SPS Commerce (SPSC) 10-Q 30 Jul 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 22, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Trading Symbol	SPSC
Entity Registrant Name	SPS COMMERCE INC
Entity Central Index Key	1,092,699
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		16,602,877

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 121,344	$ 130,795
Accounts receivable, less allowance for doubtful accounts of $313 and $279, respectively	17,255	15,422
Deferred costs	14,003	12,055
Deferred income taxes	76	76
Other current assets	6,393	3,846
Total current assets	159,071	162,194
PROPERTY AND EQUIPMENT, net	12,952	11,361
GOODWILL	34,303	34,854
INTANGIBLE ASSETS, net	16,915	18,851
MARKETABLE SECURITIES, non-current	9,995
OTHER ASSETS
Deferred costs, non-current	5,445	5,267
Deferred income taxes, non-current	10,880	11,035
Other non-current assets	365	213
Total assets	249,926	243,775
CURRENT LIABILITIES
Accounts payable	3,706	3,961
Accrued compensation	9,468	9,926
Accrued expenses	2,129	2,470
Deferred revenue	7,833	7,505
Deferred rent	704	698
Total current liabilities	23,840	24,560
OTHER LIABILITIES
Deferred revenue, non-current	10,996	10,653
Deferred rent, non-current	3,178	3,471
Total liabilities	$ 38,014	$ 38,684
COMMITMENTS and CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding
Common stock, $0.001 par value; 55,000,000 shares authorized; 16,563,361 and 16,348,747 shares issued and outstanding, respectively	$ 16	$ 16
Additional paid-in capital	257,317	250,633
Accumulated deficit	(42,851)	(44,088)
Accumulated other comprehensive loss	(2,570)	(1,470)
Total stockholders' equity	211,912	205,091
Total liabilities and stockholders' equity	$ 249,926	$ 243,775

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 313	$ 279
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	55,000,000	55,000,000
Common stock, shares issued	16,563,361	16,348,747
Common stock, shares outstanding	16,563,361	16,348,747

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Revenues	$ 38,846	$ 31,100	$ 75,816	$ 60,039
Cost of revenues	12,335	9,627	23,907	18,882
Gross profit	26,511	21,473	51,909	41,157
Operating expenses
Sales and marketing	14,101	11,570	27,845	22,454
Research and development	4,495	3,365	8,564	6,339
General and administrative	6,055	4,842	11,873	9,353
Amortization of intangible assets	833	682	1,678	1,399
Total operating expenses	25,484	20,459	49,960	39,545
Income from operations	1,027	1,014	1,949	1,612
Other income (expense)
Interest income, net	37	50	74	99
Other income (expense), net	(57)	35	(169)	(21)
Total other income (expense), net	(20)	85	(95)	78
Income before income taxes	1,007	1,099	1,854	1,690
Income tax expense	(356)	(460)	(617)	(678)
Net income	$ 651	$ 639	$ 1,237	$ 1,012
Net income per share
Basic	$ 0.04	$ 0.04	$ 0.08	$ 0.06
Diluted	$ 0.04	$ 0.04	$ 0.07	$ 0.06
Weighted average common shares used to compute net income per share
Basic	16,536	16,210	16,485	16,183
Diluted	16,998	16,768	17,043	16,799
Other comprehensive income (loss)
Foreign currency translation adjustments	$ (1,278)		$ (2,577)
Unrealized gain on investments	6		6
Comprehensive income (loss)	$ (621)	$ 639	$ (1,334)	$ 1,012

