Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Support.com, Inc. | |
Entity Central Index Key | 1,104,855 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 55,527,592 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 15,731 | $ 27,598 | |
Short-term investments | 38,766 | 38,136 | |
Accounts receivable, net | 10,195 | 10,019 | |
Prepaid expenses and other current assets | 1,352 | 1,474 | |
Total current assets | 66,044 | 77,227 | |
Property and equipment, net | 1,940 | 1,989 | |
Intangible assets, net | 493 | 1,294 | |
Other assets | 988 | 982 | |
Total assets | 69,465 | 81,492 | |
Current liabilities: | |||
Accounts payable | 617 | 267 | |
Accrued compensation | 2,405 | 2,768 | |
Other accrued liabilities | 2,601 | 4,135 | |
Short-term deferred revenue | 2,658 | 2,184 | |
Total current liabilities | 8,281 | 9,354 | |
Long-term deferred revenue | 72 | 102 | |
Other long-term liabilities | 415 | 690 | |
Total liabilities | 8,768 | 10,146 | |
Commitments and contingencies (Note 4) | |||
Stockholders' equity: | |||
Common stock; par value $0.0001, 150,000,000 shares authorized; 56,762,766 issued and 55,385,052 outstanding at September 30, 2016; 56,152,317 issued and 54,860,883 outstanding at December 31, 2015 | 6 | 5 | |
Additional paid-in capital | 267,144 | 265,324 | |
Treasury stock, at cost (1,377,714 shares at September 30, 2016 and 1,291,434 shares at December 31, 2015) | (5,239) | (5,167) | |
Accumulated other comprehensive loss | (2,233) | (2,302) | |
Accumulated deficit | (198,981) | (186,514) | |
Total stockholders' equity | 60,697 | 71,346 | |
Total liabilities and stockholders' equity | $ 69,465 | $ 81,492 | |
[1] | Derived from the December 31, 2015 audited Consolidated Financial Statements included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission ("SEC") on March 7, 2016. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 56,762,766 | 56,152,317 |
Common stock, shares outstanding (in shares) | 55,385,052 | 54,860,883 |
Treasury stock (in shares) | 1,377,714 | 1,291,434 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Services | $ 14,163 | $ 16,563 | $ 43,055 | $ 57,733 |
Software and other | 1,364 | 1,302 | 3,998 | 3,889 |
Total revenue | 15,527 | 17,865 | 47,053 | 61,622 |
Costs of revenue: | ||||
Cost of services | 11,847 | 14,357 | 38,403 | 48,555 |
Cost of software and other | 120 | 128 | 377 | 409 |
Total cost of revenue | 11,967 | 14,485 | 38,780 | 48,964 |
Gross profit | 3,560 | 3,380 | 8,273 | 12,658 |
Operating expenses: | ||||
Research and development | 1,336 | 1,790 | 4,464 | 5,244 |
Sales and marketing | 1,463 | 2,195 | 5,401 | 6,492 |
General and administrative | 2,703 | 3,047 | 10,186 | 9,183 |
Amortization of intangible assets and other | 267 | 267 | 801 | 802 |
Goodwill impairment | 0 | 0 | 0 | 14,240 |
Restructuring | 0 | 0 | 423 | 0 |
Total operating expenses | 5,769 | 7,299 | 21,275 | 35,961 |
Loss from operations | (2,209) | (3,919) | (13,002) | (23,303) |
Interest income and other, net | 124 | 113 | 383 | 319 |
Loss from continuing operations, before income taxes | (2,085) | (3,806) | (12,619) | (22,984) |
Income tax provision (benefit) | 44 | 60 | 132 | (1,041) |
Loss from continuing operations, after income taxes | (2,129) | (3,866) | (12,751) | (21,943) |
Income (loss) from discontinued operations, after income taxes | 0 | (5) | 284 | 32 |
Net loss | $ (2,129) | $ (3,871) | $ (12,467) | $ (21,911) |
Basic and diluted loss per share: | ||||
Loss from continuing operations (in dollars per shares) | $ (0.04) | $ (0.07) | $ (0.23) | $ (0.40) |
Income (loss) from discontinued operations (in dollars per shares) | 0 | 0 | 0 | 0 |
Basic and diluted net loss per share (in dollars per shares) | $ (0.04) | $ (0.07) | $ (0.23) | $ (0.40) |
Shares used in computing basic net loss per share (in shares) | 55,337 | 54,637 | 55,116 | 54,465 |
Shares used in computing diluted net loss per share (in shares) | 55,337 | 54,637 | 55,116 | 54,465 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ||||
Net loss | $ (2,129) | $ (3,871) | $ (12,467) | $ (21,911) |
Other comprehensive income (loss): | ||||
Change in foreign currency translation adjustment | 25 | (130) | (13) | (168) |
Change in net unrealized gain (loss) on investments | (40) | 20 | 82 | 44 |
Other comprehensive gain (loss) | (15) | (110) | 69 | (124) |
Comprehensive loss | $ (2,144) | $ (3,981) | $ (12,398) | $ (22,035) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Operating Activities: | |||
Net loss | $ (12,467) | $ (21,911) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 530 | 250 | |
Goodwill impairment | 0 | 14,240 | |
Amortization of premiums and accretion of discounts on investments | 244 | 366 | |
Amortization of intangible assets and other | 801 | 802 | |
Stock-based compensation | 1,776 | 2,229 | |
Changes in assets and liabilities: | |||
Accounts receivable, net | (176) | 3,419 | |
Prepaid expenses and other current assets | 122 | (284) | |
Other long-term assets | (5) | 92 | |
Accounts payable | 350 | (1,056) | |
Accrued compensation | (363) | (815) | |
Other accrued liabilities | (1,534) | 993 | |
Other long-term liabilities | (324) | (1,377) | |
Deferred revenue | 444 | (551) | |
Net cash used in operating activities | (10,602) | (3,603) | |
Investing Activities: | |||
Purchases of property and equipment | (481) | (1,270) | |
Purchases of investments | (22,901) | (31,668) | |
Maturities of investments | 22,109 | 39,965 | |
Net cash provided by (used in) investing activities | (1,273) | 7,027 | |
Financing Activities: | |||
Proceeds from employee stock purchase plan | 45 | 87 | |
Repurchase of common stock | (72) | (100) | |
Net cash used in financing activities | (27) | (13) | |
