translation adjustments (216 ) Balance as of September 30, $ 73,871 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 As of September 30, 2016 Customer related intangibles 4-10 years $ 63,134 $ (35,714 ) $ 27,420 Technology 3-10 years 58,942 (38,908 ) 20,034 Other intangibles 3 years 5,361 (5,353 ) 8 Total $ 127,437 $ (79,975 ) $ 47,462 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 September 30, Nine Months Ended September 30, (in thousands) 2016 2015 2016 2015 Cost of revenue $ 1,642 $ 1,351 $ 4,626 $ 4,041 Selling and marketing 1,867 1,537 5,274 4,602 General and administrative 90 91 268 593 Total amortization expense $ 3,599 $ 2,979 $ 10,168 $ 9,236 Amortization of intangibles is estimated to be recorded over their remaining useful lives as follows: (in thousands) as of September 30, 2016 Future estimated Remainder of 2016 $ 3,267 2017 12,335 2018 11,335 2019 5,543 2020 2,647 2021 and thereafter 12,335 $ 47,462 |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2016 | |
ACQUISITION | 8. ACQUISITION On April 11, 2016, the Company acquired OpenSpan, Inc. (“OpenSpan”), a privately held software provider of robotic process automation and workforce analytics software for $48.8 million in cash, net of $1.8 million in cash acquired. As of September 30, 2016, $7.4 million of the cash consideration remains in escrow and will remain for up to an 18-month period after the acquisition as security for the indemnification obligations of the selling shareholders. During the third quarter and nine months of 2016, the Company incurred $0.1 million and $2.6 million, respectively, of direct and incremental expenses that were primarily legal and advisory fees and due diligence costs to affect the acquisition. In allocating the total purchase consideration based on estimated fair values, the Company recorded $27.3 million of goodwill, which is nondeductible for income tax purposes, and $24.3 million of intangible assets with a weighted-average amortization period of 9.7 years. The estimated fair values of assets acquired and liabilities assumed may be subject to change as additional information is received and certain tax returns are finalized. The Company expects to finalize the valuation no later than one year from the acquisition date. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2016 | |
ACCRUED EXPENSES | 9. ACCRUED EXPENSES (in thousands) September 30, December 31, Partner commissions $ 2,661 $ 3,319 Other taxes 7,544 10,070 Employee reimbursable expenses 2,312 1,426 Dividends payable 2,291 2,297 Professional services contractor fees 4,723 4,580 Self-insurance health and dental claims 2,428 2,129 Professional fees 2,679 2,937 Short-term deferred rent 1,752 1,600 Income taxes payable 1,268 5,464 Acquisition-related expenses and merger consideration 362 834 Restructuring 132 394 Marketing and sales program expenses 1,242 1,397 Cloud hosting expenses 858 1,370 Foreign currency forward contracts 393 1,052 Fixed assets in progress 2,981 1,632 Other 2,744 2,267 $ 36,370 $ 42,768 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2016 | |
DEFERRED REVENUE | 10. DEFERRED REVENUE (in thousands) September 30, December 31, Software license $ 28,630 $ 40,886 Maintenance 95,378 95,262 Cloud 10,123 8,948 Services 6,327 10,777 Current deferred revenue 140,458 155,873 Software license 6,929 12,389 Maintenance 1,701 2,227 Cloud 1,598 1,189 Long-term deferred revenue 10,228 15,805 $ 150,686 $ 171,678 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2016 | |
