Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Mar. 31, 2015 | Sep. 30, 2015 | 27-May-15 | |
Document And Entity Information | |||
Entity Registrant Name | 8X8 INC /DE/ | ||
Entity Central Index Key | 1023731 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Mar-15 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -28 | ||
Is Entity a Well-known Seasoned Issuer? | Yes | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $587,802,739 | ||
Entity Common Stock, Shares Outstanding | 88,152,273 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2015 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $53,110 | $59,159 |
Short-term investments | 123,984 | 47,181 |
Accounts receivable, net | 6,642 | 5,503 |
Inventory | 704 | 811 |
Deferred cost of goods sold | 428 | 263 |
Deferred tax asset | 4,454 | 2,065 |
Other current assets | 2,274 | 1,951 |
Total current assets | 191,596 | 116,933 |
Long-term investments | 0 | 72,021 |
Property and equipment, net | 10,248 | 7,711 |
Intangible assets, net | 12,260 | 15,095 |
Goodwill | 36,887 | 38,461 |
Non-current deferred tax asset | 43,169 | 47,797 |
Other assets | 1,464 | 1,185 |
Total assets | 295,624 | 299,203 |
Current liabilities: | ||
Accounts payable | 7,775 | 6,789 |
Accrued compensation | 6,183 | 4,583 |
Accrued warranty | 339 | 660 |
Accrued taxes | 2,800 | 2,323 |
Deferred revenue | 1,768 | 1,857 |
Other accrued liabilities | 2,965 | 1,909 |
Total current liabilities | 21,830 | 18,121 |
Non-current liabilities | 1,352 | 1,619 |
Non-current deferred revenue | 231 | 1,285 |
Total liabilities | 23,413 | 21,025 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: no shares at March 31, 2015 and 2014 | 0 | 0 |
Common stock, $0.001 par value: Authorized: 200,000,000 shares; Issued and outstanding: 88,065,528 shares and 88,525,015 shares at March 31, 2015 and 2014, respectively | 88 | 88 |
Additional paid-in capital | 378,971 | 384,325 |
Accumulated other comprehensive (loss) income | -2,109 | 430 |
Accumulated deficit | -104,739 | -106,665 |
Total stockholders' equity | 272,211 | 278,178 |
Total liabilities and stockholders' equity | $295,624 | $299,203 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
Stockholders' equity: | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 88,065,528 | 88,525,015 |
Common stock, shares outstanding | 88,065,528 | 88,525,015 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements Of Income | |||
Service revenue | $148,208 | $116,607 | $94,384 |
Product revenue | 14,205 | 11,990 | 9,402 |
Total revenue | 162,413 | 128,597 | 103,786 |
Operating expenses: | |||
Cost of service revenue | 29,701 | 22,445 | 19,928 |
Cost of product revenue | 15,863 | 15,170 | 11,801 |
Research and development | 15,118 | 11,633 | 8,147 |
Sales and marketing | 80,667 | 60,906 | 45,573 |
General and administrative | 18,182 | 15,368 | 8,558 |
Gain on patent sale | -1,000 | 0 | -12,965 |
Total operating expenses | 158,531 | 125,522 | 81,042 |
Income from operations | 3,882 | 3,075 | 22,744 |
Other income, net | 833 | 742 | 105 |
Income from continuing operations before provision for income taxes | 4,715 | 3,817 | 22,849 |
Provision for income taxes | 2,789 | 2,219 | 9,399 |
Income from continuing operations | 1,926 | 1,598 | 13,450 |
Income from discontinued operations, net of income tax provision | 0 | 320 | 489 |
Gain on disposal of discontinued operations, net of income tax provision of $456 | 0 | 596 | 0 |
Net income | $1,926 | $2,514 | $13,939 |
Income per share - continuing operations: | |||
Basic | $0.02 | $0.02 | $0.19 |
Diluted | $0.02 | $0.02 | $0.18 |
Income per share - discontinued operations: | |||
Basic | $0 | $0.01 | $0.01 |
Diluted | $0 | $0.01 | $0.01 |
Net income per share: | |||
Basic | $0.02 | $0.03 | $0.20 |
Diluted | $0.02 | $0.03 | $0.19 |
Weighted average number of shares: | |||
Basic | 89,071 | 78,310 | 71,390 |
Diluted | 91,652 | 81,658 | 74,700 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements Of Income | |||
Discontinued Operation, Tax Effect of Income from Disposal of Discontinued Operations | $0 | $456 | $0 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $1,926 | $2,514 | $13,939 |
Other comprehensive income (loss), net of tax | |||
Unrealized gain (loss) on investments in securities | -26 | -41 | 22 |
Foreign currency translation adjustment | -2,513 | 507 | 0 |
Comprehensive (loss) income | ($613) | $2,980 | $13,961 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock | Additional Paid-In Capital | Accumulated other Comprehensive Income (Loss) | Accumulated Deficit | Total |
In Thousands, except Share data | |||||
Beginning balance, amount at Mar. 31, 2012 | $71 | $241,555 | ($58) | ($123,118) | $118,450 |
Beginning balance, shares at Mar. 31, 2012 | 70,679,493 | ||||
Issuance of common stock under stock plans | 1 | 2,400 | 0 | 0 | 2,401 |
Issuance of common stock under stock plans, shares | 1,503,238 | ||||
Cost of issuance of common stock | 0 | -43 | 0 | 0 | -43 |
Repurchase of common stock | 0 | -419 | 0 | 0 | -419 |
Repurchase of common stock, shares | -73,751 | ||||
Stock-based compensation expense | 0 | 2,634 | 0 | 0 | 2,634 |
Income tax benefit from stock-based compensation | 0 | 49 | 0 | 0 | 49 |
Unrealized investment gain (loss) | 0 | 0 | 22 | 0 | 22 |
Foreign currency translation adjustment | 0 | ||||
Net income | 0 | 0 | 0 | 13,939 | 13,939 |
Ending balance, amount at Mar. 31, 2013 | 72 | 246,176 | -36 | -109,179 | 137,033 |
Ending balance, shares at Mar. 31, 2013 | 72,108,980 | ||||
Issuance of common stock under stock plans | 2 | 5,165 | 0 | 0 | 5,167 |
Issuance of common stock under stock plans, shares | 2,091,435 | ||||
Issuance of common stock, net of issuance costs | 14 | 125,736 | 0 | 0 | 125,750 |
Issuance of common stock, net of issuance costs, shares | 14,375,000 | ||||
Repurchase of common stock | 0 | -489 | 0 | 0 | -489 |
Repurchase of common stock, shares | -50,400 | ||||
Stock-based compensation expense | 0 | 7,595 | 0 | 0 | 7,595 |
Income tax benefit from stock-based compensation | 0 | 142 | 0 | 0 | 142 |
Unrealized investment gain (loss) | 0 | 0 | -41 | 0 | -41 |
Foreign currency translation adjustment | 0 | 0 | 507 | 0 | 507 |
Net income | 0 | 0 | 0 | 2,514 | 2,514 |
Ending balance, amount at Mar. 31, 2014 | 88 | 384,325 | 430 | -106,665 | 278,178 |
Ending balance, shares at Mar. 31, 2014 | 88,525,015 | ||||
Issuance of common stock under stock plans | 2 | 4,525 | 0 | 0 | 4,527 |
Issuance of common stock under stock plans, shares | 2,043,781 | ||||
Cost of issuance of common stock | 0 | -8 | 0 | 0 | -8 |
Repurchase of common stock | -2 | -19,369 | 0 | 0 | -19,371 |
Repurchase of common stock, shares | -2,503,268 | ||||
Stock-based compensation expense | 0 | 9,347 | 0 | 0 | 9,347 |
Income tax benefit from stock-based compensation | 0 | 151 | 0 | 0 | 151 |
Unrealized investment gain (loss) | 0 | 0 | -26 | 0 | -26 |
Foreign currency translation adjustment | 0 | 0 | -2,513 | 0 | -2,513 |
Net income | 0 | 0 | 0 | 1,926 | 1,926 |
Ending balance, amount at Mar. 31, 2015 | $88 | $378,971 | ($2,109) | ($104,739) | $272,211 |
Ending balance, shares at Mar. 31, 2015 | 88,065,528 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | |||
Net income | $1,926 | $2,514 | $13,939 |
Adjustments to reconcile net income to net cash provided by operating activites: | |||
Depreciation | 3,540 | 2,567 | 2,523 |
Amortization of intangibles | 2,232 | 1,643 | 1,428 |
Amortization of capitalized software | 341 | 147 | 0 |
Net accretion of discount and amortization of premium on marketable securities | 896 | 114 | 0 |
Gain on disposal of discontinued operations | 0 | -596 | 0 |
Gain on escrow settlement | 0 | -565 | 0 |
Stock-based compensation | 9,347 | 7,595 | 2,634 |
Tax benefit from stock-based compensation | -151 | -142 | -49 |
Deferred income tax provision | 2,390 | 2,266 | 9,308 |
Other | 256 | 650 | 616 |
Changes in assets and liabilities: | |||
Accounts receivable, net | -1,529 | -1,575 | -2,171 |
Inventory | 52 | -276 | 27 |
Other current and non-current assets | -196 | -488 | -30 |
Deferred cost of goods sold | -207 | 163 | -60 |
Accounts payable | 605 | -1,035 | 410 |
Accrued compensation | 1,632 | 488 | 524 |
Accrued warranty | -321 | 208 | 65 |
Accrued taxes | 490 | 276 | 440 |
Deferred revenue | -1,065 | 681 | 345 |
Other current and non-current liabilities | 1,002 | 282 | 1,839 |
Net cash provided by operating activities | 21,240 | 14,917 | 31,788 |
Cash flows from investing activities: | |||
Acquisitions of property and equipment | -5,826 | -2,853 | -5,678 |
Cost of capitalized software | -724 | -755 | -190 |
Purchase of investments | -106,021 | -141,604 | 0 |
Sales of investments | 36,764 | 24,219 | 0 |
Proceeds from maturities of investments | 63,546 | 0 | 0 |
Acquisition of business, net of cash acquired | 0 | -18,474 | 0 |
Proceeds from disposition of discontinued operations, net of transaction costs | 0 | 3,000 | 0 |
Net cash used in investing activities | -12,261 | -136,467 | -5,868 |
Cash flows from financing activities: | |||
Capital lease payments | -149 | -85 | -86 |
Repurchase of common stock | -19,371 | -489 | -419 |
Tax benefit from stock-based compensation | 151 | 142 | 49 |
Proceeds from (cost of) issuance of common stock, net of issuance costs | 0 | 125,750 | -43 |
Proceeds from issuance of common stock under employee stock plans | 4,455 | 5,167 | 2,458 |
Net cash (used in) provided by financing activities | -14,914 | 130,485 | 1,959 |
Effect of exchange rate changes on cash | -114 | -81 | 0 |
Net (decrease) increase in cash and cash equivalents | -6,049 | 8,854 | 27,879 |
Cash and cash equivalents at the beginning of the year | 59,159 | 50,305 | 22,426 |
Cash and cash equivalents at the end of the year | 53,110 | 59,159 | 50,305 |
Supplemental and non-cash disclosures: | |||
Acquisition of property and equipment, net in connection with acquisitions of businesses | 0 | 956 | 0 |
Acquisition of capital lease in connection with acquisitions of businesses | 0 | 216 | 0 |
Interest paid | 5 | 5 | 8 |
Income taxes paid | $159 | $427 | $415 |
THE_COMPANY_AND_SIGNIFICANT_AC
THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 12 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 1. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES |
THE COMPANY | |
8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. | |
The Company is a leading provider of VoIP technology and SaaS (Software as a service) communication solutions in the cloud for SMBs and mid-market and distributed enterprises. The Company delivers a broad suite of SaaS services to in-office and mobile devices spanning cloud telephony, virtual contact center and virtual meeting through its proprietary unified SaaS platform. The Company currently serves approximately 41,600 business customers with over 650,000 subscriptions, making it a leading provider of UCC services in the cloud. The Company's software abstracts complex networking, redundancy, security and interconnection requirements to provide a seamless and easy-to-use solution for its customers. The Company's software also integrates with leading enterprise resource planning, customer relationship management, or human capital management, and other third-party application suites, such as Salesforce.com and NetSuite, to provide organizations an integrated, fully functional business communications and collaboration experience that is critical to operate their businesses. | |
The Company's fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2015 refers to the fiscal year ended March 31, 2015). | |
Common Stock Offering | |
In November 2013, the Company completed an underwritten registered offering of common stock in which it sold 14,375,000 shares for total cash proceeds of approximately $125.8 million, net of issuance costs of $0.6 million. The shares issued in the offering had been registered under a shelf registration statement previously filed with the Securities and Exchange Commission relating to up to $250,000,000 of the Company's securities. A member of the Company's board of directors participated in the offering and purchased 30,000 shares at the public offering price. | |
Acquisition of Voicenet Solutions Limited | |
In November 2013, the Company entered into a share purchase agreement with the shareholders and optionholders of Voicenet Solutions Limited, a provider of cloud communications and collaboration services in the United Kingdom. See Note 13. | |
PRINCIPLES OF CONSOLIDATION | |
The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. | |
USE OF ESTIMATES | |
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to bad debts, returns reserve for expected cancellations, valuation of inventories, income and sales tax, and litigation and other contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities, and equity that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions. | |
REVENUE RECOGNITION | |
Service and Product Revenue | |
The Company recognizes service revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company defers recognition of service revenues in instances when cash receipts are received before services are delivered and recognizes deferred revenues ratably as services are provided. | |
The Company recognizes revenue from product sales for which there are no related services to be rendered upon shipment to customers provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, title has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements, and there are no remaining significant obligations. Gross outbound shipping and handling charges are recorded as revenue, and the related costs are included in cost of goods sold. Reserves for returns and allowances for customer sales are recorded at the time of shipment. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 605, Revenue Recognition, the Company records shipments to distributors, retailers, and resellers, where the right of return exists, as deferred revenue. The Company defers recognition of revenue on product sales to distributors, retailers, and resellers until the products have been sold to the end customer. | |
The Company records revenue net of any sales and service related taxes and mandatory government charges that are billed to its customers. The Company believes this approach results in consolidated financial statements that are more easily understood by users. | |
Under the terms of the Company's typical subscription agreement, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that are not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. | |
Multiple Element Arrangements | |
ASC 605-25, Revenue Recognition - Multiple Element Arrangements, requires that revenue arrangements with multiple deliverables be divided into separate units of accounting if the deliverables in the arrangement meet specific criteria. The provisioning of the 8x8 cloud service with the accompanying 8x8 IP telephone constitutes a revenue arrangement with multiple deliverables. For arrangements with multiple deliverables, the Company allocates the arrangement consideration to all units of accounting based on their relative selling prices. In such circumstances, the accounting principles establish a hierarchy to determine the relative selling price to be used for allocating arrangement consideration to units of accounting as follows: (i) vendor-specific objective evidence of fair value ("VSOE"), (ii) third-party evidence of selling price ("TPE"), and (iii) best estimate of the selling price ("BESP"). | |
VSOE generally exists only when the Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. When VSOE cannot be established, the Company attempts to establish the selling price of deliverables based on relevant TPE. TPE is determined based on manufacturer's prices for similar deliverables when sold separately, when possible. When the Company is unable to establish selling price using VSOE or TPE, it uses a BESP for the allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a stand-alone basis. BESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings. The Company determines BESP for a product or service by considering multiple factors including, but not limited to: | |
the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and | |
analysis of pricing history of new arrangements, including multiple element and stand-alone transactions. | |
In accordance with the guidance of ASC 605-25, when the Company enters into revenue arrangements with multiple deliverables the Company allocates arrangement consideration, including activation fees, among the 8x8 IP telephones and subscriber services based on their relative selling prices. Arrangement consideration allocated to the IP telephones that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized as product revenues during the period of the sale less the allowance for estimated returns during the 30-day trial period. Arrangement consideration allocated to subscriber services that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized ratably as service revenues as the related services are provided, which is generally over the initial contract term. | |
DEFERRED COST OF GOODS SOLD | |
Deferred cost of goods sold represents the cost of products sold for which the end customer or distributor has a right of return. The cost of the products sold is recognized contemporaneously with the recognition of revenue, when the subscriber has accepted the service. | |
CASH, CASH EQUIVALENTS AND INVESTMENTS | |
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Management determines the appropriate categorization of its investments at the time of purchase and reevaluates the classification at each reporting date. The cost of the Company's investments is determined based upon specific identification. | |
The Company's investments are comprised of mutual funds, commercial paper, corporate debt, municipal securities, asset backed securities, mortgage backed securities, international government securities, certificates of deposit and money market funds. At March 31, 2015 and 2014, all investments were classified as available-for-sale and reported at fair value, based either upon quoted prices in active markets, quoted prices in less active markets, or quoted market prices for similar investments, with unrealized gains and losses, net of related tax, if any, included in other comprehensive income (loss) and disclosed as a separate component of consolidated stockholders' equity. Realized gains and losses on sales of all such investments are reported within the caption of other income, net in the consolidated statements of income and computed using the specific identification method. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations. The Company's investments in marketable securities are monitored on a periodic basis for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. These available-for-sale investments are primarily held in the custody of a major financial institution. | |
ACCOUNTS RECEIVABLE ALLOWANCE | |
The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, and communications with its customers. Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible. | |
INVENTORY | |
Inventory is stated at the lower of standard cost, which approximates actual cost using the first-in, first-out method, or market. Any write-down of inventory to the lower of cost or market at the close of a fiscal period creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. On an on-going basis, the Company evaluates inventory for obsolescence and slow-moving items. This evaluation includes analysis of sales levels, sales projections, and purchases by item, as well as raw material usage related to the Company's manufacturing facilities. If the Company's review indicates a reduction in utility below carrying value, it reduces inventory to a new cost basis. If future demand or market conditions are different than the Company's current estimates, an inventory adjustment may be required, and would be reflected in cost of goods sold in the period the revision is made. | |
PROPERTY AND EQUIPMENT | |
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method. Estimated useful lives of three years are used for equipment and software and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the shorter of the remaining facility lease term or the estimated useful life of the improvements. | |
Maintenance, repairs and ordinary replacements are charged to expense. Expenditures for improvements that extend the physical or economic life of the property are capitalized. Gains or losses on the disposition of property and equipment are recorded in the Consolidated Statements of Income. | |
Construction in progress primarily relates to costs to acquire or internally develop software for internal use not fully completed as of March 31, 2015. | |
ACCOUNTING FOR LONG-LIVED ASSETS | |
The Company reviews the recoverability of its long-lived assets, such as property and equipment, definite lived intangibles or capitalized software, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset or a significant change in the operation or use of an asset. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate future cash flows and the fair value of long-lived assets. No such charges were recorded in the periods presented. | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Goodwill and intangible assets with indefinite useful lives are not amortized. Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations. The carrying value of goodwill and indefinite lived intangible assets are not amortized, but are tested annually for impairment and more often if there is an indicator of impairment. The Company has determined that it has two reporting units, and allocates goodwill to the reporting units for the purposes of the annual test for impairment. | |
The Company's annual goodwill impairment test is performed on January 1 each year. No goodwill impairment charges were recorded in the periods presented. | |
Intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. Amortization expense for the customer relationship intangible asset is included in sales and marketing expenses. Amortization expense for technology is included in cost of service revenue. | |
WARRANTY EXPENSE | |
The Company accrues for estimated product warranty cost upon revenue recognition. Accruals for product warranties are calculated based on the Company's historical warranty experience adjusted for any specific requirements. | |
RESEARCH, DEVELOPMENT AND SOFTWARE COSTS | |
The Company accounts for software to be sold or otherwise marketed in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed (ASC 985-20) which requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. The Company defines establishment of technological feasibility as the completion of a working model. Software development costs for software to be sold or otherwise marketed incurred prior to the establishment of technological feasibility are included in research and development and are expensed as incurred. Software development costs incurred subsequent to the establishment of technological feasibility through the period of general market availability of the product are capitalized, if material. | |