Effect of exchange rate changes on cash and cash equivalents | 35 | (178) | |
Net increase (decrease) in cash and cash equivalents | (11,867) | 3,233 | |
Cash and cash equivalents at beginning of period | 27,598 | [1] | 23,354 |
Cash and cash equivalents at end of period | 15,731 | 26,587 | |
Supplemental schedule of cash flow information: | |||
Income taxes paid | $ 132 | $ 149 | |
[1] | Derived from the December 31, 2015 audited Consolidated Financial Statements included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission ("SEC") on March 7, 2016. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 1. Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements include the accounts of Support.com, Inc. (the “Company” or “Support.com”, “We” or “Our”) and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated balance sheet as of September 30, 2016 and the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2016 and 2015 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2016 and 2015 are unaudited. In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of the results for, and as of, the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year or for any future period. The condensed consolidated balance sheet information as of December 31, 2015 is derived from audited financial statements as of that date. These financial statements have been prepared based upon Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, t hese unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 7, 2016. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The accounting estimates that require management’s most significant, difficult and subjective judgments include accounting for revenue recognition, assumptions used to estimate self-insurance accruals, the valuation and recognition of investments, the assessment of recoverability of intangible assets and their estimated useful lives, the valuations and recognition of stock-based compensation and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ materially from these estimates. Revenue Recognition For all transactions, we recognize revenue only when all of the following criteria are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred; • Collection is considered probable; and • The fees are fixed or determinable. We consider all arrangements with payment terms longer than 90 days not to be fixed or determinable. If the fee is considered not to be fixed or determinable, revenue is recognized as payment becomes due from the customer provided all other revenue recognition criteria have been met. Services Revenue Services revenue is comprised primarily of fees for technology support services. Our service programs are designed for both the consumer and small and medium business (“SMB”) markets, and include computer and mobile device set-up, security and support, virus and malware removal and wireless network set-up, and automation system onboarding and support. We offer technology services to consumers and SMBs, primarily through our partners (which include communications providers, retailers, technology companies and others) and to a lesser degree directly through our website at www.support.com. We transact with customers via reseller programs, referral programs and direct transactions. In reseller programs, the partner generally executes the financial transactions with the customer and pays a fee to us which we recognize as revenue when the service is delivered. In referral programs, we transact with the customer directly and pay a referral fee to the referring party. Referral fees are generally expensed in the period in which revenues are recognized. In such referral programs, since we are the primary obligor and bear substantially all risks associated with the transaction, we record the gross amount of revenue. In direct transactions, we sell directly to the customer at the retail price. The technology services described above include four types of offerings: · Hourly-Based Services - In connection with the provisions of certain services programs, fees are calculated based on contracted hourly rates with partners. For these programs, we recognize revenue as services are performed, based on billable hours of work delivered by our technology specialists. These services programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred. · Subscription-Based Services - Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods. · Incident-Based Services - Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery. · Service Cards / Gift Cards - Customers purchase a service card or a gift card, which entitles the cardholder to redeem a certain service at a time of their choosing. For these sales, revenue is deferred until the card has been redeemed and the service has been provided. In certain cases, we are paid for services that are sold but not yet delivered. We initially record such balances as deferred revenue, and recognize revenue when the service has been provided or, on the non-subscription portion of these balances, when the likelihood of the service being redeemed by the customer is remote (“services breakage”). Based on our historical redemption patterns for these relationships, we believe that the likelihood of a service being delivered more than 90 days after sale is remote. We therefore recognize non-subscription deferred revenue balances older than 90 days as services revenue. For the three and nine month periods ended September 30, 2016 and September 30, 2015, services breakage revenue accounted for less than 1% of our total revenue. Partners are generally invoiced monthly. Fees from customers via referral programs and direct transactions are generally paid with a credit card at the time of sale. Revenue is recognized net of any applicable sales tax. We generally provide a refund period on services, during which refunds may be granted to customers under certain circumstances, including inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5 and 14 days. For referral programs and direct transactions, the refund period is generally 5 days. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material. Services revenue also includes fees from licensing of Support.com In addition, s Software and Other Revenue Software and other revenue is comprised primarily of fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. Our software is sold to customers as a perpetual license or as a fixed period subscription. We act as the primary obligor and generally control fulfillment, pricing, product requirements, and collection risk and therefore we record the gross amount of revenue. For certain end-user software products, we sell perpetual licenses. We provide a limited amount of free technical support to customers. Since the cost of providing this free technical support is insignificant and free product enhancements are minimal and infrequent, we do not defer the recognition of revenue associated with sales of these products. For certain of our end-user software products (principally SUPERAntiSpyware), we sell licenses for a fixed subscription period. We provide regular, significant updates over the subscription period and therefore recognize revenue for these products ratably over the subscription period. Other revenue consists primarily of revenue generated through partners advertising to our customer base in various forms, including toolbar advertising, email marketing, and free trial offers. Cash, Cash Equivalents and Investments All liquid instruments with an original maturity at the date of purchase of 90 days or less are classified as cash equivalents. Cash equivalents and short-term investments consist primarily of money market funds, certificates of deposit, commercial paper, corporate and municipal bonds. Our interest income on cash, cash equivalents and investments is recorded monthly and reported as interest income and other in our condensed consolidated statements of operations. Our cash equivalents and short-term investments are classified as available-for-sale, and are reported at fair value with unrealized gains/losses included in accumulated other comprehensive loss within stockholders’ equity on the condensed consolidated balance sheets. We view our available-for-sale portfolio as available for use in our current operations, and therefore we present our marketable securities as short-term assets. We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is other-than-temporary by considering factors such as current economic and market conditions, the credit rating of the security’s issuer, the length of time an investment’s fair value has been below our carrying value, the Company’s intent to sell the security and the Company’s belief that it will not be required to sell the security before the recovery of its amortized cost. If an investment’s decline in fair value is deemed to be other-than-temporary, we reduce its carrying value to its estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be other-than-temporary, if any, are recorded in operations as incurred. At September 30, 2016, we evaluated our unrealized gains/losses on available-for-sale securities and determined them to be temporary. We currently do not intend to sell securities with unrealized losses and we concluded that we will not be required to sell these securities before the recovery of their amortized cost basis. At September 30, 2016 and December 31, 2015, the fair value of cash, cash equivalents and investments was $54.5 million and $65.7 million, respectively. The following is a summary of cash, cash equivalents and investments at September 30, 2016 and December 31, 2015 (in thousands): As of September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 6,737 $ — $ — $ 6,737 Money market funds 8,994 — — 8,994 Certificates of deposit 1,780 1 — 1,781 Commercial paper 5,976 — — 5,976 Corporate notes and bonds 21,061 7 (24 ) 21,044 U.S. government agency securities 9,958 7 — 9,965 $ 54,506 $ 15 $ (24 ) $ 54,497 Classified as: Cash and cash equivalents $ 15,731 $ — $ — $ 15,731 Short-term investments 38,775 15 (24 ) 38,766 $ 54,506 $ 15 $ (24 ) $ 54,497 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value As of December 31, 2015 Cash $ 8,486 $ — $ — $ 8,486 Money market funds 19,112 — — 19,112 Certificates of deposit 2,980 — (1 ) 2,979 Commercial paper 996 — — 996 Corporate notes and bonds 31,255 — (83 ) 31,172 U.S. government agency securities 2,996 — (7 ) 2,989 $ 65,825 $ — $ (91 ) $ 65,734 Classified as: Cash and cash equivalents $ 27,598 $ — $ — $ 27,598 Short-term investments 38,227 — (91 ) 38,136 $ 65,825 $ — $ (91 ) $ 65,734 The following table summarizes the estimated fair value of our available-for-sale securities classified by the stated maturity date of the security (in thousands): September 30, December 31, Due within one year $ 27,713 $ 23,588 Due within two years 11,053 14,548 $ 38,766 $ 38,136 Fair Value Measurements Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In accordance with ASC 820, the following table represents our fair value hierarchy for our financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 (in thousands): As of September 30, 2016 Level 1 Level 2 Level 3 Total Money market funds $ 8,994 $ — $ — $ 8,994 Certificates of deposit — 1,781 — 1,781 Commercial paper — 5,976 — 5,976 Corporate notes and bonds — 21,044 — 21,044 U.S. government agency securities — 9,965 — 9,965 Total $ 8,994 $ 38,766 $ — $ 47,760 As of December 31, 2015 Level 1 Level 2 Level 3 Total Money market funds $ 19,112 $ — $ — $ 19,112 Certificates of deposit — 2,979 — 2,979 Commercial paper — 996 — 996 Corporate notes and bonds — 31,172 — 31,172 U.S. government agency securities — 2,989 — 2,989 Total $ 19,112 $ 38,136 $ — $ 57,248 For short-term investments, measured at fair value using Level 2 inputs, we review trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. Our policy is to recognize the transfer of financial instruments between levels at the end of our quarterly reporting period. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, investments and trade accounts receivable. Our investment portfolio consists of investment grade securities. Except for obligations of the United States government and securities issued by agencies of the United States government, we diversify our investments by limiting our holdings with any individual issuer. We are exposed to credit risks in the event of default by the issuers to the extent of the amount recorded on the consolidated balance sheets. The credit risk in our trade accounts receivable is substantially mitigated by our evaluation of the customers’ financial condition at the time we enter into business and reasonably short payment terms. For the three months ended September 30, 2016, Comcast and Office Depot accounted for 60% and 15%, respectively, Comcast and Office Depot accounted for 67% and 17%, respectively, For the nine months ended September 30, 2016, Comcast and Office Depot accounted for 59% and 16%, respectively, of our total revenue. For the nine months ended September 30, 2015, Comcast and Office Depot accounted for 68% and 15%, respectively, of our total revenue. The credit risk in our trade accounts receivable is substantially mitigated by our evaluation of the customers’ financial conditions at the time we enter into business and reasonably short payment terms. As of September 30, 2016, Comcast and Office Depot accounted for 72% and 9%, respectively, of our total accounts receivable. As of December 31, 2015, Comcast and Office Depot accounted for 73% and 13%, respectively, of our total accounts receivable. Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial conditions and generally do not require collateral. We make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables when collection becomes doubtful. Reserves are made based on a specific review of all significant outstanding invoices. For those invoices not specifically provided for, reserves are recorded at differing rates, based on the age of the receivable. In determining these rates, we analyze our historical collection experience and current payment trends. The determination of past-due accounts is based on contractual terms. At September 30, 2016 and December 31, 2015, we had an allowance for doubtful accounts of approximately Goodwill We test goodwill for impairment annually on September 30 and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other For the quarter ended June 30, 2015, based on various quantitative and qualitative factors which included, among others, the continuing decline in the Company’s market capitalization, the Company determined that sufficient indicators existed warranting a review to determine if the fair value of its single reporting unit had been reduced to below its carrying value. As a result, the Company performed goodwill impairment testing using the required two-step process. The Company determined the fair value of its single reporting unit by using a weighted combination of income-based approach and market-based approach, as this combination was deemed the most indicative of the Company’s fair value in an orderly transaction between market participants. Under the income-based approach, the Company used a discounted cash flow methodology which recognizes that current value is premised on the expected receipt of future economic benefits. Indications of value are developed by discounting projected future net cash flows to their present value at a rate that reflects both the current return requirements of the market and the risks inherent in the specific investment. The discounted cash flow methodology requires significant judgment by management in selecting an appropriate discount rate, terminal growth rate, weighted average cost of capital, and projection of future net cash flows, which are inherently uncertain. The inputs and assumptions used in this test are classified as Level 3 inputs within the fair value hierarchy. Due to these significant judgments, the fair value of the Company’s single reporting unit determined in connection with the goodwill impairment test may not necessarily be indicative of the actual value that would be recognized in a future transaction. Under the market-based approach, the Company considered its market capitalization and estimated control premium which was based on a review of comparative market transactions. The result of the Company’s step one test indicated that the carrying value of the Company’s single reporting unit exceeded its estimated fair value. Accordingly, the Company performed the second step test and concluded that its goodwill was fully impaired and thus recorded a non-cash impairment charge of $14.2 million for the quarter ended June 30, 2015. The goodwill impairment charge was reported as a separate line item in the consolidated statements of operations. The tax benefit associated with the goodwill impairment charge was $1.3 million for the three months ended June 30, 2015. The goodwill impairment charge and the associated tax benefit are non-cash in nature and do not affect the Company’s current or future liquidity. Self-Funded Health