Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2015 | Jul. 27, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | 8X8 INC /DE/ | |
Entity Central Index Key | 1,023,731 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
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 Common Stock, Shares Outstanding | 88,598,106 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 29,298 | $ 53,110 |
Short-term investments | 127,668 | 123,984 |
Accounts receivable, net | 8,041 | 6,642 |
Inventory | 618 | 704 |
Deferred cost of goods sold | 500 | 428 |
Deferred tax asset | 3,978 | 4,454 |
Other current assets | 4,034 | 2,274 |
Total current assets | 174,137 | 191,596 |
Property and equipment, net | 11,714 | 10,248 |
Intangible assets, net | 28,510 | 12,260 |
Goodwill | 48,039 | 36,887 |
Non-current deferred tax asset | 43,169 | 43,169 |
Other assets | 1,463 | 1,464 |
Total assets | 307,032 | 295,624 |
Current liabilities: | ||
Accounts payable | 9,736 | 7,775 |
Accrued compensation | 7,305 | 6,183 |
Accrued warranty | 342 | 339 |
Accrued taxes | 3,437 | 2,800 |
Deferred revenue | 1,514 | 1,768 |
Other accrued liabilities | 3,354 | 2,965 |
Total current liabilities | 25,688 | 21,830 |
Non-current liabilities | 4,709 | 1,352 |
Non-current deferred revenue | 196 | 231 |
Total liabilities | $ 30,593 | 23,413 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Common stock | $ 88 | 88 |
Additional paid-in capital | 382,241 | 378,971 |
Accumulated other comprehensive loss | (679) | (2,109) |
Accumulated deficit | (105,211) | (104,739) |
Total stockholders' equity | 276,439 | 272,211 |
Total liabilities and stockholders' equity | $ 307,032 | $ 295,624 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Consolidated Statements Of Income Loss | ||
Service revenue | $ 44,168 | $ 34,276 |
Product revenue | 3,724 | 3,637 |
Total revenue | 47,892 | 37,913 |
Operating expenses: | ||
Cost of service revenue | 8,459 | 6,997 |
Cost of product revenue | 4,382 | 3,969 |
Research and development | 5,080 | 3,406 |
Sales and marketing | 23,824 | 19,160 |
General and administrative | 6,068 | 3,878 |
Total operating expenses | 47,813 | 37,410 |
Income from operations | 79 | 503 |
Other income, net | 234 | 177 |
Income before provision for income taxes | 313 | 680 |
Provision for income taxes | 785 | 672 |
Net income (loss) | $ (472) | $ 8 |
Net income (loss) per share: | ||
Basic | $ (0.01) | $ 0 |
Diluted | $ (0.01) | $ 0 |
Weighted average number of shares: | ||
Basic | 88,233 | 88,592 |
Diluted | 88,233 | 91,445 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (472) | $ 8 |
Other comprehensive income (loss), net of tax | ||
Unrealized gain (loss) on investments in securities | (48) | 86 |
Foreign currency translation adjustment | 1,478 | 453 |
Comprehensive income | $ 958 | $ 547 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (472) | $ 8 |
Adjustments to reconcile net income (loss) to net cash provided by operating activites: | ||
Depreciation | 993 | 755 |
Amortization of intangible assets | 546 | 567 |
Amortization of capitalized software | 456 | 85 |
Net accretion of discount and amortization of premium on marketable securities | 236 | 192 |
Stock-based compensation | 3,022 | 1,847 |
Deferred income tax provision | 476 | 610 |
Other | 74 | 9 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (612) | (402) |
Inventory | 88 | 47 |
Other current and noncurrent assets | (470) | (175) |
Deferred cost of goods sold | (53) | 157 |
Accounts payable | 1,132 | 988 |
Accrued compensation | 725 | 674 |
Accrued warranty | 3 | (41) |
Accrued taxes and fees | 492 | 128 |
Deferred revenue | (704) | (352) |
Other current and noncurrent liabilities | (1,272) | (447) |
Net cash provided by operating activities | 4,660 | 4,650 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,073) | (1,026) |
Purchase of businesses, net of cash acquired | (23,434) | 0 |
Cost of capitalized software | (471) | 0 |
Proceeds from maturity of investments | 7,820 | 3,300 |
Sales of investments - available for sale | 22,620 | 18,992 |
Purchase of investments - available for sale | (34,409) | (30,134) |
Net cash used in investing activities | (28,947) | (8,868) |
Cash flows from financing activities: | ||
Capital lease payments | (54) | (46) |
Repurchase of common stock | (25) | (48) |
Proceeds from issuance of common stock under employee stock plans | 336 | 170 |
Net cash provided by financing activities | 257 | 76 |
Effect of exchange rate changes on cash | 218 | 56 |
Net decrease in cash and cash equivalents | (23,812) | (4,086) |
Cash and cash equivalents at the beginning of the period | 53,110 | 59,159 |
Cash and cash equivalents at the end of the period | 29,298 | 55,073 |
Supplemental cash flow information | ||
Income taxes paid | 52 | 85 |
Interest paid | $ 6 | $ 1 |
DESCRIPTION OF BUSINESS AND SIG
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 3 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS 8x8, Inc. (8x8 or the Company) is a leading provider of VoIP (Voice over Internet Protocol) technology and SaaS (Software as a Service) communication solutions in the cloud for SMBs (Small and Midsize Business) 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 was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. BASIS OF PRESENTATION 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 2016 refers to the fiscal year ended March 31, 2016). The accompanying interim condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year ended March 31, 2015. In the opinion of the Company's management, these interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The March 31, 2015 year-end condensed consolidated balance sheet data in this document were derived from audited consolidated financial statements and does not include all of the disclosures required by U.S. generally accepted accounting principles. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended March 31, 2015 and notes thereto included in the Company's fiscal 2015 Annual Report on Form 10-K. The results of operations and cash flows for the interim periods included in these condensed consolidated financial statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015 filed with the SEC on May 29, 2015, and there have been no changes to the Company's significant accounting policies during the three months ended June 30, 2015, except as described in the "Recent Accounting Pronouncements" RECENT ACCOUNTING PRONOUNCEMENTS In April 2014, the Financial Accounting Standards Board (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 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers Revenue Recognition |
CASH, CASH EQUIVALENTS AND INVE
CASH, CASH EQUIVALENTS AND INVESTMENTS - Note 2 | 3 Months Ended |
Jun. 30, 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 June 30, 2015 Costs Gain Loss Fair Value Equivalents Investments Cash $ 12,466 - $ - $ 12,466 $ 12,466 $ - Level 1: Money market funds 16,832 - - 16,832 16,832 - Mutual funds 2,000 - (139) 1,861 - 1,861 Subtotal 31,298 - (139) 31,159 29,298 1,861 Level 2: Commercial paper 9,783 2 (1) 9,784 - 9,784 Corporate debt 72,828 38 (29) 72,837 - 72,837 Municipal securities 6,471 2 (1) 6,472 - 6,472 Asset backed securities 23,427 5 (8) 23,424 - 23,424 Mortgage backed securities 5,000 1 (23) 4,978 - 4,978 Agency bond 7,509 2 (2) 7,509 - 7,509 International government securities 800 3 - 803 - 803 Subtotal 125,818 53 (64) 125,807 - 125,807 Total $ 157,116 $ 53 $ (203) $ 156,966 $ 29,298 $ 127,668 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 Contractual maturities of cash equivalents and investments as of June 30, 2015 are set forth below (in thousands): Estimated Fair Value Due within one year $ 68,976 Due after one year 58,692 Total $ 127,668 |
