Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 25, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | CALLIDUS SOFTWARE INC | |
Entity Central Index Key | 1,035,748 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 68,114,900 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 100,957 | $ 148,008 |
Short-term investments | 75,459 | 39,266 |
Accounts receivable, net of allowances of $1,591 and $1,536 at September 30, 2017 and December 31, 2016, respectively | 51,653 | 55,464 |
Prepaid and other current assets | 22,100 | 18,275 |
Total current assets | 250,169 | 261,013 |
Property and equipment, net | 44,551 | 35,456 |
Goodwill | 79,918 | 63,957 |
Intangible assets, net | 28,252 | 21,659 |
Deposits and other non-current assets | 5,335 | 4,416 |
Total assets | 408,225 | 386,501 |
Current liabilities: | ||
Accounts payable | 3,815 | 3,573 |
Accrued payroll and related expenses | 13,923 | 17,831 |
Accrued expenses | 26,146 | 15,126 |
Deferred revenue | 110,429 | 99,758 |
Total current liabilities | 154,313 | 136,288 |
Deferred revenue, non-current | 1,080 | 3,209 |
Deferred income taxes, non-current | 3,811 | 1,541 |
Other non-current liabilities | 8,764 | 8,602 |
Total liabilities | 167,968 | 149,640 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; 100,000 shares authorized; 68,114 and 66,031 shares issued and 65,775 and 63,692 shares outstanding at September 30, 2017 and December 31, 2016, respectively | 66 | 64 |
Additional paid-in capital | 577,387 | 559,200 |
Treasury stock, 2,339 shares at September 30, 2017 and December 31, 2016 | (14,430) | (14,430) |
Accumulated other comprehensive loss | (1,862) | (5,141) |
Accumulated deficit | (320,904) | (302,832) |
Total stockholders’ equity | 240,257 | 236,861 |
Total liabilities and stockholders’ equity | $ 408,225 | $ 386,501 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances (in dollars) | $ 1,591 | $ 1,536 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
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 (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 68,114,000 | 66,031,000 |
Common stock, shares outstanding | 65,775,000 | 63,692,000 |
Treasury stock, shares | 2,339,000 | 2,339,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Recurring | $ 51,183 | $ 41,465 | $ 145,985 | $ 118,361 |
Services and license | 12,993 | 11,042 | 37,595 | 32,275 |
Total revenue | 64,176 | 52,507 | 183,580 | 150,636 |
Cost of revenue: | ||||
Recurring | 13,851 | 10,948 | 40,408 | 31,047 |
Services and license | 11,063 | 9,229 | 31,922 | 25,822 |
Total cost of revenue | 24,914 | 20,177 | 72,330 | 56,869 |
Gross profit | 39,262 | 32,330 | 111,250 | 93,767 |
Operating expenses: | ||||
Sales and marketing | 24,166 | 18,357 | 68,840 | 56,942 |
Research and development | 8,973 | 8,637 | 27,551 | 23,127 |
General and administrative | 9,641 | 8,894 | 31,363 | 26,445 |
Restructuring and other | 157 | 80 | 1,129 | 482 |
Total operating expenses | 42,937 | 35,968 | 128,883 | 106,996 |
Operating loss | (3,675) | (3,638) | (17,633) | (13,229) |
Interest income and other income (expense) | 306 | (3) | 642 | (55) |
Interest expense | (16) | (48) | (58) | (130) |
Loss before provision for income taxes | (3,385) | (3,689) | (17,049) | (13,414) |
Provision for income taxes | 442 | 258 | 1,023 | 755 |
Net loss | $ (3,827) | $ (3,947) | $ (18,072) | $ (14,169) |
Net loss per share | ||||
Basic and Diluted (in dollars per share) | $ (0.06) | $ (0.07) | $ (0.28) | $ (0.25) |
Basic and Diluted (in shares) | 65,624 | 58,009 | 65,028 | 57,237 |
Comprehensive loss: | ||||
Net loss | $ (3,827) | $ (3,947) | $ (18,072) | $ (14,169) |
Unrealized (loss) gain on available-for-sale securities | (11) | (18) | (32) | 41 |
Foreign currency translation adjustments | 1,091 | (367) | 3,310 | (1,902) |
Comprehensive loss | $ (2,747) | $ (4,332) | $ (14,794) | $ (16,030) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (18,072) | $ (14,169) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation expense | 8,574 | 5,656 |
Amortization of intangible assets | 6,080 | 4,616 |
Provision for doubtful accounts | 994 | 1,227 |
Stock-based compensation | 25,337 | 20,910 |
Gain on foreign currency from mark-to-market derivatives | (88) | (1) |
Excess tax benefit from stock-based compensation | 0 | (26) |
Deferred income taxes | 235 | 13 |
Loss on disposal of property and equipment | 3 | 22 |
Amortization of premium on investments | 149 | 132 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,555 | (6,037) |
Prepaid and other current assets | (2,074) | (3,374) |
Other non-current assets | 445 | 118 |
Accounts payable | (260) | 19 |
Accrued expenses | 1,564 | (225) |
Accrued payroll and related expenses | (3,907) | 1,473 |
Accrued restructuring and other expenses | 131 | 314 |
Deferred revenue | 7,255 | 10,101 |
Net cash provided by operating activities | 29,921 | 20,769 |
Cash flows from investing activities: | ||
Purchases of investments | (58,241) | (12,113) |
Proceeds from maturities and sale of investments | 20,346 | 12,876 |
Purchases of property and equipment | (11,438) | (7,091) |
Purchases of intangible assets | (458) | (687) |
Acquisitions, net of cash acquired | (19,068) | (11,500) |
Change in restricted cash | (1,355) | 0 |
Net cash used in investing activities | (70,214) | (18,515) |
Cash flows from financing activities: | ||
Proceeds from follow-on offering, net of issuance costs | 0 | 87,144 |
Proceeds from issuance of common stock | 5,945 | 4,082 |
Restricted stock units acquired to settle employee withholding liability | (13,158) | (2,705) |
Excess tax benefit from stock-based compensation | 0 | 26 |
Payment of consideration related to acquisitions | (100) | (510) |
Net cash (used in) provided by financing activities | (7,313) | 88,037 |
Effect of foreign currency exchange rates on cash and cash equivalents | 555 | (407) |
Net (decrease) increase in cash and cash equivalents | (47,051) | 89,884 |
Cash and cash equivalents at beginning of period | 148,008 | 77,232 |
Cash and cash equivalents at end of period | 100,957 | 167,116 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | 513 | 646 |
Interest Paid | 61 | 68 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment through accounts payable and other current and non-current accrued liabilities | $ 5,677 | $ 9,392 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Summary of Accounting Policies All amounts included herein related to these condensed consolidated financial statements as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 are unaudited and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016 for Callidus Software Inc., doing business as CallidusCloud ("Company"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the Securities and Exchange Commission ("SEC") rules and regulations regarding interim financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all necessary adjustments for the fair presentation of the Company’s financial position, results of operations and cash flows. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the full fiscal year ending December 31, 2017 . The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include wholly-owned subsidiaries in Australia, Canada, Germany, Hong Kong, India, Ireland, Japan, Malaysia, Mexico, Netherlands, New Zealand, Serbia, Singapore and the United Kingdom. All intercompany transactions and balances have been eliminated upon consolidation. Use of Estimates Preparation of the unaudited condensed consolidated financial statements in conformity with GAAP and the rules and regulations of the SEC requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, the reported amounts of revenue and expenses during the reporting period and the accompanying notes. Estimates are used for, but not limited to, the allocation of the value of purchase consideration for business acquisitions and other contingencies, allowances for doubtful accounts, the useful lives of fixed assets and intangible assets, the attainment of performance-based restricted stock units, stock-based compensation forfeiture rates, accrued liabilities and uncertain tax positions. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates such estimates and assumptions on an ongoing basis for continued reasonableness, using historical experience and other factors, including the current economic environment. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such evaluation. Illiquid credit markets, volatile equity and foreign currency markets and fluctuations in information technology spending by prospective customers can increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ materially from those estimates. Changes in those estimates, if any, resulting from continuing changes in the economic environment, will be reflected in the consolidated financial statements in future periods. Revenue Recognition The Company generates revenue by providing software as a service ("SaaS") solutions through on-demand subscription and term licenses, related software maintenance associated with the Company's existing on-premise solution, and professional services. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Recurring Revenue. Recurring revenue, which includes SaaS revenue and maintenance revenue, is recognized ratably over the stated contractual period. SaaS revenue consists of subscription fees from customers accessing the Company's cloud-based service offerings. Maintenance revenue consists of fees from customers purchasing licenses and receiving support for such on-premise solutions. The Company also recognizes SaaS and maintenance revenue associated with customers using its products in excess of contracted usage ("Overages"). Overages are primarily attributed to SaaS products and such Overages are recorded in SaaS revenue in the period incurred. Revenue related to Overages was immaterial during the three and nine month periods ended September 30, 2017 and 2016 . Service and License Revenue. Service and license revenue primarily consists of training, integration and configuration services. Generally, the Company's professional services arrangements are billed on a time-and-materials basis. Time and material services are recognized as the services are rendered based on inputs to the project, such as billable hours incurred. For fixed-fee professional services arrangements, the Company recognizes revenue under the proportional performance method of accounting and estimates the proportional performance on a monthly basis, utilizing hours incurred to date as a percentage of total estimated hours to complete the project. If the Company does not have a sufficient basis to measure progress toward completion, revenue is recognized upon completion. Service and license revenue also includes revenue from perpetual licenses, which is recognized upon delivery of the product, using the residual method, assuming all the other conditions for revenue recognition have been met. Revenue related to perpetual licenses was immaterial during the three and nine month periods ended September 30, 2017 and 2016. In a limited number of arrangements with non-standard acceptance criteria, the Company defers the revenue until the acceptance criteria are satisfied. Reimbursements, including those related to travel and out-of-pocket expenses, are included in services and license revenue, and an equivalent amount of reimbursable expenses is included in cost of services and license revenue. In general, recurring revenue agreements are entered into for 12 to 36 months, and the professional services are performed within nine months of entering into a contract with the customer, depending on the size of integration. SaaS agreements provide specified service level commitments, excluding scheduled maintenance. The failure to meet this level of service availability may require the Company to credit qualifying customers a portion of their subscription and support fees. Based on the Company's historical experience meeting its service level commitments, the Company does not currently have any liabilities on its balance sheet for these commitments. The Company recognizes revenue when all of the following conditions are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • The fees are fixed or determinable; and • Collection of the fees is reasonably assured. If the Company determines that any one of the four criteria is not met, it will defer recognition of revenue until all the criteria are met. Multiple-deliverable arrangements with on-demand subscription. For on-demand subscription agreements with multiple deliverables, the Company evaluates each element to determine whether it represents a separate unit of accounting. The Company determines the best estimated selling price of each deliverable in an arrangement based on a selling price hierarchy of methods contained in Finance Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2009-13, "Revenue Recognition (Accounting Standards Codification (“ASC”) Topic 605)- Multiple-Deliverable Revenue Arrangements." The best estimated selling price for a deliverable is based on its vendor-specific objective evidence (“VSOE”), if available, third-party evidence (“TPE”), if VSOE is not available, or estimated selling price (“ESP”), if neither VSOE nor TPE is available. Total arrangement fees are allocated to each element using the relative selling price method. The Company has currently established VSOE for most deliverables, except for fixed fee service arrangements and on-premise software licenses. The Company considered all of the following factors to establish the ESP for fixed fee service arrangements when sold with its on-demand services: the weighted average actual sales prices of professional services sold on a stand-alone basis for on-demand services; average billing rates for fixed fee service agreements when sold with on-demand services, cost plus a reasonable mark-up and other factors such as gross margin objectives, pricing practices and growth strategy. Multiple-deliverable arrangements with on-premise license. For arrangements with multiple deliverables, including license, professional services and maintenance, the Company recognizes license revenue using the residual method of accounting pursuant to the requirements of the guidance contained in ASC 985-605, "Software Revenue Recognition." Under the residual method, revenue is recognized when VSOE for fair value exists for all of the undelivered elements in the arrangement, but does not exist for one or more of the delivered elements in the arrangement. If evidence of fair value cannot be established for the undelivered elements, all of the revenue is deferred until evidence of fair value can be established, or until the items for which evidence of fair value cannot be established are delivered. For maintenance and certain professional services, the Company has established VSOE because it has a sufficient history of selling these deliverables at an established price. The Company's revenue arrangements do not include a general right of return relative to the delivered products. Generally, for the Company's term-based licenses, if the only undelivered element is maintenance, the entire amount of revenue is recognized ratably over the maintenance period. