Document And Entity Information
Document And Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Ultimate Software Group Inc | ||
Entity Central Index Key | 1,016,125 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 7.6 | ||
Entity Common Stock, Shares Outstanding | 31,680,177 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 151,247 | $ 155,685 |
Investments in marketable securities | 10,741 | 9,434 |
Accounts receivable, net of allowance for doubtful accounts of $1,650 for 2018 and $900 for 2017 | 238,768 | 190,989 |
Prepaid expenses and other current assets | 90,761 | 71,602 |
Total current assets before funds held for customers | 491,517 | 427,710 |
Funds held for customers | 618,206 | 563,062 |
Total current assets | 1,109,723 | 990,772 |
Property and equipment, net | 302,939 | 243,664 |
Goodwill | 219,904 | 35,808 |
Intangible assets, net | 144,411 | 20,862 |
Other assets, net | 129,108 | 53,409 |
Deferred tax assets, net | 14,632 | 32,696 |
Total assets | 1,920,717 | 1,377,211 |
Current liabilities: | ||
Accounts payable | 16,058 | 16,099 |
Accrued expenses and other liabilities | 154,383 | 60,394 |
Deferred revenue | 238,940 | 197,088 |
Capital lease obligations | 6,303 | 5,474 |
Total current liabilities before customer funds obligations | 415,684 | 279,055 |
Customer funds obligations | 619,230 | 564,031 |
Total current liabilities | 1,034,914 | 843,086 |
Deferred revenue | 1,009 | 1,773 |
Deferred rent | 8,472 | 5,349 |
Capital lease obligations | 5,739 | 4,477 |
Other long-term liabilities | 500 | 4,250 |
Deferred income tax liability | 25,105 | 251 |
Total liabilities | 1,075,739 | 859,186 |
Commitments and contingencies (Note 17) | ||
Stockholders’ equity: | ||
Preferred Stock | 0 | 0 |
Common Stock, $.01 par value, 50,000,000 shares authorized, 35,985,995 and 34,787,986 shares issued in 2018 and 2017, respectively | 360 | 348 |
Additional paid-in capital | 863,030 | 609,160 |
Accumulated other comprehensive loss | (14,574) | (5,912) |
Accumulated earnings | 207,521 | 125,788 |
Stockholders' equity before treasury stock | 1,056,337 | 729,384 |
Treasury stock, 4,657,995 shares, at cost, for 2018 and 2017 | (211,359) | (211,359) |
Total stockholders’ equity | 844,978 | 518,025 |
Total liabilities and stockholders’ equity | 1,920,717 | 1,377,211 |
Series A Junior Preferred Stock | ||
Stockholders’ equity: | ||
Preferred Stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Allowance for doubtful accounts | $ 1,650 | $ 900 |
Stockholders’ equity: | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common Stock, shares issued (in shares) | 35,985,995 | 34,787,986 |
Treasury Stock, shares (in shares) | 4,657,995 | 4,467,595 |
Series A Junior Preferred Stock | ||
Stockholders’ equity: | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Recurring | $ 997,066 | $ 802,300 | $ 654,199 |
Services | 143,478 | 138,429 | 127,092 |
Total revenues | 1,140,544 | 940,729 | 781,291 |
Cost of revenues: | |||
Recurring | 273,165 | 210,560 | 172,676 |
Services | 158,569 | 143,140 | 127,433 |
Total cost of revenues | 431,734 | 353,700 | 300,109 |
Gross profit | 708,810 | 587,029 | 481,182 |
Operating expenses: | |||
Sales and marketing | 285,293 | 269,781 | 224,416 |
Research and development | 203,729 | 150,583 | 120,650 |
General and administrative | 139,192 | 122,119 | 94,432 |
Total operating expenses | 628,214 | 542,483 | 439,498 |
Operating income | 80,596 | 44,546 | 41,684 |
Other income (expense): | |||
Interest expense and other, net | (693) | (813) | (717) |
Other income, net | 3,458 | 397 | 451 |
Total other income (expense), net | 2,765 | (416) | (266) |
Income before income taxes | 83,361 | 44,130 | 41,418 |
Provision for income taxes | (18,221) | (30,075) | (12,178) |
Net income | $ 65,140 | $ 14,055 | $ 29,240 |
Net income per share: | |||
Basic (in dollars per share) | $ 2.11 | $ 0.47 | $ 1.01 |
Diluted (in dollars per share) | $ 2.06 | $ 0.46 | $ 0.96 |
Weighted average shares outstanding: | |||
Basic (in shares) | 30,854 | 29,791 | 28,976 |
Diluted (in shares) | 31,578 | 30,799 | 30,414 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 65,140 | $ 14,055 | $ 29,240 |
Other comprehensive (loss) income: | |||
Unrealized gain (loss) on investments in marketable available for sale securities | 366 | (558) | (61) |
Unrealized (loss) gain on foreign currency translation adjustments | (8,882) | 1,529 | 843 |
Other comprehensive (loss) income, before tax | (8,516) | 971 | 782 |
Income tax (provision) benefit related to items of other comprehensive income | (146) | 140 | 24 |
Other comprehensive (loss) income, net of tax | (8,662) | 1,111 | 806 |
Comprehensive income | $ 56,478 | $ 15,166 | $ 30,046 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid -in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Earnings | Treasury Stock |
Balance at Dec. 31, 2015 | $ 317,186 | $ 333 | $ 463,609 | $ (7,829) | $ 42,747 | $ (181,674) |
Balance (in shares) at Dec. 31, 2015 | 33,261 | 4,468 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 29,240 | 29,240 | ||||
Unrealized gain (loss) on investments in marketable securities available-for-sale, net of tax | (37) | (37) | ||||
Unrealized gain (loss) on foreign exchange, net of tax | 843 | 843 | ||||
Shares acquired to settle employee tax withholding liability | (65,522) | (65,522) | ||||
Repurchases of Common Stock | (29,685) | $ (29,685) | ||||
Repurchases of Common Stock (in shares) | 190 | |||||
Stock consideration for acquisitions (in shares) | 7 | |||||
Stock consideration for acquisitions | 0 | $ 0 | 0 | |||
Issuances of Common Stock from exercises of stock options | $ 4,659 | $ 2 | 4,657 | |||
Issuances of Common Stock from exercises of stock options (in shares) | 188 | 183 | ||||
Issuances of Common Stock from restricted stock releases | $ 5 | $ 5 | ||||
Issuances of Common Stock from restricted stock releases (in shares) | 552 | |||||
Non-cash stock-based compensation expense | 117,780 | 117,780 | ||||
Balance at Dec. 31, 2016 | 414,215 | $ 340 | 520,524 | (7,023) | 111,733 | $ (211,359) |
Balance (in shares) at Dec. 31, 2016 | 34,003 | 4,658 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 14,055 | 14,055 | ||||
Unrealized gain (loss) on investments in marketable securities available-for-sale, net of tax | (418) | (418) | ||||
Unrealized gain (loss) on foreign exchange, net of tax | 1,529 | 1,529 | ||||
Shares acquired to settle employee tax withholding liability | (68,034) | (68,034) | ||||
Issuances of Common Stock from exercises of stock options | $ 6,565 | $ 2 | 6,563 | |||
Issuances of Common Stock from exercises of stock options (in shares) | 230 | 230 | ||||
Issuances of Common Stock from restricted stock releases | $ 6 | $ 6 | ||||
Issuances of Common Stock from restricted stock releases (in shares) | 555 | |||||
Non-cash stock-based compensation expense | 150,107 | 150,107 | ||||
Balance at Dec. 31, 2017 | 518,025 | $ 348 | 609,160 | (5,912) | 125,788 | $ (211,359) |
Balance (in shares) at Dec. 31, 2017 | 34,788 | 4,658 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 65,140 | 65,140 | ||||
Unrealized gain (loss) on investments in marketable securities available-for-sale, net of tax | 220 | 220 | ||||
Unrealized gain (loss) on foreign exchange, net of tax | (8,882) | (8,882) | ||||
Shares acquired to settle employee tax withholding liability | (64,806) | (64,806) | ||||
Stock consideration for acquisitions (in shares) | 595 | |||||
Stock consideration for acquisitions | 172,165 | $ 6 | 172,159 | |||
Issuances of Common Stock from exercises of stock options | $ 3,323 | $ 1 | 3,322 | |||
Issuances of Common Stock from exercises of stock options (in shares) | 114 | 114 | ||||
Issuances of Common Stock from restricted stock releases | $ 5 | $ 5 | ||||
Issuances of Common Stock from restricted stock releases (in shares) | 489 | |||||
Non-cash stock-based compensation expense | 143,195 | 143,195 | ||||
Balance at Dec. 31, 2018 | 844,978 | $ 360 | $ 863,030 | $ (14,574) | 207,521 | $ (211,359) |
Balance (in shares) at Dec. 31, 2018 | 35,986 | 4,658 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative impact of adoption of ASU 2016-09 | Accounting Standards Update 2016-09, Excess Tax Benefit Component | $ 16,593 | $ 16,593 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 65,140 | $ 14,055 | $ 29,240 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 49,217 | 34,055 | 27,098 |
Provision for doubtful accounts | 7,855 | 5,727 | 3,213 |
Non-cash stock-based compensation expense | 140,353 | 146,427 | 113,877 |
Income taxes | 16,131 | 28,607 | 11,208 |
Net amortization of premiums and accretion of discounts on available-for-sale securities | (666) | 308 | 755 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (48,231) | (34,476) | (35,004) |
Prepaid expenses and other current assets | (37,515) | (9,704) | (14,973) |
Other assets | (27,495) | (5,977) | (16,325) |
Accounts payable | (5,136) | 2,580 | 5,850 |
Accrued expenses and deferred rent | 31,633 | 7,498 | 7,403 |
Deferred revenue | 32,585 | 24,885 | 27,179 |
Net cash provided by operating activities | 223,871 | 213,985 | 159,521 |
Cash flows from investing activities: | |||
Purchases of marketable securities | (279,926) | (168,006) | (207,676) |
Maturities of marketable securities | 204,140 | 121,857 | 123,895 |
Payments for acquisitions | (74,420) | (1,000) | (25,636) |
Net change in money market securities and other cash equivalents held to satisfy customer funds obligations | 20,370 | (37,959) | 537,077 |
Purchases of property and equipment, including capitalized software development | (80,062) | (77,594) | (69,415) |
Net cash (used in) provided by investing activities | (209,898) | (162,702) | 358,245 |
Cash flows from financing activities: | |||
Repurchases of Common Stock | 0 | 0 | (29,685) |
Net proceeds from issuances of Common Stock | 3,323 | 6,565 | 4,659 |
Shares acquired to settle employee tax withholding liabilities | (64,806) | (68,034) | (65,522) |
Principal payments on capital lease obligations | (5,422) | (6,340) | (5,831) |
Repayments of other borrowings | (3,750) | 0 | (400) |
Net increase (decrease) in customer fund obligations | 55,200 | 97,608 | (456,943) |
Net cash (used in) provided by financing activities | (15,455) | 29,799 | (553,722) |
Effect of exchange rate changes on cash | (2,956) | 830 | 404 |
Net (decrease) increase in cash and cash equivalents | (4,438) | 81,912 | (35,552) |
Cash and cash equivalents, beginning of year | 155,685 | 73,773 | 109,325 |
Cash and cash equivalents, end of year | 151,247 | 155,685 | 73,773 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 596 | 498 | 426 |
Cash paid for taxes | 7,581 | 2,192 | 1,758 |
Supplemental disclosure of non-cash investing and financing activities (in thousands): | |||
Capital lease obligations to acquire new equipment | 9,091 | 7,250 | 6,719 |
Cash held in escrow for business combinations | 0 | 0 | 3,600 |
Software Services Agreement | 0 | 6,500 | 0 |
Stock-based compensation for capitalized software | $ 3,533 | $ 4,003 | $ 3,903 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations With offices in the United States, Canada, France, Germany, England, and Singapore, The Ultimate Software Group, Inc. and subsidiaries ( “Ultimate,” “we,” “us” or “our”) is a leading provider of cloud-based human capital management solutions, often referred to as human capital management ("HCM") and employee experience solutions. Ultimate's UltiPro product suite (“UltiPro”) is a comprehensive, engaging solution that has human resources ("HR") and payroll at its core and includes benefits management, talent acquisition, talent management, time management, and global people management functionality available in 14 languages with 61 country-specific localizations. Ultimate also offers a-la-carte employee experience solutions, such as HR Service Delivery and "Perception," an employee-sentiment analysis solution. Ultimate's solutions are delivered via software-as-a-service ("SaaS"), now more commonly known as cloud computing, to organizations with employees in the United States, Canada, Europe, Asia Pacific, and other global locations. We market our UltiPro solutions primarily to enterprise companies, which we define as organizations with 2,501 or more employees, including those with 10,000 employees and larger; mid-market companies, which we define as those having 501 - 2,500 employees; and strategic market companies, which we define as those having 100 - 500 employees. |
Basis of Presentation, Consolid
Basis of Presentation, Consolidation and the Use of Estimates | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Consolidation and the Use of Estimates | Basis of Presentation, Consolidation and the Use of Estimates The accompanying consolidated financial statements of Ultimate have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The consolidated financial statements included herein reflect all adjustments, which are, in the opinion of Ultimate’s management, necessary for a fair presentation of the information for the periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Such estimates include, but are not limited to, revenue recognition, income taxes, and the valuation of deferred tax assets and the measurement of intangible assets acquired through business combinations. Our actual results could differ from those estimates. The consolidated financial statements reflect the financial position and operating results of Ultimate and include its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | Summary of Significant Accounting Policies and Recent Accounting Pronouncements Cash and Cash Equivalents All highly liquid instruments with an original maturity of three months or less when acquired are considered cash equivalents and are comprised of interest-bearing accounts. Accounts Receivable Accounts receivable are principally from end-users of Ultimate’s products. We maintain an allowance for doubtful accounts at an amount estimated to be sufficient to provide adequate protection against losses resulting from collecting less than full payment on accounts receivable. Judgment is required when the realization of receivables is assessed, including assessing the probability of collection and current credit-worthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in a further impairment of their ability to make payments, an additional provision for doubtful accounts may be required. We charge off uncollectible amounts against the allowance for doubtful accounts in the period in which we determine they are uncollectible. Funds Held for Customers and Customers’ Funds Obligations Ultimate's UltiPro Payment Services solution allows companies to meet all Federal, state, and local payroll tax filing obligations. These payment services are being sold directly by us to our customers only on a per-employee-per-month (“PEPM”) basis in conjunction with UltiPro, our core product. In connection with our UltiPro Payment Services product, we receive funds from our customers and hold such funds for purposes of paying the appropriate taxing authorities on behalf of such customers. We invest a portion of our customer funds in available for sale securities in addition to our corporate funds in accordance with our internal investment strategies. The portfolio predominantly consists of investment grade securities with long-term ratings of AAA and AA+ and short-term ratings A-1/P-1. These funds held for customers and the corresponding customer funds obligations are included in current assets and current liabilities, respectively, in our consolidated balance sheets as of December 31, 2018 and 2017 . We have reported the cash flows for purchases of securities with funds received from UltiPro Payment Services customers in the investing activities section of the consolidated statements of cash flows for the years ended December 31, 2018 , 2017 and 2016 . We have reported the cash flows related to the funds received and paid on behalf of such customers to the applicable taxing authorities in the financing activities section of the consolidated statements of cash flows for the years ended December 31, 2018 , 2017 and 2016 . The associated PEPM fees for UltiPro Payment Services are included in recurring revenues in the consolidated statements of income for the years ended December 31, 2018 , 2017 and 2016 . The associated interest earned was not material for the years ended December 31, 2018 , 2017 and 2016 . Fair Value of Financial Instruments Ultimate’s financial instruments, consisting of cash and cash equivalents, investments in marketable securities, funds held for customers and the related obligations, accounts receivable and accounts payable approximated fair value (due to their relatively short maturity) as of December 31, 2018 and 2017 . Funds Held for Customers and Corporate Investments We classify our investments in marketable securities with readily determinable fair values as available-for-sale. Available-for-sale securities consist of debt securities not classified as trading securities or as securities to be held to maturity. Unrealized gains and losses, net of tax, on available-for-sale securities are reported as a net amount in accumulated other comprehensive (loss) income in stockholders’ equity until realized. Gains and losses on the sale of available-for-sale securities are determined using the specific identification method. Interest earned on investments from funds held for customers is included in recurring revenue and was not material in the years presented. If the fair value of an available-for-sale debt security is below its amortized cost, Ultimate assesses whether we intend to sell the security or if it is more likely than not we will be required to sell the security before recovery. If either of those two conditions are met, Ultimate would recognize a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value. If we do not intend to sell a security or it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recognized in accumulated other comprehensive (loss) income. Deferred Contract Costs, Prepaid Expenses and Other Current Assets Ultimate’s consolidated financial statements include deferred contract costs, prepaid expenses and other current assets. Prepaid expenses are amortized over the life of the asset (typically within one year ). Deferred contract costs primarily relate to prepaid commissions on UltiPro sales which are amortized over 7 years, on a systematic basis, typically commencing on the day the customer processes its first live payroll using UltiPro (also referred to as going “Live”). The period of amortization takes into consideration the contract terms, our customer life and technological changes for our UltiPro product while the systemic basis of amortization corresponds with the pattern of transfer of goods and services to which the asset relates. Ultimate does not pay sales commissions for subscription contracts beyond the initial term of the contract; therefore, there are no renewal commissions incurred for contracts in their renewal periods. The portion of prepaid commissions that extends beyond one year is classified in other assets, net, in the consolidated balance sheets as of December 31, 2018 and 2017 . Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, which range from 2 to 15 years. Leasehold improvements and assets under capital leases are amortized over the shorter of the life of the asset or the term of the lease over periods ranging from approximately 3 to 15 years. Maintenance and repairs are charged to expense when incurred; betterments are capitalized. Upon the sale or retirement of assets, the cost, accumulated depreciation and amortization are removed from the accounts and any gain or loss is recognized. Computer Software Development Costs Computer software development costs related to software developed for internal use falls under the accounting guidance of ASC Topic 350-40, Intangibles Goodwill and Other–Internal Use Software , in which computer software costs are expensed as incurred during the preliminary project stage and capitalization begins in the application development stage once the capitalization criteria are met. Costs associated with post implementation activities are expensed as incurred. Costs capitalized during the application development stage include external direct costs of materials and services consumed in developing or obtaining internal-use software and payroll and payroll-related costs for employees who are directly associated with, and who devote time to, the internal-use computer software. In addition to capitalizing costs for software (which are used by us in our general operations, for internal purposes), we also capitalize costs under ASC Topic 350-40 for certain software development projects related to our suite of products sold to our customers exclusively on a subscription basis under our SaaS offering of UltiPro. Long-Lived Assets We evaluate the carrying value of long-lived assets when indicators of impairment exist. For the year ended December 31, 2018 , no such events or circumstances were identified. The carrying value of a long-lived asset is considered impaired when the undiscounted expected future cash flows from such asset (or asset group) are separately identifiable and less than the asset’s (or asset group’s) carrying value. In that event, a loss is recognized to the extent that the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. For the years ended December 31, 2018 , 2017 and 2016 , we recorded no impairment of our long-lived assets. Goodwill and Intangible Assets The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill. The determination of the value of the intangible assets acquired involves certain judgments and estimates. These judgments and estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted average cost of capital. At December 31, 2018, our goodwill totaled $219.9 million and our identifiable net intangible assets totaled $144.4 million . We assess the impairment of goodwill of our reporting unit annually, or more often if events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. We consider both market and discounted cash flow approaches to determine the fair value of the reporting unit. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit. We conducted our annual impairment test of goodwill as of December 31, 2018, and 2017. As a result of this test, we determined that no adjustment to the carrying value of goodwill for our reporting unit was required. We evaluate our amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on expected undiscounted cash flows attributable to that asset or group of assets. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We also evaluate the estimated remaining useful lives of intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization. Assumptions and estimates about future values and remaining useful lives of our intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends and internal factors such as changes in our business strategy and our internal forecasts. Deferred Revenue Deferred revenue is primarily comprised of deferrals of recurring revenues for cloud services which are recognized over the initial term of the related contract as the services are performed, typically 24 - 36 months, commencing with the related Live date; and implementation consulting services for which the services have not yet been rendered which are primarily recognized prior to the respective Live date. Guarantees The standard commercial terms in our sales contracts for UltiPro include an indemnification clause that indemnifies the customer against certain liabilities and damages arising from any claims of patent, copyright, or other proprietary rights of any third party. Due to the nature of the intellectual property indemnification provided to our customers, we cannot estimate the fair value, or determine the total nominal amount, of the indemnification until such time as a claim for such indemnification is made. In the event of a claim made against us under such provision, we evaluate estimated losses for such indemnification considering such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, Ultimate has not had any claims made against it under such provision and, accordingly, has not accrued any liabilities related to such indemnifications in its consolidated financial statements. Segment Information Public companies are required to report selected information about operating segments in annual and interim financial reports to shareholders, as well as related disclosures about an enterprise’s business segments, products, services, geographic areas and major customers. Ultimate operates its business as a single segment and is comprised as a single reporting unit. Revenue Recognition Effective January 1, 2018, we recognize revenues in accordance with Topic 606. The core principle of Topic 606 is that revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. To achieve the core principle of Topic 606, we perform the following steps: 1) Identify the contract(s) with a customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations in the contract; and 5) Recognize revenue when (or as) we satisfy a performance obligation. The significant majority of our two major revenue sources, recurring and services, is derived from contracts with customers. Recurring revenues are primarily related to our subscription-based SaaS performance obligations. Services revenues are primarily related to implementation services for our SaaS customers (including stand-alone services billed on a time and materials basis) and, to a much lesser extent, fees for other services, including the provision of payroll-related forms, sales of time clocks and the printing of W-2 and Affordable Care Act ("ACA") forms for certain customers, as well as certain client reimbursable out-of-pocket expenses ("Other Services"). Fees charged to subscription-based SaaS performance obligations are each priced on a per-employee-per-month (“PEPM”) basis for a given calendar month based on usage, and fees charged for implementation services are typically priced on a fixed fee basis for activating the product offering. Our SaaS subscription revenues are satisfied over time, because they are simultaneously received and consumed by the customer. Our activation services revenues are satisfied over time because they are simultaneously received and consumed by the customer. Our SaaS performance obligations are each priced based on the number of active customer employees, as of the signing of the contract, at the contract PEPM rate over the initial contract term. Our activation services are based on a fixed fee charged to our customers. There is typically no variable consideration related to our SaaS performance obligations or our activation services, nor do they include a significant financing component, non-cash consideration, or consideration payable to a customer. Our SaaS performance obligations are typically billed quarterly in advance while our activation services are billed over the implementation period. Our SaaS arrangements include multiple performance obligations and transaction price allocations are based on the stand-alone selling price ("SSP") for each performance obligation. There is an observable input for SSP for each of the SaaS performance obligations. Since activation services do not have directly observable pricing, the SSP is estimated using market conditions and observable inputs, which is calculated based on historical average discounts off our standard price list. For our performance obligations, the consideration allocated to cloud subscription revenues is recognized as recurring revenues, typically using the output method, over the initial contract period, as those subscription-based services are consumed, typically commencing with the date the customer processes their first live payroll using UltiPro (referred to as going "Live"). The consideration allocated to activation services is recognized as services revenues based on the proportion performed, using reasonably dependable estimates (in relation to progression through activation phases), by product. Activation services are performed by our implementation consultants and, to a lesser extent, third party implementation partners. For activation services performed by third party implementation partners, we act as the principal and report revenues on a gross basis, meaning the amounts billed to customers are recorded as services revenues, and related expenses incurred are recorded as cost of services revenues. We control the activation services performed by third party implementation partners and act as principal because we are ultimately responsible to our customers and have full discretion in establishing prices. Customers also enter into contracts for services billed on a time and materials basis and Other Services. Time and materials services are satisfied over time because the customer simultaneously receives and consumes the benefit as we perform. Services revenues for time and materials work are recognized in the period performed. Fees from Other Services substantially include the provision of payroll-related forms, sales of time clocks and printing services for certain customers. For these Other Services, revenue is recognized at a point in time, upon shipment which is when control of the goods and services transfers to the customer. Cost of Revenues Cost of revenues primarily consists of the costs of recurring and services revenues. Cost of recurring revenues primarily consists of costs to provide maintenance and technical support to our customers, the cost of providing periodic updates and the cost of recurring subscription revenues, including amortization of capitalized software. Cost of services revenues primarily consists of costs to provide implementation consulting services and, to a lesser degree, training to our customers, costs related to sales of payroll-related forms, time clocks and costs associated with certain client reimbursable out-of-pocket expenses. Stock-Based Compensation Our Amended and Restated 2005 Equity and Incentive Plan (the “Plan”) authorizes the grant of options to non-employee directors, officers and employees of Ultimate to purchase shares of Ultimate’s Common Stock. The Plan also authorizes the grant to such persons of restricted and non-restricted shares of Common Stock, stock appreciation rights, stock units and cash performance awards (collectively, together with stock options, the “Awards”). Prior to the adoption of the Plan, options to purchase shares of Common Stock were issued under our Nonqualified Stock Option Plan (the “Prior Plan”). Beginning in 2009, we began making grants to employees of restricted stock units in lieu of stock options. As of December 31, 2018 , the aggregate number of shares of Common Stock that were available to be issued under all Awards granted under the Plan was 1,706,906 shares. The Plan provides broad discretion to the Compensation Committee of the Board of Directors to create appropriate equity incentives for directors, officers and employees of Ultimate. The Plan is intended to attract and retain talented employees and align employee and stockholder interests. For purposes of calculating and accounting for stock-based compensation expense (“SBC”) in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”) for restricted stock awards and restricted stock units, we measure compensation based on the closing market price of our Common Stock at the date of grant and it is recognized on a straight-line basis over the vesting period. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The weighted-average forfeiture rate is based on historical data. In accordance with ASC 718, Ultimate capitalizes the portion of SBC expense attributed to personnel whose labor costs are being capitalized pursuant to ASC Topic 350-40, Intangibles Goodwill and Other-Internal Use Software , related to software development. The following table summarizes SBC recognized by the Company (in thousands): For the Years Ended December 31, 2018 2017 2016 SBC - Statements of income $ 140,353 $ 146,427 $ 113,877 SBC - Capitalized software 3,533 4,003 3,903 SBC - Statements of stockholders' equity $ 143,886 $ 150,430 $ 117,780 Rental Costs Incurred in Relation to a Construction Period We have incurred rental costs associated with operating leases during construction periods. Rental costs incurred during a construction period are costs incurred for the right to control the use of a leased asset during and after construction of a leased asset. Since there is no distinction between the right to use a leased asset during the construction period and the right to use that asset after the construction period, rental costs associated with ground or building operating leases that are incurred during a construction period are recognized as rental expense on a straight-line basis. Income Taxes We are subject to federal, foreign and state corporate income taxes. We account for income taxes using an asset and liability approach under which deferred income taxes are provided based upon enacted tax laws and rates applicable to the periods in which the taxes become payable. The federal Tax Cuts and Jobs Act (the "Tax Act”) was enacted on December 22, 2017. The impact of implementing the Tax Act to our deferred income tax expense was reflected during the fourth quarter of 2017. We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We assess the likelihood that Ultimate will be able to recover its deferred tax assets. Management considers all available evidence, both positive and negative, including historical levels of pre-tax book income, expiration of net operating losses, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies, as well as current tax laws and interpretation of current tax laws, in assessing the need for a valuation allowance. If recovery is not likely, we record a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. For US based deferred tax assets, the available positive evidence at December 31, 2018 included, among other factors, three years of cumulative historical pre-tax book income and a projection of future pre-tax book income and taxable income. As a result of our analysis of all available evidence, both positive and negative, we believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize all of the deferred tax assets as of December 31, 2018. As such, there was no valuation allowance on US based deferred assets for the years ended December 31, 2018 and 2017. In evaluating valuation allowance for foreign based deferred tax assets, due to negative evidence which includes history of losses for both the UK subsidiary, PeopleDoc UK Ltd., and the German subsidiary, PeopleDoc GMBH, it was determined that it would not be more likely than not that the deferred tax assets would be ultimately recoverable. The valuation allowance balance at December 31, 2018 was $1.7 million and represents an increase in the valuation allowance of $0.2 million . See Note 14 for further discussion. ASC 740, "Income Taxes" ("ASC 740") provides guidance on the related de-recognition, classification, interest and penalties, accounting for interim periods, disclosure and transition of uncertain tax positions. Our accounting policy is to record the tax effects of a change in the opening balance of the unrecognized tax benefits (including unrecognized tax benefits related to prior-period discontinued operations) in current-period income (loss) from continuing operations. We recognize interest and penalties accrued related to unrecognized tax benefits as components of our income tax provision. We did not have any interest and penalties accrued as of December 31, 2018 and 2017 , we did not have any interest and penalties accrued related to unrecognized tax benefits. Recently Adopted Accounting Standards Topic 606 In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Topic 606 supersedes the revenue requirements in ASU Topic 605, Revenue Recognition ("Topic 605") and requires the recognition of revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services and includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers , which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. Collectively, we refer to Topic 606 and Subtopic 340-40 as the "new standard." Effective January 1, 2018, we adopted the requirements of the new standard, utilizing the modified retrospective method of transition with the new standard applied to all customer contracts that were not completed on the effective date of the new standard. Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, as detailed below. The impact of adopting the new standard on our revenues resulted in an immaterial increase to deferred revenue but also resulted in a material impact on current and non-current other assets, as a result of the amortization period over which deferred contract costs to obtain related subscription contracts are recognized. Under Topic 605, we deferred incremental commission costs to obtain a contract and amortized those costs over the initial term of the related subscription contract, which is generally 2-3 years. During our assessment of the new standard, we did not identify any incremental contract costs from what was capitalized under Topic 605. We analyzed our customer contract term periods and our customer life, taking into consideration technological changes for our UltiPro product offering, and based on our assessment of the new standard, we amortize the deferred contract costs over 7 years on a systematic basis, consistent with the pattern of transfer of the goods or services to which the asset relates. The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of the new standard were as follows (in thousands): Balance as of December 31, 2017 Adjustments Due to Adoption of Topic 606 Balance as of January 1, 2018 Assets Deferred contract costs, prepaid expenses and other current assets $ 71,602 $ (22,318 ) $ 49,284 Total current assets 990,772 (22,318 ) 968,454 Deferred contract costs and other assets, net 53,409 47,259 100,668 Deferred tax assets, net 32,696 (6,268 ) 26,428 Total assets $ 1,377,211 $ 18,673 $ 1,395,884 Liabilities Deferred revenue $ 197,088 $ 1,909 $ 198,997 Total current liabilities 843,086 1,909 844,995 Deferred income tax liability 251 170 421 Total liabilities 859,186 2,079 861,265 Stockholders' Equity Accumulated earnings 125,788 16,594 142,382 Total stockholders' equity 518,025 16,594 534,619 Total liabilities and stockholders' equity $ 1,377,211 $ 18,673 $ 1,395,884 In accordance with the requirements of the new standard, the disclosure for the quantitative effect and the significant changes between the reported results under the new standard and those that would have been reported under legacy GAAP (i.e., Topic 605) on our audited consolidated income statement and balance sheet was as follows (in thousands): For the Twelve Months Ended December 31, 2018 As Reported - Topic 606 Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Income Statement Revenues Recurring revenues $ 997,066 $ 998,708 $ (1,642 ) Operating Expenses Sales and marketing 285,293 306,424 (21,131 ) Net income $ 65,140 $ 45,651 $ 19,489 As of December 31, 2018 As Reported - Topic 606 Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Balance Sheet Assets Deferred contract costs, prepaid expenses and other current assets $ 90,761 $ 111,190 $ (20,429 ) Deferred contract costs and other assets, net 129,108 $ 62,607 66,501 Deferred tax assets, net 14,632 27,620 (12,988 ) Liabilities Deferred revenue 238,940 235,942 2,998 Stockholders' Equity Accumulated earnings 207,521 171,439 36,082 ASU 2018-02 In April 2018, we adopted Accounting Standards Update ("ASU") No. 2018-02, " Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, " ("ASU 2018-02"). ASU 2018-02 allows companies to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) from accumulated other comprehensive income to retained earnings. The unaudited condensed consolidated balance sheets reflect the reclassification out of accumulated other comprehensive income. The Company's policy for releasing disproportionate income tax effects from accumulated other comprehensive income utilizes the aggregate approach. The adoption of ASU 2018-02 did not have an impact on our unaudited condensed consolidated statements of income or cash flows. Recently Issued Accounting Standards ASU 2016-02 In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"). This guidance, as amended by subsequent ASU's on the topic, improves transparency and comparability among companies by recognizing right of use (ROU) assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. ASU No. 2016-02 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. We will adopt ASU No. 2016-02 in our fiscal year beginning January 1, 2019, and will use the alternative transition method provided by the FASB in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, with no restatement of comparative periods. The new standard provides optional practical expedients in transition. We expect to only elect the "package of practical expedients" where, under the new standard, prior conclusions about lease identification, lease classification and initial direct costs do not need to be reassessed. The new standard also provides practical expedients for ongoing accounting and we do not expect to elect any of these practical expedients on adoption. We continue to assess the impact of the new standard and believe it will have a material effect on the consolidated balance sheet due to the recognition of ROU assets and lease liabilities related to real estate and office equipment operating leases. On adoption, the expected impact includes the recognition of additional operating lease liabilities ranging from $55 million to $60 million and ROU assets, net of uncollected lease incentives, ranging from $52 million to $57 million . The new standard is not expected to have a material effect on consolidated net income or consolidated cash flows. ASU 2018-15 In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations 2018 Business Combinations Acquisition of PeopleDoc SAS On July 26, 2018, Ultimate, PeopleDoc SAS, a simplified joint-stock company (société par actions simplifiée) organized under the laws of France (“PeopleDoc”) and certain shareholders of PeopleDoc, entered into a Share Purchase Agreement (the “Purchase Agreement”) and on July 27, 2018, the parties consummated the transactions contemplated by the Purchase Agreement and Ultimate acquired PeopleDoc. PeopleDoc, a pioneer in HR Service Delivery, is based in Paris, France and has more than 1,000 customers with users in 180 countries. The addition of the PeopleDoc HR Service Delivery platform will further Ultimate's mission to improve the employee experience by offering new, person-centric features, such as an online employee help center, HR case management, and employee file management. Pursuant to the Purchase Agreement, Ultimate acquired all of the capital stock of PeopleDoc for aggregate consideration valued at $295.9 million , subject to post-closing adjustments, paid with a combination of cash and shares of Ultimate common stock. The following table summarizes the calculation of consideration transferred and deferred under the transaction (in thousands of USD): Note Amount Calculation of consideration Cash consideration: Cash paid to PeopleDoc shareholders (a) $ 74,420 Deferred cash consideration (b) 49,336 Actual cash consideration $ 123,756 Share consideration: Share consideration paid to PeopleDoc shareholders (c) $ 173,329 Marketability of deferred stock consideration (d) $ (1,164 ) Actual share consideration 172,165 Fair value of total consideration transferred $ 295,921 (a) Initial cash consideration paid to PeopleDoc shareholders per the Purchase Agreement at the closing of the transaction. (b) Deferred cash consideration to be paid on the first anniversary of the closing date of the transaction. (c) Share consideration paid to PeopleDoc shareholders per the Purchase Agreement at the time of closing the transaction. Share consideration paid to PeopleDoc shareholders consists of 595,445 shares at the closing stock price of $282.74 in addition to a restricted stock award with a fair value of $5.1 million at the acquisition date. (d) Reflects a marketability adjustment to the deferred stock consideration. Under ASC 805, generally all assets acquired and liabilities assumed are recorded at their acquisition date fair value. The consolidated financial statements include various assumptions related to the purchase price allocation of the assets acquired and liabilities assumed of PeopleDoc based on management's best estimates of fair value. The purchase price allocation for the PeopleDoc acquisition is complete and has been allocated based on estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The following table represents the allocation of the purchase price for PeopleDoc to the acquired identifiable assets, assumed liabilities and goodwill (in thousands of USD): Description Note Amount Current assets (a) $ 15,581 Property and equipment, net (a) 1,489 Other non-current assets (a) 1,010 Identifiable intangible assets (b) 136,800 Goodwill (c) 188,880 Total current liabilities (a), (d) (14,713 ) Deferred revenue (a) (6,900 ) Deferred tax liability, net (e) (26,226 ) Total purchase price $ 295,921 (a) Represents fair value of assets and liabilities assumed as part of the transaction based on the closing balance sheet provided by PeopleDoc. (b) Fair value of identifiable intangible assets consisted primarily of developed technology of $77 million estimated using the relief from royalty method and customer relationships of $59 million estimated using the multi period excess earnings method (c) Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets acquired and liabilities assumed. Goodwill recorded is attributable to the expected synergies to be realized when combining the operations of this entity into our existing operations. Goodwill from this transaction is not deductible for tax purposes. (d) Included in total current liabilities was assumed debt of $4.8 million as of the closing of the transaction. As of December 31, 2018, the assumed debt was fully extinguished. (e) Reflects the recognition of a deferred tax asset and deferred tax liability as of the acquisition date for the taxable and deductible temporary differences between the financial reporting values of assets acquired and liabilities assumed and the tax bases of those assets and liabilities. The results of operations from this acquisition have been included in our consolidated financial statements since the closing of the PeopleDoc acquisition. Pro forma results of operations have not been presented because the effects of this business combination were not deemed material to our consolidated results of operations. The transaction costs associated with this acquisition for the year ended December 31, 2018 were approximately $3.1 million and were recorded in general and administrative expense. 2016 Business Combinations During the third quarter of 2016, we completed the acquisition of Kanjoya, Inc. ("Kanjoya"), a California corporation (the “Kanjoya Acquisition”), located in San Francisco, California. During the second quarter of 2016, we completed the acquisition of substantially all of the assets of Capital Analytics, Inc. (d/b/a Vestrics) (hereinafter referred to as "Vestrics") (the “Vestrics Acquisition”), a Delaware limited liability company located in North Carolina. The Kanjoya Acquisition and the Vestrics Acquisition (the “2016 Acquisitions”) were not deemed material to the audited consolidated financial statements on an individual basis and in the aggregate. Acquisition of Kanjoya, Inc. On September 29, 2016, pursuant to a merger agreement with Kanjoya, we acquired Kanjoya in exchange for $19.6 million , of which $16.9 million was paid in cash during the year ended December 31, 2016 while the remaining $2.6 million is being held in escrow, and is included in accrued liabilities on our consolidated balance sheet. We recorded the Kanjoya Acquisition using the acquisition method of accounting and recognized assets and liabilities assumed at their fair value as of the date of acquisition. Based on the valuation, the significant classes of assets and liabilities to which we allocated the purchase price of Kanjoya were acquired intangibles for a total of $13.6 million , consisting of $12.1 million for developed technology, $1.5 million for customer relationships, and goodwill for the balance of $6.4 million . Pursuant to the Kanjoya Acquisition we assumed working capital, net, totaling $0.4 million . The fair value of the acquired developed technology was estimated using the cost approach. In accordance with GAAP, direct costs related to the acquisition were expensed as incurred. Kanjoya is a leading cloud workforce intelligence provider for enterprises. Based upon the technology acquired, we launched UltiPro Perception, a feature-set that enables businesses to identify and analyze attitudes and performance traits of their employees, managers, and teams from surveys and other sources of employee feedback. Kanjoya's workforce has joined Ultimate and will serve to establish an additional research and development hub for us in San Francisco. The results of operations from this acquisition have been included in our consolidated financial statements since the closing of the Kanjoya Acquisition. Pro forma results of operations have not been presented because the effects of this business combination were not deemed material to our audited consolidated results of operations. Acquisition of Capital Analytics, Inc., d/b/a Vestrics On May 11, 2016 (the "Vestrics Closing Date"), pursuant to an asset purchase agreement with Vestrics, we acquired certain assets and liabilities in exchange for $10.1 million , of which $1.0 million and $9.1 million was paid in cash during the years ended December 31, 2017 and 2016, respectively. We recorded the Vestrics Acquisition using the acquisition method of accounting and recognized assets and liabilities assumed at their fair value as of the date of acquisition. The valuation of Vestrics has been completed and the significant classes of assets and liabilities to which we allocated the purchase price were goodwill of $4.3 million (which includes working capital, net, totaling $0.2 million , which was assumed pursuant to the Vestrics Acquisition) and identifiable intangible assets of $6.0 million related to developed technology. In accordance with GAAP, direct costs related to the acquisition were expensed as incurred. Vestrics’ predictive technology enables a company to identify and analyze the connections between its investments in human capital and the performance-related business results of those investments. We will leverage Vestrics’ technology as we continue to expand our analytics capabilities across UltiPro. The fair value of the acquired developed technology was estimated using the cost approach. Identifiable intangible assets were assigned a total weighted-average amortization period of 7.0 years. Since the developed predictive technology acquired pursuant to the Vestrics Acquisition will be included in the Development Project currently being capitalized as internal-use software to be offered as a cloud product in the future, amortization of the Vestrics developed technology will begin when it is ready for its intended use. The results of operations from this acquisition have been included in our audited consolidated financial statements since the Vestrics Closing Date. Pro forma results of operations have not been presented because the effects of this business combination were not deemed material to our audited consolidated results of operations. |
