Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
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 | 77,624,615 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 121,626 | $ 70,594 |
Marketable securities | 58,414 | 63,167 |
Total cash, cash equivalents, and marketable securities | 180,040 | 133,761 |
Trade accounts receivable, net of allowance of $5,590 and $4,126 | 217,020 | 265,028 |
Income taxes receivable | 22,081 | 14,155 |
Other current assets | 18,505 | 12,188 |
Total current assets | 437,646 | 425,132 |
Property and equipment, net | 38,881 | 38,281 |
Deferred income taxes | 71,096 | 69,898 |
Long-term other assets | 4,615 | 3,990 |
Intangible assets, net | 37,844 | 44,191 |
Goodwill | 72,890 | 73,164 |
Total assets | 662,972 | 654,656 |
Current liabilities: | ||
Accounts payable | 13,500 | 14,414 |
Accrued expenses | 38,237 | 36,751 |
Accrued compensation and related expenses | 44,287 | 60,660 |
Deferred revenue | 169,926 | 175,647 |
Total current liabilities | 265,950 | 287,472 |
Income taxes payable | 4,438 | 4,263 |
Long-term deferred revenue | 8,431 | 10,989 |
Other long-term liabilities | 15,518 | 16,043 |
Total liabilities | 294,337 | 318,767 |
Stockholders' equity: | ||
Preferred stock, 1,000 shares authorized; no shares issued and outstanding | ||
Common stock, 200,000 shares authorized; 77,604 shares and 76,591 shares issued and outstanding | 776 | 766 |
Additional paid-in capital | 140,088 | 143,903 |
Retained earnings | 232,100 | 198,315 |
Accumulated other comprehensive loss | (4,329) | (7,095) |
Total stockholders' equity | 368,635 | 335,889 |
Total liabilities and stockholders' equity | $ 662,972 | $ 654,656 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Allowance for sales credit memos | $ 5,590 | $ 4,126 |
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 | 77,604,000 | 77,604,000 |
Common stock, shares outstanding | 76,591,000 | 76,591,000 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Software license | $ 61,037 | $ 70,671 | $ 153,427 | $ 139,016 |
Maintenance | 59,590 | 55,161 | 118,555 | 108,136 |
Services | 77,353 | 63,164 | 149,245 | 120,702 |
Total revenue | 197,980 | 188,996 | 421,227 | 367,854 |
Cost of revenue: | ||||
Software license | 1,250 | 1,312 | 2,550 | 2,333 |
Maintenance | 7,011 | 6,315 | 14,229 | 12,230 |
Services | 59,614 | 52,473 | 119,186 | 102,047 |
Total cost of revenue | 67,875 | 60,100 | 135,965 | 116,610 |
Gross profit | 130,105 | 128,896 | 285,262 | 251,244 |
Operating expenses: | ||||
Selling and marketing | 75,887 | 74,016 | 147,175 | 135,094 |
Research and development | 39,762 | 35,574 | 80,058 | 70,494 |
General and administrative | 12,706 | 11,294 | 25,041 | 22,342 |
Acquisition-related | 1,623 | 2,542 | ||
Restructuring | 29 | 287 | ||
Total operating expenses | 128,355 | 122,536 | 252,274 | 230,759 |
Income from operations | 1,750 | 6,360 | 32,988 | 20,485 |
Foreign currency transaction (loss) gain | (917) | 306 | (241) | 1,682 |
Interest income, net | 161 | 188 | 326 | 478 |
Other income (expense), net | 566 | (1,356) | 287 | (3,654) |
Income before (benefit)/provision for income taxes | 1,560 | 5,498 | 33,360 | 18,991 |
(Benefit)/provision for income taxes | (9,846) | 962 | (5,067) | 4,055 |
Net income | $ 11,406 | $ 4,536 | $ 38,427 | $ 14,936 |
Earnings per share: | ||||
Basic | $ 0.15 | $ 0.06 | $ 0.50 | $ 0.20 |
Diluted | $ 0.14 | $ 0.06 | $ 0.47 | $ 0.19 |
Weighted-average number of common shares outstanding: | ||||
Basic | 77,313 | 76,318 | 77,039 | 76,347 |
Diluted | 82,945 | 79,422 | 82,412 | 79,329 |
Cash dividends declared per share | $ 0.03 | $ 0.03 | $ 0.06 | $ 0.06 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income | $ 11,406 | $ 4,536 | $ 38,427 | $ 14,936 |
Other comprehensive income (loss), net of tax | ||||
Unrealized (loss) gain on available-for-sale marketable securities, net of tax | (1) | 56 | 126 | 342 |
Foreign currency translation adjustments | 1,859 | (1,224) | 2,640 | (1,231) |
Total other comprehensive income (loss), net of tax | 1,858 | (1,168) | 2,766 | (889) |
Comprehensive income | $ 13,264 | $ 3,368 | $ 41,193 | $ 14,047 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities: | ||
Net income | $ 38,427 | $ 14,936 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Deferred income taxes | (465) | (1,190) |
Depreciation and amortization | 12,356 | 11,675 |
Stock-based compensation expense | 26,440 | 19,816 |
Foreign currency transaction loss (gain) | 241 | (1,682) |
Other non-cash | (408) | 4,576 |
Change in operating assets and liabilities: | ||
Trade accounts receivable | 52,966 | 10,853 |
Income taxes receivable and other current assets | (14,294) | (18,349) |
Accounts payable and accrued expenses | (17,734) | (19,259) |
Deferred revenue | (11,890) | (11,222) |
Other long-term assets and liabilities | 130 | 1,415 |
Cash provided by operating activities | 85,769 | 11,569 |
Investing activities: | ||
Purchases of marketable securities | (16,656) | (20,942) |
Proceeds from maturities and called marketable securities | 20,824 | 21,139 |
Sales of marketable securities | 52,483 | |
Payments for acquisitions, net of cash acquired | (290) | (49,113) |
Investment in property and equipment | (5,037) | (11,497) |
Cash used in investing activities | (1,159) | (7,930) |
Financing activities: | ||
Dividend payments to shareholders | (4,613) | (4,592) |
Common stock repurchases for tax withholdings for net settlement of equity awards | (27,261) | (7,849) |
Common stock repurchases under share repurchase programs | (2,986) | (19,225) |