Insurance Effective January 1, 2015, the Company maintains a self-funded health insurance program with a stop-loss umbrella policy with a third party insurer to limit the maximum potential liability for medical claims. With respect to this program, the Company considers historical and projected medical utilization data when estimating its health insurance program liability and related expense. As of September 30, 2016, the Company had approximately $1.0 million in reserve for its self-funded health insurance program. The reserve is included in “other accrued liabilities” in the condensed consolidated balance sheets. The Company regularly analyzes its reserves for incurred but not reported claims and for reported but not paid claims related to its self-funded insurance program. The Company believes its reserves are adequate. However, significant judgment is involved in assessing these reserves such as assessing historical paid claims, average lags between the claims’ incurred date, reported dates and paid dates, and the frequency and severity of claims. There may be differences between actual settlement amounts and recorded reserves and any resulting adjustments are included in expense once a probable amount is known. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, which relate entirely to accumulated foreign currency translation losses associated with our foreign subsidiaries and unrealized losses on investments, consisted of the following (in thousands): Foreign Currency Translation Losses Unrealized Losses on Investments Total Balance as of December 31, 2015 $ (2,211 ) $ (91 ) $ (2,302 ) Current-period other comprehensive income (loss) (13 ) 82 69 Balance as of September 30, 2016 $ (2,224 ) $ (9 ) $ (2,233 ) Realized gains/losses on investments reclassified from accumulated other comprehensive loss are reported as interest income and other, net in our consolidated statements of operations. The amounts noted in the consolidated statements of comprehensive income (loss) are shown before taking into account the related income tax impact. The income tax effect allocated to each component of other comprehensive loss for each of the periods presented is not significant. Stock-Based Compensation We apply the provisions of ASC 718, Compensation Stock Compensation The fair value of our stock-based awards was estimated using the following weighted average assumptions for the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock Option Plan: Risk-free interest rate 0.99 % 1.33 % 0.92 % 1.25 % Expected term 3.90 years 3.77 years 3.89 years 3.75 years Volatility 48.89 % 51.42 % 48.34 % 54.65 % Expected dividend 0 % 0 % 0 % 0 % Weighted average fair value (per share) $ 0.33 $ 0.51 $ 0.32 $ 0.71 Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Employee Stock Purchase Plan: Risk-free interest rate 0.38 % 0.09 % 0.38 % 0.09 % Expected term 0.5 years 0.5 years 0.5 years 0.5 years Volatility 48.86 % 39.25 % 48.86 % 39.25 % Expected dividend 0 % 0 % 0 % 0 % Weighted average fair value (per share) $ 0.28 $ 0.38 $ 0.28 $ 0.38 We recorded the following stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock-based compensation expense related to grants of: Stock options $ 266 $ 242 $ 679 $ 747 Employee Stock Purchase Plan (“ESPP”) 10 14 32 52 Restricted Stock Units (“RSU”) 385 479 1,065 1,430 $ 661 $ 735 $ 1,776 $ 2,229 Stock-based compensation expense recognized in: Cost of services $ 43 $ 62 $ 134 $ 187 Cost of software and other 1 2 4 8 Research and development 156 156 346 442 Sales and marketing 79 110 121 276 General and administrative 382 405 1,171 1,316 $ 661 $ 735 $ 1,776 $ 2,229 Earnings (Loss) Per Share Basic earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding, including the effect of the potential issuance of common stock such as stock issuable pursuant to the exercise of stock options and warrants and vesting of RSUs using the treasury stock method when dilutive. The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net loss $ (2,129 ) $ (3,871 ) $ (12,467 ) $ (21,911 ) Basic: Weighted-average shares of common stock outstanding 55,337 54,637 55,116 54,465 Shares used in computing basic loss per share 55,337 54,637 55,116 54,465 Basic loss per share $ (0.04 ) $ (0.07 ) $ (0.23 ) $ (0.40 ) Diluted: Weighted-average shares of common stock outstanding 55,337 54,637 55,116 54,465 Add: Common equivalent shares outstanding — — — — Shares used in computing diluted loss per share 55,337 54,637 55,116 54,465 Diluted loss per share $ (0.04 ) $ (0.07 ) $ (0.23 ) $ (0.40 ) The following potential common shares outstanding were excluded from the computation of diluted loss per share because including them would have been antidilutive (in thousands): As of September 30, 2016 2015 Stock options 4,475 3,733 RSUs 1,375 1,788 Warrants 324 490 Total common share equivalents 6,174 6,011 Warranties and Indemnifications We generally provide a refund period on sales, during which refunds may be granted to consumers under certain circumstances, including our inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5-14 days. For referral programs and direct transactions, the refund period is generally 5 days. For the majority of our end-user software products, we provide a 30-day money back guarantee. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material to date. We generally agree to indemnify our customers against legal claims that our end-user software products infringe certain third-party intellectual property rights. As of September 30, 2016, we have not been required to make any payment resulting from infringement claims asserted against our customers and have not recorded any related accruals. Recent Accounting Pronouncements In May 2014, 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides guidance for revenue recognition. ASU 2014-09 is applicable to any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to receive in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current U.S. GAAP. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2016 | |