Funds held for Customers, Corpo
Funds held for Customers, Corporate Investments in Marketable Securities and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Investments in Marketable Securities and Fair Value of Financial Instruments [Abstract] | |
Finds held for Customers, Corporate Investments in Marketable Securities and Fair Value of Financial Instruments | Funds Held for Customers, Corporate Investments in Marketable Securities and Fair Value of Financial Instruments We classify our investments in marketable securities with readily determinable fair values as available-for-sale. Available-for-sale securities consist of debt securities not classified as trading securities or as securities to be held to maturity. Unrealized gains and losses, net of tax, on available-for-sale securities are reported as a net amount in accumulated other comprehensive loss in stockholders’ equity until realized. Gains and losses on the sale of available-for-sale securities are determined using the specific identification method. Included in accumulated other comprehensive loss was a $162 thousand net unrealized gain and $704 thousand net unrealized loss on available-for-sale securities at December 31, 2018 and December 31, 2017 , respectively. Realized gains and losses resulting on available-for-sale securities are included in other (expense) income, net, in the consolidated statements of income. There were no significant reclassifications of realized gains and losses on available-for-sale securities to the consolidated statements of income for the years ended December 31, 2018 , 2017 and 2016 . The amortized cost, net unrealized (loss) gain and fair value of our investments in marketable available-for-sale securities as of December 31, 2018 and December 31, 2017 are shown below (in thousands): Funds held for customers and corporate investments as of December 31, 2018 and December 31, 2017 are shown below (in thousands): As of December 31, 2018 As of December 31, 2017 Amortized Cost Net Unrealized (Loss) Gain Fair Value (1) Amortized Cost Net Unrealized (Loss) Fair Value (1) Type of issue: Funds held for customers – money market securities and other cash equivalents $ 333,942 $ — $ 333,942 $ 354,312 $ — $ 354,312 Available-for-sale securities: Corporate debentures – bonds 4,469 (2 ) 4,467 2,848 (4 ) 2,844 Commercial paper 2,687 — 2,687 — — — U.S. Agency bonds 284,099 165 284,264 209,443 (693 ) 208,750 U.S. Treasury bills 2,240 — 2,240 5,876 (6 ) 5,870 Asset-Backed Securities 1,348 (1 ) 1,347 721 (1 ) 720 Total corporate investments and funds held for customers $ 628,785 $ 162 $ 628,947 $ 573,200 $ (704 ) $ 572,496 _________________ (1) Included within available-for-sale securities as of December 31, 2018 and 2017 are corporate investments with fair values of $10.7 million and $9.4 million , respectively. Included within available-for-sale securities as of December 31, 2018 and 2017 are funds held for customers with fair values of $284.3 million and $208.8 million , respectively. All available-for-sale securities were included in Level 2 of the fair value hierarchy. The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2018 are as follows (in thousands): Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Gross unrealized losses Fair market value Gross unrealized losses Fair market value Gross unrealized losses Fair market value Corporate debentures – bonds $ (2 ) $ 3,521 $ — $ — $ (2 ) $ 3,521 U.S. Agency bonds (39 ) 14,957 (133 ) 45,246 (172 ) 60,203 U.S. Treasury bills — 2,239 — — — 2,239 Asset-Backed Securities (1 ) 1,347 — — (1 ) 1,347 Total $ (42 ) $ 22,064 $ (133 ) $ 45,246 $ (175 ) $ 67,310 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2017 are as follows (in thousands): Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Gross unrealized losses Fair market value Gross unrealized losses Fair market value Gross unrealized losses Fair market value Corporate debentures – bonds $ (1 ) $ 699 $ — $ — $ (1 ) $ 699 U.S. Agency bonds (408 ) 74,940 (285 ) 133,811 (693 ) 208,751 U.S. Treasury bills — — (6 ) 5,869 (6 ) 5,869 Asset-Backed Securities — — — — — — Total $ (409 ) $ 75,639 $ (291 ) $ 139,680 $ (700 ) $ 215,319 The amortized cost and fair value of the marketable available-for-sale securities by contractual maturity at December 31, 2018 are shown below (in thousands): As of December 31, 2018 Amortized Cost Fair Value Due in one year or less $ 196,128 $ 196,102 Due after one year 98,714 98,903 Total $ 294,842 $ 295,005 We classify and disclose fair value measurements in one of the following three categories of fair value hierarchy: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities. Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our assets that are measured by management at fair value on a recurring basis are generally classified within Level 1 or Level 2 of the fair value hierarchy. The types of instruments valued based on quoted market prices in active markets include most money market securities. Such instruments are generally classified within Level 1 of the fair value hierarchy. We did not have any transfers into and out of Level 1 and Level 2 during the years ended December 31, 2018 , 2017 and 2016 . The types of instruments valued by management, based on quoted prices in less active markets, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency, include corporate debentures and bonds, commercial paper, U.S. agency bonds, and U.S. Treasury bills. Such instruments are generally classified within Level 2 of the fair value hierarchy. We use consensus pricing, which is based on multiple pricing sources, to value our fixed income investments. The following table sets forth, by level within the fair value hierarchy, financial assets accounted for at fair value as of December 31, 2018 and December 31, 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Total Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Un- Observable Inputs (Level 3) Total Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Un- Observable Inputs (Level 3) Corporate debentures and bonds $ 4,467 $ — $ 4,467 $ — $ 2,844 $ — $ 2,844 $ — Commercial paper 2,687 — 2,687 — — — — — U.S. Agency bonds 284,264 — 284,264 — 208,750 — 208,750 — U.S. Treasury bills 2,240 — 2,240 — 5,870 — 5,870 — Asset-Backed Securities 1,347 — 1,347 — 720 — 720 — Total $ 295,005 $ — $ 295,005 $ — $ 218,184 $ — $ 218,184 $ — Assets and liabilities measured at fair value on a recurring basis were presented in the consolidated balance sheets as of December 31, 2018 and as of December 31, 2017 as short-term and long-term investments in marketable securities. There were no financial liabilities accounted for at fair value as of December 31, 2018 and December 31, 2017 . |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2018 | |
Valuation and Qualifying Accounts [Abstract] | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We have established an allowance for doubtful accounts based on a review of the current status of existing accounts receivable by customer and historical experience. The activity within the allowance for doubtful accounts was as follows (in thousands): For the Years Ended December 31, 2018 2017 2016 Balance at beginning of year $ 900 $ 900 $ 900 Charged to expense 7,855 5,727 3,213 Write-offs (7,105 ) (5,727 ) (3,213 ) Balance at end of year $ 1,650 $ 900 $ 900 |
Deferred Contract Costs, Prepai
Deferred Contract Costs, Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Deferred Contract Costs, Prepaid Expenses and Other Current Assets | Deferred Contract Costs, Prepaid Expenses and Other Current Assets Deferred contract costs, prepaid expenses and other current assets consist of the following (in thousands): As of December 31, 2018 2017 Deferred contract costs $ 40,750 $ 38,519 Prepaid expenses 33,681 20,088 Other current assets 16,330 12,995 Total deferred contract costs, prepaid expenses and other current assets $ 90,761 $ 71,602 Deferred contract costs are primarily related to deferred sales commissions that are incremental and recoverable costs of obtaining a customer contract, and these costs are amortized on a systemic basis over 7 years. Current deferred contract costs were $40.8 million and $38.5 million as of December 31, 2018 and December 31, 2017, respectively. Non-current deferred contract costs to be recognized beyond the next twelve months, as included in other assets, net were $116.1 million and $45.5 million as of December 31, 2018 and December 31, 2017, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consists of the following (in thousands): As of December 31, 2018 2017 Computer equipment $ 212,215 $ 185,034 Internal-use software 234,531 178,093 Leasehold improvements 55,299 43,556 Furniture and fixtures 23,001 19,817 Building 2,100 2,100 Land 655 655 Property and equipment 527,801 429,255 Less: accumulated depreciation and amortization 224,862 185,591 Property and equipment, net $ 302,939 $ 243,664 Depreciation and amortization expense on property and equipment, including depreciation and amortization expense on property and equipment under capital leases, totaled $39.9 million , $31.2 million and $25.5 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Included in property and equipment, net, is computer equipment acquired under capital leases as follows (in thousands): As of December 31, 2018 2017 Computer equipment $ 67,391 $ 58,831 Less: accumulated amortization 51,845 48,963 Computer equipment, net $ 15,546 $ 9,868 Capital leases entered into and included in property and equipment totaled $9.1 million , $7.3 million and $6.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. See Note 10 in the Notes to Consolidated Financial Statements for further discussion of computer software development costs related to internal-use software which is included in property and equipment, net. |
Foreign Currency
Foreign Currency | 12 Months Ended |
Dec. 31, 2018 | |
Foreign Currency [Abstract] | |
Foreign Currency | Foreign Currency The financial statements of Ultimate’s foreign subsidiaries have been translated into U.S. dollars. The functional currency of our wholly-owned subsidiaries, The Ultimate Software Group of Canada, Inc. (“Ultimate Canada”), The Ultimate Software Group of Asia, PTE. LTD. ("Ultimate Asia") and PeopleDoc SAS ("PeopleDoc"), have been translated into U.S. dollars. Assets and liabilities are translated into U.S. dollars at period-end exchange rates. Income and expenses are translated at the average exchange rate for the reporting period. The resulting non-cash foreign currency translation adjustments, representing unrealized gains or losses, are included in consolidated stockholders’ equity as a component of accumulated other comprehensive (loss) income. We did not have any realized gains and losses resulting from foreign exchange transactions during the years ended December 31, 2018, 2017 and 2016. Included in accumulated other comprehensive (loss) income as presented in the accompanying consolidated balance sheets, are $14.3 million of unrealized translation losses at December 31, 2018 and $5.4 million of unrealized translation losses at December 31, 2017 . There were no significant reclassifications of realized gains and losses resulting from foreign exchange transactions to the consolidated statements of income for the years ended December 31, 2018 , 2017 and 2016 . |
Computer Software Development C
Computer Software Development Costs | 12 Months Ended |
Dec. 31, 2018 | |
Research and Development [Abstract] | |
Computer Software Development Costs | Computer Software Development Costs Computer software development costs related to software developed for internal use falls under the accounting guidance of ASC Topic 350-40, Intangibles Goodwill and Other-Internal Use Software. These capitalized costs are included with property and equipment in the consolidated balance sheets and purchases of property and equipment in the consolidated statements of cash flows. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three to seven years, commencing after the software development is substantially complete and the software is ready for its intended use. For the years ended December 31, 2018 and 2017 , we capitalized $54.0 million (including $3.5 million in non-cash stock-based compensation) and $52.6 million (including $4.0 million in non-cash stock-based compensation), respectively, of computer software development costs related to an internal-use development project for our UltiPro product offering (the "Development Project"). The capitalized costs for the Development Project were primarily from direct labor costs and, to a lesser extent, third party consulting fees. For 2018 , 2017 and 2016 , we recognized $9.9 million , $4.4 million and $1.2 million , respectively, of amortization costs which were associated with certain product modules of the Development Project which were ready for their intended use. For the year ended December 31, 2018, we capitalized $2.4 million of computer software development costs related to other internal-use development projects. These projects are not ready for their intended use and, therefore, no amortization costs have been recognized in 2018. The amortization of capitalized software is included in cost of recurring revenues. At each balance sheet date, we evaluate the useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized computer software development costs and accumulated amortization of capitalized software, developed for internal use, were as follows (in thousands): As of December 31, 2018 2017 2016 Computer software development costs $ 234,531 178,093 113,407 Less: accumulated amortization (17,155 ) (7,283 ) (2,925 ) Computer software development costs, net 217,376 170,810 110,482 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per share calculations require a dual presentation — “basic” and “diluted.” Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted average number of common shares (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued. The following is a reconciliation of the shares used in the computation of basic and diluted net income per share (in thousands): For the Years Ended December 31, 2018 2017 2016 Basic weighted average shares outstanding 30,854 29,791 28,976 Effect of dilutive equity instruments (1) 724 1,008 1,438 Dilutive shares outstanding 31,578 30,799 30,414 Anti-dilutive equity instruments (1) 1,448 — 24 _________________ (1) Includes options to purchase shares of Common Stock and other stock-based awards outstanding. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of cost over the net tangible and identifiable intangible assets of acquired businesses. Goodwill amounts are not amortized, but rather tested for impairment at least annually. Identifiable intangible assets acquired in business combinations are recorded based upon fair value at the date of acquisition and amortized over their estimated useful lives. The changes in the carrying value of goodwill were as follows (in thousands): As of December 31, 2018 2017 Goodwill, beginning of year $ 35,808 $ 35,322 Goodwill from PeopleDoc Acquisition (1) 188,880 — Translation adjustment (2) (4,784 ) 486 Goodwill, end of year $ 219,904 $ 35,808 _________________ (1) Represents the goodwill for the acquisition of PeopleDoc acquired on July 27, 2018. (2) Represents the impact of the foreign currency translation of the portion of goodwill that is recorded by our foreign subsidiaries whose functional currency is also its local currency. Such goodwill is translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive (loss) income. Our amortizable intangible assets net carrying amount and estimated useful lives are as follows (in thousands): As of December 31, 2018 Gross Carrying Amount Accumulated Amortization Cumulative Translation Adjustment (1) Net Carrying Amount Weighted Average Remaining Useful Life Developed technology $ 100,300 $ (10,888 ) $ (2,993 ) $ 86,419 6.4 Customer relationships 63,600 (5,117 ) (1,208 ) 57,275 9.4 Trademark 800 (65 ) (18 ) 717 4.6 $ 164,700 $ (16,070 ) $ (4,219 ) $ 144,411 7.6 As of December 31, 2017 Gross Carrying Amount Accumulated Amortization Cumulative Translation Adjustment (1) Net Carrying Amount Weighted Average Remaining Useful Life Developed technology $ 23,300 $ (4,355 ) $ (895 ) $ 18,050 6.0 Customer relationships 4,700 (2,004 ) — 2,696 4.5 $ 28,000 $ (6,359 ) $ (895 ) $ 20,746 5.9 _________________ (1) Represents the impact of the foreign currency translation of the portion of acquired intangible assets that is recorded by our foreign subsidiaries whose functional currency is also its local currency. Such intangible assets are translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive (loss) income. Acquired intangible assets are amortized over their estimated useful life, generally three to ten years, in a manner that reflects the pattern in which the economic benefits are consumed. Amortization expense for acquired intangible assets was $10.1 million , $3.1 million and $1.1 million for the years ended December 31, 2018 , 2017 and 2016. Future amortization expense for acquired intangible assets is as follows, as of December 31, 2018 (in thousands): Year Amount 2019 $ 19,982 2020 19,996 2021 19,573 2022 19,573 2023 19,469 Thereafter 45,818 Total $ 144,411 |
Capital Lease Obligations
Capital Lease Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Capital Lease Obligations [Abstract] | |
Capital Lease Obligations | Capital Lease Obligations We lease certain equipment under non-cancelable agreements, which are accounted for as capital leases and expire at various dates through 2021 . Interest rates on these leases are 4.5% to 6.25% . The scheduled lease payments of the capital lease obligations are as follows as of December 31, 2018 (in thousands): Year Amount 2019 $ 6,787 2020 4,409 2021 1,560 12,756 Less amount representing interest (714 ) Lease obligations reflected as current ($6,303) and non-current ($5,739) $ 12,042 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the year ended December 31, 2018 , the income tax provision of $18.2 million was based on book income from operations before income taxes of $83.4 million net of $9 million book loss from foreign operations. For the year ended December 31, 2017 , the income tax provision of $30.1 million was based on book income from operations before income taxes of $44.1 million . For the year ended December 31, 2016 , the income tax provision of $12.2 million was based on a book income from operations before income taxes of $41.4 million . Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. On December 22, 2017, the federal government passed the federal Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act made broad and complex changes to the U.S. tax code including but not limited to reducing the federal statutory tax rate from 35% to 21%, effective January 1, 2018. Accounting Standards Codification ("ASC") 740, "Income Taxes" ("ASC 740"), requires companies to recognize the effect of tax law changes in the period of enactment. During the quarter ended December 31, 2017, we adjusted the statutory federal and state income tax rates to our deferred tax assets and liabilities. The balances of the deferred tax assets and liabilities were remeasured and an $8.8 million reduction to deferred tax assets was recorded during the quarter ended December 31, 2017. We recorded $8.7 million of the $8.8 million reduction in our net deferred tax asset balance to our provision for income taxes in our consolidated statement of income and $0.1 million to our consolidated statements of comprehensive income. The income tax provision consists of the following (in thousands): For the Year Ended December 31, 2018 2017 2016 Current taxes: Federal $ (489 ) $ (209 ) $ 34 State and local (5,490 ) (230 ) (170 ) Foreign (1,523 ) (1,070 ) (856 ) Deferred taxes, net Federal (10,509 ) (26,693 ) (8,858 ) State and local (2,908 ) (2,099 ) (2,478 ) Foreign 2,698 226 150 Income tax provision $ (18,221 ) $ (30,075 ) $ (12,178 ) The income tax provision is different from that which would be obtained by applying the statutory federal income tax rate of 21% for 2018 to income from continuing operations before income taxes and tax rate of 35% for 2017 and 2016 to income from continuing operations before income taxes as a result of the following (in thousands): For the Year Ended December 31, 2018 2017 2016 Income tax provision at statutory federal tax rate $ (17,506 ) $ (15,446 ) $ (14,490 ) State and local income taxes, net of the federal benefit (6,635 ) (1,514 ) (1,720 ) Non-deductible expenses (14,373 ) (26,196 ) (20,715 ) Foreign jurisdictions rate differential 250 374 216 Recognition of excess tax benefit 8,972 18,415 20,966 Research credit, federal benefit 7,045 4,688 3,727 Enactment of Tax Cuts and Jobs Act — (9,750 ) — IRS audit settlement 4,123 — — Other, net (97 ) (646 ) (162 ) Income tax provision $ (18,221 ) $ (30,075 ) $ (12,178 ) Deferred tax assets and liabilities reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. One of the significant provisions of the Tax Act, passed December 22, 2017, is the reduction of the federal corporate tax rate to 21% effective January 1, 2018. In accordance with ASC 740, a company must remeasure its deferred tax assets and liabilities to reflect the enacted rates as of that date. The balances of the deferred tax assets and liabilities were remeasured and an $8.8 million reduction to deferred tax assets was recorded during the quarter ended December 31, 2017. Significant components of our deferred tax assets and liabilities at December 31, 2018 and 2017 were as follows (in thousands): As of December 31, 2018 2017 Deferred tax assets: Net operating losses $ 2,504 $ 34,771 Tax credit carryforwards 1,639 1,807 Research credit 35,014 27,559 Deferred revenue 259 497 Accruals not currently deductible 4,158 1,137 Allowance for doubtful accounts 454 238 Charitable contributions 1,868 1,729 Stock-based compensation 13,646 9,851 Deferred rent adjustment 3,239 2,128 Foreign deferred tax assets 1,673 — Gross deferred tax assets $ 64,454 $ 79,717 Less: valuation allowance (1,673 ) — Net deferred tax assets 62,781 79,717 Deferred tax liabilities: Property and equipment $ (35,843 ) $ (47,022 ) Deferred commissions (12,306 ) — Foreign, primarily acquired intangible assets, net (25,105 ) (250 ) Gross deferred tax liabilities (73,254 ) (47,272 ) Net deferred tax (liabilities) assets $ (10,473 ) $ 32,445 On July 27, 2018, Ultimate Software Group acquired 100% of the stock of PeopleDoc (SAS). PeopleDoc (SAS) consisted of a consolidated group of companies which includes the French Parent company (PeopleDoc (SAS)), a UK subsidiary (PeopleDoc UK LTD), a German subsidiary (PeopleDoc GMBH), and a US subsidiary (PeopleDoc, Inc). Purchase accounting deferred balances related to the fair value adjustments (excluding goodwill) were recorded as Statutory to GAAP adjustments. A net deferred tax liability of $26.3 million was recorded inclusive of a valuation allowance of $1.5 million related to the UK and German subsidiaries. Certain accounting standards related to revenue recognition and accounting for commissions were adopted effective January 1, 2018. We established a deferred tax asset of $0.5 million and a deferred tax liability of $7.0 million attributable to deferred revenue and deferred contract costs respectively upon adoption of Revenue from Contracts with Customers (Topic 606) and Sub-Topic 340-40, Other assets and Deferred Costs - Contracts from Customers. Ultimate considers all available evidence, both positive and negative, including historical levels of pre-tax book income, expiration of net operating loss carryforwards, expectations and risks associated with estimates of future taxable income, ongoing prudent and feasible tax planning strategies and reversal of deferred tax liabilities in assessing the need for the valuation allowance. If it is not more likely than not that we will recover our deferred tax assets, we will increase our provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. For US based deferred tax assets, the available positive evidence at December 31, 2018 included, among other factors, three years of cumulative historical pre-tax book income and a projection of future pre-tax book income and taxable income. As a result of our analysis of all available evidence, both positive and negative, we believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize all of the deferred tax