In fiscal 2015 and 2014, the Company capitalized approximately $0 and $0.8 million, respectively, of software development costs in accordance with ASC 985-20. At March 31, 2015 and 2014, total capitalized software development costs included in other long-term assets was approximately $1.0 million, and accumulated amortization costs related to capitalized software was approximately $0.5 million and $0.1 million, respectively. | |
The Company accounts for computer software developed or obtained for internal use in accordance with ASC 350-40, Internal Use Software (ASC 350-40), which requires capitalization of certain software development costs incurred during the application development stage. In fiscal 2015, the Company capitalized $1.5 million in accordance with ASC 350-40, of which $0.8 million is classified as property and equipment and $0.7 million is classified as long-term assets. In fiscal 2014, no such costs were capitalized. At March 31, 2015, the projects had not yet been placed into service, and accordingly no amortization has been recognized. | |
ADVERTISING COSTS | |
Advertising costs are expensed as incurred and were $6.8 million, $7.3 million and $6.5 million for the years ended March 31, 2015, 2014 and 2013, respectively. | |
FOREIGN CURRENCY TRANSLATION | |
The Company has determined that the functional currency of its UK foreign subsidiary is the subsidiary's local currency, the British Pound Sterling, which the Company believes most appropriately reflects the current economic facts and circumstances of the UK subsidiary's operations. The assets and liabilities of the subsidiary are translated at the applicable exchange rate as of the end of the balance sheet period and revenue and expenses are translated at an average rate over the period presented. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the stockholder's equity in the consolidated balance sheets. | |
BUSINESS SEGMENTS | |
The Company has one reportable operating segment. The Company's chief operating decision makers, the Chief Executive Officer, Chief Financial Officer, and Chief Technology Officer, evaluate performance of the Company and makes decisions regarding allocation of resources based on total Company results (see Note 12). | |
SUBSCRIBER ACQUISITION COSTS | |
Subscriber acquisition costs are expensed as incurred and include the advertising, marketing, promotions, commissions, rebates and equipment subsidy costs associated with the Company's efforts to acquire new subscribers. | |
INCOME TAXES | |
Income taxes are accounted for using the asset and liability approach. Under the asset and liability approach, a current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current year. A deferred tax liability or asset is recognized for the estimated future tax effects attributed to temporary differences and carryforwards. If necessary, the deferred tax assets are reduced by the amount of benefits that, based on available evidence, is more likely than not expected to be realized. | |
CONCENTRATIONS | |
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments and trade accounts receivable. The Company has cash equivalents and investment policies that limit the amount of credit exposure to any one financial institution and restrict placement of these funds to financial institutions evaluated as highly credit-worthy. The Company has not experienced any material losses relating to its investment instruments. | |
The Company sells its products to business customers and distributors. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral from its customers. At March 31, 2015 and 2014, no customer accounted for more than 10% of accounts receivable. | |
The Company outsources the manufacturing of its hardware products to independent contract manufacturers. The inability of any contract manufacturer to fulfill supply requirements of the Company could materially impact future operating results, financial position or cash flows. If any of these contract manufacturers fail to perform on their obligations to the Company, such failure to fulfill supply requirements of the Company could materially impact future operating results, financial position and cash flows. | |
The Company also relies primarily on third party network service providers to provide telephone numbers and PSTN call termination and origination services for its customers. If these service providers failed to perform their obligations to the Company, such failure could materially impact future operating results, financial position and cash flows. | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact. | |
The accounting guidance for fair value measurement requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. | |
The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: | |
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | |
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). | |
Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company's own assumptions. | |
The estimated fair value of financial instruments is determined by the Company using available market information and valuation methodologies considered to be appropriate. The carrying amounts of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company's investments are carried at fair value. | |
ACCOUNTING FOR STOCK-BASED COMPENSATION | |
The Company accounts for its employee stock options, stock purchase rights, restricted stock units and restricted performance stock units granted under the 1996 Stock Plan, 1996 Director Option Plan, the 2006 Stock Plan, the 2003 Contactual Plan, the 2012 Equity Incentive Plan, the 2013 New Employee Inducement Incentive Plan and stock purchase rights under the 1996 Employee Stock Purchase Plan (collectively "Equity Compensation Plans") under the provisions of ASC 718 - Stock Compensation. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity grant), net of estimated forfeitures. | |
To value option grants, stock purchase rights and restricted stock units under the Equity Compensation Plans for stock-based compensation the Company used the Black-Scholes option valuation model. Fair value determined using the Black-Scholes option valuation model varies based on assumptions used for the expected stock prices volatility, expected life, risk free interest rates and future dividend payments. For fiscal years 2015, 2014 and 2013, the Company used the historical volatility of its stock over a period equal to the expected life of the options. The expected life assumptions represent the weighted-average period stock-based awards are expecting to remain outstanding. These expected life assumptions were established through the review of historical exercise behavior of stock-based award grants with similar vesting periods. The risk free interest is based on the closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the expected term of the option. The dividend yield assumption is based on the Company's history and expectation of future dividend payout. Compensation expense for stock-based payment awards is recognized using the straight-line single-option method and includes the impact of estimated forfeitures. | |
The Company issued restricted performance stock units to a group of executives with vesting that is contingent on both market performance and continued service. For the market-based restricted performance stock units issued during the fiscal year ended March 31, 2015: | |
the number of shares of the Company's stock to be received at vesting if applicable service requirements are also met will range from 0% to 100% of the target amount based total shareholder return ("TSR"), which compares the performance of the price per share of the Company's common stock with the NASDAQ Composite Index ("Index") for the three performance periods ending March 31, 2016, March 31, 2017 and March 31, 2018, for the fiscal year ended March 31, 2015; and for the three performance periods ending March 31, 2015, March 31, 2016 and March 31, 2017 for the fiscal year ended March 31, 2014, in the following manner: where in each such measurement period, (1) if the performance return on the price per share of the Company's common stock exceeds the performance return on the NASDAQ Composite Index, (which shall be determined by subtracting the percentage return on the NASDAQ Composite Index from the percentage return on the price per share of the Common Stock), then all of the TSR Performance Shares for such measurement period will be deemed earned and will vest; (2) if the performance return on the price per share of Common Stock is more than 50% lower than the performance return on the NASDAQ Composite Index, then none of the TSR Performance Shares for such measurement period will be deemed earned and will vest; and (3) if the performance return on the price per share of Common Stock is between 0% and 50% lower than the performance return on the NASDAQ Composite Index, then the number of TSR Performance Shares deemed earned and vesting for such measurement period will be reduced by 2% for each 1% by which the performance return on the NASDAQ Composite Index exceeds the performance return on the Common Stock, and | |
the number of shares of the Company's stock to be received at vesting will range from 0% or 100% of the target amount based on four tranches, with each tranche vesting at the later of (a) the satisfaction of the applicable service-based vesting requirement for that tranche, and (b) on the first date that the average stock price of the Company's common stock for a consecutive 30 trading day period exceeds 150% of the grant date stock price. The minimum service vesting requirement for each tranche is as follows: | |
Tranche 1: One year following the date of the grant | |
Tranche 2: Two years following the date of the grant | |
Tranche 3: Three years following the date of the grant | |
Tranche 4: Four years following the date of the grant | |
To value these market-based restricted performance stock units under the Equity Compensation Plans, the Company used a Monte Carlo simulation model on the date of grant. Fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and the NASDAQ Composite Index, risk free interest rates, and future dividend payments. The Company used the historical volatility and correlation of our stock and the Index over a period equal to the remaining performance period as of the grant date. The risk-free interest rate was based on the closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the remaining performance period as of the grant date. The dividend yield assumption was based on our history and expectation of future dividend payout. Compensation expense for restricted stock units with performance and market conditions is recognized over the requisite service period using the straight-line method on a tranche by tranche basis and includes the impact of estimated forfeitures. | |
In October 2013, the board of directors approved the modification of unvested stock options to purchase 74,479 shares of common stock and unvested stock purchase rights totaling 37,000 shares of common stock held by the Company's president upon his resignation. The options held by the Company's president upon his resignation, taken as a whole, had a weighted average exercise price of $4.05 per share and range from $2.72 to $5.87 per share, and a weighted average remaining vesting term of 0.5 years. Approximately $1.1 million of the $7.6 million of stock-based compensation charge in fiscal year 2014 applied to the options held by the former president of the Company and was recorded in general and administrative expenses. | |
COMPREHENSIVE (LOSS) INCOME | |
Comprehensive (loss) income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. The difference between net income and comprehensive (loss) income is due to foreign currency translation adjustments and unrealized gains or losses on investments classified as available-for-sale. | |
NET INCOME PER SHARE | |
Basic net income per share is computed by dividing net income available to common stockholders (numerator) by the weighted average number of vested, unrestricted common shares outstanding during the period (denominator). Diluted net income per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and employee restricted purchase rights. | |
DEFERRED RENT | |
In April 2012, the Company entered into an 87-month lease agreement for its new headquarters. Under the terms of the lease agreement: | |
the Company received a three month rent holiday from rental payments; | |
base rent is $130,821 for the 15 months after the rent holiday; and | |
rent expense increases 3% each year thereafter. | |
In the second quarter of fiscal 2013, the Company received a $1.7 million allowance for reimbursement for the cost of tenant improvements that the Company included in cash flows from operating activities. In accordance with the guidance in ASC 840-20, Leases, the Company accounts for its headquarters facility operating lease as follows: | |
Rent Holidays. The Company recognizes the related rent expense on a straight-line basis at the earlier of the first rent payment or the date of possession of the leased property. The difference between the amounts charged to expense and the rent paid is recorded as deferred lease incentives and amortized over the lease term. | |
Rent Escalations. The Company recognizes escalating rent provisions on a straight-line basis over the lease term. The difference between the amounts charged to expense and the rent paid is recorded as deferred lease incentives and amortized over the lease term. | |
Tenant Improvement Allowance. The tenant improvement allowance is deferred and amortized on a straight-line basis over the life of the lease as a reduction to rent expense. | |
At March 31, 2015, total deferred rent included in other accrued liabilities and non-current liabilities was $0.3 million and $1.3 million, respectively. At March 31, 2014, total deferred rent included in other accrued liabilities and non-current liabilities was $0.2 million and $1.6 million, respectively. | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
In April 2014, the FASB issued Accounting Standards Update (ASU) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the requirements for reporting discontinued operations in FASB ASU 205-20, such that a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. This ASU requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position, as well as additional disclosures about discontinued operations. Additionally, the ASU requires disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements and expands the disclosures about an entity's significant continuing involvement with a discontinued operation. The accounting update is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. The adoption is not expected to have a material impact on the Company's results of operations, cash flows or financial position. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and the IASB has issued IFRS 15, Revenue from Contracts with Customers. The issuance of these documents completes the joint effort by the FASB and the IASB to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and IFRS. The new guidance affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements. | |
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation-Stock Compensation, as it relates to such awards. ASU 2014-12 is effective for us in our first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements. | |
In April 2015, the FASB issued ASU 2015-05, Intangibles -Goodwill and Other -Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provide guidance to customers about whether a cloud computing arrangement includes a software license. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements. | |
CASH_CASH_EQUIVALENTS_AND_INVE
CASH, CASH EQUIVALENTS AND INVESTMENTS - Note 2 | 12 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||
CASH, CASH EQUIVALENTS AND INVESTMENTS - Note 2 | 2. CASH, CASH EQUIVALENTS AND INVESTMENTS | |||||||||||||||||||||
Cash, cash equivalents, and available-for-sale investments were (in thousands): | ||||||||||||||||||||||
Gross | Gross | Cash and | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | Cash | Short-Term | |||||||||||||||||
As of March 31, 2015 | Costs | Gain | Loss | Fair Value | Equivalents | Investments | ||||||||||||||||
Cash | $ | 24,734 | $ | - | $ | - | $ | 24,734 | $ | 24,734 | $ | - | ||||||||||
Level 1: | ||||||||||||||||||||||
Money market funds | 28,376 | - | - | 28,376 | 28,376 | - | ||||||||||||||||
Mutual funds | 2,000 | - | -107 | 1,893 | - | 1,893 | ||||||||||||||||
Subtotal | 55,110 | - | -107 | 55,003 | 53,110 | 1,893 | ||||||||||||||||
Level 2: | ||||||||||||||||||||||
Commercial paper | 9,043 | 1 | - | 9,044 | - | 9,044 | ||||||||||||||||
Corporate debt | 75,284 | 57 | -10 | 75,331 | - | 75,331 | ||||||||||||||||
Municipal securities | 5,435 | 2 | -1 | 5,436 | - | 5,436 | ||||||||||||||||
Asset backed securities | 21,503 | 4 | -5 | 21,502 | - | 21,502 | ||||||||||||||||
Mortgage backed securities | 5,822 | - | -52 | 5,770 | - | 5,770 | ||||||||||||||||
Agency bond | 4,201 | 3 | - | 4,204 | - | 4,204 | ||||||||||||||||
International government securities | 800 | 4 | - | 804 | - | 804 | ||||||||||||||||
Subtotal | 122,088 | 71 | -68 | 122,091 | - | 122,091 | ||||||||||||||||
Total | $ | 177,198 | $ | 71 | $ | -175 | $ | 177,094 | $ | 53,110 | $ | 123,984 | ||||||||||
Gross | Gross | Cash and | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | Cash | Short-Term | Long-Term | ||||||||||||||||
As of March 31, 2014 | Costs | Gain | Loss | Fair Value | Equivalents | Investments | Investments | |||||||||||||||
Cash | $ | 26,548 | $ | - | $ | - | $ | 26,548 | $ | 26,548 | $ | - | $ | - | ||||||||
Level 1: | ||||||||||||||||||||||
Money market funds | 32,611 | - | - | 32,611 | 32,611 | - | - | |||||||||||||||
Mutual funds | 1,964 | - | -55 | 1,909 | - | 1,909 | - | |||||||||||||||
Subtotal | 61,123 | - | -55 | 61,068 | 59,159 | 1,909 | - | |||||||||||||||
Level 2: | ||||||||||||||||||||||
Commercial paper | 30,374 | 5 | - | 30,379 | - | 30,379 | - | |||||||||||||||
Corporate debt | 63,621 | 35 | -39 | 63,617 | - | 14,893 | 48,724 | |||||||||||||||
Municipal securities | 5,435 | 5 | -1 | 5,439 | - | - | 5,439 | |||||||||||||||
Asset backed securities | 17,049 | 6 | -1 | 17,054 | - | - | 17,054 | |||||||||||||||
International government securities | 800 | 4 | - | 804 | - | - | 804 | |||||||||||||||
Subtotal | 117,279 | 55 | -41 | 117,293 | - | 45,272 | 72,021 | |||||||||||||||
Total | $ | 178,402 | $ | 55 | $ | -96 | $ | 178,361 | $ | 59,159 | $ | 47,181 | $ | 72,021 | ||||||||
Contractual maturities of investments as of March 31, 2015 are set forth below (in thousands): | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||
Due within one year | $ | 69,502 | ||||||||||||||||||||
Due after one year | 54,482 | |||||||||||||||||||||
Total | $ | 123,984 | ||||||||||||||||||||
INVENTORIES_Note_3
INVENTORIES - Note 3 | 12 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Notes to Financial Statements | |||||||
INVENTORIES - Note 3 | 3. INVENTORIES | ||||||
Components of inventories were as follows: | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
(in thousands) | |||||||
Work-in-process | $ | 169 | $ | 23 | |||
Finished goods | 535 | 788 | |||||
$ | 704 | $ | 811 | ||||
PROPERTY_AND_EQUIPMENT_Note_4
PROPERTY AND EQUIPMENT - Note 4 | 12 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Property, Plant and Equipment [Abstract] | |||||||
PROPERTY AND EQUIPMENT - Note 4 | 4. PROPERTY AND EQUIPMENT | ||||||
Property and equipment consisted of the following: | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
(in thousands) | |||||||
Machinery and computer equipment | $ | 16,099 | $ | 9,557 | |||
Furniture and fixtures | 759 | 505 | |||||
Licensed software | 4,696 | 3,517 | |||||
Leasehold improvements | 3,812 | 3,468 | |||||
Construction in progress | 942 | - | |||||
26,308 | 17,047 | ||||||
Less: accumulated depreciation and amortization | -16,060 | -9,336 | |||||
$ | 10,248 | $ | 7,711 | ||||
INTANGIBLE_ASSETS_Note_5
INTANGIBLE ASSETS - Note 5 | 12 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||
INTANGIBLE ASSETS - Note 5 | 5. INTANGIBLE ASSETS | |||||||||||||||||
The carrying value of intangible assets consisted of the following (in thousands): | ||||||||||||||||||
31-Mar-15 | 31-Mar-14 | |||||||||||||||||
Gross | Gross | |||||||||||||||||
Carrying | Accumulated | Net Carrying | Carrying | Accumulated | Net Carrying | |||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||
Technology | $ | 8,242 | $ | -2,905 | $ | 5,337 | $ | 8,242 | $ | -2,080 | $ | 6,162 | ||||||
Customer relationships | 9,686 | -3,720 | 5,966 | 9,686 | -1,710 | 7,976 | ||||||||||||
Trade names/domains | 957 | - | 957 | 957 | - | 957 | ||||||||||||
Total acquired identifiable | ||||||||||||||||||
intangible assets | $ | 18,885 | $ | -6,625 | $ | 12,260 | $ | 18,885 | $ | -3,790 | $ | 15,095 | ||||||
At March 31, 2015, annual amortization of intangible assets, based upon our existing intangible assets and current useful lives, is estimated to be the following (in thousands): | ||||||||||||||||||
Amount | ||||||||||||||||||
2016 | $ | 2,159 | ||||||||||||||||
2017 | 2,152 | |||||||||||||||||
2018 | 1,904 | |||||||||||||||||
2019 | 1,658 | |||||||||||||||||
2020 | 1,658 | |||||||||||||||||
Thereafter | 1,772 | |||||||||||||||||
Total | $ | 11,303 | ||||||||||||||||
GOODWILL_Note_6
GOODWILL - Note 6 | 12 Months Ended | |||
Mar. 31, 2015 | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
GOODWILL - Note 6 | 6. GOODWILL | |||
The following table provides a summary of the changes in the carrying amounts of goodwill (in thousands): | ||||
Balance as of March 31, 2013 | $ | 25,150 | ||
Increase in goodwill related to acquisitions | 14,155 | |||
Decrease in goodwill related to disposal of discontinued operations | -1,210 | |||
Foreign currency translation | 366 | |||
Balance as of March 31, 2014 | 38,461 | |||
Foreign currency translation | -1,574 | |||
Balance as of March 31, 2015 | $ | 36,887 | ||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES - Note 7 | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Notes to Financial Statements | ||||||||||
COMMITMENTS AND CONTINGENCIES - Note 7 | 7. COMMITMENTS AND CONTINGENCIES | |||||||||
Guarantees | ||||||||||
Indemnifications | ||||||||||
In the normal course of business, the Company may agree to indemnify other parties, including customers, lessors and parties to other transactions with the Company, with respect to certain matters such as breaches of representations or covenants or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors. | ||||||||||
It is not possible to determine the maximum potential amount of the Company's exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company's operating results, financial position or cash flows. Under some of these agreements, however, the Company's potential indemnification liability might not have a contractual limit. | ||||||||||
Product Warranties | ||||||||||
The Company accrues for the estimated costs that may be incurred under its product warranties upon revenue recognition. Changes in the Company's product warranty liability, which is included in cost of product revenues in the consolidated statements of income were as follows (in thousands): | ||||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Balance at beginning of year | $ | 660 | $ | 452 | $ | 387 | ||||
