Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 08, 2019 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SPSC | ||
Entity Registrant Name | SPS COMMERCE INC | ||
Entity Central Index Key | 1,092,699 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 17,760,003 | ||
Entity Public Float | $ 1.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 133,859 | $ 123,127 |
Short-term investments | 44,537 | 40,192 |
Accounts receivable, net | 27,488 | 24,897 |
Deferred costs | 34,502 | 29,966 |
Other current assets | 9,229 | 6,149 |
Total current assets | 249,615 | 224,331 |
PROPERTY AND EQUIPMENT, net | 20,957 | 16,856 |
GOODWILL | 69,658 | 51,613 |
INTANGIBLE ASSETS, net | 22,741 | 16,529 |
INVESTMENTS | 5,206 | |
OTHER ASSETS | ||
Deferred costs | 10,973 | 9,967 |
Deferred income tax asset | 10,456 | 13,697 |
Other assets | 1,723 | 1,539 |
Total assets | 386,123 | 339,738 |
CURRENT LIABILITIES | ||
Accounts payable | 4,440 | 4,463 |
Accrued compensation | 20,415 | 15,228 |
Accrued expenses | 4,558 | 4,712 |
Deferred revenue | 25,328 | 17,863 |
Deferred rent | 1,781 | 1,679 |
Total current liabilities | 56,522 | 43,945 |
OTHER LIABILITIES | ||
Deferred revenue | 2,512 | 2,731 |
Deferred rent | 5,371 | 3,064 |
Deferred income tax liability | 1,376 | 1,887 |
Other non-current liabilities | 1,368 | |
Total liabilities | 67,149 | 51,627 |
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; 17,757,628 and 17,249,153 shares issued; and 17,345,736 and 17,127,006 outstanding, respectively | 18 | 17 |
Treasury stock, at cost; 411,892 and 122,147 shares, respectively | (25,679) | (5,815) |
Additional paid-in capital | 332,592 | 301,863 |
Retained earnings (accumulated deficit) | 15,261 | (8,611) |
Accumulated other comprehensive (loss) income | (3,218) | 657 |
Total stockholders’ equity | 318,974 | 288,111 |
Total liabilities and stockholders’ equity | $ 386,123 | $ 339,738 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
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 | 17,757,628 | 17,249,153 |
Common stock, shares outstanding | 17,345,736 | 17,127,006 |
Treasury stock, shares | 411,892 | 122,147 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenues | $ 248,240 | $ 220,085 | $ 193,153 |
Cost of revenues | 81,748 | 73,625 | 64,346 |
Gross profit | 166,492 | 146,460 | 128,807 |
Operating expenses | |||
Sales and marketing | 71,719 | 71,261 | 66,876 |
Research and development | 22,087 | 23,183 | 21,981 |
General and administrative | 41,862 | 37,461 | 28,827 |
Amortization of intangible assets | 4,093 | 4,574 | 4,738 |
Total operating expenses | 139,761 | 136,479 | 122,422 |
Income from operations | 26,731 | 9,981 | 6,385 |
Other income (expense) | |||
Interest income, net | 2,329 | 1,032 | 601 |
Other income (expense), net | (720) | (320) | 732 |
Total other income, net | 1,609 | 712 | 1,333 |
Income before income taxes | 28,340 | 10,693 | 7,718 |
Income tax expense | 4,468 | 10,342 | 2,755 |
Net income | $ 23,872 | $ 351 | $ 4,963 |
Net income per share | |||
Basic | $ 1.39 | $ 0.02 | $ 0.29 |
Diluted | $ 1.36 | $ 0.02 | $ 0.29 |
Weighted average common shares used to compute net income per share | |||
Basic | 17,196 | 17,183 | 16,947 |
Diluted | 17,606 | 17,356 | 17,241 |
Other comprehensive income | |||
Foreign currency translation adjustments | $ (3,999) | $ 3,944 | $ 336 |
Unrealized gain (loss) on investments, net of tax of $132, $0 and ($5) | 397 | (9) | |
Reclassification of unrealized (gain) loss on investments into earnings, net of tax of ($91), $24 and $0 | (273) | 39 | |
Comprehensive income | $ 19,997 | $ 4,334 | $ 5,290 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Unrealized gain( loss) on investments, tax | $ 132 | $ 0 | $ (5) |
Reclassification of unrealized (gain) loss on investments into earnings, tax | $ (91) | $ 24 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning balance at Dec. 31, 2015 | $ 231,432 | $ 17 | $ 265,265 | $ (30,202) | $ (3,648) | |
Beginning balance, shares at Dec. 31, 2015 | 16,723,994 | |||||
Stock-based compensation | 8,023 | 8,023 | ||||
Exercise of stock options and issuance of restricted stock | 4,303 | 4,303 | ||||
Exercise of stock options and issuance of restricted stock, shares | 279,841 | |||||
Excess tax benefit of stock options exercised | 4,070 | 4,070 | ||||
Employee stock purchase plan | 1,732 | 1,732 | ||||
Employee stock purchase plan, shares | 33,357 | |||||
Stock issued for acquisition | 2,922 | 2,922 | ||||
Stock issued for acquisition, Shares | 43,953 | |||||
Net income | 4,963 | 4,963 | ||||
Foreign currency translation adjustments | 336 | 336 | ||||
Reclassification of gain (loss) on investments into earnings | 18 | 18 | ||||
Unrealized gain (loss) on investments, net of tax | (32) | (32) | ||||
Ending balance at Dec. 31, 2016 | 257,767 | $ 17 | 286,315 | (25,239) | (3,326) | |
Ending balance, shares at Dec. 31, 2016 | 17,081,145 | |||||
Stock-based compensation | 12,728 | 12,728 | ||||
Exercise of stock options and issuance of restricted stock | 1,410 | 1,410 | ||||
Exercise of stock options and issuance of restricted stock, shares | 135,906 | |||||
Cumulative-effect adjustment for previously unrecognized excess tax benefits | 16,277 | 16,277 | ||||
Employee stock purchase plan | 1,933 | 1,933 | ||||
Employee stock purchase plan, shares | 40,968 | |||||
Retirement of escrow shares | (523) | (523) | ||||
Retirement of escrow shares, shares | (8,866) | |||||
Repurchases of common stock | (5,815) | $ (5,815) | ||||
Repurchases of common stock, shares | (122,147) | 122,147 | ||||
Net income | 351 | 351 | ||||
Foreign currency translation adjustments | 3,944 | 3,944 | ||||
Reclassification of gain (loss) on investments into earnings | 39 | 39 | ||||
Ending balance at Dec. 31, 2017 | 288,111 | $ 17 | $ (5,815) | 301,863 | (8,611) | 657 |
Ending balance, shares at Dec. 31, 2017 | 17,127,006 | 122,147 | ||||
Stock-based compensation | 11,270 | 11,270 | ||||
Exercise of stock options and issuance of restricted stock | 14,344 | $ 1 | 14,343 | |||
Exercise of stock options and issuance of restricted stock, shares | 433,199 | |||||
Employee stock purchase plan | 1,745 | 1,745 | ||||
Employee stock purchase plan, shares | 34,798 | |||||
Repurchases of common stock | (19,864) | $ (19,864) | ||||
Repurchases of common stock, shares | (289,745) | 289,745 | ||||
Stock issued for acquisition | 3,371 | 3,371 | ||||
Stock issued for acquisition, Shares | 40,478 | |||||
Net income | 23,872 | 23,872 | ||||
Foreign currency translation adjustments | (3,999) | (3,999) | ||||
Reclassification of gain (loss) on investments into earnings | (273) | (273) | ||||
Unrealized gain (loss) on investments, net of tax | 397 | 397 | ||||
Ending balance at Dec. 31, 2018 | $ 318,974 | $ 18 | $ (25,679) | $ 332,592 | $ 15,261 | $ (3,218) |
Ending balance, shares at Dec. 31, 2018 | 17,345,736 | 411,892 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net income | $ 23,872 | $ 351 | $ 4,963 |
Reconciliation of net income to net cash provided by operating activities | |||
Deferred income taxes | 2,798 | 9,616 | (2,083) |
Earn-out liability | 94 | (1,103) | |
Depreciation and amortization of property and equipment | 8,593 | 7,208 | 6,598 |
Amortization of intangible assets | 4,093 | 4,574 | 4,738 |
Provision for doubtful accounts | 2,592 | 1,705 | 1,375 |
Stock-based compensation | 12,510 | 12,728 | 8,023 |
Other, net | (364) | (15) | |
Changes in assets and liabilities, net of effects of acquisition | |||
Accounts receivable | (4,569) | (5,586) | (3,735) |
Deferred costs | (5,564) | (7,813) | (4,085) |
Other current and non-current assets | (3,333) | 393 | (1,911) |
Accounts payable | 937 | 832 | (382) |
Accrued compensation | 3,957 | 1,304 | 2,291 |
Accrued expenses | (135) | 1,192 | 990 |
Deferred revenue | 7,094 | 5,588 | 2,852 |
Deferred rent | 2,440 | (1,027) | 234 |
Net cash provided by operating activities | 55,015 | 31,050 | 18,765 |
Cash flows from investing activities | |||
Purchases of property and equipment | (13,750) | (7,271) | (8,008) |
Purchases of investments | (81,666) | (47,878) | (23,135) |
Maturities of investments | 82,224 | 33,029 | 15,018 |
Acquisition of business and intangible assets, net of cash acquired | (27,273) | (500) | (18,032) |
Net cash used in investing activities | (40,465) | (22,620) | (34,157) |
Cash flows from financing activities | |||
Repurchases of common stock | (19,864) | (5,815) | |
Net proceeds from exercise of options to purchase common stock | 14,344 | 1,410 | 4,303 |
Excess tax benefit from exercise of options to purchase common stock | 4,070 | ||
Net proceeds from employee stock purchase plan | 1,745 | 1,933 | 1,732 |
Net cash (used in) provided by financing activities | (3,775) | (2,472) | 10,105 |
Effect of foreign currency exchange rate changes | (43) | 1,292 | (374) |
Net increase (decrease) in cash and cash equivalents | 10,732 | 7,250 | (5,661) |
Cash and cash equivalents at beginning of year | 123,127 | 115,877 | 121,538 |
Cash and cash equivalents at end of year | 133,859 | 123,127 | 115,877 |
Supplemental disclosure of cash flow information | |||
Cash paid for income taxes, net | 1,534 | 1,068 | 722 |
Non-cash financing activities: | |||
Net purchases of property and equipment on account | 405 | $ 1,335 | |
Common stock issued for business acquisitions | $ 3,371 | $ 2,922 |
General
General | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
General | NOTE A – General Business Description SPS Commerce is a leading provider of cloud-based supply chain management solutions that make it easier for retailers, suppliers, distributors, and logistics firms to orchestrate the management of item data, order fulfillment, inventory control and sales analytics across all channels. Implementing and maintaining a suite of supply chain management capabilities is resource intensive and is not a core competency for most businesses. The solutions offered by SPS commerce eliminate the need for on-premise software and support staff by taking on that capability on the customer’s behalf. The solutions SPS Commerce provides allow our customers to increase their supply cycle agility, optimize their inventory levels and sell-through, reduce operational costs and gain increased visibility into customer orders, ensuring that suppliers, distributors, and logistics firms can satisfy exacting retailer requirements. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. Foreign Currency Translation Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, with the resulting translation adjustments recorded as a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the average exchange rates during the year. Foreign currency transaction gains and losses, if any, are included in net income. 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. Business Combinations We recognize the fair value of the assets acquired and the liabilities assumed at the acquisition date, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date amounts of the assets acquired and the liabilities assumed. Assets acquired include tangible and intangible assets. We use estimates and assumptions that we believe are reasonable as a part of the purchase price allocation, which includes the process to determine the value and useful lives of purchased intangible assets and the process to determine the value of any contingent consideration liabilities. We recorded the acquisition-date fair value of any contingent liabilities, such as earn-out provisions, as part of the consideration transferred. The earn-out liability fair value is subsequently remeasured at each reporting date. The Company evaluates each contingent consideration to determine the valuation approach. See Note B for valuation methods utilized in the fair value measurement as of the acquisition date and see Note E for valuation methods utilized in the fair value remeasurement as of the reporting date. While we believe these estimates and assumptions are reasonable, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed . Any such adjustments would be recorded Segment Information We operate in and report on one segment, which is supply chain management solutions . Risk and Uncertainties We rely on hardware and software licensed from third parties to offer our on-demand solutions. Our management believes alternate sources are available; however, disruption or termination of these relationships could adversely affect our operating results in the near term. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents in financial institutions in excess of federally insured limits and trade accounts receivable. Cash investments are held with financial institutions that we believe are subject to minimal risk. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days. Cash and cash equivalents are stated at fair value. Investments Management determines the appropriate classification of certificates of deposit and marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. 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 consolidated statements of comprehensive income. Fair Value of Financial Instruments The carrying amounts of our financial instruments, which include cash, cash equivalents, accounts receivable, accounts payable and other accrued expenses, approximates fair value due to their short maturities. Marketable securities are recorded at fair value as further described in Note E. Accounts Receivable Accounts receivable are initially recorded upon the sale of solutions to customers. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of certain customers to make the required payments. When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our experience with specific customers. We write-off accounts receivable when they are determined to be uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in general and administrative expense in our consolidated statements of comprehensive income. Property and Equipment Property and equipment, including assets acquired under capital lease obligations, are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives when placed in service, which are: Computer equipment and software: 2 to 3 years Office equipment and furniture: 5 to 7 years Leasehold improvements: the shorter of the useful life of the asset or the remaining term of the lease Significant additions or improvements extending asset lives beyond one year are capitalized, while repairs and maintenance are charged to expense as incurred. We also capitalize and amortize eligible costs to acquire or develop external-use software that are incurred after technological feasibility has been established. The assets and related accumulated depreciation and amortization are adjusted for asset retirements and disposals with the resulting gain or loss included in our consolidated statements of comprehensive income. Research and Development Research and development costs primarily include maintenance and data conversion activities related to our cloud-based supply chain management solutions and are expensed as incurred. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually at November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is conducted by comparing the fair value of the net assets with the carrying value of the reporting unit. Fair value is determined using the direct market observation of market price and outstanding equity of the reporting unit at the testing date. If the carrying value of the goodwill exceeds the fair value of the reporting unit, goodwill may be impaired. If this occurs, the fair value is then allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of goodwill. This implied fair value is then compared to the carrying amount of goodwill and, if it is less, we would recognize an impairment loss. Intangible Assets Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and non-competition agreements. We recognize separately from goodwill the fair value of the identifiable intangible assets acquired. We have determined the fair value and useful lives of our purchased intangible assets using certain estimates and assumptions that we believe are reasonable. The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives, which are three to ten years for subscriber relationships, two to five years for non-competition agreements and one to ten years for technology and other. Internal-use Software Implementation Assets Internal-use software implementation costs are capitalized assets included in Other Assets and relate to costs incurred during the application development stage for various internal-use software from hosting arrangements. Capitalized implementation costs are recognized on a straight-line basis beginning when the application is ready for its intended use and ending on the expected termination date of the hosting arrangement, including consideration of the noncancelable contractual term and reasonably certain renewals. The terms are between four and five years for our current hosting arrangements. Recognized expense is reported in general and administrative expense, which is where the hosting arrangement subscriptions are reported. Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if the carrying amount of an asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets at the date it is tested for recoverability, whether in use or under development. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Revenue Recognition Revenues are recognized when our services are made available to our customers, in an amount that reflects the consideration we are contractually and legally entitled to in exchange for those services. We determine revenue recognition through the following steps: - Identification of the contract, or contracts, with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, we satisfy a performance obligation See Note C for further descriptions of our revenue recognition policy. Deferred Costs Deferred costs consist of costs to obtain customer contracts, such as commissions paid to sales personnel and to third-party partners for customer referrals, and costs to fulfill customer contracts, such as customer implementation costs. Sales commissions relating to recurring revenues are considered incremental and recoverable costs of obtaining a contract with our customer. These commissions are calculated based on estimated annual recurring revenue to be generated over the customer’s initial contract year. These costs are deferred and amortized over the expected period of benefit which we have determined to be two years. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of comprehensive income. Stock-Based Compensation We recognize the cost of all share-based payments to employees, including grants of employee stock options, in the financial statements based on the grant date fair value of those awards. This cost is recognized over the period for which an employee is required to provide service in exchange for the award. In valuing share-based awards, judgment is required in determining the expected volatility of common stock and the expected term individuals will hold their share-based awards prior to exercising. The expected volatility of the options is based on the historical volatility of our common stock. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. The valuation does not include a forfeiture estimate as we recognize forfeitures as they occur. Income Taxes We account for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in our judgement, there is a less than a 50% likelihood that the deferred tax asset will be utilized. We assess our ability to realize our deferred tax assets at the end of each reporting period. Realization of our deferred tax assets is contingent upon future taxable earnings. Accordingly, this assessment requires estimates and judgment. If the estimates of future taxable income vary from actual results, our assessment regarding the realization of these deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in our consolidated financial statements in the period the estimate is changed, with a corresponding adjustment to our operating results. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. 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, restricted stock units and restricted stock awards. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs – Contracts with Customers (Subtopic 340-40) Other Assets and Deferred Costs – Contracts with Customers We adopted the new standard effective January 1, 2018, on a retrospective basis. The new standard did not impact our recognition of the recurring revenue received from customers for our cloud-based supply chain solutions; however, the adoption of the new standard impacted our accounting for certain upfront set-up fees, the periods over which the related revenues are recognized and the timing of revenue recognition for these set-up fees. The adoption of the new standard also impacted our accounting for certain costs to obtain our contracts, specifically related to the periods over which commissions are recognized. Selected audited consolidated balance sheet line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): December 31, 2017 As previously reported Adjustments As adjusted ASSETS Deferred costs $ 25,091 $ 4,875 $ 29,966 Deferred costs, non-current 6,770 3,197 9,967 Deferred income tax asset 17,551 (3,854 ) 13,697 LIABILITIES Accrued compensation 15,886 (658 ) 15,228 Deferred revenue 16,407 1,456 17,863 Deferred revenue, non-current 10,602 (7,871 ) 2,731 STOCKHOLDERS’ EQUITY Accumulated deficit (19,902 ) 11,291 (8,611 ) Selected audited consolidated statement of operations line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): For the twelve months ended December 31, 2016 As previously reported Adjustments As adjusted Revenues $ 193,295 $ (142 ) $ 193,153 Operating expenses Sales and marketing 65,886 990 66,876 Income from operations 7,517 (1,132 ) 6,385 Income tax expense 3,140 (385 ) 2,755 Net income $ 5,710 $ (747 ) $ 4,963 Net income per share Basic $ 0.34 (0.05 ) $ 0.29 Diluted $ 0.33 (0.04 ) $ 0.29 For the twelve months ended December 31, 2017 As previously reported Adjustments As adjusted Revenues $ 220,566 $ (481 ) $ 220,085 Operating expenses Sales and marketing 73,295 (2,034 ) 71,261 Income from operations 8,428 1,553 9,981 Income tax expense 11,580 (1,238 ) 10,342 Net income (loss) $ (2,440 ) $ 2,791 $ 351 Net income (loss) per share Basic $ (0.14 ) 0.16 $ 0.02 Diluted $ (0.14 ) 0.16 $ 0.02 Selected audited consolidated statement of cash flows line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): For the twelve months ended December 31, 2016 As previously reported Adjustments As adjusted Cash flows from operating activities Net income $ 5,710 $ (747 ) $ 4,963 Reconciliation of net income to net cash provided by operating activities Deferred income taxes (1,698 ) (385 ) (2,083 ) Changes in assets and liabilities Deferred costs (4,964 ) 879 (4,085 ) Accrued compensation 2,180 111 2,291 Deferred revenue 2,710 142 2,852 Net cash provided by operating activities 18,765 — 18,765 For the twelve months ended December 31, 2017 As previously reported Adjustments As adjusted Cash flows from operating activities Net income (loss) $ (2,440 ) $ 2,791 $ 351 Reconciliation of net income to net cash provided by operating activities Deferred income taxes 10,854 (1,238 ) 9,616 Changes in assets and liabilities Deferred costs (6,548 ) (1,265 ) (7,813 ) Accrued compensation 2,073 (769 ) 1,304 Deferred revenue 5,107 481 5,588 Net cash provided by operating activities 31,050 — 31,050 In January 2018, we adopted FASB ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In March 2018, we adopted FASB ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for interim and annual reporting periods beginning after December 15, 2019 and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements, with early adoption permitted. We early adopted ASU 2018-15 as of October 1, 2018, under the prospective method. Additional disclosure regarding capitalized implementation costs is included within Note I. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases We adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides several optional practical expedients in transition. For the fiscal period beginning January 1, 2019, we have made the following elections. We elected the “package of practical expedients,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The new standard also provided practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify which means we have not recognized right-of-use (“ROU”) assets or lease liabilities for these leases, and this included not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all leases. This standard has a material effect on our financial statements beginning January 1, 2019. The most significant effects relate to the recognition of approximately $15.0 million in ROU assets and $15.0 million additional lease liabilities on our balance sheet for our existing operating leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Acquisitions | EDIAdmin On October 3, 2018, we completed our asset acquisition of EDIAdmin, a privately held company providing end-to-end integration solutions, featuring a dedicated Integration Platform as a Service (“iPaaS”) called Cloud Hybrid Integration Platform (“CHIP”) and collaborative managed services for leading systems and applications, both cloud and on-premise. Pursuant to the asset purchase agreement, we paid $7.5 million in cash to the owner of EDIAdmin. The purchase agreement also allowed the seller to receive up to $1.7 million in cash, which becomes payable in first quarter 2020 and 2021 contingent upon the completion of certain revenue milestones at December 31, 2019 and December 31, 2020. During the year ended December 31, 2018, we recognized other expense of $0.1 million in our consolidated statements of comprehensive income due to the remeasurement of the contingent liability. See Note E for further disclosures on the remeasurement of the contingent liability. The purchase accounting for the EDIAdmin acquisition is complete as of December 31, 2018. Purchase Price Allocation We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We engaged a third-party valuation firm to assist us in the determination of the value of the purchased intangible assets and of the earn-out liability. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to a trained workforce and other buyer-specific value resulting from expected synergies, including long-term cost savings, which are not included in the fair values of identifiable assets. The purchase price consisted of the following (in thousands): Cash $ 7,461 Fair value of earn-out liability 1,274 $ 8,735 The final purchase price is subject to a net working capital adjustment to be determined by the sellers and us, pursuant to the terms of the purchase agreement. The following table summarizes the estimated fair values of the assets acquired Current assets $ 631 Goodwill 4,871 Intangible assets 3,400 Current liabilities (57 ) Deferred revenue (110 ) $ 8,735 Purchased Intangible Assets The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Estimated Estimated Fair Value Life Purchased Intangible Assets (in thousands) (in years) Subscriber relationships $ 600 10 Developed technology 2,800 10 Total $ 3,400 The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense for the period from October 3, 2018 through December 31, 2018 was $0.1 million. CovalentWorks On December 18, 2018, we completed our asset acquisition of CovalentWorks, a privately held company providing cloud-based EDI solutions to small- and medium-sized businesses. Pursuant to the asset purchase agreement, we paid $19.4 million in cash and issued $3.4 million in common stock, or 40,478 shares, to the owners of CovalentWorks. The purchase accounting for the CovalentWorks acquisition has not been finalized as of December 31, 2018. Provisional amounts are primarily related to intangible assets. We expect to finalize the allocation of purchase price within the one-year measurement-period following the acquisition. Purchase Price Allocation We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We engaged a third-party valuation firm to assist us in the determination of the value of the purchased intangible assets. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to buyer-specific value resulting from expected synergies, including long-term cost savings, which are not included in the fair values of identifiable assets. The purchase price consisted of the following (in thousands): Cash $ 19,431 SPS Commerce, Inc. common stock 3,371 $ 22,802 The final purchase price is subject to a net working capital adjustment to be determined by the sellers and us, pursuant to the terms of the purchase agreement. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Current assets $ 244 Property and equipment 44 Goodwill 15,402 Intangible assets 7,210 Current liabilities (56 ) Deferred revenue (42 ) $ 22,802 Purchased Intangible Assets The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Estimated Estimated Fair Value Life Purchased Intangible Assets (in thousands) (in years) Subscriber relationships $ 7,100 7 Developed technology 100 3 Trade names 10 1 Total $ 7,210 The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense for the period from December 18, 2018 through December 31, 2018 was not material. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | NOTE C – Revenue We derive our revenues primarily from the following revenue streams (in thousands): Year Ended December 31, 2018 2017 2016 Recurring revenues: Fulfillment $ 190,783 $ 164,682 $ 139,645 Analytics 34,447 34,260 32,938 Other 5,424 4,978 4,474 Recurring Revenues 230,654 203,920 177,057 One-time revenues 17,586 16,165 16,096 $ 248,240 $ 220,085 $ 193,153 Revenues are recognized when our services are made available to our customers, in an amount that reflects the consideration we are contractually and legally entitled to in exchange for those services. We determine revenue recognition through the following steps: - Identification of the contract, or contracts, with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, we satisfy a performance obligation Recurring Revenues Recurring revenues consists of recurring subscriptions from customers that utilize our Fulfillment, Analytics and Other cloud-based supply chain management solutions. Revenue for these solutions is generally recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our contracts with our recurring revenue customers are recurring in nature, ranging from monthly to annual, and generally allow the customer to cancel the contract for any reason with 30 to 90 days’ notice. Timing of billings varies by customer and by contract type and are either in advance or within 30 days of the service being performed. The deferred revenue liabilities for recurring revenue contracts are for one year or less and recognized on a ratable basis over the contract term. We have applied the optional exemption under ASC 606-10-50-14(a) and will not disclose information about the remaining performance obligations for contracts which have original durations of one year or less. One-time Revenues One-time revenues consist of set-up fees from customers and miscellaneous one-time fees. Set-up fees are specific for each connection a customer has with a trading partner and many of our customers have connections with numerous trading partners. Set-up fees related to our cloud-based supply chain management solutions are nonrefundable upfront fees that are necessary for our customers to utilize our cloud-based services. These set-up fees do not provide any standalone value to our customers. Except for our Analytics solution, we have determined that the set-up fees represent a material renewal option right to our customers as they will not be incurred again upon renewal. These set-up fees and related costs are deferred and recognized ratably over two years, which is the estimated period for which a material right is present for our customers. For our Analytics solution, we have determined that the set-up fees do not represent a material customer renewal right and, as such, are deferred and recognized ratably over the estimated initial contract term, which is one year. The table below presents the activity of the portion of the deferred revenue liability relating to set-up fees (in thousands): Year Ended December 31, 2018 2017 Balances, at beginning of period $ 10,031 $ 9,995 Invoiced set-up fees 10,271 10,625 Amortized set-up fees (10,445 ) (10,589 ) Balances, at end of period $ 9,857 $ 10,031 The entire balance of set-up fees will be recognized within two years and, as such, current amounts will be recognized in the next 1-12 months and long-term amounts will be recognized in the next 13-24 months. Miscellaneous one-time fees consist of professional services and testing and certification. The deferred revenue liability for these one-time fees are for one year or less and recognized at the time service is provided. We have applied the optional exemption under ASC 606-10-50-14(a) and will not disclose information about the remaining performance obligations for contracts which have original durations of one year or less. |