assets as of December 31, 2018. As such, there was no valuation allowance on US based deferred assets for the years ended December 31, 2018 and 2017. In evaluating valuation allowance for foreign based deferred tax assets, due to negative evidence which includes history of losses for both the UK subsidiary, PeopleDoc UK Ltd., and the German subsidiary, PeopleDoc GMBH, it was determined that it would not be more likely than not that the deferred tax assets would be ultimately recoverable. The valuation allowance balance at December 31, 2018 was $1.7 million , which is made up of an initial valuation allowance balance upon acquisition of $1.5 million and an increase in the valuation allowance of $0.2 million . During the fourth quarter of 2017, as part of the evaluation of net deferred tax assets for implementing the Tax Act, immaterial errors were discovered in the reporting of the GAAP deferred income tax expense and related deferred tax assets, associated with the stock-based compensation expense for certain of our named executive officers for prior periods through September 30, 2017. Since the amount of the error in any prior period was not material, we have retrospectively revised our financial statements to reflect this immaterial correction for these prior periods. See Note 18 in our Notes to Consolidated Financial Statements for further discussion. One of the provisions of the Tax Act was to transition to a territorial tax system, and to enable this, required a one-time deemed repatriation of post-1986 earnings and profits of certain foreign corporations, and would subject those amounts to reduced federal tax rates depending on whether the earnings and profits relate to cash and cash equivalents or other assets. The effective preferential rates on repatriated earnings are 15.5% for cash and cash equivalents and 8% for other amounts. The bill required income inclusion in our tax year ending December 31, 2017 but would allow offset of the deemed repatriated earnings and profits with net operating losses and foreign tax credits. We had more than sufficient foreign tax credits to offset of the amount of deemed earnings and any transition tax liability. The foreign tax credits rather than the net operating losses were used, pursuant to Internal Revenue Code 965(n), which provides for an election to not use the net operating losses. The Act also enacted a measure which requires the current-year inclusion of certain income earned by a US shareholder’s foreign subsidiaries that is not otherwise subject to US tax. The measure, Global Intangible Low Taxed Income (GILTI), results in additional taxation to the US shareholder on foreign subsidiaries’ combined net income in excess over a deemed return on tangible assets. Ultimate US will account for any applicable GILTI income inclusion as a period cost in the relevant tax period. In 2018, Ultimate US had no net GILTI income. The Act also allowed for a deduction of 37.5% of the foreign-derived intangible income (FDII) of the U.S. Company. There was an immaterial benefit related to FDII recognized by Ultimate US for 2018. For the current and subsequent tax years, we will continue to assert the position of indefinite re-investment of earnings in all foreign subsidiaries. We will apply the exception to the comprehensive recognition of deferred income taxes to the undistributed earnings of our foreign subsidiaries, the Ultimate Software Group of Canada, Inc., the Ultimate Software Group of Asia, PTE. LTD, and the PeopleDoc (SAS) foreign entities. The indefinite reinvestment criteria applicable includes state taxes and withholding taxes that arise from repatriation under IRC Section 965(n). We recorded deferred tax assets as a result of Federal research and development credit studies of $6.5 million and $4.4 million during the years ended December 31, 2018 and 2017, respectively. In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). The standard amended the accounting for share-based payments to employees effective for annual periods beginning after December 15, 2016, with early adoption permitted. The standard required transition for specific objectives of the standard. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. We elected to early adopt ASU 2016-09 in the third quarter of fiscal year 2016 which required us to reflect any adjustments as of January 1, 2016. The primary impact of adoption was the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital for all periods in fiscal year 2016. ASU 2016-09 requires entities to recognize all income tax effects of stock-based compensation in the income statement when the restricted stock units and awards vest and when the stock options are exercised. Prior to the adoption of ASU 2016-09, companies could not recognize excess tax benefits (the amount by which the tax deduction exceeds the financial statement expense previously recorded) when a restricted stock unit or award vested or an option was exercised if the related tax deduction increased a net operating loss carryforward rather than a reduction in income taxes payable. We recognized $23.7 million of excess tax benefits in our provision for income taxes for the twelve months ended December 31, 2016. At December 31, 2018, we had approximately $9.0 million of net operating loss carryforwards for federal income tax reporting purposes available to offset future taxable income. Prior to January 1, 2016, the tax benefit of net operating loss carryforwards attributable to deductions from the exercise of non-qualified employee, and non-employee director, stock options and the vesting of restricted stock units and restricted stock awards, were credited to paid-in-capital and deferred tax asset only to the extent realized through a reduction of income taxes payable. As a result, prior to January 1, 2016, the excess tax benefits associated with stock-based compensation were included in net operating loss carryforwards but not reflected in deferred tax assets. Upon adoption of ASU 2016-09, the excess tax benefits associated with stock-based compensation were reflected in deferred tax assets. Federal NOL generated post 2017 are carried over indefinitely. The carryforwards related to periods prior to 2018 expire from 2034 through 2036 and from 2026 through 2037, for Federal and state income tax reporting purposes, respectively. The Internal Revenue Service examination of our U.S. federal income tax return for the year ended December 31, 2014 was completed in 2018 with no change to the taxable income or income tax liability as reported. However the examination resulted in a change to R&D credit carryovers and FIN 48 reserve. Utilization of such net operating loss carryforwards, as well as tax credit carryforwards, may be limited as a result of cumulative ownership changes in Ultimate’s equity instruments due to ownership change provisions of Internal Revenue Code Section 382 and similar state provisions. A Section 382 limitation was computed and applied to NOLs of PeopleDoc, Inc. upon acquisition. ASC 740, “Income Taxes,” ("ASC 740") requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of December 31, 2018, we had $4.8 million of gross unrecognized tax benefits resulting from a research and development credit attributable to the 2015-2018 years as a result of the completion of the research and development activities study that if recognized would affect the annual effective tax rate. During 2016, we increased the unrecognized tax benefits by $0.2 million related to the completion of the research credit study for 2015 and increased the unrecognized tax benefits by $1.1 million related to the research credit study estimate for 2016, totaling $7.2 million at December 31, 2016. During 2017, we increased the unrecognized tax benefits by $0.2 million related to the completion of the research credit study for 2016 and increased the unrecognized tax benefits by $1.5 million related to the research credit study estimate for 2017, totaling $8.9 million at December 31, 2017. During 2018 we increased the unrecognized tax benefits by $0.5 million related to the completion of the research credit study for 2017 and increased the unrecognized tax benefits by $1.4 million related to the research credit study estimate for 2018. During 2018 we settled an IRS examination which resulted in a reduction in R&D credit carryovers and in the reserve for years subsequent to the exam. There was a total of $6.0 million in the reserve which resulted in a remaining reserve for years subsequent to 2014 totaling $4.8 million at December 31, 2018. While it is often difficult to predict the final outcome of any particular uncertain tax position, management does not believe that it is reasonably possible that the estimates of unrecognized tax benefits will change significantly in the next twelve months. Tax years 1998 to 2018 remain subject to future examination by the tax jurisdictions in which we are subject to tax. We recognize interest and penalties accrued related to unrecognized tax benefits as components of our income tax provision. Due to our net operating loss carryover position, we did not have any interest and penalties accrued upon the adoption of ASC 740, and, as of December 31, 2018 and 2017, we did not have any interest and penalties accrued related to unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands): As of December 31, 2018 2017 2016 Balance at January 1, $ 8,902 $ 7,241 $ 5,957 Tax positions taken in prior period Gross increases 686 187 205 Gross decreases — — — Tax positions taken in current period Gross increases 1,412 1,474 1,079 Settlements (6,208 ) — — Statute expiration — — — Balance at December 31, $ 4,792 $ 8,902 $ 7,241 |
Stock-Based Compensation and Eq
Stock-Based Compensation and Equity | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Equity | Stock-Based Compensation and Equity Summary of Plans Our Amended and Restated 2005 Equity and Incentive Plan (the “Plan”) authorizes the grant of options (“Options”) to non-employee directors, officers and employees of Ultimate to purchase shares of Ultimate's Common Stock ("Common Stock"). The Plan also authorizes the grant to such persons of restricted and non-restricted shares of Common Stock, stock appreciation rights, stock units and cash performance awards (collectively, together with the Options, the “Awards”). As of December 31, 2018 , the aggregate number of shares of Common Stock that were available to be issued under all Awards granted under the Plan was 1,706,906 shares. Stock-Based Compensation The following table sets forth the non-cash stock-based compensation expense resulting from stock-based arrangements that is recorded in our consolidated statements of income for the periods indicated (in thousands): For the Years Ended December 31, 2018 2017 2016 Cost of recurring revenues $ 16,087 $ 11,931 $ 8,613 Cost of services revenues 9,472 7,909 6,198 Sales and marketing 71,641 75,428 59,187 Research and development 16,275 12,026 8,238 General and administrative 26,878 39,133 31,641 Total stock-based compensation expense $ 140,353 $ 146,427 $ 113,877 Stock-based compensation for year ended December 31, 2018 was $140.4 million , as compared with stock-based compensation of $146.4 million and $113.9 million for the year ended December 31, 2017 and 2016, respectively. The decrease of $6.0 million for the year ended December 31, 2018 over 2017 was due to a $20.6 million decrease from the full vesting in February 2018 of the grant made in March 2015 in connection with modifications made to our change in control plans ("CIC Plans") for certain senior officers in March 2015 and February 2016 and terminating the CIC Plan I in February 2017, partially offset by an increase of $14.6 million due to the effects of new grants in each year and the impact of changes in our stock price ("General Operations"). The increase of $32.6 million in stock-based compensation for the year ended December 31, 2017 over 2016 was primarily due to an increase of $22.2 million associated with modifications made to our CIC Plans. As previously disclosed, these changes were made to better align management's incentives with long-term value creation for our shareholders. As part of the modifications in connection with unwinding the change in control plans, time-based restricted stock awards (vesting over three years) were granted to certain senior officers in March 2015, February 2016 and February 2017. During the years ended December 31, 2018 and 2017, our non-cash stock-based compensation expense not associated with modifications made to our CIC Plans increased $14.6 million and $10.3 million , respectively. The increases were due to the effects of new grants in each year and the impact of changes in our stock price ("General Operations"). The following table sets forth the stock-based compensation expense associated with modifications made to the Company's change in control plans as discussed above (in thousands): For the Years Ended December 31, 2018 2017 2016 Stock-based compensation expense : Stock-based compensation expense related to General Operations $ 96,018 $ 81,468 $ 71,119 Stock-based compensation expense related to CIC modifications 44,335 64,959 42,758 Total non-cash stock-based compensation expense $ 140,353 $ 146,427 $ 113,877 Included in computer equipment in property and equipment, net in our consolidated balance sheets and excluded from purchases of property and equipment in the consolidated statements of cash flow at December 31, 2018 , 2017 and 2016 was $3.5 million , $4.0 million and $3.9 million , respectively, in non-cash stock-based compensation expense related to capitalized software which was developed for internal use during the fiscal years then ended. These amounts would have otherwise been charged to research and development expense for the years ended December 31, 2018 , 2017 and 2016 . Net cash proceeds from the exercise of Options were $3.3 million , $6.6 million and $4.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Fair Value The fair value of restricted stock awards and restricted stock units is equal to the closing price of our Common Stock on NASDAQ on the date of grant. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The weighted-average forfeiture rates for the years ended December 31, 2018 , 2017 and 2016 were based on historical data. Options There were no Options granted during the years ended December 31, 2018 , 2017 and 2016 . Options granted to officers and employees under the Plan generally have a 10 -year term, vesting 25% immediately and 25% on each of the first three anniversaries of the grant date. Options granted to non-employee directors under the Plan generally have a 10 -year term and vest and become exercisable immediately on the grant date. Restricted Stock Awards Under the provisions of the Plan, Ultimate may, at the discretion of the Compensation Committee or the Board, grant restricted stock awards (“Restricted Stock Awards”) to officers, employees and non-employee directors. The shares of Common Stock issued under Restricted Stock Awards are subject to certain vesting requirements and restrictions on transfer. During the years ended December 31, 2018 , 2017 and 2016 , we granted Restricted Stock Awards for 268,522 , 353,857 and 453,023 shares, respectively, of Common Stock to officers and employees and we granted Restricted Stock Awards for 9,480 , 9,815 and 9,910 shares, respectively, of Common Stock to non-employee directors. Compensation expense for Restricted Stock Awards is measured based on the closing market price of our Common Stock at the date of grant and is recognized on a straight-line basis over the vesting period. Holders of Restricted Stock Awards have all rights of a stockholder including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto during the vesting period. Each Restricted Stock Award granted to officers and employees vest in three equal annual installments of 33-1/3% of the number of Restricted Stock Unit Awards on the anniversary of the date of grant thereof, subject to the grantee’s continued employment with Ultimate or any of its subsidiaries on each such vesting date and subject further to accelerated vesting in the event of a change in control of Ultimate, death or disability, the termination of employment by Ultimate without cause. Each Restricted Stock Award granted to non-employee directors becomes vested on the fourth anniversary of the respective date of grant, subject to the grantee’s continued board services on each such vesting date and subject further to accelerated vesting in the event of a change in control of Ultimate, death or disability, the termination of employment by Ultimate without cause or, in the case of a non-employee director, at cessation of his board services at the end of his term. Included in our consolidated statements of income for the years ended December 31, 2018 , 2017 and 2016 was $75.1 million , $98.1 million and $79.0 million , respectively, of non-cash stock-based compensation expense (which includes amounts capitalized associated with an internal-use development project) for Restricted Stock Awards. Restricted Stock Unit Awards Ultimate may, at the discretion of the Compensation Committee, make Awards of stock units or restricted stock units under the Plan (“Restricted Stock Unit Awards”) to certain officers and employees. A Restricted Stock Unit Award is a grant of a number of hypothetical share units with respect to shares of Common Stock that are subject to vesting and transfer restrictions and conditions under a restricted stock unit award agreement. The value of each unit is equal to the fair value of one share of Common Stock on any applicable date of determination. The payment with respect to each unit under a Restricted Stock Unit Award may be made, at the discretion of the Compensation Committee, (i) in a number of shares of our Common Stock equal to the number of Restricted Stock Units becoming vested, (ii) in cash, in an amount equal to the fair market value of a share of our Common Stock on the vesting date multiplied by the number of restricted stock units becoming vested on such date or (iii) in a combination of both. The grantee of a Restricted Stock Unit Award does not have any rights as a stockholder with respect to the shares subject to a Restricted Stock Unit Award until such time as shares of Common Stock are delivered to the grantee pursuant to the terms of the related stock unit award agreement. Restricted Stock Unit Awards vest in three equal annual installments of 33-1/3% of the number of Restricted Stock Unit Awards on each of the first three anniversaries of the date of grant thereof, subject to the participant’s continued employment with Ultimate or any of its subsidiaries on each such vesting date and subject further to accelerated vesting in the event of a change in control of Ultimate, death or disability, the termination of employment by Ultimate without cause and shall be payable as described above, provided, however, that if any such anniversary is not a date on which our Common Stock is traded on NASDAQ, then the vesting date shall be the last such trading day immediately preceding such anniversary; and provided further, however, that if the Chief Financial Officer (“CFO”) of Ultimate should determine that any such anniversary falls within a period during which the participant is prohibited from trading Ultimate’s Common Stock under our stock trading policy, the CFO shall so advise the participant in writing and the vesting date shall be the date as of which the CFO has determined that such period has ended. There were 448,152 , 348,979 and 363,458 Restricted Stock Unit Awards granted to employees during the years ended December 31, 2018 , 2017 and 2016 , respectively. Non-cash stock-based compensation expense for Restricted Stock Unit Awards is measured based on the fair market value of our Common Stock on the date of grant and recognized on a straight-line basis over the vesting period. Included in Ultimate’s consolidated statements of income for the years ended December 31, 2018 , 2017 and 2016 was $72.3 million , $52.1 million and $38.8 million , respectively, of non-cash stock-based compensation expense (which includes amounts capitalized associated with an internal-use development project) for Restricted Stock Unit Awards. Option, Restricted Stock and Restricted Stock Unit Activity The following table summarizes Option activity for the years ended December 31, 2016 , 2017 and 2018 , as follows (in thousands, except per share amounts and years): Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding at December 31, 2015 532 $ 27.36 1.8 $ 89,373 Granted — — Exercised (188 ) 24.79 Forfeited or expired — — Outstanding and exercisable at December 31, 2016 344 $ 28.76 1.1 $ 52,797 Outstanding at December 31, 2016 344 $ 28.76 Granted — — Exercised (230 ) 28.53 Forfeited or expired — — Outstanding and exercisable at December 31, 2017 114 $ 29.24 0.4 $ 21,476 Outstanding at December 31, 2017 114 $ 29.24 Granted — — Exercised (114 ) 29.24 Forfeited or expired — — Outstanding and exercisable at December 31, 2018 — $ — 0 $ — The aggregate intrinsic value of Options in the table above represents total pretax intrinsic value (i.e., the difference between the closing price of our Common Stock on the last trading day of the reporting period and the exercise price, times the number of shares) that would have been received by the Option holders had all Option holders exercised their Options on December 31, 2018 . The amount of the aggregate intrinsic value changes, based on the fair value of our Common Stock. Total intrinsic value of Options exercised during the years ended December 31, 2018 , 2017 and 2016 was $23.9 million , $40.6 million and $32.0 million , respectively. There were no Options vested during the years ended December 31, 2018, 2017 and 2016. All options granted under the Plan and the Prior Plan are fully vested as of December 31, 2018 . The following table summarizes Restricted Stock and Restricted Stock Unit Award activity for the years ended December 31, 2016 , 2017 and 2018 , as follows (in thousands, except per share amounts): Restricted Stock Awards Restricted Stock Unit Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2015 1,366 $ 142.61 435 $ 156.18 Granted 463 168.94 363 173.28 Vested — — — — Released (668 ) 122.37 (214 ) 145.47 Forfeited or expired — — (22 ) 170.36 Outstanding at December 31, 2016 1,161 $ 164.77 562 $ 170.73 Granted 366 195.85 349 196.54 Vested — — — — Released (645 ) 161.64 (252 ) 197.05 Forfeited or expired — — (29 ) 180.27 Outstanding at December 31, 2017 882 $ 179.95 630 $ 170.73 Granted 278 239.26 448 243.72 Vested — — — — Released (474 ) 175.22 (292 ) 181.14 Forfeited or expired — — (37 ) 210.76 Outstanding at December 31, 2018 686 $ 207.25 749 $ 220.54 As of December 31, 2018 , $85.0 million of total unrecognized compensation cost related to non-vested Restricted Stock Awards is expected to be recognized over a weighted average period of 1.41 years. As of December 31, 2018 , $118.1 million of total unrecognized compensation costs related to non-vested Restricted Stock Unit Awards is expected to be recognized over a weighted average period of 1.70 years. Board Compensation Each non-employee director of Ultimate receives compensation for serving on the Board, payable exclusively in the form of Restricted Stock Awards granted under the Plan. Under the Plan, (i) each non-employee director was granted a restricted stock award of 400 shares of Common Stock for each regular meeting of the Board attended during each quarter of 2016, 2017 and 2018 and (ii) each of the Chairmen of the Audit Committee, Compensation Committee and Nominating Committee was granted a restricted stock award of 50 shares of Common Stock for attendance at each regular meeting of the Committee during each quarter of 2016, 2017 and 2018 that he chaired. In addition, in 2018, 2017 and 2016 each non-employee director was granted, for each fiscal quarter during which he served, a restricted stock award of that number of shares of Common Stock equal to the quotient of $12,500 divided by the closing price of the Common Stock on NASDAQ on the date of grant, which is the effective date of the grant determined by the Board for each such quarter, rounded down to the closest full number of shares. Under the arrangement as amended, the date of grant shall not be a date prior to the date of the Board’s determination of the same and such restricted stock awards shall vest on the fourth anniversary of the date of grant, subject to accelerated vesting in the event of a director’s death, disability, cessation of service or the end of his term or the occurrence of a change of control of Ultimate. The following table summarizes information about Restricted Stock Awards granted by us to non-employee directors in exchange for director related services rendered for 2018, 2017 and 2016 : Year Market Value of Restricted Stock Awards Granted Number of Restricted Stock Awards Granted 2016 $ 156.12 2,550 191.67 2,425 210.29 2,445 210.59 2,395 2017 $ 195.61 2,465 196.24 2,415 201.88 2,455 209.79 2,395 214.78 2,000 2018 $ 228.87 2,420 252.25 2,345 254.81 2,395 283.52 2,320 The non-cash compensation expense, recognized in the consolidated statements of income related to the Restricted Stock Awards granted to non-employee directors, including the chairmen of the Audit, Compensation and Nominating Committees, determined pursuant to the application of ASC 718 for the years ended December 31, 2018 , 2017 and 2016 , was $1.4 million , $3.0 million and $1.8 million , respectively, and is included in general and administrative expenses in the consolidated statements of income. Common Stock The holders of Common Stock are entitled to one vote per share for each share held of record on all matters submitted to a vote of the stockholders. |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations Deferred Revenue and Performance Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Performance Obligations | Deferred Revenue and Performance Obligations During the twelve months ended December 31, 2018 and 2017, $163.8 million and $138.3 million , respectively, of recurring revenues recognized, were included in the deferred revenue balances at the beginning of the respective periods. Services revenues recognized in the same periods from deferred revenue balances at the beginning of the respective periods were not material. Transaction Price Allocated to the Remaining Performance Obligations As of December 31, 2018, approximately $2.0 billion of revenue is expected to be recognized from remaining SaaS performance obligations which includes the remaining period of their initial contract term as well as the remaining renewal periods under contract as of December 31, 2018. We expect to recognize revenue on approximately 47 percent of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Revenue from remaining performance obligations for services as of December 31, 2018 was not material. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases We lease corporate office space and certain equipment under non-cancelable operating lease agreements expiring at various dates. Total rent expense under these agreements was $23.3 million , $19.0 million and $16.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Future minimum annual rental commitments related to these leases are as follows as of December 31, 2018 (in thousands): Year Amount 2019 $ 17,359 2020 16,277 2021 14,181 2022 9,055 2023 5,102 Thereafter 10,254 $ 72,228 Litigation From time-to-time, Ultimate is involved in litigation relating to claims arising out of its operations in the normal course of business. We are not currently a party to any legal proceedings the adverse outcome of which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on our operating results or financial condition. |