Accruals for warranties | 185 | 953 | 611 | |||||||
Settlements | -364 | -745 | -546 | |||||||
Changes in estimate | -142 | - | - | |||||||
Balance at end of year | $ | 339 | $ | 660 | $ | 452 | ||||
Leases | ||||||||||
The Company leases its headquarters facility in San Jose, California under an operating lease agreement that expires in October 2019. The lease is an industrial net lease with monthly base rent of $130,821 for the first 15 months with a 3% increase each year thereafter, and requires us to pay property taxes, utilities and normal maintenance costs. | ||||||||||
The Company leases its UK headquarters in Aylesbury UK under operating lease agreements that expires in March 2017. The lease was amended in September 2014 for additional space. The lease has a base monthly rent of approximately $7,800 until March 2015, rising to approximately $8,800 thereafter, and requires us to pay property taxes, service charges, utilities and normal maintenance costs. The Company also leases office space in London UK under an operating lease agreement that expires in April 2019. The lease has a base monthly rent of approximately $6,700 until March 2016, rising to approximately $7,100 thereafter. | ||||||||||
At March 31, 2015, future minimum annual lease payments under non-cancelable operating leases were as follows (in thousands): | ||||||||||
Year ending March 31: | ||||||||||
2016 | $ | 1,913 | ||||||||
2017 | 1,977 | |||||||||
2018 | 1,872 | |||||||||
2019 | 1,926 | |||||||||
2020 and Thereafter | 1,100 | |||||||||
Total | $ | 8,788 | ||||||||
Rent expense for the years ended March 31, 2015, 2014 and 2013 was $1.8 million, $1.5 million and $1.2 million, respectively. | ||||||||||
Capital Leases | ||||||||||
The Company has non-cancelable capital lease agreements for office equipment bearing interest at various rates. At March 31, 2015, future minimum annual lease payments under non-cancelable capital leases were as follows (in thousands): | ||||||||||
Year ending March 31: | ||||||||||
2016 | $ | 29 | ||||||||
Total minimum payments | 29 | |||||||||
Less: Amount representing interest | -4 | |||||||||
25 | ||||||||||
Less: Short-term portion of capital lease obligations | -25 | |||||||||
Long-term portion of capital lease obligations | $ | - | ||||||||
Capital leases included in office equipment were approximately $0.5 million and $0.6 million at March 31, 2015 and 2014, respectively. Total accumulated amortization was approximately $0.3 million and $0.4 million at March 31, 2015 and 2014, respectively. Amortization expense for assets recorded under capital leases is included in depreciation expense. | ||||||||||
Minimum Third Party Customer Support Commitments | ||||||||||
In the third quarter of 2010, the Company amended its contract with one of its third party customer support vendors containing a minimum monthly commitment of approximately $0.4 million effective April 1, 2010. The agreement requires a 150-day notice to terminate. At March 31, 2015, the total remaining obligation under the contract was $2.2 million. | ||||||||||
Minimum Third Party Network Service Provider Commitments | ||||||||||
The Company entered into contracts with multiple vendors for third party network service which expire on various dates in fiscal 2016 through 2018. At March 31, 2015, future minimum annual payments under these third party network service contracts were as follows (in thousands): | ||||||||||
Year ending March 31: | ||||||||||
2016 | $ | 3,014 | ||||||||
2017 | 2,452 | |||||||||
2018 | 891 | |||||||||
Total minimum payments | $ | 6,357 | ||||||||
Legal Proceedings | ||||||||||
The Company, from time to time, is involved in various legal claims or litigation, including patent infringement claims that can arise in the normal course of the Company's operations. Pending or future litigation could be costly, could cause the diversion of management's attention and could upon resolution, have a material adverse effect on the Company's business, results of operations, financial condition and cash flows. | ||||||||||
On February 22, 2011, the Company was named a defendant in a lawsuit, Bear Creek Technologies, Inc. v. 8x8, Inc. et al., along with 20 other defendants. On August 17, 2011, the suit was dismissed without prejudice as to the Company under Rule 21 of the Federal Rules of Civil Procedure. On August 17, 2011, Bear Creek Technologies, Inc. refiled its suit against the Company in the United States District Court for the District of Delaware. Further, on November 28, 2012, the U.S. Patent & Trademark Office initiated a Reexamination proceeding with a Reexamination Declaration explaining that there is a substantial new question of patentability, based on four separate grounds and affecting each claim of the patent which is the basis for the complaint filed against us. On March 26, 2013, the USPTO issued a first Office Action in the Reexamination, with all claims of the '722 patent being rejected on each of the four separate grounds raised in the Request for Reexamination. On July 10, 2013, the Company filed an informational pleading in support of and joining a motion to stay the proceeding in the District Court; the District Court granted the motion on July 17, 2013, based on the possibility that at least one of the USPTO rejections will be upheld and considering the USPTO's conclusion that Bear Creek's patent suffers from a defective claim for priority. On March 24, 2014, the USPTO issued another Office Action in which the rejections of the claims were maintained. On August 15, 2014, the USPTO issued a Right of Appeal Notice, as the USPTO maintained all rejections of the patent claims. On September 15, 2014, Bear Creek Technologies, Inc. filed a Notice of Appeal of this decision with the Patent Trial and Appeal Board. The case is currently on appeal. The Company believes that it has meritorious defenses to these claims and is presenting a vigorous defense, but we cannot estimate potential liability in this case at this early stage of litigation. | ||||||||||
On March 31, 2014, the Company was named as a defendant in a lawsuit, CallWave Communications LLC (CallWave) v. 8x8, Inc. CallWave also sued Fonality Inc. on March 31, 2014, and previously had sued other companies including Verizon, Google, T-Mobile, and AT&T. The Company answered the complaint and filed counterclaims in response thereto. Thereafter, CallWave made numerous demands that 8x8 pay CallWave cash consideration for settling the suit. On April 21, 2015, the Company filed papers to present numerous counterclaims including patent misuse. On or about May 26, 2015, the parties concluded negotiations regarding CallWave’s cash-payment demands and agreed to settle all claims in the suit (and potential future claims) under confidential terms which await finalization by filing dismissal papers with the Court. As part of the settlement, the Company agreed to pay CallWave in a manner which the Company recognized as general and administrative expense in the statements of income as of March 31, 2015, as the Company determined the settlement consideration to be commensurate with a loss contingency, and the amount was probable and estimable. At March 31, 2015, the Company accrued a loss contingency related to this litigation and to other patent-related issues in current other accrued liabilities in the consolidated balance sheets. | ||||||||||
On December 31, 2014, the Company was named as a defendant in a lawsuit, Adaptive Data, LLC v. 8x8, Inc. Adaptive Data, LLC also sued another 36 other defendants on December 31, 2014 and another 16 defendants on January 5, 2015 regarding the same patents asserted in our case. Service of process has not yet been effected on the Company. | ||||||||||
On April 15, 2015, the Company was named as a defendant in a lawsuit, UrgenSync, LLC v. 8x8, Inc. UrgenSync, LLC also sued another 14 other defendants on the same day regarding the same patent asserted in the complaint filed against 8x8. | ||||||||||
On April 16, 2015, the Company was named as a defendant in a lawsuit, Slocumb Law Firm v. 8x8, Inc. The Slocumb Law Firm alleges that it purchased certain business services from the Company that did not perform as advertised or expected, asserts causes of actions for fraud, breach of contract, violations of the Alabama Deceptive Trade Practices Act and negligence. On May 7, 2015, the Company filed a motion with the Alabama Federal Court seeking an order compelling the Slocumb Law Firm to arbitrate its claims against the Company in Santa Clara County, California pursuant to a clause mandating arbitration of disputes set forth in the terms and conditions to which Slocumb Law Firm agreed in connection with its purchase of business services from the Company. No briefing schedule or hearing date for the motion has been set as of this time. Discovery has not yet commenced in the case. The Company intends to vigorously defend against Slocumb Law Firm's claims. | ||||||||||
State and Municipal Taxes | ||||||||||
From time to time, the Company has received inquiries from a number of state and municipal taxing agencies with respect to the remittance of taxes. Several jurisdictions currently are conducting tax audits of the Company's records. The Company collects or has accrued for taxes that it believes are required to be remitted. The amounts that have been remitted have historically been within the accruals established by the Company. | ||||||||||
Regulatory | ||||||||||
VoIP communication services, like the Company's, are subject to less regulation at the federal level than traditional telecommunication services and states are preempted from regulating such services. Many regulatory actions are underway or are being contemplated by federal and state authorities, including the FCC, and state regulatory agencies. The FCC initiated a notice of public rule-making in early 2004 to gather public comment on the appropriate regulatory environment for IP telephony which would include the services we offer. In November 2004, the FCC ruled that the VoIP service of a competitor and "similar" services are jurisdictionally interstate and not subject to state certification, tariffing and other legacy telecommunication carrier regulations. | ||||||||||
The effect of any future laws, regulations and the orders on the Company's operations, including, but not limited to, the 8x8 service, cannot be determined. But as a general matter, increased regulation and the imposition of additional funding obligations increases the Company's costs of providing service that may or may not be recoverable from the Company's customers which could result in making the Company's services less competitive with traditional telecommunications services if the Company increases its retail prices or decreases the Company's profit margins if it attempts to absorb such costs. | ||||||||||
STOCKHOLDERS_EQUITY_Note_8
STOCKHOLDERS' EQUITY - Note 8 | 12 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||
STOCKHOLDERS' EQUITY - Note 8 | 8. STOCKHOLDERS' EQUITY | |||||||||||||||||||
1996 Stock Plan | ||||||||||||||||||||
In June 1996, the Company's board of directors adopted the 1996 Stock Plan ("1996 Plan"). A total of 12,035,967 shares were reserved for issuance under the 1996 Plan prior to its expiration in June 2006. As of March, 31, 2015, there are no shares available for future grants under the 1996 Plan. The 1996 Plan provided for granting incentive stock options to employees and nonstatutory stock options to employees, directors or consultants. The stock option price of incentive stock options granted could not be less than the determined fair market value at the date of grant. Options generally vested over four years and had a ten-year term. | ||||||||||||||||||||
1996 Director Option Plan | ||||||||||||||||||||
The Company's 1996 Director Option Plan ("Director Plan") was adopted in June 1996 and became effective in July 1997. A total of 1,650,000 shares of common stock were reserved for issuance under the Director Plan prior to its expiration in June 2006. As of March 31, 2015 there are no shares available for future grants under the Director Plan. The Director Plan provided for both discretionary and periodic grants of nonstatutory stock options to non-employee directors of the Company (the "Outside Directors"). The exercise price per share of all options granted under the Director Plan was equal to the fair market value of a share of the Company's common stock on the date of grant. Options generally vested over a period of four years. Options granted to Outside Directors under the Director Plan had a ten year term, or shorter upon termination of an Outside Director's status as a director. | ||||||||||||||||||||
2006 Stock Plan | ||||||||||||||||||||
In May 2006, the Company's board of directors approved the 2006 Stock Plan ("2006 Plan"). The Company's stockholders subsequently adopted the 2006 Plan in September 2006, and the 2006 Plan became effective in October 2006. The Company reserved 7,000,000 shares of the Company's common stock for issuance under this plan. As of March 31, 2015, 201,336 shares remained available for future grants under the 2006 Plan. The 2006 Plan provides for granting incentive stock options to employees and nonstatutory stock options to employees, directors or consultants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2006 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options generally vest over four years and expire ten years after grant. In 2009, the 2006 Plan was amended to provide for the granting of stock purchase rights. The 2006 Plan expires in May 2016. | ||||||||||||||||||||
2003 Contactual Plan | ||||||||||||||||||||
In the second fiscal quarter of 2012, the Company assumed the Amended and Restated Contactual, Inc. 2003 Stock Option Plan (the "2003 Contactual Plan") and registered an aggregate of 171,974 shares of the Company's common stock that may be issued upon the exercise of stock options previously granted under the 2003 Contactual Plan and assumed by the Company when it acquired Contactual. No new stock options or other awards can be granted under 2003 Contactual Plan. | ||||||||||||||||||||
2012 Equity Incentive Plan | ||||||||||||||||||||
In June 2012, the Company's board of directors approved the 2012 Equity Incentive Plan ("2012 Plan"). The Company's stockholders subsequently adopted the 2012 Plan in July 2012, and the 2012 Plan became effective in August 2012. The Company reserved 4,100,000 shares of the Company's common stock for issuance under this plan. In August 2014, the 2012 Plan was amended to allow for an additional 6,800,000 shares reserved for issuance. As of March 31, 2015, 5,957,088 shares remained available under the 2012 Plan. The 2012 Plan provides for granting incentive stock options to employees and nonstatutory stock options to employees, directors or consultants, and granting of stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards and stock grants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2012 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options, restricted stock and restricted stock units generally vest over four years and expire ten years after grant. The 2012 Plan expires in June 2022. | ||||||||||||||||||||
2013 New Employee Inducement Incentive Plan | ||||||||||||||||||||
In September 2013, the Company's board of directors approved the 2013 New Employee Inducement Incentive Plan ("2013 Plan"). The Company reserved 1,000,000 shares of the Company's common stock for issuance under this plan. In November 2014, the 2013 Plan was amended to allow for an additional 1,200,000 shares reserved for issuance. As of March 31, 2015, 722,727 shares remained available for future grants under the 2013 Plan. The 2013 Plan provides for granting nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock and performance units and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options are granted at market value on the grant date under the 2013 Plan, unless determined otherwise at the time of grant by the administrator, which generally will be the compensation committee of the board of directors. Options, generally expire ten years after grant. The 2013 Plan expires in September 2023. | ||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||
The following table summarizes stock-based compensation expense (in thousands): | ||||||||||||||||||||
Years Ended March 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
Cost of service revenue | $ | 692 | $ | 372 | $ | 211 | ||||||||||||||
Cost of product revenue | - | - | - | |||||||||||||||||
Research and development | 1,495 | 967 | 428 | |||||||||||||||||
Sales and marketing | 3,748 | 2,217 | 1,363 | |||||||||||||||||
General and administrative | 3,412 | 4,039 | 632 | |||||||||||||||||
Total stock-based compensation expense | ||||||||||||||||||||
related to employee stock options | ||||||||||||||||||||
and employee stock purchases, pre-tax | 9,347 | 7,595 | 2,634 | |||||||||||||||||
Tax benefit | - | - | - | |||||||||||||||||
Stock based compensation expense related to | ||||||||||||||||||||
employee stock options and employee | ||||||||||||||||||||
stock purchases, net of tax | $ | 9,347 | $ | 7,595 | $ | 2,634 | ||||||||||||||
Stock Options, Stock Purchase Right and Restricted Stock Unit Activity | ||||||||||||||||||||
Stock Option activity under all the Company's stock option plans since March 31, 2012, is summarized as follows: | ||||||||||||||||||||
Weighted | ||||||||||||||||||||
Average | ||||||||||||||||||||
Exercise | ||||||||||||||||||||
Number of | Price | |||||||||||||||||||
Shares | Per Share | |||||||||||||||||||
Outstanding at March 31, 2012 | 6,034,335 | $ | 1.90 | |||||||||||||||||
Granted | 932,000 | 5.80 | ||||||||||||||||||
Exercised | -835,246 | 1.49 | ||||||||||||||||||
Canceled/Forfeited | -139,545 | 4.00 | ||||||||||||||||||
Outstanding at March 31, 2013 | 5,991,544 | 2.52 | ||||||||||||||||||
Granted | 1,465,400 | 9.66 | ||||||||||||||||||
Exercised | -1,283,470 | 2.75 | ||||||||||||||||||
Canceled/Forfeited | -171,092 | 5.25 | ||||||||||||||||||
Outstanding at March 31, 2014 | 6,002,382 | 4.14 | ||||||||||||||||||
Granted | 1,110,466 | 7.29 | ||||||||||||||||||
Exercised | -1,326,385 | 1.87 | ||||||||||||||||||
Canceled/Forfeited | -458,556 | 6.06 | ||||||||||||||||||
Outstanding at March 31, 2015 | 5,327,907 | $ | 5.19 | |||||||||||||||||
Vested and expected to vest at March 31, 2015 | 5,327,907 | $ | 5.19 | |||||||||||||||||
Exercisable at March 31, 2015 | 3,243,325 | $ | 3.35 | |||||||||||||||||
Stock Purchase Right activity since March 31, 2012 is summarized as follows: | ||||||||||||||||||||
Weighted | Weighted | |||||||||||||||||||
Average | Average | |||||||||||||||||||
Grant-Date | Remaining | |||||||||||||||||||
Number of | Fair Market | Contractual | ||||||||||||||||||
Shares | Value | Term (in Years) | ||||||||||||||||||
Balance at March 31, 2012 | 966,400 | $ | 2.50 | 2.61 | ||||||||||||||||
Granted | 443,436 | 5.75 | ||||||||||||||||||
Vested | -367,017 | 2.14 | ||||||||||||||||||
Forfeited | -84,244 | 2.89 | ||||||||||||||||||
Balance at March 31, 2013 | 958,575 | 4.11 | 2.52 | |||||||||||||||||
Granted | 22,380 | 9.69 | ||||||||||||||||||
Vested | -392,844 | 3.25 | ||||||||||||||||||
Forfeited | -98,484 | 5.18 | ||||||||||||||||||
Balance at March 31, 2014 | 489,627 | 4.83 | 1.93 | |||||||||||||||||
Granted | 31,432 | 7.88 | ||||||||||||||||||
Vested | -223,360 | 3.98 | ||||||||||||||||||
Forfeited | -73,864 | 5.39 | ||||||||||||||||||
Balance at March 31, 2015 | 223,835 | $ | 5.92 | 1.50 | ||||||||||||||||
Restricted Stock Unit activity since June 22, 2012 is summarized as follows: | ||||||||||||||||||||
Weighted | Weighted Average | |||||||||||||||||||
Number of | Average Grant | Remaining Contractual | ||||||||||||||||||
Shares | Date Fair Value | Term (in Years) | ||||||||||||||||||
Balance at June 22, 2012 | - | $ | - | |||||||||||||||||
Granted | 25,000 | 6.91 | ||||||||||||||||||
Vested | - | - | ||||||||||||||||||
Forfeited | - | - | ||||||||||||||||||
Balance at March 31, 2013 | 25,000 | 6.91 | 2.47 | |||||||||||||||||
Granted | 1,291,200 | 9.11 | ||||||||||||||||||
Vested | -133,000 | 9.49 | ||||||||||||||||||
Forfeited | -48,344 | 9.61 | ||||||||||||||||||
Balance at March 31, 2014 | 1,134,856 | 9.00 | 2.00 | |||||||||||||||||
Granted | 1,965,786 | 6.68 | ||||||||||||||||||
Vested | -187,788 | 9.54 | ||||||||||||||||||
Forfeited | -214,168 | 8.30 | ||||||||||||||||||
Balance at March 31, 2015 | 2,698,686 | $ | 7.33 | 1.88 | ||||||||||||||||
Significant option groups outstanding at March 31, 2015 and related weighted average exercise price, contractual life, and aggregate intrinsic value information for 8x8, Inc.'s stock option plans are as follows: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Remaining | Aggregate | Exercise | Aggregate | ||||||||||||||||
Price | Contractual | Intrinsic | Price | Intrinsic | ||||||||||||||||
Shares | Per Share | Life (Years) | Value | Shares | Per Share | Value | ||||||||||||||
$ 0.55 to $ 1.26 | 1,095,000 | $ | 1.11 | 2.9 | $ | 7,982,430 | 1,095,000 | $ | 1.11 | $ | 7,982,430 | |||||||||
$ 1.27 to $ 3.92 | 1,067,933 | $ | 1.63 | 1.4 | 7,233,393 | 1,064,403 | $ | 1.62 | 7,214,201 | |||||||||||
$ 4.25 to $ 6.86 | 1,543,322 | $ | 6.10 | 8.2 | 3,543,355 | 622,739 | $ | 5.50 | 1,803,291 | |||||||||||
$ 7.52 to $ 9.74 | 1,471,652 | $ | 9.26 | 8.7 | 156,354 | 415,871 | $ | 9.62 | 1,083 | |||||||||||
$ 10.97 to $ 11.26 | 150,000 | $ | 11.11 | 8.8 | - | 45,312 | $ | 11.09 | - | |||||||||||
5,327,907 | $ | 18,915,532 | 3,243,325 | $ | 17,001,005 | |||||||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock price of the Company's common stock on March 31, 2015 and the exercise price for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on March 31, 2015. | ||||||||||||||||||||
The total intrinsic value of options exercised in the years ended March 31, 2015, 2014 and 2013 was $8.1 million, $8.2 million and $3.3 million, respectively. As of March 31, 2015, there was $24.6 million of unamortized stock-based compensation expense related to unvested stock options and awards which is expected to be recognized over a weighted average period of 2.76 years. | ||||||||||||||||||||
Cash received from option exercises and purchases of shares under the Equity Compensation Plans for the years ended March 31, 2015, 2014 and 2013 were $4.5 million, $5.2 million and $2.4 million, respectively. The total tax benefit attributable to stock options exercised in the year ended March 31, 2015, 2014 and 2013 was $151,000, $142,000 and $49,000, respectively. | ||||||||||||||||||||
1996 Employee Stock Purchase Plan | ||||||||||||||||||||
The Company's 1996 Stock Purchase Plan ("Employee Stock Purchase Plan") was adopted in June 1996 and became effective upon the closing of the Company's initial public offering in July 1997. The Company suspended the Employee Stock Purchase Plan in 2003 and reactivated the Employee Stock Purchase Plan in fiscal 2005. Under the Employee Stock Purchase Plan, 500,000 shares of common stock were initially reserved for issuance. At the start of each fiscal year, the number of shares of common stock subject to the Employee Stock Purchase Plan increases so that 500,000 shares remain available for issuance. During fiscal 2015, 2014 and 2013, 306,248, 282,062 and 301,303 shares, respectively, were issued under the Employee Stock Purchase Plan. In May 2006, the Company's board of directors approved a ten-year extension of the Employee Stock Purchase Plan. Stockholders approved a ten-year extension of the Employee Stock Purchase Plan at the 2006 Annual Meeting of Stockholders held September 18, 2006. The Employee Stock Purchase Plan is effective until 2017. | ||||||||||||||||||||