Deferred Costs
Deferred Costs | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs [Abstract] | |
Deferred Costs | NOTE D – Deferred Costs Deferred costs consist of costs to obtain customer contracts, such as commissions paid to sales personnel and to third-party partners for customer referrals, and costs to fulfill customer contracts, such as customer implementation costs. Sales commissions relating to recurring revenues are considered incremental and recoverable costs of obtaining a contract with our customer. These commissions are calculated based on estimated annual recurring revenue to be generated over the customer’s initial contract year. These costs are deferred and amortized over the expected period of benefit which we have determined to be two years. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations. The table below presents the activity of deferred costs and amortization of deferred costs (in thousands): Year Ended December 31, 2018 2017 Balances, at beginning of period $ 39,933 $ 32,117 Incurred deferred costs 49,583 44,628 Amortized deferred costs (44,041 ) (36,812 ) Balances, at end of period $ 45,475 $ 39,933 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Financial Instruments | NOTE E – Financial Instruments We invest primarily in money market funds, certificates of deposit, 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 less 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 short-term investments. Investments with remaining maturities of more than one year from the balance sheet date are classified as long-term investments. Our short- and long-term marketable securities are classified as available-for-sale. We intend to hold marketable securities 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 keep securities with stated holding periods to maturity. Our marketable securities 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 consolidated balance sheets. Realized gains or losses are included in other income (expense), net in the consolidated statements of comprehensive income. 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 consolidated statements of comprehensive income. Cash equivalents and short- and long-term investments consisted of the following (in thousands): December 31, 2018 2017 Amortized Unrealized Fair Amortized Unrealized Fair Cost Gains (Losses) Value Cost Gains (Losses) Value Cash equivalents: Money market funds $ 109,265 $ — $ 109,265 $ 104,544 $ — $ 104,544 Certificate of deposit 7,000 — 7,000 7,814 — 7,814 Marketable securities: Corporate bonds 15,194 40 15,234 17,758 (57 ) 17,701 Commercial paper 9,889 76 9,965 7,456 20 7,476 U.S. treasury securities 12,300 38 12,338 12,381 26 12,407 $ 153,648 $ 154 $ 153,802 $ 149,953 $ (11 ) $ 149,942 Due within one year $ 153,802 $ 144,736 Due within two years — 5,206 Total $ 153,802 $ 149,942 We do not believe any of the unrealized losses represent an other-than-temporary impairment based on our assessment of available evidence as of December 31, 2018. We expect to receive the full principal and interest on all of these cash equivalents and investments. 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. We obtain the fair values of our level 2 available-for-sale securities from a professional pricing service. • Level 3 – unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. For the earn-out liability related to the EDIAdmin acquisition, the Company utilized the Monte Carlo simulation method to estimate the fair value of this contingent liability as of the reporting date. Thousands of iterations of the simulation were performed using forecasted revenues to develop a distribution of future values of recurring revenue which, in turn, provide indicated earn-out payments. The total estimated fair value equals the sum of the average present values of the indicated earn-out payments. Changes in assumptions described above could have an impact on the payout of contingent consideration with a maximum payout being $1.7 million. The earn-out liability has been measured as Level 3 given the unobservable inputs that are significant to the measurement of the liability. 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 December 31, 2018: Cash equivalents: Money market funds $ 109,265 $ — $ — $ 109,265 Certificate of deposit 7,000 — — 7,000 Marketable securities: Corporate bonds — 15,234 — 15,234 Commercial paper — 9,965 — 9,965 U.S. treasury securities — 12,338 — 12,338 $ 116,265 $ 37,537 $ — $ 153,802 Liabilities at December 31, 2018: Earn-out liability $ — $ — $ 1,368 $ 1,368 $ — $ — $ 1,368 $ 1,368 Assets at December 31, 2017: Cash equivalents: Money market funds $ 104,544 $ — $ — $ 104,544 Certificate of deposit 7,814 — — 7,814 Marketable securities: Corporate bonds — 17,701 — 17,701 Commercial paper — 7,476 — 7,476 U.S. treasury securities — 12,407 — 12,407 $ 112,358 $ 37,584 $ — $ 149,942 |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Allowance for Doubtful Accounts | NOTE F – Allowance for Doubtful Accounts The allowance for doubtful accounts activity, included in accounts receivable, net, was as follows (in thousands): 2018 2017 2016 Balances, January 1 $ 763 $ 515 $ 446 Provision for doubtful accounts 2,590 1,705 1,375 Write-offs, net of recoveries (1,961 ) (1,457 ) (1,306 ) Balances, December 31 $ 1,392 $ 763 $ 515 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, net | NOTE G – Property and Equipment, net Property and equipment, net included the following (in thousands): December 31, 2018 2017 Computer equipment and software $ 44,781 $ 35,326 Office equipment and furniture 7,985 7,439 Leasehold improvements 9,366 8,042 62,132 50,807 Less: accumulated depreciation and amortization (41,175 ) (33,951 ) $ 20,957 $ 16,856 At December 31, 2018 and 2017, property and equipment, net included approximately $1.7 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | NOTE H – Goodwill and Intangible Assets, net The changes in the net carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows (in thousands): 2018 2017 Balances, January 1 $ 51,613 $ 49,777 Additions from business acquisitions 20,272 — Foreign currency translation (2,227 ) 1,836 Balances, December 31 $ 69,658 $ 51,613 Intangible assets, net included the following (in thousands): December 31, 2018 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 43,212 $ (23,284 ) $ (623 ) $ 19,305 Non-competition agreements 2,560 (2,247 ) (28 ) 285 Technology and other 5,199 (2,012 ) (36 ) 3,151 $ 50,971 $ (27,543 ) $ (687 ) $ 22,741 December 31, 2017 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 34,350 $ (19,592 ) $ 614 $ 15,372 Non-competition agreements 2,499 (2,058 ) 45 486 Technology and other 2,130 (1,518 ) 59 671 $ 38,979 $ (23,168 ) $ 718 $ 16,529 Amortization expense was $4.1 2019 $ 5,026 2020 4,679 2021 3,845 2022 2,742 2023 2,668 Thereafter 3,781 $ 22,741 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets [Abstract] | |
Other Assets | NOTE I – Other Assets Test The changes in the net amount of capitalized implementation costs for internal-use software from hosting arrangements for the years ended December 31, 2018 and 2017 are as follows (in thousands): 2018 2017 Balances, January 1 $ — $ — Capitalized implementation fees 455 — Amortization of implementation fees — — Balances, December 31 $ 455 $ — There were no impairment losses in relation to the capitalized implementation costs for the periods presented. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE J – Commitments and Contingencies Operating Leases We are obligated under non-cancellable operating leases primarily for office space. Rent expense for all operating leases, which includes minimum lease payments and other charges such as common area maintenance fees, charged to operations was $5.6 On December 20, 2017, we executed the fourth amendment to our lease agreement for our current headquarters located in Minneapolis, Minnesota where we lease approximately 189,000 square feet under an agreement that expires on April 30, 2025. We have agreed to expand our headquarters premises by approximately 25,000 square feet during 2020. Our lease agreement also includes a further expansion right and a right of first offer to lease certain additional space and two options to extend the term of the lease for five years at a market rate determined in accordance with the lease. We received $3.2 million in incentives upon execution of the amendment and we are owed an additional $2.1 million in incentives upon expansion of our square footage in 2018, both of which have been incorporated into our deferred rent calculation. At December 31, 2018, our future minimum payments under operating leases were as follows (in thousands): 2019 $ 4,209 2020 3,542 2021 4,414 2022 4,042 2023 3,854 Thereafter 4,817 $ 24,878 Other Contingencies We may be involved in various claims and legal actions in the normal course of business. Our management believes that the outcome of any such claims and legal actions will not have a material effect on our financial position, results of operations or cash flows. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders’ Equity | NOTE K – Stockholders’ Equity Common Stock Issued In connection with the acquisition of CovalentWorks (see Note B), we issued 40,478 shares of SPS common stock as calculated according to the terms of the purchase agreement. Stock Repurchase Program On November 2, 2017, our board of directors authorized a program to repurchase up to $50.0 million of common stock. Under the program, purchases may be made from time to time in the open market over two years. The number of shares to be purchased and the timing of purchases will be based on the price of our common stock, general business and market conditions and other investment considerations and factors. The program does not obligate us to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice. We intend to finance the share repurchase program with cash on hand. We repurchased 289,745 shares at a cost of $19.9 million and 122,147 shares at a cost of $5.8 million for the years ended December 31, 2018 and December 31, 2017, respectively. Of the $50.0 million share repurchases authorized, $24.3 million was available for future share repurchases at December 31, 2018. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
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 2018 and February 2017, 1,027,620 and 1,024,868 additional shares, respectively, were reserved for future issuance under our 2010 Equity Incentive Plan. At December 31, 2018, there were approximately 5.3 million shares available for grant under approved equity compensation plans. We recorded stock-based compensation expense of $12.5 Year Ended December 31, 2018 2017 2016 Cost of revenues $ 2,168 $ 1,887 $ 1,309 Operating expenses Sales and marketing 2,675 2,197 2,412 Research and development 1,505 949 618 General and administrative 6,162 7,694 3,684 Total stock-based compensation expense $ 12,510 $ 12,727 $ 8,023 Stock-based compensation expense by type was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Stock Options $ 3,355 $ 5,223 $ 3,777 Performance Share Units 1,034 — — Restricted Stock Units 5,930 6,526 3,386 Restricted Stock Awards 487 318 308 Employee Stock Purchase Plan 466 660 552 401K Stock Match 1,238 — — Total stock-based compensation expense $ 12,510 $ 12,727 $ 8,023 As of December 31, 2018, there was approximately $13.6 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a straight-line basis over a weighted-average period of 2.3 years. Stock Options Stock options generally vest over four years and have a contractual term of seven to ten years from the date of grant. Our stock option activity was as follows: Weighted Average Options Exercise Price (#) ($/share) Outstanding at December 31, 2015 943,103 $ 37.91 Granted 340,609 48.58 Exercised (221,630 ) 19.42 Forfeited (46,070 ) 55.58 Outstanding at December 31, 2016 1,016,012 44.72 Granted 172,697 55.87 Exercised (65,502 ) 21.53 Forfeited (25,876 ) 55.93 Outstanding at December 31, 2017 1,097,331 47.60 Granted 181,472 59.88 Exercised (344,334 ) 41.66 Forfeited (61,235 ) 56.67 Outstanding at December 31, 2018 873,234 51.86 Of the total outstanding options at December 31, 2018, 576,842 The fair value of options that vested during the years ended December 31, 2018, 2017 and 2016 was $3.7 The intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 was $14.9 The weighted-average fair values per share of options granted during the years ended December 31, 2018, 2017 and 2016 were $19.48, $18.85 and $16.13, respectively. The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2018 2017 2016 Volatility 35 % 38 % 38 % Dividend yield — — — Life (in years) 4.44 4.51 4.54 Risk-free interest rate 2.54 % 1.85 % 1.19 % The expected volatility of the options is based on the historical volatility of our common stock. We have not issued dividends on our common stock and do not expect to do so in the foreseeable future. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Performance Share Units and Restricted Stock Units and Awards In February 2018, our executive officers were granted performance share unit (“PSU”) awards with vesting contingent on the Company’s total shareholder return as compared to indexed total shareholder return over the course of a three-year performance period (fiscal years 2018 – 2020). The grant date fair value was estimated using a Monte Carlo simulation that utilizes multiple input variables that determine the probability of satisfying the performance conditions stipulated in the award and calculates the fair market value for the performance stock units granted. Expense is recognized on a straight-line basis over the vesting period, regardless of whether the market condition is satisfied as the likelihood of the market condition being met is included in the fair-value measurement of the award. In February 2017, our executive officers were granted PSU awards with vesting contingent on successful attainment of pre-determined revenue targets over the course of a three-year performance period (fiscal 2017 – 2019). The fair value is measured as the number of performance shares expected to be earned multiplied by the grant date fair value of our shares. Restricted stock units (“RSU”) vest over four years and, upon vesting, the holder is entitled to receive shares of our common stock. With restricted stock awards (“RSA”), shares of our common stock are issued when the award is granted and the restrictions lapse over one year. Our PSU and RSU activity was as follows: Weighted Average PSUs and RSUs Grant Date Fair (#) Value ($/share) Outstanding at December 31, 2015 140,565 $ 56.88 Granted 115,896 48.32 Vested and common stock issued (52,133 ) 48.19 Forfeited (15,286 ) 55.48 Outstanding at December 31, 2016 189,042 54.14 Granted 211,168 55.62 Vested and common stock issued (64,950 ) 53.64 Forfeited (13,348 ) 55.39 Outstanding at December 31, 2017 321,912 55.16 Granted 172,795 66.03 Vested and common stock issued (81,561 ) 56.32 Forfeited (35,811 ) 55.04 Outstanding at December 31, 2018 377,335 59.90 The number of PSUs and RSUs outstanding at December 31, 2018 included 54,688 Our RSA activity was as follows: Weighted Average RSAs Grant Date Fair (#) Value ($/share) Outstanding at December 31, 2015 1,032 $ 67.39 Restricted common stock issued 6,078 52.27 Restrictions lapsed (5,586 ) 55.06 Outstanding at December 31, 2016 1,524 52.28 Restricted common stock issued 5,454 58.29 Restrictions lapsed (5,610 ) 56.65 Outstanding at December 31, 2017 1,368 58.29 Restricted common stock issued 7,304 74.43 Restrictions lapsed (6,840 ) 71.20 Outstanding at December 31, 2018 1,832 74.44 Employee Stock Purchase Plan We have an employee stock purchase plan which 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 1.0 shares of common stock are remaining for issuance under the plan. For the offering periods in the years ended December 31, 2018, 2017 and 2016, we withheld approximately $1.7 million, $1.9 million and $1.7 million, respectively, from employees participating in the plan and purchased 34,798 shares, 40,968 shares and 33,357 shares, respectively, on their behalf. For the years ended December 31, 2018, 2017 and 2016, we recorded approximately $0.5 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: Year Ended December 31, 2018 2017 2016 Volatility 26 % 32 % 37 % Dividend yield — — — Life (in years) 0.50 0.50 0.50 Risk-free interest rate 1.77 % 0.90 % 0.42 % |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE M – Income Taxes Our provisions for income taxes included current federal, foreign and state income tax expense, as well as deferred tax expense as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current Federal $ — $ (184 ) $ 3,684 State 1,103 258 555 Foreign 540 652 599 Deferred Federal 3,011 10,262 (1,337 ) State 224 (291 ) (169 ) Foreign (410 ) (355 ) (577 ) $ 4,468 $ 10,342 $ 2,755 The tax provision for the year ended December 31, 2017 includes a $0.4 million reclass of alternative minimum tax (“AMT”) credit carryforwards from the deferred federal provision to current federal provision. These unutilized AMT credit carryforwards become partially refundable in 2019, 2020 and 2021 and fully refundable in 2022. A reconciliation of the expected federal income tax at the statutory rate to the provision for income taxes was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Expected federal income tax at statutory rate $ 5,951 $ 3,635 $ 2,662 State income taxes, net of federal tax effect 1,293 417 284 Tax impact of foreign activity 57 (105 ) (115 ) Nondeductible executive compensation 902 530 159 Nondeductible expenses 351 268 213 Change in valuation allowance (4 ) 16 (35 ) Change in state deferred rate 38 (134 ) (67 ) Research and development credit (1,843 ) (227 ) (261 ) Tax impact of Tax Cuts and Jobs Act — 6,796 — Tax impact of stock activity (2,438 ) (925 ) — Other 161 71 (85 ) Total provision for income taxes $ 4,468 $ 10,342 $ 2,755 The Tax Act, which was enacted on December 22, 2017, reduced the corporate federal income tax rate to 21.0% effective January 1, 2018, resulting in discrete tax expense of $6.8 million for the reduction of deferred tax assets. Also, the Tax Act expanded the deduction limits on executive compensation and included transition rules for previously awarded compensation. Differences between our effective tax rate and statutory tax rates are primarily due to the federal research and development credit partially offset by permanently non-deductible expense. Additionally, under ASU 2016-09, excess tax benefits generated upon settlement or exercise of stock awards are now recognized as a reduction to income tax expense as a discrete tax item in the period that the event occurs creating potentially significant fluctuation in tax expense by year. The significant components of our deferred tax assets (liabilities) were as follows (in thousands): December 31, 2018 2017 Deferred tax assets Net operating loss and credit carryforwards $ 8,356 $ 11,067 Stock-based compensation expense 3,647 4,273 Accounts receivable allowances 464 307 Accrued expenses 3,185 2,126 Other 180 182 Gross deferred tax asset 15,832 17,955 Less: valuation allowance (797 ) (602 ) Total net deferred tax asset 15,035 17,353 Deferred tax liability Deferred operations (2,787 ) (3,850 ) Foreign operations (135 ) (133 ) Depreciation and amortization (2,943 ) (1,536 ) Other (90 ) (24 ) Total deferred tax liability (5,955 ) (5,543 ) Net deferred tax assets $ 9,080 $ 11,810 As of December 31, 2018, we had net operating loss carryforwards of $37.5 Section 382 of the U.S. Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. We have performed a Section 382 analysis and we believe that approximately $17.6 million of federal losses will expire unused due to Section 382 limitations. The maximum annual limitation of federal net operating losses under Section 382 is approximately $1.0 million. This limitation could be further restricted if any ownership changes occur in future years. Accordingly, our deferred tax assets are reported net of the Section 382 limitations. As of December 31, 2018 we had federal research and development credit carryforwards, net of Section 383 limitations, of $3.0 million, which, if not utilized, will begin to expire in 2030. We had state research and development credit carryforwards of $1.0 million which, if not utilized, will begin to expire in 2025. As of December 31, 2018, we had a valuation allowance against our deferred tax assets of $0.8 million. The valuation allowance is established for state credit carryforwards that we do not expect to utilize based on our current expectations of future state taxable income. We are subject to income taxes for U.S. federal and various state and international jurisdictions. We are generally subject to U.S. federal and state tax examinations for all prior tax years due to our net operating loss carryforwards and the utilization of the carryforwards in years still open under statute. As of December 31, 2018, 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 | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NOTE N – 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): Year Ended December 31, 2018 2017 2016 Numerator Net income $ 23,872 $ 351 $ 4,963 Denominator Weighted average common shares outstanding, basic 17,196 17,183 16,947 Options to purchase common stock 306 150 267 Restricted stock units 104 23 27 Weighted average common shares outstanding, diluted 17,606 17,356 17,241 Net income per share Basic $ 1.39 $ 0.02 $ 0.29 Diluted $ 1.36 $ 0.02 $ 0.29 For the year ended December 31, 2018, 2017 and 2016, the effect of less than 1,000, approximately 283,000 and approximately 5,000 outstanding potential common shares, respectively, were excluded from the calculation of diluted net income per share as they were anti-dilutive. |
Retirement Savings Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Savings Plan | NOTE O – Retirement Savings Plan We sponsor a 401(k) retirement savings plan for our employees. Employees can contribute up to 100% of their compensation, subject to the limits established by law. In 2018, we increased our match to 50% of the employee’s contribution up to the first 6% of pre-tax annual compensation. A portion of our match is in company stock, which is purchased from the open market by our plan provider and immediately deposited into the employee’s 401(k) account, which resulted in $1.2 million of stock-based compensation expense in 2018. Additionally, we make statutory contributions to retirement plans as required by local foreign government regulations. Our total contributions to the plan were $2.9 million, $1.6 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE P – Related Party Transactions SPS Commerce Foundation (the “Foundation”) is a Minnesota non-profit organization exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code. The Foundation was formed in 2015 to engage in, advance, support, promote and administer charitable activities. The directors of the Foundation are also our officers. These officers receive no compensation from the Foundation for the management services performed for the Foundation. The Foundation is not a subsidiary of ours and the financial results of the Foundation are not consolidated with our financial statements. We made contributions of $0.7 million and $0.2 million to the Foundation for the years ended December 31, 2018 and 2017, respectively. We have no current legal obligations for future commitments to the Foundation. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | NOTE Q – Selected Quarterly Financial Data (Unaudited) The following table presents our selected unaudited quarterly statements of comprehensive income data (in thousands, except per share amounts): For the Three Months Ended 2018 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 59,092 $ 61,091 $ 62,868 $ 65,189 Gross profit 39,334 40,689 42,457 44,012 Income from operations 4,300 5,965 8,257 8,209 Net income 3,254 5,416 8,061 7,141 Diluted earnings per share $ 0.19 $ 0.31 $ 0.45 $ 0.40 For the Three Months Ended 2017 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 51,879 $ 54,092 $ 56,057 $ 58,057 Gross profit 34,549 35,901 37,412 38,598 Income from operations 3,379 2,956 3,354 292 Net income (loss) 2,985 1,968 2,176 (6,778 ) Diluted earnings per share $ 0.17 $ 0.11 $ 0.13 $ (0.39 ) |
General (Policies)
General (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business Description | Business Description SPS Commerce is a leading provider of cloud-based supply chain management solutions that make it easier for retailers, suppliers, distributors, and logistics firms to orchestrate the management of item data, order fulfillment, inventory control and sales analytics across all channels. Implementing and maintaining a suite of supply chain management capabilities is resource intensive and is not a core competency for most businesses. The solutions offered by SPS commerce eliminate the need for on-premise software and support staff by taking on that capability on the customer’s behalf. The solutions SPS Commerce provides allow our customers to increase their supply cycle agility, optimize their inventory levels and sell-through, reduce operational costs and gain increased visibility into customer orders, ensuring that suppliers, distributors, and logistics firms can satisfy exacting retailer requirements. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, with the resulting translation adjustments recorded as a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the average exchange rates during the year. Foreign currency transaction gains and losses, if any, are included in net income. |
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. |
Business Combinations | Business Combinations We recognize the fair value of the assets acquired and the liabilities assumed at the acquisition date, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date amounts of the assets acquired and the liabilities assumed. Assets acquired include tangible and intangible assets. We use estimates and assumptions that we believe are reasonable as a part of the purchase price allocation, which includes the process to determine the value and useful lives of purchased intangible assets and the process to determine the value of any contingent consideration liabilities. We recorded the acquisition-date fair value of any contingent liabilities, such as earn-out provisions, as part of the consideration transferred. The earn-out liability fair value is subsequently remeasured at each reporting date. The Company evaluates each contingent consideration to determine the valuation approach. See Note B for valuation methods utilized in the fair value measurement as of the acquisition date and see Note E for valuation methods utilized in the fair value remeasurement as of the reporting date. While we believe these estimates and assumptions are reasonable, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed . Any such adjustments would be recorded |
Segment Information | Segment Information We operate in and report on one segment, which is supply chain management solutions . |
Risk and Uncertainties | Risk and Uncertainties We rely on hardware and software licensed from third parties to offer our on-demand solutions. Our management believes alternate sources are available; however, disruption or termination of these relationships could adversely affect our operating results in the near term. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents in financial institutions in excess of federally insured limits and trade accounts receivable. Cash investments are held with financial institutions that we believe are subject to minimal risk. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days. Cash and cash equivalents are stated at fair value. |
Investments | Investments Management determines the appropriate classification of certificates of deposit and marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. 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 consolidated statements of comprehensive income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our financial instruments, which include cash, cash equivalents, accounts receivable, accounts payable and other accrued expenses, approximates fair value due to their short maturities. Marketable securities are recorded at fair value as further described in Note E. |
Accounts Receivable | Accounts Receivable Accounts receivable are initially recorded upon the sale of solutions to customers. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of certain customers to make the required payments. When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our experience with specific customers. We write-off accounts receivable when they are determined to be uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in general and administrative expense in our consolidated statements of comprehensive income. |