Immaterial Correction of Prior
Immaterial Correction of Prior Period Financial Statements | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Immaterial Correction of Prior Period Financial Statements | Immaterial Correction of Prior Period Financial Statements In connection with the preparation of the consolidated statements of income, consolidated statements of comprehensive income and consolidated balance sheets for the year ended December 31, 2017, we revalued our net deferred tax assets to implement the Tax Act. During the revaluation, immaterial errors were discovered in prior periods in the reporting of the GAAP income tax expense associated with the stock-based compensation for certain of our executive officers. While we have concluded that the impact of these errors on our previously-issued consolidated statements of income, consolidated statements of comprehensive income and consolidated balance sheets was not material, we have revised our previously-reported consolidated statement of income and consolidated statement of comprehensive income for the year end December 31, 2016. The revisions to our consolidated statement of income and consolidated statement of comprehensive income for the year ended December 31, 2016 is as follows (in thousands, except per share amounts): For the Year Ended December 31, 2016 As Reported As Revised Income before income taxes $ 41,418 $ 41,418 Provision for income taxes (11,165 ) (12,178 ) Net income $ 30,253 $ 29,240 Net income per share: Basic $ 1.04 $ 1.01 Diluted $ 0.99 $ 0.96 Weighted average shares outstanding: Basic 28,976 28,976 Diluted 30,414 30,414 Net income $ 30,253 $ 29,240 Other comprehensive income: Unrealized loss on investments in marketable available for sale securities (61 ) (61 ) Unrealized gain on foreign currency translation adjustments 843 843 Other comprehensive income, before tax 782 782 Income tax benefit related to items of other comprehensive income 24 24 Other comprehensive income, net of tax 806 806 Comprehensive income $ 31,059 $ 30,046 The revisions had no impact on cash flows from operating, investing, or financing activities on the consolidated statement of cash flows for the year ended December 31, 2016. The revisions to the consolidated statements of shareholders' equity include the changes to net income and comprehensive income, as noted above, and a $17.9 million decrease to retained earnings at the beginning of fiscal 2016. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On May 15, 2017 , Ultimate’s shareholders elected Jason Dorsey as a non-employee member of Ultimate’s Board of Directors. During February 2016, The Center for Generational Kinetics, LLC ("TCGK"), entered into an agreement with Ultimate. TCGK is a leading Millennials and Generation Z research, speaking, and strategy firm in the U.S. Mr. Dorsey is co-founder of TCGK. The agreement was to lead custom research and thought leadership opportunities for Ultimate that would benefit the Company through lead generation, marketing differentiation, media appearances, executive speaking opportunities and innovation based on research. For the years ending December 31, 2018 and 2017, Ultimate paid approximately $14,000 and $71,500 , respectively, to TCGK for these services. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Defined Contribution Plan [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan Ultimate provides retirement benefits for eligible employees, as defined, through a defined contribution plan that is qualified under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). Contributions to the 401(k) Plan, which are made at the sole discretion of Ultimate, were $15.8 million , $13.1 million and $10.5 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 4, 2019 , the Company announced that it has entered into a definitive merger agreement to be acquired by an investor group led by Hellman & Friedman in an all-cash transaction that values the Company at an aggregate value of approximately $11 billion . Under the terms of the merger agreement, the Company’s stockholders will receive $331.50 per share in cash upon the closing of the transaction. The obligation of the parties to complete the merger is subject to customary closing conditions, including, among others, approval by the Company’s stockholders and regulatory approvals. The merger is currently expected to close in the second quarter of 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid instruments with an original maturity of three months or less when acquired are considered cash equivalents and are comprised of interest-bearing accounts. |
Accounts Receivable | Accounts Receivable Accounts receivable are principally from end-users of Ultimate’s products. We maintain an allowance for doubtful accounts at an amount estimated to be sufficient to provide adequate protection against losses resulting from collecting less than full payment on accounts receivable. Judgment is required when the realization of receivables is assessed, including assessing the probability of collection and current credit-worthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in a further impairment of their ability to make payments, an additional provision for doubtful accounts may be required. We charge off uncollectible amounts against the allowance for doubtful accounts in the period in which we determine they are uncollectible. |
Funds Held for Customers and Customers' Funds Obligations | Funds Held for Customers and Customers’ Funds Obligations Ultimate's UltiPro Payment Services solution allows companies to meet all Federal, state, and local payroll tax filing obligations. These payment services are being sold directly by us to our customers only on a per-employee-per-month (“PEPM”) basis in conjunction with UltiPro, our core product. In connection with our UltiPro Payment Services product, we receive funds from our customers and hold such funds for purposes of paying the appropriate taxing authorities on behalf of such customers. We invest a portion of our customer funds in available for sale securities in addition to our corporate funds in accordance with our internal investment strategies. The portfolio predominantly consists of investment grade securities with long-term ratings of AAA and AA+ and short-term ratings A-1/P-1. These funds held for customers and the corresponding customer funds obligations are included in current assets and current liabilities, respectively, in our consolidated balance sheets as of December 31, 2018 and 2017 . We have reported the cash flows for purchases of securities with funds received from UltiPro Payment Services customers in the investing activities section of the consolidated statements of cash flows for the years ended December 31, 2018 , 2017 and 2016 . We have reported the cash flows related to the funds received and paid on behalf of such customers to the applicable taxing authorities in the financing activities section of the consolidated statements of cash flows for the years ended December 31, 2018 , 2017 and 2016 . The associated PEPM fees for UltiPro Payment Services are included in recurring revenues in the consolidated statements of income for the years ended December 31, 2018 , 2017 and 2016 . The associated interest earned was not material for the years ended December 31, 2018 , 2017 and 2016 . |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Ultimate’s financial instruments, consisting of cash and cash equivalents, investments in marketable securities, funds held for customers and the related obligations, accounts receivable and accounts payable approximated fair value (due to their relatively short maturity) as of December 31, 2018 and 2017 . |
Funds Held for Customers and Corporate Investments | Funds Held for Customers and Corporate Investments We classify our investments in marketable securities with readily determinable fair values as available-for-sale. Available-for-sale securities consist of debt securities not classified as trading securities or as securities to be held to maturity. Unrealized gains and losses, net of tax, on available-for-sale securities are reported as a net amount in accumulated other comprehensive (loss) income in stockholders’ equity until realized. Gains and losses on the sale of available-for-sale securities are determined using the specific identification method. Interest earned on investments from funds held for customers is included in recurring revenue and was not material in the years presented. If the fair value of an available-for-sale debt security is below its amortized cost, Ultimate assesses whether we intend to sell the security or if it is more likely than not we will be required to sell the security before recovery. If either of those two conditions are met, Ultimate would recognize a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value. If we do not intend to sell a security or it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recognized in accumulated other comprehensive (loss) income. |
Deferred Contract Costs, Prepaid Expenses and Other Current Assets | Deferred Contract Costs, Prepaid Expenses and Other Current Assets Ultimate’s consolidated financial statements include deferred contract costs, prepaid expenses and other current assets. Prepaid expenses are amortized over the life of the asset (typically within one year ). Deferred contract costs primarily relate to prepaid commissions on UltiPro sales which are amortized over 7 years, on a systematic basis, typically commencing on the day the customer processes its first live payroll using UltiPro (also referred to as going “Live”). The period of amortization takes into consideration the contract terms, our customer life and technological changes for our UltiPro product while the systemic basis of amortization corresponds with the pattern of transfer of goods and services to which the asset relates. Ultimate does not pay sales commissions for subscription contracts beyond the initial term of the contract; therefore, there are no renewal commissions incurred for contracts in their renewal periods. The portion of prepaid commissions that extends beyond one year is classified in other assets, net, in the consolidated balance sheets as of December 31, 2018 and 2017 . |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, which range from 2 to 15 years. Leasehold improvements and assets under capital leases are amortized over the shorter of the life of the asset or the term of the lease over periods ranging from approximately 3 to 15 years. Maintenance and repairs are charged to expense when incurred; betterments are capitalized. Upon the sale or retirement of assets, the cost, accumulated depreciation and amortization are removed from the accounts and any gain or loss is recognized. Computer Software Development Costs Computer software development costs related to software developed for internal use falls under the accounting guidance of ASC Topic 350-40, Intangibles Goodwill and Other–Internal Use Software , in which computer software costs are expensed as incurred during the preliminary project stage and capitalization begins in the application development stage once the capitalization criteria are met. Costs associated with post implementation activities are expensed as incurred. Costs capitalized during the application development stage include external direct costs of materials and services consumed in developing or obtaining internal-use software and payroll and payroll-related costs for employees who are directly associated with, and who devote time to, the internal-use computer software. In addition to capitalizing costs for software (which are used by us in our general operations, for internal purposes), we also capitalize costs under ASC Topic 350-40 for certain software development projects related to our suite of products sold to our customers exclusively on a subscription basis under our SaaS offering of UltiPro. |
Long-Lived Assets | Long-Lived Assets We evaluate the carrying value of long-lived assets when indicators of impairment exist. For the year ended December 31, 2018 , no such events or circumstances were identified. The carrying value of a long-lived asset is considered impaired when the undiscounted expected future cash flows from such asset (or asset group) are separately identifiable and less than the asset’s (or asset group’s) carrying value. In that event, a loss is recognized to the extent that the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill. The determination of the value of the intangible assets acquired involves certain judgments and estimates. These judgments and estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted average cost of capital. At December 31, 2018, our goodwill totaled $219.9 million and our identifiable net intangible assets totaled $144.4 million . We assess the impairment of goodwill of our reporting unit annually, or more often if events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. We consider both market and discounted cash flow approaches to determine the fair value of the reporting unit. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit. We conducted our annual impairment test of goodwill as of December 31, 2018, and 2017. As a result of this test, we determined that no adjustment to the carrying value of goodwill for our reporting unit was required. We evaluate our amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on expected undiscounted cash flows attributable to that asset or group of assets. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We also evaluate the estimated remaining useful lives of intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization. Assumptions and estimates about future values and remaining useful lives of our intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends and internal factors such as changes in our business strategy and our internal forecasts. |
Deferred Revenue | Deferred Revenue Deferred revenue is primarily comprised of deferrals of recurring revenues for cloud services which are recognized over the initial term of the related contract as the services are performed, typically 24 - 36 months, commencing with the related Live date; and implementation consulting services for which the services have not yet been rendered which are primarily recognized prior to the respective Live date. |
Guarantees | Guarantees The standard commercial terms in our sales contracts for UltiPro include an indemnification clause that indemnifies the customer against certain liabilities and damages arising from any claims of patent, copyright, or other proprietary rights of any third party. Due to the nature of the intellectual property indemnification provided to our customers, we cannot estimate the fair value, or determine the total nominal amount, of the indemnification until such time as a claim for such indemnification is made. In the event of a claim made against us under such provision, we evaluate estimated losses for such indemnification considering such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, Ultimate has not had any claims made against it under such provision and, accordingly, has not accrued any liabilities related to such indemnifications in its consolidated financial statements. |
Segment Information | Segment Information Public companies are required to report selected information about operating segments in annual and interim financial reports to shareholders, as well as related disclosures about an enterprise’s business segments, products, services, geographic areas and major customers. Ultimate operates its business as a single segment and is comprised as a single reporting unit. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, we recognize revenues in accordance with Topic 606. The core principle of Topic 606 is that revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. To achieve the core principle of Topic 606, we perform the following steps: 1) Identify the contract(s) with a customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations in the contract; and 5) Recognize revenue when (or as) we satisfy a performance obligation. The significant majority of our two major revenue sources, recurring and services, is derived from contracts with customers. Recurring revenues are primarily related to our subscription-based SaaS performance obligations. Services revenues are primarily related to implementation services for our SaaS customers (including stand-alone services billed on a time and materials basis) and, to a much lesser extent, fees for other services, including the provision of payroll-related forms, sales of time clocks and the printing of W-2 and Affordable Care Act ("ACA") forms for certain customers, as well as certain client reimbursable out-of-pocket expenses ("Other Services"). Fees charged to subscription-based SaaS performance obligations are each priced on a per-employee-per-month (“PEPM”) basis for a given calendar month based on usage, and fees charged for implementation services are typically priced on a fixed fee basis for activating the product offering. Our SaaS subscription revenues are satisfied over time, because they are simultaneously received and consumed by the customer. Our activation services revenues are satisfied over time because they are simultaneously received and consumed by the customer. Our SaaS performance obligations are each priced based on the number of active customer employees, as of the signing of the contract, at the contract PEPM rate over the initial contract term. Our activation services are based on a fixed fee charged to our customers. There is typically no variable consideration related to our SaaS performance obligations or our activation services, nor do they include a significant financing component, non-cash consideration, or consideration payable to a customer. Our SaaS performance obligations are typically billed quarterly in advance while our activation services are billed over the implementation period. Our SaaS arrangements include multiple performance obligations and transaction price allocations are based on the stand-alone selling price ("SSP") for each performance obligation. There is an observable input for SSP for each of the SaaS performance obligations. Since activation services do not have directly observable pricing, the SSP is estimated using market conditions and observable inputs, which is calculated based on historical average discounts off our standard price list. For our performance obligations, the consideration allocated to cloud subscription revenues is recognized as recurring revenues, typically using the output method, over the initial contract period, as those subscription-based services are consumed, typically commencing with the date the customer processes their first live payroll using UltiPro (referred to as going "Live"). The consideration allocated to activation services is recognized as services revenues based on the proportion performed, using reasonably dependable estimates (in relation to progression through activation phases), by product. Activation services are performed by our implementation consultants and, to a lesser extent, third party implementation partners. For activation services performed by third party implementation partners, we act as the principal and report revenues on a gross basis, meaning the amounts billed to customers are recorded as services revenues, and related expenses incurred are recorded as cost of services revenues. We control the activation services performed by third party implementation partners and act as principal because we are ultimately responsible to our customers and have full discretion in establishing prices. Customers also enter into contracts for services billed on a time and materials basis and Other Services. Time and materials services are satisfied over time because the customer simultaneously receives and consumes the benefit as we perform. Services revenues for time and materials work are recognized in the period performed. Fees from Other Services substantially include the provision of payroll-related forms, sales of time clocks and printing services for certain customers. For these Other Services, revenue is recognized at a point in time, upon shipment which is when control of the goods and services transfers to the customer. |
Cost of Revenues | Cost of Revenues Cost of revenues primarily consists of the costs of recurring and services revenues. Cost of recurring revenues primarily consists of costs to provide maintenance and technical support to our customers, the cost of providing periodic updates and the cost of recurring subscription revenues, including amortization of capitalized software. Cost of services revenues primarily consists of costs to provide implementation consulting services and, to a lesser degree, training to our customers, costs related to sales of payroll-related forms, time clocks and costs associated with certain client reimbursable out-of-pocket expenses. |
Stock-Based Compensation | Stock-Based Compensation Our Amended and Restated 2005 Equity and Incentive Plan (the “Plan”) authorizes the grant of options to non-employee directors, officers and employees of Ultimate to purchase shares of Ultimate’s Common Stock. The Plan also authorizes the grant to such persons of restricted and non-restricted shares of Common Stock, stock appreciation rights, stock units and cash performance awards (collectively, together with stock options, the “Awards”). Prior to the adoption of the Plan, options to purchase shares of Common Stock were issued under our Nonqualified Stock Option Plan (the “Prior Plan”). Beginning in 2009, we began making grants to employees of restricted stock units in lieu of stock options. As of December 31, 2018 , the aggregate number of shares of Common Stock that were available to be issued under all Awards granted under the Plan was 1,706,906 shares. The Plan provides broad discretion to the Compensation Committee of the Board of Directors to create appropriate equity incentives for directors, officers and employees of Ultimate. The Plan is intended to attract and retain talented employees and align employee and stockholder interests. For purposes of calculating and accounting for stock-based compensation expense (“SBC”) in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”) for restricted stock awards and restricted stock units, we measure compensation based on the closing market price of our Common Stock at the date of grant and it is recognized on a straight-line basis over the vesting period. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The weighted-average forfeiture rate is based on historical data. In accordance with ASC 718, Ultimate capitalizes the portion of SBC expense attributed to personnel whose labor costs are being capitalized pursuant to ASC Topic 350-40, Intangibles Goodwill and Other-Internal Use Software , related to software development. |