Warrants [Abstract] | |
Warrants | Note 2. Warrants On October 25, 2010, we entered into a Support Services Agreement (the “Customer Agreement”) with Comcast Cable Communications Management, LLC (“Comcast”) under which Support.com provides technology support services to customers of Comcast in exchange for fees. In connection with the Customer Agreement, Support.com and Comcast entered into a Warrant Agreement, under which Support.com agreed to issue to Comcast warrants to purchase up to 975,000 shares of Support.com common stock in the future in the event that Comcast meets specified sales milestones under the Customer Agreement. Each warrant, if issued, will have an exercise price per share of $4.9498 and a term of three years from issuance. On September 27, 2011, the Company and Comcast amended the Warrant Agreement to extend the expiration date for the performance milestones while maintaining the previously agreed revenue thresholds. The warrants were valued as they were earned, and the resulting value was recorded as a charge against revenue in the period in which the performance milestone was met and the warrant was earned. During the third and fourth quarters of 2013, the performance milestones for the first and second tranche of warrants were met, respectively. Therefore, we issued to Comcast warrants to purchase a total of 490,000 shares of our common stock (warrants to purchase 166,000 shares were issued on September 30, 2013 and warrants to purchase 324,000 shares were issued on December 31, 2013) and recorded warrant-related charges of $777,000 against revenue for the year ended December 31, 2013. The value of the first and second tranche of warrants was estimated using the following weighted-average assumptions: risk-free interest rate of 0.74%, expected term of 3 years, volatility of 59.12% and expected dividend of 0%. The first tranche, consisting of warrants to purchase 166,000 shares, expired on September 30, 2016. The right to receive the final tranche expired on March 31, 2014 due to the termination of the Customer Agreement on such date. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | Note 3. Income Taxes We recorded an income tax provision of $44,000 and $132,000 for the three and nine months ended September 30, 2016, respectively, and an income tax provision of $60,000 and income tax benefit of $1.0 million for the three and nine months ended September 30, 2015, respectively. The income tax provision (benefit) is comprised of estimates of current taxes due in domestic and foreign jurisdictions. The income tax provision (benefit) for continuing operations reflects tax expense associated with state income tax accrual, foreign income tax accrual, and interest accrued on ASC 740-10 reserves. During Q1 2016, ASC 740-10 reserves and related interest were released in the amount of $284,000 due to the expiration of statutes which resulted in a tax benefit to discontinued operations. When goodwill is amortizable for tax purposes, a deferred tax liability is recorded as the tax deduction is realized, which will not be reversed unless and until the goodwill is disposed of or impaired. During the quarter ended June 30, 2015, the Company recorded a tax benefit of $1.3 million associated with a non-cash goodwill impairment charge as described in Note 1 in the accompanying condensed consolidated financial statements. As of September 30, 2016, our deferred tax assets are fully offset by a valuation allowance except in those jurisdictions where it is determined that a valuation allowance is not required. ASC 740 , Income Taxes The Company does not anticipate a material change in the total amount or composition of its unrecognized tax benefits within 12 months of September 30, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 4. Commitments and Contingencies Legal contingencies On October 11, 2016 the Wage and Hour Division of the U.S. Department of Labor notified the Company that it would be conducting an audit of the Company. The audit commenced on October 20, 2016 and is ongoing. From time to time, we are subject to routine legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business, potentially including assertions that we may be infringing patents or other intellectual property rights of others. We currently do not believe that the ultimate amount of liability, if any, for such routine legal proceedings (alone or combined) will materially affect our financial position, results of operations or cash flows. The ultimate outcome of any litigation is uncertain, however, and unfavorable outcomes could have a material negative impact on our financial condition and operating results. Regardless of outcome, litigation can have an adverse impact on us because of defense costs, negative publicity, diversion of management resources and other factors. Guarantees We have identified guarantees in accordance with ASC 450, Contingencies . This guidance stipulates that an entity must recognize an initial liability for the fair value, or market value, of the obligation it assumes under the guarantee at the time it issues such a guarantee, and must disclose that information in its interim and annual financial statements. We have entered into various service level agreements with our partners, in which we may guarantee the maintenance of certain service level thresholds. Under some circumstances, if we do not meet these thresholds, we may be liable for certain financial costs. We evaluate costs for such guarantees under the provisions of ASC 450. We consider such factors as the degree of probability that we would be required to satisfy the liability associated with the guarantee and the ability to make a reasonable estimate of the resulting cost. No costs were incurred during the three and nine months ended September 30, 2016 and 2015. We have not accrued any liabilities related to such obligations in the condensed consolidated financial statements as of September 30, 2016 and December 31, 2015. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 5. Intangible Assets Amortization expense and other related to intangible assets for the three and nine months ended September 30, 2016 was $267,000 and $801,000, respectively. Amortization expense and other related to intangible assets for the three and nine months ended September 30, 2015 was $267,000 and $802,000, respectively. The following table summarizes the components of intangible assets (in thousands): Non- compete Partner Relationships Customer Base Technology Rights Tradenames Indefinite Life Intangibles Total As of September 30, 2016 Gross carrying value $ 593 $ 145 $ 641 $ 5,330 $ 760 $ 250 $ 7,719 Accumulated amortization (575 ) (145 ) (614 ) (5,144 ) (748 ) — (7,226 ) Net carrying value $ 18 $ — $ 27 $ 186 $ 12 $ 250 $ 493 As of December 31, 2015 Gross carrying value $ 593 $ 145 $ 641 $ 5,330 $ 760 $ 250 $ 7,719 Accumulated amortization (555 ) (145 ) (545 ) (4,474 ) (706 ) — (6,425 ) Net carrying value $ 38 $ — $ 96 $ 856 $ 54 $ 250 $ 1,294 In December 2006, we acquired the use of a toll-free telephone number for cash consideration of $250,000. This asset has an indefinite useful life. The estimated future amortization expense of intangible assets, with the exception of the indefinite-life intangible assets as of September 30, 2016 is as follows (in thousands): Fiscal Year Amount 2016 (October-December) $ 227 2017 16 Total $ 243 Weighted average remaining useful life 0.26 years |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 6. Other Accrued Liabilities Other accrued liabilities consist of the following (in thousands): As of September 30, 2016 As of December 31, 2015 Accrued expenses $ 836 $ 2,490 Self-insurance accruals 1,023 953 Customer deposits 541 570 Restructuring obligations 31 - Other accrued liabilities 170 122 Total other accrued liabilities $ 2,601 $ 4,135 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 7. Stockholder’s Equity Stock Options The following table represents the stock option activity for the nine months ended September 30, 2016: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding options at December 31, 2015 3,669,469 $ 2.74 6.66 $ - Granted 1,962,093 $ 0.84 Exercised (555 ) $ 0.84 Forfeited (1,155,747 ) $ 2.56 Outstanding options at September 30, 2016 4,475,260 $ 1.95 7.36 $ 23 Options vested and expected to vest 4,278,402 $ 1.99 7.28 $ 21 Exercisable at September 30, 2016 2,031,446 $ 2.72 5.34 $ 3 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had they all exercised their options on September 30, 2016. This amount changes based on the fair market value of our stock. The aggregate intrinsic value of options exercised under our stock option plans was zero during the three and nine months ended September 30, 2016, and zero during the three and nine months ended September 30, 2015. Total fair value of options vested was $270,000 and $689,000 during the three and nine months ended September 30, 2016, respectively, and $263,000 and $523,000 during the three and nine months ended September 30, 2015, respectively. At September 30, 2016, there was $971,000 of unrecognized compensation cost related to existing stock options outstanding which is expected to be recognized over a weighted average period of 2.38 years. On June 15, 2016, pursuant to approval by the Company's Compensation Committee, the Company issued approximately 992,000 time-based stock options to its corporate employees. These time-based stock options vest monthly over three years. Employee Stock Purchase Plan In the second quarter of 2011, to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward eligible employees and by motivating such persons to contribute to the growth and profitability of the Company, the Company’s Board of Directors and stockholders approved an ESPP and reserved 1,000,000 shares of our common stock for issuance effective as of May 15, 2011. The ESPP continues in effect for ten (10) years from its effective date unless terminated earlier by the Company. The ESPP consists of six-month offering periods during which employees may enroll in the plan. The purchase price on each purchase date shall not be less than eighty‑five percent (85%) of the lesser of (a) the fair market value of a share of stock on the offering date of the offering period or (b) the fair market value of a share of stock on the purchase date. During the nine months ended September 30, 2016, 63,311 shares were purchased under ESPP. Restricted Stock Units The following table represents RSU activity for the nine months ended September 30, 2016 Number of Shares Weighted Average Grant-Date Fair Value per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding RSUs at December 31, 2015 1,697,897 $ 2.25 1.41 $ 1,715 Awarded 610,349 $ 0.88 Released (556,832 ) $ 2.09 Forfeited (376,463 ) $ 1.97 Outstanding RSUs at September 30, 2016 1,374,951 $ 1.79 1.23 $ 1,155 On May 27, 2015, the Board of Directors of the Company approved, based on recommendations of the Compensation Committee, a grant of 173,610 time-based RSUs to non-employee directors. These time-based RSUs