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities
Net income	$ 1,237	$ 1,012
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes	155	576
Depreciation and amortization of property and equipment	3,109	2,823
Amortization of intangible assets	1,678	1,399
Provision for doubtful accounts	518	323
Stock-based compensation	3,146	2,698
Changes in assets and liabilities
Accounts receivable	(2,397)	(2,060)
Deferred costs	(2,126)	(2,260)
Other current and non-current assets	(2,710)	(491)
Accounts payable	125	1,202
Accrued compensation	(409)	(342)
Accrued expenses	(324)	421
Deferred revenue	671	1,809
Deferred rent	(286)	(170)
Net cash provided by operating activities	2,387	6,940
Cash flows from investing activities
Purchases of property and equipment	(5,079)	(3,380)
Purchases of marketable securities	(9,989)
Net cash used in investing activities	(15,068)	(3,380)
Cash flows from financing activities
Net proceeds from exercise of options to purchase common stock	2,396	922
Excess tax benefit from exercise of options to purchase common stock	400	60
Net proceeds from employee stock purchase plan	741	672
Net cash provided by financing activities	3,537	1,654
Effect of foreign currency exchange rate changes	(307)
Net increase (decrease) in cash and cash equivalents	(9,451)	5,214
Cash and cash equivalents at beginning of period	130,795	131,294
Cash and cash equivalents at end of period	$ 121,344	$ 136,508

General

General	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
General	NOTE A – General Business Description We are a leading provider of cloud-based supply chain management solutions, providing network-proven integrations and comprehensive retail performance analytics to thousands of customers worldwide. We provide our solutions through the SPS Commerce platform, a cloud-based product suite that improves the way suppliers, retailers, distributors and other customers manage and fulfill orders. We derive the majority of our revenues from thousands of monthly recurring subscriptions from businesses that utilize our solutions. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. We have included all normal recurring adjustments considered necessary to give a fair statement of our financial position, results of operations and cash flows for the interim periods shown. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year. The December 31, 2014 condensed consolidated balance sheet data was derived from our audited financial statements at that date. For further information, refer to the consolidated financial statements and accompanying notes for the year ended December 31, 2014 included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 20, 2015. Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant Accounting Policies During the six months ended June 30, 2015, there were no material changes in our significant accounting policies. See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on February 20, 2015, for additional information regarding our significant accounting policies. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued new accounting requirements for the recognition of revenue from contracts with customers. These new requirements are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. We are currently evaluating the impact of this guidance on our results of operations and financial position.

Financial Instruments

Financial Instruments	6 Months Ended
	Jun. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Financial Instruments	NOTE B – Financial Instruments We invest primarily in money market funds, highly liquid debt instruments of the U.S. government, and U.S. corporate debt securities. All highly liquid investments with original maturities of 90 days or are classified as cash equivalents. All investments with original maturities greater than 90 days and remaining maturities less than one year from the balance sheet date are classified as current marketable securities. Investments with remaining maturities of more than one year from the balance sheet date are classified as marketable securities, non-current. Current marketable securities and marketable securities, non-current are also classified as available-for-sale. We intend to hold marketable securities, non-current, until maturity; however, we may sell these securities at any time for use in current operations or for other purposes. Consequently, we may or may not hold securities with stated maturities greater than twelve months until maturity. Our fixed income investments are carried at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive loss in the condensed consolidated balance sheets. Realized gains or losses are included in other income (expense) in the condensed consolidated statements of comprehensive income (loss). When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the condensed consolidated statements of comprehensive income (loss). Cash equivalents and marketable securities, non-current, consisted of the following (in thousands): June 30, 2015 Amortized Unrealized Unrealized Fair Value Cash equivalents: Money market funds $ 105,628 $ — $ — $ 105,628 Marketable securities, non-current: Corporate bonds 2,500 — (2 ) 2,498 U.S. treasury securities 7,489 8 — 7,497 $ 115,617 $ 8 $ (2 ) $ 115,623 Due within one year $ 105,628 Due within two years 9,995 Total $ 115,623 We do not believe any of the unrealized losses represent an other-than-temporary impairment based on our valuation of available evidence as of June 30, 2015. We expect to receive the full principal and interest on all of these cash equivalents and marketable securities. Fair Value Measurements We measure certain financial assets at fair value on a recurring basis based on a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are: • Level 1 – quoted prices in active markets for identical assets or liabilities • Level 2 – observable inputs other than Level 1 prices, such as (a) quoted prices for similar assets or liabilities, (b) quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or (c) model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 1 Measurements Our cash equivalents held in money market funds are measured at fair value using level 1 inputs. Level 2 Measurements Our available-for-sale U.S. treasury securities and corporate debt securities are measured at fair value using level 2 inputs. We obtain the fair values of our level 2 available-for-sale securities from a professional pricing service. The following table presents information about our financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total Assets at June 30, 2015: Cash and cash equivalents: Cash $ 15,716 $ — $ — $ 15,716 Money market funds 105,628 — — 105,628 Marketable securities: — Corporate bonds — 2,498 — 2,498 U.S. treasury securities — 7,497 — 7,497 $ 121,344 $ 9,995 $ — $ 131,339 Assets at December 31, 2014: Cash and cash equivalents: Cash $ 39,049 $ — $ — $ 39,049 Money market funds 91,746 — — 91,746 $ 130,795 $ — $ — $ 130,795