The Employee Stock Purchase Plan permits eligible employees to purchase common stock through payroll deductions at a price equal to 85% of the fair market value of the common stock at the beginning of each two year offering period or the end of a six month purchase period, whichever is lower. When the Employee Stock Purchase Plan was reinstated in fiscal 2005, the offering period was reduced from two years to one year. The contribution amount may not exceed ten percent of an employee's base compensation, including commissions, but not including bonuses and overtime. In the event of a merger of the Company with or into another corporation or the sale of all or substantially all of the assets of the Company, the Employee Stock Purchase Plan provides that a new exercise date will be set for each option under the plan which exercise date will occur before the date of the merger or asset sale. | ||||||||||||||||||||
Assumptions Used to Calculate Stock-Based Compensation Expense | ||||||||||||||||||||
The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: | ||||||||||||||||||||
Years Ended March 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
Expected volatility | 61% | 64% | 70% | |||||||||||||||||
Expected dividend yield | - | - | - | |||||||||||||||||
Risk-free interest rate | 1.4% to 1.9% | 0.7% to 2.2% | 0.5% to 0.8% | |||||||||||||||||
Weighted average expected option term | 6.0 years | 6.1 years | 5.3 years | |||||||||||||||||
Weighted average fair value of options granted | $ | 4.14 | $ | 5.70 | $ | 3.32 | ||||||||||||||
The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: | ||||||||||||||||||||
Years Ended March 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
Expected volatility | 49% | 40% | 40% | |||||||||||||||||
Expected dividend yield | - | - | - | |||||||||||||||||
Risk-free interest rate | 0.12% | 0.09% | 0.14% | |||||||||||||||||
Weighted average expected rights term | 0.80 years | 0.75 years | 0.75 years | |||||||||||||||||
Weighted average fair value of rights granted | $ | 2.52 | $ | 2.83 | $ | 1.78 | ||||||||||||||
Stock Repurchases | ||||||||||||||||||||
In July 2014, the Company's board of directors authorized the Company to purchase up to $15.0 million of its common stock from time to time until July 22, 2015 (the "2014 Repurchase Plan"). Share repurchases, if any, will be funded with available cash. Repurchases under the Repurchase Plan may be made through open market purchases at prevailing market prices or in privately negotiated transactions. The timing, volume and nature of share repurchases are subject to market prices and conditions, applicable securities laws and other factors, and are at the discretion of the Company's management. Share repurchases under the Repurchase Plan may be commenced, suspended or discontinued at any time. There was no remaining authorized repurchase amount at March 31, 2015. | ||||||||||||||||||||
In February, 2015 the Company's board of directors authorized the Company to purchase up to $20.0 million of its common stock from time to time until July 22, 2015 (the "2015 Repurchase Plan") with the same conditions as the 2014 Repurchase plan. The remaining authorized repurchase amount at March 31, 2015 was approximately $15.7 million. | ||||||||||||||||||||
The stock repurchase activity as of March 31, 2015 is summarized as follows: | ||||||||||||||||||||
Weighted | ||||||||||||||||||||
Average | ||||||||||||||||||||
Shares | Price | Amount | ||||||||||||||||||
Repurchased | Per Share | Repurchased(1) | ||||||||||||||||||
Repurchase of common stock | ||||||||||||||||||||
under 2014 Repurchase Plan | 1,913,748 | $ | 7.82 | $ | 14,961,177 | |||||||||||||||
Repurchase of common stock | ||||||||||||||||||||
under 2015 Repurchase Plan | 574,467 | $ | 7.38 | 4,239,216 | ||||||||||||||||
Total | 2,488,215 | $ | 19,200,393 | |||||||||||||||||
(1) Amount excludes commission fees. | ||||||||||||||||||||
The total purchase prices of the common stock repurchased and retired were reflected as a reduction to consolidated stockholders' equity during the period of repurchase. | ||||||||||||||||||||
In fiscal 2015, 2014 and 2013, the Company also withheld 15,053, 50,400, 73,751, respectively, shares related to tax withholdings on restricted stock awards with a total price of $0.1 million, $0.5 million, and $0.4 million, respectively. | ||||||||||||||||||||
INCOME_TAXES_Note_9
INCOME TAXES - Note 9 | 12 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Notes to Financial Statements | ||||||||||||
INCOME TAXES - Note 9 | 9. INCOME TAXES | |||||||||||
For the years ended March 31, 2015, 2014 and 2013, the Company recorded a provision for income taxes of approximately $2.8 million, $2.2 million and $9.4 million, respectively. The provision in each year was attributable to federal and state current and deferred taxes. The components of the consolidated provision for income taxes for fiscal 2015, 2014 and 2013 consisted of the following (in thousands): | ||||||||||||
March 31, | ||||||||||||
Current: | 2015 | 2014 | 2013 | |||||||||
Federal | $ | 92 | $ | - | $ | - | ||||||
State | 457 | 276 | 434 | |||||||||
Foreign | 1 | - | - | |||||||||
Total current tax provision | 550 | 276 | 434 | |||||||||
Deferred | ||||||||||||
Federal | $ | 2,602 | $ | 1,578 | $ | 7,185 | ||||||
State | -363 | 365 | 1,780 | |||||||||
Foreign | - | - | - | |||||||||
Total deferred tax provision | 2,239 | 1,943 | 8,965 | |||||||||
Total income tax provision | $ | 2,789 | $ | 2,219 | $ | 9,399 | ||||||
The Company's income from continuing operations before income taxes included $3.5 million, $0.8 million and $0 of foreign subsidiary loss for the fiscal years ended March 31, 2015, 2014 and 2013, respectively. | ||||||||||||
Deferred tax assets were comprised of the following (in thousands): | ||||||||||||
March 31, | ||||||||||||
Current deferred tax assets | 2015 | 2014 | ||||||||||
Net operating loss carryforwards | $ | 2,179 | $ | 333 | ||||||||
Inventory valuation | 14 | 33 | ||||||||||
Reserves and allowances | 2,394 | 1,791 | ||||||||||
Net current deferred tax assets | 4,587 | 2,157 | ||||||||||
Net operating loss carryforwards | 44,228 | 51,598 | ||||||||||
Research and development and other credit carryforwards | 5,414 | 4,488 | ||||||||||
Fixed assets and intangibles | -1,705 | -2,819 | ||||||||||
Net non-current deferred tax assets | 47,937 | 53,267 | ||||||||||
Valuation allowance | -4,901 | -5,562 | ||||||||||
Total | $ | 47,623 | $ | 49,862 | ||||||||
As of March 31, 2015 and 2014, management assessed the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. At March 31, 2015, management evaluated the need for a valuation allowance and determined that a valuation allowance of approximately $4.9 million was needed. At March 31, 2014, management evaluated the need for a valuation allowance and determined that a valuation allowance of approximately $5.6 million was needed. The net change in the valuation allowance for the years ended March 31, 2015 and 2014 was a decrease of $0.7 million and an increase of $2.5 million, respectively. | ||||||||||||
At March 31, 2015, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $142.8 million and $66.7 million, respectively, which expire at various dates between 2016 and 2035. The net operating loss carryforwards include approximately $30.9 million resulting from employee exercises of non-qualified stock options or disqualifying dispositions, the tax benefits of which, when realized, will be accounted for as an addition to additional paid-in capital rather than as a reduction of the provision for income taxes. In addition, at March 31, 2015, the Company had research and development credit carryforwards for federal and California tax reporting purposes of approximately $3.3 million and $5.1 million, respectively. The federal income tax credit carryforwards will expire at various dates between 2021 and 2035, while the California income tax credits will carry forward indefinitely. A reconciliation of the Company's provision for income taxes to the amounts computed using the statutory U.S. federal income tax rate of 34% is as follows (in thousands): | ||||||||||||
Years Ended March 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Tax provision at statutory rate | $ | 1,599 | $ | 1,285 | $ | 7,768 | ||||||
State income taxes before valuation allowance, | ||||||||||||
net of federal effect | 269 | 196 | 822 | |||||||||
Research and development credits | -725 | -1,534 | -385 | |||||||||
Change in valuation allowance | -1,480 | 1,264 | 1,038 | |||||||||
Compensation/option differences | -331 | -264 | -207 | |||||||||
Non-deductible compensation | 746 | 605 | 403 | |||||||||
Acquisition costs | - | 230 | - | |||||||||
Expiring CA NOLs | 1,484 | 240 | - | |||||||||
Foreign loss not benefited | 1,192 | 271 | - | |||||||||
Other | 35 | -74 | -40 | |||||||||
Total income tax provision | $ | 2,789 | $ | 2,219 | $ | 9,399 | ||||||
The Company recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): | ||||||||||||
Unrecognized Tax Benefits | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Balance at beginning of year | $ | 2,165 | $ | 3,024 | $ | 2,483 | ||||||
Gross increases - tax position in prior period | 27 | - | 73 | |||||||||
Gross decreases - tax position in prior period | - | -1,081 | - | |||||||||
Gross increases - tax positions related to the current year | 228 | 222 | 468 | |||||||||
Settlements | - | - | - | |||||||||
Lapse of statute of limitations | - | - | - | |||||||||
Balance at end of year | $ | 2,420 | $ | 2,165 | $ | 3,024 | ||||||
At March 31, 2015, the company had a liability for unrecognized tax benefits of $2.4 million, all of which, if recognized, would decrease the company's effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. | ||||||||||||
The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. The Company has not been under examination by income tax authorities in federal, state or other foreign jurisdictions. The 1996 through fiscal 2015 tax years generally remain subject to examination by federal and most state tax authorities. | ||||||||||||
The Company's policy for recording interest and penalties associated with tax examinations is to record such items as a component of operating expense income before taxes. During the fiscal year ended March 31, 2015, 2014 and 2013, the Company did not recognize any interest or penalties related to unrecognized tax benefits. | ||||||||||||
Utilization of the Company's net operating loss and tax credit carryforwards can become subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. The Company has performed an analysis of its changes in ownership under Section 382 of the Internal Revenue Code. Management currently believes that the Section 382 limitation will not limit utilization of the carryforwards prior to their expiration, with the exception of certain acquired loss and tax credit carryforwards of Contactual, Inc. | ||||||||||||
EMPLOYEE_BENEFIT_PLAN_Note_10
EMPLOYEE BENEFIT PLAN - Note 10 | 12 Months Ended |
Mar. 31, 2015 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN - Note 10 | 10. EMPLOYEE BENEFIT PLAN |
401(k) Savings Plan | |
In April 1991, the Company adopted a 401(k) savings plan (the "Savings Plan") covering substantially all of its U.S. employees. Eligible employees may contribute to the Savings Plan from their compensation up to the maximum allowed by the Internal Revenue Service. In January 2007, the Company reactivated the employer matching contribution. The matching contribution is 100% of each employee's contributions in each year, not to exceed $1,500 per annum. The matching expense in 2015, 2014 and 2013 was $0.7 million, $0.4 million and $0.3 million, respectively. The Savings Plan does not allow employee contributions to be invested in the Company's common stock. | |
NET_INCOME_PER_SHARE_Note_11
NET INCOME PER SHARE - Note 11 | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Notes to Financial Statements | ||||||||||
NET INCOME PER SHARE - Note 11 | 11. NET INCOME PER SHARE | |||||||||
The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net income per share (in thousands, except share and per share data): | ||||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||
Numerator: | ||||||||||
Income from continuing operations | $ | 1,926 | $ | 1,598 | $ | 13,450 | ||||
Income from discontinued operations, net | ||||||||||
of income tax provision | - | 916 | 489 | |||||||
Net income available to common stockholders | $ | 1,926 | $ | 2,514 | $ | 13,939 | ||||
Denominator: | ||||||||||
Common shares | 89,071 | 78,310 | 71,390 | |||||||
Denominator for basic calculation | 89,071 | 78,310 | 71,390 | |||||||
Employee stock options | 2,088 | 2,927 | 2,958 | |||||||
Employee restricted purchase rights | 493 | 421 | 352 | |||||||
Denominator for diluted calculation | 91,652 | 81,658 | 74,700 | |||||||
Income per share - continuing operations: | ||||||||||
Basic | $ | 0.02 | $ | 0.02 | $ | 0.19 | ||||
Diluted | $ | 0.02 | $ | 0.02 | $ | 0.18 | ||||
Income per share - discontinued operations: | ||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||
Net income per share: | ||||||||||
Basic | $ | 0.02 | $ | 0.03 | $ | 0.20 | ||||
Diluted | $ | 0.02 | $ | 0.03 | $ | 0.19 | ||||
The following shares attributable to outstanding stock options and restricted stock purchase rights were excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive (in thousands): | ||||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Common stock options | 1,812 | 750 | 953 | |||||||
Stock purchase rights | 57 | 18 | 16 | |||||||
1,869 | 768 | 969 | ||||||||
SEGMENT_REPORTING_Note_12
SEGMENT REPORTING - Note 12 | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Segment Reporting [Abstract] | ||||||||||
SEGMENT REPORTING - Note 12 | 12. SEGMENT REPORTING | |||||||||
ASC 280, Segment Reporting, establishes annual and interim reporting standards for an enterprise's business segments and related disclosures about its products, services, geographic areas and major customers. Under ASC 280, the method for determining what information to report is based upon the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance. The Company has one reportable operating segment. The Company's chief operating decision makers, the Chief Executive Officer, the Chief Financial Officer, and the Chief Technology Officer, evaluate performance of the Company and make decisions regarding allocation of resources based on total Company results. | ||||||||||
The Company's revenue distribution by geographic region (based upon the destination of shipments and the customer's service address) was as follows: | ||||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Americas (principally US) | 92% | 97% | 99% | |||||||
Europe | 7% | 2% | 0% | |||||||
Asia-Pacific | 1% | 1% | 1% | |||||||
100% | 100% | 100% | ||||||||
Geographic area data is based upon the location of the property and equipment and is as follows (in thousands): | ||||||||||
March 31, | ||||||||||
2015 | 2014 | |||||||||
North America | $ | 8,348 | $ | 6,305 | ||||||
Europe | 1,411 | 1,087 | ||||||||
Asia-Pacific | 489 | 319 | ||||||||
$ | 10,248 | $ | 7,711 | |||||||
ACQUISITION_Note_13
ACQUISITION - Note 13 | 12 Months Ended | |||
Mar. 31, 2015 | ||||
Business Combinations [Abstract] | ||||
ACQUISITION - Note 13 | 13. ACQUISITION | |||
Voicenet Solutions Limited | ||||
On November 11, 2013, the Company entered into a share purchase agreement with the shareholders and optionholders of Voicenet Solutions Limited ("Voicenet"), a provider of cloud communications and collaboration services in the United Kingdom (the "Transaction"). The Company completed the acquisition of Voicenet on November 29, 2013. The Company purchased all of the outstanding shares of Voicenet for total consideration transferred of $19.3 million; $3.0 million was placed in escrow and eligible for release to the Voicenet shareholders and optionholders in installments on the first and second anniversaries of the closing date. The shares of Voicenet are held by a wholly-owned subsidiary of 8x8 recently formed in the United Kingdom, such that Voicenet is an indirect, wholly-owned subsidiary of 8x8. | ||||
The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite−lived intangible assets consist of customer relationship, with an estimated weighted-average useful life of 7 years. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using the excess earnings method. Intangible assets are amortized on a straight-line basis. | ||||
The fair values of the assets acquired and liabilities assumed are as follows (in thousands): | ||||
Fair Value | ||||
Assets acquired: | ||||
Cash | $ | 854 | ||
Current assets | 1,114 | |||
Property and equipment | 956 | |||
Intangible asset - customer relationship | 6,381 | |||
Total assets acquired | 9,305 | |||
Liabilities assumed: | ||||
Current and non-current liabilities | -4,132 | |||
Total liabilities assumed | -4,132 | |||
Net identifiable assets acquired | 5,173 | |||
Goodwill | 14,155 | |||
Total consideration transferred | $ | 19,328 | ||
None of the goodwill recognized is expected to be deductible for income tax purposes. | ||||
Voicenet contributed revenue of approximately $3.3 million and a net loss of approximately $0.8 million for the period from the date of acquisition to March 31, 2014. The Company determined that it is impractical to include such pro forma information given the difficulty in obtaining the historical financial information of Voicenet. Inclusion of such information would require the Company to make estimates and assumptions regarding Voicenet's historical financial results that we believe may ultimately prove inaccurate. | ||||
GAIN_ON_SETTLEMENT_OF_ESCROW_C
GAIN ON SETTLEMENT OF ESCROW CLAIM - Note 14 | 12 Months Ended |
Mar. 31, 2015 | |
Other Income and Expenses [Abstract] | |
GAIN ON SETTLEMENT OF ESCROW CLAIM - Note 14 | 14. GAIN ON SETTLEMENT OF ESCROW CLAIM |
In December 2013, the Company settled an escrow claim for indemnification with the sellers of Contactual, Inc. Under the terms of the settlement, the Company recorded a gain of $0.6 million in other income, net, in the consolidated statement of income during the year ended March 31, 2014. Under the terms of the Contactual merger agreement and the escrow agreement, each indemnifying seller paid his, her or its pro rata share of the obligations owed to the Company on January 29, 2014. Upon receipt of the cash on January 29, 2014, the Company released the remaining escrow account balance to the sellers of Contactual Inc. | |
PATENT_SALE_Note_15
PATENT SALE - Note 15 | 12 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
PATENT SALE - Note 15 | 15. PATENT SALE |
In June 2012, the Company entered into a patent purchase agreement and sold a family of patents to a third party for approximately $12.0 million plus a future payment of up to a maximum of $3.0 million based on future license agreements entered into by the third party purchaser. In August 2014 and February 2013, the third party entered into two separate license agreements with its customers; therefore, the Company earned an additional $1.0 million each under the patent purchase agreement for fiscal 2015 and 2013. Under the terms and conditions of the patent purchase agreement, the Company has retained certain limited rights to continue to use the patents. The patent purchase agreement contains representations and warranties customary for transactions of this type. | |
DISCONTINUED_OPERATIONS_Note_1
DISCONTINUED OPERATIONS - Note 16 | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Discontinued Operations - Note 16 | ||||||||||
DISCONTINUED OPERATIONS - Note 16 | 16. DISCONTINUED OPERATIONS | |||||||||
On September 30, 2013, the Company completed the sale of its dedicated server hosting business to IRC Company, Inc. ("IRC") and, as a result, no longer provides dedicated server hosting services. In the transaction, IRC purchased 100% of the stock of Central Host, Inc., which had been wholly owned by the Company and all of the assets specific to the dedicated server hosting business. | ||||||||||
The Company sold its dedicated server hosting business for total consideration of $3.0 million in cash, which was received on October 1, 2013. | ||||||||||
The dedicated server hosting business has been reported as discontinued operations. The results of operations of these discontinued operations are as follows: | ||||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Revenue | $ | - | $ | 1,430 | $ | 3,828 | ||||
Operating expense | - | 922 | 3,005 | |||||||
Income before income taxes | - | 508 | 823 | |||||||
Provision for income taxes | - | 188 | 334 | |||||||
Income from discontinued operations | - | 320 | 489 | |||||||
Gain on disposal of discontinued operations, | ||||||||||
net of income tax provision of $456 | - | 596 | - | |||||||
SUBSEQUENT_EVENTS_Note_17
SUBSEQUENT EVENTS - Note 17 | 12 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS - Note 17 | 17. SUBSEQUENT EVENTS |
On May 26, 2015, the Company, together with 8x8 UK Investments Limited, its wholly-owned subsidiary, entered into a share purchase agreement with the shareholders of DXI Limited, API Telecom Limited, Easycallnow Limited, and RAS Telecom Limited (collectively, “DXI”), for the purchase of the entire share capital of DXI. DXI provides SaaS for call center solution workflows. The total aggregate purchase price was approximately $25.5 million, consisting of $18.7 million in cash paid to DXI shareholders at closing, $3.8 million in cash deposited in escrow to be held for two years as security against indemnity claims made by the Company after the closing date, and $3.0 million in its common stock (approximately 353,000 shares). The Company funded the aggregate cash purchase price from our cash and investments. | |
CONSOLIDATED_QUARTERLY_FINANCI
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) - Note 18 | 12 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Consolidated Quarterly Financial Data | |||||||||||||||||||||||||
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) - Note 18 | 18. CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||||||||||
In thousands, except per share data amounts: | |||||||||||||||||||||||||
QUARTER ENDED | |||||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | ||||||||||||||||||
Service revenue | $ | 40,009 | $ | 37,802 | $ | 36,121 | $ | 34,276 | $ | 32,545 | $ | 29,737 | $ | 27,826 | $ | 26,499 | |||||||||
Product revenue | 3,521 | 3,570 | 3,477 | 3,637 | 3,241 | 3,008 | 2,989 | 2,752 | |||||||||||||||||
Total revenue | 43,530 | 41,372 | 39,598 | 37,913 | 35,786 | 32,745 | 30,815 | 29,251 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Cost of service revenue | 7,655 | 7,544 | 7,505 | 6,997 | 6,866 | 5,584 | 5,209 | 4,786 | |||||||||||||||||