STOCK-BASED COMPENSATION | 11. 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 Nine Months Ended (in thousands) 2016 2015 2016 2015 Cost of revenues $ 3,117 $ 2,285 $ 8,711 $ 6,519 Operating expenses 7,701 5,806 21,923 16,486 Total stock-based compensation before tax $ 10,818 $ 8,091 $ 30,634 $ 23,005 Income tax benefit $ (3,227 ) $ (2,326 ) $ (8,917 ) $ (6,437 ) During the nine months of 2016, the Company issued approximately 812,000 shares of common stock to its employees and 18,000 shares of common stock to its non-employee directors under the Company’s share-based compensation plans. During the nine months of 2016, the Company granted approximately 1,802,000 restricted stock units (“RSUs”) and 2,567,000 non-qualified stock options to its employees with total fair values of approximately $45.5 million and $21.2 million, respectively. This includes approximately 225,000 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 $5.6 million associated with this RSU grant will be recognized over a one-year period beginning on the grant date. During the nine months of 2016, the Company also granted approximately 36,000 RSUs to its non-employee directors with a total fair value of $1 million, which primarily vested 25% on the grant date and will vest 25% quarterly thereafter. The Company recognizes stock based compensation on the accelerated recognition method, treating each vesting tranche as if it were an individual grant. As of September 30, 2016, the Company had approximately $51.1 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, 2016 | |
EARNINGS PER SHARE | 12. 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 Nine Months Ended (in thousands, except per share amounts) 2016 2015 2016 2015 Basic Net income $ 2,418 $ 6,325 $ 15,070 $ 15,364 Weighted-average common shares outstanding 76,278 76,534 76,323 76,521 Earnings per share, basic $ 0.03 $ 0.08 $ 0.20 $ 0.20 Diluted Net income $ 2,418 $ 6,325 $ 15,070 $ 15,364 Weighted-average common shares outstanding, basic 76,278 76,534 76,323 76,521 Weighted-average effect of dilutive securities: Stock options 1,613 1,603 1,556 1,546 RSUs 1,191 1,037 1,097 839 Effect of assumed exercise of stock options and RSUs 2,804 2,640 2,653 2,385 Weighted-average common shares outstanding, assuming dilution 79,082 79,174 78,976 78,906 Earnings per share, diluted $ 0.03 $ 0.08 $ 0.19 $ 0.19 Outstanding options and RSUs excluded as impact would be anti-dilutive 296 320 368 201 |
GEOGRAPHIC INFORMATION AND MAJO
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | 9 Months Ended |
Sep. 30, 2016 | |
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | 13. 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 software applications for customer engagement and its Pega ® 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 Nine Months Ended (Dollars in thousands) 2016 2015 2016 2015 U.S. $ 111,274 61 % $ 89,640 55 % $ 308,049 56 % $ 267,671 56 % Other Americas 7,952 4 % 6,602 4 % 49,494 9 % 46,278 10 % U.K. 21,490 12 % 19,491 12 % 77,181 14 % 60,867 13 % Other EMEA (1) 23,656 13 % 20,672 13 % 67,314 12 % 55,376 11 % Asia Pacific 18,430 10 % 25,998 16 % 48,618 9 % 48,148 10 % $ 182,802 100 % $ 162,403 100 % $ 550,656 100 % $ 478,340 100 % (1) Includes Europe, the Middle East and Africa (“Other EMEA”). There were no clients accounting for 10% or more of the Company’s total revenue during the third quarter and nine months of 2016 and 2015. 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 As of Trade receivables, net of allowances $ 208,562 $ 211,846 Client A — % 10 % |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Available for Sale Securities Reconciliation | September 30, 2016 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Municipal bonds $ 35,717 $ 34 $ (24 ) $ 35,727 Corporate bonds 26,655 30 (16 ) 26,669 Certificates of deposit 950 1 — 951 $ 63,322 $ 65 $ (40 ) $ 63,347 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) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value of Company Outstanding Forward Contracts | The fair value of the Company’s outstanding forward contracts was as follows: September 30, 2016 December 31, 2015 (in thousands) Recorded In: Fair Value Recorded In: Fair Value Asset Derivatives Foreign currency forward contracts Other current assets $ 354 Other current assets $ 48 Liability Derivatives Foreign currency forward contracts Accrued expenses $ 393 Accrued expenses $ 1,052 |
Forward Contracts Outstanding with Total Notional Values | The Company had forward contracts outstanding with total notional values as follows: As of September 30, Currency (in thousands) 2016 2015 Euro € 21,810 € 15,900 British pound £ 5,919 £ 1,300 Australian dollar A$ 19,515 A$ 11,500 Indian rupee Rs — Rs 300,000 United States dollar $ 59,450 $ 23,300 |