BALANCE SHEET DETAIL - Note 3
BALANCE SHEET DETAIL - Note 3 | 3 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
BALANCE SHEET DETAIL - Note 3 | 3. BALANCE SHEET DETAIL June 30, March 31, 2015 2015 Inventory (in thousands) Work-in-process $ 11 $ 169 Finished goods 607 535 $ 618 $ 704 |
INTANGIBLE ASSETS - Note 4
INTANGIBLE ASSETS - Note 4 | 3 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS - Note 4 | 4. INTANGIBLE ASSETS The carrying value of intangible assets consisted of the following (in thousands): June 30, 2015 March 31, 2015 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 21,840 $ (2,978) $ 18,862 $ 8,242 $ (2,905) $ 5,337 Customer relationships 10,554 (3,778) 6,776 9,686 (3,720) 5,966 Trade names/domains 2,522 - 2,522 957 - 957 In-process research and development 350 - 350 - - - Total acquired identifiable intangible assets $ 35,266 $ (6,756) $ 28,510 $ 18,885 $ (6,625) $ 12,260 At June 30, 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 Remaining 2016 $ 3,891 2017 4,714 2018 4,445 2019 4,192 2020 4,192 Thereafter 4,554 Total $ 25,988 |
RESEARCH, DEVELOPMENT AND SOFTW
RESEARCH, DEVELOPMENT AND SOFTWARE COSTS - Note 5 | 3 Months Ended |
Jun. 30, 2015 | |
Research and Development [Abstract] | |
RESEARCH, DEVELOPMENT AND SOFTWARE COSTS - Note 5 | 5. RESEARCH, DEVELOPMENT AND SOFTWARE COSTS In the first three months of fiscal 2016, the Company expensed all research and development costs in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed The Company accounts for computer software developed or obtained for internal use in accordance with ASC 350-40, Internal Use Software |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Note 6 | 3 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES - Note 6 | 6. 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 (loss), were as follows (in thousands): Three Months Ended June 30, 2015 2014 Balance at beginning of period $ 339 $ 660 Accruals for warranties 98 54 Settlements (83) (95) Adjustments (12) - Balance at end of period $ 342 $ 619 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 June 30, 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 June 30, 2015, future minimum annual payments under these third party network service contracts were as follows (in thousands): Year ending March 31: Remaining 2016 $ 2,231 2017 2,452 2018 891 Total minimum payments $ 5,574 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, Bear Creek Technologies, Inc. v. 8x8, Inc. et al. 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. On April 21, 2015, the Company filed its answer and alleged a number of counterclaims including patent misuse. On or about May 26, 2015, the parties agreed to settle all claims in the suit, including, (but not necessarily limited to) a release and/or covenant not to sue by the plaintiff on future claims that 8x8 products infringe the CallWave patents alleged to have been infringed. The case was dismissed with prejudice on June 5, 2015. On December 31, 2014, the Company was named as a defendant in a lawsuit, Adaptive Data, LLC v. 8x8, Inc., filed in the U.S. District Court for the District of Delaware. 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 was never effected on the Company. The Court issued a Notice of Voluntary Dismissal on January 23, 2015. On April 15, 2015, the Company was named as a defendant in a lawsuit, UrgenSync, LLC v. 8x8, Inc., filed in the U.S. District Court for the E.D. of Texas. UrgenSync, LLC also sued another 14 other defendants on the same day regarding the same patent asserted in the complaint filed against 8x8. The Court issued an Order of Voluntary Dismissal with Prejudice on June 18, 2015. On April 16, 2015, the Company was named as a defendant in a lawsuit, Slocumb Law Firm v. 8x8, Inc., filed in the United States District Court for the Middle District of Alabama. The Slocumb Law Firm alleges that it purchased certain business services from the Company that did not perform as advertised or expected, and asserts various causes of actions including fraud, breach of contract, violations of the Alabama Deceptive Trade Practices Act and negligence. On June 30, 2015, the Court granted the Companys motion to stay the case and compel 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. The Company has not yet received a formal arbitration demand from the Slocumb Law Firm, nor has discovery commenced. The Company intends to vigorously defend against the 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 sales, use, telecommunications, excise, and income 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. |
STOCK-BASED COMPENSATION - Note
STOCK-BASED COMPENSATION - Note 7 | 3 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION - Note 7 | 7. STOCK-BASED COMPENSATION The following table summarizes stock-based compensation expense (in thousands): Three Months Ended June 30, 2015 2014 Cost of service revenue $ 219 $ 115 Cost of product revenue - - Research and development 531 314 Sales and marketing 1,197 744 General and administrative 1,075 674 Total stock-based compensation expense related to employee stock options and employee stock purchases, pre-tax 3,022 1,847 Tax benefit - - Stock-based compensation expense related to employee stock options and employee stock purchases, net of tax $ 3,022 $ 1,847 Stock Options, Stock Purchase Right and Restricted Stock Unit Activity Stock Option activity under all the Company's stock option plans for the three months ended June 30, 2015, is summarized as follows: Weighted Average Number of Exercise Price Shares Per Share Outstanding at March 31, 2015 5,327,907 $ 5.19 Granted 229,000 8.66 Exercised (88,048) 3.10 Canceled/Forfeited (8,167) 6.78 Outstanding at June 30, 2015 5,460,692 $ 5.37 Vested and expected to vest at June 30, 2015 5,460,692 $ 5.37 Exercisable at June 30, 2015 3,316,717 $ 3.57 Stock Purchase Right activity for the three months ended June 30, 2015 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, 2015 223,835 $ 5.92 1.50 Granted - - Vested (28,760) 4.42 Forfeited (1,875) 11.26 Balance at June 30, 2015 193,200 $ 6.09 1.31 Restricted Stock Unit activity for the three months ended June 30, 2015 is summarized as follows: Weighted Weighted Average Average Remaining Number of Grant Date Contractual Shares Fair Value Term (in Years) Balance at March 31, 2015 2,698,686 $ 7.33 1.88 Granted 543,147 8.85 Vested (39,921) 7.86 Forfeited (35,462) 8.63 Balance at June 30, 2015 3,166,450 $ 7.57 1.77 The following table summarizes stock options outstanding and exercisable at June 30, 2015: 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 2.6 $ 8,595,630 1,095,000 $ 1.11 $ 8,595,630 $ 1.27 to $ 4.32 1,166,033 $ 1.98 1.9 8,144,892 1,141,467 $ 1.93 8,029,723 $ 4.45 to $ 6.86 1,353,069 $ 6.33 8.3 3,558,963 544,405 $ 5.87 1,682,505 $ 7.52 to $ 9.70 1,272,022 $ 8.99 8.8 368,605 295,412 $ 9.54 2,925 $ 9.74 to $ 11.26 574,568 $ 10.10 8.3 - 240,433 $ 10.05 - 5,460,692 $ 20,668,090 3,316,717 $ 18,310,783 As of June 30, 2015, there was $26.3 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 2.71 years. 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: Three Months Ended June 30, 2015 2014 Expected volatility 53% 59% Expected dividend yield - - Risk-free interest rate 1.59% 1.53% Weighted average expected option term 5.25 years 5.00 years Weighted average fair value of options granted $ 4.17 $ 4.01 Stock Repurchases In February 2015, the Company's board of directors authorized the Company to purchase up to $20 . The stock repurchase activity as of June 30, 2015 is summarized as follows: Shares Weighted Average Price Amount Repurchased Per Share Repurchased (1) Repurchase of common stock under 2015 Repurchase Plan 574,467 $ 7.38 $ 4,239,216 Total 574,467 $ 4,239,216 (1) Amount excludes commission fees. |