Rental Costs Incurred in Relation to a Construction Period | Rental Costs Incurred in Relation to a Construction Period We have incurred rental costs associated with operating leases during construction periods. Rental costs incurred during a construction period are costs incurred for the right to control the use of a leased asset during and after construction of a leased asset. Since there is no distinction between the right to use a leased asset during the construction period and the right to use that asset after the construction period, rental costs associated with ground or building operating leases that are incurred during a construction period are recognized as rental expense on a straight-line basis. |
Income Taxes | Income Taxes We are subject to federal, foreign and state corporate income taxes. We account for income taxes using an asset and liability approach under which deferred income taxes are provided based upon enacted tax laws and rates applicable to the periods in which the taxes become payable. The federal Tax Cuts and Jobs Act (the "Tax Act”) was enacted on December 22, 2017. The impact of implementing the Tax Act to our deferred income tax expense was reflected during the fourth quarter of 2017. We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We assess the likelihood that Ultimate will be able to recover its deferred tax assets. Management considers all available evidence, both positive and negative, including historical levels of pre-tax book income, expiration of net operating losses, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies, as well as current tax laws and interpretation of current tax laws, in assessing the need for a valuation allowance. If recovery is not likely, we record a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. For US based deferred tax assets, the available positive evidence at December 31, 2018 included, among other factors, three years of cumulative historical pre-tax book income and a projection of future pre-tax book income and taxable income. As a result of our analysis of all available evidence, both positive and negative, we believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize all of the deferred tax assets as of December 31, 2018. As such, there was no valuation allowance on US based deferred assets for the years ended December 31, 2018 and 2017. In evaluating valuation allowance for foreign based deferred tax assets, due to negative evidence which includes history of losses for both the UK subsidiary, PeopleDoc UK Ltd., and the German subsidiary, PeopleDoc GMBH, it was determined that it would not be more likely than not that the deferred tax assets would be ultimately recoverable. The valuation allowance balance at December 31, 2018 was $1.7 million and represents an increase in the valuation allowance of $0.2 million . See Note 14 for further discussion. ASC 740, "Income Taxes" ("ASC 740") provides guidance on the related de-recognition, classification, interest and penalties, accounting for interim periods, disclosure and transition of uncertain tax positions. Our accounting policy is to record the tax effects of a change in the opening balance of the unrecognized tax benefits (including unrecognized tax benefits related to prior-period discontinued operations) in current-period income (loss) from continuing operations. We recognize interest and penalties accrued related to unrecognized tax benefits as components of our income tax provision. We did not have any interest and penalties accrued as of December 31, 2018 and 2017 , we did not have any interest and penalties accrued related to unrecognized tax benefits. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Standards Topic 606 In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Topic 606 supersedes the revenue requirements in ASU Topic 605, Revenue Recognition ("Topic 605") and requires the recognition of revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services and includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers , which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. Collectively, we refer to Topic 606 and Subtopic 340-40 as the "new standard." Effective January 1, 2018, we adopted the requirements of the new standard, utilizing the modified retrospective method of transition with the new standard applied to all customer contracts that were not completed on the effective date of the new standard. Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, as detailed below. The impact of adopting the new standard on our revenues resulted in an immaterial increase to deferred revenue but also resulted in a material impact on current and non-current other assets, as a result of the amortization period over which deferred contract costs to obtain related subscription contracts are recognized. Under Topic 605, we deferred incremental commission costs to obtain a contract and amortized those costs over the initial term of the related subscription contract, which is generally 2-3 years. During our assessment of the new standard, we did not identify any incremental contract costs from what was capitalized under Topic 605. We analyzed our customer contract term periods and our customer life, taking into consideration technological changes for our UltiPro product offering, and based on our assessment of the new standard, we amortize the deferred contract costs over 7 years on a systematic basis, consistent with the pattern of transfer of the goods or services to which the asset relates. The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of the new standard were as follows (in thousands): Balance as of December 31, 2017 Adjustments Due to Adoption of Topic 606 Balance as of January 1, 2018 Assets Deferred contract costs, prepaid expenses and other current assets $ 71,602 $ (22,318 ) $ 49,284 Total current assets 990,772 (22,318 ) 968,454 Deferred contract costs and other assets, net 53,409 47,259 100,668 Deferred tax assets, net 32,696 (6,268 ) 26,428 Total assets $ 1,377,211 $ 18,673 $ 1,395,884 Liabilities Deferred revenue $ 197,088 $ 1,909 $ 198,997 Total current liabilities 843,086 1,909 844,995 Deferred income tax liability 251 170 421 Total liabilities 859,186 2,079 861,265 Stockholders' Equity Accumulated earnings 125,788 16,594 142,382 Total stockholders' equity 518,025 16,594 534,619 Total liabilities and stockholders' equity $ 1,377,211 $ 18,673 $ 1,395,884 In accordance with the requirements of the new standard, the disclosure for the quantitative effect and the significant changes between the reported results under the new standard and those that would have been reported under legacy GAAP (i.e., Topic 605) on our audited consolidated income statement and balance sheet was as follows (in thousands): For the Twelve Months Ended December 31, 2018 As Reported - Topic 606 Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Income Statement Revenues Recurring revenues $ 997,066 $ 998,708 $ (1,642 ) Operating Expenses Sales and marketing 285,293 306,424 (21,131 ) Net income $ 65,140 $ 45,651 $ 19,489 As of December 31, 2018 As Reported - Topic 606 Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Balance Sheet Assets Deferred contract costs, prepaid expenses and other current assets $ 90,761 $ 111,190 $ (20,429 ) Deferred contract costs and other assets, net 129,108 $ 62,607 66,501 Deferred tax assets, net 14,632 27,620 (12,988 ) Liabilities Deferred revenue 238,940 235,942 2,998 Stockholders' Equity Accumulated earnings 207,521 171,439 36,082 ASU 2018-02 In April 2018, we adopted Accounting Standards Update ("ASU") No. 2018-02, " Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, " ("ASU 2018-02"). ASU 2018-02 allows companies to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) from accumulated other comprehensive income to retained earnings. The unaudited condensed consolidated balance sheets reflect the reclassification out of accumulated other comprehensive income. The Company's policy for releasing disproportionate income tax effects from accumulated other comprehensive income utilizes the aggregate approach. The adoption of ASU 2018-02 did not have an impact on our unaudited condensed consolidated statements of income or cash flows. Recently Issued Accounting Standards ASU 2016-02 In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"). This guidance, as amended by subsequent ASU's on the topic, improves transparency and comparability among companies by recognizing right of use (ROU) assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. ASU No. 2016-02 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. We will adopt ASU No. 2016-02 in our fiscal year beginning January 1, 2019, and will use the alternative transition method provided by the FASB in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, with no restatement of comparative periods. The new standard provides optional practical expedients in transition. We expect to only elect the "package of practical expedients" where, under the new standard, prior conclusions about lease identification, lease classification and initial direct costs do not need to be reassessed. The new standard also provides practical expedients for ongoing accounting and we do not expect to elect any of these practical expedients on adoption. We continue to assess the impact of the new standard and believe it will have a material effect on the consolidated balance sheet due to the recognition of ROU assets and lease liabilities related to real estate and office equipment operating leases. On adoption, the expected impact includes the recognition of additional operating lease liabilities ranging from $55 million to $60 million and ROU assets, net of uncollected lease incentives, ranging from $52 million to $57 million . The new standard is not expected to have a material effect on consolidated net income or consolidated cash flows. ASU 2018-15 In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning January 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Non-cash stock-based compensation expense | The following table summarizes SBC recognized by the Company (in thousands): For the Years Ended December 31, 2018 2017 2016 SBC - Statements of income $ 140,353 $ 146,427 $ 113,877 SBC - Capitalized software 3,533 4,003 3,903 SBC - Statements of stockholders' equity $ 143,886 $ 150,430 $ 117,780 The following table sets forth the non-cash stock-based compensation expense resulting from stock-based arrangements that is recorded in our consolidated statements of income for the periods indicated (in thousands): For the Years Ended December 31, 2018 2017 2016 Cost of recurring revenues $ 16,087 $ 11,931 $ 8,613 Cost of services revenues 9,472 7,909 6,198 Sales and marketing 71,641 75,428 59,187 Research and development 16,275 12,026 8,238 General and administrative 26,878 39,133 31,641 Total stock-based compensation expense $ 140,353 $ 146,427 $ 113,877 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of the new standard were as follows (in thousands): Balance as of December 31, 2017 Adjustments Due to Adoption of Topic 606 Balance as of January 1, 2018 Assets Deferred contract costs, prepaid expenses and other current assets $ 71,602 $ (22,318 ) $ 49,284 Total current assets 990,772 (22,318 ) 968,454 Deferred contract costs and other assets, net 53,409 47,259 100,668 Deferred tax assets, net 32,696 (6,268 ) 26,428 Total assets $ 1,377,211 $ 18,673 $ 1,395,884 Liabilities Deferred revenue $ 197,088 $ 1,909 $ 198,997 Total current liabilities 843,086 1,909 844,995 Deferred income tax liability 251 170 421 Total liabilities 859,186 2,079 861,265 Stockholders' Equity Accumulated earnings 125,788 16,594 142,382 Total stockholders' equity 518,025 16,594 534,619 Total liabilities and stockholders' equity $ 1,377,211 $ 18,673 $ 1,395,884 In accordance with the requirements of the new standard, the disclosure for the quantitative effect and the significant changes between the reported results under the new standard and those that would have been reported under legacy GAAP (i.e., Topic 605) on our audited consolidated income statement and balance sheet was as follows (in thousands): For the Twelve Months Ended December 31, 2018 As Reported - Topic 606 Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Income Statement Revenues Recurring revenues $ 997,066 $ 998,708 $ (1,642 ) Operating Expenses Sales and marketing 285,293 306,424 (21,131 ) Net income $ 65,140 $ 45,651 $ 19,489 As of December 31, 2018 As Reported - Topic 606 Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Balance Sheet Assets Deferred contract costs, prepaid expenses and other current assets $ 90,761 $ 111,190 $ (20,429 ) Deferred contract costs and other assets, net 129,108 $ 62,607 66,501 Deferred tax assets, net 14,632 27,620 (12,988 ) Liabilities Deferred revenue 238,940 235,942 2,998 Stockholders' Equity Accumulated earnings 207,521 171,439 36,082 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the calculation of consideration transferred and deferred under the transaction (in thousands of USD): Note Amount Calculation of consideration Cash consideration: Cash paid to PeopleDoc shareholders (a) $ 74,420 Deferred cash consideration (b) 49,336 Actual cash consideration $ 123,756 Share consideration: Share consideration paid to PeopleDoc shareholders (c) $ 173,329 Marketability of deferred stock consideration (d) $ (1,164 ) Actual share consideration 172,165 Fair value of total consideration transferred $ 295,921 (a) Initial cash consideration paid to PeopleDoc shareholders per the Purchase Agreement at the closing of the transaction. (b) Deferred cash consideration to be paid on the first anniversary of the closing date of the transaction. (c) Share consideration paid to PeopleDoc shareholders per the Purchase Agreement at the time of closing the transaction. Share consideration paid to PeopleDoc shareholders consists of 595,445 shares at the closing stock price of $282.74 in addition to a restricted stock award with a fair value of $5.1 million at the acquisition date. (d) Reflects a marketability adjustment to the deferred stock consideration. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table represents the allocation of the purchase price for PeopleDoc to the acquired identifiable assets, assumed liabilities and goodwill (in thousands of USD): Description Note Amount Current assets (a) $ 15,581 Property and equipment, net (a) 1,489 Other non-current assets (a) 1,010 Identifiable intangible assets (b) 136,800 Goodwill (c) 188,880 Total current liabilities (a), (d) (14,713 ) Deferred revenue (a) (6,900 ) Deferred tax liability, net (e) (26,226 ) Total purchase price $ 295,921 (a) Represents fair value of assets and liabilities assumed as part of the transaction based on the closing balance sheet provided by PeopleDoc. (b) Fair value of identifiable intangible assets consisted primarily of developed technology of $77 million estimated using the relief from royalty method and customer relationships of $59 million estimated using the multi period excess earnings method (c) Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets acquired and liabilities assumed. Goodwill recorded is attributable to the expected synergies to be realized when combining the operations of this entity into our existing operations. Goodwill from this transaction is not deductible for tax purposes. (d) Included in total current liabilities was assumed debt of $4.8 million as of the closing of the transaction. As of December 31, 2018, the assumed debt was fully extinguished. (e) Reflects the recognition of a deferred tax asset and deferred tax liability as of the acquisition date for the taxable and deductible temporary differences between the financial reporting values of assets acquired and liabilities assumed and the tax bases of those assets and liabilities. |
Investments in Marketable Secur
Investments in Marketable Securities and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments in Marketable Securities and Fair Value of Financial Instruments [Abstract] | |
Amortized cost, net unrealized gain and fair value of investments in marketable available-for-sale securities | The amortized cost, net unrealized (loss) gain and fair value of our investments in marketable available-for-sale securities as of December 31, 2018 and December 31, 2017 are shown below (in thousands): Funds held for customers and corporate investments as of December 31, 2018 and December 31, 2017 are shown below (in thousands): As of December 31, 2018 As of December 31, 2017 Amortized Cost Net Unrealized (Loss) Gain Fair Value (1) Amortized Cost Net Unrealized (Loss) Fair Value (1) Type of issue: Funds held for customers – money market securities and other cash equivalents $ 333,942 $ — $ 333,942 $ 354,312 $ — $ 354,312 Available-for-sale securities: Corporate debentures – bonds 4,469 (2 ) 4,467 2,848 (4 ) 2,844 Commercial paper 2,687 — 2,687 — — — U.S. Agency bonds 284,099 165 284,264 209,443 (693 ) 208,750 U.S. Treasury bills 2,240 — 2,240 5,876 (6 ) 5,870 Asset-Backed Securities 1,348 (1 ) 1,347 721 (1 ) 720 Total corporate investments and funds held for customers $ 628,785 $ 162 $ 628,947 $ 573,200 $ (704 ) $ 572,496 _________________ (1) Included within available-for-sale securities as of December 31, 2018 and 2017 are corporate investments with fair values of $10.7 million and $9.4 million , respectively. Included within available-for-sale securities as of December 31, 2018 and 2017 are funds held for customers with fair values of $284.3 million and $208.8 million , respectively. All available-for-sale securities were included in Level 2 of the fair value hierarchy. |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block] | The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2018 are as follows (in thousands): Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Gross unrealized losses Fair market value Gross unrealized losses Fair market value Gross unrealized losses Fair market value Corporate debentures – bonds $ (2 ) $ 3,521 $ — $ — $ (2 ) $ 3,521 U.S. Agency bonds (39 ) 14,957 (133 ) 45,246 (172 ) 60,203 U.S. Treasury bills — 2,239 — — — 2,239 Asset-Backed Securities (1 ) 1,347 — — (1 ) 1,347 Total $ (42 ) $ 22,064 $ (133 ) $ 45,246 $ (175 ) $ 67,310 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2017 are as follows (in thousands): Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Gross unrealized losses Fair market value Gross unrealized losses Fair market value Gross unrealized losses Fair market value Corporate debentures – bonds $ (1 ) $ 699 $ — $ — $ (1 ) $ 699 U.S. Agency bonds (408 ) 74,940 (285 ) 133,811 (693 ) 208,751 U.S. Treasury bills — — (6 ) 5,869 (6 ) 5,869 Asset-Backed Securities — — — — — — Total $ (409 ) $ 75,639 $ (291 ) $ 139,680 $ (700 ) $ 215,319 |
Amortized costs and fair value of marketable available-for-sale securities by contractual maturity | The amortized cost and fair value of the marketable available-for-sale securities by contractual maturity at December 31, 2018 are shown below (in thousands): As of December 31, 2018 Amortized Cost Fair Value Due in one year or less $ 196,128 $ 196,102 Due after one year 98,714 98,903 Total $ 294,842 $ 295,005 |
Fair value of financial assets and liabilities, by level within the fair value hierarchy | The following table sets forth, by level within the fair value hierarchy, financial assets accounted for at fair value as of December 31, 2018 and December 31, 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Total Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Un- Observable Inputs (Level 3) Total Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Un- Observable Inputs (Level 3) Corporate debentures and bonds $ 4,467 $ — $ 4,467 $ — $ 2,844 $ — $ 2,844 $ — Commercial paper 2,687 — 2,687 — — — — — U.S. Agency bonds 284,264 — 284,264 — 208,750 — 208,750 — U.S. Treasury bills 2,240 — 2,240 — 5,870 — 5,870 — Asset-Backed Securities 1,347 — 1,347 — 720 — 720 — Total $ 295,005 $ — $ 295,005 $ — $ 218,184 $ — $ 218,184 $ — |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Valuation and Qualifying Accounts [Abstract] | |
Allowance for doubtful account | The activity within the allowance for doubtful accounts was as follows (in thousands): For the Years Ended December 31, 2018 2017 2016 Balance at beginning of year $ 900 $ 900 $ 900 Charged to expense 7,855 5,727 3,213 Write-offs (7,105 ) (5,727 ) (3,213 ) Balance at end of year $ 1,650 $ 900 $ 900 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid expenses and other current assets | Deferred contract costs, prepaid expenses and other current assets consist of the following (in thousands): As of December 31, 2018 2017 Deferred contract costs $ 40,750 $ 38,519 Prepaid expenses 33,681 20,088 Other current assets 16,330 12,995 Total deferred contract costs, prepaid expenses and other current assets $ 90,761 $ 71,602 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment, net consists of the following (in thousands): As of December 31, 2018 2017 Computer equipment $ 212,215 $ 185,034 Internal-use software 234,531 178,093 Leasehold improvements 55,299 43,556 Furniture and fixtures 23,001 19,817 Building 2,100 2,100 Land 655 655 Property and equipment 527,801 429,255 Less: accumulated depreciation and amortization 224,862 185,591 Property and equipment, net $ 302,939 $ 243,664 |
Schedule of Capital Leased Assets | Included in property and equipment, net, is computer equipment acquired under capital leases as follows (in thousands): As of December 31, 2018 2017 Computer equipment $ 67,391 $ 58,831 Less: accumulated amortization 51,845 48,963 Computer equipment, net $ 15,546 $ 9,868 |
Computer Software Development_2
Computer Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Research and Development [Abstract] | |
Capitalized software | Capitalized computer software development costs and accumulated amortization of capitalized software, developed for internal use, were as follows (in thousands): As of December 31, 2018 2017 2016 Computer software development costs $ 234,531 178,093 113,407 Less: accumulated amortization (17,155 ) (7,283 ) (2,925 ) Computer software development costs, net 217,376 170,810 110,482 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of shares used in the computation of basic and diluted net income per share | The following is a reconciliation of the shares used in the computation of basic and diluted net income per share (in thousands): For the Years Ended December 31, 2018 2017 2016 Basic weighted average shares outstanding 30,854 29,791 28,976 Effect of dilutive equity instruments (1) 724 1,008 1,438 Dilutive shares outstanding 31,578 30,799 30,414 Anti-dilutive equity instruments (1) 1,448 — 24 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying balance of goodwill | The changes in the carrying value of goodwill were as follows (in thousands): As of December 31, 2018 2017 Goodwill, beginning of year $ 35,808 $ 35,322 Goodwill from PeopleDoc Acquisition (1) 188,880 — Translation adjustment (2) (4,784 ) 486 Goodwill, end of year $ 219,904 $ 35,808 _________________ (1) Represents the goodwill for the acquisition of PeopleDoc acquired on July 27, 2018. (2) Represents the impact of the foreign currency translation of the portion of goodwill that is recorded by our foreign subsidiaries whose functional currency is also its local currency. Such goodwill is translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive (loss) income. |
Schedule of estimated useful lives of intangible assets | Our amortizable intangible assets net carrying amount and estimated useful lives are as follows (in thousands): As of December 31, 2018 Gross Carrying Amount Accumulated Amortization Cumulative Translation Adjustment (1) Net Carrying Amount Weighted Average Remaining Useful Life Developed technology $ 100,300 $ (10,888 ) $ (2,993 ) $ 86,419 6.4 Customer relationships 63,600 (5,117 ) (1,208 ) 57,275 9.4 Trademark 800 (65 ) (18 ) 717 4.6 $ 164,700 $ (16,070 ) $ (4,219 ) $ 144,411 7.6 As of December 31, 2017 Gross Carrying Amount Accumulated Amortization Cumulative Translation Adjustment (1) Net Carrying Amount Weighted Average Remaining Useful Life Developed technology $ 23,300 $ (4,355 ) $ (895 ) $ 18,050 6.0 Customer relationships 4,700 (2,004 ) — 2,696 4.5 $ 28,000 $ (6,359 ) $ (895 ) $ 20,746 5.9 _________________ (1) Represents the impact of the foreign currency translation of the portion of acquired intangible assets that is recorded by our foreign subsidiaries whose functional currency is also its local currency. Such intangible assets are translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive (loss) income. |
Schedule of expected amortization expense | Future amortization expense for acquired intangible assets is as follows, as of December 31, 2018 (in thousands): Year Amount 2019 $ 19,982 2020 19,996 2021 19,573 2022 19,573 2023 19,469 Thereafter 45,818 Total $ 144,411 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Capital Lease Obligations [Abstract] | |