Change in Fair Value of Forward Contracts | Three Months Ended September 30, Nine Months Ended (in thousands) 2016 2015 2016 2015 Loss from the change in the fair value of forward contracts included in other expense, net $ (1,237 ) $ (319 ) $ (4,955 ) $ (319 ) Foreign currency transaction gain (loss) from the remeasurement of foreign currency assets and liabilities $ 1,082 $ (412 ) $ 2,764 $ (4,342 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 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) September 30, Level 1 Level 2 Fair Value Assets: Money market funds $ 481 $ 481 $ — Marketable securities: Municipal bonds $ 35,727 $ — $ 35,727 Corporate bonds 26,669 — 26,669 Certificates of deposit 951 — 951 Total marketable securities $ 63,347 $ — $ 63,347 Foreign currency forward contracts $ 354 $ — $ 354 Fair Value Liabilities: Foreign currency forward contracts $ 393 $ — $ 393 Fair Value Measurements at (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) | 9 Months Ended |
Sep. 30, 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) September 30, 2016 December 31, 2015 Trade accounts receivable $ 178,846 $ 190,820 Unbilled trade accounts receivable 34,280 25,657 Total accounts receivable 213,126 216,477 Allowance for sales credit memos (4,564 ) (4,631 ) $ 208,562 $ 211,846 |
GOODWILL AND OTHER INTANGIBLE24
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 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 Goodwill acquired during the year 27,311 Currency translation adjustments (216 ) Balance as of September 30, $ 73,871 |
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 As of September 30, 2016 Customer related intangibles 4-10 years $ 63,134 $ (35,714 ) $ 27,420 Technology 3-10 years 58,942 (38,908 ) 20,034 Other intangibles 3 years 5,361 (5,353 ) 8 Total $ 127,437 $ (79,975 ) $ 47,462 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 September 30, Nine Months Ended September 30, (in thousands) 2016 2015 2016 2015 Cost of revenue $ 1,642 $ 1,351 $ 4,626 $ 4,041 Selling and marketing 1,867 1,537 5,274 4,602 General and administrative 90 91 268 593 Total amortization expense $ 3,599 $ 2,979 $ 10,168 $ 9,236 |
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, 2016 Future estimated Remainder of 2016 $ 3,267 2017 12,335 2018 11,335 2019 5,543 2020 2,647 2021 and thereafter 12,335 $ 47,462 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Accrued Expenses | (in thousands) September 30, December 31, Partner commissions $ 2,661 $ 3,319 Other taxes 7,544 10,070 Employee reimbursable expenses 2,312 1,426 Dividends payable 2,291 2,297 Professional services contractor fees 4,723 4,580 Self-insurance health and dental claims 2,428 2,129 Professional fees 2,679 2,937 Short-term deferred rent 1,752 1,600 Income taxes payable 1,268 5,464 Acquisition-related expenses and merger consideration 362 834 Restructuring 132 394 Marketing and sales program expenses 1,242 1,397 Cloud hosting expenses 858 1,370 Foreign currency forward contracts 393 1,052 Fixed assets in progress 2,981 1,632 Other 2,744 2,267 $ 36,370 $ 42,768 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Deferred Revenue | (in thousands) September 30, December 31, Software license $ 28,630 $ 40,886 Maintenance 95,378 95,262 Cloud 10,123 8,948 Services 6,327 10,777 Current deferred revenue 140,458 155,873 Software license 6,929 12,389 Maintenance 1,701 2,227 Cloud 1,598 1,189 Long-term deferred revenue 10,228 15,805 $ 150,686 $ 171,678 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 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 Nine Months Ended (in thousands) 2016 2015 2016 2015 Cost of revenues $ 3,117 $ 2,285 $ 8,711 $ 6,519 Operating expenses 7,701 5,806 21,923 16,486 Total stock-based compensation before tax $ 10,818 $ 8,091 $ 30,634 $ 23,005 Income tax benefit $ (3,227 ) $ (2,326 ) $ (8,917 ) $ (6,437 ) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Basic and Diluted Earnings (Loss) Per