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 |