Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | STAMPS.COM INC | |
Entity Central Index Key | 1,082,923 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18,102,028 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 78,264 | $ 153,903 |
Accounts receivable, net | 95,850 | 80,797 |
Current income taxes | 23,717 | 22,344 |
Other current assets | 34,499 | 14,449 |
Total current assets | 232,330 | 271,493 |
Property and equipment, net | 36,801 | 37,507 |
Goodwill | 378,805 | 239,705 |
Intangible assets, net | 171,815 | 80,990 |
Deferred income taxes, net | 32,083 | 43,148 |
Other assets | 7,560 | 6,261 |
Total assets | 859,394 | 679,104 |
Current liabilities: | ||
Accounts payable and accrued expenses | 115,312 | 103,076 |
Deferred revenue | 4,694 | 3,871 |
Current portion of debt, net of debt issuance costs | 9,938 | 8,392 |
Total current liabilities | 129,944 | 115,339 |
Long-term debt, net of debt issuance costs | 53,189 | 60,642 |
Deferred income taxes, net | 15,331 | 0 |
Other liabilities | 8,288 | 5,310 |
Total liabilities | 206,752 | 181,291 |
Commitments and contingencies (Note 3) | ||
Stockholders' equity: | ||
Common stock, $.001 par value per share Authorized shares: 47,500 in 2018 and 2017 Issued shares: 33,017 in 2018 and 32,177 in 2017 Outstanding shares: 18,168 in 2018 and 17,573 in 2017 | 56 | 55 |
Additional paid-in capital | 1,037,955 | 962,227 |
Treasury stock, at cost, 14,849 shares in 2018 and 14,604 in 2017 | (439,969) | (387,545) |
Retained earnings (accumulated deficit) | 49,051 | (76,930) |
Accumulated other comprehensive income | 5,549 | 6 |
Total stockholders' equity | 652,642 | 497,813 |
Total liabilities and stockholders' equity | $ 859,394 | $ 679,104 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 47,500,000 | 47,500,000 |
Common stock, shares issued (in shares) | 33,017,000 | 32,177,000 |
Common stock, shares outstanding (in shares) | 18,168,000 | 17,573,000 |
Treasury stock, shares (in shares) | 14,849,000 | 14,604,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Revenues | $ 143,507 | $ 115,062 | $ 416,699 | $ 336,242 |
Cost of revenues (exclusive of amortization of intangible assets, which is included in general and administrative expense): | ||||
Total cost of revenues | 33,124 | 21,534 | 88,093 | 58,361 |
Gross profit | 110,383 | 93,528 | 328,606 | 277,881 |
Operating expenses: | ||||
Sales and marketing | 26,743 | 20,588 | 78,280 | 66,018 |
Research and development | 14,432 | 12,037 | 38,845 | 34,187 |
General and administrative | 24,916 | 25,243 | 71,119 | 65,676 |
Total operating expenses | 66,091 | 57,868 | 188,244 | 165,881 |
Income from operations | 44,292 | 35,660 | 140,362 | 112,000 |
Foreign currency exchange gain (loss), net | (957) | 0 | (957) | 0 |
Interest expense | (668) | (967) | (1,908) | (2,779) |
Interest income and other income, net | 83 | 120 | 175 | 309 |
Income before income taxes | 42,750 | 34,813 | 137,672 | 109,530 |
Income tax expense (benefit) | 9,337 | (11,412) | 11,691 | (873) |
Net income | $ 33,413 | $ 46,225 | $ 125,981 | $ 110,403 |
Net income per share: | ||||
Basic (in dollars per share) | $ 1.84 | $ 2.71 | $ 7.02 | $ 6.51 |
Diluted (in dollars per share) | $ 1.75 | $ 2.49 | $ 6.69 | $ 6.04 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 18,161 | 17,073 | 17,942 | 16,969 |
Diluted (in shares) | 19,046 | 18,548 | 18,822 | 18,282 |
Service | ||||
Revenues: | ||||
Revenues | $ 127,810 | $ 97,529 | $ 373,932 | $ 292,634 |
Cost of revenues (exclusive of amortization of intangible assets, which is included in general and administrative expense): | ||||
Total cost of revenues | 25,102 | 11,882 | 68,361 | 37,284 |
Product | ||||
Revenues: | ||||
Revenues | 4,705 | 4,824 | 15,276 | 15,301 |
Cost of revenues (exclusive of amortization of intangible assets, which is included in general and administrative expense): | ||||
Total cost of revenues | 1,383 | 1,535 | 4,614 | 4,930 |
Insurance | ||||
Revenues: | ||||
Revenues | 4,023 | 4,099 | 12,684 | 12,932 |
Cost of revenues (exclusive of amortization of intangible assets, which is included in general and administrative expense): | ||||
Total cost of revenues | 933 | 966 | 2,945 | 3,547 |
Customized postage | ||||
Revenues: | ||||
Revenues | 6,957 | 8,588 | 14,755 | 15,306 |
Cost of revenues (exclusive of amortization of intangible assets, which is included in general and administrative expense): | ||||
Total cost of revenues | 5,706 | 7,151 | 12,173 | 12,600 |
Product and service, other | ||||
Revenues: | ||||
Revenues | $ 12 | $ 22 | $ 52 | $ 69 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 33,413 | $ 46,225 | $ 125,981 | $ 110,403 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 5,544 | 0 | 5,544 | 0 |
Unrealized gain (loss) on investments | (1) | 0 | (1) | (4) |
Comprehensive income | $ 38,956 | $ 46,225 | $ 131,524 | $ 110,399 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net income | $ 125,981 | $ 110,403 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 16,861 | 16,055 |
Stock-based compensation expense | 26,350 | 33,669 |
Deferred income tax expense | 10,929 | 8,650 |
Accretion of debt issuance costs | 279 | 279 |
Changes in operating assets and liabilities, net of assets and liabilities acquired: | ||
Accounts receivable | (5,054) | 10,201 |
Other current assets | (16,716) | (31,535) |
Current income taxes | (1,373) | 0 |
Other assets | (1,299) | (2,073) |
Deferred revenue | 560 | (261) |
Other liabilities | 2,183 | 0 |
Accounts payable and accrued expenses | 1,363 | 3,647 |
Net cash provided by operating activities | 160,064 | 149,035 |
Investing activities: | ||
Acquisition of MetaPack, net of cash acquired | (208,500) | 0 |
Sale of short-term investments | 0 | 1,502 |
Sale of long-term investments | 0 | 10 |
Purchase of long-term investments | 0 | (4) |
Acquisition of property and equipment | (1,587) | (5,972) |
Net cash used in investing activities | (210,087) | (4,464) |
Financing activities: | ||
Proceeds from short term financing obligation, net of repayments | 678 | (389) |
Principal payments on term loan | (6,187) | (4,641) |
Payment on revolving credit facility | (12,716) | (10,000) |
Proceeds from exercise of stock options | 45,625 | 48,054 |
Issuance of common stock under Employee Stock Purchase Plan | 3,755 | 2,937 |
Repurchase of common stock | (52,424) | (103,127) |
Payments related to tax withholding for share-based compensation | (4,144) | (799) |
Net cash used in financing activities | (25,413) | (67,965) |
Effect of Exchange Rate on Cash and Cash Equivalents | (203) | 0 |
Net (decrease) increase in cash and cash equivalents | (75,639) | 76,606 |
Cash and cash equivalents at beginning of period | 153,903 | 106,932 |
Cash and cash equivalents at end of period | 78,264 | 183,538 |
Supplemental information: | ||
Capital expenditures accrued but not paid at period end | 13 | 123 |
Tenant improvement allowance | $ 600 | $ 848 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation We prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading. We recommend that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in our latest annual report on Form 10-K for the fiscal year ended December 31, 2017 , filed with the SEC on February 28, 2018. In our opinion, these unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly our financial position as of September 30, 2018 , our results of operations for the three and nine months ended September 30, 2018 , and our cash flows for the nine months ended September 30, 2018 . The results of operations for the interim period are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018 . Basis of Consolidation The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of Stamps.com Inc. and the entities in which we have 100% voting and/or economic control, which includes Auctane LLC (ShipStation), Interapptive, Inc. (ShipWorks), MetaPack Limited (MetaPack), PSI Systems, Inc. (Endicia), ShippingEasy Group, Inc. (ShippingEasy) and PhotoStamps Inc. In July 2016, we completed our acquisition of 100% of the outstanding shares of ShippingEasy. In August 2018, we completed our acquisition of 100% of the outstanding shares of MetaPack. Please see Note 2 - “Acquisitions” in our Notes to Consolidated Financial Statements for further description. References in this Report to "we" "us" "our" or "Company" are references to Stamps.com Inc. and its subsidiaries. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the fair value of assets and liabilities for allocation of the purchase price of companies acquired, estimates of loss contingencies, and estimates related to the realizability of deferred income taxes. Business Combinations The acquisition method of accounting is used for business combinations. The results of operations of acquired businesses are included in our consolidated financial statements prospectively from the date of acquisition. The fair value of purchase consideration is allocated to the assets acquired and liabilities assumed from the acquired entity and is generally based on their fair value at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Historically, the primary items that have generated goodwill include anticipated synergies between the acquired business and the Company and the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. Acquisition-related expenses are recognized in our consolidated financial statements as incurred. Contingencies and Litigation In the ordinary course of business, we are subject to various routine litigation matters as a claimant and a defendant. We record any amounts recovered in these matters when received. We establish loss provisions for claims against us when the loss is both probable and can be reasonably estimated. If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. If there is a reasonable possibility that a loss or additional loss may have been incurred for such proceedings, we disclose the estimate of the amount of loss or possible range of loss, or disclose that an estimate of loss cannot be made, as applicable. Deferred Revenue Our deferred revenue relates mainly to service revenue, which generally arises due to the timing of payment versus the provision of services for certain customers billed in advance. Approximately $2.6 million of revenue recognized in the nine months ended September 30, 2018 was included in the deferred revenue balance at December 31, 2017 . Fair Value of Financial Instruments Carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate fair value due to their short maturities. The Company’s outstanding debt held by third-party financial institutions is carried at cost, adjusted for debt issuance costs. The Company’s debt is not publicly traded and the carrying amount typically approximates fair value for debt that accrues interest at a variable rate for companies with similar financial characteristics as the Company, which are considered Level 2 fair value inputs as defined in Note 8 in our Consolidated Financial Statements. Foreign Currency Translation The functional currency of the Company’s major foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into United States dollars are recorded in accumulated other comprehensive income as a component of stockholders’ equity. Foreign currency transaction gains and losses are included in foreign currency exchange gain (loss), net. All assets and liabilities denominated in a foreign currency are translated into United States dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in a business combination. We are required to test goodwill for impairment annually and whenever events or circumstances indicate the fair value of a reporting unit may be below its carrying value. A reporting unit is the operating segment or a business that is one level below that operating segment. Reporting units are aggregated as a single reporting unit if they have similar economic characteristics. Goodwill is reviewed for impairment annually on October 1 utilizing either a qualitative assessment or a two-step process. We have an option to make a qualitative assessment of a reporting unit's goodwill for impairment. If we choose to perform a qualitative assessment and determine the fair value more likely than not exceeds the carrying value, no further evaluation is necessary. When we perform the two-step process, the first step requires us to compare the fair value of our reporting unit, which we primarily determine using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of our reporting unit exceeds its carrying value, the goodwill is not considered impaired. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step is required. In step two, the implied fair value of goodwill is calculated as the excess of the fair value of our reporting unit over the fair values assigned to its assets and liabilities. If the implied fair value of goodwill is less than the carrying value of our reporting unit's goodwill, the difference is recognized as an impairment loss. As of September 30, 2018 , we are not aware of any indicators of impairment that would require an impairment analysis other than our annual goodwill impairment analysis. Indefinite-lived intangible assets are reviewed for impairment annually on October 1. In assessing other intangible assets not subject to amortization for impairment, the Company also has the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of such an intangible asset is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of such an intangible asset is less than its carrying amount, then the Company is not required to perform any additional tests for assessing those intangible assets for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it is required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. As of September 30, 2018 , we are not aware of any indicators of impairment that would require an impairment analysis other than our annual indefinite-lived intangible assets impairment analysis. Long-Lived Assets and Finite-Lived Intangible Assets Long-lived assets including intangible assets with finite useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful life of the asset, generally three to five years for furniture, fixtures, and equipment and ten to forty years for building and building improvements. Leasehold improvements are capitalized and amortized over the shorter of the useful life of the asset or the remaining term of the lease. We have a policy of capitalizing expenditures that materially increase assets' useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed, and any gain or loss is included in income from operations. Income Taxes We account for income taxes in accordance with Financial Accounting Standards Board (FASB) ASC Topic No. 740, Income Taxes ( Income Taxes ), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Income Taxes also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. We record a valuation allowance to reduce our gross deferred tax assets to the amount that is more likely than not (a likelihood of more than 50 percent) to be realized. In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income. We evaluate the appropriateness of our deferred tax assets and related valuation allowance in accordance with Income Taxes based on all available positive and negative evidence. Revenue Recognition We recognize revenues when we transfer control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Our payment terms vary by the products and services offered. The term between billings and when payment is due is not significant. Revenues are presented on a disaggregated basis on the consolidated statements of income. Service revenues are recognized at a point in time, as transactions are processed, or over a period of time, typically one month or less. We earn service revenue from our mailing and shipping operations in several different ways: (1) customers may pay us a monthly fee based on a subscription plan which may be waived or refunded for certain customers; (2) we may be compensated directly by the United States Postal Service (USPS) for certain qualifying customers under our USPS partnership; (3) we may earn transaction related revenue based on customers purchasing postage or printing shipping labels; (4) we may earn compensation by offering customers a discounted postage rate that is provided to the customers by our integration partners; and (5) we may earn other types of revenue shares or other compensation from specific customers or integration partners. Customers may purchase postage and other delivery services from the USPS and other carriers through our mailing and shipping solutions. When funds are transferred directly from customers to the carrier, these funds are not recognized as revenue. We also provide mailing and shipping services for which the cost of postage or delivery is included in the cost of the service and, therefore, is recognized as service revenue. Product revenue consists of products sold through the mailing and shipping supplies stores which are available to our customers from within some of our mailing and shipping solutions. Products sold include shipping labels, mailing labels, dedicated postage printers, scales, and other mailing and shipping-focused office supplies. We recognize product revenue on product purchases upon delivery of the order to the customer. We provide our customers with the opportunity to purchase parcel insurance directly through our solutions. Insurance revenue represents the gross amount charged to the customer for purchasing insurance and the related cost represents the amount paid to our insurance providers. We recognize insurance revenue on insurance purchases upon the ship date of the insured package. Customized postage revenue, which includes the face value of postage, from the sale of customized postage sheets and rolls is recognized upon transfer of control of the product to the customer, which occurs upon our delivery to the carrier. On a limited basis, we allow third parties to offer products and promotions to our customer base. These arrangements generally provide payment in the form of a flat fee or revenue sharing arrangements where we receive payment upon customers accessing third party products and services. Total revenue from such advertising arrangements was not significant during the nine months ended September 30, 2018 or 2017 , respectively. Segment Information We have organized our operations into two segments: Stamps.com and MetaPack. Please see Note 10 - “Segment and Geographical Information” in our Notes to Consolidated Financial Statements for further description. Short-Term Financing Obligations We utilize short-term financing, which is separate from our debt, to fund certain Company operations. Short-term financing obligations are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. As of September 30, 2018 , we had $17.9 million in short-term financing obligations and $87.6 million of unused credit. As of December 31, 2017 , we had $17.2 million in short-term financing obligations and $103.4 million of unused credit. Stock-Based Compensation We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options and restricted stock units (RSUs), to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. We account for forfeitures as they occur. Prior to the adoption of ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, in 2017, share-based compensation expense was recorded net of estimated forfeitures, which were based on historical forfeitures and adjusted to reflect changes in facts and circumstances, if any. We use the Black-Scholes-Merton option valuation model to estimate the fair value of share-based payment awards on the date of grant, which requires us to use a number of estimates and subjective assumptions, including stock price volatility, expected term, risk-free interest rates, and projected employee stock option exercise behaviors. In the case of options we grant, our assumption of expected volatility is based on the historical volatility of our stock price over the term equal to the expected life of the options. We base the risk-free interest rate on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the options assumed at the date of grant. The estimated expected life represents the weighted average period the stock options are expected to remain outstanding, determined based on an analysis of historical exercise behavior. Trademarks, Trade Names, and Other Intangible Assets (excluding Goodwill) Acquired trademarks, trade names, and other intangibles (excluding goodwill) include both amortizable and non-amortizable assets and are included in intangible assets, net in the accompanying consolidated balance sheets. Intangible assets are carried at cost less accumulated amortization. Cost associated with internally developed intangible assets is typically expensed as incurred as research and development costs. Amortization of amortizable intangible assets is calculated on a straight-line basis, which is consistent with the expected future cash flows. Treasury Stock During the nine months ended September 30, 2018 and September 30, 2017 , we repurchased approximately 223,000 shares and 818,000 shares for $48.3 million and $103.1 million , respectively. Also, in the first quarter of 2018 and the first quarter of 2017 , we withheld 21,076 and 6,670 of shares, respectively, to satisfy income tax obligations related to performance-based inducement equity awards issued to the General Manager and the then Chief Technology Officer of ShippingEasy as described in Note 2 - “Acquisitions.” Accounting Guidance Adopted in 2018 Definition of a Business In January 2017, the FASB issued ASU 2017-01, guidance that changes the definition of a business for accounting purposes. Under the new guidance, an entity first determines whether substantially all of the fair value of a set of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of assets is not deemed to be a business. If this threshold is not met, the entity then evaluates whether the set of assets meets the requirement to be deemed a business, which at minimum, requires there to be an input and a substantive process that together significantly contribute to the ability to create outputs. The guidance became effective on a prospective basis for the Company on January 1, 2018. The Company's adoption of the guidance on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements. Modification of Share-Based Payments In May 2017, the FASB issued ASU 2017-09, guidance that clarifies when changes to the terms and conditions of share-based awards must be accounted for as modifications. The guidance does not change the accounting treatment for modifications. The guidance became effective for the Company on January 1, 2018 and was adopted on a prospective basis. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , an updated standard on revenue recognition. This ASU superseded the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition , and most industry-specific guidance. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using U.S. GAAP and International Financial Reporting Standards. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies may be required to use more judgment and make more estimates than under current authoritative guidance. On January 1, 2018, the Company adopted the guidance under the modified retrospective method. The adoption of the guidance did not have a material impact on the Company's consolidated financial statements. Accounting Guidance Not Yet Adopted Disclosure Update and Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective for quarterly reporting for quarters which begin after November 5, 2018. The Company is in the process of evaluating the impact of the final rule on its consolidated financial statements. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, a standard which simplifies the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance will become effective on a prospective basis for the Company on January 1, 2020 and is not expected to have a material impact on the Company's consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, a new accounting standard for leases. The new standard generally requires the recognition of financing and operating lease liabilities and corresponding right-of-use assets on the balance sheet. For financing leases, a lessee recognizes amortization of the right-of-use asset as an operating expense over the lease term separately from interest on the lease liability. For operating leases, a lessee recognizes its total lease expense as an operating expense over the lease term. The amendments are effective for the Company in the first quarter of 2019 using a modified retrospective approach with early adoption permitted. Although the Company is in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company's balance sheet for real estate operating leases. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions We have accounted for all of our acquisitions under the acquisition method of accounting in accordance with the provisions of FASB ASC Topic No. 805, Business Combinations . MetaPack Acquisition On August 15, 2018, we, through our wholly owned subsidiary Pacific Shelf 1855 Limited (Pacific Shelf), completed the acquisition of MetaPack Limited, a private limited company incorporated in England and Wales, pursuant to a share purchase agreement dated July 24, 2018, as amended (the “Agreement”), by and among the certain key sellers named in the Agreement (the “Key Sellers”), MetaPack, Pacific Shelf, and Stamps.com Inc. as Pacific Shelf’s guarantor. MetaPack provides multi-carrier enterprise-level solutions to many of the world’s preeminent e-commerce retailers and brands. Pursuant to the Agreement and a related agreement to purchase Minority Shares (as defined below), Pacific Shelf acquired 100% of MetaPack’s issued and to be issued share capital by purchasing (i) all of the Key Sellers’ shares of MetaPack, representing approximately 80% of the total outstanding shares and (ii) all other issued and to be issued shares of MetaPack (Minority Shares), for a final adjusted purchase price, for all such shares, of approximately £171 million , or $217.7 million using the August 15, 2018 GBP to USD exchange rate. Total cash paid for the acquisition was funded from cash and investment balances. Stamps.com granted inducement stock options for an aggregate of 320,250 shares of Stamps.com common stock to 72 new employees after completion of its acquisition of MetaPack. The stock options were granted as inducements material to the new employees entering into employment with Stamps.com, pursuant to the Stamps.com 2018 MetaPack Equity Inducement Plan, which was approved by Stamps.com’s Compensation Committee. The awards were granted without stockholder approval in accordance with Nasdaq Listing Rule 5635(c)(4). Each option vests 25% on the one year anniversary of the grant date with the remaining 75% vesting in approximately equal monthly increments over the succeeding thirty-six months, provided that the option holder is still employed by Stamps.com or one of its subsidiaries on the vesting dates. The stock options have a ten year term and an exercise price equal to closing price of Stamps.com common stock on the grant date of August 15, 2018. Under the acquisition method of accounting under ASC 805, the total purchase price of the acquired company is allocated to the assets acquired and the liabilities assumed based on their fair values. We have made significant estimates and assumptions in determining the preliminary allocation of the purchase price. The Company has made a preliminary allocation of the purchase price of MetaPack to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value. The preliminary allocation of the purchase price is based upon management's estimates and is subject to revision, as a more detailed analysis of intangible assets and tax and other liabilities is completed and additional information on the fair value of assets and liabilities becomes available. A change in the fair value of the net assets may change the amount of the purchase price allocable to goodwill, and could impact the amounts of amortization expense. The purchase price of MetaPack has been allocated on a preliminary basis as follows to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value based on the August 15, 2018 GBP to USD exchange rate (in thousands, except years): Fair Value Fair Value Useful Life (In Years) Weighted Average Estimated Useful Life (In Years) Cash and cash equivalents $ 9,186 Trade accounts receivable 9,767 Other current assets 3,259 Property and equipment 1,179 Goodwill 135,747 Identifiable intangible assets: Trade names $ 10,936 12 Developed technology 40,691 16 Customer relationships 49,211 16 Total identifiable intangible assets 100,838 16 Accounts payable and accrued expenses (13,450 ) Deferred revenue (254 ) Revolving credit facility (12,716 ) Deferred income tax liability (15,094 ) Other liabilities (776 ) Total purchase consideration $ 217,686 The fair value of the assets acquired and liabilities assumed were preliminarily determined using income, cost and market participant approaches. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement as defined in ASC 820. The identified intangible assets consist of trade names, developed technology, and customer relationships. The estimated fair values of the trade names and developed technology were determined using the “relief from royalty” method. The estimated fair value of customer relationships was determined using the “excess earnings” method. The rate utilized to discount net cash flows to their present values was approximately 15% and was determined after consideration of the overall enterprise rate of return and the relative risk and importance of the assets to the generation of future cash flows. Intangible assets are being amortized on a straight-line basis over their estimated useful lives. Based on the September 30, 2018 exchange rate, we expect the amortization of acquired intangibles will be approximately $1.7 million per quarter for the remaining estimated useful lives. Deferred taxes were adjusted to record the deferred tax impact of acquisition accounting adjustments primarily related to intangible assets. The incremental deferred tax liabilities were calculated based on the tax effect of the step-up in book basis of the net assets of MetaPack, excluding the amount attributable to goodwill, using the estimated statutory tax rates. Goodwill represents the excess of the consideration given over the sum of the fair values assigned to identifiable assets acquired less liabilities assumed in a business combination. The goodwill balance is primarily attributable to the expanded market opportunities for the Company internationally and MetaPack in the United States and the Company's ability to generate future technology. None of the goodwill recognized is expected to be deductible for income tax purposes. The goodwill recorded as part of this acquisition is included in the MetaPack segment (see Note 6 - “Goodwill and Intangible Assets” in our Notes to Consolidated Financial Statements). Immediately following the acquisition, we repaid in full MetaPack's existing revolving credit facility balance of approximately $12.7 million . We incurred approximately $2.5 million in transaction costs included in general and administrative expense and $1.0 million of nonrecurring foreign currency exchange loss directly related to the acquisition during the nine months ended September 30, 2018. MetaPack revenues and net loss included in the Consolidated Statements of Operations for the three months ended September 30, 2018 are $5.2 million and $1.3 million , respectively. Pro Forma Financial Information (unaudited) The pro forma financial information presented is for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the acquisition had been completed on the date assumed, nor is it indicative of future operating results. The pro forma financial information does not include any adjustments for anticipated operating efficiencies or cost savings. The pro forma results include material adjustments related to (a) purchase accounting, primarily amortization of intangible assets, (b) share-based compensation expense for inducement awards issued to continuing employees of MetaPack, and (c) the elimination of nonrecurring expenses that were directly related to the transaction, including transaction costs, foreign currency exchange loss, and one-time bonuses and related tax payments. The following table presents the pro forma financial information (in thousands, except per share amounts) and assumes the acquisition of MetaPack occurred on January 1, 2017: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenue $ 150,697 $ 125,715 $ 449,644 $ 367,295 Net income 33,432 43,918 122,341 101,009 Basic earnings per share $ 1.84 $ 2.57 $ 6.82 $ 5.95 Diluted earnings per share $ 1.76 $ 2.37 $ 6.50 $ 5.53 ShippingEasy Acquisition On July 1, 2016, we completed our acquisition of ShippingEasy Group, Inc. (ShippingEasy). The net purchase price including adjustments for net working capital totaled approximately $55.4 million and was funded from current cash and investment balances. In connection with the acquisition, we agreed to issue performance-based inducement equity awards to the General Manager and the then Chief Technology Officer of ShippingEasy. These inducement awards cover an aggregate of up to 87,134 common shares if earnings targets for ShippingEasy are achieved over a two and one-half year period which began July 1, 2016. The awards are subject to proration if at least 75% of the applicable target is achieved and are subject to forfeiture or acceleration based on changes in employment circumstances over the performance period. In fiscal 2016, we determined the achievement of 100% of the earnings target for the six months ended December 31, 2016 was met, therefore, we recognized approximately $1.9 million of stock-based compensation expense, representing 21,783 shares, for these inducement equity awards during the six months ended December 31, 2016. The equity award for the first phase was issued in the first quarter of 2017 with 15,113 shares distributed and 6,670 shares withheld to satisfy income tax obligations. In fiscal 2017, we determined the achievement of 100% of the earnings target for the twelve months ended December 31, 2017 was met, therefore, we recognized approximately $4.9 million of stock-based compensation expense, representing 56,638 shares, for these inducement equity awards during the year ended December 31, 2017. The equity award for the second phase was issued in the first quarter of 2018 with 35,562 shares distributed and 21,076 shares withheld to satisfy income tax obligations. As of the third quarter of 2018 , we estimated the achievement of the earnings target for the twelve months ended December 31, 2018 is probable. Stock-based compensation expense related to these inducement equity awards was not material during the three and nine months ended September 30, 2018 . We also issued inducement stock option grants for an aggregate of approximately 62,000 shares of Stamps.com common stock to 48 new employees in connection with our acquisition of ShippingEasy. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings We are subject to various routine legal proceedings and claims incidental to our business, and we do not believe that these proceedings and claims would reasonably be expected to have a material adverse effect on our financial position, results of operations, or cash flows. On February 8, 2018, a putative class action complaint was filed against us in a case entitled Juan Lopez and Nicholas Dixon v. Stamps.com, Inc. , Case No. 2:18-cv-01101, in the United States District Court for the Central District of California, Western Division, alleging wage and hour claims on behalf of our current and former “non-exempt” hourly call center employees. The complaint sought class certification, unspecified damages, unpaid wages, penalties, restitution, interest, and attorneys’ fees and costs. On July 24, 2018, we entered into a preliminary settlement that would resolve this matter for a non-material payment to be distributed to the participating class members. The court granted preliminary approval of the settlement and has scheduled a final approval hearing to be held on February 11, 2019, or on another date convenient to the court. The Company had not accrued any material amounts related to any of the Company’s legal proceedings as of September 30, 2018 or December 31, 2017 . Although management at present believes that the ultimate outcome of the various routine proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations, cash flows, or overall trends, legal proceedings are subject to inherent uncertainties, and unfavorable rulings or other events could occur. An unfavorable outcome for an amount in excess of management's present expectations may result in a material adverse impact on our business, results of operations, financial position, and overall trends. Commitments The Company leases facilities pursuant to noncancelable operating lease agreements expiring through 2028. Rent expense is recognized on a straight-line basis over the lease term. Lease incentives are amortized over the lease term on a straight-line basis. Leasehold improvements are capitalized and amortized over the shorter of the useful life of the asset or the remaining term of the lease. Rent expense for the three and nine months ended September 30, 2018 was approximately $1.2 million and $3.0 million , respectively. Rent expense for the three and nine months ended September 30, 2017 was approximately $1.0 million and $2.8 million , respectively. The following table is a schedule of our significant contractual obligations and commercial commitments (other than debt commitments), which consist of minimum operating lease payments as of September 30, 2018 (in thousands): Twelve Month Period Ending September 30, Operating 2019 $ 5,217 2020 5,243 2021 4,906 2022 3,802 2023 3,461 Thereafter 4,634 Total $ 27,263 |
Net Income per Share
Net Income per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share The following table reconciles share amounts utilized to calculate basic and diluted net income per share (in thousands, except per share data): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net income $ 33,413 $ 46,225 $ 125,981 $ 110,403 Basic - weighted average common shares 18,161 17,073 17,942 16,969 Diluted effect of common stock equivalents 885 1,475 880 1,313 Diluted - weighted average common shares 19,046 18,548 18,822 18,282 Earnings per share: Basic 1.84 2.71 7.02 6.51 Diluted 1.75 2.49 6.69 6.04 The calculation of dilutive shares excludes the effect of the following options that are considered anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Anti-dilutive stock options 143 30 102 24 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options and RSUs, to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. Starting in the third quarter of fiscal 2016, our stock-based compensation expense included performance-based inducement equity awards relating to the ShippingEasy acquisition as described in Note 2 - "Acquisitions." Starting in the third quarter of fiscal 2018, our stock-based compensation expense included performance-based inducement equity awards relating to the MetaPack acquisition as described in Note 2 - "Acquisitions." The following table sets forth the stock-based compensation expense that we recognized for the periods indicated (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Stock-based compensation expense relating to: Stock options $ 8,500 $ 11,065 $ 25,198 $ 32,923 Employee stock purchases 411 269 1,151 746 Total stock-based compensation expense $ 8,911 $ 11,334 $ 26,349 $ 33,669 Stock-based compensation expense relating to: Cost of revenues $ 785 $ 444 $ 1,998 $ 1,437 Sales and marketing 1,816 1,915 4,818 6,197 Research and development 2,001 2,337 5,593 7,054 General and administrative 4,309 6,638 13,940 18,981 Total stock-based compensation expense $ 8,911 $ 11,334 $ 26,349 $ 33,669 The following are the weighted average assumptions used in the Black-Scholes-Merton option valuation model for the periods indicated: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Expected dividend yield — % — % — % — % Risk-free interest rate 2.7 % 1.5 % 2.5 % 1.5 % Expected volatility 49.8 % 47.9 % 50.3 % 46.9 % Expected life (in years) 3.3 3.3 3.3 3.4 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in business combinations. The following table summarizes goodwill as of December 31, 2017 and September 30, 2018 (in thousands): Stamps.com Segment MetaPack Segment Total Goodwill balance at December 31, 2017 $ 239,705 $ — $ 239,705 Acquisition of MetaPack (see Note 2 - "Acquisitions" ) — 135,747 135,747 Foreign currency translation — 3,353 3,353 Goodwill balance at September 30, 2018 $ 239,705 $ 139,100 $ 378,805 We have amortizable and non-amortizable intangible assets consisting of trademarks, trade names, developed technology, non-compete agreements, customer relationships, and other. The gross carrying amount of amortizable and non-amortizable intangible assets was $229.0 million at September 30, 2018 and $125.4 million at December 31, 2017 . Non-amortizable assets of $11.4 million as of both September 30, 2018 and December 31, 2017 consist primarily of the trade name relating to the Endicia acquisition. The following table summarizes our amortizable intangible assets as of September 30, 2018 (in thousands, except years): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining weighted average amortization period (years) Patents and Others $ 8,889 $ 8,854 $ 35 0.7 Customer Relationships 111,373 30,043 81,330 8.9 Technology 81,853 15,520 66,333 10.6 Non-Compete 2,211 1,611 600 2.7 Trademarks and Trade Names 13,249 1,120 12,129 11.1 Total amortizable intangible assets at September 30, 2018 $ 217,575 $ 57,148 $ 160,427 9.7 The following table summarizes our amortizable intangible assets as of December 31, 2017 (in thousands, except years): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining weighted average amortization period (years) Patents and Others $ 8,889 $ 8,820 $ 69 1.5 Customer Relationships 60,816 22,170 38,646 3.9 Technology 40,048 11,297 28,751 5.9 Non-Compete 2,211 1,280 931 2.0 Trademark 2,004 800 1,204 4.6 Total amortizable intangible assets at December 31, 2017 $ 113,968 $ 44,367 $ 69,601 4.6 We recorded amortization of intangible assets totaling approximately $4.8 million and $12.8 million for the three and nine months ended September 30, 2018 , respectively. We recorded amortization of intangible assets totaling approximately $4.0 million and $12.0 million for the three and nine months ended September 30, 2017 , respectively. Amortization of intangible assets is included in general and administrative expense in the accompanying consolidated statements of income. Our estimated amortization expense for the next five years and thereafter is as follows (in thousands): Twelve Month Period Ending September 30, Estimated Amortization Expense 2019 $ 22,314 2020 22,236 2021 21,113 2022 12,190 2023 9,754 Thereafter 72,820 Total $ 160,427 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax expense was $9.3 million and $11.7 million for the three and nine months ended September 30, 2018 , respectively. The income tax expense for the three and nine months ended September 30, 2018 was primarily due to (a) our pre-tax income multiplied by an estimated annual effective tax rate and (b) discrete tax benefits related to the exercises of stock awards of approximately $1.6 million and $22.5 million , respectively. Our income tax benefit was $11.4 million and $0.9 million for the three and nine months ended September 30, 2017 , respectively. The income tax benefit for the three and nine months ended September 30, 2017 was primarily due to (a) our pre-tax income multiplied by an estimated annual effective tax rate and (b) discrete tax benefits related to the exercises of stock awards of approximately $23.5 million and $41.8 million , respectively. Our effective income tax rate differs from the statutory income tax rate primarily as a result of permanent tax adjustments for tax benefits from exercises of stock awards and research and development tax credits, as well as nondeductible items and state taxes. As of September 30, 2018 and December 31, 2017 , we have recorded a valuation allowance of $654,000 and $410,000 against certain state research and development credits for which we believe it is more likely than not that these deferred tax assets will not be realized. We also have recorded a valuation allowance against the activity of certain foreign jurisdictions. We recorded provisional amounts as of December 31, 2017 related to certain income tax effects of the Tax Cuts and Jobs Act enacted December 22, 2017 under guidance set forth in Staff Accounting Bulletin No. 118 (SAB 118). These amounts have not been adjusted as of September 30, 2018 , and we will continue to monitor any changes to the provisional amounts during the measurement period or until the accounting is complete. Any subsequent adjustment to these amounts will be recorded to current tax expense in the fourth quarter of 2018 when the analysis is complete. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets measured at fair value on a recurring basis are classified in one of the three categories described below: Level 1 - Valuations based on unadjusted quoted prices for identical assets in an active market Level 2 - Valuations based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets Level 3 - Valuations based on inputs that are unobservable and involve management judgment and our own assumptions about market participants and pricing The following tables summarize our financial assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands): Fair Value Measurement at Reporting Date Using Description September 30, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 78,264 $ 78,264 — — Total $ 78,264 $ 78,264 — — Fair Value Measurement at Reporting Date Using Description December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 153,903 $ 153,903 — — Total $ 153,903 $ 153,903 $ — — |