Share | Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2016 2015 2016 2015 Basic Net income $ 2,418 $ 6,325 $ 15,070 $ 15,364 Weighted-average common shares outstanding 76,278 76,534 76,323 76,521 Earnings per share, basic $ 0.03 $ 0.08 $ 0.20 $ 0.20 Diluted Net income $ 2,418 $ 6,325 $ 15,070 $ 15,364 Weighted-average common shares outstanding, basic 76,278 76,534 76,323 76,521 Weighted-average effect of dilutive securities: Stock options 1,613 1,603 1,556 1,546 RSUs 1,191 1,037 1,097 839 Effect of assumed exercise of stock options and RSUs 2,804 2,640 2,653 2,385 Weighted-average common shares outstanding, assuming dilution 79,082 79,174 78,976 78,906 Earnings per share, diluted $ 0.03 $ 0.08 $ 0.19 $ 0.19 Outstanding options and RSUs excluded as impact would be anti-dilutive 296 320 368 201 |
GEOGRAPHIC INFORMATION AND MA29
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS (Tables) | 9 Months Ended |
Sep. 30, 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 Nine Months Ended (Dollars in thousands) 2016 2015 2016 2015 U.S. $ 111,274 61 % $ 89,640 55 % $ 308,049 56 % $ 267,671 56 % Other Americas 7,952 4 % 6,602 4 % 49,494 9 % 46,278 10 % U.K. 21,490 12 % 19,491 12 % 77,181 14 % 60,867 13 % Other EMEA (1) 23,656 13 % 20,672 13 % 67,314 12 % 55,376 11 % Asia Pacific 18,430 10 % 25,998 16 % 48,618 9 % 48,148 10 % $ 182,802 100 % $ 162,403 100 % $ 550,656 100 % $ 478,340 100 % (1) Includes Europe, the Middle East and Africa (“Other EMEA”). |
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 As of Trade receivables, net of allowances $ 208,562 $ 211,846 Client A — % 10 % |
Schedule of Marketable Securiti
Schedule of Marketable Securities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 63,322 | $ 126,257 |
Unrealized Gains | 65 | 9 |
Unrealized Losses | (40) | (214) |
Fair Value | 63,347 | 126,052 |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 35,717 | 57,394 |
Unrealized Gains | 34 | 7 |
Unrealized Losses | (24) | (66) |
Fair Value | 35,727 | 57,335 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 26,655 | 66,960 |
Unrealized Gains | 30 | 2 |
Unrealized Losses | (16) | (147) |
Fair Value | 26,669 | 66,815 |
Certificates of Deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 950 | 1,903 |
Unrealized Gains | 1 | |
Unrealized Losses | (1) | |
Fair Value | $ 951 | $ 1,902 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |
Weighted-average remaining maturity period of marketable debt securities, months | 16 months |
Minimum | |
Schedule of Available-for-sale Securities [Line Items] | |
Remaining maturities of marketable debt securities | 2016-10 |
Maximum | |
Schedule of Available-for-sale Securities [Line Items] | |
Remaining maturities of marketable debt securities | 2019-08 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Forward Contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 106.6 | $ 32.3 |
Fair Value of Company Outstandi
Fair Value of Company Outstanding Forward Contracts (Detail) - Forward Contracts - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accrued expenses | ||
Derivative [Line Items] | ||
Liability Derivatives | $ 393 | $ 1,052 |
Other current assets | ||
Derivative [Line Items] | ||
Asset Derivatives | $ 354 | $ 48 |
Forward Contracts Outstanding w
Forward Contracts Outstanding with Total Notional Values (Detail) - Forward Contracts € in Thousands, ₨ in Thousands, £ in Thousands, AUD in Thousands, $ in Thousands | 9 Months Ended | ||||||||
Sep. 30, 2016USD ($) | Sep. 30, 2016AUD | Sep. 30, 2016GBP (£) | Sep. 30, 2016EUR (€) | Sep. 30, 2015USD ($) | Sep. 30, 2015AUD | Sep. 30, 2015GBP (£) | Sep. 30, 2015INR (₨) | Sep. 30, 2015EUR (€) | |
Euro Member Countries, Euros | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | € | € 21,810 | € 15,900 | |||||||
British Pounds | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | £ | £ 5,919 | £ 1,300 | |||||||
Australian Dollar | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | AUD | AUD 19,515 | AUD 11,500 | |||||||
Indian Rupees | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | ₨ | ₨ 300,000 | ||||||||