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which simplifies various aspects related to the accounting and presentation of stock-based payments. The amendments require entities to record all tax effects related to stock-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from the stock-based payments are required to be reported as operating activities in the statement of cash flows. Further, the amendments allow entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. The Company adopted this guidance on January 1, 2017 on a prospective basis. Adoption of the new standard did not have a material impact to the Company's condensed financial statements and resulted in the recognition of excess tax benefits to the Company's income taxes rather than paid-in capital. The Company elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. Recently Issued, But Not Yet Adopted Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting , which amends the scope of modification accounting for stock-based payment arrangements, provides guidance on the types of changes to the terms or conditions of stock-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation- Stock Compensation . This ASU is effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the impact this ASU will have on its unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows, Restricted Cash (Topic 230), which requires that a statement of cash flows explain the change during the period for the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective for the Company's fiscal year beginning January 1, 2018. Restricted cash will be included as a component of cash, cash equivalents, and restricted cash on the Company's unaudited condensed consolidated statement of cash flows. The inclusion of restricted cash will increase the beginning and ending balances of the unaudited condensed consolidated statement of cash flows by $1.4 million. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice for certain cash receipts and cash payments. The amendments in this guidance are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Entities are permitted to adopt the standard early in any interim or annual period, and a retrospective application is required. While the Company continues to assess the impact of this standard, it does not expect the adoption of this ASU will have a material impact on its unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. The updated standard is effective for the Company beginning in the first quarter of 2019. The Company is currently evaluating the impact of this new standard on its unaudited condensed consolidated financial statements. In May 2014, August 2015, April 2016 and May 2016, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , ASU 2015-14, Revenue from Contracts with Customers, Deferral of the Effective Date , ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients , respectively, (collectively referred to as "Topic 606"). Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, and supersedes current revenue recognition guidance, including industry-specific guidance. Topic 606 also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 will be effective for the Company starting on January 1, 2018. The Company is on schedule in establishing new accounting policies, implementing systems and processes, and internal controls necessary to support the requirements of the new standard by the effective date. The Company has completed its preliminary assessment of the financial statement impact of Topic 606, as discussed below, and will continue to update that assessment as more information becomes available. Topic 606 will accelerate the recognition of revenue for term software licenses and, in some cases, where so-called contingent revenue (i.e., amounts allocated to delivered items are limited to amounts that are not contingent on the provision of future services) exists. The table below details both the current and expected revenue recognition timing in the following areas: Current Revenue Standard Topic 606 Customer arrangements: Term software licenses Ratable Upfront Software support services Ratable Ratable Software-as-a-service Ratable Ratable Contingent revenue Defer As delivered The Company does expect revenue related to its professional services and cloud offerings for business enterprises, individuals and teams to be materially affected by Topic 606. Due to the complexity of the Company’s contracts, the actual revenue recognition treatment required under Topic 606 for these arrangements may be dependent on contract-specific terms and, therefore, may vary in some instances. Also, included in the Company’s assessment of Topic 606 is the potential impact relating to the deferral of incremental commission costs of obtaining subscription contracts. Under current accounting guidance, the Company defers only direct and incremental commission costs to obtain a contract and amortized those costs over the corresponding term of the contract. Under Topic 606, the Company will defer all direct and incremental commission costs to obtain the contract. The Company will amortize these costs on a straight-line basis over the estimated period of benefit or the related contractual renewal period, depending on whether the contract is an initial or renewal contract, respectively. The two permitted transition methods under the new standard are the full retrospective method, under which Topic 606 would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, under which the cumulative effect of applying Topic 606 would be recognized at the date of initial application. The Company currently intends to elect the modified retrospective transition approach. The Company is currently determining the financial statement impact and its disclosure requirements of Topic 606. Except for the updated accounting standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company's unaudited condensed consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions OrientDB Ltd. On September 15, 2017, the Company acquired OrientDB Ltd. ("OrientDB"), a privately-held provider of data management platforms of Graph Data Base technology. The purchase of OrientDB enhances the Company's Direct Selling Pro solution for the multi-level marketing industry, and other applications in the Company's Lead to Money Suite. The purchase consideration was $9.1 million , which included $8.0 million paid in cash, a $1.0 million indemnity holdback to be paid one year from the date of the agreement and $0.1 million to be paid two years from the date of the agreement. As part of the acquisition, the Company agreed to make incentive payments to specified consultants and employees for up to an aggregate of $1.9 million which will be treated as compensation expense and will be recognized over the term of the payments in 2018 and 2019. The preliminary purchase price allocation for OrientDB is summarized as follows (in thousands): Fair Value Net liabilities assumed $ (1,778 ) Intangible assets 7,700 Goodwill 2,739 Total purchase price, net of cash acquired $ 8,661 Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair values at the date of acquisition. The fair values of the intangible assets at the date of acquisition require significant judgment, and were measured primarily based on inputs that are not observable in the market and thus represent a Level 3 measurement as defined in ASC 820, Fair Val ue Measurements . The Company was not able to produce reliable long-term cash flows attributable to the acquired intangible assets because the acquired technology would be a component of an integrated product to be sold after the technology integration. As such, the primary asset was valued based on a replacement cost approach. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of September 30, 2017, and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of September 30, 2017, the primary areas that are not yet finalized due to information that may become available subsequently and may result in changes in the values assigned to various assets and liabilities, include the fair values of intangible assets and deferred tax liabilities as well as assumed tax assets and liabilities. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill. Factors comprising goodwill includes the expected benefits of integrating the data management platform into the Company's Lead-to-Money solutions as well as the value of the assembled workforce. The goodwill balance is not deductible for income tax purposes. The Company did not record any in-process research and development intangible assets in connection with the OrientDB acquisition. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the OrientDB acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Developed technology $ 7,300 5 years Cost of sales Customer contracts and related relationships 400 4 years Sales and marketing Total intangible assets subject to amortization $ 7,700 The financial results of OrientDB are included in the Company's unaudited condensed consolidated financial statements from the date of acquisition through September 30, 2017 . The acquisition of OrientDB did not have a material impact on the Company's unaudited condensed consolidated financial statements and, therefore, pro forma disclosures have not been presented. Learning Heroes Ltd. On June 2, 2017, the Company acquired Learning Heroes Ltd. ("Learning Heroes"), a privately-held company that is a provider of innovative education content. The purchase of Learning Heroes enhances the Company's learning business, and accelerates its creation of high quality, engaging and impactful learning experiences. Learning Heroes creates courses that run on any Learning Management System. The purchase consideration was $10.3 million , which included $8.8 million in cash and 1.2 million Pound Sterling indemnity holdback to be paid one year from the date of the agreement. The preliminary purchase price allocation for Learning Heroes is summarized as follows (in thousands): Fair Value Net liabilities assumed $ (1,170 ) Intangible assets 3,250 Goodwill 7,512 Total purchase price, net of cash acquired $ 9,592 Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value at the date of acquisition. The fair value of the intangible assets at the date of acquisition require significant judgment, and were measured primarily based on inputs that are not observable in the market and thus represent a Level 3 measurement as defined in ASC 820, Fair Value Measurements. The methodologies used in valuing the intangible assets include, but are not limited to, the multiple period excess earnings method for customer contracts and related relationships, and the relief-from-royalty method for education content. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of September 30, 2017, and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of September 30, 2017, the primary areas that are not yet finalized due to information that may become available subsequently and may result in changes in the values assigned to various assets and liabilities, include the fair values of intangible assets and deferred tax liabilities as well as assumed tax assets and liabilities. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill. Factors comprising goodwill includes synergies expected from the expanded learning capabilities as well as the value of the assembled workforce. The goodwill balance is not deductible for income tax purposes. The Company did not record any in-process research and development intangible assets in connection with the acquisition. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the Leaning Heroes acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Customer contracts and related relationships $ 1,840 7 years Sales and marketing expense Education course content 1,410 5 years Cost of sales Total intangible assets subject to amortization $ 3,250 The financial results of Leaning Heroes are included in the Company's unaudited condensed consolidated financial statements from the date of acquisition through September 30, 2017 . The acquisition of Learning Heroes did not have a material impact on the Company's unaudited condensed consolidated financial statements and, therefore, pro forma disclosures have not been presented. RevSym Inc. On May 18, 2017, the Company acquired RevSym Inc. ("RevSym"), a privately-held company focused on innovative cloud-based solutions for the management of revenue. RevSym is a cloud solution that enables companies to follow the new accounting guidance for Topic 606. The Company purchased RevSym, a cloud solution, in order to integrate with the Company's leading commissions, Configure Price Quote and Contract Lifecycle Management solutions, to enable customers to optimize their critical revenue and commissions processes to streamline compliance under Topic 606. The purchase consideration was $5.5 million , which included $3.0 million in cash and an indemnity holdback with the first payment of $1.0 million to be paid six months from the date of the agreement and the remaining balance of $1.5 million to be paid one year from the date of the agreement. The preliminary purchase price allocation for RevSym is summarized as follows (in thousands): Fair Value Net assets assumed $ 13 Intangible assets 1,610 Goodwill 3,796 Total purchase price, net of cash acquired $ 5,419 Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value at the date of acquisition. The fair value of the intangible assets at the date of acquisition require significant judgment, and were measured primarily based on inputs that are not observable in the market and thus represent a Level 3 measurement as defined in ASC 820, Fair Value Measurements. The methodologies used in valuing the intangible assets include, but are not limited to, multiple period excess earnings method for developed technology, cost method for customer contracts and related relationships, and the relief-from-royalty method for trademarks, tradenames and domain names. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of June 30, 2017 and were subsequently adjusted as of September 30, 2017, as a result of updating estimates used in valuing the intangible assets. These fair values may be further adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of September 30, 2017, the primary areas that are not yet finalized, due to information that may become available subsequently and may result in changes in the values assigned to various assets and liabilities, include the fair values of intangible assets and deferred tax liabilities as well as assumed tax assets and liabilities. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill. Factors comprising goodwill include how RevSym integrates into the Company's leading commissions solutions as well as the value of the assembled workforce. The goodwill balance is deductible for U.S. income tax purposes. The Company did not record any in-process research and development intangible assets in connection with the acquisition. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the RevSym acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Developed technology $ 1,400 3 years Cost of sales Customer contracts and related relationships 100 3 years Sales and marketing expense Trademarks/tradenames/ domain names 110 3 years General and administrative Total intangible assets subject to amortization $ 1,610 The financial results of RevSym are included in the Company's unaudited condensed consolidated financial statements from the date of acquisition through September 30, 2017 . The acquisition of RevSym did not have a material impact on the Company's unaudited condensed consolidated financial statements, and therefore, pro forma disclosures have not been presented. DataHug Ltd. On November 7, 2016, the Company acquired DataHug Ltd. ("DataHug"), a privately-held company and provider of SaaS predictive forecasting and sales analytics. The Company's purchase of DataHug is intended to utilize its unique, patented technology to deliver predictive analysis of sales pipelines that is easy to understand and visualize. The purchase consideration was $13.0 million , which included $11.7 million paid in cash and a $1.3 million indemnity holdback to be paid one year from the date of the agreement. The preliminary purchase price allocation for DataHug is summarized as follows (in thousands): Fair Value Net liabilities assumed $ (600 ) Intangible assets 5,350 Goodwill 8,138 Total purchase price, net of cash acquired $ 12,888 Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value at the date of acquisition. The fair value of the intangible assets at the date of acquisition require significant judgment, and were measured primarily based on inputs that are not observable in the market and thus represent a Level 3 measurement as defined in ASC 820, Fair Value Measurements. The methodologies used in valuing the intangible assets include, but are not limited to, the multiple period excess earnings method for developed technology, the with and without method for customer contracts and related relationships, the relief-from-royalty method for trademarks, tradenames and domain names, and the multiple period excess earnings method for order backlog. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of December 31, 2016, and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of September 30, 2017, the primary areas that are not yet finalized, due to information that may become available subsequently and may result in changes in the values assigned to various assets and liabilities, include the fair values of intangible assets and deferred tax liabilities as well as assumed tax assets and liabilities. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill. Factors comprising goodwill includes the synergies expected from the expanded service capabilities resulting from the extension of the predictive analysis of the sales pipeline to the Company's Lead to Money suite as well as the value of the assembled workforce. The goodwill balance is not deductible for income tax purposes. The Company did not record any in-process research and development intangible assets in connection with the acquisition. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the DataHug acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Developed technology $ 3,800 4 years Cost of sales Customer contracts and related relationships 1,250 6 years Sales and marketing expense Trademarks/tradenames/ domain names 150 3 years General and administrative Order backlog 150 2 years Cost of sales Total intangible assets subject to amortization $ 5,350 The financial results of DataHug are included in the Company's unaudited condensed consolidated financial statements from the date of acquisition through September 30, 2017 . The acquisition of DataHug did not have a material impact on the Company's unaudited condensed consolidated financial statements and, therefore, pro forma disclosures have not been presented. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments | |
Financial Instruments | Financial Instruments As of September 30, 2017 and December 31, 2016 , all investment debt securities were classified as available-for-sale and carried at estimated fair value, which is determined based on the inputs discussed in Note 4. The Company classifies all highly-liquid instruments with an original maturity on the date of purchase of three months or less as cash and cash equivalents. The Company classifies available-for-sale securities that have a maturity date longer than three months as short-term investments, including those investments with a maturity date of longer than one year that are highly liquid and which the Company does not intend to hold to maturity. Realized gains and losses are calculated using the specific identification method. As of September 30, 2017 and December 31, 2016 , the Company had no short-term investments in a material unrealized loss position. The components of the Company’s cash, cash equivalents, and investments classified as available-for-sale were as follows at September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Amortized Cost Gross Gains Gross Losses Estimated Fair Value Cash $ 57,957 $ — $ — $ 57,957 Cash equivalents: Money market funds 40,351 — — 40,351 Agency Discount 2,649 — — 2,649 Total cash equivalents 43,000 — — 43,000 Total cash and cash equivalents $ 100,957 $ — $ — $ 100,957 Short-term investments: Certificates of deposits $ 12,668 $ — $ — $ 12,668 U.S. government and agency obligations 19,658 18 (31 ) 19,645 Corporate notes and obligations 43,144 24 (22 ) 43,146 Total short-term investments $ 75,470 $ 42 $ (53 ) $ 75,459 December 31, 2016 Amortized Cost Gross Gains Gross Losses Estimated Fair Value Cash $ 147,680 $ — $ — $ 147,680 Cash equivalents: Money market funds 328 — — 328 Total cash equivalents 328 — — 328 Total cash and cash equivalents $ 148,008 $ — $ — $ 148,008 Short-term investments: Certificate of deposits $ 1,200 $ — $ — $ 1,200 U.S. government and agency obligations 19,351 19 (18 ) 19,352 Corporate notes and obligations 18,716 18 (20 ) 18,714 Total short-term investments $ 39,267 $ 37 $ (38 ) $ 39,266 The market value and the amortized cost of available-for-sale debt securities by contractual maturities as of September 30, 2017 were as follows (in thousands): Contractual maturity Amortized Cost Estimated Fair value Less than 1 year $ 44,970 $ 44,961 Between 1 and 2 years 30,500 30,498 Total $ 75,470 $ 75,459 The Company had no realized gains or losses on sales of its investments for the three and nine months ended September 30, 2017 and 2016 . The Company had $37.9 million of net purchases of investments during the nine months ended September 30, 2017 and $0.8 million net proceeds from investments during the nine months ended September 30, 2016 . The short-term investments in highly-rated credit securities generally have minor to moderate fluctuations in the fair values from period to period. The Company monitors credit ratings, downgrades and significant events surrounding these securities in order to assess whether any of the impairments will be considered other-than-temporary. The Company did not identify any securities held as of September 30, 2017 or as of December 31, 2016 for which the fair value declined significantly below amortized cost and were considered other-than-temporary impairments. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Valuation of Investments Level 1 and Level 2 The Company’s available-for-sale securities include money market funds, certificates of deposits, corporate notes and obligations, and U.S. government and agency obligations. The Company values these securities using a pricing matrix from a pricing service provider, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs). The Company classifies all of its available-for-sale securities, except for money market funds, as having Level 2 inputs. The Company validates the estimated fair value of certain securities from a pricing service provider on a quarterly basis. The valuation techniques used to measure the fair value of the financial instruments having Level 2 inputs, all of which have counterparties with high credit ratings, were derived from the following: non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments or pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data. The Company measures financial assets and liabilities at fair value on an ongoing basis. The estimated fair value of the Company’s financial assets was determined using the following inputs at September 30, 2017 and December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2017 Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 40,351 $ 40,351 $ — $ — Agency Discount (1) 2,649 — 2,649 — Certificates of deposit (2) 12,668 — 12,668 — U.S. government and agency obligations (2) 19,645 — 19,645 — Corporate notes and obligations (2) 43,146 — 43,146 — Foreign currency derivative contracts (3) 174 — 174 $ — Total $ 118,633 $ 40,351 $ 78,282 $ — Liabilities: Foreign currency derivative contracts (4) $ 86 $ — $ 86 $ — Total $ 86 $ — $ 86 $ — Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant December 31, 2016 Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 328 $ 328 $ — $ — Certificates of deposit (2) 1,200 — 1,200 — U.S. government and agency obligations (2) 19,352 — 19,352 — Corporate notes and obligations (2) 18,714 — 18,714 — Foreign currency derivative contracts (3) 76 — 76 $ — Total $ 39,670 $ 328 $ 39,342 $ — Liabilities: Foreign currency derivative contracts (4) $ 53 $ — $ 53 $ — Total $ 53 $ — $ 53 $ — _____________________________________________________________________________ (1) Included in cash and cash equivalents on the unaudited condensed consolidated balance sheets. (2) Included in short-term investments on the unaudited condensed consolidated balance sheets. (3) Included in prepaid and other current assets on the unaudited condensed consolidated balance sheets. (4) Included in accrued expenses on the unaudited condensed consolidated balance sheets. Derivative Financial Instruments The Company entered into foreign currency derivative contracts with a financial institution to reduce the risk that its earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily denominated in Australian, Canadian, Euros and Pound Sterling. Foreign currency derivative contracts are mark-to-market at the end of each reporting period with gains and losses recognized as other expense to offset the gains or losses resulting from the settlement or remeasurement of the underlying foreign currency denominated cash, receivables and payables. Details on outstanding foreign currency derivative contracts related primarily to receivables and payables are presented below (in thousands): September 30, 2017 December 31, 2016 Notional amount of foreign currency derivative contracts $ 11,024 $ 3,850 Fair value of foreign currency derivative contracts $ 11,112 $ 3,873 The fair value of the Company’s outstanding derivative instruments are summarized below (in thousands): Fair Value of Derivative Instruments Balance Sheet Location September 30, 2017 December 31, 2016 Derivative Assets Derivatives not designated as hedging instruments: Foreign currency derivative contracts Prepaid expenses and other current assets $ 174 $ 75 Derivative Liabilities Derivatives not designated as hedging instruments: Foreign currency derivative contracts Accrued expenses $ 86 $ 52 The Company accounts for the derivative instruments at fair value with changes in the fair value recorded as a component of interest income and other income (expense). During both the three and nine months ended September 30, 2017 and September 30, 2016 such changes were immaterial. The Company did not have any transfers of its fair value measurement between Level 1, Level 2 and Level 3 during the periods presented. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Except as discussed below, there were no material changes in the Company's commitments under contractual obligations as disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2016 . During the nine months ended September 30, 2017 , the Company entered into various contractual obligations, long-term operating lease obligations and unconditional purchase commitments. Future minimum lease payments under non-cancellable operating leases (with initial or remaining lease terms in excess of one year) and purchase commitments as of September 30, 2017 are as follows (in thousands): Unconditional Purchase Commitments (1) Operating Lease Commitments (2) Years ending: Remainder of 2017 $ 11,016 $ 1,169 2018 15,498 5,028 2019 10,375 4,691 2020 3,008 4,731 2021 — 4,450 2022 and beyond — 3,237 Future minimum payments $ 39,897 $ 23,306 (1) Primarily represents amounts associated with agreements that are enforceable, legally binding and specific terms, including: software purchases, data center equipment purchases and maintenance agreements. In addition, amounts include unconditional purchase agreements during the normal course of business with various vendors for future services. (2) The Company has facilities under non-cancellable operating lease agreements that expire at various dates through 2022. Letter of Credit The Company obtained a $1.4 million letter of credit in October 1, 2016 for its leased space in Dublin, California. The letter of credit will expire on October 1, 2018. As of September 30, 2017 , there was no balance outstanding under this letter of credit. The letter of credit is secured by cash collateral, which is treated as restricted cash and recorded in deposits and other non-current assets on the balance sheet. Prior to the Company obtaining the cash collateral, the Company secured the letter credit with the revolver line of credit with Wells Fargo Bank that was entered into in May 2014, and was terminated during the third quarter of 2017. Revolver Line of Credit During the third quarter of 2017, the Company terminated its May 2014 credit agreement with Wells Fargo Bank that provided for a revolving loan in an amount not to exceed $15.0 million . The Company did not have a balance outstanding at the time of terminating this arrangement. Warranties and Indemnification The Company generally warrants that its software will perform in accordance with its standard documentation. Under the Company’s standard warranty, should a software product not perform as specified in the documentation within the warranty period, the Company will repair or replace the software or refund the license fee paid. To date, the Company has not incurred any incremental costs related to warranty obligations for its software. The Company’s product license and on-demand agreements typically include a limited indemnification provision for claims by third parties relating to the Company’s intellectual property. To date, the Company has not incurred material costs, and has not accrued any costs, related to such indemnification provisions. |
Restructuring and Other
Restructuring and Other | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other | Restructuring and Other Restructuring and other expenses primarily consist of costs associated with exit from excess facilities, streamlining operations and employee terminations. The Company incurred restructuring and other expenses of $0.2 million and $0.1 million during the three months ended September 30, 2017 and September 30, 2016, respectively, and $1.1 million and $ 0.5 million during the nine months ended September 30, 2017 and September 30, 2016, respectively. The following tables set forth a summary of accrued restructuring and other expenses for the nine months ended September 30, 2017 and 2016 (in thousands): December 31, 2016 Additions Adjustments Cash Payments September 30, 2017 Severance and termination related costs $ — $ 1,038 $ — $ (835 ) $ 203 Facilities related costs 269 91 — (181 ) 179 Total accrued restructuring and other expenses $ 269 $ 1,129 $ — $ (1,016 ) $ 382 December 31, 2015 Additions Adjustments Cash September 30, 2016 Facilities related costs $ 17 $ 482 $ 18 $ (186 ) $ 331 Total accrued restructuring and other expenses $ 17 $ 482 $ 18 $ (186 ) $ 331 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss for the period by the weighted average common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted average common shares outstanding, adjusted for all dilutive potential common shares, which includes shares issuable upon the exercise of outstanding common stock options, the release of restricted stock units and purchases of shares pursuant to the Company's employee stock purchase plan ("ESPP"), to the extent these shares are dilutive. For the three and nine months ended September 30, 2017 and 2016 , the diluted net loss per share calculation was the same as the basic net loss per share calculation as all potential common shares were anti-dilutive. Diluted net loss per share does not include the effect of the following potential weighted average common shares because to do so would be anti-dilutive for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Restricted Stock Units 3,294 3,727 3,541 3,679 Stock Options 286 509 350 577 ESPP Shares 33 36 29 30 Total 3,613 4,272 3,920 4,286 The weighted average exercise price per share of stock options excluded for the three months ended September 30, 2017 and September 30, 2016 was $6.74 and $6.72 , respectively, and for the nine months ended September 30, 2017 and September 30, 2016 was $ 6.70 and $ 6.71 , respectively. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-based Compensation Expense Summary Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards. The Company recognizes stock-based compensation expense, for the portion of the awards that are ultimately expected to vest, on a straight-line basis over the requisite service period for those awards with graded vesting and service conditions. The table below sets forth a summary of stock-based compensation expense for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Stock options $ 44 $ 145 $ 325 $ 433 Restricted stock units Performance-based awards 1,101 1,352 4,292 3,801 Service-based awards 5,597 4,951 19,581 15,404 ESPP shares 404 398 1,139 1,272 Total stock-based compensation $ 7,146 $ 6,846 $ 25,337 $ 20,910 As of September 30, 2017 , there was total unrecognized compensation expense of $32.2 million , $6.5 million , and $ 0.9 million related to service-based awards, performance-based awards, and ESPP shares, respectively, which were expected to be recognized over weighted average periods of 1.8 years, 1.6 years, and 0.5 years, respectively. Stock options outstanding as of September 30, 2017 are fully vested, and therefore unrecognized compensation expense is nil. The table below sets forth the functional classification of stock-based compensation expense for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cost of recurring revenue $ 447 $ 388 $ 1,282 $ 1,350 Cost of services and license 577 530 1,767 1,566 Sales and marketing 2,273 2,261 6,838 6,558 Research and development 1,689 1,251 5,085 3,591 General and administrative 2,160 2,416 10,365 7,845 Total stock-based compensation $ 7,146 $ 6,846 $ 25,337 $ 20,910 Performance-based Awards In 2017, the Company granted performance-based restricted stock units with vesting contingent on successful attainment of pre-set SaaS revenue growth and Non-GAAP operating margin targets over the three-year period from January 1, 2017 through December 31, 2019. During the three and nine months ended September 30, 2017 , expense of $ 0.5 million and $1.3 million , respectively, net of forfeiture, was recognized. In 2016, the Company granted performance-based restricted stock units with vesting contingent on attainment of pre-set SaaS revenue growth and pre-set recurring revenue gross margin targets over the three-year period from January 1, 2016 through December 31, 2018 and performance-based restricted stock units with vesting contingent upon the Company's relative total shareholder return over the same three-year period compared to an index of 17 SaaS companies in the Company's executive compensation peer group. During the three and nine months ended September 30, 2016, expense of $0.1 million and $0.2 million , respectively, net of forfeiture was recognized. During the three and nine months ended September 30, 2017 , expense of $ 0.1 million and $0.3 million , respectively, net of forfeiture, was recognized. In 2015, the Company granted performance-based restricted stock units with vesting contingent on successful attainment of pre-set SaaS revenue growth target over the three -year period from July 1, 2015 through June 30, 2018. During the three and nine months ended September 30, 2016, expense of $0.4 million and $1.2 million respectively, net of forfeiture rates was recognized. During the three and nine months ended September 30, 2017 , expense of $0.6 million and $2.1 million , respectively, net of forfeiture, was recognized. In 2014, the Company granted performance-based restricted stock units with vesting contingent on absolute SaaS revenue growth over the three-year period from January 1, 2014 through December 31, 2016, and on the Company's relative total shareholder return over the same three-year period compared to an index of 17 SaaS companies. These performance shares vested in February 2017. During the three and nine months ended September 30, 2016 expense of $0.8 million and $2.4 million , respectively, net of forfeiture rates, was recognized. During the first quarter of 2017, expense of 0.3 million , net of forfeiture was recognized. There was no expenses recorded in the second and third quarters of 2017. Determination of Fair Value The fair value of service-based awards is estimated based on the market value of the Company’s stock on the date of grant. Fair value of the performance-based awards, that are subject to SaaS revenue growth and non-GAAP operating margin is estimated based on the market value of the awards at the date of the grant, adjusted by the respective SaaS revenue growth and non-GAAP operating margin probability assessment. Fair value of the performance awards that are subject to relative stockholder return and market conditions, is calculated using a Monte Carlo simulation model that estimates the distribution of the potential outcomes of the grants of performance awards based on simulated future index of the peer companies. The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation model. No stock options were granted during the three and nine months ended September 30, 2017 and September 30, 2016 . The fair value of each ESPP share is estimated on the enrollment date of the offering period using the Black-Scholes valuation model and the assumptions noted in the following table: Nine Months Ended September 30, Employee Stock Purchase Plan 2017 2016 Expected life (in years) 0.50 to 1.00 0.50 to 1.00 Risk-free interest rate 1.11% to 1.24% 0.45% to 0.57% Volatility 31.2% to 32.1% 33.2% to 43.0% Dividend yield None None |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the three months ended September 30, 2017 and September 30, 2016 was $0.4 million and $0.3 million , respectively, and for the nine months ended September 30, 2017 and September 30, 2016 was $1.0 million and $0.8 million , respectively. For both the three and nine months ended September 30, 2017 and 2016, the income tax expense is mainly attributable to withholding taxes associated with some foreign customers and income in foreign jurisdictions subject to income tax. In addition, at the beginning of 2017, the Company adopted FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which resulted in the recognition of excess tax benefits in the Company's provision for income taxes rather than paid-in capital. Given the Company's current valuation allowance position in the United States jurisdiction, the adoption of this guidance did not have a material impact on its unaudited condensed consolidated financial statements. |
Segment, Geographic and Custome