Cash used in financing activities | (34,860) | (31,666) |
Effect of exchange rates on cash and cash equivalents | 1,282 | (738) |
Net increase (decrease) in cash and cash equivalents | 51,032 | (28,765) |
Cash and cash equivalents, beginning of period | 70,594 | 93,026 |
Cash and cash equivalents, end of period | $ 121,626 | $ 64,261 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION | 1. 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 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 2017. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2017 | |
NEW ACCOUNTING PRONOUNCEMENTS | 2. NEW ACCOUNTING PRONOUNCEMENTS Stock-Based Compensation In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09 “Stock Compensation (Topic 718), Scope of Modification Accounting” to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The effective date for the Company will be January 1, 2018. The Company does not expect the adoption of this standard to have a material effect on its financial position or results of operations. Financial Instruments In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires measurement and recognition of expected credit losses for financial assets measured at amortized cost, including trade accounts receivable, upon initial recognition of that financial asset using a forward-looking expected loss model, rather than an incurred loss model for credit losses. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses when the fair value is below the amortized cost of the asset, removing the concept of “other-than-temporary” impairments. The effective date for the Company will be January 1, 2020, with early adoption permitted. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to record most leases on their balance sheets, recognizing a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The effective date for the Company will be January 1, 2019, with early adoption permitted. The Company expects that most of its operating lease commitments will be subject to this ASU and recognized as operating lease liabilities and right-of-use assets upon adoption with no material impact to its results of operations and cash flows. Revenue In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This ASU amends the guidance for revenue recognition, creating the new Accounting Standards Codification Topic 606 (“ASC 606”). ASC 606 requires entities to apportion consideration from contracts to performance obligations on a relative standalone selling price basis, based on a five-step model. Under ASC 606, revenue is recognized when a customer obtains control of a promised good or service and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for the good or service. In addition, ASC 606 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company has elected the full retrospective adoption model, effective January 1, 2018. The Company’s quarterly results beginning with the quarter ending March 31, 2018 and comparative prior periods will be compliant with ASC 606. The Company’s Annual Report on Form 10-K for the year ended December 31, 2018 will be the Company’s first Annual Report that will be issued in compliance with ASC 606. The Company is still in the process of quantifying the implications of the adoption of ASC 606. However the Company expects the following impacts: • Currently, the Company recognizes revenue from term licenses and perpetual licenses with extended payment terms over the term of the agreement as payments become due or earlier if prepaid, provided all other criteria for revenue recognition have been met, and any corresponding maintenance over the term of the agreement. The adoption of ASC 606 will result in revenue for performance obligations being recognized as they are satisfied. Therefore, revenue from the term and perpetual license performance obligations with extended payment terms is recognized when control is transferred to the customer. Revenue from the maintenance performance obligations is expected to be recognized on a straight-line basis over the contractual term. Due to the revenue from term and perpetual licenses with extended payment terms being recognized prior to amounts being billed to the customer, the Company expects to recognize a net contract asset on the balance sheet. • Currently, the Company allocates revenue to licenses under the residual method when it has VSOE for the remaining undelivered elements which allocates any future credits or significant discounts entirely to the license. The adoption of ASC 606 will result in the future credits, significant discounts, and material rights under ASC 606, being allocated to all performance obligations based upon their relative selling price. Under ASC 606, additional license revenue from the reallocation of such arrangement considerations will be recognized when control is transferred to the customer. • Currently, the Company does not have VSOE for fixed price services, time and materials services in certain geographical areas, and unspecified future products, which results in revenue being deferred in such instances until such time as VSOE exists for all undelivered elements or recognized ratably over the longest performance period. The adoption of ASC 606 eliminates the requirement for VSOE and replaces it with the concept of a stand-alone selling price. Once the transaction price is allocated to each of the performance obligations, the Company can recognize revenue as the performance