INCOME TAXES - Note 8
INCOME TAXES - Note 8 | 3 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
INCOME TAXES - Note 8 | 8. INCOME TAXES For the three months ended June 30, 2015, the Company recorded a provision for income taxes of $0.8 million, which was primarily attributable to income from operations. For the three months ended June 30, 2014, the Company recorded a provision for income taxes of $0.7 million which was primarily attributable to income from operations. The effective tax rate is calculated by dividing the income tax provision by net income before income tax expense. At March 31, 2015, there were $2.4 million of unrecognized tax benefits that, if recognized, would have affected the effective tax rate. The Company does not believe that there has been any significant change in the unrecognized tax benefits in the three-month period ended June 30, 2015, and does not expect the remaining unrecognized tax benefit to change materially in the next 12 months. To the extent that the remaining unrecognized tax benefits are ultimately recognized, they will have an impact on the effective tax rate in future periods. The Company is subject to taxation in the U.S., California and various other states and foreign jurisdictions in which it has or had a subsidiary or branch operations or it is collecting sales tax. All tax returns from fiscal 1996 to fiscal 2015 may be subject to examination by the Internal Revenue Service, California and various other states. As of July 22, 2015, there were no active federal or state income tax audits. Returns filed in foreign jurisdictions may be subject to examination for the fiscal years 2011 to 2015. |
NET INCOME (LOSS) PER SHARE - N
NET INCOME (LOSS) PER SHARE - Note 9 | 3 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NET INCOME (LOSS) PER SHARE - Note 9 | 9. NET INCOME (LOSS) 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): Three Months Ended June 30, 2015 2014 Numerator: Net income (loss) available to common stockholders $ (472) $ 8 Denominator: Common shares 88,233 88,592 Denominator for basic calculation 88,233 88,592 Employee stock options - 2,480 Stock purchase rights - 373 Denominator for diluted calculation 88,233 91,445 Net income (loss) per share Basic $ (0.01) $ 0.00 Diluted $ (0.01) $ 0.00 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): Three Months Ended June 30, 2015 2014 Employee stock options 2,447 1,370 Stock purchase rights 70 79 Total anti-dilutive employee stock-based securities 2,517 1,449 |
SEGMENT REPORTING - Note 10
SEGMENT REPORTING - Note 10 | 3 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING - Note 10 | 10. SEGMENT REPORTING ASC 280, Segment Reporting As of June 30, 2015, the Company has reclassified the presentation of the information regarding its reportable segments to reflect a change from one reportable segment in prior periods to two reportable segments, due to changes in reporting structure as a result of a business acquisition that occurred in the first fiscal quarter of 2016. The Company manages its operations primarily on a geographic basis. The Company's chief operating decision makers (CODMs) are the Chief Executive Officer, the Chief Financial Officer, and the Chief Technology Officer, who evaluate performance of the Company and make decisions regarding allocation of resources based on geographic results. The Company's reportable operating segments are the Americas and Europe. The Americas segment is primarily North America. The Europe segment is primarily the United Kingdom. Each operating segment provides similar products and services. The Company's CODMs evaluate the performance of its operating segments based on revenues and net income. Revenues are attributed to each segment based on the ordering location of the customer or ship to location. The Company allocates corporate overhead costs such as research and development, sales and marketing, general and administrative, amortization expense, stock-based compensation expense, and commitment and contingencies to the US segment. The Company did not allocate goodwill for each segment as the Company had not completed its analysis of assigning goodwill to its reporting units as of July 31, 2015. The Company's revenue distribution by geographic region (based upon the destination of shipments and the customer's service address) was as follows: Three Months Ended June 30, 2015 2014 Americas (principally US) 88% 91% Europe 9% 8% Asia-Pacific 3% 1% 100% 100% Geographic area data is based upon the location of the property and equipment and is as follows (in thousands): June 30, March 31, 2015 2015 Americas (principally US) $ 8,280 $ 8,348 Europe 2,931 1,411 Asia-Pacific 503 489 Total $ 11,714 $ 10,248 The following table provides financial information by operating segment for the three month period ending June 30, 2015 and 2014 (in thousands): Three Months Ended June 30, 2015 2014 Americas (principally US): Net Revenues $ 43,588 $ 35,128 Net Income (loss) $ 251 $ 803 Europe: Net Revenues $ 4,304 $ 2,785 Net Income (loss) $ (723) $ (795) |
ACQUISITIONS - Note 11
ACQUISITIONS - Note 11 | 3 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS - Note 11 | 11. ACQUISITIONS DXI Group Limited On May 26, 2015, the Company 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. The transaction closed effective May 29, 2015 and was not subject to regulatory approvals. The total aggregate purchase price was approximately $22.5 million, consisting of $18.7 million in cash paid to the DXI shareholders at closing, and $3.8 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. Approximately 352,000 shares of common stock valued at approximately $3.0 million were issued only to former management shareholders of DXI as part of the share purchase agreement and are subject to certain restrictions, including a four-year annual vesting requirement based on the continued employment of such shareholders. Under ASC 805-10-55-25, Business Combinations 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 the following: customer relationships, with an estimated weighted-average useful life of two and five years; and developed technology, with an estimated weighted-average useful life of seven years. The indefinite lived intangible