Cost of product revenue | 4,173 | 3,959 | 3,762 | 3,969 | 3,999 | 4,041 | 3,783 | 3,347 | |||||||||||||||||
Research and development | 4,348 | 3,868 | 3,496 | 3,406 | 3,332 | 3,325 | 2,640 | 2,336 | |||||||||||||||||
Sales and marketing | 21,508 | 20,559 | 19,440 | 19,160 | 18,038 | 16,051 | 13,745 | 13,072 | |||||||||||||||||
General and administrative | 5,794 | 4,617 | 3,893 | 3,878 | 3,924 | 5,547 | 3,125 | 2,772 | |||||||||||||||||
Gain on patent sale | - | - | -1,000 | - | - | - | - | - | |||||||||||||||||
Total operating expenses | 43,478 | 40,547 | 37,096 | 37,410 | 36,159 | 34,548 | 28,502 | 26,313 | |||||||||||||||||
Income (loss) from operations | 52 | 825 | 2,502 | 503 | -373 | -1,803 | 2,313 | 2,938 | |||||||||||||||||
Other income net | 210 | 246 | 200 | 177 | 140 | 586 | 1 | 15 | |||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||
operations before provision | |||||||||||||||||||||||||
(benefit) for income taxes | 262 | 1,071 | 2,702 | 680 | -233 | -1,217 | 2,314 | 2,953 | |||||||||||||||||
Provision (benefit) for | |||||||||||||||||||||||||
income taxes (1) | 79 | 627 | 1,411 | 672 | 1,738 | -1,306 | 826 | 961 | |||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||
operations | 183 | 444 | 1,291 | 8 | -1,971 | 89 | 1,488 | 1,992 | |||||||||||||||||
Income from discontinued | |||||||||||||||||||||||||
operations, net of income | |||||||||||||||||||||||||
tax provision | - | - | - | - | 19 | - | 154 | 147 | |||||||||||||||||
Gain on disposal of discontinued | |||||||||||||||||||||||||
operations, net of income tax | |||||||||||||||||||||||||
provision of $456 | - | - | - | - | 7 | - | 589 | - | |||||||||||||||||
Net income (loss) | $ | 183 | $ | 444 | $ | 1,291 | $ | 8 | $ | -1,945 | $ | 89 | $ | 2,231 | $ | 2,139 | |||||||||
Income (loss) per share | |||||||||||||||||||||||||
continuing operations: | |||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.02 | $ | 0.03 | |||||||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.02 | $ | 0.03 | |||||||||
Income per share | |||||||||||||||||||||||||
discontinued operations: | |||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.01 | $ | 0.00 | |||||||||
Diluted | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.01 | $ | 0.00 | |||||||||
Net income (loss) per share: | |||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.03 | $ | 0.03 | |||||||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.03 | $ | 0.03 | |||||||||
Shares used in per share calculations: | |||||||||||||||||||||||||
Basic | 88,950 | 89,594 | 89,073 | 88,592 | 88,184 | 79,742 | 72,970 | 72,510 | |||||||||||||||||
Diluted | 91,266 | 91,974 | 91,615 | 91,445 | 88,184 | 83,182 | 76,232 | 75,756 | |||||||||||||||||
-1 | Comparability affected by the decrease in fiscal 2015 and increase in fiscal 2014 in the valuation allowance related to the deferred tax asset which resulted in a decrease in fiscal 2015 and an increase in the provision for income taxes of $1.5 million and $1.3 million in the fourth quarter of fiscal 2015 and 2014, respectively. | ||||||||||||||||||||||||
Schedule_II_Valuation_and_Qual
Schedule II Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Chedule Ii Valuation And Qualifying Accounts | |||||||||||||
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II | ||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||
(in thousands) | |||||||||||||
Balance | |||||||||||||
at | Additions | Balance | |||||||||||
Beginning | Charged to | at End | |||||||||||
Description | of Year | Expenses | Deductions (a) | of Year | |||||||||
Total Allowance for Doubtful Accounts: | |||||||||||||
Year ended March 31, 2013: | $ | 140 | $ | 639 | $ | -452 | $ | 327 | |||||
Year ended March 31, 2014: | $ | 327 | $ | 571 | $ | -432 | $ | 466 | |||||
Year ended March 31, 2015: | $ | 466 | $ | 279 | $ | -329 | $ | 416 | |||||
(a) The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. | |||||||||||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Company | THE COMPANY |
8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. | |
The Company is a leading provider of VoIP technology and SaaS (Software as a service) communication solutions in the cloud for SMBs and mid-market and distributed enterprises. The Company delivers a broad suite of SaaS services to in-office and mobile devices spanning cloud telephony, virtual contact center and virtual meeting through its proprietary unified SaaS platform. The Company currently serves approximately 41,600 business customers with over 650,000 subscriptions, making it a leading provider of UCC services in the cloud. The Company's software abstracts complex networking, redundancy, security and interconnection requirements to provide a seamless and easy-to-use solution for its customers. The Company's software also integrates with leading enterprise resource planning, customer relationship management, or human capital management, and other third-party application suites, such as Salesforce.com and NetSuite, to provide organizations an integrated, fully functional business communications and collaboration experience that is critical to operate their businesses. | |
Fiscal Period | The Company's fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2015 refers to the fiscal year ended March 31, 2015). |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION |
The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. | |
Use of Estimates | USE OF ESTIMATES |
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to bad debts, returns reserve for expected cancellations, valuation of inventories, income and sales tax, and litigation and other contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities, and equity that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions. | |
Service Revenue | Service Revenue |
The Company recognizes service revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company defers recognition of service revenues in instances when cash receipts are received before services are delivered and recognizes deferred revenues ratably as services are provided. | |
Under the terms of the Company's typical subscription agreement, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that are not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. | |
Product Revenue | Product Revenue |
The Company recognizes revenue from product sales for which there are no related services to be rendered upon shipment to customers provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, title has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements, and there are no remaining significant obligations. Gross outbound shipping and handling charges are recorded as revenue, and the related costs are included in cost of goods sold. Reserves for returns and allowances for customer sales are recorded at the time of shipment. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 605, Revenue Recognition, the Company records shipments to distributors, retailers, and resellers, where the right of return exists, as deferred revenue. The Company defers recognition of revenue on product sales to distributors, retailers, and resellers until the products have been sold to the end customer. | |
The Company records revenue net of any sales and service related taxes and mandatory government charges that are billed to its customers. The Company believes this approach results in consolidated financial statements that are more easily understood by users. | |
Under the terms of the Company's typical subscription agreement, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that are not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. | |
Revenue Recognition for Multiple Element Arrangements | Multiple Element Arrangements |
ASC 605-25, Revenue Recognition - Multiple Element Arrangements, requires that revenue arrangements with multiple deliverables be divided into separate units of accounting if the deliverables in the arrangement meet specific criteria. The provisioning of the 8x8 cloud service with the accompanying 8x8 IP telephone constitutes a revenue arrangement with multiple deliverables. For arrangements with multiple deliverables, the Company allocates the arrangement consideration to all units of accounting based on their relative selling prices. In such circumstances, the accounting principles establish a hierarchy to determine the relative selling price to be used for allocating arrangement consideration to units of accounting as follows: (i) vendor-specific objective evidence of fair value ("VSOE"), (ii) third-party evidence of selling price ("TPE"), and (iii) best estimate of the selling price ("BESP"). | |
VSOE generally exists only when the Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. When VSOE cannot be established, the Company attempts to establish the selling price of deliverables based on relevant TPE. TPE is determined based on manufacturer's prices for similar deliverables when sold separately, when possible. When the Company is unable to establish selling price using VSOE or TPE, it uses a BESP for the allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a stand-alone basis. BESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings. The Company determines BESP for a product or service by considering multiple factors including, but not limited to: | |
the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and | |
analysis of pricing history of new arrangements, including multiple element and stand-alone transactions. | |
In accordance with the guidance of ASC 605-25, when the Company enters into revenue arrangements with multiple deliverables the Company allocates arrangement consideration, including activation fees, among the 8x8 IP telephones and subscriber services based on their relative selling prices. Arrangement consideration allocated to the IP telephones that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized as product revenues during the period of the sale less the allowance for estimated returns during the 30-day trial period. Arrangement consideration allocated to subscriber services that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized ratably as service revenues as the related services are provided, which is generally over the initial contract term. | |
Deferred Cost of Goods Sold | DEFERRED COST OF GOODS SOLD |
Deferred cost of goods sold represents the cost of products sold for which the end customer or distributor has a right of return. The cost of the products sold is recognized contemporaneously with the recognition of revenue, when the subscriber has accepted the service. | |
Cash, Cad Equivalents and Investments | CASH, CASH EQUIVALENTS AND INVESTMENTS |
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Management determines the appropriate categorization of its investments at the time of purchase and reevaluates the classification at each reporting date. The cost of the Company's investments is determined based upon specific identification. | |
The Company's investments are comprised of mutual funds, commercial paper, corporate debt, municipal securities, asset backed securities, mortgage backed securities, international government securities, certificates of deposit and money market funds. At March 31, 2015 and 2014, all investments were classified as available-for-sale and reported at fair value, based either upon quoted prices in active markets, quoted prices in less active markets, or quoted market prices for similar investments, with unrealized gains and losses, net of related tax, if any, included in other comprehensive income (loss) and disclosed as a separate component of consolidated stockholders' equity. Realized gains and losses on sales of all such investments are reported within the caption of other income, net in the consolidated statements of income and computed using the specific identification method. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations. The Company's investments in marketable securities are monitored on a periodic basis for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. These available-for-sale investments are primarily held in the custody of a major financial institution. | |
ACCOUNTS RECEIVABLE ALLOWANCE | ACCOUNTS RECEIVABLE ALLOWANCE |
The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, and communications with its customers. Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible. | |
INVENTORY | INVENTORY |
Inventory is stated at the lower of standard cost, which approximates actual cost using the first-in, first-out method, or market. Any write-down of inventory to the lower of cost or market at the close of a fiscal period creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. On an on-going basis, the Company evaluates inventory for obsolescence and slow-moving items. This evaluation includes analysis of sales levels, sales projections, and purchases by item, as well as raw material usage related to the Company's manufacturing facilities. If the Company's review indicates a reduction in utility below carrying value, it reduces inventory to a new cost basis. If future demand or market conditions are different than the Company's current estimates, an inventory adjustment may be required, and would be reflected in cost of goods sold in the period the revision is made. | |
Property and Equipment | PROPERTY AND EQUIPMENT |
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method. Estimated useful lives of three years are used for equipment and software and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the shorter of the remaining facility lease term or the estimated useful life of the improvements. | |
Maintenance, repairs and ordinary replacements are charged to expense. Expenditures for improvements that extend the physical or economic life of the property are capitalized. Gains or losses on the disposition of property and equipment are recorded in the Consolidated Statements of Income. | |
Construction in progress primarily relates to costs to acquire or internally develop software for internal use not fully completed as of March 31, 2015. | |
Accounting for Long-Lived Assets | ACCOUNTING FOR LONG-LIVED ASSETS |
The Company reviews the recoverability of its long-lived assets, such as property and equipment, definite lived intangibles or capitalized software, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset or a significant change in the operation or use of an asset. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate future cash flows and the fair value of long-lived assets. No such charges were recorded in the periods presented. | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS |
Goodwill and intangible assets with indefinite useful lives are not amortized. Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations. The carrying value of goodwill and indefinite lived intangible assets are not amortized, but are tested annually for impairment and more often if there is an indicator of impairment. The Company has determined that it has two reporting units, and allocates goodwill to the reporting units for the purposes of the annual test for impairment. | |
The Company's annual goodwill impairment test is performed on January 1 each year. No goodwill impairment charges were recorded in the periods presented. | |
Intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. Amortization expense for the customer relationship intangible asset is included in sales and marketing expenses. Amortization expense for technology is included in cost of service revenue. | |
Warranty Expense | WARRANTY EXPENSE |
The Company accrues for estimated product warranty cost upon revenue recognition. Accruals for product warranties are calculated based on the Company's historical warranty experience adjusted for any specific requirements. | |
Research, Development and Software Costs | RESEARCH, DEVELOPMENT AND SOFTWARE COSTS |
The Company accounts for software to be sold or otherwise marketed in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed (ASC 985-20) which requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. The Company defines establishment of technological feasibility as the completion of a working model. Software development costs for software to be sold or otherwise marketed incurred prior to the establishment of technological feasibility are included in research and development and are expensed as incurred. Software development costs incurred subsequent to the establishment of technological feasibility through the period of general market availability of the product are capitalized, if material. | |
In fiscal 2015 and 2014, the Company capitalized approximately $0 and $0.8 million, respectively, of software development costs in accordance with ASC 985-20. At March 31, 2015 and 2014, total capitalized software development costs included in other long-term assets was approximately $1.0 million, and accumulated amortization costs related to capitalized software was approximately $0.5 million and $0.1 million, respectively. | |
The Company accounts for computer software developed or obtained for internal use in accordance with ASC 350-40, Internal Use Software (ASC 350-40), which requires capitalization of certain software development costs incurred during the application development stage. In fiscal 2015, the Company capitalized $1.5 million in accordance with ASC 350-40, of which $0.8 million is classified as property and equipment and $0.7 million is classified as long-term assets. In fiscal 2014, no such costs were capitalized. At March 31, 2015, the projects had not yet been placed into service, and accordingly no amortization has been recognized. | |
Advertising Costs | ADVERTISING COSTS |
Advertising costs are expensed as incurred and were $6.8 million, $7.3 million and $6.5 million for the years ended March 31, 2015, 2014 and 2013, respectively. | |
Foreign Currency Translation | FOREIGN CURRENCY TRANSLATION |
The Company has determined that the functional currency of its UK foreign subsidiary is the subsidiary's local currency, the British Pound Sterling, which the Company believes most appropriately reflects the current economic facts and circumstances of the UK subsidiary's operations. The assets and liabilities of the subsidiary are translated at the applicable exchange rate as of the end of the balance sheet period and revenue and expenses are translated at an average rate over the period presented. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the stockholder's equity in the consolidated balance sheets. | |
Business Segments | BUSINESS SEGMENTS |
The Company has one reportable operating segment. The Company's chief operating decision makers, the Chief Executive Officer, Chief Financial Officer, and Chief Technology Officer, evaluate performance of the Company and makes decisions regarding allocation of resources based on total Company results (see Note 12). | |
Subscriber Acquisition Costs | SUBSCRIBER ACQUISITION COSTS |
Subscriber acquisition costs are expensed as incurred and include the advertising, marketing, promotions, commissions, rebates and equipment subsidy costs associated with the Company's efforts to acquire new subscribers. | |
Income Taxes | INCOME TAXES |
Income taxes are accounted for using the asset and liability approach. Under the asset and liability approach, a current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current year. A deferred tax liability or asset is recognized for the estimated future tax effects attributed to temporary differences and carryforwards. If necessary, the deferred tax assets are reduced by the amount of benefits that, based on available evidence, is more likely than not expected to be realized. | |
Concentrations | CONCENTRATIONS |
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments and trade accounts receivable. The Company has cash equivalents and investment policies that limit the amount of credit exposure to any one financial institution and restrict placement of these funds to financial institutions evaluated as highly credit-worthy. The Company has not experienced any material losses relating to its investment instruments. | |
The Company sells its products to business customers and distributors. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral from its customers. At March 31, 2015 and 2014, no customer accounted for more than 10% of accounts receivable. | |
The Company outsources the manufacturing of its hardware products to independent contract manufacturers. The inability of any contract manufacturer to fulfill supply requirements of the Company could materially impact future operating results, financial position or cash flows. If any of these contract manufacturers fail to perform on their obligations to the Company, such failure to fulfill supply requirements of the Company could materially impact future operating results, financial position and cash flows. | |
The Company also relies primarily on third party network service providers to provide telephone numbers and PSTN call termination and origination services for its customers. If these service providers failed to perform their obligations to the Company, such failure could materially impact future operating results, financial position and cash flows. | |
Fair Values of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS |
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact. | |
The accounting guidance for fair value measurement requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. | |
The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: | |
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | |
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). | |
Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company's own assumptions. | |
The estimated fair value of financial instruments is determined by the Company using available market information and valuation methodologies considered to be appropriate. The carrying amounts of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company's investments are carried at fair value. | |
Accounting for Stock-Based Compensation | ACCOUNTING FOR STOCK-BASED COMPENSATION |
The Company accounts for its employee stock options, stock purchase rights, restricted stock units and restricted performance stock units granted under the 1996 Stock Plan, 1996 Director Option Plan, the 2006 Stock Plan, the 2003 Contactual Plan, the 2012 Equity Incentive Plan, the 2013 New Employee Inducement Incentive Plan and stock purchase rights under the 1996 Employee Stock Purchase Plan (collectively "Equity Compensation Plans") under the provisions of ASC 718 - Stock Compensation. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity grant), net of estimated forfeitures. | |
To value option grants, stock purchase rights and restricted stock units under the Equity Compensation Plans for stock-based compensation the Company used the Black-Scholes option valuation model. Fair value determined using the Black-Scholes option valuation model varies based on assumptions used for the expected stock prices volatility, expected life, risk free interest rates and future dividend payments. For fiscal years 2015, 2014 and 2013, the Company used the historical volatility of its stock over a period equal to the expected life of the options. The expected life assumptions represent the weighted-average period stock-based awards are expecting to remain outstanding. These expected life assumptions were established through the review of historical exercise behavior of stock-based award grants with similar vesting periods. The risk free interest is based on the closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the expected term of the option. The dividend yield assumption is based on the Company's history and expectation of future dividend payout. Compensation expense for stock-based payment awards is recognized using the straight-line single-option method and includes the impact of estimated forfeitures. | |