obligations are delivered, either at a point in time or over time. Under ASC 606, license revenue will be recognized when control is transferred to the customer. • Sales commissions and other third party acquisition costs resulting directly from securing contracts with customers are currently expensed when incurred. ASC 606 will require these costs to be recognized as an asset when incurred and to be expensed over the associated contract term. As a practical expedient, if the term of the contract is one year or less, the Company will expense the costs resulting directly from securing the contracts with customers as incurred. The Company expects this change to impact its multi-year cloud offerings and term and perpetual licenses with additional rights of use that extend beyond one year. • ASC 606 provides additional accounting guidance for contract modifications whereby changes must be accounted for either as a retrospective change (creating either a catch up or deferral of past revenues), prospectively with a reallocation of revenues amongst identified performance obligations, or prospectively as separate contracts which will not require any reallocation. This may result in a difference in the timing of the recognition of revenue as compared to how current contract modifications are recognized. • There will be a corresponding effect on tax liabilities in relation to all of the above impacts. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 6 Months Ended |
Jun. 30, 2017 | |
MARKETABLE SECURITIES | 3. MARKETABLE SECURITIES The Company’s marketable securities are as follows: June 30, 2017 (in thousands) Amortized Unrealized Unrealized Fair Municipal bonds $ 32,238 $ 11 $ (30 ) $ 32,219 Corporate bonds 26,234 3 (42 ) 26,195 $ 58,472 $ 14 $ (72 ) $ 58,414 December 31, 2016 (in thousands) Amortized Unrealized Unrealized Fair Municipal bonds $ 36,746 $ — $ (139 ) $ 36,607 Corporate bonds 26,610 1 (51 ) 26,560 $ 63,356 $ 1 $ (190 ) $ 63,167 As of June 30, 2017, the Company did not hold any investments with unrealized losses that are considered to be other-than-temporary. As of June 30, 2017, remaining maturities of marketable debt securities ranged from July 2017 to September 2020, with a weighted-average remaining maturity of approximately 15 months. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2017 | |
DERIVATIVE INSTRUMENTS | 4. DERIVATIVE INSTRUMENTS The Company has historically used 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 primarily by the U.S. parent company and its United Kingdom (“U.K.”) subsidiary. The Company is primarily exposed to foreign currency exchange rate fluctuations in the Euro relative to the U.S. dollar for the U.S. parent and in the U.S. dollar, the Euro, and the Australian dollar relative to the British pound for the Company’s U.K. subsidiary. 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. In May 2017, the Company discontinued its forward contracts program, however, it will continue to periodically evaluate its foreign exchange exposures and may re-initiate this program if it is deemed necessary. At December 31, 2016, the total notional value of the Company’s outstanding forward contracts was $128.4 million. The fair value of the Company’s outstanding forward contracts was as follows: December 31, 2016 (in thousands) Recorded In: Fair Value Asset Derivatives Foreign currency forward contracts Other current assets $ 628 Liability Derivatives Foreign currency forward contracts Accrued expenses $ 883 As of June 30, 2017, the Company did not have any forward contracts outstanding. The Company had forward contracts outstanding with total notional values as of June 30, 2016 as follows: (in thousands) Euro € 24,735 British pound £ 7,885 Australian dollar A$ 25,830 Indian rupee Rs 353,500 United States dollar $ 93,460 The income statement impact of the Company’s outstanding forward contracts and foreign currency transactions was as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Gain (loss) from the change in the fair value of forward contracts included in other income (expense), net $ 565 $ (1,421 ) $ 286 $ (3,718 ) Foreign currency transaction (loss) gain from the remeasurement of foreign currency assets and liabilities $ (917 ) $ 306 $ (241 ) $ 1,682 $ (352 ) $ (1,115 ) $ 45 $ (2,036 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
FAIR VALUE MEASUREMENTS | 5. FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company records its money market funds, 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 marketable securities 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 were 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 six months ended June 30, 2017. The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following: Fair Value Measurements at (in thousands) June 30, Level 1 Level 2 Fair Value Assets: Money market funds $ 5,633 $ 5,633 $ — Marketable securities: Municipal bonds $ 32,219 $ — $ 32,219 Corporate bonds 26,195 — 26,195 Total marketable securities $ 58,414 $ — $ 58,414 Fair Value Measurements at (in thousands) December 31, Level 1 Level 2 Fair Value Assets: Money market funds $ 458 $ 458 $ — Marketable securities: Municipal bonds $ 36,607 $ — $ 36,607 Corporate bonds 26,560 — 26,560 Total marketable securities $ 63,167 $ — $ 63,167 Foreign currency forward contracts $ 628 $ — $ 628 Fair Value Liabilities: Foreign currency forward contracts $ 883 $ — $ 883 For certain other financial instruments, including accounts receivable and accounts payable, the carrying value approximates their fair value due to the relatively short maturity of these items. Assets Measured at Fair Value on a Nonrecurring Basis Assets recorded at fair value on a nonrecurring basis, such as property and equipment and intangible assets, are recognized at fair value when they are impaired. During the six months ended June 30, 2017 and 2016, the Company did not recognize any impairments of its assets recorded at fair value on a nonrecurring basis. |