Property and Equipment | Property and Equipment Property and equipment, including assets acquired under capital lease obligations, are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives when placed in service, which are: Computer equipment and software: 2 to 3 years Office equipment and furniture: 5 to 7 years Leasehold improvements: the shorter of the useful life of the asset or the remaining term of the lease Significant additions or improvements extending asset lives beyond one year are capitalized, while repairs and maintenance are charged to expense as incurred. We also capitalize and amortize eligible costs to acquire or develop external-use software that are incurred after technological feasibility has been established. The assets and related accumulated depreciation and amortization are adjusted for asset retirements and disposals with the resulting gain or loss included in our consolidated statements of comprehensive income. |
Research and Development | Research and Development Research and development costs primarily include maintenance and data conversion activities related to our cloud-based supply chain management solutions and are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually at November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is conducted by comparing the fair value of the net assets with the carrying value of the reporting unit. Fair value is determined using the direct market observation of market price and outstanding equity of the reporting unit at the testing date. If the carrying value of the goodwill exceeds the fair value of the reporting unit, goodwill may be impaired. If this occurs, the fair value is then allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of goodwill. This implied fair value is then compared to the carrying amount of goodwill and, if it is less, we would recognize an impairment loss. |
Intangible Assets | Intangible Assets Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and non-competition agreements. We recognize separately from goodwill the fair value of the identifiable intangible assets acquired. We have determined the fair value and useful lives of our purchased intangible assets using certain estimates and assumptions that we believe are reasonable. The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives, which are three to ten years for subscriber relationships, two to five years for non-competition agreements and one to ten years for technology and other. |
Internal-use Software Implementation Assets | Internal-use Software Implementation Assets Internal-use software implementation costs are capitalized assets included in Other Assets and relate to costs incurred during the application development stage for various internal-use software from hosting arrangements. Capitalized implementation costs are recognized on a straight-line basis beginning when the application is ready for its intended use and ending on the expected termination date of the hosting arrangement, including consideration of the noncancelable contractual term and reasonably certain renewals. The terms are between four and five years for our current hosting arrangements. Recognized expense is reported in general and administrative expense, which is where the hosting arrangement subscriptions are reported. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if the carrying amount of an asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets at the date it is tested for recoverability, whether in use or under development. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. |
Revenue Recognition | Revenue Recognition Revenues are recognized when our services are made available to our customers, in an amount that reflects the consideration we are contractually and legally entitled to in exchange for those services. We determine revenue recognition through the following steps: - Identification of the contract, or contracts, with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, we satisfy a performance obligation See Note C for further descriptions of our revenue recognition policy. |
Deferred Costs | Deferred Costs Deferred costs consist of costs to obtain customer contracts, such as commissions paid to sales personnel and to third-party partners for customer referrals, and costs to fulfill customer contracts, such as customer implementation costs. Sales commissions relating to recurring revenues are considered incremental and recoverable costs of obtaining a contract with our customer. These commissions are calculated based on estimated annual recurring revenue to be generated over the customer’s initial contract year. These costs are deferred and amortized over the expected period of benefit which we have determined to be two years. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of comprehensive income. |
Stock-Based Compensation | Stock-Based Compensation We recognize the cost of all share-based payments to employees, including grants of employee stock options, in the financial statements based on the grant date fair value of those awards. This cost is recognized over the period for which an employee is required to provide service in exchange for the award. In valuing share-based awards, judgment is required in determining the expected volatility of common stock and the expected term individuals will hold their share-based awards prior to exercising. The expected volatility of the options is based on the historical volatility of our common stock. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. The valuation does not include a forfeiture estimate as we recognize forfeitures as they occur. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in our judgement, there is a less than a 50% likelihood that the deferred tax asset will be utilized. We assess our ability to realize our deferred tax assets at the end of each reporting period. Realization of our deferred tax assets is contingent upon future taxable earnings. Accordingly, this assessment requires estimates and judgment. If the estimates of future taxable income vary from actual results, our assessment regarding the realization of these deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in our consolidated financial statements in the period the estimate is changed, with a corresponding adjustment to our operating results. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. |
Net Income (Loss) Per Share | 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, restricted stock units and restricted stock awards. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs – Contracts with Customers (Subtopic 340-40) Other Assets and Deferred Costs – Contracts with Customers We adopted the new standard effective January 1, 2018, on a retrospective basis. The new standard did not impact our recognition of the recurring revenue received from customers for our cloud-based supply chain solutions; however, the adoption of the new standard impacted our accounting for certain upfront set-up fees, the periods over which the related revenues are recognized and the timing of revenue recognition for these set-up fees. The adoption of the new standard also impacted our accounting for certain costs to obtain our contracts, specifically related to the periods over which commissions are recognized. Selected audited consolidated balance sheet line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): December 31, 2017 As previously reported Adjustments As adjusted ASSETS Deferred costs $ 25,091 $ 4,875 $ 29,966 Deferred costs, non-current 6,770 3,197 9,967 Deferred income tax asset 17,551 (3,854 ) 13,697 LIABILITIES Accrued compensation 15,886 (658 ) 15,228 Deferred revenue 16,407 1,456 17,863 Deferred revenue, non-current 10,602 (7,871 ) 2,731 STOCKHOLDERS’ EQUITY Accumulated deficit (19,902 ) 11,291 (8,611 ) Selected audited consolidated statement of operations line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): For the twelve months ended December 31, 2016 As previously reported Adjustments As adjusted Revenues $ 193,295 $ (142 ) $ 193,153 Operating expenses Sales and marketing 65,886 990 66,876 Income from operations 7,517 (1,132 ) 6,385 Income tax expense 3,140 (385 ) 2,755 Net income $ 5,710 $ (747 ) $ 4,963 Net income per share Basic $ 0.34 (0.05 ) $ 0.29 Diluted $ 0.33 (0.04 ) $ 0.29 For the twelve months ended December 31, 2017 As previously reported Adjustments As adjusted Revenues $ 220,566 $ (481 ) $ 220,085 Operating expenses Sales and marketing 73,295 (2,034 ) 71,261 Income from operations 8,428 1,553 9,981 Income tax expense 11,580 (1,238 ) 10,342 Net income (loss) $ (2,440 ) $ 2,791 $ 351 Net income (loss) per share Basic $ (0.14 ) 0.16 $ 0.02 Diluted $ (0.14 ) 0.16 $ 0.02 Selected audited consolidated statement of cash flows line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): For the twelve months ended December 31, 2016 As previously reported Adjustments As adjusted Cash flows from operating activities Net income $ 5,710 $ (747 ) $ 4,963 Reconciliation of net income to net cash provided by operating activities Deferred income taxes (1,698 ) (385 ) (2,083 ) Changes in assets and liabilities Deferred costs (4,964 ) 879 (4,085 ) Accrued compensation 2,180 111 2,291 Deferred revenue 2,710 142 2,852 Net cash provided by operating activities 18,765 — 18,765 For the twelve months ended December 31, 2017 As previously reported Adjustments As adjusted Cash flows from operating activities Net income (loss) $ (2,440 ) $ 2,791 $ 351 Reconciliation of net income to net cash provided by operating activities Deferred income taxes 10,854 (1,238 ) 9,616 Changes in assets and liabilities Deferred costs (6,548 ) (1,265 ) (7,813 ) Accrued compensation 2,073 (769 ) 1,304 Deferred revenue 5,107 481 5,588 Net cash provided by operating activities 31,050 — 31,050 In January 2018, we adopted FASB ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In March 2018, we adopted FASB ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for interim and annual reporting periods beginning after December 15, 2019 and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements, with early adoption permitted. We early adopted ASU 2018-15 as of October 1, 2018, under the prospective method. Additional disclosure regarding capitalized implementation costs is included within Note I. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases We adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides several optional practical expedients in transition. For the fiscal period beginning January 1, 2019, we have made the following elections. We elected the “package of practical expedients,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The new standard also provided practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify which means we have not recognized right-of-use (“ROU”) assets or lease liabilities for these leases, and this included not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all leases. This standard has a material effect on our financial statements beginning January 1, 2019. The most significant effects relate to the recognition of approximately $15.0 million in ROU assets and $15.0 million additional lease liabilities on our balance sheet for our existing operating leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) |
General (Tables)
General (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ASU 2014-09 [Member] | |
Adoption of Accounting Standard Changes on Financial Statements | Selected audited consolidated balance sheet line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): December 31, 2017 As previously reported Adjustments As adjusted ASSETS Deferred costs $ 25,091 $ 4,875 $ 29,966 Deferred costs, non-current 6,770 3,197 9,967 Deferred income tax asset 17,551 (3,854 ) 13,697 LIABILITIES Accrued compensation 15,886 (658 ) 15,228 Deferred revenue 16,407 1,456 17,863 Deferred revenue, non-current 10,602 (7,871 ) 2,731 STOCKHOLDERS’ EQUITY Accumulated deficit (19,902 ) 11,291 (8,611 ) Selected audited consolidated statement of operations line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): For the twelve months ended December 31, 2016 As previously reported Adjustments As adjusted Revenues $ 193,295 $ (142 ) $ 193,153 Operating expenses Sales and marketing 65,886 990 66,876 Income from operations 7,517 (1,132 ) 6,385 Income tax expense 3,140 (385 ) 2,755 Net income $ 5,710 $ (747 ) $ 4,963 Net income per share Basic $ 0.34 (0.05 ) $ 0.29 Diluted $ 0.33 (0.04 ) $ 0.29 For the twelve months ended December 31, 2017 As previously reported Adjustments As adjusted Revenues $ 220,566 $ (481 ) $ 220,085 Operating expenses Sales and marketing 73,295 (2,034 ) 71,261 Income from operations 8,428 1,553 9,981 Income tax expense 11,580 (1,238 ) 10,342 Net income (loss) $ (2,440 ) $ 2,791 $ 351 Net income (loss) per share Basic $ (0.14 ) 0.16 $ 0.02 Diluted $ (0.14 ) 0.16 $ 0.02 Selected audited consolidated statement of cash flows line items, which reflect the adoption of ASU 2014-09 are as follows (in thousands): For the twelve months ended December 31, 2016 As previously reported Adjustments As adjusted Cash flows from operating activities Net income $ 5,710 $ (747 ) $ 4,963 Reconciliation of net income to net cash provided by operating activities Deferred income taxes (1,698 ) (385 ) (2,083 ) Changes in assets and liabilities Deferred costs (4,964 ) 879 (4,085 ) Accrued compensation 2,180 111 2,291 Deferred revenue 2,710 142 2,852 Net cash provided by operating activities 18,765 — 18,765 For the twelve months ended December 31, 2017 As previously reported Adjustments As adjusted Cash flows from operating activities Net income (loss) $ (2,440 ) $ 2,791 $ 351 Reconciliation of net income to net cash provided by operating activities Deferred income taxes 10,854 (1,238 ) 9,616 Changes in assets and liabilities Deferred costs (6,548 ) (1,265 ) (7,813 ) Accrued compensation 2,073 (769 ) 1,304 Deferred revenue 5,107 481 5,588 Net cash provided by operating activities 31,050 — 31,050 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
E D I Admin [Member] | |
Business Acquisition [Line Items] | |
Business Purchase Price | The purchase price consisted of the following (in thousands): Cash $ 7,461 Fair value of earn-out liability 1,274 $ 8,735 |
Estimated Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date | The following table summarizes the estimated fair values of the assets acquired Current assets $ 631 Goodwill 4,871 Intangible assets 3,400 Current liabilities (57 ) Deferred revenue (110 ) $ 8,735 |
Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives | The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Estimated Estimated Fair Value Life Purchased Intangible Assets (in thousands) (in years) Subscriber relationships $ 600 10 Developed technology 2,800 10 Total $ 3,400 |
CovalentWorks [Member] | |
Business Acquisition [Line Items] | |
Business Purchase Price | The purchase price consisted of the following (in thousands): Cash $ 19,431 SPS Commerce, Inc. common stock 3,371 $ 22,802 |
Estimated Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Current assets $ 244 Property and equipment 44 Goodwill 15,402 Intangible assets 7,210 Current liabilities (56 ) Deferred revenue (42 ) $ 22,802 |
Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives | The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Estimated Estimated Fair Value Life Purchased Intangible Assets (in thousands) (in years) Subscriber relationships $ 7,100 7 Developed technology 100 3 Trade names 10 1 Total $ 7,210 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenues by Revenue Stream | We derive our revenues primarily from the following revenue streams (in thousands): Year Ended December 31, 2018 2017 2016 Recurring revenues: Fulfillment $ 190,783 $ 164,682 $ 139,645 Analytics 34,447 34,260 32,938 Other 5,424 4,978 4,474 Recurring Revenues 230,654 203,920 177,057 One-time revenues 17,586 16,165 16,096 $ 248,240 $ 220,085 $ 193,153 |