United States of America, Dollars | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | $ | $ 59,450 | $ 23,300 |
Change in Fair Value of Forward
Change in Fair Value of Forward Contracts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 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 | $ (1,237) | $ (319) | $ (4,955) | $ (319) |
Foreign currency transaction gain (loss) from the remeasurement of foreign currency assets and liabilities | $ 1,082 | $ (412) | $ 2,764 | $ (4,342) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amount of 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 | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Assets | ||
Total marketable securities | $ 63,347 | $ 126,052 |
Foreign currency forward contracts | ||
Fair Value Liabilities | ||
Foreign currency forward contracts | 393 | 1,052 |
Fair Value Assets | ||
Foreign currency forward contracts | 354 | 48 |
Money Market Funds | ||
Fair Value Assets | ||
Money market funds | 481 | 573 |
Municipal bonds | ||
Fair Value Assets | ||
Total marketable securities | 35,727 | 57,335 |
Corporate bonds | ||
Fair Value Assets | ||
Total marketable securities | 26,669 | 66,815 |
Certificates of Deposit | ||
Fair Value Assets | ||
Total marketable securities | 951 | 1,902 |
Level 1 | Money Market Funds | ||
Fair Value Assets | ||
Money market funds | 481 | 573 |
Level 2 | ||
Fair Value Assets | ||
Total marketable securities | 63,347 | 126,052 |
Level 2 | Foreign currency forward contracts | ||
Fair Value Liabilities | ||
Foreign currency forward contracts | 393 | 1,052 |
Fair Value Assets | ||
Foreign currency forward contracts | 354 | 48 |
Level 2 | Municipal bonds | ||
Fair Value Assets | ||
Total marketable securities | 35,727 | 57,335 |
Level 2 | Corporate bonds | ||
Fair Value Assets | ||
Total marketable securities | 26,669 | 66,815 |
Level 2 | Certificates of Deposit | ||
Fair Value Assets | ||
Total marketable securities | $ 951 | $ 1,902 |
Schedule of Trade Accounts Rece
Schedule of Trade Accounts Receivable (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 213,126 | $ 216,477 |
Allowance for sales credit memos | (4,564) | (4,631) |
Total accounts receivable net | 208,562 | 211,846 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 178,846 | 190,820 |
Unbilled trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 34,280 | $ 25,657 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Line Items] | |
Balance as of January 1, | $ 46,776 |
Goodwill acquired during the year | 27,311 |
Currency translation adjustments | (216) |
Balance as of September 30, | $ 73,871 |
Schedule of Amortizable Intangi
Schedule of Amortizable Intangible Asset (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Intangible Assets [Line Items] | ||
Cost | $ 127,437 | $ 103,249 |
Accumulated Amortization | (79,975) | (69,831) |
Net Book Value | 47,462 | 33,418 |
Customer related intangibles | ||
Intangible Assets [Line Items] | ||
Cost | 63,134 | 49,546 |
Accumulated Amortization | (35,714) | (30,465) |
Net Book Value | 27,420 | 19,081 |
Technology | ||
Intangible Assets [Line Items] | ||
Cost | 58,942 | 48,342 |
Accumulated Amortization | (38,908) | (34,282) |
Net Book Value | $ 20,034 | $ 14,060 |
Other intangibles | ||
Intangible Assets [Line Items] | ||
Range of Useful Lives | 3 years | 3 years |
Cost | $ 5,361 | $ 5,361 |
Accumulated Amortization | (5,353) | (5,084) |
Net Book Value | $ 8 | $ 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 | 10 years | 9 years |
Maximum | Technology | ||
Intangible Assets [Line Items] | ||
Range of Useful Lives | 10 years | 9 years |
Amortization Expense of Acquire
Amortization Expense of Acquired Intangibles (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | $ 3,599 | $ 2,979 | $ 10,168 | $ 9,236 |
Cost of revenue | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | 1,642 | 1,351 | 4,626 | 4,041 |
Selling and marketing | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | 1,867 | 1,537 | 5,274 | 4,602 |
General and administrative | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | $ 90 | $ 91 | $ 268 | $ 593 |