TRADE ACCOUNTS RECEIVABLE, NET
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | 6 Months Ended |
Jun. 30, 2017 | |
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | 6. TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE (in thousands) June 30, December 31, Trade accounts receivable $ 188,304 $ 234,473 Unbilled trade accounts receivable 34,306 34,681 Total accounts receivable 222,610 269,154 Allowance for sales credit memos (5,590 ) (4,126 ) $ 217,020 $ 265,028 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. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 7. GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill are: (in thousands) 2017 Balance as of January 1, $ 73,164 Purchase price adjustments to goodwill (354 ) Currency translation adjustments 80 Balance as of June 30, $ 72,890 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 Net Book June 30, 2017 Customer related intangibles 4-10 years $ 63,132 $ (41,322 ) $ 21,810 Technology 3-10 years 58,942 (42,908 ) 16,034 Other intangibles — 5,361 (5,361 ) — $ 127,435 $ (89,591 ) $ 37,844 December 31, 2016 Customer related intangibles 4-10 years $ 63,091 $ (37,573 ) $ 25,518 Technology 3-10 years 58,942 (40,269 ) 18,673 Other intangibles — 5,361 (5,361 ) — $ 127,394 $ (83,203 ) $ 44,191 Amortization expense of intangibles assets is reflected in the Company’s unaudited condensed consolidated statements of operations as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Cost of revenue $ 1,305 $ 1,638 $ 2,639 $ 2,984 Operating expenses 1,869 1,966 3,735 3,585 Total amortization expense $ 3,174 $ 3,604 $ 6,374 $ 6,569 Future estimated amortization expense related to intangible assets as of June 30, 2017 is as follows: (in thousands) Remainder of 2017 $ 5,953 2018 11,343 2019 5,551 2020 2,655 2021 2,631 2022 and thereafter 9,711 $ 37,844 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2017 | |
ACCRUED EXPENSES | 8. ACCRUED EXPENSES (in thousands) June 30, December 31, Professional services contractor fees $ 7,125 $ 6,550 Other taxes 5,338 9,031 Marketing and sales program expenses 5,188 1,508 Professional fees 3,276 3,654 Other 3,084 2,411 Self-insurance health and dental claims 2,523 2,182 Fixed assets in progress 2,417 855 Dividends payable 2,328 2,298 Employee reimbursable expenses 2,120 1,624 Short-term deferred rent 1,954 1,770 Partner commissions 1,748 2,199 Income taxes payable 1,038 1,391 Restructuring 98 105 Acquisition-related expenses and merger consideration — 290 Foreign currency forward contracts — 883 $ 38,237 $ 36,751 |
DEFERRED REVENUE
DEFERRED REVENUE | 6 Months Ended |
Jun. 30, 2017 | |
DEFERRED REVENUE | 9. DEFERRED REVENUE (in thousands) June 30, December 31, Term license $ 6,294 $ 15,843 Perpetual license 24,709 23,189 Maintenance 111,759 112,397 Cloud 17,677 13,604 Services 9,487 10,614 Current deferred revenue 169,926 175,647 Term license — — Perpetual license 5,833 7,909 Maintenance 1,465 1,802 Cloud 1,133 1,278 Long-term deferred revenue 8,431 10,989 $ 178,357 $ 186,636 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
STOCK-BASED COMPENSATION | 10. STOCK-BASED COMPENSATION Stock-based compensation expense is reflected in the Company’s unaudited condensed consolidated statements of operations as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Cost of revenues $ 3,677 $ 2,914 $ 7,299 $ 5,594 Operating expenses $ 10,255 $ 7,967 $ 19,141 $ 14,222 Total stock-based compensation before tax $ 13,932 $ 10,881 $ 26,440 $ 19,816 Income tax benefit $ (4,287 ) $ (3,085 ) $ (8,102 ) $ (5,690 ) During the six months ended June 30, 2017, the Company issued approximately 1,068,000 shares of common stock to its employees and 13,000 shares of common stock to its non-employee directors under the Company’s stock-based compensation plans. During the six months ended June 30, 2017, the Company granted approximately 954,000 restricted stock units (“RSUs”) and 1,441,000 non-qualified stock options to its employees with total fair values of approximately $41.9 million and $19.2 million, respectively. This includes approximately 175,000 RSUs which were granted in connection with the election by employees to receive 50% of their 2017 target incentive compensation under the Company’s Corporate Incentive Compensation Plan in the form of RSUs instead of cash. Stock-based compensation of approximately $7.7 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 June 30, 2017, the Company had approximately $64.7 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 | 6 Months Ended |
Jun. 30, 2017 | |