Goodwill and Intangible Assets,

Goodwill and Intangible Assets, net	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets, net	NOTE C – Goodwill and Intangible Assets, net The change in our goodwill for the six months ended June 30, 2015 was due to the effect of foreign currency translation. Intangible assets included the following (in thousands): June 30, 2015 December 31, 2014 Carrying Accumulated Net Carrying Accumulated Net Subscriber relationships $ 26,524 $ (10,445 ) $ 16,079 $ 26,724 $ (8,992 ) $ 17,732 Non-competition agreements 1,842 (1,621 ) 221 1,849 (1,581 ) 268 Technology and other 871 (256 ) 615 922 (71 ) 851 $ 29,237 $ (12,322 ) $ 16,915 $ 29,495 $ (10,644 ) $ 18,851 At June 30, 2015, future amortization expense for intangible assets was as follows (in thousands): Remainder of 2015 $ 1,661 2016 3,321 2017 3,052 2018 2,460 2019 2,168 Thereafter 4,253 $ 16,915

Line of Credit

Line of Credit	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Line of Credit	NOTE D – Line of Credit We have a revolving credit agreement with JPMorgan Chase Bank, N.A. which provides for a $20 million revolving credit facility that we may draw upon from time to time, subject to certain terms and conditions, and will mature on September 30, 2016. There were no borrowings outstanding at June 30, 2015 and we were in compliance with all covenants under the revolving credit agreement as of that date.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	NOTE E – Stock-Based Compensation Our equity compensation plans provide for the grant of incentive and nonqualified stock options, as well as other stock-based awards including restricted stock and restricted stock units, to employees, non-employee directors and other consultants who provide services to us. Restricted stock awards result in the issuance of new shares when granted. For other stock-based awards, new shares are issued when the award is exercised, vested or released according to the terms of the agreement. In January 2015, 980,924 additional shares were reserved for future issuance under our 2010 Equity Incentive Plan. At June 30, 2015, there were approximately 3.3 million shares available for grant under approved equity compensation plans. We recorded stock-based compensation expense of $1.6 million and $3.1 million for the three and six months ended June 30, 2015 and $1.4 million and $2.7 million for the three and six months ended June 30, 2014, respectively. This expense was allocated as follows (in thousands): Three Months Ended Six Months Ended 2015 2014 2015 2014 Cost of revenues $ 288 $ 152 $ 460 $ 305 Operating expenses Sales and marketing 482 472 1,024 954 Research and development 173 95 308 188 General and administrative 704 640 1,354 1,251 Total stock-based compensation expense $ 1,647 $ 1,359 $ 3,146 $ 2,698 At June 30, 2015, there was approximately $14.4 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a straight line basis over a weighted average period of 2.9 years. Stock Options Stock options generally vest over four years and have a contractual term of seven to ten years from the date of grant. Our stock option activity was as follows: Options Weighted Average Outstanding at December 31, 2014 1,085,463 $ 26.53 Granted 177,864 67.37 Exercised (157,569 ) 15.20 Forfeited (12,683 ) 41.56 Outstanding at June 30, 2015 1,093,075 34.64 Of the total outstanding options at June 30, 2015, 719,418 were exercisable with a weighted average exercise price of $22.88 per share. The total outstanding options had a weighted average remaining contractual life of 5.1 years. The weighted average fair value per share of options granted during the first six months of 2015 was $23.06 and this was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Volatility 39.0 % Dividend yield 0 % Life (in years) 4.5 Risk-free interest rate 1.36%-1.40 % As discussed in Note J to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, beginning in 2015, the volatility assumption used for the Black-Scholes option pricing model is now based solely on the historical volatility of our common stock. Previously, we