Cash and Cash Equivalents
Cash and Cash Equivalents | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents Our cash equivalents consisted of money market funds at September 30, 2018 and December 31, 2017 . We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. At September 30, 2018 and December 31, 2017 , we had no material investments. The following tables summarize our cash and cash equivalents as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash $ 71,662 — — $ 71,662 Money market 6,602 — — 6,602 Cash and cash equivalents $ 78,264 — — $ 78,264 December 31, 2017 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash $ 147,386 — — $ 147,386 Money market 6,517 — — 6,517 Cash and cash equivalents $ 153,903 — — $ 153,903 |
Segment Information and Geograp
Segment Information and Geographic Data | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information and Geographic Data | Segment Information and Geographic Data Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) for purposes of allocating resources and evaluating financial performance. The Company's Chairman and Chief Executive Officer has been identified as the CODM as defined by guidance regarding segment disclosures. The Company’s reportable segments have been determined based on the distinct nature of their operations and customer bases, and the financial information that is evaluated regularly by the CODM. Following the MetaPack acquisition (see Note 2), the Company has added a new segment for the MetaPack business. Previously, the Company had a single reportable segment. The Stamps.com segment derives revenue from external customers from offering postage online and shipping software solutions offered to consumers, small businesses, e-commerce shippers, enterprise mailers, and high volume shippers. The Stamps.com reportable segment includes the results of brand names Stamps.com, Endicia, ShipStation, ShipWorks and ShippingEasy. Stamps.com's customers are primarily located in the US. The MetaPack segment consists of the operations of MetaPack which derives revenues from external customers from offering multi-carrier enterprise-level shipping software solutions to large e-commerce retailers and brands. MetaPack's customers are primarily located outside the US. Revenues, cost of revenues, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our CODM does not evaluate operating segments using asset information. Information about segments during the periods presented were as follows (in thousands, unaudited): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Segment revenues Stamps.com $ 138,270 $ 115,062 $ 411,462 $ 336,242 MetaPack 5,237 — 5,237 — Total revenues $ 143,507 $ 115,062 $ 416,699 $ 336,242 Segment income (loss) from operations Stamps.com $ 45,593 $ 35,660 $ 141,663 $ 112,000 MetaPack (1,301 ) — (1,301 ) — Total income from operations $ 44,292 $ 35,660 $ 140,362 $ 112,000 Company's total segment income from operations $ 44,292 $ 35,660 $ 140,362 $ 112,000 Foreign currency exchange loss, net (957 ) — (957 ) — Interest expense (668 ) (967 ) (1,908 ) (2,779 ) Interest income and other income, net 83 120 175 309 Income before income taxes $ 42,750 $ 34,813 $ 137,672 $ 109,530 Geographic Data No sales to an individual customer or country other than the US accounted for more than 10% of revenue for the three or nine months ended September 30, 2018 or 2017. The following table presents our revenues by geography, based on the billing addresses of our customers (in thousands, unaudited): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues United States $ 137,853 $ 115,062 $ 409,853 $ 336,242 International 5,654 — 6,846 — Total revenues $ 143,507 $ 115,062 $ 416,699 $ 336,242 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We are not aware of any material subsequent events or transactions that have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation We prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading. We recommend that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in our latest annual report on Form 10-K for the fiscal year ended December 31, 2017 , filed with the SEC on February 28, 2018. In our opinion, these unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly our financial position as of September 30, 2018 , our results of operations for the three and nine months ended September 30, 2018 , and our cash flows for the nine months ended September 30, 2018 . The results of operations for the interim period are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018 . |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of Stamps.com Inc. and the entities in which we have 100% voting and/or economic control, which includes Auctane LLC (ShipStation), Interapptive, Inc. (ShipWorks), MetaPack Limited (MetaPack), PSI Systems, Inc. (Endicia), ShippingEasy Group, Inc. (ShippingEasy) and PhotoStamps Inc. In July 2016, we completed our acquisition of 100% of the outstanding shares of ShippingEasy. In August 2018, we completed our acquisition of 100% of the outstanding shares of MetaPack. Please see Note 2 - “Acquisitions” in our Notes to Consolidated Financial Statements for further description. References in this Report to "we" "us" "our" or "Company" are references to Stamps.com Inc. and its subsidiaries. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the fair value of assets and liabilities for allocation of the purchase price of companies acquired, estimates of loss contingencies, and estimates related to the realizability of deferred income taxes. |
Business Combinations | Business Combinations The acquisition method of accounting is used for business combinations. The results of operations of acquired businesses are included in our consolidated financial statements prospectively from the date of acquisition. The fair value of purchase consideration is allocated to the assets acquired and liabilities assumed from the acquired entity and is generally based on their fair value at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Historically, the primary items that have generated goodwill include anticipated synergies between the acquired business and the Company and the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. Acquisition-related expenses are recognized in our consolidated financial statements as incurred. |
Contingencies and Litigation | Contingencies and Litigation In the ordinary course of business, we are subject to various routine litigation matters as a claimant and a defendant. We record any amounts recovered in these matters when received. We establish loss provisions for claims against us when the loss is both probable and can be reasonably estimated. If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. If there is a reasonable possibility that a loss or additional loss may have been incurred for such proceedings, we disclose the estimate of the amount of loss or possible range of loss, or disclose that an estimate of loss cannot be made, as applicable. |
Revenue From Contract With Customer | Revenue Recognition We recognize revenues when we transfer control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Our payment terms vary by the products and services offered. The term between billings and when payment is due is not significant. Revenues are presented on a disaggregated basis on the consolidated statements of income. Service revenues are recognized at a point in time, as transactions are processed, or over a period of time, typically one month or less. We earn service revenue from our mailing and shipping operations in several different ways: (1) customers may pay us a monthly fee based on a subscription plan which may be waived or refunded for certain customers; (2) we may be compensated directly by the United States Postal Service (USPS) for certain qualifying customers under our USPS partnership; (3) we may earn transaction related revenue based on customers purchasing postage or printing shipping labels; (4) we may earn compensation by offering customers a discounted postage rate that is provided to the customers by our integration partners; and (5) we may earn other types of revenue shares or other compensation from specific customers or integration partners. Customers may purchase postage and other delivery services from the USPS and other carriers through our mailing and shipping solutions. When funds are transferred directly from customers to the carrier, these funds are not recognized as revenue. We also provide mailing and shipping services for which the cost of postage or delivery is included in the cost of the service and, therefore, is recognized as service revenue. Product revenue consists of products sold through the mailing and shipping supplies stores which are available to our customers from within some of our mailing and shipping solutions. Products sold include shipping labels, mailing labels, dedicated postage printers, scales, and other mailing and shipping-focused office supplies. We recognize product revenue on product purchases upon delivery of the order to the customer. We provide our customers with the opportunity to purchase parcel insurance directly through our solutions. Insurance revenue represents the gross amount charged to the customer for purchasing insurance and the related cost represents the amount paid to our insurance providers. We recognize insurance revenue on insurance purchases upon the ship date of the insured package. Customized postage revenue, which includes the face value of postage, from the sale of customized postage sheets and rolls is recognized upon transfer of control of the product to the customer, which occurs upon our delivery to the carrier. On a limited basis, we allow third parties to offer products and promotions to our customer base. These arrangements generally provide payment in the form of a flat fee or revenue sharing arrangements where we receive payment upon customers accessing third party products and services. Deferred Revenue Our deferred revenue relates mainly to service revenue, which generally arises due to the timing of payment versus the provision of services for certain customers billed in advance. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate fair value due to their short maturities. The Company’s outstanding debt held by third-party financial institutions is carried at cost, adjusted for debt issuance costs. The Company’s debt is not publicly traded and the carrying amount typically approximates fair value for debt that accrues interest at a variable rate for companies with similar financial characteristics as the Company, which are considered Level 2 fair value inputs as defined in Note 8 in our Consolidated Financial Statements. |