Segment, Geographic and Customer Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment, Geographic and Customer Information | Segment, Geographic and Customer Information The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, who in the Company's case is the chief executive officer, in deciding how to allocate resources and assess performance. The Company's chief executive officer ("CEO") is considered to be the chief operating decision maker. The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. By this definition, the Company operates in one business segment, which is the development, marketing and sale of the Company's cloud-based sales, marketing, learning and customer experience solutions. The following table summarizes revenue for the three and nine months ended September 30, 2017 and 2016 by geographic areas (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 United States and Canada $ 52,013 $ 43,029 $ 149,490 $ 123,645 EMEA 7,695 5,839 20,964 16,167 Asia Pacific 3,092 2,471 9,202 7,456 Other 1,376 1,168 3,924 3,368 $ 64,176 $ 52,507 $ 183,580 $ 150,636 As of September 30, 2017, the Company's goodwill balance was $79.9 million , of which $27.8 million was located in the U.K. and Ireland (EMEA) and the Company's intangible asset balance was $28.3 million , of which $15.6 million was located in the U.K. and Ireland (EMEA). No other individual country outside the U.S. accounted for more than 10% of the goodwill and intangible asset balances as of September 30, 2017. During the three and nine months ended September 30, 2017 and 2016 , no customer accounted for more than 10% of total revenue. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Lithium Technologies, Inc. In the normal course of business, the Company entered into agreements with Lithium Technologies, Inc. (“Lithium”), whose then-current Chief Financial Officer was a member of the Company's Board of Directors. On August 31, 2016, that member of the Company's Board of Directors ceased to be the Chief Financial Officer of Lithium Technologies, Inc. In 2015, Lithium entered into a three -year SaaS subscription agreement with the Company in the amount of $ 0.1 million per year, from which the Company recognized SaaS revenue of $34,755 and $103,197 during the three and nine months ended September 30, 2017, respectively, and $38,000 and $111,500 during the three and nine months ended September 30, 2016, respectively. In addition, the Company entered into various agreements with Lithium and recognized professional services revenue of $3,273 and $8,974 during the three and nine months ended September 30, 2017, respectively, and none and $17,325 during the three and nine months ended September 30, 2016, respectively. In 2017, the Company purchased the final year of a three -year subscription for Lithium's Customer Community platform for $155,000 , which was paid in full in August 2017. As of September 30, 2017, approximately $114,000 was included in prepaid and other current assets. TIBCO Software Inc. During 2016, the Company renewed an annual subscription services agreement for $ 0.1 million with TIBCO Software Inc. ("TIBCO"), whose chief executive officer and director is a member of the Company's Board of Directors. The original agreement had been entered into between TIBCO and ViewCentral for SaaS revenue prior to the Company's acquisition of the assets of ViewCentral, and the renewal was based on the same terms as the original agreement. In connection with this agreement, the Company recognized SaaS revenue of $30,833 and $90,828 during the three and nine months ended September 30, 2017, respectively, and none during the three and nine months ended September 30, 2016. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Accounting Policies | Basis of Presentation and Summary of Accounting Policies All amounts included herein related to these condensed consolidated financial statements as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 are unaudited and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016 for Callidus Software Inc., doing business as CallidusCloud ("Company"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the Securities and Exchange Commission ("SEC") rules and regulations regarding interim financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all necessary adjustments for the fair presentation of the Company’s financial position, results of operations and cash flows. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the full fiscal year ending December 31, 2017 . The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include wholly-owned subsidiaries in Australia, Canada, Germany, Hong Kong, India, Ireland, Japan, Malaysia, Mexico, Netherlands, New Zealand, Serbia, Singapore and the United Kingdom. All intercompany transactions and balances have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates Preparation of the unaudited condensed consolidated financial statements in conformity with GAAP and the rules and regulations of the SEC requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, the reported amounts of revenue and expenses during the reporting period and the accompanying notes. Estimates are used for, but not limited to, the allocation of the value of purchase consideration for business acquisitions and other contingencies, allowances for doubtful accounts, the useful lives of fixed assets and intangible assets, the attainment of performance-based restricted stock units, stock-based compensation forfeiture rates, accrued liabilities and uncertain tax positions. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates such estimates and assumptions on an ongoing basis for continued reasonableness, using historical experience and other factors, including the current economic environment. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such evaluation. Illiquid credit markets, volatile equity and foreign currency markets and fluctuations in information technology spending by prospective customers can increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ materially from those estimates. Changes in those estimates, if any, resulting from continuing changes in the economic environment, will be reflected in the consolidated financial statements in future periods. |
Revenue Recognition | Revenue Recognition The Company generates revenue by providing software as a service ("SaaS") solutions through on-demand subscription and term licenses, related software maintenance associated with the Company's existing on-premise solution, and professional services. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Recurring Revenue. Recurring revenue, which includes SaaS revenue and maintenance revenue, is recognized ratably over the stated contractual period. SaaS revenue consists of subscription fees from customers accessing the Company's cloud-based service offerings. Maintenance revenue consists of fees from customers purchasing licenses and receiving support for such on-premise solutions. The Company also recognizes SaaS and maintenance revenue associated with customers using its products in excess of contracted usage ("Overages"). Overages are primarily attributed to SaaS products and such Overages are recorded in SaaS revenue in the period incurred. Revenue related to Overages was immaterial during the three and nine month periods ended September 30, 2017 and 2016 . Service and License Revenue. Service and license revenue primarily consists of training, integration and configuration services. Generally, the Company's professional services arrangements are billed on a time-and-materials basis. Time and material services are recognized as the services are rendered based on inputs to the project, such as billable hours incurred. For fixed-fee professional services arrangements, the Company recognizes revenue under the proportional performance method of accounting and estimates the proportional performance on a monthly basis, utilizing hours incurred to date as a percentage of total estimated hours to complete the project. If the Company does not have a sufficient basis to measure progress toward completion, revenue is recognized upon completion. Service and license revenue also includes revenue from perpetual licenses, which is recognized upon delivery of the product, using the residual method, assuming all the other conditions for revenue recognition have been met. Revenue related to perpetual licenses was immaterial during the three and nine month periods ended September 30, 2017 and 2016. In a limited number of arrangements with non-standard acceptance criteria, the Company defers the revenue until the acceptance criteria are satisfied. Reimbursements, including those related to travel and out-of-pocket expenses, are included in services and license revenue, and an equivalent amount of reimbursable expenses is included in cost of services and license revenue. In general, recurring revenue agreements are entered into for 12 to 36 months, and the professional services are performed within nine months of entering into a contract with the customer, depending on the size of integration. SaaS agreements provide specified service level commitments, excluding scheduled maintenance. The failure to meet this level of service availability may require the Company to credit qualifying customers a portion of their subscription and support fees. Based on the Company's historical experience meeting its service level commitments, the Company does not currently have any liabilities on its balance sheet for these commitments. The Company recognizes revenue when all of the following conditions are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • The fees are fixed or determinable; and • Collection of the fees is reasonably assured. If the Company determines that any one of the four criteria is not met, it will defer recognition of revenue until all the criteria are met. Multiple-deliverable arrangements with on-demand subscription. For on-demand subscription agreements with multiple deliverables, the Company evaluates each element to determine whether it represents a separate unit of accounting. The Company determines the best estimated selling price of each deliverable in an arrangement based on a selling price hierarchy of methods contained in Finance Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2009-13, "Revenue Recognition (Accounting Standards Codification (“ASC”) Topic 605)- Multiple-Deliverable Revenue Arrangements." The best estimated selling price for a deliverable is based on its vendor-specific objective evidence (“VSOE”), if available, third-party evidence (“TPE”), if VSOE is not available, or estimated selling price (“ESP”), if neither VSOE nor TPE is available. Total arrangement fees are allocated to each element using the relative selling price method. The Company has currently established VSOE for most deliverables, except for fixed fee service arrangements and on-premise software licenses. The Company considered all of the following factors to establish the ESP for fixed fee service arrangements when sold with its on-demand services: the weighted average actual sales prices of professional services sold on a stand-alone basis for on-demand services; average billing rates for fixed fee service agreements when sold with on-demand services, cost plus a reasonable mark-up and other factors such as gross margin objectives, pricing practices and growth strategy. Multiple-deliverable arrangements with on-premise license. For arrangements with multiple deliverables, including license, professional services and maintenance, the Company recognizes license revenue using the residual method of accounting pursuant to the requirements of the guidance contained in ASC 985-605, "Software Revenue Recognition." Under the residual method, revenue is recognized when VSOE for fair value exists for all of the undelivered elements in the arrangement, but does not exist for one or more of the delivered elements in the arrangement. If evidence of fair value cannot be established for the undelivered elements, all of the revenue is deferred until evidence of fair value can be established, or until the items for which evidence of fair value cannot be established are delivered. For maintenance and certain professional services, the Company has established VSOE because it has a sufficient history of selling these deliverables at an established price. The Company's revenue arrangements do not include a general right of return relative to the delivered products. Generally, for the Company's term-based licenses, if the only undelivered element is maintenance, the entire amount of revenue is recognized ratably over the maintenance period. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which simplifies various aspects related to the accounting and presentation of stock-based payments. The amendments require entities to record all tax effects related to stock-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from the stock-based payments are required to be reported as operating activities in the statement of cash flows. Further, the amendments allow entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. The Company adopted this guidance on January 1, 2017 on a prospective basis. Adoption of the new standard did not have a material impact to the Company's condensed financial statements and resulted in the recognition of excess tax benefits to the Company's income taxes rather than paid-in capital. The Company elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. Recently Issued, But Not Yet Adopted Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting , which amends the scope of modification accounting for stock-based payment arrangements, provides guidance on the types of changes to the terms or conditions of stock-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation- Stock Compensation . This ASU is effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the impact this ASU will have on its unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows, Restricted Cash (Topic 230), which requires that a statement of cash flows explain the change during the period for the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective for the Company's fiscal year beginning January 1, 2018. Restricted cash will be included as a component of cash, cash equivalents, and restricted cash on the Company's unaudited condensed consolidated statement of cash flows. The inclusion of restricted cash will increase the beginning and ending balances of the unaudited condensed consolidated statement of cash flows by $1.4 million. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice for certain cash receipts and cash payments. The amendments in this guidance are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Entities are permitted to adopt the standard early in any interim or annual period, and a retrospective application is required. While the Company continues to assess the impact of this standard, it does not expect the adoption of this ASU will have a material impact on its unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. The updated standard is effective for the Company beginning in the first quarter of 2019. The Company is currently evaluating the impact of this new standard on its unaudited condensed consolidated financial statements. In May 2014, August 2015, April 2016 and May 2016, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , ASU 2015-14, Revenue from Contracts with Customers, Deferral of the Effective Date , ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients , respectively, (collectively referred to as "Topic 606"). Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, and supersedes current revenue recognition guidance, including industry-specific guidance. Topic 606 also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 will be effective for the Company starting on January 1, 2018. The Company is on schedule in establishing new accounting policies, implementing systems and processes, and internal controls necessary to support the requirements of the new standard by the effective date. The Company has completed its preliminary assessment of the financial statement impact of Topic 606, as discussed below, and will continue to update that assessment as more information becomes available. Topic 606 will accelerate the recognition of revenue for term software licenses and, in some cases, where so-called contingent revenue (i.e., amounts allocated to delivered items are limited to amounts that are not contingent on the provision of future services) exists. The table below details both the current and expected revenue recognition timing in the following areas: Current Revenue Standard Topic 606 Customer arrangements: Term software licenses Ratable Upfront Software support services Ratable Ratable Software-as-a-service Ratable Ratable Contingent revenue Defer As delivered The Company does expect revenue related to its professional services and cloud offerings for business enterprises, individuals and teams to be materially affected by Topic 606. Due to the complexity of the Company’s contracts, the actual revenue recognition treatment required under Topic 606 for these arrangements may be dependent on contract-specific terms and, therefore, may vary in some instances. Also, included in the Company’s assessment of Topic 606 is the potential impact relating to the deferral of incremental commission costs of obtaining subscription contracts. Under current accounting guidance, the Company defers only direct and incremental commission costs to obtain a contract and amortized those costs over the corresponding term of the contract. Under Topic 606, the Company will defer all direct and incremental commission costs to obtain the contract. The Company will amortize these costs on a straight-line basis over the estimated period of benefit or the related contractual renewal period, depending on whether the contract is an initial or renewal contract, respectively. The two permitted transition methods under the new standard are the full retrospective method, under which Topic 606 would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, under which the cumulative effect of applying Topic 606 would be recognized at the date of initial application. The Company currently intends to elect the modified retrospective transition approach. The Company is currently determining the financial statement impact and its disclosure requirements of Topic 606. Except for the updated accounting standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company's unaudited condensed consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Orient DB Ltd. | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The preliminary purchase price allocation for OrientDB is summarized as follows (in thousands): Fair Value Net liabilities assumed $ (1,778 ) Intangible assets 7,700 Goodwill 2,739 Total purchase price, net of cash acquired $ 8,661 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the OrientDB acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Developed technology $ 7,300 5 years Cost of sales Customer contracts and related relationships 400 4 years Sales and marketing Total intangible assets subject to amortization $ 7,700 |
Learning Heroes Ltd. | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The preliminary purchase price allocation for Learning Heroes is summarized as follows (in thousands): Fair Value Net liabilities assumed $ (1,170 ) Intangible assets 3,250 Goodwill 7,512 Total purchase price, net of cash acquired $ 9,592 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the Leaning Heroes acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Customer contracts and related relationships $ 1,840 7 years Sales and marketing expense Education course content 1,410 5 years Cost of sales Total intangible assets subject to amortization $ 3,250 |
RevSym, Inc. | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The preliminary purchase price allocation for RevSym is summarized as follows (in thousands): Fair Value Net assets assumed $ 13 Intangible assets 1,610 Goodwill 3,796 Total purchase price, net of cash acquired $ 5,419 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the RevSym acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Developed technology $ 1,400 3 years Cost of sales Customer contracts and related relationships 100 3 years Sales and marketing expense Trademarks/tradenames/ domain names 110 3 years General and administrative Total intangible assets subject to amortization $ 1,610 |
DataHug, Ltd. | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The preliminary purchase price allocation for DataHug is summarized as follows (in thousands): Fair Value Net liabilities assumed $ (600 ) Intangible assets 5,350 Goodwill 8,138 Total purchase price, net of cash acquired $ 12,888 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives, as of the date of the DataHug acquisition (in thousands): Fair Value Weighted Average Useful Life Consolidated statements of comprehensive loss Classification: Amortization expense Developed technology $ 3,800 4 years Cost of sales Customer contracts and related relationships 1,250 6 years Sales and marketing expense Trademarks/tradenames/ domain names 150 3 years General and administrative Order backlog 150 2 years Cost of sales Total intangible assets subject to amortization $ 5,350 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments | |
Summary of cash, cash equivalents and investments classified as available-for-sale | The components of the Company’s cash, cash equivalents, and investments classified as available-for-sale were as follows at September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Amortized Cost Gross Gains Gross Losses Estimated Fair Value Cash $ 57,957 $ — $ — $ 57,957 Cash equivalents: Money market funds 40,351 — — 40,351 Agency Discount 2,649 — — 2,649 Total cash equivalents 43,000 — — 43,000 Total cash and cash equivalents $ 100,957 $ — $ — $ 100,957 Short-term investments: Certificates of deposits $ 12,668 $ — $ — $ 12,668 U.S. government and agency obligations 19,658 18 (31 ) 19,645 Corporate notes and obligations 43,144 24 (22 ) 43,146 Total short-term investments $ 75,470 $ 42 $ (53 ) $ 75,459 December 31, 2016 Amortized Cost Gross Gains Gross Losses Estimated Fair Value Cash $ 147,680 $ — $ — $ 147,680 Cash equivalents: Money market funds 328 — — 328 Total cash equivalents 328 — — 328 Total cash and cash equivalents $ 148,008 $ — $ — $ 148,008 Short-term investments: Certificate of deposits $ 1,200 $ — $ — $ 1,200 U.S. government and agency obligations 19,351 19 (18 ) 19,352 Corporate notes and obligations 18,716 18 (20 ) 18,714 Total short-term investments $ 39,267 $ 37 $ (38 ) $ 39,266 |
Schedule of contractual maturities of available-for-sale debt securities | The market value and the amortized cost of available-for-sale debt securities by contractual maturities as of September 30, 2017 were as follows (in thousands): Contractual maturity Amortized Cost Estimated Fair value Less than 1 year $ 44,970 $ 44,961 Between 1 and 2 years 30,500 30,498 Total $ 75,470 $ 75,459 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Valuation of Investments Level 1 and Level 2 The Company’s available-for-sale securities include money market funds, certificates of deposits, corporate notes and obligations, and U.S. government and agency obligations. The Company values these securities using a pricing matrix from a pricing service provider, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs). The Company classifies all of its available-for-sale securities, except for money market funds, as having Level 2 inputs. The Company validates the estimated fair value of certain securities from a pricing service provider on a quarterly basis. The valuation techniques used to measure the fair value of the financial instruments having Level 2 inputs, all of which have counterparties with high credit ratings, were derived from the following: non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments or pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data. The Company measures financial assets and liabilities at fair value on an ongoing basis. The estimated fair value of the Company’s financial assets was determined using the following inputs at September 30, 2017 and December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2017 Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 40,351 $ 40,351 $ — $ — Agency Discount (1) 2,649 — 2,649 — Certificates of deposit (2) 12,668 — 12,668 — U.S. government and agency obligations (2) 19,645 — 19,645 — Corporate notes and obligations (2) 43,146 — 43,146 — Foreign currency derivative contracts (3) 174 — 174 $ — Total $ 118,633 $ 40,351 $ 78,282 $ — Liabilities: Foreign currency derivative contracts (4) $ 86 $ — $ 86 $ — Total $ 86 $ — $ 86 $ — Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant December 31, 2016 Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 328 $ 328 $ — $ — Certificates of deposit (2) 1,200 — 1,200 — U.S. government and agency obligations (2) 19,352 — 19,352 — Corporate notes and obligations (2) 18,714 — 18,714 — Foreign currency derivative contracts (3) 76 — 76 $ — Total $ 39,670 $ 328 $ 39,342 $ — Liabilities: Foreign currency derivative contracts (4) $ 53 $ — $ 53 $ — Total $ 53 $ — $ 53 $ — _____________________________________________________________________________ (1) Included in cash and cash equivalents on the unaudited condensed consolidated balance sheets. (2) Included in short-term investments on the unaudited condensed consolidated balance sheets. (3) Included in prepaid and other current assets on the unaudited condensed consolidated balance sheets. (4) Included in accrued expenses on the unaudited condensed consolidated balance sheets. Derivative Financial Instruments The Company entered into foreign currency derivative contracts with a financial institution to reduce the risk that its earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily denominated in Australian, Canadian, Euros and Pound Sterling. Foreign currency derivative contracts are mark-to-market at the end of each reporting period with gains and losses recognized as other expense to offset the gains or losses resulting from the settlement or remeasurement of the underlying foreign currency denominated cash, receivables and payables. Details on outstanding foreign currency derivative contracts related primarily to receivables and payables are presented below (in thousands): September 30, 2017 December 31, 2016 Notional amount of foreign currency derivative contracts $ 11,024 $ 3,850 Fair value of foreign currency derivative contracts $ 11,112 $ 3,873 The fair value of the Company’s outstanding derivative instruments are summarized below (in thousands): Fair Value of Derivative Instruments Balance Sheet Location September 30, 2017 December 31, 2016 Derivative Assets Derivatives not designated as hedging instruments: Foreign currency derivative contracts Prepaid expenses and other current assets $ 174 $ 75 Derivative Liabilities Derivatives not designated as hedging instruments: Foreign currency derivative contracts Accrued expenses $ 86 $ 52 The Company accounts for the derivative instruments at fair value with changes in the fair value recorded as a component of interest income and other income (expense). During both the three and nine months ended September 30, 2017 and September 30, 2016 such changes were immaterial. The Company did not have any transfers of its fair value measurement between Level 1, Level 2 and Level 3 during the periods presented. |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The estimated fair value of the Company’s financial assets was determined using the following inputs at September 30, 2017 and December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2017 Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 40,351 $ 40,351 $ — $ — Agency Discount (1) 2,649 — 2,649 — Certificates of deposit (2) 12,668 — 12,668 — U.S. government and agency obligations (2) 19,645 — 19,645 — Corporate notes and obligations (2) 43,146 — 43,146 — Foreign currency derivative contracts (3) 174 — 174 $ — Total $ 118,633 $ 40,351 $ 78,282 $ — Liabilities: Foreign currency derivative contracts (4) $ 86 $ — $ 86 $ — Total $ 86 $ — $ 86 $ — Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant December 31, 2016 Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 328 $ 328 $ — $ — Certificates of deposit (2) 1,200 — 1,200 — U.S. government and agency obligations (2) 19,352 — 19,352 — Corporate notes and obligations (2) 18,714 — 18,714 — Foreign currency derivative contracts (3) 76 — 76 $ — Total $ 39,670 $ 328 $ 39,342 $ — Liabilities: Foreign currency derivative contracts (4) $ 53 $ — $ 53 $ — Total $ 53 $ — $ 53 $ — _____________________________________________________________________________ (1) Included in cash and cash equivalents on the unaudited condensed consolidated balance sheets. (2) Included in short-term investments on the unaudited condensed consolidated balance sheets. (3) Included in prepaid and other current assets on the unaudited condensed consolidated balance sheets. (4) Included in accrued expenses on the unaudited condensed consolidated balance sheets. Derivative Financial Instruments The Company entered into foreign currency derivative contracts with a financial institution to reduce the risk that its earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily denominated in Australian, Canadian, Euros and Pound Sterling. Foreign currency derivative contracts are mark-to-market at the end of each reporting period with gains and losses recognized as other expense to offset the gains or losses resulting from the settlement or remeasurement of the underlying foreign currency denominated cash, receivables and payables. Details on outstanding foreign currency derivative contracts related primarily to receivables and payables are presented below (in thousands): September 30, 2017 December 31, 2016 Notional amount of foreign currency derivative contracts $ 11,024 $ 3,850 Fair value of foreign currency derivative contracts $ 11,112 $ 3,873 The fair value of the Company’s outstanding derivative instruments are summarized below (in thousands): Fair Value of Derivative Instruments Balance Sheet Location September 30, 2017 December 31, 2016 Derivative Assets Derivatives not designated as hedging instruments: Foreign currency derivative contracts Prepaid expenses and other current assets $ 174 $ 75 Derivative Liabilities Derivatives not designated as hedging instruments: Foreign currency derivative contracts Accrued expenses $ 86 $ 52 The Company accounts for the derivative instruments at fair value with changes in the fair value recorded as a component of interest income and other income (expense). During both the three and nine months ended September 30, 2017 and September 30, 2016 such changes were immaterial. The Company did not have any transfers of its fair value measurement between Level 1, Level 2 and Level 3 during the periods presented. |