Scheduled lease payments of the capital lease obligations | The scheduled lease payments of the capital lease obligations are as follows as of December 31, 2018 (in thousands): Year Amount 2019 $ 6,787 2020 4,409 2021 1,560 12,756 Less amount representing interest (714 ) Lease obligations reflected as current ($6,303) and non-current ($5,739) $ 12,042 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income tax (provision) benefit components | The income tax provision consists of the following (in thousands): For the Year Ended December 31, 2018 2017 2016 Current taxes: Federal $ (489 ) $ (209 ) $ 34 State and local (5,490 ) (230 ) (170 ) Foreign (1,523 ) (1,070 ) (856 ) Deferred taxes, net Federal (10,509 ) (26,693 ) (8,858 ) State and local (2,908 ) (2,099 ) (2,478 ) Foreign 2,698 226 150 Income tax provision $ (18,221 ) $ (30,075 ) $ (12,178 ) |
Income tax reconciliation to statutory rate | The income tax provision is different from that which would be obtained by applying the statutory federal income tax rate of 21% for 2018 to income from continuing operations before income taxes and tax rate of 35% for 2017 and 2016 to income from continuing operations before income taxes as a result of the following (in thousands): For the Year Ended December 31, 2018 2017 2016 Income tax provision at statutory federal tax rate $ (17,506 ) $ (15,446 ) $ (14,490 ) State and local income taxes, net of the federal benefit (6,635 ) (1,514 ) (1,720 ) Non-deductible expenses (14,373 ) (26,196 ) (20,715 ) Foreign jurisdictions rate differential 250 374 216 Recognition of excess tax benefit 8,972 18,415 20,966 Research credit, federal benefit 7,045 4,688 3,727 Enactment of Tax Cuts and Jobs Act — (9,750 ) — IRS audit settlement 4,123 — — Other, net (97 ) (646 ) (162 ) Income tax provision $ (18,221 ) $ (30,075 ) $ (12,178 ) |
Deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities at December 31, 2018 and 2017 were as follows (in thousands): As of December 31, 2018 2017 Deferred tax assets: Net operating losses $ 2,504 $ 34,771 Tax credit carryforwards 1,639 1,807 Research credit 35,014 27,559 Deferred revenue 259 497 Accruals not currently deductible 4,158 1,137 Allowance for doubtful accounts 454 238 Charitable contributions 1,868 1,729 Stock-based compensation 13,646 9,851 Deferred rent adjustment 3,239 2,128 Foreign deferred tax assets 1,673 — Gross deferred tax assets $ 64,454 $ 79,717 Less: valuation allowance (1,673 ) — Net deferred tax assets 62,781 79,717 Deferred tax liabilities: Property and equipment $ (35,843 ) $ (47,022 ) Deferred commissions (12,306 ) — Foreign, primarily acquired intangible assets, net (25,105 ) (250 ) Gross deferred tax liabilities (73,254 ) (47,272 ) Net deferred tax (liabilities) assets $ (10,473 ) $ 32,445 |
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands): As of December 31, 2018 2017 2016 Balance at January 1, $ 8,902 $ 7,241 $ 5,957 Tax positions taken in prior period Gross increases 686 187 205 Gross decreases — — — Tax positions taken in current period Gross increases 1,412 1,474 1,079 Settlements (6,208 ) — — Statute expiration — — — Balance at December 31, $ 4,792 $ 8,902 $ 7,241 |
Stock-Based Compensation and _2
Stock-Based Compensation and Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Non-cash stock-based compensation expense | The following table summarizes SBC recognized by the Company (in thousands): For the Years Ended December 31, 2018 2017 2016 SBC - Statements of income $ 140,353 $ 146,427 $ 113,877 SBC - Capitalized software 3,533 4,003 3,903 SBC - Statements of stockholders' equity $ 143,886 $ 150,430 $ 117,780 The following table sets forth the non-cash stock-based compensation expense resulting from stock-based arrangements that is recorded in our consolidated statements of income for the periods indicated (in thousands): For the Years Ended December 31, 2018 2017 2016 Cost of recurring revenues $ 16,087 $ 11,931 $ 8,613 Cost of services revenues 9,472 7,909 6,198 Sales and marketing 71,641 75,428 59,187 Research and development 16,275 12,026 8,238 General and administrative 26,878 39,133 31,641 Total stock-based compensation expense $ 140,353 $ 146,427 $ 113,877 |
Allocation of share-based compensation costs by plan | The following table sets forth the stock-based compensation expense associated with modifications made to the Company's change in control plans as discussed above (in thousands): For the Years Ended December 31, 2018 2017 2016 Stock-based compensation expense : Stock-based compensation expense related to General Operations $ 96,018 $ 81,468 $ 71,119 Stock-based compensation expense related to CIC modifications 44,335 64,959 42,758 Total non-cash stock-based compensation expense $ 140,353 $ 146,427 $ 113,877 |
Summary of stock option activity | The following table summarizes Option activity for the years ended December 31, 2016 , 2017 and 2018 , as follows (in thousands, except per share amounts and years): Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding at December 31, 2015 532 $ 27.36 1.8 $ 89,373 Granted — — Exercised (188 ) 24.79 Forfeited or expired — — Outstanding and exercisable at December 31, 2016 344 $ 28.76 1.1 $ 52,797 Outstanding at December 31, 2016 344 $ 28.76 Granted — — Exercised (230 ) 28.53 Forfeited or expired — — Outstanding and exercisable at December 31, 2017 114 $ 29.24 0.4 $ 21,476 Outstanding at December 31, 2017 114 $ 29.24 Granted — — Exercised (114 ) 29.24 Forfeited or expired — — Outstanding and exercisable at December 31, 2018 — $ — 0 $ — |
Summary of restricted stock award and restricted stock unit activity | The following table summarizes Restricted Stock and Restricted Stock Unit Award activity for the years ended December 31, 2016 , 2017 and 2018 , as follows (in thousands, except per share amounts): Restricted Stock Awards Restricted Stock Unit Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2015 1,366 $ 142.61 435 $ 156.18 Granted 463 168.94 363 173.28 Vested — — — — Released (668 ) 122.37 (214 ) 145.47 Forfeited or expired — — (22 ) 170.36 Outstanding at December 31, 2016 1,161 $ 164.77 562 $ 170.73 Granted 366 195.85 349 196.54 Vested — — — — Released (645 ) 161.64 (252 ) 197.05 Forfeited or expired — — (29 ) 180.27 Outstanding at December 31, 2017 882 $ 179.95 630 $ 170.73 Granted 278 239.26 448 243.72 Vested — — — — Released (474 ) 175.22 (292 ) 181.14 Forfeited or expired — — (37 ) 210.76 Outstanding at December 31, 2018 686 $ 207.25 749 $ 220.54 |
Options outstanding and exercisable by exercise price range | |
Stock options and restricted stock awards granted to non-employee directors | The following table summarizes information about Restricted Stock Awards granted by us to non-employee directors in exchange for director related services rendered for 2018, 2017 and 2016 : Year Market Value of Restricted Stock Awards Granted Number of Restricted Stock Awards Granted 2016 $ 156.12 2,550 191.67 2,425 210.29 2,445 210.59 2,395 2017 $ 195.61 2,465 196.24 2,415 201.88 2,455 209.79 2,395 214.78 2,000 2018 $ 228.87 2,420 252.25 2,345 254.81 2,395 283.52 2,320 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum annual rental commitments related to operating leases | Future minimum annual rental commitments related to these leases are as follows as of December 31, 2018 (in thousands): Year Amount 2019 $ 17,359 2020 16,277 2021 14,181 2022 9,055 2023 5,102 Thereafter 10,254 $ 72,228 |
Immaterial Correction of Prio_2
Immaterial Correction of Prior Period Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The revisions to our consolidated statement of income and consolidated statement of comprehensive income for the year ended December 31, 2016 is as follows (in thousands, except per share amounts): For the Year Ended December 31, 2016 As Reported As Revised Income before income taxes $ 41,418 $ 41,418 Provision for income taxes (11,165 ) (12,178 ) Net income $ 30,253 $ 29,240 Net income per share: Basic $ 1.04 $ 1.01 Diluted $ 0.99 $ 0.96 Weighted average shares outstanding: Basic 28,976 28,976 Diluted 30,414 30,414 Net income $ 30,253 $ 29,240 Other comprehensive income: Unrealized loss on investments in marketable available for sale securities (61 ) (61 ) Unrealized gain on foreign currency translation adjustments 843 843 Other comprehensive income, before tax 782 782 Income tax benefit related to items of other comprehensive income 24 24 Other comprehensive income, net of tax 806 806 Comprehensive income $ 31,059 $ 30,046 |
Nature of Operations (Details)
Nature of Operations (Details) | Dec. 31, 2018employeecountrylanguage |
Nature of Operations [Line Items] | |
Number of languages in which product solution available | language | 14 |
Number of countries in which entity operates | country | 61 |
UltiPro Enterprise Solution Suite, company size, minimum number of employees | 2,501 |
UltiPro Enterprise Solution Suite, number of employees in a company (10,000 or more) | 10,000 |
Minimum [Member] | |
Nature of Operations [Line Items] | |
UltiPro Enterprise Solution Suite, number of employees in mid-market companies | 501 |
Number of employees in companies as strategic market | 100 |
Maximum [Member] | |
Nature of Operations [Line Items] | |
UltiPro Enterprise Solution Suite, number of employees in mid-market companies | 2,500 |
Number of employees in companies as strategic market | 500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Prepaid Expenses and Other Current Assets [Abstract] | |||
Amortization life | 1 year | ||
Deferred Revenue [Abstract] | |||
Deferred revenue, typical recognition period | 7 years | ||
Revenue Recognition [Abstract] | |||
Goodwill | $ 219,904 | $ 35,808 | $ 35,322 |
Intangible assets, net | 144,411 | 20,862 | |
Stock-Based Compensation [Abstract] | |||
SBC - Statements of operations | 140,353 | 146,427 | 113,877 |
SBC - Capitalized software | 3,533 | 4,003 | 3,903 |
SBC - Statements of stockholders' equity | 143,886 | 150,430 | $ 117,780 |
Deferred tax assets, valuation allowance | 1,673 | $ 0 | |
Increase in valuation allowance | $ 200 | ||
Minimum [Member] | |||
Deferred Revenue [Abstract] | |||
Deferred revenue, typical recognition period | 24 months | ||
Maximum [Member] | |||
Deferred Revenue [Abstract] | |||
Deferred revenue, typical recognition period | 36 months | ||
Property and equipment | Minimum [Member] | |||
Property and Equipment [Abstract] | |||
Estimated useful life | 2 years | ||
Property and equipment | Maximum [Member] | |||
Property and Equipment [Abstract] | |||
Estimated useful life | 15 years | ||
Leasehold Improvements | Minimum [Member] | |||
Property and Equipment [Abstract] | |||
Estimated useful life | 3 years | ||
Leasehold Improvements | Maximum [Member] | |||
Property and Equipment [Abstract] | |||
Estimated useful life | 15 years | ||
Amended And Restated 2005 Equity And Incentive Plan | |||
Stock-Based Compensation [Abstract] | |||
Aggregate number of shares of common stock available for issuance (in shares) | 1,706,906 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Topic 606 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Dec. 31, 2015 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Deferred contract costs, prepaid expenses and other current assets | $ 90,761 | $ 71,602 | $ 49,284 | ||
Total current assets | 1,109,723 | 990,772 | 968,454 | ||
Deferred contract costs and other assets, net | 129,108 | 53,409 | 100,668 | ||
Deferred tax assets, net | 14,632 | 32,696 | 26,428 | ||
Total assets | 1,920,717 | 1,377,211 | 1,395,884 | ||
Deferred revenue | 238,940 | 197,088 | 198,997 | ||
Total current liabilities | 1,034,914 | 843,086 | 844,995 | ||
Deferred income tax liability | 10,473 | 421 | |||
Liabilities | 1,075,739 | 859,186 | 861,265 | ||
Accumulated earnings | 207,521 | 125,788 | 142,382 | ||
Total stockholders’ equity | 844,978 | 518,025 | $ 414,215 | 534,619 | $ 317,186 |
Total liabilities and stockholders’ equity | 1,920,717 | 1,377,211 | 1,395,884 | ||
Recurring revenues | 997,066 | 802,300 | 654,199 | ||
Sales and marketing | 285,293 | 269,781 | 224,416 | ||
Net income | 65,140 | 14,055 | $ 29,240 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Deferred contract costs, prepaid expenses and other current assets | 111,190 | 71,602 | |||
Total current assets | 990,772 | ||||
Deferred contract costs and other assets, net | 62,607 | 53,409 | |||
Deferred tax assets, net | 27,620 | 32,696 | |||
Total assets | 1,377,211 | ||||
Deferred revenue | 235,942 | 197,088 | |||
Total current liabilities | 843,086 | ||||
Deferred income tax liability | 251 | ||||
Liabilities | 859,186 | ||||
Accumulated earnings | 171,439 | 125,788 | |||
Total stockholders’ equity | 518,025 | ||||
Total liabilities and stockholders’ equity | $ 1,377,211 | ||||
Recurring revenues | 998,708 | ||||
Sales and marketing | 306,424 | ||||
Net income | 45,651 | ||||
Accounting Standards Update 2014-09 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Deferred income tax liability | 7,000 | ||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Deferred contract costs, prepaid expenses and other current assets | (20,429) | (22,318) | |||
Total current assets | (22,318) | ||||
Deferred contract costs and other assets, net | 66,501 | 47,259 | |||
Deferred tax assets, net | (12,988) | (6,268) | |||
Total assets | 18,673 | ||||
Deferred revenue | 2,998 | 1,909 | |||
Total current liabilities | 1,909 | ||||
Deferred income tax liability | 170 | ||||
Liabilities | 2,079 | ||||
Accumulated earnings | 36,082 | 16,594 | |||
Total stockholders’ equity | 16,594 | ||||
Total liabilities and stockholders’ equity | $ 18,673 | ||||
Recurring revenues | (1,642) | ||||
Sales and marketing | (21,131) | ||||
Net income | $ 19,489 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Recently Issued Accounting Standards (Details) - Subsequent Event - Accounting Standards Update 2016-02 $ in Millions | Jan. 01, 2019USD ($) |
Minimum [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating lease, liability | $ 55 |
Operating lease, right-of-use asset | 52 |
Maximum [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating lease, liability | 60 |
Operating lease, right-of-use asset | $ 57 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) customer in Thousands, $ in Thousands | Jul. 27, 2018USD ($)customercountry | Dec. 31, 2018USD ($)country |
Business Acquisition [Line Items] | ||
Number of countries in which entity has users | country | 61 | |
PeopleDoc SAS | ||
Business Acquisition [Line Items] | ||
Number of customers (more than a 1000) | customer | 1 | |
Number of countries in which entity has users | country | 180 | |
Acquisition price | $ | $ 295,921 | |
Transaction costs | $ | $ 3,100 |
Business Combinations - Conside
Business Combinations - Consideration (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 27, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Cash payment to acquire business | $ 74,420 | $ 1,000 | $ 25,636 | |
PeopleDoc SAS | ||||
Business Acquisition [Line Items] | ||||
Cash payment to acquire business | $ 74,420 | |||
Deferred cash consideration for business combination | 49,336 | |||
Actual cash consideration | 123,756 | |||
Stock consideration recorded for business combination | 172,165 | |||
Marketability of deferred stock consideration | (1,164) | |||
Fair value of total consideration transferred | $ 295,921 | |||
Share consideration paid (in shares) | 595,445 | |||
Purchase closing stock price (in dollars per share) | $ 282.74 | |||
PeopleDoc Shareholders | PeopleDoc SAS | ||||
Business Acquisition [Line Items] | ||||
Stock consideration recorded for business combination | $ 173,329 | |||
Restricted Stock | PeopleDoc SAS | ||||
Business Acquisition [Line Items] | ||||
Restricted stock award intrinsic value | $ 5,100 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) | Dec. 31, 2018 | Jul. 27, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 219,904,000 | $ 35,808,000 | $ 35,322,000 | |
PeopleDoc SAS | ||||
Business Acquisition [Line Items] | ||||
Current assets | $ 15,581 | |||
Property and equipment, net | 1,489 | |||
Other non-current assets | 1,010 | |||
Identifiable intangible assets | 136,800 | |||
Goodwill | 188,880 | |||
Total current liabilities | (14,713) | |||
Deferred revenue | (6,900) | |||
Deferred tax liability, net | (26,226) | |||
Total purchase price | 295,921 | |||
Debt assumed | 4,800,000 | |||
Developed Technology | ||||
Business Acquisition [Line Items] | ||||
Identifiable intangible assets | 77,000,000 | |||
Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Identifiable intangible assets | $ 59,000,000 |
Business Combinations - Acquisi
Business Combinations - Acquisition of Kanjoya, Inc (Details) - USD ($) $ in Thousands | Sep. 29, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 27, 2018 |
Business Acquisition [Line Items] | |||||
Cash payment to acquire business | $ 74,420 | $ 1,000 | $ 25,636 | ||
Goodwill | 219,904 | $ 35,808 | $ 35,322 | ||
Kanjoya, Inc. | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 19,600 | ||||
Cash payment to acquire business | 16,900 | ||||
Escrow Deposit | $ 2,600 | ||||
Intangible assets | 13,600 | ||||
Goodwill | 6,400 | ||||
Working capital | 400 | ||||
Developed Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 77,000 | ||||
Developed Technology | Kanjoya, Inc. | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 12,100 | ||||
Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 59,000 | ||||
Customer relationships | Kanjoya, Inc. | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 1,500 |
Business Combinations - Acqui_2
Business Combinations - Acquisition of Capital Analytics, Inc., d/b/a Vestrics (Details) - USD ($) $ in Thousands | May 11, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Cash payment to acquire business | $ 74,420 | $ 1,000 | $ 25,636 | |
Goodwill | 219,904 | 35,808 | $ 35,322 | |
Vestrics Acquisition | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 10,100 | |||
Cash payment to acquire business | $ 1,000 | $ 9,100 | ||
Goodwill | 4,300 | |||
Working capital | 200 | |||
Finite-lived intangibles | $ 6,000 | |||
Weighted average useful life | 7 years |
Investments in Marketable Sec_2
Investments in Marketable Securities and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Funds held for customers – money market securities and other cash equivalents | $ 333,942 | $ 354,312 |
Net Unrealized Gain (Loss) | 162 | (704) |
Fair Value | 295,005 | 218,184 |
Total corporate investments and funds held for clients - Amortized Cost | 628,785 | 573,200 |
Total corporate investments and funds held for clients - Fair Value | 628,947 | 572,496 |
Amortized Cost Basis | ||
Due in one year or less | 196,128 | |
Due after one year | 98,714 | |
Total | 294,842 | |
Fair Value | ||
Due in one year or less | 196,102 | |
Due after one year | 98,903 | |
Total | 295,005 | 218,184 |
Corporate debentures – bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,469 | 2,848 |
Net Unrealized Gain (Loss) | (2) | (4) |
Fair Value | 4,467 | 2,844 |
Fair Value | ||
Total | 4,467 | 2,844 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,687 | 0 |
Net Unrealized Gain (Loss) | 0 | 0 |
Fair Value | 2,687 | 0 |
Fair Value | ||
Total | 2,687 | 0 |
U.S. Agency bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 284,099 | 209,443 |
Net Unrealized Gain (Loss) | 165 | (693) |
Fair Value | 284,264 | 208,750 |
Fair Value | ||
Total | 284,264 | 208,750 |
U.S. Treasury bills | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,240 | 5,876 |
Net Unrealized Gain (Loss) | 0 | (6) |
Fair Value | 2,240 | 5,870 |
Fair Value | ||
Total | 2,240 | 5,870 |
Asset-Backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,348 | 721 |
Net Unrealized Gain (Loss) | (1) | (1) |
Fair Value | 1,347 | 720 |
Fair Value | ||
Total | 1,347 | 720 |
Corporate Investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 10,700 | 9,400 |
Fair Value | ||
Total | 10,700 | 9,400 |
Funds Held For Customers | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 284,300 | 208,800 |
Fair Value | ||
Total | $ 284,300 | $ 208,800 |
Funds held for Customers, Cor_2
Funds held for Customers, Corporate Investments in Marketable Securities and Fair Value of Financial Instruments - AFS in unrealized loss positions (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses - less than 12 months | $ (42) | $ (409) |
Fair market value - less than 12 months | 22,064 | 75,639 |
Unrealized losses - greater than 12 months | (133) | (291) |
Fair market value - greater than 12 months | 45,246 | 139,680 |
Gross unrealized losses | (175) | (700) |
Fair market value | 67,310 | 215,319 |
Corporate debentures – bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses - less than 12 months | (2) | (1) |
Fair market value - less than 12 months | 3,521 | 699 |
Unrealized losses - greater than 12 months | 0 | 0 |
Fair market value - greater than 12 months | 0 | 0 |
Gross unrealized losses | (2) | (1) |
Fair market value | 3,521 | 699 |
U.S. Agency bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses - less than 12 months | (39) | (408) |
Fair market value - less than 12 months | 14,957 | 74,940 |
Unrealized losses - greater than 12 months | (133) | (285) |
Fair market value - greater than 12 months | 45,246 | 133,811 |
Gross unrealized losses | (172) | (693) |
Fair market value | 60,203 | 208,751 |
U.S. Treasury bills | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses - less than 12 months | 0 | 0 |
Fair market value - less than 12 months | 2,239 | 0 |
Unrealized losses - greater than 12 months | 0 | (6) |
Fair market value - greater than 12 months | 0 | 5,869 |
Gross unrealized losses | 0 | (6) |
Fair market value | 2,239 | 5,869 |
Asset-Backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses - less than 12 months | (1) | 0 |
Fair market value - less than 12 months | 1,347 | 0 |
Unrealized losses - greater than 12 months | 0 | 0 |
Fair market value - greater than 12 months | 0 | 0 |
Gross unrealized losses | (1) | 0 |
Fair market value | $ 1,347 | $ 0 |
Investments in Marketable Sec_3
Investments in Marketable Securities and Fair Value of Financial Instruments (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debentures and bonds | $ 4,467 | $ 2,844 |
Commercial paper | 2,687 | 0 |
U.S. Agency bonds | 284,264 | 208,750 |
U.S. Treasury bills | 2,240 | 5,870 |
Asset-Backed Securities | 1,347 | 720 |
Total | 295,005 | 218,184 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debentures and bonds | 0 | 0 |
Commercial paper | 0 | 0 |
U.S. Agency bonds | 0 | 0 |
U.S. Treasury bills | 0 | 0 |
Asset-Backed Securities | 0 | 0 |
Total | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debentures and bonds | 4,467 | 2,844 |
Commercial paper | 2,687 | 0 |
U.S. Agency bonds | 284,264 | 208,750 |
U.S. Treasury bills | 2,240 | 5,870 |
Asset-Backed Securities | 1,347 | 720 |
Total | 295,005 | 218,184 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debentures and bonds | 0 | 0 |
Commercial paper | 0 | 0 |
U.S. Agency bonds | 0 | 0 |
U.S. Treasury bills | 0 | 0 |
Asset-Backed Securities | 0 | 0 |
Total | $ 0 | $ 0 |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance at beginning of year | $ 900 | $ 900 | $ 900 |
Charged to expenses | 7,855 | 5,727 | 3,213 |
Write-offs | (7,105) | (5,727) | (3,213) |
Balance at end of year | $ 1,650 | $ 900 | $ 900 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Prepaid Expense and Other Assets, Current [Abstract] | |||
Deferred contract costs | $ 40,750 | $ 38,519 | |
Prepaid expenses | 33,681 | 20,088 | |
Prepaid expenses | 16,330 | 12,995 | |
Total deferred contract costs, prepaid expenses and other current assets | $ 90,761 | $ 49,284 | 71,602 |
Deferred revenue, typical recognition period | 7 years | ||
Contract costs, current | $ 40,750 | 38,519 | |
Contract costs, noncurrent | $ 116,100 | $ 45,500 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 527,801 | $ 429,255 | |
Less: accumulated depreciation and amortization | 224,862 | 185,591 | |
Property and equipment, net | 302,939 | 243,664 | |
Depreciation and amortization expense | 39,900 | 31,200 | $ 25,500 |
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 212,215 | 185,034 | |
Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 234,531 | 178,093 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 55,299 | 43,556 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 23,001 | 19,817 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,100 | 2,100 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 655 | $ 655 |
Property and Equipment 1 (Detai
Property and Equipment 1 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Capital Leased Assets [Line Items] | |||
Depreciation and amortization expense | $ 9,100 | $ 7,300 | $ 6,700 |
Computer Equipment [Member] | |||
Capital Leased Assets [Line Items] | |||
Capital leased assets, gross | 67,391 | 58,831 | |
Capital Leases, accumulated amortization | 51,845 | 48,963 | |
Capital Leases, net | $ 15,546 | $ 9,868 |
Foreign Currency (Details)
Foreign Currency (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Foreign Currency [Abstract] | ||
Unrealized foreign currency translation gains (losses) | $ (14.3) | $ (5.4) |
Computer Software Development_3
Computer Software Development Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Capitalized software development costs | $ 2,400 | ||
Capitalized software | 234,531 | $ 178,093 | $ 113,407 |
Accumulated amortization | (17,155) | (7,283) | (2,925) |
Capitalized software, net | $ 217,376 | 170,810 | 110,482 |
Internal Use Software | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Internal Use Software | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 7 years | ||
UltiPro Recruiting | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized software development costs | $ 54,000 | 52,600 | |
Amortization | 9,900 | 4,400 | $ 1,200 |