Foreign Currency Transactions and Translations Policy | Foreign Currency Translation The functional currency of the Company’s major foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into United States dollars are recorded in accumulated other comprehensive income as a component of stockholders’ equity. Foreign currency transaction gains and losses are included in foreign currency exchange gain (loss), net. All assets and liabilities denominated in a foreign currency are translated into United States dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. |
Goodwill and Indefinite-lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in a business combination. We are required to test goodwill for impairment annually and whenever events or circumstances indicate the fair value of a reporting unit may be below its carrying value. A reporting unit is the operating segment or a business that is one level below that operating segment. Reporting units are aggregated as a single reporting unit if they have similar economic characteristics. Goodwill is reviewed for impairment annually on October 1 utilizing either a qualitative assessment or a two-step process. We have an option to make a qualitative assessment of a reporting unit's goodwill for impairment. If we choose to perform a qualitative assessment and determine the fair value more likely than not exceeds the carrying value, no further evaluation is necessary. When we perform the two-step process, the first step requires us to compare the fair value of our reporting unit, which we primarily determine using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of our reporting unit exceeds its carrying value, the goodwill is not considered impaired. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step is required. In step two, the implied fair value of goodwill is calculated as the excess of the fair value of our reporting unit over the fair values assigned to its assets and liabilities. If the implied fair value of goodwill is less than the carrying value of our reporting unit's goodwill, the difference is recognized as an impairment loss. As of September 30, 2018 , we are not aware of any indicators of impairment that would require an impairment analysis other than our annual goodwill impairment analysis. Indefinite-lived intangible assets are reviewed for impairment annually on October 1. In assessing other intangible assets not subject to amortization for impairment, the Company also has the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of such an intangible asset is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of such an intangible asset is less than its carrying amount, then the Company is not required to perform any additional tests for assessing those intangible assets for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it is required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. |
Long-Lived Assets and Finite-Lived Intangible Assets | Long-Lived Assets and Finite-Lived Intangible Assets Long-lived assets including intangible assets with finite useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful life of the asset, generally three to five years for furniture, fixtures, and equipment and ten to forty years for building and building improvements. Leasehold improvements are capitalized and amortized over the shorter of the useful life of the asset or the remaining term of the lease. We have a policy of capitalizing expenditures that materially increase assets' useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed, and any gain or loss is included in income from operations. |
Income Taxes | Income Taxes We account for income taxes in accordance with Financial Accounting Standards Board (FASB) ASC Topic No. 740, Income Taxes ( Income Taxes ), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Income Taxes also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. We record a valuation allowance to reduce our gross deferred tax assets to the amount that is more likely than not (a likelihood of more than 50 percent) to be realized. In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income. We evaluate the appropriateness of our deferred tax assets and related valuation allowance in accordance with Income Taxes based on all available positive and negative evidence. |
Segment Information | Segment Information We have organized our operations into two segments: Stamps.com and MetaPack. |
Short-Term Financing Obligations | Short-Term Financing Obligations We utilize short-term financing, which is separate from our debt, to fund certain Company operations. Short-term financing obligations are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options and restricted stock units (RSUs), to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. We account for forfeitures as they occur. Prior to the adoption of ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, in 2017, share-based compensation expense was recorded net of estimated forfeitures, which were based on historical forfeitures and adjusted to reflect changes in facts and circumstances, if any. We use the Black-Scholes-Merton option valuation model to estimate the fair value of share-based payment awards on the date of grant, which requires us to use a number of estimates and subjective assumptions, including stock price volatility, expected term, risk-free interest rates, and projected employee stock option exercise behaviors. In the case of options we grant, our assumption of expected volatility is based on the historical volatility of our stock price over the term equal to the expected life of the options. We base the risk-free interest rate on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the options assumed at the date of grant. The estimated expected life represents the weighted average period the stock options are expected to remain outstanding, determined based on an analysis of historical exercise behavior. |
Trademarks, Trade Names, and Other Intangible Assets (excluding Goodwill) | Trademarks, Trade Names, and Other Intangible Assets (excluding Goodwill) Acquired trademarks, trade names, and other intangibles (excluding goodwill) include both amortizable and non-amortizable assets and are included in intangible assets, net in the accompanying consolidated balance sheets. Intangible assets are carried at cost less accumulated amortization. Cost associated with internally developed intangible assets is typically expensed as incurred as research and development costs. Amortization of amortizable intangible assets is calculated on a straight-line basis, which is consistent with the expected future cash flows. |
Accounting Guidance Adopted in 2018 and Guidance Not Yet Adopted | Accounting Guidance Adopted in 2018 Definition of a Business In January 2017, the FASB issued ASU 2017-01, guidance that changes the definition of a business for accounting purposes. Under the new guidance, an entity first determines whether substantially all of the fair value of a set of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of assets is not deemed to be a business. If this threshold is not met, the entity then evaluates whether the set of assets meets the requirement to be deemed a business, which at minimum, requires there to be an input and a substantive process that together significantly contribute to the ability to create outputs. The guidance became effective on a prospective basis for the Company on January 1, 2018. The Company's adoption of the guidance on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements. Modification of Share-Based Payments In May 2017, the FASB issued ASU 2017-09, guidance that clarifies when changes to the terms and conditions of share-based awards must be accounted for as modifications. The guidance does not change the accounting treatment for modifications. The guidance became effective for the Company on January 1, 2018 and was adopted on a prospective basis. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , an updated standard on revenue recognition. This ASU superseded the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition , and most industry-specific guidance. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using U.S. GAAP and International Financial Reporting Standards. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies may be required to use more judgment and make more estimates than under current authoritative guidance. On January 1, 2018, the Company adopted the guidance under the modified retrospective method. The adoption of the guidance did not have a material impact on the Company's consolidated financial statements. Accounting Guidance Not Yet Adopted Disclosure Update and Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective for quarterly reporting for quarters which begin after November 5, 2018. The Company is in the process of evaluating the impact of the final rule on its consolidated financial statements. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, a standard which simplifies the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance will become effective on a prospective basis for the Company on January 1, 2020 and is not expected to have a material impact on the Company's consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, a new accounting standard for leases. The new standard generally requires the recognition of financing and operating lease liabilities and corresponding right-of-use assets on the balance sheet. For financing leases, a lessee recognizes amortization of the right-of-use asset as an operating expense over the lease term separately from interest on the lease liability. For operating leases, a lessee recognizes its total lease expense as an operating expense over the lease term. The amendments are effective for the Company in the first quarter of 2019 using a modified retrospective approach with early adoption permitted. Although the Company is in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company's balance sheet for real estate operating leases. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The purchase price of MetaPack has been allocated on a preliminary basis as follows to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value based on the August 15, 2018 GBP to USD exchange rate (in thousands, except years): Fair Value Fair Value Useful Life (In Years) Weighted Average Estimated Useful Life (In Years) Cash and cash equivalents $ 9,186 Trade accounts receivable 9,767 Other current assets 3,259 Property and equipment 1,179 Goodwill 135,747 Identifiable intangible assets: Trade names $ 10,936 12 Developed technology 40,691 16 Customer relationships 49,211 16 Total identifiable intangible assets 100,838 16 Accounts payable and accrued expenses (13,450 ) Deferred revenue (254 ) Revolving credit facility (12,716 ) Deferred income tax liability (15,094 ) Other liabilities (776 ) Total purchase consideration $ 217,686 |