The Company issued restricted performance stock units to a group of executives with vesting that is contingent on both market performance and continued service. For the market-based restricted performance stock units issued during the fiscal year ended March 31, 2015: | |
the number of shares of the Company's stock to be received at vesting if applicable service requirements are also met will range from 0% to 100% of the target amount based total shareholder return ("TSR"), which compares the performance of the price per share of the Company's common stock with the NASDAQ Composite Index ("Index") for the three performance periods ending March 31, 2016, March 31, 2017 and March 31, 2018, for the fiscal year ended March 31, 2015; and for the three performance periods ending March 31, 2015, March 31, 2016 and March 31, 2017 for the fiscal year ended March 31, 2014, in the following manner: where in each such measurement period, (1) if the performance return on the price per share of the Company's common stock exceeds the performance return on the NASDAQ Composite Index, (which shall be determined by subtracting the percentage return on the NASDAQ Composite Index from the percentage return on the price per share of the Common Stock), then all of the TSR Performance Shares for such measurement period will be deemed earned and will vest; (2) if the performance return on the price per share of Common Stock is more than 50% lower than the performance return on the NASDAQ Composite Index, then none of the TSR Performance Shares for such measurement period will be deemed earned and will vest; and (3) if the performance return on the price per share of Common Stock is between 0% and 50% lower than the performance return on the NASDAQ Composite Index, then the number of TSR Performance Shares deemed earned and vesting for such measurement period will be reduced by 2% for each 1% by which the performance return on the NASDAQ Composite Index exceeds the performance return on the Common Stock, and | |
the number of shares of the Company's stock to be received at vesting will range from 0% or 100% of the target amount based on four tranches, with each tranche vesting at the later of (a) the satisfaction of the applicable service-based vesting requirement for that tranche, and (b) on the first date that the average stock price of the Company's common stock for a consecutive 30 trading day period exceeds 150% of the grant date stock price. The minimum service vesting requirement for each tranche is as follows: | |
Tranche 1: One year following the date of the grant | |
Tranche 2: Two years following the date of the grant | |
Tranche 3: Three years following the date of the grant | |
Tranche 4: Four years following the date of the grant | |
To value these market-based restricted performance stock units under the Equity Compensation Plans, the Company used a Monte Carlo simulation model on the date of grant. Fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and the NASDAQ Composite Index, risk free interest rates, and future dividend payments. The Company used the historical volatility and correlation of our stock and the Index over a period equal to the remaining performance period as of the grant date. The risk-free interest rate was based on the closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the remaining performance period as of the grant date. The dividend yield assumption was based on our history and expectation of future dividend payout. Compensation expense for restricted stock units with performance and market conditions is recognized over the requisite service period using the straight-line method on a tranche by tranche basis and includes the impact of estimated forfeitures. | |
In October 2013, the board of directors approved the modification of unvested stock options to purchase 74,479 shares of common stock and unvested stock purchase rights totaling 37,000 shares of common stock held by the Company's president upon his resignation. The options held by the Company's president upon his resignation, taken as a whole, had a weighted average exercise price of $4.05 per share and range from $2.72 to $5.87 per share, and a weighted average remaining vesting term of 0.5 years. Approximately $1.1 million of the $7.6 million of stock-based compensation charge in fiscal year 2014 applied to the options held by the former president of the Company and was recorded in general and administrative expenses. | |
Comprehensive (Loss) Income | COMPREHENSIVE (LOSS) INCOME |
Comprehensive (loss) income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. The difference between net income and comprehensive (loss) income is due to foreign currency translation adjustments and unrealized gains or losses on investments classified as available-for-sale. | |
Net Income Per Share | NET INCOME PER SHARE |
Basic net income per share is computed by dividing net income available to common stockholders (numerator) by the weighted average number of vested, unrestricted common shares outstanding during the period (denominator). Diluted net income per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and employee restricted purchase rights. | |
Deferred Rent | DEFERRED RENT |
In April 2012, the Company entered into an 87-month lease agreement for its new headquarters. Under the terms of the lease agreement: | |
the Company received a three month rent holiday from rental payments; | |
base rent is $130,821 for the 15 months after the rent holiday; and | |
rent expense increases 3% each year thereafter. | |
In the second quarter of fiscal 2013, the Company received a $1.7 million allowance for reimbursement for the cost of tenant improvements that the Company included in cash flows from operating activities. In accordance with the guidance in ASC 840-20, Leases, the Company accounts for its headquarters facility operating lease as follows: | |
Rent Holidays. The Company recognizes the related rent expense on a straight-line basis at the earlier of the first rent payment or the date of possession of the leased property. The difference between the amounts charged to expense and the rent paid is recorded as deferred lease incentives and amortized over the lease term. | |
Rent Escalations. The Company recognizes escalating rent provisions on a straight-line basis over the lease term. The difference between the amounts charged to expense and the rent paid is recorded as deferred lease incentives and amortized over the lease term. | |
Tenant Improvement Allowance. The tenant improvement allowance is deferred and amortized on a straight-line basis over the life of the lease as a reduction to rent expense. | |
At March 31, 2015, total deferred rent included in other accrued liabilities and non-current liabilities was $0.3 million and $1.3 million, respectively. At March 31, 2014, total deferred rent included in other accrued liabilities and non-current liabilities was $0.2 million and $1.6 million, respectively. | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS |
In April 2014, the FASB issued Accounting Standards Update (ASU) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the requirements for reporting discontinued operations in FASB ASU 205-20, such that a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. This ASU requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position, as well as additional disclosures about discontinued operations. Additionally, the ASU requires disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements and expands the disclosures about an entity's significant continuing involvement with a discontinued operation. The accounting update is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. The adoption is not expected to have a material impact on the Company's results of operations, cash flows or financial position. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and the IASB has issued IFRS 15, Revenue from Contracts with Customers. The issuance of these documents completes the joint effort by the FASB and the IASB to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and IFRS. The new guidance affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements. | |
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation-Stock Compensation, as it relates to such awards. ASU 2014-12 is effective for us in our first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements. | |
In April 2015, the FASB issued ASU 2015-05, Intangibles -Goodwill and Other -Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provide guidance to customers about whether a cloud computing arrangement includes a software license. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements. | |
Indemnifications | Indemnifications |
In the normal course of business, the Company may agree to indemnify other parties, including customers, lessors and parties to other transactions with the Company, with respect to certain matters such as breaches of representations or covenants or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors. | |
It is not possible to determine the maximum potential amount of the Company's exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company's operating results, financial position or cash flows. Under some of these agreements, however, the Company's potential indemnification liability might not have a contractual limit. | |
Recovered_Sheet1
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Cash Cash Equivalents And Investments Tables | ||||||||||||||||||||||
Cash and Cash Equivalents (Tables) | Cash, cash equivalents, and available-for-sale investments were (in thousands): | |||||||||||||||||||||
Gross | Gross | Cash and | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | Cash | Short-Term | |||||||||||||||||
As of March 31, 2015 | Costs | Gain | Loss | Fair Value | Equivalents | Investments | ||||||||||||||||
Cash | $ | 24,734 | $ | - | $ | - | $ | 24,734 | $ | 24,734 | $ | - | ||||||||||
Level 1: | ||||||||||||||||||||||
Money market funds | 28,376 | - | - | 28,376 | 28,376 | - | ||||||||||||||||
Mutual funds | 2,000 | - | -107 | 1,893 | - | 1,893 | ||||||||||||||||
Subtotal | 55,110 | - | -107 | 55,003 | 53,110 | 1,893 | ||||||||||||||||
Level 2: | ||||||||||||||||||||||
Commercial paper | 9,043 | 1 | - | 9,044 | - | 9,044 | ||||||||||||||||
Corporate debt | 75,284 | 57 | -10 | 75,331 | - | 75,331 | ||||||||||||||||
Municipal securities | 5,435 | 2 | -1 | 5,436 | - | 5,436 | ||||||||||||||||
Asset backed securities | 21,503 | 4 | -5 | 21,502 | - | 21,502 | ||||||||||||||||
Mortgage backed securities | 5,822 | - | -52 | 5,770 | - | 5,770 | ||||||||||||||||
Agency bond | 4,201 | 3 | - | 4,204 | - | 4,204 | ||||||||||||||||
International government securities | 800 | 4 | - | 804 | - | 804 | ||||||||||||||||
Subtotal | 122,088 | 71 | -68 | 122,091 | - | 122,091 | ||||||||||||||||
Total | $ | 177,198 | $ | 71 | $ | -175 | $ | 177,094 | $ | 53,110 | $ | 123,984 | ||||||||||
Gross | Gross | Cash and | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | Cash | Short-Term | Long-Term | ||||||||||||||||
As of March 31, 2014 | Costs | Gain | Loss | Fair Value | Equivalents | Investments | Investments | |||||||||||||||
Cash | $ | 26,548 | $ | - | $ | - | $ | 26,548 | $ | 26,548 | $ | - | $ | - | ||||||||
Level 1: | ||||||||||||||||||||||
Money market funds | 32,611 | - | - | 32,611 | 32,611 | - | - | |||||||||||||||
Mutual funds | 1,964 | - | -55 | 1,909 | - | 1,909 | - | |||||||||||||||
Subtotal | 61,123 | - | -55 | 61,068 | 59,159 | 1,909 | - | |||||||||||||||
Level 2: | ||||||||||||||||||||||
Commercial paper | 30,374 | 5 | - | 30,379 | - | 30,379 | - | |||||||||||||||
Corporate debt | 63,621 | 35 | -39 | 63,617 | - | 14,893 | 48,724 | |||||||||||||||
Municipal securities | 5,435 | 5 | -1 | 5,439 | - | - | 5,439 | |||||||||||||||
Asset backed securities | 17,049 | 6 | -1 | 17,054 | - | - | 17,054 | |||||||||||||||
International government securities | 800 | 4 | - | 804 | - | - | 804 | |||||||||||||||
Subtotal | 117,279 | 55 | -41 | 117,293 | - | 45,272 | 72,021 | |||||||||||||||
Total | $ | 178,402 | $ | 55 | $ | -96 | $ | 178,361 | $ | 59,159 | $ | 47,181 | $ | 72,021 | ||||||||
Contractual maturities of investments as of March 31, 2015 are set forth below (in thousands): | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||
Due within one year | $ | 69,502 | ||||||||||||||||||||
Due after one year | 54,482 | |||||||||||||||||||||
Total | $ | 123,984 | ||||||||||||||||||||
Inventory_Tables
Inventory (Tables) | 12 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Inventory Tables | |||||||
Inventory (Tables) | Components of inventories were as follows: | ||||||
March 31, | |||||||
2015 | 2014 | ||||||
(in thousands) | |||||||
Work-in-process | $ | 169 | $ | 23 | |||
Finished goods | 535 | 788 | |||||
$ | 704 | $ | 811 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Property And Equipment Tables | |||||||
Components of Property, Plant and Equipment | Property and equipment was comprised of the following: | ||||||
March 31, | |||||||
2015 | 2014 | ||||||
(in thousands) | |||||||
Machinery and computer equipment | $ | 16,099 | $ | 9,557 | |||
Furniture and fixtures | 759 | 505 | |||||
Licensed software | 4,696 | 3,517 | |||||
Leasehold improvements | 3,812 | 3,468 | |||||
Construction in progress | 942 | - | |||||
26,308 | 17,047 | ||||||
Less: accumulated depreciation and amortization | -16,060 | -9,336 | |||||
$ | 10,248 | $ | 7,711 | ||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Intangible Assets Tables | ||||||||||||||||||
Carrying values of intangible assets | The carrying value of intangible assets consisted of the following (in thousands): | |||||||||||||||||
31-Mar-15 | 31-Mar-14 | |||||||||||||||||
Gross | Gross | |||||||||||||||||
Carrying | Accumulated | Net Carrying | Carrying | Accumulated | Net Carrying | |||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||
Technology | $ | 8,242 | $ | -2,905 | $ | 5,337 | $ | 8,242 | $ | -2,080 | $ | 6,162 | ||||||
Customer relationships | 9,686 | -3,720 | 5,966 | 9,686 | -1,710 | 7,976 | ||||||||||||
Trade names/domains | 957 | - | 957 | 957 | - | 957 | ||||||||||||
Total acquired identifiable | ||||||||||||||||||
intangible assets | $ | 18,885 | $ | -6,625 | $ | 12,260 | $ | 18,885 | $ | -3,790 | $ | 15,095 | ||||||
Finite-lived intangible assets - future amortization expense | At March 31, 2015, annual amortization of intangible assets, based upon our existing intangible assets and current useful lives, is estimated to be the following (in thousands): | |||||||||||||||||
Amount | ||||||||||||||||||
2016 | $ | 2,159 | ||||||||||||||||
2017 | 2,152 | |||||||||||||||||
2018 | 1,904 | |||||||||||||||||
2019 | 1,658 | |||||||||||||||||
2020 | 1,658 | |||||||||||||||||
Thereafter | 1,772 | |||||||||||||||||
Total | $ | 11,303 | ||||||||||||||||
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | |||
Mar. 31, 2015 | ||||
Goodwill Tables | ||||
Carrying amounts of goodwill | The following table provides a summary of the changes in the carrying amounts of goodwill (in thousands): | |||
Balance as of March 31, 2013 | $ | 25,150 | ||
Increase in goodwill related to acquisitions | 14,155 | |||
Decrease in goodwill related to disposal of discontinued operations | -1,210 | |||
Foreign currency translation | 366 | |||
Balance as of March 31, 2014 | 38,461 | |||
Foreign currency translation | -1,574 | |||
Balance as of March 31, 2015 | $ | 36,887 | ||
Recovered_Sheet2
Commitments And Contingencies (Tables) | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Commitments And Contingencies Tables | ||||||||||
Product warranties | Changes in the Company's product warranty liability, which is included in cost of product revenues in the consolidated statements of income were as follows (in thousands): | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Balance at beginning of year | $ | 660 | $ | 452 | $ | 387 | ||||
Accruals for warranties | 185 | 953 | 611 | |||||||
Settlements | -364 | -745 | -546 | |||||||
Changes in estimate | -142 | - | - | |||||||
Balance at end of year | $ | 339 | $ | 660 | $ | 452 | ||||
Future minimum annual operating lease payments | At March 31, 2015, future minimum annual lease payments under non-cancelable operating leases were as follows (in thousands): | |||||||||
Year ending March 31: | ||||||||||
2016 | $ | 1,913 | ||||||||
2017 | 1,977 | |||||||||
2018 | 1,872 | |||||||||
2019 | 1,926 | |||||||||
2020 and Thereafter | 1,100 | |||||||||
Total | $ | 8,788 | ||||||||
Future annual lease payments under noncancelable capital leases | At March 31, 2015, future minimum annual lease payments under non-cancelable capital leases were as follows (in thousands): | |||||||||
Year ending March 31: | ||||||||||
2016 | $ | 29 | ||||||||
Total minimum payments | 29 | |||||||||
Less: Amount representing interest | -4 | |||||||||
25 | ||||||||||
Less: Short-term portion of capital lease obligations | -25 | |||||||||
Long-term portion of capital lease obligations | $ | - | ||||||||
Minimum third party network service provider commitments | At March 31, 2015, future minimum annual payments under these third party network service contracts were as follows (in thousands): | |||||||||
Year ending March 31: | ||||||||||
2016 | $ | 3,014 | ||||||||
2017 | 2,452 | |||||||||
2018 | 891 | |||||||||
Total minimum payments | $ | 6,357 | ||||||||
Distribution_of_StockBased_Com
Distribution of Stock-Based Compensation Plan Expense (Tables) | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Distribution Of Stock-based Compensation Plan Expense Tables | ||||||||||
Schedule Of Stock-Based Compensation Expense By Statement Of Operations Line Item | The following table summarizes stock-based compensation expense (in thousands): | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Cost of service revenue | $ | 692 | $ | 372 | $ | 211 | ||||
Cost of product revenue | - | - | - | |||||||
Research and development | 1,495 | 967 | 428 | |||||||
Sales and marketing | 3,748 | 2,217 | 1,363 | |||||||
General and administrative | 3,412 | 4,039 | 632 | |||||||
Total stock-based compensation expense | ||||||||||
related to employee stock options | ||||||||||
and employee stock purchases, pre-tax | 9,347 | 7,595 | 2,634 | |||||||
Tax benefit | - | - | - | |||||||
Stock based compensation expense related to | ||||||||||
employee stock options and employee | ||||||||||
stock purchases, net of tax | $ | 9,347 | $ | 7,595 | $ | 2,634 | ||||
StockBased_Compensation_And_Em
Stock-Based Compensation And Employee Purchase Plan (Tables) | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Employee Stock Purchase Plan | ||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Expected volatility | 49% | 40% | 40% | |||||||
Expected dividend yield | - | - | - | |||||||
Risk-free interest rate | 0.12% | 0.09% | 0.14% | |||||||
Weighted average expected rights term | 0.80 years | 0.75 years | 0.75 years | |||||||
Weighted average fair value of rights granted | $ | 2.52 | $ | 2.83 | $ | 1.78 | ||||
Option Grants | ||||||||||
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Option activity under all the Company's stock option plans since March 31, 2012, is summarized as follows: | |||||||||
Weighted | ||||||||||
Average | ||||||||||
Exercise | ||||||||||
Number of | Price | |||||||||
Shares | Per Share | |||||||||
Outstanding at March 31, 2012 | 6,034,335 | $ | 1.90 | |||||||
Granted | 932,000 | 5.80 | ||||||||
Exercised | -835,246 | 1.49 | ||||||||
Canceled/Forfeited | -139,545 | 4.00 | ||||||||
Outstanding at March 31, 2013 | 5,991,544 | 2.52 | ||||||||
Granted | 1,465,400 | 9.66 | ||||||||
Exercised | -1,283,470 | 2.75 | ||||||||
Canceled/Forfeited | -171,092 | 5.25 | ||||||||
Outstanding at March 31, 2014 | 6,002,382 | 4.14 | ||||||||
Granted | 1,110,466 | 7.29 | ||||||||
Exercised | -1,326,385 | 1.87 | ||||||||
Canceled/Forfeited | -458,556 | 6.06 | ||||||||
Outstanding at March 31, 2015 | 5,327,907 | $ | 5.19 | |||||||
Vested and expected to vest at March 31, 2015 | 5,327,907 | $ | 5.19 | |||||||
Exercisable at March 31, 2015 | 3,243,325 | $ | 3.35 | |||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Expected volatility | 61% | 64% | 70% | |||||||
Expected dividend yield | - | - | - | |||||||
Risk-free interest rate | 1.4% to 1.9% | 0.7% to 2.2% | 0.5% to 0.8% | |||||||
Weighted average expected option term | 6.0 years | 6.1 years | 5.3 years | |||||||
Weighted average fair value of options granted | $ | 4.14 | $ | 5.70 | $ | 3.32 | ||||
Stock Purchase Rights | ||||||||||
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Purchase Right activity since March 31, 2012 is summarized as follows: | |||||||||
Weighted | Weighted | |||||||||
Average | Average | |||||||||
Grant-Date | Remaining | |||||||||
Number of | Fair Market | Contractual | ||||||||
Shares | Value | Term (in Years) | ||||||||
Balance at March 31, 2012 | 966,400 | $ | 2.50 | 2.61 | ||||||
Granted | 443,436 | 5.75 | ||||||||
Vested | -367,017 | 2.14 | ||||||||
Forfeited | -84,244 | 2.89 | ||||||||
Balance at March 31, 2013 | 958,575 | 4.11 | 2.52 | |||||||
Granted | 22,380 | 9.69 | ||||||||
Vested | -392,844 | 3.25 | ||||||||
Forfeited | -98,484 | 5.18 | ||||||||
Balance at March 31, 2014 | 489,627 | 4.83 | 1.93 | |||||||
Granted | 31,432 | 7.88 | ||||||||
Vested | -223,360 | 3.98 | ||||||||
Forfeited | -73,864 | 5.39 | ||||||||
Balance at March 31, 2015 | 223,835 | $ | 5.92 | 1.50 | ||||||
Restricted Stock Units | ||||||||||
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Restricted Stock Unit activity since June 22, 2012 is summarized as follows: | |||||||||
Weighted | Weighted Average | |||||||||
Number of | Average Grant | Remaining Contractual | ||||||||
Shares | Date Fair Value | Term (in Years) | ||||||||
Balance at June 22, 2012 | - | $ | - | |||||||
Granted | 25,000 | 6.91 | ||||||||
Vested | - | - | ||||||||
Forfeited | - | - | ||||||||
Balance at March 31, 2013 | 25,000 | 6.91 | 2.47 | |||||||
Granted | 1,291,200 | 9.11 | ||||||||
Vested | -133,000 | 9.49 | ||||||||
Forfeited | -48,344 | 9.61 | ||||||||
Balance at March 31, 2014 | 1,134,856 | 9.00 | 2.00 | |||||||
Granted | 1,965,786 | 6.68 | ||||||||
Vested | -187,788 | 9.54 | ||||||||
Forfeited | -214,168 | 8.30 | ||||||||
Balance at March 31, 2015 | 2,698,686 | $ | 7.33 | 1.88 | ||||||
Stock_Options_Outstanding_And_
Stock Options Outstanding And Exercisable (Tables) | 12 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Stock Options Outstanding And Exercisable Tables | ||||||||||||||||||||
Summary Of Outstanding And Exercisable Stock Options | Significant option groups outstanding at March 31, 2015 and related weighted average exercise price, contractual life, and aggregate intrinsic value information for 8x8, Inc.'s stock option plans are as follows: | |||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Remaining | Aggregate | Exercise | Aggregate | ||||||||||||||||