estimated volatility based partially on the historical volatilities of the publicly traded shares of a selected peer group and partially on the historical volatility of our common stock. Restricted Stock Units and Awards Restricted stock units vest over four years and, upon vesting, the holder is entitled to receive shares of our common stock. With restricted stock awards, shares of our common stock are issued when the award is granted and the restrictions lapse over one year. Our restricted stock units activity was as follows: Restricted Stock Weighted Average Outstanding at December 31, 2014 115,133 $ 45.25 Granted 66,454 67.34 Vested and common stock issued (37,537 ) 40.86 Forfeited (3,422 ) 49.08 Outstanding at June 30, 2015 140,628 56.77 The number of restricted stock units outstanding at June 30, 2015 included 12,487 units that have vested but for which shares of common stock have not yet been issued pursuant to the terms of the agreement. Our restricted stock awards activity was as follows: Restricted Stock Weighted Average Outstanding at December 31, 2014 1,338 $ 51.74 Restricted common stock issued 4,110 67.37 Restrictions lapsed (2,364 ) 58.52 Forfeited — — Outstanding at June 30, 2015 3,084 67.37 Employee Stock Purchase Plan Our employee stock purchase plan allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The plan is available to all employees subject to certain eligibility requirements. Participating employees may purchase common stock, on a voluntary after tax basis, at a price that is the lower of 85% of the fair market value of one share of common stock at the beginning or end of each stock purchase period. The plan consists of two six-month offering periods, beginning on January 1 and July 1 of each calendar year. A total of 1.2 million shares of common stock are reserved for issuance under the plan. For the offering period that began on January 1, 2015 and ended June 30, 2015, we withheld approximately $748,000 from employees participating in the plan. On June 30, 2015, approximately $741,000 of these funds was used to purchase 15,398 shares on behalf of the employees participating in the plan. The remaining funds are expected to be refunded to employees pursuant to the requirements of the plan. For the three and six months ended June 30, 2015, we recorded approximately $113,000 and $209,000, respectively, of stock-based compensation expense associated with the employee stock purchase plan. The fair value was estimated based on the market price of our common stock at the beginning of each offering period and using the Black-Scholes option pricing model with the following weighted-average assumptions: Volatility 32.0 % Dividend yield 0 % Life (in years) 0.50 Risk-free interest rate 0.12 %

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Income Taxes	NOTE F – Income Taxes We record our interim provision for income taxes by applying our estimated annual effective tax rate to our year-to-date pretax income and adjust the provision for discrete tax items recorded in the period. Differences between our effective tax rate and statutory tax rates are primarily due to the impact of meals and entertainment expense and employee stock purchase plan expense. We recorded income tax expense of $356,000 and $617,000 for the three and six months ended June 30, 2015. We recorded income tax expense of $460,000 and $678,000 for the three and six months ended June 30, 2014. Our provisions for income taxes included current foreign and state income tax expense, as well as deferred tax expense. We are subject to U.S federal income tax as well as income tax in various state and international jurisdictions. We are generally subject to tax examinations for all prior years due to our net operating loss carryforwards. As of June 30, 2015, we were not under any income tax audits by tax authorities. As of June 30, 2015 we do not have any unrecognized tax benefits. It is our practice to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not expect any material changes in our unrecognized tax positions over the next 12 months.