Summary of Deferred Revenue Liability Relating to Set-Up Fees | The table below presents the activity of the portion of the deferred revenue liability relating to set-up fees (in thousands): Year Ended December 31, 2018 2017 Balances, at beginning of period $ 10,031 $ 9,995 Invoiced set-up fees 10,271 10,625 Amortized set-up fees (10,445 ) (10,589 ) Balances, at end of period $ 9,857 $ 10,031 |
Deferred Costs (Tables)
Deferred Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs [Abstract] | |
Summary of Deferred Costs and Amortization of Deferred Costs | The table below presents the activity of deferred costs and amortization of deferred costs (in thousands): Year Ended December 31, 2018 2017 Balances, at beginning of period $ 39,933 $ 32,117 Incurred deferred costs 49,583 44,628 Amortized deferred costs (44,041 ) (36,812 ) Balances, at end of period $ 45,475 $ 39,933 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments Owned At Fair Value [Abstract] | |
Summary of Cash Equivalents and Short and Long-term Investments | Cash equivalents and short- and long-term investments consisted of the following (in thousands): December 31, 2018 2017 Amortized Unrealized Fair Amortized Unrealized Fair Cost Gains (Losses) Value Cost Gains (Losses) Value Cash equivalents: Money market funds $ 109,265 $ — $ 109,265 $ 104,544 $ — $ 104,544 Certificate of deposit 7,000 — 7,000 7,814 — 7,814 Marketable securities: Corporate bonds 15,194 40 15,234 17,758 (57 ) 17,701 Commercial paper 9,889 76 9,965 7,456 20 7,476 U.S. treasury securities 12,300 38 12,338 12,381 26 12,407 $ 153,648 $ 154 $ 153,802 $ 149,953 $ (11 ) $ 149,942 Due within one year $ 153,802 $ 144,736 Due within two years — 5,206 Total $ 153,802 $ 149,942 |
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 December 31, 2018: Cash equivalents: Money market funds $ 109,265 $ — $ — $ 109,265 Certificate of deposit 7,000 — — 7,000 Marketable securities: Corporate bonds — 15,234 — 15,234 Commercial paper — 9,965 — 9,965 U.S. treasury securities — 12,338 — 12,338 $ 116,265 $ 37,537 $ — $ 153,802 Liabilities at December 31, 2018: Earn-out liability $ — $ — $ 1,368 $ 1,368 $ — $ — $ 1,368 $ 1,368 Assets at December 31, 2017: Cash equivalents: Money market funds $ 104,544 $ — $ — $ 104,544 Certificate of deposit 7,814 — — 7,814 Marketable securities: Corporate bonds — 17,701 — 17,701 Commercial paper — 7,476 — 7,476 U.S. treasury securities — 12,407 — 12,407 $ 112,358 $ 37,584 $ — $ 149,942 |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Allowance for Doubtful Activity Included in Accounts Receivable Net | The allowance for doubtful accounts activity, included in accounts receivable, net, was as follows (in thousands): 2018 2017 2016 Balances, January 1 $ 763 $ 515 $ 446 Provision for doubtful accounts 2,590 1,705 1,375 Write-offs, net of recoveries (1,961 ) (1,457 ) (1,306 ) Balances, December 31 $ 1,392 $ 763 $ 515 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net included the following (in thousands): December 31, 2018 2017 Computer equipment and software $ 44,781 $ 35,326 Office equipment and furniture 7,985 7,439 Leasehold improvements 9,366 8,042 62,132 50,807 Less: accumulated depreciation and amortization (41,175 ) (33,951 ) $ 20,957 $ 16,856 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Amount of Goodwill | The changes in the net carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows (in thousands): 2018 2017 Balances, January 1 $ 51,613 $ 49,777 Additions from business acquisitions 20,272 — Foreign currency translation (2,227 ) 1,836 Balances, December 31 $ 69,658 $ 51,613 |
Intangible Assets | Intangible assets, net included the following (in thousands): December 31, 2018 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 43,212 $ (23,284 ) $ (623 ) $ 19,305 Non-competition agreements 2,560 (2,247 ) (28 ) 285 Technology and other 5,199 (2,012 ) (36 ) 3,151 $ 50,971 $ (27,543 ) $ (687 ) $ 22,741 December 31, 2017 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 34,350 $ (19,592 ) $ 614 $ 15,372 Non-competition agreements 2,499 (2,058 ) 45 486 Technology and other 2,130 (1,518 ) 59 671 $ 38,979 $ (23,168 ) $ 718 $ 16,529 |
Future Amortization Expense for Intangible Assets | At December 31, 2018, future amortization expense for intangible assets was as follows (in thousands): 2019 $ 5,026 2020 4,679 2021 3,845 2022 2,742 2023 2,668 Thereafter 3,781 $ 22,741 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets [Abstract] | |
Summary of Changes in Net Amount of Capitalized Implementation Costs for Internal-use Software from Hosting Arrangements | Test The changes in the net amount of capitalized implementation costs for internal-use software from hosting arrangements for the years ended December 31, 2018 and 2017 are as follows (in thousands): 2018 2017 Balances, January 1 $ — $ — Capitalized implementation fees 455 — Amortization of implementation fees — — Balances, December 31 $ 455 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Payments Under Operating Leases | At December 31, 2018, our future minimum payments under operating leases were as follows (in thousands): 2019 $ 4,209 2020 3,542 2021 4,414 2022 4,042 2023 3,854 Thereafter 4,817 $ 24,878 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation Expense | Stock-based compensation expense was allocated as follows (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenues $ 2,168 $ 1,887 $ 1,309 Operating expenses Sales and marketing 2,675 2,197 2,412 Research and development 1,505 949 618 General and administrative 6,162 7,694 3,684 Total stock-based compensation expense $ 12,510 $ 12,727 $ 8,023 Stock-based compensation expense by type was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Stock Options $ 3,355 $ 5,223 $ 3,777 Performance Share Units 1,034 — — Restricted Stock Units 5,930 6,526 3,386 Restricted Stock Awards 487 318 308 Employee Stock Purchase Plan 466 660 552 401K Stock Match 1,238 — — Total stock-based compensation expense $ 12,510 $ 12,727 $ 8,023 |
Stock Option Activity | Our stock option activity was as follows: Weighted Average Options Exercise Price (#) ($/share) Outstanding at December 31, 2015 943,103 $ 37.91 Granted 340,609 48.58 Exercised (221,630 ) 19.42 Forfeited (46,070 ) 55.58 Outstanding at December 31, 2016 1,016,012 44.72 Granted 172,697 55.87 Exercised (65,502 ) 21.53 Forfeited (25,876 ) 55.93 Outstanding at December 31, 2017 1,097,331 47.60 Granted 181,472 59.88 Exercised (344,334 ) 41.66 Forfeited (61,235 ) 56.67 Outstanding at December 31, 2018 873,234 51.86 |
Weighted Average Fair Value Per Share of Options Granted, Assumptions | The weighted-average fair values per share of options granted during the years ended December 31, 2018, 2017 and 2016 were $19.48, $18.85 and $16.13, respectively. The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2018 2017 2016 Volatility 35 % 38 % 38 % Dividend yield — — — Life (in years) 4.44 4.51 4.54 Risk-free interest rate 2.54 % 1.85 % 1.19 % |
Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Weighted-Average Assumptions | The fair value was estimated based on the market price of our common stock at the beginning of each offering period and using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2018 2017 2016 Volatility 26 % 32 % 37 % Dividend yield — — — Life (in years) 0.50 0.50 0.50 Risk-free interest rate 1.77 % 0.90 % 0.42 % |
Performance Share Units and Restricted Stock Units [Member] | |
Performance Share Units and Restricted Stock Units and Restricted Stock Awards | Our PSU and RSU activity was as follows: Weighted Average PSUs and RSUs Grant Date Fair (#) Value ($/share) Outstanding at December 31, 2015 140,565 $ 56.88 Granted 115,896 48.32 Vested and common stock issued (52,133 ) 48.19 Forfeited (15,286 ) 55.48 Outstanding at December 31, 2016 189,042 54.14 Granted 211,168 55.62 Vested and common stock issued (64,950 ) 53.64 Forfeited (13,348 ) 55.39 Outstanding at December 31, 2017 321,912 55.16 Granted 172,795 66.03 Vested and common stock issued (81,561 ) 56.32 Forfeited (35,811 ) 55.04 Outstanding at December 31, 2018 377,335 59.90 |
Restricted Stock Award [Member] | |
Performance Share Units and Restricted Stock Units and Restricted Stock Awards | Our RSA activity was as follows: Weighted Average RSAs Grant Date Fair (#) Value ($/share) Outstanding at December 31, 2015 1,032 $ 67.39 Restricted common stock issued 6,078 52.27 Restrictions lapsed (5,586 ) 55.06 Outstanding at December 31, 2016 1,524 52.28 Restricted common stock issued 5,454 58.29 Restrictions lapsed (5,610 ) 56.65 Outstanding at December 31, 2017 1,368 58.29 Restricted common stock issued 7,304 74.43 Restrictions lapsed (6,840 ) 71.20 Outstanding at December 31, 2018 1,832 74.44 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | Our provisions for income taxes included current federal, foreign and state income tax expense, as well as deferred tax expense as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current Federal $ — $ (184 ) $ 3,684 State 1,103 258 555 Foreign 540 652 599 Deferred Federal 3,011 10,262 (1,337 ) State 224 (291 ) (169 ) Foreign (410 ) (355 ) (577 ) $ 4,468 $ 10,342 $ 2,755 |
Reconciliation of the Provision for Income Taxes to the Statutory Federal Rate | A reconciliation of the expected federal income tax at the statutory rate to the provision for income taxes was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Expected federal income tax at statutory rate $ 5,951 $ 3,635 $ 2,662 State income taxes, net of federal tax effect 1,293 417 284 Tax impact of foreign activity 57 (105 ) (115 ) Nondeductible executive compensation 902 530 159 Nondeductible expenses 351 268 213 Change in valuation allowance (4 ) 16 (35 ) Change in state deferred rate 38 (134 ) (67 ) Research and development credit (1,843 ) (227 ) (261 ) Tax impact of Tax Cuts and Jobs Act — 6,796 — Tax impact of stock activity (2,438 ) (925 ) — Other 161 71 (85 ) Total provision for income taxes $ 4,468 $ 10,342 $ 2,755 |
Significant Components of Deferred Tax Assets (Liabilities) | The significant components of our deferred tax assets (liabilities) were as follows (in thousands): December 31, 2018 2017 Deferred tax assets Net operating loss and credit carryforwards $ 8,356 $ 11,067 Stock-based compensation expense 3,647 4,273 Accounts receivable allowances 464 307 Accrued expenses 3,185 2,126 Other 180 182 Gross deferred tax asset 15,832 17,955 Less: valuation allowance (797 ) (602 ) Total net deferred tax asset 15,035 17,353 Deferred tax liability Deferred operations (2,787 ) (3,850 ) Foreign operations (135 ) (133 ) Depreciation and amortization (2,943 ) (1,536 ) Other (90 ) (24 ) Total deferred tax liability (5,955 ) (5,543 ) Net deferred tax assets $ 9,080 $ 11,810 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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): Year Ended December 31, 2018 2017 2016 Numerator Net income $ 23,872 $ 351 $ 4,963 Denominator Weighted average common shares outstanding, basic 17,196 17,183 16,947 Options to purchase common stock 306 150 267 Restricted stock units 104 23 27 Weighted average common shares outstanding, diluted 17,606 17,356 17,241 Net income per share Basic $ 1.39 $ 0.02 $ 0.29 Diluted $ 1.36 $ 0.02 $ 0.29 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Statements of Comprehensive Income Data | The following table presents our selected unaudited quarterly statements of comprehensive income data (in thousands, except per share amounts): For the Three Months Ended 2018 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 59,092 $ 61,091 $ 62,868 $ 65,189 Gross profit 39,334 40,689 42,457 44,012 Income from operations 4,300 5,965 8,257 8,209 Net income 3,254 5,416 8,061 7,141 Diluted earnings per share $ 0.19 $ 0.31 $ 0.45 $ 0.40 For the Three Months Ended 2017 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 51,879 $ 54,092 $ 56,057 $ 58,057 Gross profit 34,549 35,901 37,412 38,598 Income from operations 3,379 2,956 3,354 292 Net income (loss) 2,985 1,968 2,176 (6,778 ) Diluted earnings per share $ 0.17 $ 0.11 $ 0.13 $ (0.39 ) |
General - Additional Informatio
General - Additional Information (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2018Segment | Jan. 01, 2019USD ($) | |
Schedule Of Accounting Policies [Line Items] | ||
Number of reportable segments | Segment | 1 | |
Deferred commission expected amortization period | 2 years | |
ASU 2016-02 [Member] | Subsequent Event [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Operating leases, right of use assets | $ 15 | |
Operating leases, lease liabilities | $ 15 | |
Minimum [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Hosting services arrangement period | 4 years | |
Minimum [Member] | Subscriber Relationships [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of intangible assets | 3 years | |
Minimum [Member] | Non-competition Agreements [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of intangible assets | 2 years | |
Minimum [Member] | Technology and Other [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of intangible assets | 1 year | |
Maximum [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Hosting services arrangement period | 5 years | |
Maximum [Member] | Subscriber Relationships [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of intangible assets | 10 years | |
Maximum [Member] | Non-competition Agreements [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of intangible assets | 5 years | |
Maximum [Member] | Technology and Other [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of intangible assets | 10 years | |
Computer Equipment and Software [Member] | Minimum [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of property and equipment | 2 years | |
Computer Equipment and Software [Member] | Maximum [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of property and equipment | 3 years | |
Office Equipment and Furniture [Member] | Minimum [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of property and equipment | 5 years | |
Office Equipment and Furniture [Member] | Maximum [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Estimated useful lives of property and equipment | 7 years |
General - Audited Consolidated
General - Audited Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Deferred costs | $ 34,502 | $ 29,966 |
Deferred costs, non-current | 10,973 | 9,967 |
Deferred income tax asset | 10,456 | 13,697 |
LIABILITIES | ||
Accrued compensation | 20,415 | 15,228 |
Deferred revenue | 25,328 | 17,863 |
Deferred revenue, non-current | 2,512 | 2,731 |
STOCKHOLDERS’ EQUITY | ||
Accumulated deficit | $ 15,261 | (8,611) |
ASU 2014-09 [Member] | As Previously Reported [Member] | ||
ASSETS | ||
Deferred costs | 25,091 | |
Deferred costs, non-current | 6,770 | |
Deferred income tax asset | 17,551 | |
LIABILITIES | ||
Accrued compensation | 15,886 | |
Deferred revenue | 16,407 | |
Deferred revenue, non-current | 10,602 | |
STOCKHOLDERS’ EQUITY | ||
Accumulated deficit | (19,902) | |
ASU 2014-09 [Member] | Adjustments [Member] | ||
ASSETS | ||
Deferred costs | 4,875 | |
Deferred costs, non-current | 3,197 | |
Deferred income tax asset | (3,854) | |
LIABILITIES | ||
Accrued compensation | (658) | |
Deferred revenue | 1,456 | |
Deferred revenue, non-current | (7,871) | |
STOCKHOLDERS’ EQUITY | ||
Accumulated deficit | $ 11,291 |
General - Audited Consolidate_2