Price | Contractual | Intrinsic | Price | Intrinsic | ||||||||||||||||
Shares | Per Share | Life (Years) | Value | Shares | Per Share | Value | ||||||||||||||
$ 0.55 to $ 1.26 | 1,095,000 | $ | 1.11 | 2.9 | $ | 7,982,430 | 1,095,000 | $ | 1.11 | $ | 7,982,430 | |||||||||
$ 1.27 to $ 3.92 | 1,067,933 | $ | 1.63 | 1.4 | 7,233,393 | 1,064,403 | $ | 1.62 | 7,214,201 | |||||||||||
$ 4.25 to $ 6.86 | 1,543,322 | $ | 6.10 | 8.2 | 3,543,355 | 622,739 | $ | 5.50 | 1,803,291 | |||||||||||
$ 7.52 to $ 9.74 | 1,471,652 | $ | 9.26 | 8.7 | 156,354 | 415,871 | $ | 9.62 | 1,083 | |||||||||||
$ 10.97 to $ 11.26 | 150,000 | $ | 11.11 | 8.8 | - | 45,312 | $ | 11.09 | - | |||||||||||
5,327,907 | $ | 18,915,532 | 3,243,325 | $ | 17,001,005 | |||||||||||||||
Stock_Repurchases_Tables
Stock Repurchases (Tables) | 12 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stock Repurchases Tables | |||||||||
Stock Repurchases [Table Text Block] | The stock repurchase activity as of March 31, 2015 is summarized as follows: | ||||||||
Weighted | |||||||||
Average | |||||||||
Shares | Price | Amount | |||||||
Repurchased | Per Share | Repurchased(1) | |||||||
Repurchase of common stock | |||||||||
under 2014 Repurchase Plan | 1,913,748 | $ | 7.82 | $ | 14,961,177 | ||||
Repurchase of common stock | |||||||||
under 2015 Repurchase Plan | 574,467 | $ | 7.38 | 4,239,216 | |||||
Total | 2,488,215 | $ | 19,200,393 | ||||||
(1) Amount excludes commission fees. | |||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Income Taxes Tables | ||||||||||||
Components of tax provision | The components of the consolidated provision for income taxes for fiscal 2015, 2014 and 2013 consisted of the following (in thousands): | |||||||||||
March 31, | ||||||||||||
Current: | 2015 | 2014 | 2013 | |||||||||
Federal | $ | 92 | $ | - | $ | - | ||||||
State | 457 | 276 | 434 | |||||||||
Foreign | 1 | - | - | |||||||||
Total current tax provision | 550 | 276 | 434 | |||||||||
Deferred | ||||||||||||
Federal | $ | 2,602 | $ | 1,578 | $ | 7,185 | ||||||
State | -363 | 365 | 1,780 | |||||||||
Foreign | - | - | - | |||||||||
Total deferred tax provision | 2,239 | 1,943 | 8,965 | |||||||||
Total income tax provision | $ | 2,789 | $ | 2,219 | $ | 9,399 | ||||||
Schedule of tax effects of temporary differences that give rise to deferred tax assets and liabilities | Deferred tax assets were comprised of the following (in thousands): | |||||||||||
March 31, | ||||||||||||
Current deferred tax assets | 2015 | 2014 | ||||||||||
Net operating loss carryforwards | $ | 2,179 | $ | 333 | ||||||||
Inventory valuation | 14 | 33 | ||||||||||
Reserves and allowances | 2,394 | 1,791 | ||||||||||
Net current deferred tax assets | 4,587 | 2,157 | ||||||||||
Net operating loss carryforwards | 44,228 | 51,598 | ||||||||||
Research and development and other credit carryforwards | 5,414 | 4,488 | ||||||||||
Fixed assets and intangibles | -1,705 | -2,819 | ||||||||||
Net non-current deferred tax assets | 47,937 | 53,267 | ||||||||||
Valuation allowance | -4,901 | -5,562 | ||||||||||
Total | $ | 47,623 | $ | 49,862 | ||||||||
Reconciliation of U.S. statutory income tax rate to company's effective tax rate | A reconciliation of the Company's provision for income taxes to the amounts computed using the statutory U.S. federal income tax rate of 34% is as follows (in thousands): | |||||||||||
Years Ended March 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Tax provision at statutory rate | $ | 1,599 | $ | 1,285 | $ | 7,768 | ||||||
State income taxes before valuation allowance, | ||||||||||||
net of federal effect | 269 | 196 | 822 | |||||||||
Research and development credits | -725 | -1,534 | -385 | |||||||||
Change in valuation allowance | -1,480 | 1,264 | 1,038 | |||||||||
Compensation/option differences | -331 | -264 | -207 | |||||||||
Non-deductible compensation | 746 | 605 | 403 | |||||||||
Acquisition costs | - | 230 | - | |||||||||
Expiring CA NOLs | 1,484 | 240 | - | |||||||||
Foreign loss not benefited | 1,192 | 271 | - | |||||||||
Other | 35 | -74 | -40 | |||||||||
Total income tax provision | $ | 2,789 | $ | 2,219 | $ | 9,399 | ||||||
Reconciliation of beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): | |||||||||||
Unrecognized Tax Benefits | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Balance at beginning of year | $ | 2,165 | $ | 3,024 | $ | 2,483 | ||||||
Gross increases - tax position in prior period | 27 | - | 73 | |||||||||
Gross decreases - tax position in prior period | - | -1,081 | - | |||||||||
Gross increases - tax positions related to the current year | 228 | 222 | 468 | |||||||||
Settlements | - | - | - | |||||||||
Lapse of statute of limitations | - | - | - | |||||||||
Balance at end of year | $ | 2,420 | $ | 2,165 | $ | 3,024 | ||||||
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Net Income Per Share Tables | ||||||||||
Net Income Per Share | The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net income per share (in thousands, except share and per share data): | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||
Numerator: | ||||||||||
Income from continuing operations | $ | 1,926 | $ | 1,598 | $ | 13,450 | ||||
Income from discontinued operations, net | ||||||||||
of income tax provision | - | 916 | 489 | |||||||
Net income available to common stockholders | $ | 1,926 | $ | 2,514 | $ | 13,939 | ||||
Denominator: | ||||||||||
Common shares | 89,071 | 78,310 | 71,390 | |||||||
Denominator for basic calculation | 89,071 | 78,310 | 71,390 | |||||||
Employee stock options | 2,088 | 2,927 | 2,958 | |||||||
Employee restricted purchase rights | 493 | 421 | 352 | |||||||
Denominator for diluted calculation | 91,652 | 81,658 | 74,700 | |||||||
Income per share - continuing operations: | ||||||||||
Basic | $ | 0.02 | $ | 0.02 | $ | 0.19 | ||||
Diluted | $ | 0.02 | $ | 0.02 | $ | 0.18 | ||||
Income per share - discontinued operations: | ||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||
Net income per share: | ||||||||||
Basic | $ | 0.02 | $ | 0.03 | $ | 0.20 | ||||
Diluted | $ | 0.02 | $ | 0.03 | $ | 0.19 | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares attributable to outstanding stock options and restricted stock purchase rights were excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive (in thousands): | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Common stock options | 1,812 | 750 | 953 | |||||||
Stock purchase rights | 57 | 18 | 16 | |||||||
1,869 | 768 | 969 | ||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Segment Information Tables | ||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The Company's revenue distribution by geographic region (based upon the destination of shipments and the customer's service address) was as follows: | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Americas (principally US) | 92% | 97% | 99% | |||||||
Europe | 7% | 2% | 0% | |||||||
Asia-Pacific | 1% | 1% | 1% | |||||||
100% | 100% | 100% | ||||||||
Geographic area data is based upon the location of the property and equipment and is as follows (in thousands): | ||||||||||
March 31, | ||||||||||
2015 | 2014 | |||||||||
North America | $ | 8,348 | $ | 6,305 | ||||||
Europe | 1,411 | 1,087 | ||||||||
Asia-Pacific | 489 | 319 | ||||||||
$ | 10,248 | $ | 7,711 | |||||||
Acquisition_Tables
Acquisition (Tables) | 12 Months Ended | |||
Mar. 31, 2015 | ||||
Acquisition Tables | ||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The fair values of the assets acquired and liabilities assumed are as follows (in thousands): | |||
Fair Value | ||||
Assets acquired: | ||||
Cash | $ | 854 | ||
Current assets | 1,114 | |||
Property and equipment | 956 | |||
Intangible asset - customer relationship | 6,381 | |||
Total assets acquired | 9,305 | |||
Liabilities assumed: | ||||
Current and non-current liabilities | -4,132 | |||
Total liabilities assumed | -4,132 | |||
Net identifiable assets acquired | 5,173 | |||
Goodwill | 14,155 | |||
Total consideration transferred | $ | 19,328 | ||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Discontinued Operations Tables | ||||||||||
Schedule of Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The dedicated server hosting business has been reported as discontinued operations. The results of operations of these discontinued operations are as follows: | |||||||||
Years Ended March 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Revenue | $ | - | $ | 1,430 | $ | 3,828 | ||||
Operating expense | - | 922 | 3,005 | |||||||
Income before income taxes | - | 508 | 823 | |||||||
Provision for income taxes | - | 188 | 334 | |||||||
Income from discontinued operations | - | 320 | 489 | |||||||
Gain on disposal of discontinued operations, | ||||||||||
net of income tax provision of $456 | - | 596 | - | |||||||
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Consolidated Quarterly Financial Data | |||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | In thousands, except per share data amounts: | ||||||||||||||||||||||||
QUARTER ENDED | |||||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | ||||||||||||||||||
Service revenue | $ | 40,009 | $ | 37,802 | $ | 36,121 | $ | 34,276 | $ | 32,545 | $ | 29,737 | $ | 27,826 | $ | 26,499 | |||||||||
Product revenue | 3,521 | 3,570 | 3,477 | 3,637 | 3,241 | 3,008 | 2,989 | 2,752 | |||||||||||||||||
Total revenue | 43,530 | 41,372 | 39,598 | 37,913 | 35,786 | 32,745 | 30,815 | 29,251 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Cost of service revenue | 7,655 | 7,544 | 7,505 | 6,997 | 6,866 | 5,584 | 5,209 | 4,786 | |||||||||||||||||
Cost of product revenue | 4,173 | 3,959 | 3,762 | 3,969 | 3,999 | 4,041 | 3,783 | 3,347 | |||||||||||||||||
Research and development | 4,348 | 3,868 | 3,496 | 3,406 | 3,332 | 3,325 | 2,640 | 2,336 | |||||||||||||||||
Sales and marketing | 21,508 | 20,559 | 19,440 | 19,160 | 18,038 | 16,051 | 13,745 | 13,072 | |||||||||||||||||
General and administrative | 5,794 | 4,617 | 3,893 | 3,878 | 3,924 | 5,547 | 3,125 | 2,772 | |||||||||||||||||
Gain on patent sale | - | - | -1,000 | - | - | - | - | - | |||||||||||||||||
Total operating expenses | 43,478 | 40,547 | 37,096 | 37,410 | 36,159 | 34,548 | 28,502 | 26,313 | |||||||||||||||||
Income (loss) from operations | 52 | 825 | 2,502 | 503 | -373 | -1,803 | 2,313 | 2,938 | |||||||||||||||||
Other income net | 210 | 246 | 200 | 177 | 140 | 586 | 1 | 15 | |||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||
operations before provision | |||||||||||||||||||||||||
(benefit) for income taxes | 262 | 1,071 | 2,702 | 680 | -233 | -1,217 | 2,314 | 2,953 | |||||||||||||||||
Provision (benefit) for | |||||||||||||||||||||||||
income taxes (1) | 79 | 627 | 1,411 | 672 | 1,738 | -1,306 | 826 | 961 | |||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||
operations | 183 | 444 | 1,291 | 8 | -1,971 | 89 | 1,488 | 1,992 | |||||||||||||||||
Income from discontinued | |||||||||||||||||||||||||
operations, net of income | |||||||||||||||||||||||||
tax provision | - | - | - | - | 19 | - | 154 | 147 | |||||||||||||||||
Gain on disposal of discontinued | |||||||||||||||||||||||||
operations, net of income tax | |||||||||||||||||||||||||
provision of $456 | - | - | - | - | 7 | - | 589 | - | |||||||||||||||||
Net income (loss) | $ | 183 | $ | 444 | $ | 1,291 | $ | 8 | $ | -1,945 | $ | 89 | $ | 2,231 | $ | 2,139 | |||||||||
Income (loss) per share | |||||||||||||||||||||||||
continuing operations: | |||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.02 | $ | 0.03 | |||||||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.02 | $ | 0.03 | |||||||||
Income per share | |||||||||||||||||||||||||
discontinued operations: | |||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.01 | $ | 0.00 | |||||||||
Diluted | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.01 | $ | 0.00 | |||||||||
Net income (loss) per share: | |||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.03 | $ | 0.03 | |||||||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | -0.02 | $ | 0.00 | $ | 0.03 | $ | 0.03 | |||||||||
Shares used in per share calculations: | |||||||||||||||||||||||||
Basic | 88,950 | 89,594 | 89,073 | 88,592 | 88,184 | 79,742 | 72,970 | 72,510 | |||||||||||||||||
Diluted | 91,266 | 91,974 | 91,615 | 91,445 | 88,184 | 83,182 | 76,232 | 75,756 | |||||||||||||||||
-1 | Comparability affected by the decrease in fiscal 2015 and increase in fiscal 2014 in the valuation allowance related to the deferred tax asset which resulted in a decrease in fiscal 2015 and an increase in the provision for income taxes of $1.5 million and $1.3 million in the fourth quarter of fiscal 2015 and 2014, respectively. | ||||||||||||||||||||||||
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts (Tables) | 12 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Valuation And Qualifying Accounts Tables | |||||||||||||
Schedule of Valuation Allowance for Impairment of Recognized Servicing Assets [Table Text Block] | SCHEDULE II | ||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||
(in thousands) | |||||||||||||
Balance | |||||||||||||
at | Additions | Balance | |||||||||||
Beginning | Charged to | at End | |||||||||||
Description | of Year | Expenses | Deductions (a) | of Year | |||||||||
Total Allowance for Doubtful Accounts: | |||||||||||||
Year ended March 31, 2013: | $ | 140 | $ | 639 | $ | -452 | $ | 327 | |||||
Year ended March 31, 2014: | $ | 327 | $ | 571 | $ | -432 | $ | 466 | |||||
Year ended March 31, 2015: | $ | 466 | $ | 279 | $ | -329 | $ | 416 | |||||
(a) The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. | |||||||||||||
Description_of_the_Business_Na
Description of the Business (Narrative) (Details) | 12 Months Ended |
Mar. 31, 2015 | |
Description Of Business Narrative Details | |
Approximate number of business customers | 41,600 |
Year Founded | 1987 |
Entity Incorporation, Date of Incorporation | 31-Dec-96 |
Entity Incorporation, State Country Name | Delaware |
Fiscal Year End Date | -28 |
Software_Development_Costs_Nar
Software Development Costs (Narrative) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Software Development Costs | ||
Software costs capitalized during the period | $0 | $0.80 |
Total capitalized software costs | 1 | 1 |
Accumulated software costs amortization | 0.5 | 0.1 |
Software Development | ||
Software costs capitalized during the period | 1.5 | 0 |
Property and equipment | 0.8 | |
Long-term assets charged to other assets | $0.70 |
Significant_Accounting_Policie
Significant Accounting Policies (Advertising Costs) (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Significant Accounting Policies Advertising Costs Narrative Details | |||
Advertising expense | $6.80 | $7.30 | $6.50 |
Significant_Accounting_Policie1
Significant Accounting Policies (Deferred Rent) (Narrative) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Significant Accounting Policies Deferred Rent Narrative Details | ||
April 2012 lease agreement terms | In April 2012, the Company entered into an 87-month lease agreement. Under the terms of the lease agreement: | |
the Company received a three month rent holiday from rental payments before; | ||
base rent is $130,821 for the 15 months after the rent holiday; and | ||
rent expense increases 3% each year thereafter. | ||
In the second quarter of fiscal 2013, the Company received a $1.7 million allowance for reimbursement for the cost of tenant improvements that the Company included in cash flows from operating activities. | ||
Term of contract | 7 years 4 months | |
Tenant improvement allowance | $1.70 | |
Deferred rent recorded in other accrued liabilities | 0.3 | 0.2 |
Deferred rent recorded in other non-current liabilities | $1.30 | $1.60 |
Service_and_Product_Revenue_Na
Service and Product Revenue (Narrative) (Details) | Mar. 31, 2015 |
Service And Product Revenue Narrative Details | |
Trial period offered with all new services, days | 30 |
Cash_Cash_Equivalents_and_Inve1
Cash, Cash Equivalents and Investments with Hierarchy (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Amortized Costs | $177,198 | $178,402 | ||
Gross Unrealized Gains | 71 | 55 | ||
Gross Unrealized Loss | -175 | -96 | ||
Estimated Fair Value | 177,094 | 178,361 | ||
Cash and cash equivalents | 53,110 | 59,159 | 50,305 | 22,426 |
Short-term marketable investments | 123,984 | 47,181 | ||
Long-term marketable investments | 72,021 | |||
Aavailable-for-sale investments due within one year | 69,502 | |||
Aavailable-for-sale investments due after one year | 54,482 | |||
Level 1 | ||||
Amortized Costs | 55,110 | 61,123 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | -107 | -55 | ||
Estimated Fair Value | 55,003 | 61,068 | ||
Cash and cash equivalents | 53,110 | 59,159 | ||
Short-term marketable investments | 1,893 | 1,909 | ||
Long-term marketable investments | 0 | |||
Level 2 | ||||
Amortized Costs | 122,088 | 117,279 | ||
Gross Unrealized Gains | 71 | 55 | ||
Gross Unrealized Loss | -68 | -41 | ||
Estimated Fair Value | 12,291 | 117,293 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 122,091 | 45,272 | ||
Long-term marketable investments | 72,021 | |||
Cash | ||||
Amortized Costs | 24,734 | 26,548 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 24,734 | 26,548 | ||
Cash and cash equivalents | 24,734 | 26,548 | ||
Short-term marketable investments | 0 | 0 | ||
Long-term marketable investments | 0 | |||
Money Market Funds | Level 1 | ||||
Amortized Costs | 28,376 | 32,611 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 28,376 | 32,611 | ||
Cash and cash equivalents | 28,376 | 32,611 | ||
Short-term marketable investments | 0 | 0 | ||
Long-term marketable investments | 0 | |||
Mutual Funds | Level 1 | ||||
Amortized Costs | 2,000 | 1,964 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | -107 | -55 | ||
Estimated Fair Value | 1,893 | 1,909 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 1,893 | 1,909 | ||
Long-term marketable investments | 0 | |||
Commercial Paper | Level 2 | ||||
Amortized Costs | 9,043 | 30,374 | ||
Gross Unrealized Gains | 1 | 5 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 9,044 | 30,379 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 9,044 | 30,379 | ||
Long-term marketable investments | 0 | |||
Corporate Debt | Level 2 | ||||
Amortized Costs | 75,284 | 63,621 | ||
Gross Unrealized Gains | 57 | 35 | ||
Gross Unrealized Loss | -10 | -39 | ||
Estimated Fair Value | 75,331 | 63,617 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 75,331 | 14,893 | ||
Long-term marketable investments | 48,724 | |||
Municipal Securities | Level 2 | ||||
Amortized Costs | 5,435 | 5,435 | ||
Gross Unrealized Gains | 2 | 5 | ||
Gross Unrealized Loss | -1 | -1 | ||
Estimated Fair Value | 5,436 | 5,439 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 5,436 | 0 | ||
Long-term marketable investments | 5,439 | |||
Asset-backed Securities | Level 2 | ||||
Amortized Costs | 21,503 | 17,049 | ||
Gross Unrealized Gains | 4 | 6 | ||
Gross Unrealized Loss | -5 | -1 | ||
Estimated Fair Value | 21,502 | 17,054 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 21,502 | 0 | ||
Long-term marketable investments | 17,054 | |||
Mortgage backed Securities | Level 2 | ||||
Amortized Costs | 5,822 | |||
Gross Unrealized Gains | 0 | |||
Gross Unrealized Loss | -52 | |||
Estimated Fair Value | 5,770 | |||
Cash and cash equivalents | 0 | |||
Short-term marketable investments | 5,770 | |||
Agency Bond | Level 2 | ||||
Amortized Costs | 4,201 | |||
Gross Unrealized Gains | 3 | |||
Gross Unrealized Loss | 0 | |||
Estimated Fair Value | 4,204 | |||
Cash and cash equivalents | 0 | |||
Short-term marketable investments | 4,204 | |||
International Government Securities | Level 2 | ||||
Amortized Costs | 800 | 800 | ||
Gross Unrealized Gains | 4 | 4 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 804 | 804 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 804 | 0 | ||
Long-term marketable investments | $804 |
Inventory_Details
Inventory (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Details | ||
Work-in-process | $169 | $23 |
Finished goods | 535 | 788 |
Inventory, net | $704 | $811 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property And Equipment Details | ||
Machinery and computer equipment | $16,099 | $9,557 |
Furniture and fixtures | 759 | 505 |
Licensed software | 4,696 | 3,517 |
Leasehold improvements | 3,812 | 3,468 |
Construction in progress | 942 | 0 |
Gross | 26,308 | 17,047 |
Less: accumulated depreciation and amortization | -16,060 | -9,336 |
Net | $10,248 | $7,711 |
Intangible_Assets_Schedule_Of_
Intangible Assets Schedule Of Intangibles (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Gross Carrying Amount | $18,885 | $18,885 |
Accumulated Amortization | -6,625 | -3,790 |
Net Carrying Amount | 12,260 | 15,095 |
Technology | ||
Gross Carrying Amount | 8,242 | 8,242 |
Accumulated Amortization | -2,905 | -2,080 |
Net Carrying Amount | 5,337 | 6,162 |
Customer relationships | ||
Gross Carrying Amount | 9,686 | 9,686 |
Accumulated Amortization | -3,720 | -1,710 |
Net Carrying Amount | 5,966 | 7,976 |
Trade names/domains | ||
Gross Carrying Amount | 957 | 957 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | $957 | $957 |
Intangible_Assets_Schedule_Of_1
Intangible Assets Schedule Of Future Amortization Of Intangibles (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Intangible Assets Schedule Of Future Amortization Of Intangibles Details | |
2016 | $2,159 |
2017 | 2,152 |
2018 | 1,904 |
2019 | 1,658 |
2020 | 1,658 |
Thereafter | 1,772 |
Total | $11,303 |
Goodwill_Schedule_Of_Goodwill_
Goodwill Schedule Of Goodwill Changes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Goodwill Schedule Of Goodwill Changes Details | |||
Goodwill | $36,887 | $38,461 | $25,150 |
Increase in goodwill related to acquisitions | 14,155 | ||
Decrease in goodwill related to disposal of discontinued operations | -1,210 | ||
Foreign currency translation | ($1,574) | $366 |
Recovered_Sheet3
Commitments and Contingencies (Product Warranties) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Commitments And Contingencies Product Warranties Details | |||
Balance at beginning of year | $660 | $452 | $387 |
Accruals for warranties | 185 | 953 | 611 |
Settlements | -364 | -745 | -546 |
Changes in estimate | -142 | 0 | 0 |
Balance at end of year | $339 | $660 | $452 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Operating Leases) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Year ending March 31: | |
2016 | $1,913 |
2017 | 1,977 |
2018 | 1,872 |
2019 | 1,926 |
2020 and Thereafter | 1,100 |
Total | $8,788 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Capital Leases) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Year ending March 31: | |
2016 | $29 |
Total minimum payments | 29 |
Less: Amount representing interest | -4 |
Total payments, net of interest | 25 |
Less: Short-term portion of capital lease obligations | -25 |
Long-term portion of capital lease obligations | $0 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Service Provider Contracts) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Service Provider Contracts Details | |
2016 | $3,014 |
2017 | 2,452 |
2018 | 891 |