Net Income Per Share

Net Income Per Share	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Net Income Per Share	NOTE G – Net Income Per Share Basic net income per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share also includes the impact of our outstanding potential common shares, including options and restricted stock units. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share. The following table presents the components of the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Three Months Ended Six Months Ended 2015 2014 2015 2014 Numerator Net income $ 651 $ 639 $ 1,237 $ 1,012 Denominator Weighted average common shares outstanding, basic 16,536 16,210 16,485 16,183 Options to purchase common stock 436 528 531 572 Restricted stock units 24 30 24 43 Employee stock purchase plan 2 — 3 1 Weighted average common shares outstanding, diluted 16,998 16,768 17,043 16,799 Net income per share Basic $ 0.04 $ 0.04 $ 0.08 $ 0.06 Diluted $ 0.04 $ 0.04 $ 0.07 $ 0.06 The effect of approximately 39,000 and 126,000 outstanding potential common shares was excluded from the calculation of diluted net income per share for the three and six months ended June 30, 2015 and 2014, respectively, as they were anti-dilutive.

General (Policies)

General (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Business Description	Business Description We are a leading provider of cloud-based supply chain management solutions, providing network-proven integrations and comprehensive retail performance analytics to thousands of customers worldwide. We provide our solutions through the SPS Commerce platform, a cloud-based product suite that improves the way suppliers, retailers, distributors and other customers manage and fulfill orders. We derive the majority of our revenues from thousands of monthly recurring subscriptions from businesses that utilize our solutions.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. We have included all normal recurring adjustments considered necessary to give a fair statement of our financial position, results of operations and cash flows for the interim periods shown. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year. The December 31, 2014 condensed consolidated balance sheet data was derived from our audited financial statements at that date. For further information, refer to the consolidated financial statements and accompanying notes for the year ended December 31, 2014 included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 20, 2015.
Use of Estimates	Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Significant Accounting Policies	Significant Accounting Policies During the six months ended June 30, 2015, there were no material changes in our significant accounting policies. See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on February 20, 2015, for additional information regarding our significant accounting policies.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued new accounting requirements for the recognition of revenue from contracts with customers. These new requirements are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. We are currently evaluating the impact of this guidance on our results of operations and financial position.

Financial Instruments (Tables)

Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Summary of Investment in Cash Equivalents and Marketable Securities Non-current	Cash equivalents and marketable securities, non-current, consisted of the following (in thousands): June 30, 2015 Amortized Unrealized Unrealized Fair Value Cash equivalents: Money market funds $ 105,628 $ — $ — $ 105,628 Marketable securities, non-current: Corporate bonds 2,500 — (2 ) 2,498 U.S. treasury securities 7,489 8 — 7,497 $ 115,617 $ 8 $ (2 ) $ 115,623 Due within one year $ 105,628 Due within two years 9,995 Total $ 115,623
Summary of Financial Assets Measured at Fair Value on a Recurring Basis	The following table presents information about our financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total Assets at June 30, 2015: Cash and cash equivalents: Cash $ 15,716 $ — $ — $ 15,716 Money market funds 105,628 — — 105,628 Marketable securities: — Corporate bonds — 2,498 — 2,498 U.S. treasury securities — 7,497 — 7,497 $ 121,344 $ 9,995 $ — $ 131,339 Assets at December 31, 2014: Cash and cash equivalents: Cash $ 39,049 $ — $ — $ 39,049 Money market funds 91,746 — — 91,746 $ 130,795 $ — $ — $ 130,795