General - Audited Consolidated Statement of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 65,189 | $ 62,868 | $ 61,091 | $ 59,092 | $ 58,057 | $ 56,057 | $ 54,092 | $ 51,879 | $ 248,240 | $ 220,085 | $ 193,153 |
Operating expenses | |||||||||||
Sales and marketing | 71,719 | 71,261 | 66,876 | ||||||||
Income from operations | 8,209 | 8,257 | 5,965 | 4,300 | 292 | 3,354 | 2,956 | 3,379 | 26,731 | 9,981 | 6,385 |
Income tax expense | 4,468 | 10,342 | 2,755 | ||||||||
Net income (loss) | $ 7,141 | $ 8,061 | $ 5,416 | $ 3,254 | $ (6,778) | $ 2,176 | $ 1,968 | $ 2,985 | $ 23,872 | $ 351 | $ 4,963 |
Net income per share | |||||||||||
Basic | $ 1.39 | $ 0.02 | $ 0.29 | ||||||||
Diluted | $ 0.40 | $ 0.45 | $ 0.31 | $ 0.19 | $ (0.39) | $ 0.13 | $ 0.11 | $ 0.17 | $ 1.36 | $ 0.02 | $ 0.29 |
ASU 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues | $ 220,566 | $ 193,295 | |||||||||
Operating expenses | |||||||||||
Sales and marketing | 73,295 | 65,886 | |||||||||
Income from operations | 8,428 | 7,517 | |||||||||
Income tax expense | 11,580 | 3,140 | |||||||||
Net income (loss) | $ (2,440) | $ 5,710 | |||||||||
Net income per share | |||||||||||
Basic | $ (0.14) | $ 0.34 | |||||||||
Diluted | $ (0.14) | $ 0.33 | |||||||||
ASU 2014-09 [Member] | Adjustments [Member] | |||||||||||
Revenues | $ (481) | $ (142) | |||||||||
Operating expenses | |||||||||||
Sales and marketing | (2,034) | 990 | |||||||||
Income from operations | 1,553 | (1,132) | |||||||||
Income tax expense | (1,238) | (385) | |||||||||
Net income (loss) | $ 2,791 | $ (747) | |||||||||
Net income per share | |||||||||||
Basic | $ 0.16 | $ (0.05) | |||||||||
Diluted | $ 0.16 | $ (0.04) |
General - Audited Consolidate_3
General - Audited Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||||||||||
Net income (loss) | $ 7,141 | $ 8,061 | $ 5,416 | $ 3,254 | $ (6,778) | $ 2,176 | $ 1,968 | $ 2,985 | $ 23,872 | $ 351 | $ 4,963 |
Reconciliation of net income to net cash provided by operating activities | |||||||||||
Deferred income taxes | 2,798 | 9,616 | (2,083) | ||||||||
Changes in assets and liabilities | |||||||||||
Deferred costs | (5,564) | (7,813) | (4,085) | ||||||||
Accrued compensation | 3,957 | 1,304 | 2,291 | ||||||||
Deferred revenue | 7,094 | 5,588 | 2,852 | ||||||||
Net cash provided by operating activities | $ 55,015 | 31,050 | 18,765 | ||||||||
ASU 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Cash flows from operating activities | |||||||||||
Net income (loss) | (2,440) | 5,710 | |||||||||
Reconciliation of net income to net cash provided by operating activities | |||||||||||
Deferred income taxes | 10,854 | (1,698) | |||||||||
Changes in assets and liabilities | |||||||||||
Deferred costs | (6,548) | (4,964) | |||||||||
Accrued compensation | 2,073 | 2,180 | |||||||||
Deferred revenue | 5,107 | 2,710 | |||||||||
Net cash provided by operating activities | 31,050 | 18,765 | |||||||||
ASU 2014-09 [Member] | Adjustments [Member] | |||||||||||
Cash flows from operating activities | |||||||||||
Net income (loss) | 2,791 | (747) | |||||||||
Reconciliation of net income to net cash provided by operating activities | |||||||||||
Deferred income taxes | (1,238) | (385) | |||||||||
Changes in assets and liabilities | |||||||||||
Deferred costs | (1,265) | 879 | |||||||||
Accrued compensation | (769) | 111 | |||||||||
Deferred revenue | $ 481 | $ 142 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Detail) - USD ($) | Dec. 18, 2018 | Oct. 03, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Amortization expense for purchased intangible assets | $ 4,093,000 | $ 4,574,000 | $ 4,738,000 | |||
Stock issued for acquisition | 3,371,000 | $ 2,922,000 | ||||
E D I Admin [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ 7,461,000 | |||||
Maximum payout of contingent consideration | $ 1,700,000 | |||||
Amortization expense for purchased intangible assets | $ 100,000 | |||||
E D I Admin [Member] | Contingent Consideration Liability [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Other expense | $ 100,000 | |||||
CovalentWorks [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ 19,431,000 | |||||
Stock issued for acquisition | $ 3,371,000 | |||||
Stock issued for acquisition, Shares | 40,478 |
Business Acquisitions - Busines
Business Acquisitions - Business Purchase Price (Detail) - USD ($) $ in Thousands | Dec. 18, 2018 | Oct. 03, 2018 | Dec. 31, 2018 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
SPS Commerce, Inc. common stock | $ 3,371 | $ 2,922 | ||
E D I Admin [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 7,461 | |||
Fair value of earn-out liability | 1,274 | |||
Total purchase price | $ 8,735 | |||
CovalentWorks [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 19,431 | |||
SPS Commerce, Inc. common stock | 3,371 | |||
Total purchase price | $ 22,802 |
Business Acquisitions - Estimat
Business Acquisitions - Estimated Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 18, 2018 | Oct. 03, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Goodwill | $ 69,658 | $ 51,613 | $ 49,777 | ||
E D I Admin [Member] | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Current assets | $ 631 | ||||
Goodwill | 4,871 | ||||
Intangible assets | 3,400 | ||||
Current liabilities | (57) | ||||
Deferred revenue | (110) | ||||
Total purchase price | $ 8,735 | ||||
CovalentWorks [Member] | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Current assets | $ 244 | ||||
Property and equipment | 44 | ||||
Goodwill | 15,402 | ||||
Intangible assets | 7,210 | ||||
Current liabilities | (56) | ||||
Deferred revenue | (42) | ||||
Total purchase price | $ 22,802 |
Business Acquisitions - Estim_2
Business Acquisitions - Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives (Detail) - USD ($) $ in Thousands | Dec. 18, 2018 | Oct. 03, 2018 |
E D I Admin [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 3,400 | |
E D I Admin [Member] | Subscriber Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 600 | |
Estimated Life (in years) | 10 years | |
E D I Admin [Member] | Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 2,800 | |
Estimated Life (in years) | 10 years | |
CovalentWorks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 7,210 | |
CovalentWorks [Member] | Subscriber Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 7,100 | |
Estimated Life (in years) | 7 years | |
CovalentWorks [Member] | Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 100 | |
Estimated Life (in years) | 3 years | |
CovalentWorks [Member] | Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 10 | |
Estimated Life (in years) | 1 year |
Revenue - Summary of Revenues b
Revenue - Summary of Revenues by Revenue Stream (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Recognition [Line Items] | |||||||||||
Revenues | $ 65,189 | $ 62,868 | $ 61,091 | $ 59,092 | $ 58,057 | $ 56,057 | $ 54,092 | $ 51,879 | $ 248,240 | $ 220,085 | $ 193,153 |
Recurring Revenues [Member] | |||||||||||
Revenue Recognition [Line Items] | |||||||||||
Revenues | 230,654 | 203,920 | 177,057 | ||||||||
One-time Revenues [Member] | |||||||||||
Revenue Recognition [Line Items] | |||||||||||
Revenues | 17,586 | 16,165 | 16,096 | ||||||||
Fulfillment [Member] | Recurring Revenues [Member] | |||||||||||
Revenue Recognition [Line Items] | |||||||||||
Revenues | 190,783 | 164,682 | 139,645 | ||||||||
Analytics [Member] | Recurring Revenues [Member] | |||||||||||
Revenue Recognition [Line Items] | |||||||||||
Revenues | 34,447 | 34,260 | 32,938 | ||||||||
Other [Member] | Recurring Revenues [Member] | |||||||||||
Revenue Recognition [Line Items] | |||||||||||
Revenues | $ 5,424 | $ 4,978 | $ 4,474 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | |
Earliest timing of billings | in advance |
Latest timing of billings | 30 days |
Estimated period for material rights present to customers | 2 years |
Set up fees recognized period | 2 years |
Maximum recognition period for miscellaneous one-time fee | 1 year |
Analytics Solution [Member] | |
Disaggregation Of Revenue [Line Items] | |
Set up fees recognized period | 1 year |
Minimum [Member] | |
Disaggregation Of Revenue [Line Items] | |
Customer contract cancellation period | 30 days |
Current amount recognition period of set up fees | 1 month |
Long term amount recognition period of set up fees | 13 months |
Maximum [Member] | |
Disaggregation Of Revenue [Line Items] | |
Customer contract cancellation period | 90 days |
Deferred revenue recognition period | 1 year |
Contract period for remaining performance obligations for contracts in which the optional exemption under ASC 606-10-50-14(a) was applied | 1 year |
Current amount recognition period of set up fees | 12 months |
Long term amount recognition period of set up fees | 24 months |
Revenue - Summary of Deferred R
Revenue - Summary of Deferred Revenue Liability Relating to Set-Up Fees (Detail) - Set-Up Fees [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Revenue Arrangement [Line Items] | ||
Balances, at beginning of period | $ 10,031 | $ 9,995 |
Invoiced set-up fees | 10,271 | 10,625 |
Amortized set-up fees | (10,445) | (10,589) |
Balances, at end of period | $ 9,857 | $ 10,031 |
Deferred Costs - Additional Inf
Deferred Costs - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs [Abstract] | |
Deferred commission expected amortization period | 2 years |
Deferred Costs - Summary of Def
Deferred Costs - Summary of Deferred Costs and Amortization of Deferred Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Costs [Abstract] | ||
Balances, at beginning of period | $ 39,933 | $ 32,117 |
Incurred deferred costs | 49,583 | 44,628 |
Amortized deferred costs | (44,041) | (36,812) |
Balances, at end of period | $ 45,475 | $ 39,933 |
Financial Instruments - Summary
Financial Instruments - Summary of Cash Equivalents and Short and Long-term Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial Instruments [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Due within one year | $ 153,802 | $ 144,736 |
Amortized Cost | 153,648 | 149,953 |
Due within two years | 5,206 | |
Unrealized Gains (Losses) | 154 | (11) |
Fair Value | 153,802 | 149,942 |
Money Market Funds [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 109,265 | 104,544 |
Fair Value | 109,265 | 104,544 |
Certificate of Deposit [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 7,000 | 7,814 |
Fair Value | 7,000 | 7,814 |
Corporate Bonds [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 15,194 | 17,758 |
Unrealized Gains (Losses) | 40 | (57) |
Fair Value | 15,234 | 17,701 |
Commercial Paper [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 9,889 | 7,456 |
Unrealized Gains (Losses) | 76 | 20 |
Fair Value | 9,965 | 7,476 |
U.S. Treasury Securities [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 12,300 | 12,381 |
Unrealized Gains (Losses) | 38 | 26 |
Fair Value | $ 12,338 | $ 12,407 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - E D I Admin [Member] | Oct. 03, 2018USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Maximum payout of contingent consideration | $ 1,700,000 |
Level 3 [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Maximum payout of contingent consideration | $ 1,700,000 |
Financial Instruments - Summa_2
Financial Instruments - Summary of Financial Assets Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | $ 153,802 | $ 149,942 |
Liabilities fair value | 1,368 | |
Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 109,265 | 104,544 |
Certificate of Deposit [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,000 | 7,814 |
Corporate Bonds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 15,234 | 17,701 |
Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 9,965 | 7,476 |
U.S. Treasury Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 12,338 | 12,407 |
Earn-out Liability [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities fair value | 1,368 | |
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 116,265 | 112,358 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 109,265 | 104,544 |
Level 1 [Member] | Certificate of Deposit [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,000 | 7,814 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 37,537 | 37,584 |
Level 2 [Member] | Corporate Bonds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 15,234 | 17,701 |
Level 2 [Member] | Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 9,965 | 7,476 |
Level 2 [Member] | U.S. Treasury Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 12,338 | $ 12,407 |
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities fair value | 1,368 | |
Level 3 [Member] | Earn-out Liability [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities fair value | $ 1,368 |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts - Schedule of Allowance for Doubtful Activity Included in Accounts Receivable Net (Detail) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balances, January 1 | $ 763 | $ 515 | $ 446 |
Provision for doubtful accounts | 2,590 | 1,705 | 1,375 |
Write-offs, net of recoveries | (1,961) | (1,457) | (1,306) |
Balances, December 31 | $ 1,392 | $ 763 | $ 515 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 62,132 | $ 50,807 |
Less: accumulated depreciation and amortization | (41,175) | (33,951) |
Net, Total | 20,957 | 16,856 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 44,781 | 35,326 |
Office Equipment and Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 7,985 | 7,439 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 9,366 | $ 8,042 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Outside of U.S [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Property and equipment, net held at subsidiary and office locations outside of the U.S. | $ 1.7 | $ 2.2 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Balances, January 1 | $ 51,613 | $ 49,777 |
Additions from business acquisitions | 20,272 | |
Foreign currency translation | (2,227) | 1,836 |
Balances, December 31 | $ 69,658 | $ 51,613 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | $ 50,971 | $ 38,979 |
Accumulated Amortization | (27,543) | (23,168) |
Foreign Currency Translation | (687) | 718 |
Net | 22,741 | 16,529 |
Subscriber Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 43,212 | 34,350 |
Accumulated Amortization | (23,284) | (19,592) |
Foreign Currency Translation | (623) | 614 |
Net | 19,305 | 15,372 |
Non-competition Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 2,560 | 2,499 |
Accumulated Amortization | (2,247) | (2,058) |
Foreign Currency Translation | (28) | 45 |
Net | 285 | 486 |
Technology and Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 5,199 | 2,130 |
Accumulated Amortization | (2,012) | (1,518) |
Foreign Currency Translation | (36) | 59 |
Net | $ 3,151 | $ 671 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 4,093 | $ 4,574 | $ 4,738 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net - Future Amortization Expense for Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 5,026 | |
2,020 | 4,679 | |
2,021 | 3,845 | |
2,022 | 2,742 | |
2,023 | 2,668 | |
Thereafter | 3,781 | |
Net | $ 22,741 | $ 16,529 |
Other Assets - Summary of Chang
Other Assets - Summary of Changes in Net Amount of Capitalized Implementation Costs for Internal-use Software from Hosting Arrangements (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Capitalized Computer Software Net [Abstract] | |
Capitalized implementation fees | $ 455 |
Ending balance | $ 455 |
Other Assets - Additional Infor
Other Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Capitalized Computer Software Net [Abstract] | ||