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. 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. The calculation of the Company’s basic and diluted earnings per share is as follows: Three Months Ended Six Months Ended (in thousands, except per share amounts) 2017 2016 2017 2016 Basic Net income $ 11,406 $ 4,536 $ 38,427 $ 14,936 Weighted-average common shares outstanding 77,313 76,318 77,039 76,347 Earnings per share, basic $ 0.15 $ 0.06 $ 0.50 $ 0.20 Diluted Net income $ 11,406 $ 4,536 $ 38,427 $ 14,936 Weighted-average effect of dilutive securities: Stock options 3,694 1,924 3,439 1,808 RSUs 1,938 1,180 1,934 1,174 Effect of assumed exercise of stock options and RSUs 5,632 3,104 5,373 2,982 Weighted-average common shares outstanding, assuming dilution 82,945 79,422 82,412 79,329 Earnings per share, diluted $ 0.14 $ 0.06 $ 0.47 $ 0.19 Outstanding stock options and RSUs excluded as impact would be anti-dilutive 237 315 276 404 |
GEOGRAPHIC INFORMATION AND MAJO
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | 6 Months Ended |
Jun. 30, 2017 | |
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS | 12. GEOGRAPHIC INFORMATION AND MAJOR CLIENTS Geographic Information Operating segments are defined as components of an enterprise, about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company 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 Six Months Ended (Dollars in thousands) 2017 2016 2017 2016 U.S. $ 118,447 60 % $ 103,547 55 % $ 256,056 60 % $ 196,775 53 % Other Americas 12,086 6 % 15,983 8 % 21,577 5 % 41,542 12 % U.K. 19,228 10 % 31,336 17 % 49,418 12 % 55,691 15 % Other EMEA (1) 27,395 13 % 22,391 12 % 49,241 12 % 43,658 12 % Asia Pacific 20,824 11 % 15,739 8 % 44,935 11 % 30,188 8 % $ 197,980 100 % $ 188,996 100 % $ 421,227 100 % $ 367,854 100 % (1) Includes Europe, the Middle East and Africa, but excludes the United Kingdom. Major Clients No client accounted for 10% or more of the Company’s total revenue during the three and six months ended June 30, 2017 or 2016. No client accounted for 10% or more of the Company’s total outstanding trade receivables as of June 30, 2017 or December 31, 2016. |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Schedule of Marketable Securities | The Company’s marketable securities are as follows: June 30, 2017 (in thousands) Amortized Unrealized Unrealized Fair Municipal bonds $ 32,238 $ 11 $ (30 ) $ 32,219 Corporate bonds 26,234 3 (42 ) 26,195 $ 58,472 $ 14 $ (72 ) $ 58,414 December 31, 2016 (in thousands) Amortized Unrealized Unrealized Fair Municipal bonds $ 36,746 $ — $ (139 ) $ 36,607 Corporate bonds 26,610 1 (51 ) 26,560 $ 63,356 $ 1 $ (190 ) $ 63,167 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value of Company Outstanding Forward Contracts | The fair value of the Company’s outstanding forward contracts was as follows: December 31, 2016 (in thousands) Recorded In: Fair Value Asset Derivatives Foreign currency forward contracts Other current assets $ 628 Liability Derivatives Foreign currency forward contracts Accrued expenses $ 883 |
Forward Contracts Outstanding with Total Notional Values | The Company had forward contracts outstanding with total notional values as of June 30, 2016 as follows: (in thousands) Euro € 24,735 British pound £ 7,885 Australian dollar A$ 25,830 Indian rupee Rs 353,500 United States dollar $ 93,460 |
Change in Fair Value of Forward Contracts | The income statement impact of the Company’s outstanding forward contracts and foreign currency transactions was as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Gain (loss) from the change in the fair value of forward contracts included in other income (expense), net $ 565 $ (1,421 ) $ 286 $ (3,718 ) Foreign currency transaction (loss) gain from the remeasurement of foreign currency assets and liabilities $ (917 ) $ 306 $ (241 ) $ 1,682 $ (352 ) $ (1,115 ) $ 45 $ (2,036 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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) June 30, Level 1 Level 2 Fair Value Assets: Money market funds $ 5,633 $ 5,633 $ — Marketable securities: Municipal bonds $ 32,219 $ — $ 32,219 Corporate bonds 26,195 — 26,195 Total marketable securities $ 58,414 $ — $ 58,414 Fair Value Measurements at (in thousands) December 31, Level 1 Level 2 Fair Value Assets: Money market funds $ 458 $ 458 $ — Marketable securities: Municipal bonds $ 36,607 $ — $ 36,607 Corporate bonds 26,560 — 26,560 Total marketable securities $ 63,167 $ — $ 63,167 Foreign currency forward contracts $ 628 $ — $ 628 Fair Value Liabilities: Foreign currency forward contracts $ 883 $ — $ 883 |
TRADE ACCOUNTS RECEIVABLE, NE22
TRADE ACCOUNTS RECEIVABLE, NET OF ALLOWANCE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Schedule of Trade Accounts Receivable | (in thousands) June 30, December 31, Trade accounts receivable $ 188,304 $ 234,473 Unbilled trade accounts receivable 34,306 34,681 Total accounts receivable 222,610 269,154 Allowance for sales credit memos (5,590 ) (4,126 ) $ 217,020 $ 265,028 |
GOODWILL AND OTHER INTANGIBLE23
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are: (in thousands) 2017 Balance as of January 1, $ 73,164 Purchase price adjustments to goodwill (354 ) Currency translation adjustments 80 Balance as of June 30, $ 72,890 |
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 Net Book June 30, 2017 Customer related intangibles 4-10 years $ 63,132 $ (41,322 ) $ 21,810 Technology 3-10 years 58,942 (42,908 ) 16,034 Other intangibles — 5,361 (5,361 ) — $ 127,435 $ (89,591 ) $ 37,844 December 31, 2016 Customer related intangibles 4-10 years $ 63,091 $ (37,573 ) $ 25,518 Technology 3-10 years 58,942 (40,269 ) 18,673 Other intangibles — 5,361 (5,361 ) — $ 127,394 $ (83,203 ) $ 44,191 |
Amortization Expense of Acquired Intangibles | Amortization expense of intangibles assets is reflected in the Company’s unaudited condensed consolidated statements of operations as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Cost of revenue $ 1,305 $ 1,638 $ 2,639 $ 2,984 Operating expenses 1,869 1,966 3,735 3,585 Total amortization expense $ 3,174 $ 3,604 $ 6,374 $ 6,569 |