Goodwill and Intangible Asset15

Goodwill and Intangible Assets, net (Tables)	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible assets included the following (in thousands): June 30, 2015 December 31, 2014 Carrying Accumulated Net Carrying Accumulated Net Subscriber relationships $ 26,524 $ (10,445 ) $ 16,079 $ 26,724 $ (8,992 ) $ 17,732 Non-competition agreements 1,842 (1,621 ) 221 1,849 (1,581 ) 268 Technology and other 871 (256 ) 615 922 (71 ) 851 $ 29,237 $ (12,322 ) $ 16,915 $ 29,495 $ (10,644 ) $ 18,851
Future Amortization Expense for Intangible Assets	At June 30, 2015, future amortization expense for intangible assets was as follows (in thousands): Remainder of 2015 $ 1,661 2016 3,321 2017 3,052 2018 2,460 2019 2,168 Thereafter 4,253 $ 16,915

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Stock-Based Compensation Expense	This expense was allocated as follows (in thousands): Three Months Ended Six Months Ended 2015 2014 2015 2014 Cost of revenues $ 288 $ 152 $ 460 $ 305 Operating expenses Sales and marketing 482 472 1,024 954 Research and development 173 95 308 188 General and administrative 704 640 1,354 1,251 Total stock-based compensation expense $ 1,647 $ 1,359 $ 3,146 $ 2,698
Stock Option Activity	Our stock option activity was as follows: Options Weighted Average Outstanding at December 31, 2014 1,085,463 $ 26.53 Granted 177,864 67.37 Exercised (157,569 ) 15.20 Forfeited (12,683 ) 41.56 Outstanding at June 30, 2015 1,093,075 34.64
Weighted Average Fair Value Per Share of Options Granted, Assumptions	The weighted average fair value per share of options granted during the first six months of 2015 was $23.06 and this was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Volatility 39.0 % Dividend yield 0 % Life (in years) 4.5 Risk-free interest rate 1.36%-1.40 %
Weighted Average Fair Value Per Share, Employee Stock Purchase Plan, Assumptions	The fair value was estimated based on the market price of our common stock at the beginning of each offering period and using the Black-Scholes option pricing model with the following weighted-average assumptions: Volatility 32.0 % Dividend yield 0 % Life (in years) 0.50 Risk-free interest rate 0.12 %
Restricted Stock Units [Member]
Restricted Stock Units and Restricted Stock Awards	Our restricted stock units activity was as follows: Restricted Stock Weighted Average Outstanding at December 31, 2014 115,133 $ 45.25 Granted 66,454 67.34 Vested and common stock issued (37,537 ) 40.86 Forfeited (3,422 ) 49.08 Outstanding at June 30, 2015 140,628 56.77
Restricted Stock Award [Member]
Restricted Stock Units and Restricted Stock Awards	Our restricted stock awards activity was as follows: Restricted Stock Weighted Average Outstanding at December 31, 2014 1,338 $ 51.74 Restricted common stock issued 4,110 67.37 Restrictions lapsed (2,364 ) 58.52 Forfeited — — Outstanding at June 30, 2015 3,084 67.37

Net Income Per Share (Tables)

Net Income Per Share (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Components of Computation of Basic and Diluted Net Income Per Share	The following table presents the components of the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Three Months Ended Six Months Ended 2015 2014 2015 2014 Numerator Net income $ 651 $ 639 $ 1,237 $ 1,012 Denominator Weighted average common shares outstanding, basic 16,536 16,210 16,485 16,183 Options to purchase common stock 436 528 531 572 Restricted stock units 24 30 24 43 Employee stock purchase plan 2 — 3 1 Weighted average common shares outstanding, diluted 16,998 16,768 17,043 16,799 Net income per share Basic $ 0.04 $ 0.04 $ 0.08 $ 0.06 Diluted $ 0.04 $ 0.04 $ 0.07 $ 0.06

Financial Instruments - Summary

Financial Instruments - Summary of Investment in Cash Equivalents and Marketable Securities Non-current (Detail) $ in Thousands	Jun. 30, 2015USD ($)
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 115,617
Due within one year	105,628
Unrealized Gains	8
Due within two years	9,995
Unrealized Losses	(2)
Fair Value	115,623
Money Market Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	105,628
Fair Value	105,628
Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,500
Unrealized Losses	(2)
Fair Value	2,498
U.S. Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	7,489
Unrealized Gains	8
Fair Value	$ 7,497