Impairment losses on capitalized implementation costs | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Dec. 20, 2017ft²Option | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2020ft² |
Commitments And Contingencies [Line Items] | |||||
Rent expense charged to operations | $ 5.6 | $ 4.9 | $ 5 | ||
Current Headquarters [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Lease agreement expires, date | Apr. 30, 2025 | ||||
Number of options to extend term of the lease | Option | 2 | ||||
Lease extension period, number of years | 5 years | ||||
Incentives received upon execution of amendment | 3.2 | ||||
Incentives Owed Upon Expansion of Square Footage | $ 2.1 | ||||
Current Headquarters [Member] | Minneapolis, Minnesota [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Current leased space for headquarters | ft² | 189,000 | ||||
Current Headquarters [Member] | Scenario, Forecast [Member] | Minneapolis, Minnesota [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Future expansion of headquarters premises | ft² | 25,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments Under Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,019 | $ 4,209 |
2,020 | 3,542 |
2,021 | 4,414 |
2,022 | 4,042 |
2,023 | 3,854 |
Thereafter | 4,817 |
Operating leases, total | $ 24,878 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 18, 2018 | Nov. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Stockholders Equity [Line Items] | |||||
Stock issued for acquisition | $ 3,371 | $ 2,922 | |||
Treasury stock at cost | $ 19,864 | $ 5,815 | |||
Common Stock [Member] | |||||
Schedule Of Stockholders Equity [Line Items] | |||||
Stock issued for acquisition, Shares | 40,478 | 43,953 | |||
Stock repurchase program, authorized amount | $ 50,000 | ||||
Stock repurchase program, period | 2 years | ||||
Repurchase of treasury shares | (289,745) | (122,147) | |||
Stock repurchase program, available for future repurchases | $ 24,300 | ||||
CovalentWorks [Member] | |||||
Schedule Of Stockholders Equity [Line Items] | |||||
Stock issued for acquisition, Shares | 40,478 | ||||
Stock issued for acquisition | $ 3,371 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2018 | Feb. 28, 2017shares | Dec. 31, 2018USD ($)Offering$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Jan. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for grant | shares | 5,300,000 | |||||
Stock-based compensation expense | $ 12,510 | $ 12,727 | $ 8,023 | |||
Unrecognized stock-based compensation expense | $ 13,600 | |||||
Unrecognized stock-based compensation, expected to be recognized, weighted average period | 2 years 3 months 18 days | |||||
Fair value of options vested | $ 3,700 | 4,200 | 3,400 | |||
Intrinsic value of options exercised | 14,900 | 2,800 | 8,600 | |||
Intrinsic value of options outstanding | $ 26,700 | $ 7,300 | $ 25,600 | |||
Weighted average fair value per share of options granted | $ / shares | $ 19.48 | $ 18.85 | $ 16.13 | |||
Employee Stock Purchase Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Additional shares reserved for issuance under the plan | shares | 1,000,000 | |||||
Stock-based compensation expense | $ 500 | $ 700 | $ 600 | |||
Number of offerings per year | Offering | 2 | |||||
Amount withheld from employees | $ 1,700 | $ 1,900 | $ 1,700 | |||
Employee stock purchase plan, shares purchased | shares | 34,798 | 40,968 | 33,357 | |||
Maximum [Member] | Employee Stock Purchase Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price as a percentage of fair market value | 85.00% | |||||
Chief Executive Officers [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 3,600 | |||||
Equity Incentive Plan [Member] | 2010 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Additional shares reserved for issuance under the plan | shares | 1,024,868 | 1,027,620 | ||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 3,355 | 5,223 | $ 3,777 | |||
Vesting period | 4 years | |||||
Stock options exercisable | shares | 576,842 | |||||
Weighted average exercise price | $ / shares | $ 50.10 | |||||
Weighted average remaining contractual life | 4 years | |||||
Stock Options [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options contractual term range | 7 years | |||||
Stock Options [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options contractual term range | 10 years | |||||
Performance Share Unit [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | 3 years | ||||
Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 5,930 | 6,526 | 3,386 | |||
Vesting period | 4 years | |||||
Restricted Stock Award [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 487 | $ 318 | $ 308 | |||
Restricted stock awards units vest over, period | 1 year | |||||
Performance Share Units and Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of RSU's vested and not issued during the period | shares | 54,688 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 12,510 | $ 12,727 | $ 8,023 |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 3,355 | 5,223 | 3,777 |
Performance Share Unit [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Performance Share Units | 1,034 | ||
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 5,930 | 6,526 | 3,386 |
Restricted Stock Award [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 487 | 318 | 308 |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 466 | 660 | 552 |
401(k) Stock Match [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,238 | ||
Cost of Revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 2,168 | 1,887 | 1,309 |
Sales and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 2,675 | 2,197 | 2,412 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,505 | 949 | 618 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 6,162 | $ 7,694 | $ 3,684 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Options Outstanding, Beginning balance | 1,097,331 | 1,016,012 | 943,103 |
Options, Granted | 181,472 | 172,697 | 340,609 |
Options, Exercised | (344,334) | (65,502) | (221,630) |
Options, Forfeited | (61,235) | (25,876) | (46,070) |
Options Outstanding, Ending balance | 873,234 | 1,097,331 | 1,016,012 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 47.60 | $ 44.72 | $ 37.91 |
Weighted Average Exercise Price, Granted | 59.88 | 55.87 | 48.58 |
Weighted Average Exercise Price, Exercised | 41.66 | 21.53 | 19.42 |
Weighted Average Exercise Price, Forfeited | 56.67 | 55.93 | 55.58 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 51.86 | $ 47.60 | $ 44.72 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Fair Value Per Share of Options Granted, Assumptions (Detail) - Stock Options [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 35.00% | 38.00% | 38.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Life (in years) | 4 years 5 months 8 days | 4 years 6 months 3 days | 4 years 6 months 15 days |
Risk-free interest rate | 2.54% | 1.85% | 1.19% |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Share Units and Restricted Stock Units (Detail) - Performance Share Units and Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, Outstanding, Beginning Balance | 321,912 | 189,042 | 140,565 |
Granted, stock units | 172,795 | 211,168 | 115,896 |
Vested and common stock issued, stock units | (81,561) | (64,950) | (52,133) |
Forfeited, stock units | (35,811) | (13,348) | (15,286) |
Stock awards, Outstanding, Ending Balance | 377,335 | 321,912 | 189,042 |
Weighted average grant date fair value, Outstanding, Beginning Balance | $ 55.16 | $ 54.14 | $ 56.88 |
Granted, Weighted Average Grant Date Fair Value | 66.03 | 55.62 | 48.32 |
Vested and common stock issued, Weighted Average Grant Date Fair Value | 56.32 | 53.64 | 48.19 |
Forfeited, Weighted Average Grant Date Fair Value | 55.04 | 55.39 | 55.48 |
Weighted average grant date fair value, Outstanding, Ending Balance | $ 59.90 | $ 55.16 | $ 54.14 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Detail) - Restricted Stock Award [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, Outstanding, Beginning Balance | 1,368 | 1,524 | 1,032 |
Restricted common stock issued, stock awards | 7,304 | 5,454 | 6,078 |
Restrictions lapsed, stock awards | (6,840) | (5,610) | (5,586) |
Stock awards, Outstanding, Ending Balance | 1,832 | 1,368 | 1,524 |
Weighted average grant date fair value, Outstanding, Beginning Balance | $ 58.29 | $ 52.28 | $ 67.39 |
Restricted common stock issued, Weighted Average Grant Date Fair Value | 74.43 | 58.29 | 52.27 |
Restrictions lapsed, Weighted Average Grant Date Fair Value | 71.20 | 56.65 | 55.06 |
Weighted average grant date fair value, Outstanding, Ending Balance | $ 74.44 | $ 58.29 | $ 52.28 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Weighted-Average Assumptions (Detail) - Employee Stock Purchase Plan [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 26.00% | 32.00% | 37.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Life (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 1.77% | 0.90% | 0.42% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current | |||
Federal | $ (184) | $ 3,684 | |
State | $ 1,103 | 258 | 555 |
Foreign | 540 | 652 | 599 |
Deferred | |||
Federal | 3,011 | 10,262 | (1,337) |
State | 224 | (291) | (169) |
Foreign | (410) | (355) | (577) |
Total provision for income taxes | $ 4,468 | $ 10,342 | $ 2,755 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Expense Benefit [Line Items] | ||
Reclass of AMT credit carryforward to current federal expense | $ 400 | |
Unutilized alternative minimum tax credit carryforwards partially refundable year one | 2,019 | |
Unutilized alternative minimum tax credit carryforwards partially refundable year two | 2,020 | |
Unutilized alternative minimum tax credit carryforwards partially refundable year three | 2,021 | |
Unutilized alternative minimum tax credit carryforwards fully refundable year | 2,022 | |
Tax expense related to The Job Cuts and Tax Act (“Tax Act”), primarily due to reduction in corporate tax rate | 6,796 | |
Corporate federal income tax rate | 21.00% | |
Valuation allowance against our deferred tax assets | $ 797 | $ 602 |
Domestic Tax Authority [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Net operating loss carryforward | $ 37,500 | |
Expiration of net operating loss carryforwards | Loss carryforwards for federal tax purposes will expire between 2020 and 2038 if not utilized | |
Losses expected to expire unused | $ 17,600 | |
Maximum annual limitation of federal net operating losses | 1,000 | |
Domestic Tax Authority [Member] | Research and Development [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Research and development credit carryforwards | $ 3,000 | |
Year in which credit carryforward begins to expire | 2,030 | |
State and Local Jurisdiction [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Net operating loss carryforward | $ 4,100 | |
Expiration of net operating loss carryforwards | Loss carryforwards for state tax purposes will expire between 2019 and 2031 if not utilized | |
State and Local Jurisdiction [Member] | Net Operating Loss and Credit Carryforwards [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Valuation allowance against our deferred tax assets | $ 800 | |
State and Local Jurisdiction [Member] | Research and Development [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Research and development credit carryforwards | $ 1,000 | |
Year in which credit carryforward begins to expire | 2,025 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes to Statutory Federal Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Expected federal income tax at statutory rate | $ 5,951 | $ 3,635 | $ 2,662 |
State income taxes, net of federal tax effect | 1,293 | 417 | 284 |
Tax impact of foreign activity | 57 | (105) | (115) |
Nondeductible executive compensation | 902 | 530 | 159 |
Nondeductible expenses | 351 | 268 | 213 |
Change in valuation allowance | (4) | 16 | (35) |
Change in state deferred rate | 38 | (134) | (67) |
Research and development credit | (1,843) | (227) | (261) |
Tax impact of Tax Cuts and Jobs Act | 6,796 | ||
Tax impact of stock activity | (2,438) | (925) | |
Other | 161 | 71 | (85) |
Total provision for income taxes | $ 4,468 | $ 10,342 | $ 2,755 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets (Liabilities) (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | ||
Net operating loss and credit carryforwards | $ 8,356 | $ 11,067 |
Stock-based compensation expense | 3,647 | 4,273 |
Accounts receivable allowances | 464 | 307 |
Accrued expenses | 3,185 | 2,126 |
Other | 180 | 182 |
Gross deferred tax asset | 15,832 | 17,955 |
Less: valuation allowance | (797) | (602) |
Total net deferred tax asset | 15,035 | 17,353 |
Deferred tax liability | ||
Deferred operations | (2,787) | (3,850) |
Foreign operations | (135) | (133) |
Depreciation and amortization | (2,943) | (1,536) |
Other | (90) | (24) |
Total deferred tax liability | (5,955) | (5,543) |
Net deferred tax assets | $ 9,080 | $ 11,810 |
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 | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator | |||||||||||
Net income | $ 7,141 | $ 8,061 | $ 5,416 | $ 3,254 | $ (6,778) | $ 2,176 | $ 1,968 | $ 2,985 | $ 23,872 | $ 351 | $ 4,963 |
Denominator | |||||||||||
Weighted average common shares outstanding, basic | 17,196 | 17,183 | 16,947 | ||||||||
Options to purchase common stock | 306 | 150 | 267 | ||||||||
Restricted stock units | 104 | 23 | 27 | ||||||||
Weighted average common shares outstanding, diluted | 17,606 | 17,356 | 17,241 | ||||||||
Net income per share | |||||||||||
Basic | $ 1.39 | $ 0.02 | $ 0.29 | ||||||||
Diluted | $ 0.40 | $ 0.45 | $ 0.31 | $ 0.19 | $ (0.39) | $ 0.13 | $ 0.11 | $ 0.17 | $ 1.36 | $ 0.02 | $ 0.29 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income per share | |||
Outstanding potential common shares excluded from calculation of diluted net income (loss) per share | 1 | 283 | 5 |
Retirement Savings Plan - Addit
Retirement Savings Plan - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum allowable contribution by employee percentage | 100.00% | ||
Defined benefit plan employer matching contribution percent | 50.00% | ||
Maximum annual contribution per employee, percent | 6.00% | ||
Employer matching contribution amount | $ 2,900 | $ 1,600 | $ 1,400 |
Stock-based compensation expense | 12,510 | $ 12,727 | $ 8,023 |
401(k) Stock Match [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Stock-based compensation expense | $ 1,238 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - SPS Commerce Foundation [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Contributions to Foundation | $ 700,000 | $ 200,000 |
Legal obligations for future commitments to Foundation | 0 | |
Directors of Foundation [Member] | ||
Related Party Transaction [Line Items] | ||
Officers' compensation from Foundation | $ 0 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Summary of Unaudited Quarterly Statements of Comprehensive Income Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 65,189 | $ 62,868 | $ 61,091 | $ 59,092 | $ 58,057 | $ 56,057 | $ 54,092 | $ 51,879 | $ 248,240 | $ 220,085 | $ 193,153 |
Gross profit | 44,012 | 42,457 | 40,689 | 39,334 | 38,598 | 37,412 | 35,901 | 34,549 | 166,492 | 146,460 | 128,807 |
Income from operations | 8,209 | 8,257 | 5,965 | 4,300 | 292 | 3,354 | 2,956 | 3,379 | 26,731 | 9,981 | 6,385 |
Net income (loss) | $ 7,141 | $ 8,061 | $ 5,416 | $ 3,254 | $ (6,778) | $ 2,176 | $ 1,968 | $ 2,985 | $ 23,872 | $ 351 | $ 4,963 |
Diluted earnings per share | $ 0.40 | $ 0.45 | $ 0.31 | $ 0.19 | $ (0.39) | $ 0.13 | $ 0.11 | $ 0.17 | $ 1.36 | $ 0.02 | $ 0.29 |