Stock Compensation Plan | UltiPro Recruiting | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized software development costs | $ 3,500 | $ 4,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Basic weighted average shares outstanding (in shares) | 30,854 | 29,791 | 28,976 |
Effect of dilutive equity instruments | 724 | 1,008 | 1,438 |
Dilutive weighted average shares outstanding | 31,578 | 30,799 | 30,414 |
Options to purchase shares of Common Stock and other stock-based awards outstanding which are not included in the calculation of diluted income per share because their impact is anti-dilutive | 1,448 | 0 | 24 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets Goodwill and Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning of year | $ 35,808 | $ 35,322 |
Translation adjustment | (4,784) | 486 |
Goodwill, end of year | 219,904 | 35,808 |
PeopleDoc SAS | ||
Goodwill [Roll Forward] | ||
Goodwill from PeopleDoc Acquisition | $ 188,880 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 7 years 7 months 6 days | 5 years 10 months 21 days | |
Indefinite-lived intangible assets | $ 0 | ||
Amortization expense for the acquired intangible assets | $ 10,100,000 | 3,100,000 | $ 1,100,000 |
2,019 | 19,982,000 | ||
2,020 | 19,996,000 | ||
2,021 | 19,573,000 | ||
2,022 | 19,573,000 | ||
2,023 | 19,469,000 | ||
Thereafter | 45,818,000 | ||
Total | 144,411,000 | 20,746,000 | |
Translation adjustment - Employtouch Acquisition | (4,219,000) | (895,000) | |
Total | 164,700,000 | 28,000,000 | |
Amortization of acquired intangibles | $ (16,070,000) | $ (6,359,000) | |
Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 10 years | ||
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 6 years 5 months | 6 years 7 days | |
Total | $ 86,419,000 | $ 18,050,000 | |
Translation adjustment - Employtouch Acquisition | (2,993,000) | (895,000) | |
Total | 100,300,000 | 23,300,000 | |
Amortization of acquired intangibles | $ (10,888,000) | $ (4,355,000) | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 9 years 4 months 24 days | 4 years 6 months 4 days | |
Total | $ 57,275,000 | $ 2,696,000 | |
Translation adjustment - Employtouch Acquisition | (1,208,000) | 0 | |
Total | 63,600,000 | 4,700,000 | |
Amortization of acquired intangibles | $ (5,117,000) | $ (2,004,000) | |
Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 4 years 7 months 4 days | ||
Total | $ 717,000 | ||
Translation adjustment - Employtouch Acquisition | (18,000) | ||
Total | 800,000 | ||
Amortization of acquired intangibles | $ (65,000) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 164,700 | $ 28,000 | |
Accumulated Amortization | (16,070) | (6,359) | |
Cumulative Translation Adjustment | (4,219) | (895) | |
Net Carrying Amount | $ 144,411 | $ 20,746 | |
Estimated Useful Lives | 7 years 7 months 6 days | 5 years 10 months 21 days | |
Amortization of Intangible Assets | $ 10,100 | $ 3,100 | $ 1,100 |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 100,300 | 23,300 | |
Accumulated Amortization | (10,888) | (4,355) | |
Cumulative Translation Adjustment | (2,993) | (895) | |
Net Carrying Amount | $ 86,419 | $ 18,050 | |
Estimated Useful Lives | 6 years 5 months | 6 years 7 days | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 63,600 | $ 4,700 | |
Accumulated Amortization | (5,117) | (2,004) | |
Cumulative Translation Adjustment | (1,208) | 0 | |
Net Carrying Amount | $ 57,275 | $ 2,696 | |
Estimated Useful Lives | 9 years 4 months 24 days | 4 years 6 months 4 days |
Capital Lease Obligations (Deta
Capital Lease Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Scheduled lease payments of capital lease obligations [Abstract] | ||
2,019 | $ 6,787 | |
2,020 | 4,409 | |
2,021 | 1,560 | |
Future minimum payments due, total | 12,756 | |
Less amount representing interest | (714) | |
Lease obligations reflected as current ($6,303) and non-current ($5,739) | 12,042 | |
Lease obligations, current | 6,303 | $ 5,474 |
Lease obligations, non-current | $ 5,739 | $ 4,477 |
Minimum [Member] | ||
Capital Leased Assets [Line Items] | ||
Interest rate on capital leases | 4.50% | |
Maximum [Member] | ||
Capital Leased Assets [Line Items] | ||
Interest rate on capital leases | 6.25% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Income Tax Contingency [Line Items] | |||||
Income (loss) from continuing operations before income taxes | $ 83,361 | $ 44,130 | $ 41,418 | ||
Book loss from foreign operations | 9,000 | ||||
Current taxes [Abstract] | |||||
Federal | (489) | (209) | 34 | ||
State and local | (5,490) | (230) | (170) | ||
Foreign | (1,523) | (1,070) | (856) | ||
Deferred taxes, net [Abstract] | |||||
Federal | (10,509) | (26,693) | (8,858) | ||
State and local | (2,908) | (2,099) | (2,478) | ||
Foreign | 2,698 | 226 | 150 | ||
Income tax provision | (18,221) | (30,075) | (12,178) | ||
Reconciliation of income tax (provision) benefit [Abstract] | |||||
Income tax provision at statutory federal tax rate | (17,506) | (15,446) | (14,490) | ||
State and local income taxes, net of the federal benefit | (6,635) | (1,514) | (1,720) | ||
Non-deductible expenses | (14,373) | (26,196) | (20,715) | ||
Foreign jurisdictions rate differential | 250 | 374 | 216 | ||
Recognition of excess tax benefit | 8,972 | 18,415 | 20,966 | ||
Research credit, federal benefit | 7,045 | 4,688 | 3,727 | ||
Enactment of Tax Cuts and Jobs Act | 0 | (9,750) | 0 | ||
IRS audit settlement | 4,123 | 0 | 0 | ||
Other, net | (97) | (646) | (162) | ||
Income tax provision | (18,221) | (30,075) | $ (12,178) | ||
Tax Cuts And Jobs Act Of 2017, deferred tax asset reduction | $ 8,800 | ||||
Deferred tax assets [Abstract] | |||||
Net operating losses | 2,504 | 2,504 | 34,771 | ||
Tax credit carryforwards | 1,639 | 1,639 | 1,807 | ||
Research credit | 35,014 | 35,014 | 27,559 | ||
Deferred revenue | 259 | 259 | 497 | ||
Accruals not currently deductible | 4,158 | 4,158 | 1,137 | ||
Allowance for doubtful accounts | 454 | 454 | 238 | ||
Charitable contributions | 1,868 | 1,868 | 1,729 | ||
Stock-based compensation | 13,646 | 13,646 | 9,851 | ||
Deferred rent adjustment | 3,239 | 3,239 | 2,128 | ||
Foreign deferred tax assets | 1,673 | 1,673 | 0 | ||
Gross deferred tax assets | 64,454 | 64,454 | 79,717 | ||
Less: valuation allowance | (1,673) | (1,673) | 0 | ||
Net deferred tax assets | 62,781 | 62,781 | 79,717 | ||
Deferred tax liabilities [Abstract] | |||||
Property and equipment | (35,843) | (35,843) | (47,022) | ||
Deferred commissions | (12,306) | (12,306) | 0 | ||
Foreign, primarily acquired intangible assets, net | (25,105) | (25,105) | (250) | ||
Gross deferred tax liabilities | (73,254) | (73,254) | (47,272) | ||
Deferred tax liabilities, net | (10,473) | $ (10,473) | $ (421) | ||
Deferred tax assets, net | $ 32,445 | ||||
Income Statement | |||||
Reconciliation of income tax (provision) benefit [Abstract] | |||||
Tax Cuts And Jobs Act Of 2017, deferred tax asset reduction | 8,700 | ||||
Other Comprehensive Income (Loss) | |||||
Reconciliation of income tax (provision) benefit [Abstract] | |||||
Tax Cuts And Jobs Act Of 2017, deferred tax asset reduction | $ 100 |
Income Taxes (Details 1) (Detai
Income Taxes (Details 1) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 27, 2018 | Jan. 01, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||
Deferred income tax liability | $ 10,473 | $ 421 | |||
Deferred tax assets, valuation allowance | 1,673 | $ 0 | |||
Deferred tax asset | 32,445 | ||||
Increase in valuation allowance | 200 | ||||
Research credit | 35,014 | 27,559 | |||
Deferred tax asset, research and development credit studies | 6,500 | 4,400 | |||
Unrecognized tax benefits that would impact effective tax rate | 4,800 | 8,900 | $ 7,200 | ||
Tax credit carryforward, reserve | 6,000 | ||||
Unrecognized tax benefits reconciliation [Abstract] | |||||
Beginning Balance | 8,902 | 7,241 | 5,957 | ||
Tax positions taken in prior period [Abstract] | |||||
Gross increases | 686 | 187 | 205 | ||
Gross decreases | 0 | 0 | 0 | ||
Tax positions taken in current period [Abstract] | |||||
Gross increases | 1,412 | 1,474 | 1,079 | ||
Settlements | (6,208) | 0 | 0 | ||
Statute expiration | 0 | 0 | 0 | ||
Ending Balance | 4,792 | 8,902 | 7,241 | ||
Tax Year 2015 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits, period increase (decrease) | 200 | ||||
Tax Year 2016 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits, period increase (decrease) | 200 | 1,100 | |||
Tax Year 2017 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits, period increase (decrease) | 500 | $ 1,500 | |||
Tax Year 2018 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits, period increase (decrease) | 1,400 | ||||
Tax Years Subsequent To 2014 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward, reserve | 4,800 | ||||
Accounting Standards Update 2014-09 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Deferred income tax liability | 7,000 | ||||
Deferred tax asset | $ 500 | ||||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | |||||
Operating Loss Carryforwards [Line Items] | |||||
Cumulative impact of adoption of ASU 2016-09 | 16,593 | ||||
Excess tax benefit, amount | $ 23,700 | ||||
UK and Germany | Subsidiaries | |||||
Operating Loss Carryforwards [Line Items] | |||||
Deferred income tax liability | $ 26,300 | ||||
Deferred tax assets, valuation allowance | 1,700 | $ 1,500 | |||
Increase in valuation allowance | 200 | ||||
Federal | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforwards | $ 9,000 |
Stock-Based Compensation and _3
Stock-Based Compensation and Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | $ 140,353 | $ 146,427 | $ 113,877 |
Change In Control Plan | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | 96,018 | 81,468 | 71,119 |
March 2015 And February 2016 Control Plans Change | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | $ 44,335 | 64,959 | 42,758 |
Amended And Restated 2005 Equity And Incentive Plan | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Aggregate number of shares of common stock available for issuance (in shares) | 1,706,906 | ||
Cost of recurring revenues [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | $ 16,087 | 11,931 | 8,613 |
Cost of services revenues [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | 9,472 | 7,909 | 6,198 |
Sales and marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | 71,641 | 75,428 | 59,187 |
Research and development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | 16,275 | 12,026 | 8,238 |
General and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total non-cash stock-based compensation expense | $ 26,878 | $ 39,133 | $ 31,641 |
Stock-Based Compensation and _4
Stock-Based Compensation and Equity 1 (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Total non-cash stock-based compensation expense | $ 140,353,000 | $ 146,427,000 | $ 113,877,000 | |||||||||||||||||
Increase (decrease) In share-based compensation | 6,000,000 | 32,600,000 | ||||||||||||||||||
Total non-cash stock-based compensation expense | 140,353,000 | 146,427,000 | 113,877,000 | |||||||||||||||||
Proceeds from Issuance of Common Stock | 3,323,000 | $ 6,565,000 | 4,659,000 | |||||||||||||||||
Granted (in shares) | 2,320 | 2,395 | 2,345 | 2,420 | 2,395 | 2,455 | 2,415 | 2,465 | 2,395 | 2,445 | 2,425 | 2,550 | 2,000 | |||||||
Non-employee Directors [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Total non-cash stock-based compensation expense | 1,400,000 | $ 3,000,000 | 1,800,000 | |||||||||||||||||
Deferred Compensation Arrangement with Individual, Quarterly Awards, Common Stock Equivalent Value | 12,500 | |||||||||||||||||||
Restricted Stock | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Total non-cash stock-based compensation expense | $ 75,100,000 | $ 98,100,000 | $ 79,000,000 | |||||||||||||||||
Awards granted to officers and employees during the period (in shares) | 268,522 | 353,857 | 453,023 | |||||||||||||||||
Annual vesting percentage (in hundredths) | 33.3333% | |||||||||||||||||||
Award vesting period (3 annual installments) | 3 years | |||||||||||||||||||
Granted (in shares) | 278,000 | 366,000 | 463,000 | |||||||||||||||||
Restricted Stock | Non-employee Directors [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Awards granted to non-employee directors | 9,910 | |||||||||||||||||||
Granted (in shares) | 9,000 | 10,000 | ||||||||||||||||||
Number of awards granted per quarterly meeting attended (in shares) | 400 | 400 | 400 | 400 | 400 | 400 | 400 | |||||||||||||
Restricted Stock | Chairman Of Board Committee | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Number of awards granted per quarterly meeting attended (in shares) | 50 | 50 | 50 | 50 | 50 | 50 | 50 | |||||||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Total non-cash stock-based compensation expense | $ 72,300,000 | $ 52,100,000 | $ 38,800,000 | |||||||||||||||||
Granted (in shares) | 448,000 | 349,000 | 363,000 | |||||||||||||||||
Restricted Stock Units (RSUs) [Member] | Officers or Employees [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Granted (in shares) | 448,000 | 349,000 | 363,458 | |||||||||||||||||
Stock Options [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Proceeds from Issuance of Common Stock | $ 3,300,000 | $ 6,600,000 | $ 4,700,000 | |||||||||||||||||
Term of stock options (in years) | 10 years | |||||||||||||||||||
Annual vesting percentage | 25.00% | 25.00% | ||||||||||||||||||
Internal Use Software | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Total non-cash stock-based compensation expense | $ 3,500,000 | $ 4,000,000 | 3,900,000 | |||||||||||||||||
March 2015 And February 2016 Control Plans Change | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Total non-cash stock-based compensation expense | 44,335,000 | 64,959,000 | 42,758,000 | |||||||||||||||||
Increase (decrease) In share-based compensation | $ 22,200,000 | |||||||||||||||||||
CIC Plan | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Increase (decrease) In share-based compensation | $ 14,600,000 | $ 10,300,000 |
Stock-Based Compensation and _5
Stock-Based Compensation and Equity 2 (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Stock Options [Roll Forward] | ||||||
Outstanding at beginning of period (in shares) | 114 | 344 | 532 | |||
Granted (in shares) | 0 | 0 | 0 | |||
Exercised (in shares) | (114) | (230) | (188) | |||
Forfeited or expired (in shares) | 0 | 0 | 0 | |||
Outstanding at end of period (in shares) | 0 | 114 | 0 | 114 | 344 | |
Weighted Average Exercise Price [Abstract] | ||||||
Outstanding at beginning of period (in dollars per share) | $ 29.24 | $ 28.76 | $ 27.36 | |||
Granted (in dollars per share) | 0 | 0 | 0 | |||
Exercised (in dollars per share) | 29.24 | 28.53 | 24.79 | |||
Forfeited or expired (in dollars per share) | 0 | 0 | 0 | |||
Outstanding at end of period (in dollars per share) | $ 0 | $ 29.24 | $ 0 | $ 29.24 | $ 28.76 | |
Weighted Average Remaining Contractual Term [Abstract] | ||||||
Options outstanding, weighted-average remaining contractual life (in years) | 0 years | 5 months | 1 year 1 month 7 days | 1 year 9 months 4 days | ||
Outstanding at end of period (in years) | 0 years | 5 months | 1 year 1 month 7 days | 1 year 9 months 4 days | ||
Aggregate Intrinsic Value [Abstract] | ||||||
Outstanding at beginning of period | $ 21,476 | $ 52,797 | $ 89,373 | |||
Outstanding at end of period | $ 0 | $ 21,476 | 0 | $ 21,476 | 52,797 | |
Restricted Stock | ||||||
Aggregate Intrinsic Value [Abstract] | ||||||
Total unrecognized compensation costs | 85,000 | $ 85,000 | ||||
Weighted average period over which unrecognized compensation costs are expected to be recognized (in years) | 1 year 4 months 28 days | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Aggregate Intrinsic Value [Abstract] | ||||||
Total unrecognized compensation costs | 118,100 | $ 118,100 | ||||
Weighted average period over which unrecognized compensation costs are expected to be recognized (in years) | 1 year 8 months 12 days | |||||
Stock Options [Member] | ||||||
Aggregate Intrinsic Value [Abstract] | ||||||
Total intrinsic value of options exercised | $ 23,900 | $ 40,600 | $ 32,000 |
Stock-Based Compensation and _6
Stock-Based Compensation and Equity 3 (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted stock and restricted stock unit award [Roll Forward} | |||||||||||||||
Granted (in shares) | 2,320 | 2,395 | 2,345 | 2,420 | 2,395 | 2,455 | 2,415 | 2,465 | 2,395 | 2,445 | 2,425 | 2,550 | 2,000 | ||
Restricted stock awards, weighted average grant date fair value [Abstract] | |||||||||||||||
Granted (in dollars per share) | $ 283.52 | $ 254.81 | $ 252.25 | $ 228.87 | $ 209.79 | $ 201.88 | $ 196.24 | $ 195.61 | $ 210.59 | $ 210.29 | $ 191.67 | $ 156.12 | $ 214.78 | ||
Restricted Stock | |||||||||||||||
Restricted stock and restricted stock unit award [Roll Forward} | |||||||||||||||
Outstanding at beginning of period (in shares) | 882,000 | 1,161,000 | 1,366,000 | 882,000 | 1,161,000 | 1,366,000 | |||||||||
Granted (in shares) | 278,000 | 366,000 | 463,000 | ||||||||||||
Vested (in shares) | 0 | 0 | 0 | ||||||||||||
Released (in shares) | (474,000) | (645,000) | (668,000) | ||||||||||||
Forfeited or expired (in shares) | 0 | 0 | 0 | ||||||||||||
Outstanding at end of period (in shares) | 686,000 | 882,000 | 1,161,000 | 686,000 | 882,000 | 1,161,000 | |||||||||
Restricted stock awards, weighted average grant date fair value [Abstract] | |||||||||||||||
Outstanding at beginning of period (in dollars per share) | $ 179.95 | $ 164.77 | $ 142.61 | $ 179.95 | $ 164.77 | $ 142.61 | |||||||||
Granted (in dollars per share) | 239.26 | 195.85 | 168.94 | ||||||||||||
Vested (in dollars per share) | 0 | 0 | 0 | ||||||||||||
Released (in dollars per share) | 175.22 | 161.64 | 122.37 | ||||||||||||
Forfeited or expired (in dollars per share) | 0 | 0 | 0 | ||||||||||||
Outstanding at end of period (in dollars per share) | $ 207.25 | $ 179.95 | $ 164.77 | $ 207.25 | $ 179.95 | $ 164.77 | |||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||||
Restricted stock and restricted stock unit award [Roll Forward} | |||||||||||||||
Outstanding at beginning of period (in shares) | 630,000 | 562,000 | 435,000 | 630,000 | 562,000 | 435,000 | |||||||||
Granted (in shares) | 448,000 | 349,000 | 363,000 | ||||||||||||
Vested (in shares) | 0 | 0 | 0 | ||||||||||||
Released (in shares) | (292,000) | (252,000) | (214,000) | ||||||||||||
Forfeited or expired (in shares) | (37,000) | (29,000) | (22,000) | ||||||||||||
Outstanding at end of period (in shares) | 749,000 | 630,000 | 562,000 | 749,000 | 630,000 | 562,000 | |||||||||
Restricted stock awards, weighted average grant date fair value [Abstract] | |||||||||||||||
Outstanding at beginning of period (in dollars per share) | $ 170.73 | $ 170.73 | $ 156.18 | $ 170.73 | $ 170.73 | $ 156.18 | |||||||||
Granted (in dollars per share) | 243.72 | 196.54 | 173.28 | ||||||||||||
Vested (in dollars per share) | 0 | 0 | 0 | ||||||||||||
Released (in dollars per share) | 181.14 | 197.05 | 145.47 | ||||||||||||
Forfeited or expired (in dollars per share) | 210.76 | 180.27 | 170.36 | ||||||||||||
Outstanding at end of period (in dollars per share) | $ 220.54 | $ 170.73 | $ 170.73 | $ 220.54 | $ 170.73 | $ 170.73 |
Stock-Based Compensation and _7
Stock-Based Compensation and Equity 4 (Details) - $ / shares shares in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2015 | |
Options outstanding and exercisable [Abstract] | |||||
Options outstanding, number (in shares) | 0 | 114 | 344 | 532 | |
Options outstanding, weighted-average remaining contractual life (in years) | 0 years | 5 months | 1 year 1 month 7 days | 1 year 9 months 4 days | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 0 | $ 29.24 | $ 28.76 | $ 27.36 | |
$14.72—$14.72 | |||||
Options outstanding and exercisable [Abstract] | |||||
Range of exercise prices, minimum (in dollars per share) | 14.72 | ||||
Range of exercise prices, maximum (in dollars per share) | 14.72 | ||||
$28.41—$28.41 | |||||
Options outstanding and exercisable [Abstract] | |||||
Range of exercise prices, minimum (in dollars per share) | 28.41 | ||||
Range of exercise prices, maximum (in dollars per share) | 28.41 | ||||
$32.39—$32.39 | |||||
Options outstanding and exercisable [Abstract] | |||||
Range of exercise prices, minimum (in dollars per share) | 32.39 | ||||
Range of exercise prices, maximum (in dollars per share) | 32.39 | ||||
$32.54—$32.54 | |||||
Options outstanding and exercisable [Abstract] | |||||
Range of exercise prices, minimum (in dollars per share) | 32.54 | ||||
Range of exercise prices, maximum (in dollars per share) | 32.54 | ||||
$14.72—$32.54 | |||||
Options outstanding and exercisable [Abstract] | |||||
Range of exercise prices, minimum (in dollars per share) | 14.72 | ||||
Range of exercise prices, maximum (in dollars per share) | $ 32.54 |
Stock-Based Compensation and _8
Stock-Based Compensation and Equity 5 (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options and Restricted Stock Awards, non-employee directors in exchange for services [Abstract] | |||||||||||||||
Exercise price of options granted (in dollars per share) | $ 0 | $ 0 | $ 0 | ||||||||||||
Number of options granted (in shares) | 0 | 0 | 0 | ||||||||||||
Market value of restricted stock awards granted (in dollars per share) | $ 283.52 | $ 254.81 | $ 252.25 | $ 228.87 | $ 209.79 | $ 201.88 | $ 196.24 | $ 195.61 | $ 210.59 | $ 210.29 | $ 191.67 | $ 156.12 | $ 214.78 | ||
Number of restricted stock awards granted (in shares) | 2,320 | 2,395 | 2,345 | 2,420 | 2,395 | 2,455 | 2,415 | 2,465 | 2,395 | 2,445 | 2,425 | 2,550 | 2,000 |
Deferred Revenue and Performa_2
Deferred Revenue and Performance Obligations (Details) $ in Billions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 47.00% |
Deferred Revenue and Performa_3
Deferred Revenue and Performance Obligations - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability, revenue recognized | $ 163.8 | $ 138.3 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leases [Abstract] | |||
Total rent expense under operating lease agreements | $ 23,300 | $ 19,000 | $ 16,700 |
Future minimum annual rental commitments [Abstract] | |||
2,019 | 17,359 | ||
2,020 | 16,277 | ||
2,021 | 14,181 | ||
2,022 | 9,055 | ||
2,023 | 5,102 | ||
Thereafter | 10,254 | ||
Operating leases, future minimum payment due, Total | $ 72,228 |
Immaterial Correction of Prio_3
Immaterial Correction of Prior Period Financial Statements - Revisions (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Income before income taxes | $ 83,361 | $ 44,130 | $ 41,418 | |
Provision for income taxes | (18,221) | (30,075) | (12,178) | |
Net income | $ 65,140 | $ 14,055 | $ 29,240 | |
Basic (in dollars per share) | $ 2.11 | $ 0.47 | $ 1.01 | |
Diluted (in dollars per share) | $ 2.06 | $ 0.46 | $ 0.96 | |
Basic weighted average shares outstanding (in shares) | 30,854 | 29,791 | 28,976 | |
Diluted weighted average shares outstanding (in shares) | 31,578 | 30,799 | 30,414 | |
Unrealized gain (loss) on investments in marketable available for sale securities | $ 366 | $ (558) | $ (61) | |
Unrealized (loss) gain on foreign currency translation adjustments | (8,882) | 1,529 | 843 | |
Other comprehensive (loss) income, before tax | (8,516) | 971 | 782 | |
Income tax (provision) benefit related to items of other comprehensive income | (146) | 140 | 24 | |
Other comprehensive (loss) income, net of tax | (8,662) | 1,111 | 806 | |
Comprehensive income | 56,478 | 15,166 | 30,046 | |
Accumulated earnings | $ (207,521) | $ (125,788) | $ (142,382) | |
Restatement Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Accumulated earnings | 17,900 | |||
Scenario, Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Income before income taxes | 41,418 | |||
Provision for income taxes | (11,165) | |||
Net income | $ 30,253 | |||
Basic (in dollars per share) | $ 1.04 | |||
Diluted (in dollars per share) | $ 0.99 | |||
Basic weighted average shares outstanding (in shares) | 28,976 | |||
Diluted weighted average shares outstanding (in shares) | 30,414 | |||
Unrealized gain (loss) on investments in marketable available for sale securities | $ (61) | |||
Unrealized (loss) gain on foreign currency translation adjustments | 843 | |||
Other comprehensive (loss) income, before tax | 782 | |||
Income tax (provision) benefit related to items of other comprehensive income | 24 | |||
Other comprehensive (loss) income, net of tax | 806 | |||
Comprehensive income | $ 31,059 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
The Center For Generational Kinetics, LLC | ||
Related Party Transaction [Line Items] | ||
Marketing expense | $ 14,000 | $ 71,500 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan [Abstract] | |||
Employer contributions to the defined contribution plan | $ 15.8 | $ 13.1 | $ 10.5 |
Subsequent Events (Details)
Subsequent Events (Details) - Merger Agreement To Be Acquired - Hellman & Friedman - Subsequent Event $ / shares in Units, $ in Billions | Feb. 04, 2019USD ($)$ / shares |
Subsequent Event [Line Items] | |
Disposal group, including discontinued operation, consideration | $ | $ 11 |
Disposal group, including discontinued operation, consideration, price per share (in dollars per share) | $ / shares | $ 331.50 |
Uncategorized Items - ulti-2018
Label | Element | Value |
Accounting Standards Update 2016-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 39,746,000 |
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 39,746,000 |