Financial Instruments - Summa19

Financial Instruments - Summary of Financial Assets Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Cash and Cash Equivalents [Line Items]
Assets fair value	$ 131,339	$ 130,795
Cash [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	15,716	39,049
Money Market Funds [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	105,628	91,746
Corporate Bonds [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	2,498
U.S. Treasury Securities [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	7,497
Level 1 [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	121,344	130,795
Level 1 [Member] | Cash [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	15,716	39,049
Level 1 [Member] | Money Market Funds [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	105,628	$ 91,746
Level 2 [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	9,995
Level 2 [Member] | Corporate Bonds [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	2,498
Level 2 [Member] | U.S. Treasury Securities [Member]
Cash and Cash Equivalents [Line Items]
Assets fair value	$ 7,497

Goodwill and Intangible Asset20

Goodwill and Intangible Assets, net - Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Carrying Amount	$ 29,237	$ 29,495
Accumulated Amortization	(12,322)	(10,644)
Net	16,915	18,851
Subscriber Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying Amount	26,524	26,724
Accumulated Amortization	(10,445)	(8,992)
Net	16,079	17,732
Non-competition Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying Amount	1,842	1,849
Accumulated Amortization	(1,621)	(1,581)
Net	221	268
Technology and Other [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying Amount	871	922
Accumulated Amortization	(256)	(71)
Net	$ 615	$ 851

Goodwill and Intangible Asset21

Goodwill and Intangible Assets, net - Future Amortization Expense for Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2015	$ 1,661
2,016	3,321
2,017	3,052
2,018	2,460
2,019	2,168
Thereafter	4,253
Net	$ 16,915	$ 18,851

Line of Credit - Additional Inf

Line of Credit - Additional Information (Detail) - Jun. 30, 2015 - USD ($)	Total
Line of Credit Facility [Line Items]
Revolving credit facility, amount	$ 20,000,000
Revolving credit facility, maturity date	Sep. 30, 2016
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Borrowings outstanding revolving credit agreement	$ 0

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail)	1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 31, 2015shares	Jun. 30, 2015USD ($)$ / sharesshares	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)OfferingPeriods$ / sharesshares	Jun. 30, 2014USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant | shares		3,300,000		3,300,000
Stock-based compensation expense		$ 1,647,000	$ 1,359,000	$ 3,146,000	$ 2,698,000
Unrecognized stock-based compensation expense		$ 14,400,000		$ 14,400,000
Unrecognized stock-based compensation, expected to be recognized, weighted average period				2 years 10 months 24 days
Stock options vest, period				4 years
Stock options contractual term, from the date of grant				Seven to ten years
Stock options exercisable | shares		719,418		719,418
Weighted average exercise price | $ / shares		$ 22.88		$ 22.88
Weighted average remaining contractual life				5 years 1 month 6 days
Weighted average fair value per share of options granted | $ / shares				$ 23.06
Number of RSU's vested and not issued during the period | shares				12,487
Percentage of common stock on fair market value				85.00%
Number of offerings per year | OfferingPeriods				2
Net proceeds from employee stock purchase plan				$ 741,000	$ 672,000
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 113,000		$ 209,000
Common stock reserved for future issuance | shares		1,200,000		1,200,000
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vest, period				4 years
Restricted Stock Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awards units vest over, period				1 year
Equity Incentive Plan [Member] | 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares were authorized under 2010 Equity Incentive Plan | shares	980,924
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock purchase plan, employees contribution		$ 748,000		$ 748,000
Employee stock purchase plan, shares purchased | shares				15,398
Net proceeds from employee stock purchase plan				$ 741,000
Maximum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options contractual term range				10 years
Minimum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options contractual term range				7 years

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 1,647	$ 1,359	$ 3,146	$ 2,698
Cost of Revenues [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	288	152	460	305
Sales and Marketing [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	482	472	1,024	954
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	173	95	308	188
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 704	$ 640	$ 1,354	$ 1,251