Summary of Pro Forma Information | The following table presents the pro forma financial information (in thousands, except per share amounts) and assumes the acquisition of MetaPack occurred on January 1, 2017: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenue $ 150,697 $ 125,715 $ 449,644 $ 367,295 Net income 33,432 43,918 122,341 101,009 Basic earnings per share $ 1.84 $ 2.57 $ 6.82 $ 5.95 Diluted earnings per share $ 1.76 $ 2.37 $ 6.50 $ 5.53 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payment under Operating Leases | The following table is a schedule of our significant contractual obligations and commercial commitments (other than debt commitments), which consist of minimum operating lease payments as of September 30, 2018 (in thousands): Twelve Month Period Ending September 30, Operating 2019 $ 5,217 2020 5,243 2021 4,906 2022 3,802 2023 3,461 Thereafter 4,634 Total $ 27,263 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Net Income Per Share | The following table reconciles share amounts utilized to calculate basic and diluted net income per share (in thousands, except per share data): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net income $ 33,413 $ 46,225 $ 125,981 $ 110,403 Basic - weighted average common shares 18,161 17,073 17,942 16,969 Diluted effect of common stock equivalents 885 1,475 880 1,313 Diluted - weighted average common shares 19,046 18,548 18,822 18,282 Earnings per share: Basic 1.84 2.71 7.02 6.51 Diluted 1.75 2.49 6.69 6.04 |
Anti-dilutive Securities Excluded from Computation of Earnings Per Share | The calculation of dilutive shares excludes the effect of the following options that are considered anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Anti-dilutive stock options 143 30 102 24 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | The following table sets forth the stock-based compensation expense that we recognized for the periods indicated (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Stock-based compensation expense relating to: Stock options $ 8,500 $ 11,065 $ 25,198 $ 32,923 Employee stock purchases 411 269 1,151 746 Total stock-based compensation expense $ 8,911 $ 11,334 $ 26,349 $ 33,669 Stock-based compensation expense relating to: Cost of revenues $ 785 $ 444 $ 1,998 $ 1,437 Sales and marketing 1,816 1,915 4,818 6,197 Research and development 2,001 2,337 5,593 7,054 General and administrative 4,309 6,638 13,940 18,981 Total stock-based compensation expense $ 8,911 $ 11,334 $ 26,349 $ 33,669 |
Weighted Average Assumptions Used in Black-Scholes-Merton Option Valuation Model | The following are the weighted average assumptions used in the Black-Scholes-Merton option valuation model for the periods indicated: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Expected dividend yield — % — % — % — % Risk-free interest rate 2.7 % 1.5 % 2.5 % 1.5 % Expected volatility 49.8 % 47.9 % 50.3 % 46.9 % Expected life (in years) 3.3 3.3 3.3 3.4 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes goodwill as of December 31, 2017 and September 30, 2018 (in thousands): Stamps.com Segment MetaPack Segment Total Goodwill balance at December 31, 2017 $ 239,705 $ — $ 239,705 Acquisition of MetaPack (see Note 2 - "Acquisitions" ) — 135,747 135,747 Foreign currency translation — 3,353 3,353 Goodwill balance at September 30, 2018 $ 239,705 $ 139,100 $ 378,805 |
Schedule of Acquired Intangible Assets | The following table summarizes our amortizable intangible assets as of September 30, 2018 (in thousands, except years): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining weighted average amortization period (years) Patents and Others $ 8,889 $ 8,854 $ 35 0.7 Customer Relationships 111,373 30,043 81,330 8.9 Technology 81,853 15,520 66,333 10.6 Non-Compete 2,211 1,611 600 2.7 Trademarks and Trade Names 13,249 1,120 12,129 11.1 Total amortizable intangible assets at September 30, 2018 $ 217,575 $ 57,148 $ 160,427 9.7 The following table summarizes our amortizable intangible assets as of December 31, 2017 (in thousands, except years): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining weighted average amortization period (years) Patents and Others $ 8,889 $ 8,820 $ 69 1.5 Customer Relationships 60,816 22,170 38,646 3.9 Technology 40,048 11,297 28,751 5.9 Non-Compete 2,211 1,280 931 2.0 Trademark 2,004 800 1,204 4.6 Total amortizable intangible assets at December 31, 2017 $ 113,968 $ 44,367 $ 69,601 4.6 |
Schedule of Future Amortization Expense | Our estimated amortization expense for the next five years and thereafter is as follows (in thousands): Twelve Month Period Ending September 30, Estimated Amortization Expense 2019 $ 22,314 2020 22,236 2021 21,113 2022 12,190 2023 9,754 Thereafter 72,820 Total $ 160,427 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on a Recurring Basis | The following tables summarize our financial assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands): Fair Value Measurement at Reporting Date Using Description September 30, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 78,264 $ 78,264 — — Total $ 78,264 $ 78,264 — — Fair Value Measurement at Reporting Date Using Description December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 153,903 $ 153,903 — — Total $ 153,903 $ 153,903 $ — — |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Summary of Cash and Cash Equivalents | The following tables summarize our cash and cash equivalents as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash $ 71,662 — — $ 71,662 Money market 6,602 — — 6,602 Cash and cash equivalents $ 78,264 — — $ 78,264 December 31, 2017 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash $ 147,386 — — $ 147,386 Money market 6,517 — — 6,517 Cash and cash equivalents $ 153,903 — — $ 153,903 |
Segment Information and Geogr_2
Segment Information and Geographic Data (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information about segments during the periods presented were as follows (in thousands, unaudited): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Segment revenues Stamps.com $ 138,270 $ 115,062 $ 411,462 $ 336,242 MetaPack 5,237 — 5,237 — Total revenues $ 143,507 $ 115,062 $ 416,699 $ 336,242 Segment income (loss) from operations Stamps.com $ 45,593 $ 35,660 $ 141,663 $ 112,000 MetaPack (1,301 ) — (1,301 ) — Total income from operations $ 44,292 $ 35,660 $ 140,362 $ 112,000 Company's total segment income from operations $ 44,292 $ 35,660 $ 140,362 $ 112,000 Foreign currency exchange loss, net (957 ) — (957 ) — Interest expense (668 ) (967 ) (1,908 ) (2,779 ) Interest income and other income, net 83 120 175 309 Income before income taxes $ 42,750 $ 34,813 $ 137,672 $ 109,530 |
Revenue from External Customers by Geographic Areas | The following table presents our revenues by geography, based on the billing addresses of our customers (in thousands, unaudited): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues United States $ 137,853 $ 115,062 $ 409,853 $ 336,242 International 5,654 — 6,846 — Total revenues $ 143,507 $ 115,062 $ 416,699 $ 336,242 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Principles of Consolidation (Details) | Sep. 30, 2018 | Aug. 31, 2018 | Aug. 15, 2018 | Jul. 31, 2016 |
Principles of Consolidation [Abstract] | ||||
Percentage of voting control | 100.00% | |||
Auctane LLC - 100% | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of voting control | 100.00% | |||
Interapptive, Inc. - 100% | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of voting control | 100.00% | |||
PSI Systems Inc - 100% | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of voting control | 100.00% | |||
ShippingEasy - 100% | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of voting control | 100.00% | |||
PhotoStamps Inc - 100% | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of voting control | 100.00% | |||
MetaPack - 100% | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of voting control | 100.00% | |||
ShippingEasy | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of outstanding equity purchased | 100.00% | |||
MetaPack | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of outstanding equity purchased | 100.00% | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Deferred Revenue (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Accounting Policies [Abstract] | |
Deferred revenue recognized in the period | $ 2.6 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Furniture, Fixtures and Equipment | Minimum | |
Property, Plant and Equipment [Abstract] | |
Estimated useful life | 3 years |
Furniture, Fixtures and Equipment | Maximum | |
Property, Plant and Equipment [Abstract] | |
Estimated useful life | 5 years |
Building and Building Improvements | Minimum | |
Property, Plant and Equipment [Abstract] | |
Estimated useful life | 10 years |
Building and Building Improvements | Maximum | |
Property, Plant and Equipment [Abstract] | |
Estimated useful life | 40 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Segment Information (Details) - segment | Aug. 14, 2018 | Sep. 30, 2018 |
Accounting Policies [Abstract] | ||
Number of reportable segments | 1 | 2 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Short Term Obligations (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Short-term financing obligation | $ 17.9 | $ 17.2 |
Unused credit | $ 87.6 | $ 103.4 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Treasury Stock (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Treasury stock, shares, acquired (in shares) | 223,000 | 818,000 | ||
Treasury stock, value, acquired, cost method | $ 48.3 | $ 103.1 | ||
ShippingEasy | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares withheld to satisfy income tax obligations (in shares) | 21,076 | 6,670 |
Acquisitions - MetaPack Acquisi
Acquisitions - MetaPack Acquisition Details (Details) £ in Millions | Aug. 16, 2018USD ($) | Aug. 15, 2018USD ($)employeeshares | Aug. 15, 2018GBP (£)employeeshares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Aug. 31, 2018 |
Business Acquisition [Line Items] | ||||||||
Discount net cash flows to present value, rate | 15.00% | |||||||
Amortization of intangible assets | $ 4,800,000 | $ 4,000,000 | $ 12,800,000 | $ 12,000,000 | ||||
MetaPack | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of outstanding equity purchased | 100.00% | 100.00% | ||||||
Business acquisition, percentage of key sellers shares of voting interest acquired | 80.00% | |||||||
Business combination, consideration transferred | $ 217,700,000 | £ 171 | ||||||
Number of options granted (in shares) | shares | 320,250 | 320,250 | ||||||
Shares granted for number of new employees | employee | 72 | 72 | ||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, term | 10 years | 10 years | ||||||
Amortization of intangible assets | 1,700,000 | |||||||
Expected tax deductible goodwill | $ 0 | |||||||
Transaction costs | 2,500,000 | |||||||
Foreign currency exchange loss | $ 1,000,000 | |||||||
Revenues from acquiree | 5,200,000 | |||||||
Net loss from acquiree | $ 1,300,000 | |||||||
Revolving Credit Facility | Line of Credit | MetaPack | ||||||||
Business Acquisition [Line Items] | ||||||||
Repayments of line of credit | $ 12,700,000 | |||||||
One year anniversary | MetaPack | ||||||||
Business Acquisition [Line Items] | ||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 25.00% | 25.00% | ||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year | 1 year | ||||||
Over the succeeding thirty-six months | MetaPack | ||||||||
Business Acquisition [Line Items] | ||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 75.00% | 75.00% | ||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 36 months | 36 months |
Acquisitions - MetaPack Acqui_2
Acquisitions - MetaPack Acquisition - Allocation Of Purchase Price (Details) - USD ($) $ in Thousands | Aug. 15, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 378,805 | $ 239,705 | |