asset consisted of a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using various income approach methods. Intangible assets are amortized on a straight-line basis. The preliminary fair values of the assets acquired and liabilities assumed are as follows (in thousands): Estimated Fair Value Assets acquired: Cash $ 1,318 Current assets 2,016 Property and equipment 1,453 Intangible assets 14,691 Total assets acquired 19,478 Liabilities assumed: Current liabilities and non-current liabilities (5,997) Total liabilities assumed (5,997) Net identifiable assets acquired 13,481 Goodwill 9,071 Total consideration transferred $ 22,552 None of the goodwill recognized is expected to be deductible for income tax purposes. DXI contributed revenue of approximately $1.1 million and net income was not material for the period from the date of acquisition to June 30, 2015. Total acquisition related costs were approximately $0.8 million. The Company determined it is impractical to include pro forma information given the difficulty in obtaining the historical financial information of DXI. Inclusion of such information would require the Company to make estimates and assumptions regarding DXI's historical financial results that we believe may ultimately prove inaccurate. Quality Software Corporation On June 18, 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation (QSC) and other parties affiliated with the shareholder and QSC for the purchase of certain assets as per the purchase agreement. The total aggregate fair value of the consideration was approximately $2.9 million, which was paid in cash to the QSC shareholder at closing. As part of the aggregate purchases price, there is also $0.5 million in contingent consideration payable subject to attainment of certain revenue and product release milestones for the acquired business, and $0.3 million in cash held by the Company in escrow to be retained for two years as security against indemnity claims made by the Company after the closing date. The preliminary fair value of the contingent consideration and escrow amounts was $0.7 million at the acquisition date. The Company recorded the acquired 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 the following: customer relationships, with an estimated weighted-average useful life of five years; and developed technology, with an estimated weighted-average useful life of seven years. The indefinite lived intangible asset consisted of a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using various income approach methods. Intangible assets are amortized on a straight-line basis. The preliminary fair values of the assets acquired and liabilities assumed are as follows (in thousands): Estimated Fair Value Assets acquired: Intangible assets $ 1,675 Goodwill 1,214 Total consideration transferred $ 2,889 The goodwill recognized is expected to be deductible for income tax purposes. QSC's contributions to revenue and income for the period from the date of acquisition to June 30, 2015 was not material. Total acquisition related costs were approximately $0.1 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
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 2016 refers to the fiscal year ended March 31, 2016). |
Use of Estimates | The accompanying interim condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year ended March 31, 2015. In the opinion of the Company's management, these interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. |
Basis of Accounting | The March 31, 2015 year-end condensed consolidated balance sheet data in this document were derived from audited consolidated financial statements and does not include all of the disclosures required by U.S. generally accepted accounting principles. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended March 31, 2015 and notes thereto included in the Company's fiscal 2015 Annual Report on Form 10-K. The results of operations and cash flows for the interim periods included in these condensed consolidated financial statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015 filed with the SEC on May 29, 2015, and there have been no changes to the Company's significant accounting policies during the three months ended June 30, 2015, except as described in the "Recent Accounting Pronouncements" |
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. |
Warranty Expense | WARRANTY EXPENSE The Company accrues for the estimated costs that may be incurred under its product warranties upon revenue recognition. |
Research, Development and Software Costs | RESEARCH, DEVELOPMENT AND SOFTWARE COSTS In the first three months of fiscal 2016, the Company expensed all research and development costs in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed The Company accounts for computer software developed or obtained for internal use in accordance with ASC 350-40, Internal Use Software |
Segment Reporting | SEGMENT REPORTING ASC 280, Segment Reporting As of June 30, 2015, the Company has reclassified the presentation of the information regarding its reportable segments to reflect a change from one reportable segment in prior periods to two reportable segments, due to changes in reporting structure as a result of a business acquisition that occurred in the first fiscal quarter of 2016. The Company manages its operations primarily on a geographic basis. The Company's chief operating decision makers (CODMs) are the Chief Executive Officer, the Chief Financial Officer, and the Chief Technology Officer, who evaluate performance of the Company and make decisions regarding allocation of resources based on geographic results. The Company's reportable operating segments are the Americas and Europe. The Americas segment is primarily North America. The Europe segment is primarily the United Kingdom. Each operating segment provides similar products and services. The Company's CODMs evaluate the performance of its operating segments based on revenues and net income. Revenues are attributed to each segment based on the ordering location of the customer or ship to location. The Company allocates corporate overhead costs such as research and development, sales and marketing, general and administrative, amortization expense, stock-based compensation expense, and commitment and contingencies to the US segment. The Company did not allocate goodwill for each segment as the Company had not completed its analysis of assigning goodwill to its reporting units as of July 31, 2015. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In April 2014, the Financial Accounting Standards Board (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 |
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. |
Cash, Cash Equivalents and In18
Cash, Cash Equivalents and Investments (Tables) | 3 Months Ended |