Stock-Based Compensation - St25

Stock-Based Compensation - Stock Option Activity (Detail) - 6 months ended Jun. 30, 2015 - $ / shares	Total
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options Outstanding, Beginning balance	1,085,463
Options, Granted	177,864
Options, Exercised	(157,569)
Options, Forfeited	(12,683)
Options Outstanding, Ending balance	1,093,075
Weighted Average Exercise Price, Outstanding, Beginning Balance	$ 26.53
Weighted Average Exercise Price, Granted	67.37
Weighted Average Exercise Price, Exercised	15.20
Weighted Average Exercise Price, Forfeited	41.56
Weighted Average Exercise Price, Outstanding, Ending Balance	$ 34.64

Stock-Based Compensation - Weig

Stock-Based Compensation - Weighted Average Fair Value Per Share of Options Granted, Assumptions (Detail) - 6 months ended Jun. 30, 2015 - Stock Options [Member]	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	39.00%
Dividend yield	0.00%
Life (in years)	4 years 6 months
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.36%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.40%

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Units (Detail) - 6 months ended Jun. 30, 2015 - Restricted Stock Units [Member] - $ / shares	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards, Outstanding, Beginning Balance	115,133
Granted, stock units	66,454
Vested, stock units	(37,537)
Forfeited, stock units	(3,422)
Stock awards, Outstanding, Ending Balance	140,628
Weighted average grant date fair value, Outstanding, Beginning Balance	$ 45.25
Granted, Weighted Average Grant Date Fair Value	67.34
Vested, Weighted Average Grant Date Fair Value	40.86
Forfeited, Weighted Average Grant Date Fair Value	49.08
Weighted average grant date fair value, Outstanding, Ending Balance	$ 56.77

Stock-Based Compensation - Re28

Stock-Based Compensation - Restricted Stock Awards (Detail) - 6 months ended Jun. 30, 2015 - Restricted Stock Award [Member] - $ / shares	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards, Outstanding, Beginning Balance	1,338
Restricted common stock issued, stock awards	4,110
Restrictions lapsed, stock awards	(2,364)
Forfeited, stock awards	0
Stock awards, Outstanding, Ending Balance	3,084
Weighted average grant date fair value, Outstanding, Beginning Balance	$ 51.74
Restricted common stock issued, Weighted Average Grant Date Fair Value	67.37
Restrictions lapsed, Weighted Average Grant Date Fair Value	58.52
Forfeited, Weighted Average Grant Date Fair Value	0
Weighted average grant date fair value, Outstanding, Ending Balance	$ 67.37

Stock-Based Compensation - Fair

Stock-Based Compensation - Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Assumptions (Detail) - 6 months ended Jun. 30, 2015 - Employee Stock Purchase Plan [Member]	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	32.00%
Dividend yield	0.00%
Life (in years)	6 months
Risk-free interest rate	0.12%

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Tax Disclosure [Abstract]
Income tax expense	$ 356,000	$ 460,000	$ 617,000	$ 678,000
Unrecognized tax benefits	0		0
Significant change in unrecognized tax benefits is reasonably possible, amount of unrecorded benefit	$ 0		$ 0

Net Income Per Share - Componen

Net Income Per Share - Components of Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator
Net income	$ 651	$ 639	$ 1,237	$ 1,012
Denominator
Weighted average common shares outstanding, basic	16,536	16,210	16,485	16,183
Options to purchase common stock	436	528	531	572
Restricted stock units	24	30	24	43
Employee stock purchase plan	2		3	1
Weighted average common shares outstanding, diluted	16,998	16,768	17,043	16,799
Net income per share
Basic	$ 0.04	$ 0.04	$ 0.08	$ 0.06
Diluted	$ 0.04	$ 0.04	$ 0.07	$ 0.06

Net Income Per Share - Addition

Net Income Per Share - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share [Abstract]
Outstanding potential common shares excluded from computation of net income per share	39,000	126,000	39,000	126,000