Estimated Future Amortization Expense | Future estimated amortization expense related to intangible assets as of June 30, 2017 is as follows: (in thousands) Remainder of 2017 $ 5,953 2018 11,343 2019 5,551 2020 2,655 2021 2,631 2022 and thereafter 9,711 $ 37,844 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Schedule of Accrued Expenses | (in thousands) June 30, December 31, Professional services contractor fees $ 7,125 $ 6,550 Other taxes 5,338 9,031 Marketing and sales program expenses 5,188 1,508 Professional fees 3,276 3,654 Other 3,084 2,411 Self-insurance health and dental claims 2,523 2,182 Fixed assets in progress 2,417 855 Dividends payable 2,328 2,298 Employee reimbursable expenses 2,120 1,624 Short-term deferred rent 1,954 1,770 Partner commissions 1,748 2,199 Income taxes payable 1,038 1,391 Restructuring 98 105 Acquisition-related expenses and merger consideration — 290 Foreign currency forward contracts — 883 $ 38,237 $ 36,751 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Schedule of Deferred Revenue | (in thousands) June 30, December 31, Term license $ 6,294 $ 15,843 Perpetual license 24,709 23,189 Maintenance 111,759 112,397 Cloud 17,677 13,604 Services 9,487 10,614 Current deferred revenue 169,926 175,647 Term license — — Perpetual license 5,833 7,909 Maintenance 1,465 1,802 Cloud 1,133 1,278 Long-term deferred revenue 8,431 10,989 $ 178,357 $ 186,636 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stock-Based Compensation Expense Included in Consolidated Statements of Operations | Stock-based compensation expense is reflected in the Company’s unaudited condensed consolidated statements of operations as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Cost of revenues $ 3,677 $ 2,914 $ 7,299 $ 5,594 Operating expenses $ 10,255 $ 7,967 $ 19,141 $ 14,222 Total stock-based compensation before tax $ 13,932 $ 10,881 $ 26,440 $ 19,816 Income tax benefit $ (4,287 ) $ (3,085 ) $ (8,102 ) $ (5,690 ) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Basic and Diluted Earnings Per Share | The calculation of the Company’s basic and diluted earnings per share is as follows: Three Months Ended Six Months Ended (in thousands, except per share amounts) 2017 2016 2017 2016 Basic Net income $ 11,406 $ 4,536 $ 38,427 $ 14,936 Weighted-average common shares outstanding 77,313 76,318 77,039 76,347 Earnings per share, basic $ 0.15 $ 0.06 $ 0.50 $ 0.20 Diluted Net income $ 11,406 $ 4,536 $ 38,427 $ 14,936 Weighted-average effect of dilutive securities: Stock options 3,694 1,924 3,439 1,808 RSUs 1,938 1,180 1,934 1,174 Effect of assumed exercise of stock options and RSUs 5,632 3,104 5,373 2,982 Weighted-average common shares outstanding, assuming dilution 82,945 79,422 82,412 79,329 Earnings per share, diluted $ 0.14 $ 0.06 $ 0.47 $ 0.19 Outstanding stock options and RSUs excluded as impact would be anti-dilutive 237 315 276 404 |
GEOGRAPHIC INFORMATION AND MA28
GEOGRAPHIC INFORMATION AND MAJOR CLIENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 Six Months Ended (Dollars in thousands) 2017 2016 2017 2016 U.S. $ 118,447 60 % $ 103,547 55 % $ 256,056 60 % $ 196,775 53 % Other Americas 12,086 6 % 15,983 8 % 21,577 5 % 41,542 12 % U.K. 19,228 10 % 31,336 17 % 49,418 12 % 55,691 15 % Other EMEA (1) 27,395 13 % 22,391 12 % 49,241 12 % 43,658 12 % Asia Pacific 20,824 11 % 15,739 8 % 44,935 11 % 30,188 8 % $ 197,980 100 % $ 188,996 100 % $ 421,227 100 % $ 367,854 100 % (1) Includes Europe, the Middle East and Africa, but excludes the United Kingdom. |
Schedule of Marketable Securiti
Schedule of Marketable Securities (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 58,472 | $ 63,356 |
Unrealized Gains | 14 | 1 |
Unrealized Losses | (72) | (190) |
Fair Value | 58,414 | 63,167 |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 32,238 | 36,746 |
Unrealized Gains | 11 | |
Unrealized Losses | (30) | (139) |
Fair Value | 32,219 | 36,607 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 26,234 | 26,610 |
Unrealized Gains | 3 | 1 |
Unrealized Losses | (42) | (51) |
Fair Value | $ 26,195 | $ 26,560 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | |
Weighted-average remaining maturity period of marketable debt securities, months | 15 months |
Minimum | |
Schedule of Available-for-sale Securities [Line Items] | |
Remaining maturities of marketable debt securities | 2017-07 |
Maximum | |
Schedule of Available-for-sale Securities [Line Items] | |
Remaining maturities of marketable debt securities | 2020-09 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - Foreign Exchange Forward - USD ($) | Jun. 30, 2017 | May 31, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | |||
Notional value | $ 0 | $ 128,400,000 | |
Derivative outstanding | $ 0 |
Fair Value of Company Outstandi
Fair Value of Company Outstanding Forward Contracts (Detail) - Foreign Exchange Forward $ in Thousands | Dec. 31, 2016USD ($) |
Accrued expenses | |
Derivative [Line Items] | |
Liability Derivatives | $ 883 |
Other current assets | |
Derivative [Line Items] | |
Asset Derivatives | $ 628 |
Forward Contracts Outstanding w
Forward Contracts Outstanding with Total Notional Values (Detail) - Jun. 30, 2016 - Foreign Exchange Forward € in Thousands, ₨ in Thousands, £ in Thousands, AUD in Thousands, $ in Thousands | USD ($) | AUD | GBP (£) | INR (₨) | EUR (€) |