Jun. 30, 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 June 30, 2015 Costs Gain Loss Fair Value Equivalents Investments Cash $ 12,466 - $ - $ 12,466 $ 12,466 $ - Level 1: Money market funds 16,832 - - 16,832 16,832 - Mutual funds 2,000 - (139) 1,861 - 1,861 Subtotal 31,298 - (139) 31,159 29,298 1,861 Level 2: Commercial paper 9,783 2 (1) 9,784 - 9,784 Corporate debt 72,828 38 (29) 72,837 - 72,837 Municipal securities 6,471 2 (1) 6,472 - 6,472 Asset backed securities 23,427 5 (8) 23,424 - 23,424 Mortgage backed securities 5,000 1 (23) 4,978 - 4,978 Agency bond 7,509 2 (2) 7,509 - 7,509 International government securities 800 3 - 803 - 803 Subtotal 125,818 53 (64) 125,807 - 125,807 Total $ 157,116 $ 53 $ (203) $ 156,966 $ 29,298 $ 127,668 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 Contractual maturities of cash equivalents and investments as of June 30, 2015 are set forth below (in thousands): Estimated Fair Value Due within one year $ 68,976 Due after one year 58,692 Total $ 127,668 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Inventory Tables | |
Inventory (Tables) | June 30, March 31, 2015 2015 Inventory (in thousands) Work-in-process $ 11 $ 169 Finished goods 607 535 $ 618 $ 704 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Intangible Assets Tables | |
Carrying values of intangible assets | The carrying value of intangible assets consisted of the following (in thousands): June 30, 2015 March 31, 2015 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 21,840 $ (2,978) $ 18,862 $ 8,242 $ (2,905) $ 5,337 Customer relationships 10,554 (3,778) 6,776 9,686 (3,720) 5,966 Trade names/domains 2,522 - 2,522 957 - 957 In-process research and development 350 - 350 - - - Total acquired identifiable intangible assets $ 35,266 $ (6,756) $ 28,510 $ 18,885 $ (6,625) $ 12,260 |
Finite-lived intangible assets - future amortization expense | At June 30, 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 Remaining 2016 $ 3,891 2017 4,714 2018 4,445 2019 4,192 2020 4,192 Thereafter 4,554 Total $ 25,988 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 3 Months Ended |
Jun. 30, 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 (loss), were as follows (in thousands): Three Months Ended June 30, 2015 2014 Balance at beginning of period $ 339 $ 660 Accruals for warranties 98 54 Settlements (83) (95) Adjustments (12) - Balance at end of period $ 342 $ 619 |
Minimum third party network service provider commitments | At June 30, 2015, future minimum annual payments under these third party network service contracts were as follows (in thousands): Year ending March 31: Remaining 2016 $ 2,231 2017 2,452 2018 891 Total minimum payments $ 5,574 |
Distribution of Stock-Based Com
Distribution of Stock-Based Compensation Plan Expense (Tables) | 3 Months Ended |
Jun. 30, 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): Three Months Ended June 30, 2015 2014 Cost of service revenue $ 219 $ 115 Cost of product revenue - - Research and development 531 314 Sales and marketing 1,197 744 General and administrative 1,075 674 Total stock-based compensation expense related to employee stock options and employee stock purchases, pre-tax 3,022 1,847 Tax benefit - - Stock-based compensation expense related to employee stock options and employee stock purchases, net of tax $ 3,022 $ 1,847 |
Stock-Based Compensation And Em
Stock-Based Compensation And Employee Purchase Plan (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Option Grants | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Option activity under all the Company's stock option plans for the three months ended June 30, 2015, is summarized as follows: Weighted Average Number of Exercise Price Shares Per Share Outstanding at March 31, 2015 5,327,907 $ 5.19 Granted 229,000 8.66 Exercised (88,048) 3.10 Canceled/Forfeited (8,167) 6.78 Outstanding at June 30, 2015 5,460,692 $ 5.37 Vested and expected to vest at June 30, 2015 5,460,692 $ 5.37 Exercisable at June 30, 2015 3,316,717 $ 3.57 |
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: Three Months Ended June 30, 2015 2014 Expected volatility 53% 59% Expected dividend yield - - Risk-free interest rate 1.59% 1.53% Weighted average expected option term 5.25 years 5.00 years Weighted average fair value of options granted $ 4.17 $ 4.01 |
Stock Purchase Rights | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Purchase Right activity for the three months ended June 30, 2015 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, 2015 223,835 $ 5.92 1.50 Granted - - Vested (28,760) 4.42 Forfeited (1,875) 11.26 Balance at June 30, 2015 193,200 $ 6.09 1.31 |
Restricted Stock Units | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Restricted Stock Unit activity for the three months ended June 30, 2015 is summarized as follows: Weighted Weighted Average Average Remaining Number of Grant Date Contractual Shares Fair Value Term (in Years) Balance at March 31, 2015 2,698,686 $ 7.33 1.88 Granted 543,147 8.85 Vested (39,921) 7.86 Forfeited (35,462) 8.63 Balance at June 30, 2015 3,166,450 $ 7.57 1.77 |
Stock Options Outstanding And E
Stock Options Outstanding And Exercisable (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Stock Options Outstanding And Exercisable Tables | |
Summary Of Outstanding And Exercisable Stock Options | The following table summarizes stock options outstanding and exercisable at June 30, 2015: 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 2.6 $ 8,595,630 1,095,000 $ 1.11 $ 8,595,630 $ 1.27 to $ 4.32 1,166,033 $ 1.98 1.9 8,144,892 1,141,467 $ 1.93 8,029,723 $ 4.45 to $ 6.86 1,353,069 $ 6.33 8.3 3,558,963 544,405 $ 5.87 1,682,505 $ 7.52 to $ 9.70 1,272,022 $ 8.99 8.8 368,605 295,412 $ 9.54 2,925 $ 9.74 to $ 11.26 574,568 $ 10.10 8.3 - 240,433 $ 10.05 - 5,460,692 $ 20,668,090 3,316,717 $ 18,310,783 |
Stock Repurchases (Tables)
Stock Repurchases (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Stock Repurchases Tables | |
Stock Repurchases [Table Text Block] | The stock repurchase activity as of June 30, 2015 is summarized as follows: Shares Weighted Average Price Amount Repurchased Per Share Repurchased (1) Repurchase of common stock under 2015 Repurchase Plan 574,467 $ 7.38 $ 4,239,216 Total 574,467 $ 4,239,216 (1) Amount excludes commission fees. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Net Income Loss Per Share Tables | |
Net Income (Loss) 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): Three Months Ended June 30, 2015 2014 Numerator: Net income (loss) available to common stockholders $ (472) $ 8 Denominator: Common shares 88,233 88,592 Denominator for basic calculation 88,233 88,592 Employee stock options - 2,480 Stock purchase rights - 373 Denominator for diluted calculation 88,233 91,445 Net income (loss) per share Basic $ (0.01) $ 0.00 Diluted $ (0.01) $ 0.00 |
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): Three Months Ended June 30, 2015 2014 Employee stock options 2,447 1,370 Stock purchase rights 70 79 Total anti-dilutive employee stock-based securities 2,517 1,449 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jun. 30, 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: Three Months Ended June 30, 2015 2014 Americas (principally US) 88% 91% Europe 9% 8% Asia-Pacific 3% 1% 100% 100% Geographic area data is based upon the location of the property and equipment and is as follows (in thousands): June 30, March 31, 2015 2015 Americas (principally US) $ 8,280 $ 8,348 Europe 2,931 1,411 Asia-Pacific 503 489 Total $ 11,714 $ 10,248 |
Operating Segment Information (
Operating Segment Information (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Operating Segment Information Tables | |