Commitments and Contingencies -
Commitments and Contingencies - (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block] | Future minimum lease payments under non-cancellable operating leases (with initial or remaining lease terms in excess of one year) and purchase commitments as of September 30, 2017 are as follows (in thousands): Unconditional Purchase Commitments (1) Operating Lease Commitments (2) Years ending: Remainder of 2017 $ 11,016 $ 1,169 2018 15,498 5,028 2019 10,375 4,691 2020 3,008 4,731 2021 — 4,450 2022 and beyond — 3,237 Future minimum payments $ 39,897 $ 23,306 (1) Primarily represents amounts associated with agreements that are enforceable, legally binding and specific terms, including: software purchases, data center equipment purchases and maintenance agreements. In addition, amounts include unconditional purchase agreements during the normal course of business with various vendors for future services. (2) The Company has facilities under non-cancellable operating lease agreements that expire at various dates through 2022. |
Restructuring and Other (Tables
Restructuring and Other (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of accrued restructuring expenses | The following tables set forth a summary of accrued restructuring and other expenses for the nine months ended September 30, 2017 and 2016 (in thousands): December 31, 2016 Additions Adjustments Cash Payments September 30, 2017 Severance and termination related costs $ — $ 1,038 $ — $ (835 ) $ 203 Facilities related costs 269 91 — (181 ) 179 Total accrued restructuring and other expenses $ 269 $ 1,129 $ — $ (1,016 ) $ 382 December 31, 2015 Additions Adjustments Cash September 30, 2016 Facilities related costs $ 17 $ 482 $ 18 $ (186 ) $ 331 Total accrued restructuring and other expenses $ 17 $ 482 $ 18 $ (186 ) $ 331 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of potential weighted average common shares excluded from computation of diluted net loss per share | Diluted net loss per share does not include the effect of the following potential weighted average common shares because to do so would be anti-dilutive for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Restricted Stock Units 3,294 3,727 3,541 3,679 Stock Options 286 509 350 577 ESPP Shares 33 36 29 30 Total 3,613 4,272 3,920 4,286 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock-based compensation expenses | The table below sets forth a summary of stock-based compensation expense for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Stock options $ 44 $ 145 $ 325 $ 433 Restricted stock units Performance-based awards 1,101 1,352 4,292 3,801 Service-based awards 5,597 4,951 19,581 15,404 ESPP shares 404 398 1,139 1,272 Total stock-based compensation $ 7,146 $ 6,846 $ 25,337 $ 20,910 |
Schedule of functional classification of stock-based compensation expense | The table below sets forth the functional classification of stock-based compensation expense for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cost of recurring revenue $ 447 $ 388 $ 1,282 $ 1,350 Cost of services and license 577 530 1,767 1,566 Sales and marketing 2,273 2,261 6,838 6,558 Research and development 1,689 1,251 5,085 3,591 General and administrative 2,160 2,416 10,365 7,845 Total stock-based compensation $ 7,146 $ 6,846 $ 25,337 $ 20,910 |
Schedule of valuation assumptions for determining the fair value of stock options and employee stock purchase plans | The fair value of each ESPP share is estimated on the enrollment date of the offering period using the Black-Scholes valuation model and the assumptions noted in the following table: Nine Months Ended September 30, Employee Stock Purchase Plan 2017 2016 Expected life (in years) 0.50 to 1.00 0.50 to 1.00 Risk-free interest rate 1.11% to 1.24% 0.45% to 0.57% Volatility 31.2% to 32.1% 33.2% to 43.0% Dividend yield None None |
Segment, Geographic and Custo25
Segment, Geographic and Customer Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of revenues by geographic areas | The following table summarizes revenue for the three and nine months ended September 30, 2017 and 2016 by geographic areas (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 United States and Canada $ 52,013 $ 43,029 $ 149,490 $ 123,645 EMEA 7,695 5,839 20,964 16,167 Asia Pacific 3,092 2,471 9,202 7,456 Other 1,376 1,168 3,924 3,368 $ 64,176 $ 52,507 $ 183,580 $ 150,636 |
Acquisitions - Acquisitions (De
Acquisitions - Acquisitions (Details) $ in Thousands, £ in Millions | Sep. 15, 2017USD ($) | Jun. 02, 2017USD ($) | May 18, 2017USD ($) | Nov. 07, 2016USD ($) | Sep. 30, 2017USD ($) | Jun. 02, 2017GBP (£) | Jun. 02, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 79,918 | $ 63,957 | ||||||
Deferred compensation arrangement with individual, compensation expense | $ 1,900 | |||||||
Orient DB Ltd. | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase consideration | 9,100 | |||||||
Payments to acquire businesses, gross | 8,000 | |||||||
Net liabilities assumed | (1,778) | |||||||
Intangible assets | 7,700 | |||||||
Goodwill | 2,739 | |||||||
Finite-lived intangible assets acquired | 7,700 | |||||||
Total purchase price, net of cash acquired | $ 8,661 | |||||||
Orient DB Ltd. | Customer contracts | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||
Orient DB Ltd. | Customer contracts | Sales and marketing | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 400 | |||||||
Orient DB Ltd. | Developed technology | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 5 years | |||||||
Orient DB Ltd. | Developed technology | Cost of sales | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 7,300 | |||||||
Learning Heroes Ltd. | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase consideration | $ 10,300 | |||||||
Payments to acquire businesses, gross | 8,800 | |||||||
Consideration held back for stakeholder expenses | £ | £ 1.2 | |||||||
Net liabilities assumed | $ (1,170) | |||||||
Intangible assets | 3,250 | |||||||
Goodwill | $ 7,512 | |||||||
Finite-lived intangible assets acquired | 3,250 | |||||||
Total purchase price, net of cash acquired | $ 9,592 | |||||||
Learning Heroes Ltd. | Customer contracts | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 7 years | |||||||
Learning Heroes Ltd. | Customer contracts | Sales and marketing | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 1,840 | |||||||
Learning Heroes Ltd. | Education course content | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 5 years | |||||||
Learning Heroes Ltd. | Education course content | Cost of sales | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 1,410 | |||||||
RevSym, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase consideration | $ 5,500 | |||||||
Payments to acquire businesses, gross | 3,000 | |||||||
Net assets assumed | 13 | |||||||
Intangible assets | 1,610 | |||||||
Goodwill | 3,796 | |||||||
Finite-lived intangible assets acquired | 1,610 | |||||||
Total purchase price, net of cash acquired | $ 5,419 | |||||||
RevSym, Inc. | Developed Technology Rights [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 3 years | |||||||
RevSym, Inc. | Developed Technology Rights [Member] | Cost of sales | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 1,400 | |||||||
RevSym, Inc. | Customer contracts | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 3 years | |||||||
RevSym, Inc. | Customer contracts | Sales and marketing | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 100 | |||||||
RevSym, Inc. | Trademarks/Trade names/Domain names | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 3 years | |||||||
RevSym, Inc. | Trademarks/Trade names/Domain names | General and administrative | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 110 | |||||||
DataHug, Ltd. | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase consideration | $ 13,000 | |||||||
Payments to acquire businesses, gross | 11,700 | |||||||
Consideration held back for stakeholder expenses | $ 1,300 | |||||||
Consideration held back for stakeholder expenses, period | 1 year | |||||||
Net liabilities assumed | $ (600) | |||||||
Intangible assets | 5,350 | |||||||
Goodwill | 8,138 | |||||||
Finite-lived intangible assets acquired | 5,350 | |||||||
Total purchase price, net of cash acquired | $ 12,888 | |||||||
DataHug, Ltd. | Customer contracts | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 6 years | |||||||
DataHug, Ltd. | Customer contracts | Sales and marketing | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 1,250 | |||||||
DataHug, Ltd. | Developed technology | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||
DataHug, Ltd. | Developed technology | Cost of sales | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 3,800 | |||||||
DataHug, Ltd. | Trademarks/Trade names/Domain names | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 3 years | |||||||
DataHug, Ltd. | Trademarks/Trade names/Domain names | General and administrative | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 150 | |||||||
DataHug, Ltd. | Order or Production Backlog | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 2 years | |||||||
DataHug, Ltd. | Order or Production Backlog | General and administrative | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 150 | |||||||
Payment Tranche One | Orient DB Ltd. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration held back for stakeholder expenses | $ 1,000 | |||||||
Consideration held back for stakeholder expenses, period | 1 year | |||||||
Payment Tranche One | RevSym, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration held back for stakeholder expenses | $ 1,000 | |||||||
Consideration held back for stakeholder expenses, period | 6 months | |||||||
Payment Tranche Two | Orient DB Ltd. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration held back for stakeholder expenses | $ 100 | |||||||
Consideration held back for stakeholder expenses, period | 2 years | |||||||
Payment Tranche Two | RevSym, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration held back for stakeholder expenses | $ 1,500 | |||||||
Consideration held back for stakeholder expenses, period | 1 year |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Financial instruments | ||||
Cash and cash equivalents | $ 100,957 | $ 148,008 | $ 167,116 | $ 77,232 |
Cash and cash equivalents | ||||
Financial instruments | ||||
Cash and cash equivalents | 100,957 | 148,008 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value, Cash and Cash Equivalents | 100,957 | 148,008 | ||
Cash | ||||
Financial instruments | ||||
Cash and cash equivalents | 57,957 | 147,680 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value, Cash and Cash Equivalents | 57,957 | 147,680 | ||
Money market funds | ||||
Financial instruments | ||||
Cash and cash equivalents | 40,351 | 328 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value, Cash and Cash Equivalents | 40,351 | 328 | ||
Cash equivalents | ||||
Financial instruments | ||||
Cash and cash equivalents | 43,000 | 328 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value, Cash and Cash Equivalents | 43,000 | 328 | ||
Short-term investments | ||||
Financial instruments | ||||
Amortized Cost | 75,470 | 39,267 | ||
Gross Unrealized Gains | 42 | 37 | ||
Gross Unrealized Losses | (53) | (38) | ||
Estimated FV, Available for Sale Securities | 75,459 | 39,266 | ||
Certificates of deposit | ||||
Financial instruments | ||||
Amortized Cost | 12,668 | 1,200 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated FV, Available for Sale Securities | 12,668 | 1,200 | ||
U.S. government and agency obligations | ||||
Financial instruments | ||||
Amortized Cost | 19,658 | 19,351 | ||
Gross Unrealized Gains | 18 | 19 | ||
Gross Unrealized Losses | (31) | (18) | ||
Estimated FV, Available for Sale Securities | 19,645 | 19,352 | ||
Corporate notes and obligations | ||||
Financial instruments | ||||
Amortized Cost | 43,144 | 18,716 | ||
Gross Unrealized Gains | 24 | 18 | ||
Gross Unrealized Losses | (22) | (20) | ||
Estimated FV, Available for Sale Securities | $ 43,146 | $ 18,714 |
Financial Instruments (Details
Financial Instruments (Details 2) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)investment | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)investment | Sep. 30, 2016USD ($) | Dec. 31, 2016investment | |
Contractual maturity, Amortized Cost | |||||
Less than 1 year | $ 44,970,000 | $ 44,970,000 | |||
Between 1 and 2 years | 30,500,000 | 30,500,000 | |||
Total | 75,470,000 | 75,470,000 | |||
Contractual maturity, Estimated Fair value | |||||
Less than 1 year | 44,961,000 | 44,961,000 | |||
Between 1 and 2 years | 30,498,000 | 30,498,000 | |||
Total | $ 75,459,000 | $ 75,459,000 | |||