Euro Member Countries, Euros | |||||
Derivative [Line Items] | |||||
Notional amount | € | € 24,735 | ||||
British Pounds | |||||
Derivative [Line Items] | |||||
Notional amount | £ | £ 7,885 | ||||
Australian Dollar | |||||
Derivative [Line Items] | |||||
Notional amount | AUD | AUD 25,830 | ||||
Indian Rupees | |||||
Derivative [Line Items] | |||||
Notional amount | ₨ | ₨ 353,500 | ||||
United States of America, Dollars | |||||
Derivative [Line Items] | |||||
Notional amount | $ | $ 93,460 |
Change in Fair Value of Forward
Change in Fair Value of Forward Contracts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (loss) from the change in the fair value of forward contracts included in other income (expense), net | $ 565 | $ (1,421) | $ 286 | $ (3,718) |
Foreign currency transaction (loss) gain from the remeasurement of foreign currency assets and liabilities | (917) | 306 | (241) | 1,682 |
Net gain (loss) | $ (352) | $ (1,115) | $ 45 | $ (2,036) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amount of transfers between Level 1 and Level 2 | $ 0 | $ 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 | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value Assets | ||
Total marketable securities | $ 58,414 | $ 63,167 |
Foreign currency forward contracts | ||
Fair Value Assets | ||
Foreign currency forward contracts | 628 | |
Fair Value Liabilities | ||
Foreign currency forward contracts | 883 | |
Money Market Funds | ||
Fair Value Assets | ||
Money market funds | 5,633 | 458 |
Municipal bonds | ||
Fair Value Assets | ||
Total marketable securities | 32,219 | 36,607 |
Corporate bonds | ||
Fair Value Assets | ||
Total marketable securities | 26,195 | 26,560 |
Level 1 | Money Market Funds | ||
Fair Value Assets | ||
Money market funds | 5,633 | 458 |
Level 2 | ||
Fair Value Assets | ||
Total marketable securities | 58,414 | 63,167 |
Level 2 | Foreign currency forward contracts | ||
Fair Value Assets | ||
Foreign currency forward contracts | 628 | |
Fair Value Liabilities | ||
Foreign currency forward contracts | 883 | |
Level 2 | Municipal bonds | ||
Fair Value Assets | ||
Total marketable securities | 32,219 | 36,607 |
Level 2 | Corporate bonds | ||
Fair Value Assets | ||
Total marketable securities | $ 26,195 | $ 26,560 |
Schedule of Trade Accounts Rece
Schedule of Trade Accounts Receivable (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 222,610 | $ 269,154 |
Allowance for sales credit memos | (5,590) | (4,126) |
Total accounts receivable net | 217,020 | 265,028 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 188,304 | 234,473 |
Unbilled trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 34,306 | $ 34,681 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Line Items] | |
Balance as of January 1, | $ 73,164 |
Purchase price adjustments to goodwill | (354) |
Currency translation adjustments | 80 |
Balance as of June 30, | $ 72,890 |
Schedule of Amortizable Intangi
Schedule of Amortizable Intangible Asset (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | $ 127,435 | $ 127,394 |
Accumulated Amortization | (89,591) | (83,203) |
Net Book Value | 37,844 | 44,191 |
Customer related intangibles | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 63,132 | 63,091 |
Accumulated Amortization | (41,322) | (37,573) |
Net Book Value | 21,810 | 25,518 |
Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 58,942 | 58,942 |
Accumulated Amortization | (42,908) | (40,269) |
Net Book Value | 16,034 | 18,673 |
Other intangibles | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 5,361 | 5,361 |
Accumulated Amortization | $ (5,361) | $ (5,361) |
Minimum | Customer related intangibles | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Range of Useful Lives | 4 years | 4 years |
Minimum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Range of Useful Lives | 3 years | 3 years |
Maximum | Customer related intangibles | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Range of Useful Lives | 10 years | 10 years |
Maximum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Range of Useful Lives | 10 years | 10 years |
Amortization Expense of Acquire
Amortization Expense of Acquired Intangibles (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | $ 3,174 | $ 3,604 | $ 6,374 | $ 6,569 |
Cost of revenue | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | 1,305 | 1,638 | 2,639 | 2,984 |
Operating expenses | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | $ 1,869 | $ 1,966 | $ 3,735 | $ 3,585 |
Estimated Future Amortization E
Estimated Future Amortization Expense (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Goodwill and Other Intangible Assets [Line Items] | ||
Remainder of 2017 | $ 5,953 | |
2,018 | 11,343 | |
2,019 | 5,551 | |
2,020 | 2,655 | |
2,021 | 2,631 | |
2022 and thereafter | 9,711 | |
Net Book Value | $ 37,844 | $ 44,191 |
Schedule of Accrued Expenses (D
Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Accrued expenses | ||
Professional services contractor fees | $ 7,125 | $ 6,550 |
Other taxes | 5,338 | 9,031 |
Marketing and sales program expenses | 5,188 | 1,508 |
Professional fees | 3,276 | 3,654 |
Other | 3,084 | 2,411 |
Self-insurance health and dental claims | 2,523 | 2,182 |
Fixed assets in progress | 2,417 | 855 |
Dividends payable | 2,328 | 2,298 |
Employee reimbursable expenses | 2,120 | 1,624 |
Short-term deferred rent | 1,954 | 1,770 |
Partner commissions | 1,748 | 2,199 |
Income taxes payable | 1,038 | 1,391 |
Restructuring | 98 | 105 |