Schedule of Segment Reporting Information, by Segment | The following table provides financial information by operating segment for the three month period ending June 30, 2015 and 2014 (in thousands): Three Months Ended June 30, 2015 2014 Americas (principally US) Net Revenues $ 43,588 $ 35,128 Net Income (loss) $ 251 $ 803 Europe: Net Revenues $ 4,304 $ 2,785 Net Income (loss) $ (723) $ (795) |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Acquisition Tables | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The preliminary fair values of the assets acquired and liabilities assumed are as follows (in thousands): Estimated Fair Value Assets acquired: Cash $ 1,318 Current assets 2,016 Property and equipment 1,453 Intangible assets 14,691 Total assets acquired 19,478 Liabilities assumed: Current liabilities and non-current liabilities (5,997) Total liabilities assumed (5,997) Net identifiable assets acquired 13,481 Goodwill 9,071 Total consideration transferred $ 22,552 The preliminary fair values of the assets acquired and liabilities assumed are as follows (in thousands): Estimated Fair Value Assets acquired: Intangible assets $ 1,675 Goodwill 1,214 Total consideration transferred $ 2,889 |
Description of the Business (Na
Description of the Business (Narrative) (Details) | 3 Months Ended |
Jun. 30, 2015 | |
Description Of Business Narrative Details | |
Year Founded | 1,987 |
Entity Incorporation, Date of Incorporation | Dec. 31, 1996 |
Entity Incorporation, State Country Name | Delaware |
Fiscal Year End Date | --03-31 |
Cash, Cash Equivalents and In31
Cash, Cash Equivalents and Investments with Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 |
Amortized Costs | $ 157,116 | $ 177,198 | ||
Gross Unrealized Gains | 53 | 71 | ||
Gross Unrealized Loss | (203) | (175) | ||
Estimated Fair Value | 156,966 | 177,094 | ||
Cash and cash equivalents | 29,298 | 53,110 | $ 55,073 | $ 59,159 |
Short-term marketable investments | 127,668 | 123,984 | ||
Aavailable-for-sale investments due within one year | 68,976 | |||
Aavailable-for-sale investments due after one year | 58,692 | |||
Level 1 | ||||
Amortized Costs | 31,298 | 55,110 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | (139) | (107) | ||
Estimated Fair Value | 31,159 | 55,003 | ||
Cash and cash equivalents | 29,298 | 53,110 | ||
Short-term marketable investments | 1,861 | 1,893 | ||
Level 2 | ||||
Amortized Costs | 125,818 | 122,088 | ||
Gross Unrealized Gains | 53 | 71 | ||
Gross Unrealized Loss | (64) | (68) | ||
Estimated Fair Value | 125,807 | 122,091 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 125,807 | 122,091 | ||
Cash | ||||
Amortized Costs | 12,466 | 24,734 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 12,466 | 24,734 | ||
Cash and cash equivalents | 12,466 | 24,734 | ||
Short-term marketable investments | 0 | 0 | ||
Money Market Funds | Level 1 | ||||
Amortized Costs | 16,832 | 28,376 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 16,832 | 28,376 | ||
Cash and cash equivalents | 16,832 | 28,376 | ||
Short-term marketable investments | 0 | 0 | ||
Mutual Funds | Level 1 | ||||
Amortized Costs | 2,000 | 2,000 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | (139) | (107) | ||
Estimated Fair Value | 1,861 | 1,893 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 1,861 | 1,893 | ||
Commercial Paper | Level 2 | ||||
Amortized Costs | 9,783 | 9,043 | ||
Gross Unrealized Gains | 2 | 1 | ||
Gross Unrealized Loss | (1) | 0 | ||
Estimated Fair Value | 9,784 | 9,044 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 9,784 | 9,044 | ||
Corporate Debt | Level 2 | ||||
Amortized Costs | 72,828 | 75,284 | ||
Gross Unrealized Gains | 38 | 57 | ||
Gross Unrealized Loss | (29) | (10) | ||
Estimated Fair Value | 72,837 | 75,331 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 72,837 | 75,331 | ||
Municipal Securities | Level 2 | ||||
Amortized Costs | 6,471 | 5,435 | ||
Gross Unrealized Gains | 2 | 2 | ||
Gross Unrealized Loss | (1) | (1) | ||
Estimated Fair Value | 6,472 | 5,436 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 6,472 | 5,436 | ||
Asset-backed Securities | Level 2 | ||||
Amortized Costs | 23,427 | 21,503 | ||
Gross Unrealized Gains | 5 | 4 | ||
Gross Unrealized Loss | (8) | (5) | ||
Estimated Fair Value | 23,424 | 21,502 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 23,424 | 21,502 | ||
Mortgage backed Securities | Level 2 | ||||
Amortized Costs | 5,000 | 5,822 | ||
Gross Unrealized Gains | 1 | 0 | ||
Gross Unrealized Loss | (23) | (52) | ||
Estimated Fair Value | 4,978 | 5,770 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 4,978 | 5,770 | ||
Agency Bond | Level 2 | ||||
Amortized Costs | 7,509 | 4,201 | ||
Gross Unrealized Gains | 2 | 3 | ||
Gross Unrealized Loss | (2) | 0 | ||
Estimated Fair Value | 7,509 | 4,204 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 7,509 | 4,204 | ||
International Government Securities | Level 2 | ||||
Amortized Costs | 800 | 800 | ||
Gross Unrealized Gains | 3 | 4 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 803 | 804 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | $ 803 | $ 804 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Inventory Details | ||
Work-in-process | $ 11 | $ 169 |
Finished goods | 607 | 535 |
Inventory, net | $ 618 | $ 704 |
Intangible Assets Schedule Of I
Intangible Assets Schedule Of Intangibles (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Gross Carrying Amount | $ 35,266 | $ 18,885 |
Accumulated Amortization | (6,756) | (6,625) |
Net Carrying Amount | 28,510 | 12,260 |
Technology | ||
Gross Carrying Amount | 21,840 | 8,242 |
Accumulated Amortization | (2,978) | (2,905) |
Net Carrying Amount | 18,862 | 5,337 |
Customer relationships | ||
Gross Carrying Amount | 10,554 | 9,686 |
Accumulated Amortization | (3,778) | (3,720) |
Net Carrying Amount | 6,776 | 5,966 |
Trade names/domains | ||
Gross Carrying Amount | 2,522 | 957 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | 2,522 | 957 |
In-process R&D | ||
Gross Carrying Amount | 350 | 0 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | $ 350 | $ 0 |
Intangible Assets Schedule Of F
Intangible Assets Schedule Of Future Amortization Of Intangibles (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Intangible Assets Schedule Of Future Amortization Of Intangibles Details | |
Remaining 2,016 | $ 3,891 |
2,017 | 4,714 |
2,018 | 4,445 |
2,019 | 4,192 |
2,020 | 4,192 |
Thereafter | 4,554 |
Total | $ 25,988 |
Software Development Costs (Nar
Software Development Costs (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Mar. 31, 2015 | |
Software Development Costs | ||
Software costs capitalized during the period | $ 0 | $ 0 |
Total capitalized software costs | 0 | 1 |
Accumulated software costs amortization | 0 | 0.5 |
Software Development | ||
Software costs capitalized during the period | 0.5 | 1.5 |
Property and equipment | 0.8 | 0.8 |
Long-term assets charged to other assets | $ 1.2 | $ 0.7 |
Commitments and Contingencies36
Commitments and Contingencies (Product Warranties) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Commitments And Contingencies Product Warranties Details | ||
Balance at beginning of period | $ 339 | $ 660 |
Accruals for warranties | 98 | 54 |
Settlements | (83) | (95) |
Adjustments | (12) | 0 |