Estimated Future Amortization E
Estimated Future Amortization Expense (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Intangible Assets [Line Items] | ||
Remainder of 2016 | $ 3,267 | |
2,017 | 12,335 | |
2,018 | 11,335 | |
2,019 | 5,543 | |
2,020 | 2,647 | |
2021 and thereafter | 12,335 | |
Net Book Value | $ 47,462 | $ 33,418 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Apr. 11, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Purchase price of acquired company | $ 49,113 | $ 1,671 | |||
Direct and incremental expenses | $ 74 | 2,616 | $ 39 | ||
Goodwill | 73,871 | 73,871 | $ 46,776 | ||
OpenSpan, Inc. | |||||
Business Acquisition [Line Items] | |||||
Purchase price of acquired company | $ 48,800 | ||||
Cash acquired from acquisition | 1,800 | ||||
Escrow deposit | 7,400 | ||||
Direct and incremental expenses | 100 | 2,600 | |||
Goodwill | $ 27,300 | $ 27,300 | |||
Acquired identifiable intangible assets | $ 24,300 | ||||
Acquired identifiable intangible assets, weighted average useful life | 9 years 8 months 12 days | ||||
Fair value valuation of assets and liabilities, finalizing period | 1 year | ||||
OpenSpan, Inc. | Maximum | |||||
Business Acquisition [Line Items] | |||||
Deposited in escrow period | 18 months |
Schedule of Accrued Expenses (D
Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accrued expenses | ||
Partner commissions | $ 2,661 | $ 3,319 |
Other taxes | 7,544 | 10,070 |
Employee reimbursable expenses | 2,312 | 1,426 |
Dividends payable | 2,291 | 2,297 |
Professional services contractor fees | 4,723 | 4,580 |
Self-insurance health and dental claims | 2,428 | 2,129 |
Professional fees | 2,679 | 2,937 |
Short-term deferred rent | 1,752 | 1,600 |
Income taxes payable | 1,268 | 5,464 |
Acquisition-related expenses and merger consideration | 362 | 834 |
Restructuring | 132 | 394 |
Marketing and sales program expenses | 1,242 | 1,397 |
Cloud hosting expenses | 858 | 1,370 |
Foreign currency forward contracts | 393 | 1,052 |
Fixed assets in progress | 2,981 | 1,632 |
Other | 2,744 | 2,267 |
Total accrued expenses | $ 36,370 | $ 42,768 |
Schedule of Deferred Revenue (D
Schedule of Deferred Revenue (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | $ 140,458 | $ 155,873 |
Long-term deferred revenue | 10,228 | 15,805 |
Total deferred revenue | 150,686 | 171,678 |
Software license | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 28,630 | 40,886 |
Long-term deferred revenue | 6,929 | 12,389 |
Maintenance | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 95,378 | 95,262 |
Long-term deferred revenue | 1,701 | 2,227 |
Cloud | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 10,123 | 8,948 |
Long-term deferred revenue | 1,598 | 1,189 |
Services | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | $ 6,327 | $ 10,777 |
Stock Based Compensation Expens
Stock Based Compensation Expense Included in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | $ 10,818 | $ 8,091 | $ 30,634 | $ 23,005 |
Income tax benefit | (3,227) | (2,326) | (8,917) | (6,437) |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 3,117 | 2,285 | 8,711 | 6,519 |
Operating Expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | $ 7,701 | $ 5,806 | $ 21,923 | $ 16,486 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ | $ 51.1 |
Weighted-average period of recognition of unrecognized stock-based compensation expense (in years) | 2 years 1 month 6 days |
Employees | RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted, RSUs | 1,802,000 |
Fair value of shares granted | $ | $ 45.5 |
RSUs granted in connection with the 2016 CICP | 225,000 |
Percentage of target incentive compensation eligible to be elected and received by employees in the form of RSUs | 50.00% |
Restricted stock compensation expense | $ | $ 5.6 |
Total stock-based compensation, period of recognition | 1 year |
Employees | Nonqualified Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of shares granted | $ | $ 21.2 |
Number of shares granted, options | 2,567,000 |