MetaPack | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 9,186 | ||
Trade accounts receivable | 9,767 | ||
Other current assets | 3,259 | ||
Property and equipment | 1,179 | ||
Goodwill | 135,747 | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 100,838 | ||
Acquired finite-lived intangible assets, weighted average useful life | 16 years | ||
Accounts payable and accrued expenses | $ (13,450) | ||
Deferred revenue | (254) | ||
Revolving credit facility | (12,716) | ||
Deferred income tax liability | (15,094) | ||
Other liabilities | (776) | ||
Total purchase consideration | 217,686 | ||
Trade Names | MetaPack | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 10,936 | ||
Acquired finite-lived intangible assets, weighted average useful life | 12 years | ||
Developed Technology Rights | MetaPack | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 40,691 | ||
Acquired finite-lived intangible assets, weighted average useful life | 16 years | ||
Customer Relationships | MetaPack | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 49,211 | ||
Acquired finite-lived intangible assets, weighted average useful life | 16 years |
Acquisitions - MetaPack Acqui_3
Acquisitions - MetaPack Acquisition - Pro Forma information (Details) - MetaPack - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 150,697 | $ 125,715 | $ 449,644 | $ 367,295 |
Net income | $ 33,432 | $ 43,918 | $ 122,341 | $ 101,009 |
Basic earnings per share (in dollars per share) | $ 1.84 | $ 2.57 | $ 6.82 | $ 5.95 |
Diluted earnings per share (in dollars per share) | $ 1.76 | $ 2.37 | $ 6.50 | $ 5.53 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Jul. 01, 2016USD ($)employeeshares | Sep. 30, 2018USD ($) | Mar. 31, 2018shares | Sep. 30, 2017USD ($) | Mar. 31, 2017shares | Dec. 31, 2016USD ($)shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)shares |
Business Acquisition [Line Items] | |||||||||
Stock-based compensation expense | $ | $ 8,911 | $ 11,334 | $ 26,349 | $ 33,669 | |||||
ShippingEasy | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase price including adjustments for net working capital | $ | $ 55,400 | ||||||||
Share-based compensation arrangement by share-based payment award, maximum target award (in shares) | 87,134 | ||||||||
Earnings target, period | 2 years 6 months | ||||||||
Earnings target percentage | 100.00% | 100.00% | |||||||
Stock-based compensation expense | $ | $ 1,900 | $ 4,900 | |||||||
Stock-based compensation expense (in shares) | 21,783 | 56,638 | |||||||
Shares issued and distributed (in shares) | 35,562 | 15,113 | |||||||
Shares withheld to satisfy income tax obligations (in shares) | 21,076 | 6,670 | |||||||
Aggregate shares issued (in shares) | 62,000 | ||||||||
Shares granted for number of new employees | employee | 48 | ||||||||
ShippingEasy | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of awards subject to proration | 75.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Loss contingency accrual | $ 0 | $ 0 | $ 0 | ||
Rent expense | 1,200 | $ 1,000 | 3,000 | $ 2,800 | |
Future Minimum Lease Payment Under Operating Leases [Abstract] | |||||
2,019 | 5,217 | 5,217 | |||
2,020 | 5,243 | 5,243 | |||
2,021 | 4,906 | 4,906 | |||
2,022 | 3,802 | 3,802 | |||
2,023 | 3,461 | 3,461 | |||
Thereafter | 4,634 | 4,634 | |||
Total | $ 27,263 | $ 27,263 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 33,413 | $ 46,225 | $ 125,981 | $ 110,403 |
Basic - weighted average common shares (in shares) | 18,161 | 17,073 | 17,942 | 16,969 |
Diluted effect of common stock equivalents (in shares) | 885 | 1,475 | 880 | 1,313 |
Diluted - weighted average common shares (in shares) | 19,046 | 18,548 | 18,822 | 18,282 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.84 | $ 2.71 | $ 7.02 | $ 6.51 |
Diluted (in dollars per share) | $ 1.75 | $ 2.49 | $ 6.69 | $ 6.04 |
Employee stock option | ||||
Antidilutive Securities Excluded from Computation of Diluted Shares [Line Items] | ||||
Anti-dilutive stock options (in shares) | 143 | 30 | 102 | 24 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 8,911 | $ 11,334 | $ 26,349 | $ 33,669 |
Weighted Average Assumptions used in Black-Scholes-Merton Option Valuation Model [Abstract] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.70% | 1.50% | 2.50% | 1.50% |
Expected volatility | 49.80% | 47.90% | 50.30% | 46.90% |
Expected life (in years) | 3 years 4 months 2 days | 3 years 3 months 18 days | 3 years 4 months 6 days | 3 years 4 months 24 days |
Cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 785 | $ 444 | $ 1,998 | $ 1,437 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 1,816 | 1,915 | 4,818 | 6,197 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 2,001 | 2,337 | 5,593 | 7,054 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 4,309 | 6,638 | 13,940 | 18,981 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 8,500 | 11,065 | 25,198 | 32,923 |
Employee stock purchases | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 411 | $ 269 | $ 1,151 | $ 746 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 239,705 | |
Acquisition of MetaPack (see Note 2 - Acquisitions) | 135,747 | |
Foreign currency translation | $ 3,353 | |
Goodwill | 378,805 | 378,805 |
Stamps.com | ||
Goodwill [Roll Forward] | ||
Goodwill | 239,705 | |
Acquisition of MetaPack (see Note 2 - Acquisitions) | 0 | |
Foreign currency translation | 0 | |
Goodwill | 239,705 | 239,705 |
MetaPack | ||
Goodwill [Roll Forward] | ||
Goodwill | 0 | |
Acquisition of MetaPack (see Note 2 - Acquisitions) | 135,747 | |
Foreign currency translation | 3,353 | |
Goodwill | $ 139,100 | $ 139,100 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Goodwill and Intangible Assets [Line Items] | |||||
Amortizable and non-amortizable intangible assets gross carrying amount | $ 229,000 | $ 229,000 | $ 125,400 | ||
Non-amortizable assets | 11,400 | 11,400 | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Amount | 217,575 | 217,575 | 113,968 | ||
Accumulated Amortization | 57,148 | 57,148 | 44,367 | ||
Net Carrying Amount | 160,427 | $ 160,427 | $ 69,601 | ||
Remaining weighted average amortization period (years) | 9 years 8 months 12 days | 4 years 7 months 6 days | |||
Amortization of intangible assets | 4,800 | $ 4,000 | $ 12,800 | $ 12,000 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
2,019 | 22,314 | 22,314 | |||
2,020 | 22,236 | 22,236 | |||
2,021 | 21,113 | 21,113 | |||
2,022 | 12,190 | 12,190 | |||
2,023 | 9,754 | 9,754 | |||
Thereafter | 72,820 | 72,820 | |||
Net Carrying Amount | 160,427 | 160,427 | $ 69,601 | ||
Patents and Others | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Amount | 8,889 | 8,889 | 8,889 | ||
Accumulated Amortization | 8,854 | 8,854 | 8,820 | ||
Net Carrying Amount | 35 | $ 35 | $ 69 | ||
Remaining weighted average amortization period (years) | 8 months 12 days | 1 year 6 months | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net Carrying Amount | 35 | $ 35 | $ 69 | ||
Customer Relationships | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Amount | 111,373 | 111,373 | 60,816 | ||
Accumulated Amortization | 30,043 | 30,043 | 22,170 | ||
Net Carrying Amount | 81,330 | $ 81,330 | $ 38,646 | ||
Remaining weighted average amortization period (years) | 8 years 10 months 24 days | 3 years 10 months 24 days | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net Carrying Amount | 81,330 | $ 81,330 | $ 38,646 | ||
Technology | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Amount | 81,853 | 81,853 | 40,048 | ||
Accumulated Amortization | 15,520 | 15,520 | 11,297 | ||
Net Carrying Amount | 66,333 | $ 66,333 | $ 28,751 | ||
Remaining weighted average amortization period (years) | 10 years 7 months 6 days | 5 years 10 months 24 days | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net Carrying Amount | 66,333 | $ 66,333 | $ 28,751 | ||
Non-Compete | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Amount | 2,211 | 2,211 | 2,211 | ||
Accumulated Amortization | 1,611 | 1,611 | 1,280 | ||
Net Carrying Amount | 600 | $ 600 | $ 931 | ||
Remaining weighted average amortization period (years) | 2 years 8 months 12 days | 2 years | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net Carrying Amount | 600 | $ 600 | $ 931 | ||
Trademarks and Trade Names | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Amount | 13,249 | 13,249 | 2,004 | ||
Accumulated Amortization | 1,120 | 1,120 | 800 | ||
Net Carrying Amount | 12,129 | $ 12,129 | $ 1,204 | ||
Remaining weighted average amortization period (years) | 11 years 1 month 6 days | 4 years 7 months 6 days | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net Carrying Amount | $ 12,129 | $ 12,129 | $ 1,204 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||||
Income tax expense (benefit) | $ 9,337 | $ (11,412) | $ 11,691 | $ (873) | |
Discrete tax benefits related to exercises of stock awards | 1,600 | $ 23,500 | 22,500 | $ 41,800 | |
State and Local Jurisdiction | Research Tax Credit Carryforward | |||||
Tax Credit Carryforward [Line Items] | |||||
Valuation allowance | $ 654 | $ 654 | $ 410 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 78,264,000 | $ 153,903,000 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 78,264,000 | 153,903,000 |
Assets, Fair Value Disclosure | 78,264,000 | 153,903,000 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 78,264,000 | 153,903,000 |
Assets, Fair Value Disclosure | 78,264,000 | 153,903,000 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Assets, Fair Value Disclosure | $ 0 | $ 0 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and cash equivalents [Abstract] | ||||
Cost or Amortized Cost | $ 78,264 | $ 153,903 | $ 183,538 | $ 106,932 |
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 78,264 | 153,903 | ||
Cash | ||||
Cash and cash equivalents [Abstract] | ||||
Cost or Amortized Cost | 71,662 | 147,386 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 71,662 | 147,386 | ||
Money market | ||||
Cash and cash equivalents [Abstract] | ||||
Cost or Amortized Cost | 6,602 | 6,517 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | $ 6,602 | $ 6,517 |
Segment Information and Geogr_3
Segment Information and Geographic Data (Details) $ in Thousands | Aug. 14, 2018segment | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 1 | 2 | |||
Revenues | $ 143,507 | $ 115,062 | $ 416,699 | $ 336,242 | |
Income from operations | 44,292 | 35,660 | 140,362 | 112,000 | |
Foreign currency exchange loss, net | (957) | 0 | (957) | 0 | |
Interest expense | (668) | (967) | (1,908) | (2,779) | |
Interest income and other income, net | 83 | 120 | 175 | 309 | |
Income before income taxes | 42,750 | 34,813 | 137,672 | 109,530 | |
Stamps.com | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 138,270 | 115,062 | 411,462 | 336,242 | |
Income from operations | 45,593 | 35,660 | 141,663 | 112,000 | |
MetaPack | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 5,237 | 0 | 5,237 | 0 | |
Income from operations | $ (1,301) | $ 0 | $ (1,301) | $ 0 |
Segment Information and Geogr_4
Segment Information and Geographic Data - Schedule of Revenue by Geographical Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 143,507 | $ 115,062 | $ 416,699 | $ 336,242 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 137,853 | 115,062 | 409,853 | 336,242 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 5,654 | $ 0 | $ 6,846 | $ 0 |