Balance at end of period | $ 342 | $ 619 |
Commitments and Contingencies37
Commitments and Contingencies (Service Provider Contracts) (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Commitments And Contingencies Service Provider Contracts Details | |
Remaining 2,016 | $ 2,231 |
2,017 | 2,452 |
2,018 | 891 |
Total minimum payments | $ 5,574 |
Commitments and Contingencies38
Commitments and Contingencies (CustomerSupport Commitments) (Narrative) (Details) - Jun. 30, 2015 $ in Millions | USD ($) |
Commitments And Contingencies Customersupport Commitments Narrative Details | |
Third party customer support vendor minimum monthly commitment | $ 0.4 |
Third party customer support vendor maximum obligation | $ 2.2 |
Advance termination notice required, days | 150 |
Stock-based Compensation Stock-
Stock-based Compensation Stock-Based Compensation Expense By Statement Of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | $ 3,022 | $ 1,847 |
Tax benefit | 0 | 0 |
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 3,022 | 1,847 |
Cost of service revenue | ||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 219 | 115 |
Cost of product revenue | ||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 0 | 0 |
Research and development | ||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 531 | 314 |
Sales and marketing | ||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 1,197 | 744 |
General and administrative | ||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | $ 1,075 | $ 674 |
Stock-based Compensation Option
Stock-based Compensation Option Activity (Details) - Jun. 30, 2015 - $ / shares | Total |
Stock-based Compensation Option Activity Details | |
Balance at beginning of period | 5,327,907 |
Granted | 229,000 |
Exercised | (88,048) |
Cancelled/forfeited | (8,167) |
Balance at end of period | 5,460,692 |
Options, Vested and expected to vest | 5,460,692 |
Options, Exercisable at end of period | 3,316,717 |
Weighted-average exercise price of options outstanding, at beginning of period | $ 5.19 |
Weighted-average exercise price of options granted during period | 8.66 |
Weighted-average exercise price of options exercised during the period | 3.10 |
Weighted-average exercise price of options forfeited, cancelled or expired during the period | 6.78 |
Weighted-average exercise price of options outstanding at end of period | 5.37 |
Options, Vested and Expected to Vest, Weighted Average Exercise Price | 5.37 |
Weighted-Average Exercise Prices, Exercisable at end of period | $ 3.57 |
Stock-based Compensation Stock
Stock-based Compensation Stock Purchase Right Activity (Details) - 3 months ended Jun. 30, 2015 - $ / shares | Total |
Stock-based Compensation Stock Purchase Right Activity Details | |
Balance at beginning of year | 223,835 |
Granted | 0 |
Vested | (28,760) |
Forfeited | (1,875) |
Balance at end of year | 193,200 |
Weighted-average grant date fair market value, beginning balance | $ 5.92 |
Weighted-average grant date fair market value of restricted stock rights granted | 0 |
Weighted-average grant date fair market value, released during period | 4.42 |
Weighted-average grant date fair market value, forfeited during period | 11.26 |
Weighted-average grant date fair market value, ending balance | $ 6.09 |
Weighted-average remaining contractual term, in years, ending balance | 1 year 113 days |
Stock-based Compensation Restri
Stock-based Compensation Restricted Stock Unit Activity (Details) | 3 Months Ended | |
Jun. 30, 2015$ / sharesshares | Mar. 31, 2015 | |
Stock-based Compensation Restricted Stock Unit Activity Details | ||
Balance at beginning of period | 2,698,686 | |
Granted | 543,147 | |
Vested | (39,921) | |
Forfeited | (35,462) | |
Balance at end of period | 3,166,450 | |
RSU weighted-average remaining contractual term, in years | 1.77 | 1.88 |
Beginning of period, weighted-average purchase price | $ / shares | $ 7.33 | |
Granted, weighted-average purchase price | $ / shares | 8.85 | |
Vested, weighted-average purchase price | $ / shares | 7.86 | |
Forfeited, weighted-average purchase price | $ / shares | 8.63 | |
End of period, weighted-average purchase price | $ / shares | $ 7.57 |
Stock-based Compenstaion Stock
Stock-based Compenstaion Stock Options Outstanding And Exercisable (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2015 | |
Options Outstanding, Number of Shares | 5,460,692 | 5,327,907 |
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 5.37 | $ 5.19 |
Options Exercisable, Number of Shares | 3,316,717 | |
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 3.57 | |
$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 219 days | |
Options Outstanding, Aggregate Intrinsic Value | $ 8,595,630 | |
Options Exercisable, Number of Shares | 1,095,000 | |
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 1.11 | |
Options Exercisable, Aggregate Intrinsic Value | $ 8,595,630 | |
$1.27 - $4.32 | ||
Range of Exercise Prices, Minimum | $ 1.27 | |
Range of Exercise Prices, Maximum | $ 4.32 | |
Options Outstanding, Number of Shares | 1,166,033 | |
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 1.98 | |
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 1 year 329 days | |
Options Outstanding, Aggregate Intrinsic Value | $ 8,144,892 | |
Options Exercisable, Number of Shares | 1,141,467 | |
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 1.93 | |
Options Exercisable, Aggregate Intrinsic Value | $ 8,029,723 | |
$4.45 - $6.86 | ||
Range of Exercise Prices, Minimum | $ 4.45 | |
Range of Exercise Prices, Maximum | $ 6.86 | |
Options Outstanding, Number of Shares | 1,353,069 | |
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 6.33 | |
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 110 days | |
Options Outstanding, Aggregate Intrinsic Value | $ 3,558,963 | |
Options Exercisable, Number of Shares | 544,405 | |
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 5.87 | |
Options Exercisable, Aggregate Intrinsic Value | $ 1,682,505 | |
$7.52 - $9.70 | ||
Range of Exercise Prices, Minimum | $ 7.52 | |
Range of Exercise Prices, Maximum | $ 9.70 | |
Options Outstanding, Number of Shares | 1,272,022 | |
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 8.99 | |
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 292 days | |
Options Outstanding, Aggregate Intrinsic Value | $ 368,605 | |
Options Exercisable, Number of Shares | 295,412 | |
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 9.54 | |
Options Exercisable, Aggregate Intrinsic Value | $ 2,925 | |
$9.74 - $11.26 | ||
Range of Exercise Prices, Minimum | $ 9.74 | |
Range of Exercise Prices, Maximum | $ 11.26 | |
Options Outstanding, Number of Shares | 574,568 | |
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 10.10 | |
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 110 days | |
Options Outstanding, Aggregate Intrinsic Value | $ 0 | |
Options Exercisable, Number of Shares | 240,433 | |
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 10.05 | |
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 | 5,460,692 | |
Options Outstanding, Aggregate Intrinsic Value | $ 20,668,090 | |
Options Exercisable, Number of Shares | 3,316,717 | |
Options Exercisable, Aggregate Intrinsic Value | $ 18,310,783 |
Stock-based Compensation Assump