Total minimum payments | $6,357 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Leases - Rent Expense) (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Commitments And Contingencies Leases - Rent Expense Narrative Details | |||
Rent expense | $1.80 | $1.50 | $1.20 |
Commitments_and_Contingencies_5
Commitments and Contingencies (CustomerSupport Commitments) (Narrative) (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Millions, unless otherwise specified | ||
Commitments And Contingencies Customersupport Commitments Narrative Details | ||
Third party customer support vendor minimum monthly commitment | $0.40 | |
Third party customer support vendor maximum obligation | 2.2 | |
Advance termination notice required, days | 150 | |
Property and equipment under capital lease | 0.5 | 0.6 |
Accumulated depreciation related to assets under capital lease | $0.30 | $0.40 |
Stockholders_Equity_StockBased
Stockholders' Equity Stock-Based Compensation Expense By Statement Of Operations (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | $9,347 | $7,595 | $2,634 |
Tax benefit | 0 | 0 | 0 |
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 9,347 | 7,595 | 2,634 |
Cost of service revenue | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 692 | 372 | 211 |
Cost of product revenue | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 0 | 0 | 0 |
Research and development | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 1,495 | 967 | 428 |
Sales and marketing | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 3,748 | 2,217 | 1,363 |
General and administrative | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | $3,412 | $4,039 | $632 |
Stockholders_Equity_Option_Act
Stockholders' Equity Option Activity (Details) (USD $) | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | |
Stockholders Equity Option Activity Details | |||
Balance at beginning of period | 6,002,382 | 5,991,544 | 6,034,335 |
Granted | 1,110,466 | 1,465,400 | 932,000 |
Exercised | -1,326,385 | -1,283,470 | -835,246 |
Cancelled/forfeited | -458,556 | -171,092 | -139,545 |
Balance at end of period | 5,327,907 | 6,002,382 | 5,991,544 |
Options, Vested and expected to vest | 5,327,907 | ||
Options, Exercisable at end of period | 3,243,325 | ||
Weighted-average exercise price of options outstanding, at beginning of period | $4.14 | $2.52 | $1.90 |
Weighted-average exercise price of options granted during period | $7.29 | $9.66 | $5.80 |
Weighted-average exercise price of options exercised during the period | $1.87 | $2.75 | $1.49 |
Weighted-average exercise price of options forfeited, cancelled or expired during the period | $6.06 | $5.25 | $4 |
Weighted-average exercise price of options outstanding at end of period | $5.19 | $4.14 | $2.52 |
Options, Vested and Expected to Vest, Weighted Average Exercise Price | $5.19 | ||
Weighted-Average Exercise Prices, Exercisable at end of period | $3.35 |
Stockholders_Equity_Stock_Purc
Stockholders' Equity Stock Purchase Right Activity (Details) (USD $) | 12 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Stockholders Equity Stock Purchase Right Activity Details | ||||
Balance at beginning of year | 489,627 | 958,575 | 966,400 | |
Granted | 31,432 | 22,380 | 443,436 | |
Vested | -223,360 | -392,844 | -367,017 | |
Forfeited | -73,864 | -98,484 | -84,244 | |
Balance at end of year | 223,835 | 489,627 | 958,575 | 966,400 |
Weighted-average grant date fair market value, beginning balance | $4.83 | $4.11 | $2.50 | |
Weighted-average grant date fair market value of restricted stock rights granted | $7.88 | $9.69 | $5.75 | |
Weighted-average grant date fair market value, released during period | $3.98 | $3.25 | $2.14 | |
Weighted-average grant date fair market value, forfeited during period | $5.39 | $5.18 | $2.89 | |
Weighted-average grant date fair market value, ending balance | $5.92 | $4.83 | $4.11 | $2.50 |
Weighted-average remaining contractual term, in years, ending balance | 1 year 183 days | 1 year 339 days | 2 years 190 days | 2 years 223 days |
Stockholders_Equity_Restricted
Stockholders' Equity Restricted Stock Unit Activity (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | |
Stockholders Equity Restricted Stock Unit Activity Details | |||
Balance at beginning of period | 0 | 1,134,856 | 25,000 |
Granted | 25,000 | 1,965,786 | 1,291,200 |
Vested | 0 | -187,788 | -133,000 |
Forfeited | 0 | -214,168 | -48,344 |
Balance at end of period | 25,000 | 2,698,686 | 1,134,856 |
RSU weighted-average remaining contractual term, in years | 2.47 | 1.88 | 2 |
Beginniing of period, weighted-average purchase price | $0 | $9 | $6.91 |
Granted, weighted-average purchase price | $6.91 | $6.68 | $9.11 |
Vested, weighted-average purchase price | $0 | $9.54 | $9.49 |
Forfeited, weighted-average purchase price | $0 | $8.30 | $9.61 |
End of period, weighted-average purchase price | $6.91 | $7.33 | $9 |
Stockholders_Equity_Stock_Opti
Stockholder's Equity Stock Options Outstanding And Exercisable (Details) (USD $) | 12 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Options Outstanding, Number of Shares | 5,327,907 | 6,002,382 | 5,991,544 | 6,034,335 |
Options Outstanding, Weighted-Average Exercise Price Per Share | $5.19 | $4.14 | $2.52 | $1.90 |
Options Exercisable, Number of Shares | 3,243,325 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $3.35 | |||
$0.55 - $1.26 | ||||
Range of Exercise Prices, Minimum | $0.55 | |||
Range of Exercise Prices, Maximum | $1.26 | |||
Options Outstanding, Number of Shares | 1,095,000 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $1.11 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 2 years 329 days | |||
Options Outstanding, Aggregate Intrinsic Value | $7,982,430 | |||
Options Exercisable, Number of Shares | 1,095,000 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $1.11 | |||
Options Exercisable, Aggregate Intrinsic Value | 7,982,430 | |||
$1.27 - $3.92 | ||||
Range of Exercise Prices, Minimum | $1.27 | |||
Range of Exercise Prices, Maximum | $3.92 | |||
Options Outstanding, Number of Shares | 1,067,933 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $1.63 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 1 year 146 days | |||
Options Outstanding, Aggregate Intrinsic Value | 7,233,393 | |||
Options Exercisable, Number of Shares | 1,064,403 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $1.62 | |||
Options Exercisable, Aggregate Intrinsic Value | 7,214,201 | |||
$4.25 - $6.86 | ||||
Range of Exercise Prices, Minimum | $4.25 | |||
Range of Exercise Prices, Maximum | $6.86 | |||
Options Outstanding, Number of Shares | 1,543,322 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $6.10 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 73 days | |||
Options Outstanding, Aggregate Intrinsic Value | 3,543,355 | |||
Options Exercisable, Number of Shares | 622,739 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $5.50 | |||
Options Exercisable, Aggregate Intrinsic Value | 1,803,291 | |||
$7.52 - $9.74 | ||||
Range of Exercise Prices, Minimum | $7.52 | |||
Range of Exercise Prices, Maximum | $9.74 | |||
Options Outstanding, Number of Shares | 1,471,652 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $9.26 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 256 days | |||
Options Outstanding, Aggregate Intrinsic Value | 156,354 | |||
Options Exercisable, Number of Shares | 415,871 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $9.62 | |||
Options Exercisable, Aggregate Intrinsic Value | 1,083 | |||
$10.97 - $11.26 | ||||
Range of Exercise Prices, Minimum | $10.97 | |||
Range of Exercise Prices, Maximum | $11.26 | |||
Options Outstanding, Number of Shares | 150,000 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $11.11 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 292 days | |||
Options Outstanding, Aggregate Intrinsic Value | 0 | |||
Options Exercisable, Number of Shares | 45,312 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $11.09 | |||
Options Exercisable, Aggregate Intrinsic Value | 0 | |||
$0.55 - $11.26 | ||||
Range of Exercise Prices, Minimum | $0.55 | |||
Range of Exercise Prices, Maximum | $11.26 | |||
Options Outstanding, Number of Shares | 5,327,907 | |||
Options Outstanding, Aggregate Intrinsic Value | 18,915,533 | |||
Options Exercisable, Number of Shares | 3,243,325 | |||
Options Exercisable, Aggregate Intrinsic Value | $17,001,005 |
Stockholders_Equity_Assumption
Stockholder's Equity Assumptions Used In Black-Scholes Model (Details) (USD $) | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | |
Option Grants | |||
Expected volatility | 61.00% | 64.00% | 70.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate, minimum | 1.40% | 0.70% | 0.50% |
Risk-free interest rate, maximum | 1.90% | 2.20% | 0.80% |
Weighted average expected option term, in years | 6 years | 6 years 37 days | 5 years 110 days |
Weighted average fair value of options granted, per share | $4.14 | $5.70 | $3.32 |
Employee Stock Purchase | |||
Expected volatility | 49.00% | 40.00% | 40.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.12% | 0.09% | 0.14% |
Weighted average expected option term, in years | 0 years 292 days | 0 years 274 days | 0 years 274 days |
Weighted average fair value of options granted, per share | $2.52 | $2.83 | $1.78 |
Stockholders_Equity_Narrative_
Stockholders' Equity (Narrative) (Details) (USD $) | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | |
Cash received from option exercises and purchases of shares under the Purchase Plans | $4,500,000 | $5,200,000 | $2,400,000 |
Stock-Based Awards | |||
Total intrinsic value of options exercised | 8,100,000 | 8,200,000 | 3,300,000 |
Unamortized stock-based compensation expense related to unvested stock awards | 24,600,000 | ||
Weighted average period of recognition for unrecognized compensation costs (in years) | 2 years 277 days | ||
Tax benefit attributable to stock options exercised | $151,000 | $142,000 | $49,000 |
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan Shares Issued | 306,248 | 282,062 | 301,303 |
Percentage of market value price of common stock under Employee Stock Purchase Plan | 85.00% | ||
Maximum contribution percentage amount of employee's base compensation | 10.00% |
Repurchases_of_Common_Shares_D
Repurchases of Common Shares (Detail) (USD $) | 12 Months Ended | |
Mar. 31, 2015 | ||
Number of Shares | 2,488,215 | |
Amount | $19,200,393 | [1] |
2014 Repurchase Plan | ||
Number of Shares | 1,913,748 | |
Weighted Average Price Per Share | $7.82 | |
Amount | 14,961,177 | [1] |
2015 Repurchase Plan | ||
Number of Shares | 574,467 | |
Weighted Average Price Per Share | $7.38 | |
Amount | $4,239,216 | [1] |
[1] | Amount excludes commission fees. |
Inome_Taxes_Income_Tax_Provisi
Inome Taxes (Income Tax Provision) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | ||
Mar. 31, 2015 | |||||||||||||
Federal | $92 | $0 | $0 | ||||||||||
State | 457 | 276 | 434 | ||||||||||
Foreign | 1 | 0 | 0 | ||||||||||
Total current income tax provision | 550 | 276 | 434 | ||||||||||
Deferred: | |||||||||||||
Federal | 2,602 | 1,578 | 7,185 | ||||||||||
State | -363 | 365 | 1,780 | ||||||||||
Foreign | 0 | 0 | 0 | ||||||||||
Total deferred tax provision | 2,239 | 1,943 | 8,965 | ||||||||||
Income tax provision | $79 | [1] | $627 | $1,411 | $672 | $1,738 | [1] | ($1,306) | $826 | $961 | $2,789 | $2,219 | $9,399 |
[1] | Comparability affected by the decrease in fiscal 2015 and increase in fiscal 2014 in the valuation allowance related to the deferred tax asset which resulted in a decrease in fiscal 2015 and an increase in the provision for income taxes of $1.5 million and $1.3 million in the fourth quarter of fiscal 2015 and 2014, respectively. |
Income_taxes_Deferred_Tax_Asse
Income taxes (Deferred Tax Assets) (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current deferred tax assets | ||
Net operating loss carryforwards | $2,179 | $333 |
Inventory valuation | 14 | 33 |
Reserves and allowances | 2,394 | 1,791 |
Net current deferred tax assets | 4,587 | 2,157 |
Net operating loss carryforwards | 44,228 | 51,598 |
Research and development and other credit carryforwards | 5,414 | 4,488 |
Fixed assets and intangibles | -1,705 | -2,819 |
Net non-current deferred tax assets | 47,937 | 53,267 |
Valuation allowance | -4,901 | -5,562 |
Total | $47,623 | $49,862 |
Income_Taxes_Reconciliation_of
Income Taxes (Reconciliation of Taxes Provided to Federal Statutory Rate) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | ||
Income Taxes Reconciliation Of Taxes Provided To Federal Statutory Rate Details | |||||||||||||
Tax provision at statutory rate | $1,599 | $1,285 | $7,768 | ||||||||||
State income taxes before valuation allowance, net of federal effect | 269 | 196 | 822 | ||||||||||
Research and development credits | -725 | -1,534 | -385 | ||||||||||
Change in valuation allowance | -1,480 | 1,264 | 1,038 | ||||||||||
Compensation/option differences | -331 | -264 | -207 | ||||||||||
Non-deductible compensation | 746 | 605 | 403 | ||||||||||
Acquisition costs | 0 | 230 | 0 | ||||||||||
Expiring CA NOLs | 1,484 | 240 | 0 | ||||||||||
Foreign loss not benefited | 1,192 | 271 | 0 | ||||||||||
Other | 35 | -74 | -40 | ||||||||||
Total income tax provision | $79 | [1] | $627 | $1,411 | $672 | $1,738 | [1] | ($1,306) | $826 | $961 | $2,789 | $2,219 | $9,399 |
[1] | Comparability affected by the decrease in fiscal 2015 and increase in fiscal 2014 in the valuation allowance related to the deferred tax asset which resulted in a decrease in fiscal 2015 and an increase in the provision for income taxes of $1.5 million and $1.3 million in the fourth quarter of fiscal 2015 and 2014, respectively. |
Income_Taxes_Unrecognized_Tax_
Income Taxes (Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Income Taxes Unrecognized Tax Benefits Details | |||
Balance at beginning of year | $2,165 | $3,024 | $2,483 |
Gross increases - tax position in prior period | 27 | 0 | 73 |
Gross decreases - tax position in prior period | 0 | -1,081 | 0 |
Gross increases - tax positions related to the current year | 228 | 222 | 468 |
Settlements | 0 | 0 | 0 |
Lapse of statute of limitations | 0 | 0 | 0 |
Balance at end of year | $2,420 | $2,165 | $3,024 |
Net_Income_Per_Share_Details
Net Income Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Net Income Per Share Details | |||||||||||
Income from continuing operations | $183 | $444 | $1,291 | $8 | ($1,971) | $89 | $1,488 | $1,992 | $1,926 | $1,598 | $13,450 |
Income from discontinued operations, net of income tax provision | 0 | 916 | 489 | ||||||||
Net income available to common stockholders | $183 | $444 | $1,291 | $8 | ($1,945) | $89 | $2,231 | $2,139 | $1,926 | $2,514 | $13,939 |
Common shares | 88,950 | 89,594 | 89,073 | 88,592 | 88,184 | 79,742 | 72,970 | 72,510 | 89,071 | 78,310 | 71,390 |
Denominator for basic calculation | 88,950 | 89,594 | 89,073 | 88,592 | 88,184 | 79,742 | 72,970 | 72,510 | 89,071 | 78,310 | 71,390 |
Employee stock options | 2,088 | 2,927 | 2,958 | ||||||||
Employee stock purchase rights | 493 | 421 | 352 | ||||||||
Denominator for diluted calculation | 91,266 | 91,974 | 91,615 | 91,445 | 88,184 | 83,182 | 76,232 | 75,756 | 91,652 | 81,658 | 74,700 |
Income per share - continuing operations: | |||||||||||
Basic | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.02 | $0.03 | $0.02 | $0.02 | $0.19 |
Diluted | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.02 | $0.03 | $0.02 | $0.02 | $0.18 |
Income per share - discontinued operations: | |||||||||||
Basic | $0 | $0 | $0 | $0 | $0 | $0 | $0.01 | $0 | $0 | $0.01 | $0.01 |
Diluted | $0 | $0 | $0 | $0 | $0 | $0 | $0.01 | $0 | $0 | $0.01 | $0.01 |
Net income per share: | |||||||||||
Basic | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.03 | $0.03 | $0.02 | $0.03 | $0.20 |
Diluted | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.03 | $0.03 | $0.02 | $0.03 | $0.19 |
Net_Income_Per_Share_Options_a
Net Income Per Share Options and Rights Excluded (Details) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Anti-dilutive shares | 1,869 | 768 | 969 |
Employee stock options | |||
Anti-dilutive shares | 1,812 | 750 | 953 |
Stock purchase rights | |||
Anti-dilutive shares | 57 | 18 | 16 |
Segment_Reporting_Revenue_and_
Segment Reporting Revenue and Property and Equipment by Geographic Area (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Geographic Areas, Revenue from External Customers | 100% | 100% | 100% |
Number of customers at more than 10% of revenue | 0 | 0 | 0 |
Geographic Areas, Long-Lived Assets | $10,248 | $7,711 | |
Americas | |||
Geographic Areas, Revenue from External Customers | 92% | 97% | 99% |
Geographic Areas, Long-Lived Assets | 8,348 | 6,305 | |
Europe | |||
Geographic Areas, Revenue from External Customers | 7% | 2% | 0% |
Geographic Areas, Long-Lived Assets | 1,411 | 1,087 | |
Asia Pacific | |||
Geographic Areas, Revenue from External Customers | 1% | 1% | 1% |
Geographic Areas, Long-Lived Assets | $489 | $319 |
Acquisition_Purchase_Informati
Acquisition (Purchase Information) (Details) (USD $) | Nov. 30, 2013 |
In Thousands, unless otherwise specified | |
Assets acquired: | |
Cash | $854 |
Current assets | 1,114 |
Property and equipment | 956 |
Intangible asset - customer relationship | 6,381 |
Total assets acquired | 9,305 |
Liabilities assumed: | |
Current and non-current liabilities | -4,132 |
Total liabilities assumed | -4,132 |
Net identifiable assets acquired | 5,173 |
Goodwill | 14,155 |
Total consideration transferred | $19,328 |
Patent_Sale_Narrative_Details
Patent Sale (Narrative) (Details) (USD $) | 1 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2012 | Mar. 31, 2015 |
Patent Sale Narrative Details | ||
Sale of patents | $12 | |
Future maximum patent license collection | $3 | $1 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Results of Operations | |||||||||||
Revenue | $0 | $1,430 | $3,828 | ||||||||
Operating expense | 0 | 922 | 3,005 | ||||||||
Income before income taxes | 0 | 508 | 823 | ||||||||
Provision for income taxes | 0 | 188 | 334 | ||||||||
Income from discontinued operations | 0 | 0 | 0 | 0 | 19 | 0 | 154 | 147 | 0 | 320 | 489 |
Gain on disposal of discontinued operations. net of income tax provision of $456k | 0 | 0 | 0 | 0 | 7 | 0 | 589 | 0 | 0 | 596 | 0 |
Income tax provision on gain on disposal | $0 | $456 | $0 |
Subsequent_Events_Narrative_De
Subsequent Events (Narrative) (Details) | 12 Months Ended |
Mar. 31, 2015 | |
Subsequent Events Narrative Details | |
Subsequent Events, Description | On May 26, 2015, the Company, together with 8x8 UK Investments Limited, its wholly-owned subsidiary, entered into a share purchase agreement with the shareholders of DXI Limited, API Telecom Limited, Easycallnow Limited, and RAS Telecom Limited (collectively, “DXI”), for the purchase of the entire share capital of DXI. DXI provides SaaS for call center solution workflows. The total aggregate purchase price was approximately $25.5 million, consisting of $18.7 million in cash paid to DXI shareholders at closing, $3.8 million in cash deposited in escrow to be held for two years as security against indemnity claims made by the Company after the closing date, and $3.0 million in its common stock (approximately 353,000 shares). The Company funded the aggregate cash purchase price from our cash and investments. |
Recovered_Sheet4
Consolidated Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | ||
Quarterly Financial Data Details | |||||||||||||
Service revenue | $40,009 | $37,802 | $36,121 | $34,276 | $32,545 | $29,737 | $27,826 | $26,499 | $148,208 | $116,607 | $94,384 | ||
Product revenue | 3,521 | 3,570 | 3,477 | 3,637 | 3,241 | 3,008 | 2,989 | 2,752 | 14,205 | 11,990 | 9,402 | ||
Total revenue | 43,530 | 41,372 | 39,598 | 37,913 | 35,786 | 32,745 | 30,815 | 29,251 | 162,413 | 128,597 | 103,786 | ||
Operating expenses: | |||||||||||||
Cost of service revenue | 7,655 | 7,544 | 7,505 | 6,997 | 6,866 | 5,584 | 5,209 | 4,786 | 29,701 | 22,445 | 19,928 | ||
Cost of product revenue | 4,173 | 3,959 | 3,762 | 3,969 | 3,999 | 4,041 | 3,783 | 3,347 | 15,863 | 15,170 | 11,801 | ||
Research and development | 4,348 | 3,868 | 3,496 | 3,406 | 3,332 | 3,325 | 2,640 | 2,336 | 15,118 | 11,633 | 8,147 | ||
Sales and marketing | 21,508 | 20,559 | 19,440 | 19,160 | 18,038 | 16,051 | 13,745 | 13,072 | 80,667 | 60,906 | 45,573 | ||
General and administrative | 5,794 | 4,617 | 3,893 | 3,878 | 3,924 | 5,547 | 3,125 | 2,772 | 18,182 | 15,368 | 8,558 | ||
Gain on patent sale | 0 | 0 | -1,000 | 0 | 0 | 0 | 0 | 0 | -1,000 | 0 | -12,965 | ||
Total operating expenses | 43,478 | 40,547 | 37,096 | 37,410 | 36,159 | 34,548 | 28,502 | 26,313 | 158,531 | 125,522 | 81,042 | ||
Income from operations | 52 | 825 | 2,502 | 503 | -373 | -1,803 | 2,313 | 2,938 | 3,882 | 3,075 | 22,744 | ||
Other income, net | 210 | 246 | 200 | 177 | 140 | 586 | 1 | 15 | |||||
Income from continuing operations before provision for income taxes | 262 | 1,071 | 2,702 | 680 | -233 | -1,217 | 2,314 | 2,953 | 4,715 | 3,817 | 22,849 | ||
Provision (benefit) for income taxes (1) | 79 | [1] | 627 | 1,411 | 672 | 1,738 | [1] | -1,306 | 826 | 961 | 2,789 | 2,219 | 9,399 |
Income from continuing operations | 183 | 444 | 1,291 | 8 | -1,971 | 89 | 1,488 | 1,992 | 1,926 | 1,598 | 13,450 | ||
Income from discontinued operations, net of income tax provision | 0 | 0 | 0 | 0 | 19 | 0 | 154 | 147 | 0 | 320 | 489 | ||
Gain on disposal of discontinued operations, net of income tax provision of $456 | 0 | 0 | 0 | 0 | 7 | 0 | 589 | 0 | 0 | 596 | 0 | ||
Net income | $183 | $444 | $1,291 | $8 | ($1,945) | $89 | $2,231 | $2,139 | $1,926 | $2,514 | $13,939 | ||
Income (loss) per share - continuing operations: | |||||||||||||
Basic | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.02 | $0.03 | $0.02 | $0.02 | $0.19 | ||
Diluted | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.02 | $0.03 | $0.02 | $0.02 | $0.18 | ||
Income per share - discontinued operations: | |||||||||||||
Basic | $0 | $0 | $0 | $0 | $0 | $0 | $0.01 | $0 | $0 | $0.01 | $0.01 | ||
Diluted | $0 | $0 | $0 | $0 | $0 | $0 | $0.01 | $0 | $0 | $0.01 | $0.01 | ||
Net income (loss) per share: | |||||||||||||
Basic | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.03 | $0.03 | $0.02 | $0.03 | $0.20 | ||
Diluted | $0 | $0.01 | $0.01 | $0 | ($0.02) | $0 | $0.03 | $0.03 | $0.02 | $0.03 | $0.19 | ||
Shares used in per share calculations: | |||||||||||||
Basic | 88,950 | 89,594 | 89,073 | 88,592 | 88,184 | 79,742 | 72,970 | 72,510 | 89,071 | 78,310 | 71,390 | ||
Diluted | 91,266 | 91,974 | 91,615 | 91,445 | 88,184 | 83,182 | 76,232 | 75,756 | 91,652 | 81,658 | 74,700 | ||
[1] | Comparability affected by the decrease in fiscal 2015 and increase in fiscal 2014 in the valuation allowance related to the deferred tax asset which resulted in a decrease in fiscal 2015 and an increase in the provision for income taxes of $1.5 million and $1.3 million in the fourth quarter of fiscal 2015 and 2014, respectively. |
Schedule_II_Valuation_and_Qual1
Schedule II Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | |||
Allowance for Doubtful Accounts | ||||||
Balance at Beginning of Year | $466 | $327 | $140 | |||
Additions Charged to Costs and Expenses | 279 | 571 | 639 | |||
Deductions | -329 | [1] | -432 | [1] | -452 | [1] |
Balance At End of Year | $416 | $466 | $327 | |||
[1] | The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. |