Employees | Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued | 812,000 |
Non-employee directors | RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted, RSUs | 36,000 |
Fair value of shares granted | $ | $ 1 |
Non-employee directors | RSUs | Vesting on the grant date | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage of stock units | 25.00% |
Non-employee directors | RSUs | Vesting quarterly thereafter | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage of stock units | 25.00% |
Non-employee directors | Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued | 18,000 |
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 | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earning per share reconciliation | ||||
Net income | $ 2,418 | $ 6,325 | $ 15,070 | $ 15,364 |
Weighted-average common shares outstanding | 76,278 | 76,534 | 76,323 | 76,521 |
Earnings per share, basic | $ 0.03 | $ 0.08 | $ 0.20 | $ 0.20 |
Net income | $ 2,418 | $ 6,325 | $ 15,070 | $ 15,364 |
Weighted-average common shares outstanding | 76,278 | 76,534 | 76,323 | 76,521 |
Effect of assumed exercise of stock options and RSUs | 2,804 | 2,640 | 2,653 | 2,385 |
Weighted-average common shares outstanding, assuming dilution | 79,082 | 79,174 | 78,976 | 78,906 |
Earnings per share, diluted | $ 0.03 | $ 0.08 | $ 0.19 | $ 0.19 |
Outstanding options, warrants and RSUs excluded as impact would be antidilutive | 296 | 320 | 368 | 201 |
Stock Options | ||||
Earning per share reconciliation | ||||
Weighted-average effect of dilutive securities | 1,613 | 1,603 | 1,556 | 1,546 |
RSUs | ||||
Earning per share reconciliation | ||||
Weighted-average effect of dilutive securities | 1,191 | 1,037 | 1,097 | 839 |
Geographic Information and Ma49
Geographic Information and Major Clients - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016Customer | Sep. 30, 2015Customer | Sep. 30, 2016CustomerSegmentUnit | Sep. 30, 2015Customer | |
Geographic information and major clients | ||||
Number of reportable segment, customer engagement solutions | Segment | 1 | |||
Number of reporting unit | Unit | 1 | |||
Clients accounting for 10% or more of total revenue or outstanding trade receivables | There were no clients accounting for 10% or more of the Company's total revenue during the second quarter and first six months of 2016 and 2015. | |||
Number of clients representing 10% or more of Company's total revenue | Customer | 0 | 0 | 0 | 0 |
Credit Concentration Risk | Total Revenue | Minimum | ||||
Geographic information and major clients | ||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Credit Concentration Risk | Trade Receivables | 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 | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 182,802 | $ 162,403 | $ 550,656 | $ 478,340 | |
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 | $ 111,274 | $ 89,640 | $ 308,049 | $ 267,671 | |
Geographic revenue percentage | 61.00% | 55.00% | 56.00% | 56.00% | |
Other Americas | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 7,952 | $ 6,602 | $ 49,494 | $ 46,278 | |
Geographic revenue percentage | 4.00% | 4.00% | 9.00% | 10.00% | |
U.K. | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 21,490 | $ 19,491 | $ 77,181 | $ 60,867 | |
Geographic revenue percentage | 12.00% | 12.00% | 14.00% | 13.00% | |
Other EMEA | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | [1] | $ 23,656 | $ 20,672 | $ 67,314 | $ 55,376 |
Geographic revenue percentage | [1] | 13.00% | 13.00% | 12.00% | 11.00% |
Asia Pacific | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 18,430 | $ 25,998 | $ 48,618 | $ 48,148 | |
Geographic revenue percentage | 10.00% | 16.00% | 9.00% | 10.00% | |
[1] | Includes Europe, the Middle East and Africa ("Other EMEA"). |
Trade Receivables of Major Clie
Trade Receivables of Major Clients (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2016 | |
Revenue, Major Customer [Line Items] | ||
Trade receivables, net of allowance | $ 211,846 | $ 208,562 |
Credit Concentration Risk | Trade Receivables | Client A | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 10.00% |