Stock-based Compensation Assumptions Used In Black-Scholes Model (Details) - Option Grants - $ / shares | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Expected volatility | 53.00% | 59.00% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.59% | 1.53% |
Weighted average expected option term, in years | 5 years 3 months | 5 years |
Weighted average fair value of options granted, per share | $ 4.17 | $ 4.01 |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - Jun. 30, 2015 - Stock-Based Awards - USD ($) $ in Millions | Total |
Unamortized stock-based compensation expense related to unvested stock awards | $ 26.3 |
Weighted average period of recognition for unrecognized compensation costs (in years) | 2 years 259 days |
Repurchases of Common Shares (D
Repurchases of Common Shares (Detail) - 3 months ended Jun. 30, 2015 - USD ($) | Total | |
Number of Shares | 574,467 | |
Amount | [1] | $ 4,239,216 |
2015 Repurchase Plan | ||
Number of Shares | 574,467 | |
Weighted Average Price Per Share | $ 7.38 | |
Amount | [1] | $ 4,239,216 |
[1] | Amount excludes commission fees. |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - Jun. 30, 2015 - USD ($) $ in Millions | Total |
Unrecognized tax benefits | $ 2.4 |
Federal | |
Tax years open for examination | 1,996 |
State | |
Tax years open for examination | 1,996 |
Foreign | |
Tax years open for examination | 2,011 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Numerator: | ||
Net income (loss) available to common stockholders | $ (472) | $ 8 |
Denominator: | ||
Common shares | 88,233 | 88,592 |
Denominator for basic calculation | 88,233 | 88,592 |
Employee stock options | 0 | 2,480 |
Employee stock purchase rights | 0 | 373 |
Denominator for diluted calculation | 88,233 | 91,445 |
Net income (loss) per share: | ||
Basic | $ (0.01) | $ 0 |
Diluted | $ (0.01) | $ 0 |
Net Income (Loss) Per Share (Op
Net Income (Loss) Per Share (Options and Rights Excluded) (Details) - shares shares in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Anti-dilutive shares | 2,517 | 1,449 |
Employee stock options | ||
Anti-dilutive shares | 2,447 | 1,370 |
Stock purchase rights | ||
Anti-dilutive shares | 70 | 79 |
Segment Reporting Revenue and P
Segment Reporting Revenue and Property and Equipment by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | |
Geographic Areas, Revenue from External Customers | 100% | 100% | |
Number of customers at more than 10% of revenue | 0 | 0 | |
Geographic Areas, Long-Lived Assets | $ 11,714 | $ 10,248 | |
Americas | |||
Geographic Areas, Revenue from External Customers | 88% | 91% | |
Geographic Areas, Long-Lived Assets | $ 8,280 | 8,348 | |
Europe | |||
Geographic Areas, Revenue from External Customers | 9% | 8% | |
Geographic Areas, Long-Lived Assets | $ 2,931 | 1,411 | |
Asia-Pacific | |||
Geographic Areas, Revenue from External Customers | 3% | 1% | |
Geographic Areas, Long-Lived Assets | $ 503 | $ 489 |
Operating Segment (Details)
Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Net revenues | $ 47,892 | $ 37,913 |
Net income (loss) | (472) | 8 |
Americas | ||
Net revenues | 43,588 | 35,128 |
Net income (loss) | 251 | 803 |
Europe | ||
Net revenues | 4,304 | 2,785 |
Net income (loss) | $ (723) | $ (795) |
Acquisitions (Details)
Acquisitions (Details) - Jun. 30, 2015 - USD ($) $ in Thousands | Total |
DXI | |
Assets acquired: | |
Cash | $ 1,318 |
Current assets | 2,016 |
Property and equipment | 1,453 |
Intangible assets | 14,691 |
Total assets acquired | 19,478 |
Liabilities assumed: | |
Current and non-current liabilities | (5,997) |
Total liabilities assumed | (5,997) |
Net identifiable assets acquired | 13,481 |
Goodwill | 971 |
Total consideration transferred | 22,552 |
Purchase price components | |
Cash | 18,700 |
Contingent payments | 3,800 |
Fair value of shares of stock issued | 3,000 |
Total purchase price | $ 25,500 |
Business Acquisition, Name of Acquired Entity | DXI Group Limited |
Business Acquisition, Description of Acquired Entity | On May 26, 2015, the Company 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. The transaction closed effective May 29, 2015 and was not subject to regulatory approvals. The total aggregate purchase price was approximately $22.5 million, consisting of $18.7 million in cash paid to the DXI shareholders at closing, and $3.8 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. Approximately 352,000 shares of common stock valued at approximately $3.0 million were issued only to former management shareholders of DXI as part of the share purchase agreement and are subject to certain restrictions, including a four-year annual vesting requirement based on the continued employment of such shareholders. Under ASC 805-10-55-25, Business Combinations |
Business Combination, Assets and Liabilities, Description | 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 the following: customer relationships, with an estimated weighted-average useful life of two and five years; and developed technology, with an estimated weighted-average useful life of seven years. The indefinite lived intangible asset consisted of a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using various income approach methods. Intangible assets are amortized on a straight-line basis. None of the goodwill recognized is expected to be deductible for income tax purposes. |
Quality Software | |
Assets acquired: | |
Intangible assets | $ 1,675 |
Total assets acquired | 1,675 |
Liabilities assumed: | |
Net identifiable assets acquired | 1,675 |
Goodwill | 1,214 |
Total consideration transferred | 2,889 |
Purchase price components | |
Cash | 2,200 |
Contingent payments | 700 |
Total purchase price | $ 2,900 |
Business Acquisition, Name of Acquired Entity | Quality Software Corporation |
Business Acquisition, Description of Acquired Entity | On June 18, 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation (QSC) and other parties affiliated with the shareholder and QSC for the purchase of certain assets as per the purchase agreement. The total aggregate fair value of the consideration was approximately $2.9 million, which was paid in cash to the QSC shareholder at closing. As part of the aggregate purchases price, there is also $0.5 million in contingent consideration payable subject to attainment of certain revenue and product release milestones for the acquired business, and $0.3 million in cash held by the Company in escrow to be retained for two years as security against indemnity claims made by the Company after the closing date. The preliminary fair value of the contingent consideration and escrow amounts was $0.7 million at the acquisition date. |
Business Combination, Assets and Liabilities, Description | The Company recorded the acquired 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 the following: customer relationships, with an estimated weighted-average useful life of five years; and developed technology, with an estimated weighted-average useful life of seven years. The indefinite lived intangible asset consisted of a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using various income approach methods. Intangible assets are amortized on a straight-line basis. The goodwill recognized is expected to be deductible for income tax purposes. |