Acquisition-related expenses and merger consideration | 290 | |
Foreign currency forward contracts | 883 | |
Total accrued expenses | $ 38,237 | $ 36,751 |
Schedule of Deferred Revenue (D
Schedule of Deferred Revenue (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | $ 169,926 | $ 175,647 |
Long-term deferred revenue | 8,431 | 10,989 |
Total deferred revenue | 178,357 | 186,636 |
Term license | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 6,294 | 15,843 |
Perpetual license | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 24,709 | 23,189 |
Long-term deferred revenue | 5,833 | 7,909 |
Maintenance | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 111,759 | 112,397 |
Long-term deferred revenue | 1,465 | 1,802 |
Cloud | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | 17,677 | 13,604 |
Long-term deferred revenue | 1,133 | 1,278 |
Services | ||
Deferred Revenue Arrangement [Line Items] | ||
Current deferred revenue | $ 9,487 | $ 10,614 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense Included in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | $ 13,932 | $ 10,881 | $ 26,440 | $ 19,816 |
Income tax benefit | (4,287) | (3,085) | (8,102) | (5,690) |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 3,677 | 2,914 | 7,299 | 5,594 |
Operating expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | $ 10,255 | $ 7,967 | $ 19,141 | $ 14,222 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ | $ 64.7 |
Weighted-average period of recognition of unrecognized stock-based compensation expense (in years) | 2 years 1 month 6 days |
Employees | Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued | 1,068,000 |
Non-employee directors | Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued | 13,000 |
Nonqualified Stock Options | Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of shares granted | $ | $ 19.2 |
Number of shares granted, options | 1,441,000 |
RSUs | Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted, RSUs | 954,000 |
Fair value of shares granted | $ | $ 41.9 |
RSUs granted in connection with the 2016 CICP | 175,000 |
Percentage of target incentive compensation eligible to be elected and received by employees in the form of RSUs | 50.00% |
Restricted stock compensation expense | $ | $ 7.7 |
Total stock-based compensation, period of recognition | 1 year |
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 | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earning per share reconciliation | ||||
Net income | $ 11,406 | $ 4,536 | $ 38,427 | $ 14,936 |
Weighted-average common shares outstanding | 77,313 | 76,318 | 77,039 | 76,347 |
Earnings per share, basic | $ 0.15 | $ 0.06 | $ 0.50 | $ 0.20 |
Net income | $ 11,406 | $ 4,536 | $ 38,427 | $ 14,936 |
Effect of assumed exercise of stock options and RSUs | 5,632 | 3,104 | 5,373 | 2,982 |
Weighted-average common shares outstanding, assuming dilution | 82,945 | 79,422 | 82,412 | 79,329 |
Earnings per share, diluted | $ 0.14 | $ 0.06 | $ 0.47 | $ 0.19 |
Outstanding stock options and RSUs excluded as impact would be anti-dilutive | 237 | 315 | 276 | 404 |
Stock Options | ||||
Earning per share reconciliation | ||||
Weighted-average effect of dilutive securities | 3,694 | 1,924 | 3,439 | 1,808 |
RSUs | ||||
Earning per share reconciliation | ||||
Weighted-average effect of dilutive securities | 1,938 | 1,180 | 1,934 | 1,174 |
Geographic Information and Ma47
Geographic Information and Major Clients - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017Customer | Jun. 30, 2016Customer | Jun. 30, 2017SegmentUnitCustomer | Jun. 30, 2016Customer | Dec. 31, 2016Customer | |
Geographic information and major clients | |||||
Number of reportable segment, customer engagement solutions | Segment | 1 | ||||
Number of reporting unit | Unit | 1 | ||||
Number of clients representing 10% or more of Company's total revenue | 0 | 0 | 0 | 0 | |
Number of clients representing 10% or more of Company's total outstanding trade receivables | 0 | 0 | |||
Clients accounting for 10% or more of total revenue or outstanding trade receivables | No client accounted for 10% or more of the Company’s total revenue during the three and six months ended June 30, 2017 and 2016. No client accounted for 10% or more of the Company’s total outstanding trade receivables as of June 30, 2017 or December 31, 2016. | ||||
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 | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 197,980 | $ 188,996 | $ 421,227 | $ 367,854 | |
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 | $ 118,447 | $ 103,547 | $ 256,056 | $ 196,775 | |
Geographic revenue percentage | 60.00% | 55.00% | 60.00% | 53.00% | |
Other Americas | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 12,086 | $ 15,983 | $ 21,577 | $ 41,542 | |
Geographic revenue percentage | 6.00% | 8.00% | 5.00% | 12.00% | |
United Kingdom | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 19,228 | $ 31,336 | $ 49,418 | $ 55,691 | |
Geographic revenue percentage | 10.00% | 17.00% | 12.00% | 15.00% | |
Other EMEA | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | [1] | $ 27,395 | $ 22,391 | $ 49,241 | $ 43,658 |
Geographic revenue percentage | [1] | 13.00% | 12.00% | 12.00% | 12.00% |
Asia Pacific | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Geographic revenue | $ 20,824 | $ 15,739 | $ 44,935 | $ 30,188 | |
Geographic revenue percentage | 11.00% | 8.00% | 11.00% | 8.00% | |
[1] | Includes Europe, the Middle East and Africa, but excludes the United Kingdom. |