Other disclosures pertaining to available-for-sale securities | |||||
Short-term investments in a material unrealized loss position with maturities of greater than 12 months | investment | 0 | 0 | 0 | ||
Realized gains or losses on sales of investments | $ 0 | $ 0 | |||
Purchases of investments, net of proceeds from maturities of investments | $ 37,900,000 | $ 800,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Ongoing basis | Estimate of Fair Value Measurement | |||
Assets: | |||
Assets, Fair Value | $ 118,633 | $ 39,670 | |
Liabilities: | |||
Derivative Liability | 86 | 53 | |
Liabilities, Fair Value | 86 | 53 | |
Ongoing basis | Money market funds | Estimate of Fair Value Measurement | |||
Assets: | |||
Assets, Fair Value | [1] | 40,351 | 328 |
Ongoing basis | Certificates of deposit | Estimate of Fair Value Measurement | |||
Assets: | |||
Assets, Fair Value | [2] | 12,668 | 1,200 |
Ongoing basis | U.S. government and agency obligations | Estimate of Fair Value Measurement | |||
Assets: | |||
Assets, Fair Value | [2] | 19,645 | 19,352 |
Ongoing basis | Corporate notes and obligations | Estimate of Fair Value Measurement | |||
Assets: | |||
Assets, Fair Value | [2] | 43,146 | 18,714 |
Ongoing basis | Derivative Financial Instruments, Assets [Member] | Estimate of Fair Value Measurement | |||
Assets: | |||
Assets, Fair Value | 174 | 76 | |
Ongoing basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets: | |||
Assets, Fair Value | 40,351 | 328 | |
Liabilities: | |||
Derivative Liability | 0 | 0 | |
Liabilities, Fair Value | 0 | 0 | |
Ongoing basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | |||
Assets: | |||
Assets, Fair Value | [1] | 40,351 | 328 |
Ongoing basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Certificates of deposit | |||
Assets: | |||
Assets, Fair Value | [2] | 0 | 0 |
Ongoing basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government and agency obligations | |||
Assets: | |||
Assets, Fair Value | [2] | 0 | 0 |
Ongoing basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate notes and obligations | |||
Assets: | |||
Assets, Fair Value | [2] | 0 | 0 |
Ongoing basis | Significant Other Observable Inputs (Level 2) | |||
Assets: | |||
Assets, Fair Value | 78,282 | 39,342 | |
Liabilities: | |||
Derivative Liability | 86 | 53 | |
Liabilities, Fair Value | 86 | 53 | |
Ongoing basis | Significant Other Observable Inputs (Level 2) | Money market funds | |||
Assets: | |||
Assets, Fair Value | [1] | 0 | 0 |
Ongoing basis | Significant Other Observable Inputs (Level 2) | Certificates of deposit | |||
Assets: | |||
Assets, Fair Value | [2] | 12,668 | 1,200 |
Ongoing basis | Significant Other Observable Inputs (Level 2) | U.S. government and agency obligations | |||
Assets: | |||
Assets, Fair Value | [2] | 19,645 | 19,352 |
Ongoing basis | Significant Other Observable Inputs (Level 2) | Corporate notes and obligations | |||
Assets: | |||
Assets, Fair Value | [2] | 43,146 | 18,714 |
Ongoing basis | Significant Other Observable Inputs (Level 2) | Derivative Financial Instruments, Assets [Member] | |||
Assets: | |||
Assets, Fair Value | 174 | 76 | |
Ongoing basis | Significant Unobservable Inputs (Level 3) | |||
Assets: | |||
Assets, Fair Value | 0 | 0 | |
Liabilities: | |||
Derivative Liability | 0 | 0 | |
Liabilities, Fair Value | 0 | 0 | |
Ongoing basis | Significant Unobservable Inputs (Level 3) | Money market funds | |||
Assets: | |||
Assets, Fair Value | [1] | 0 | 0 |
Ongoing basis | Significant Unobservable Inputs (Level 3) | Certificates of deposit | |||
Assets: | |||
Assets, Fair Value | [2] | 0 | 0 |
Ongoing basis | Significant Unobservable Inputs (Level 3) | U.S. government and agency obligations | |||
Assets: | |||
Assets, Fair Value | [2] | 0 | 0 |
Ongoing basis | Significant Unobservable Inputs (Level 3) | Corporate notes and obligations | |||
Assets: | |||
Assets, Fair Value | [2] | 0 | 0 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | |||
Fair value of financial assets and liabilities | |||
Derivative, Notional Amount | 11,024 | 3,850 | |
Derivative, Fair Value, Net | 11,112 | 3,873 | |
Not Designated as Hedging Instrument | Prepaid And Other Current Assets | Foreign Exchange Contract | |||
Fair value of financial assets and liabilities | |||
Derivative, Fair Value, Net | 174 | 75 | |
Not Designated as Hedging Instrument | Accrued Expenses | Foreign Exchange Contract | |||
Fair value of financial assets and liabilities | |||
Derivative, Fair Value, Net | $ 86 | $ 52 | |
[1] | Included in cash and cash equivalents on the unaudited condensed consolidated balance sheets. | ||
[2] | Included in short-term investments on the unaudited condensed consolidated balance sheets. |
Commitments and Contingencies30
Commitments and Contingencies - Maturity Schedule (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Recorded Unconditional Purchase Obligation, Fiscal Year Maturity Schedule [Abstract] | |
Remainder of 2017 | $ 11,016 |
2,018 | 15,498 |
2,019 | 10,375 |
2,020 | 3,008 |
2,021 | 0 |
2022 and beyond | 0 |
Future minimum payments | 39,897 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | 1,169 |
2,018 | 5,028 |
2,019 | 4,691 |
2,020 | 4,731 |
2,021 | 4,450 |
2022 and beyond | 3,237 |
Future minimum payments | $ 23,306 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Line of Credit | Wells Fargo Credit Agreement | Revolving Credit Facility | |
Contractual cash obligations | |
Line of credit, borrowing capacity | $ 15,000,000 |
Letter of Credit | Dublin (CA) Headquarters | |
Contractual cash obligations | |
Line of credit facility, increase | 1,400,000 |
Line of credit | $ 0 |
Restructuring and Other (Detail
Restructuring and Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | $ 157 | $ 80 | $ 1,129 | $ 482 |
Restructuring Reserve [Roll Forward] | ||||
Balance at the beginning of the period | 269 | 17 | ||
Additions | 1,129 | 482 | ||
Adjustments | 0 | 18 | ||
Cash Payments | (1,016) | (186) | ||
Balance at the end of the period | 382 | 331 | 382 | 331 |
Severance and termination-related costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at the beginning of the period | 0 | |||
Additions | 1,038 | |||
Adjustments | 0 | |||
Cash Payments | (835) | |||
Balance at the end of the period | 203 | 203 | ||
Facilities related costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at the beginning of the period | 269 | 17 | ||
Additions | 91 | 482 | ||
Adjustments | 0 | 18 | ||
Cash Payments | (181) | (186) | ||
Balance at the end of the period | $ 179 | $ 331 | $ 179 | $ 331 |
Net Loss Per Share Net Income (
Net Loss Per Share Net Income (Loss) Per Share (Calculation of basic and diluted net income (loss) per share) (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share, Diluted | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 3,613 | 4,272 | 3,920 | 4,286 |
Restricted Stock Units | ||||
Earnings Per Share, Diluted | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 3,294 | 3,727 | 3,541 | 3,679 |
Stock Options | ||||
Earnings Per Share, Diluted | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 286 | 509 | 350 | 577 |
Antidilutive securities excluded from computation of earnings per share, weighted average exercise price | $ 6.74 | $ 6.72 | $ 6.70 | $ 6.71 |
ESPP shares | ||||
Earnings Per Share, Diluted | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 33 | 36 | 29 | 30 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock-based compensation | |||||
Stock-based compensation expense | $ 7,146 | $ 6,846 | $ 25,337 | $ 20,910 | |
Stock options | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 44 | 145 | 325 | 433 | |
Performance-based awards | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 1,101 | 1,352 | 4,292 | 3,801 | |
Compensation expense not yet recognized | 6,500 | $ 6,500 | |||
Recognition period for compensation expense not yet recognized | 1 year 7 months | ||||
Service-based awards | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 5,597 | 4,951 | $ 19,581 | 15,404 | |
Compensation expense not yet recognized | 32,200 | $ 32,200 | |||
Recognition period for compensation expense not yet recognized | 1 year 10 months | ||||
ESPP shares | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 404 | 398 | $ 1,139 | 1,272 | |
Compensation expense not yet recognized | 900 | $ 900 | |||
Recognition period for compensation expense not yet recognized | 6 months | ||||
Granted in 2017 | Performance stock units | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 500 | $ 1,300 | |||
Granted in 2016 | Performance stock units | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 100 | 100 | 300 | 200 | |
Granted in 2015 | Performance stock units | |||||
Stock-based compensation | |||||
Stock-based compensation expense | $ 600 | 400 | $ 2,100 | 1,200 | |
Granted in 2014 | Performance stock units | |||||
Stock-based compensation | |||||
Stock-based compensation expense | $ 300 | $ 800 | $ 2,400 |
Stock-based Compensation (Det35
Stock-based Compensation (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Classification of stock-based compensation expense | |||||
Stock-based compensation expense | $ 7,146 | $ 6,846 | $ 25,337 | $ 20,910 | |
Cost of recurring revenues | |||||
Classification of stock-based compensation expense | |||||
Stock-based compensation expense | 447 | 388 | 1,282 | 1,350 | |
Cost of services and other revenues | |||||
Classification of stock-based compensation expense | |||||
Stock-based compensation expense | 577 | 530 | 1,767 | 1,566 | |
Sales and marketing | |||||
Classification of stock-based compensation expense | |||||
Stock-based compensation expense | 2,273 | 2,261 | 6,838 | 6,558 | |
Research and development | |||||
Classification of stock-based compensation expense | |||||
Stock-based compensation expense | 1,689 | 1,251 | 5,085 | 3,591 | |
General and administrative | |||||
Classification of stock-based compensation expense | |||||
Stock-based compensation expense | $ 2,160 | 2,416 | $ 10,365 | 7,845 | |
Granted in 2014 | Performance stock units | |||||
Classification of stock-based compensation expense | |||||
Stock-based compensation expense | $ 300 | $ 800 | $ 2,400 |
Stock-based Compensation (Det36
Stock-based Compensation (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Stock-based compensation | |||||
Stock-based compensation expense | $ 7,146 | $ 6,846 | $ 25,337 | $ 20,910 | |
Performance stock units | |||||
Stock-based compensation | |||||
Performance period | 3 years | ||||
Performance stock units | Granted in 2017 | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 500 | 1,300 | |||
Performance stock units | Granted in 2016 | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 100 | 100 | 300 | 200 | |
Performance stock units | Granted in 2015 | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 600 | 400 | 2,100 | 1,200 | |
ESPP shares | |||||
Stock-based compensation | |||||
Stock-based compensation expense | $ 404 | $ 398 | $ 1,139 | $ 1,272 | |
Fair value assumptions using the Black-Scholes-Merton valuation model | |||||
Risk-free interest rate, minimum (as a percent) | 1.11% | 0.45% | |||
Risk-free interest rate, maximum (as a percent) | 1.24% | 0.57% | |||
Volatility, minimum (as a percent) | 31.20% | 33.20% | |||
Volatility, maximum (as a percent) | 32.10% | 43.00% | |||
Dividend yield (as a percent) | 0.00% | 0.00% | |||
ESPP shares | Minimum | |||||
Fair value assumptions using the Black-Scholes-Merton valuation model | |||||
Expected life (in years) | 6 months | 6 months | |||
ESPP shares | Maximum | |||||
Fair value assumptions using the Black-Scholes-Merton valuation model | |||||
Expected life (in years) | 1 year | 1 year |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 442 | $ 258 | $ 1,023 | $ 755 |
Segment, Geographic and Custo38
Segment, Geographic and Customer Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)customer | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segmentcustomer | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||||
Number of operating segments | segment | 1 | ||||
Revenues by geographic area | |||||
Goodwill | $ 79,918 | $ 79,918 | $ 63,957 | ||
Revenues | 64,176 | $ 52,507 | 183,580 | $ 150,636 | |
Intangible assets, net | $ 28,252 | $ 28,252 | $ 21,659 | ||
Number of customers accounted for more than 10% of total revenues | customer | 0 | 0 | |||
United States and Canada | |||||
Revenues by geographic area | |||||
Revenues | $ 52,013 | 43,029 | $ 149,490 | 123,645 | |
EMEA | |||||
Revenues by geographic area | |||||
Goodwill | 27,800 | 27,800 | |||
Revenues | 7,695 | 5,839 | 20,964 | 16,167 | |
Intangible assets, net | 15,600 | 15,600 | |||
Asia Pacific | |||||
Revenues by geographic area | |||||
Revenues | 3,092 | 2,471 | 9,202 | 7,456 | |
Other | |||||
Revenues by geographic area | |||||
Revenues | $ 1,376 | $ 1,168 | $ 3,924 | $ 3,368 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Aug. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Lithium | Subscription Arrangement | |||||||
Related party transactions | |||||||
Revenue recongnized in related party transaction | $ 100,000 | ||||||
Lithium | Subscription Arrangement | Affiliated Entity | |||||||
Related party transactions | |||||||
Agreement term | 3 years | 3 years | |||||
Related party transaction, purchases from related party | $ 155,000 | ||||||
Prepaid expense and other assets | $ 114,000 | $ 114,000 | |||||
Lithium | Service Agreements | |||||||
Related party transactions | |||||||
Revenue recongnized in related party transaction | 34,755 | $ 38,000 | 103,197 | $ 111,500 | |||
Lithium | Service Agreements | Affiliated Entity | |||||||
Related party transactions | |||||||
Revenue recongnized in related party transaction | 3,273 | $ 0 | 8,974 | $ 17,325 | |||
TIBCO | Service Agreements | |||||||
Related party transactions | |||||||
Annual subscription recorded in prepaid expense and other current assets | $ 100,000 | ||||||
TIBCO | Hosting Agreement | |||||||
Related party transactions | |||||||
Revenue recongnized in related party transaction | $ 30,833 | $ 90,828 |