vest upon the first anniversary of the grant date. On April 21, 2015, pursuant to approval by the Company's Compensation Committee, the Company issued approximately 397,000 time-based RSUs to its corporate employees. These time-based RSUs vest monthly over three years. At September 30, 2016, there was $1.6 million of unrecognized compensation cost related to RSUs which is expected to be recognized over a weighted average period of 1.9 years. Stock Repurchase Program On April 27, 2005, our Board of Directors authorized the repurchase of up to 2,000,000 outstanding shares of our common stock. As of September 30, 2015 the maximum number of shares remaining that can be repurchased under this program was 1,807,402. The Company does not intend to repurchase shares without a further approval from its Board of Directors. Treasury Stock The Board of Directors has given the Company the general authorization to repurchase shares of its common stock to satisfy withholding tax obligations related to vested RSUs granted to certain key executives and non-employee directors. The Company repurchased 86,280 shares at aggregate costs of approximately $72,000 in the nine months ended September 30, 2016 to satisfy withholding taxes related to stock-based compensation. |
Restructuring Obligations and C
Restructuring Obligations and Charges | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring Obligations and Charges [Abstract] | |
Restructuring Obligations and Charges | Note 8. Restructuring Obligations and Charges Severance For the three and nine months ended September 30, 2016, the Company recorded $0 and $310,000 of severance and benefit related costs, respectively, included in restructuring costs in the condensed consolidated statement of operations, related to the termination of 35 employees worldwide as a result of cost reduction efforts. As of September 30, 2016, the entire $310,000 of severance and benefit related costs have been paid. Contract Terminations For the three and nine months ended September 30, 2016, the Company recorded $0 and $113,000 of contract termination costs, respectively, included in restructuring related costs in the condensed consolidated statement of operations, related to the termination of contracts as a result of cost reduction efforts. As of September 30, 2016, approximately $31,000 of unpaid costs is included in accrued liabilities in the condensed consolidated balance sheet. The Company expects all remaining obligations to be paid by March 31, 2017. Contract Terminations Severance Total Restructuring obligations, March 31, 2016 - - - Restructuring costs incurred 113,000 310,000 423,000 Cash payments (82,000 ) (286,000 ) (368,000 ) Restructuring obligations, June 30, 2016 31,000 24,000 55,000 Restructuring costs incurred - - - Cash payments - (24,000 ) (24,000 ) Restructuring obligations, September 30, 2016 31,000 - 31,000 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9. Related Party Transactions During the second quarter of 2016, the Independent Committee of the Board of Directors approved the reimbursement of $425,000 of proxy contest costs to VIEX Capital Advisors, LLC (“VIEX Capital”), a beneficial owner holding approximately 5.9% of the Company’s voting stock. A member of the Company’s Board of Directors is also managing member of VIEX Capital. As of September 30, 2016, the full amount of the reimbursement has been paid. |
Significant Accounting Polici16
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements include the accounts of Support.com, Inc. (the “Company” or “Support.com”, “We” or “Our”) and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated balance sheet as of September 30, 2016 and the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2016 and 2015 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2016 and 2015 are unaudited. In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of the results for, and as of, the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year or for any future period. The condensed consolidated balance sheet information as of December 31, 2015 is derived from audited financial statements as of that date. These financial statements have been prepared based upon Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, t hese unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 7, 2016. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The accounting estimates that require management’s most significant, difficult and subjective judgments include accounting for revenue recognition, assumptions used to estimate self-insurance accruals, the valuation and recognition of investments, the assessment of recoverability of intangible assets and their estimated useful lives, the valuations and recognition of stock-based compensation and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ materially from these estimates. |
Revenue Recognition | Revenue Recognition For all transactions, we recognize revenue only when all of the following criteria are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred; • Collection is considered probable; and • The fees are fixed or determinable. We consider all arrangements with payment terms longer than 90 days not to be fixed or determinable. If the fee is considered not to be fixed or determinable, revenue is recognized as payment becomes due from the customer provided all other revenue recognition criteria have been met. Services Revenue Services revenue is comprised primarily of fees for technology support services. Our service programs are designed for both the consumer and small and medium business (“SMB”) markets, and include computer and mobile device set-up, security and support, virus and malware removal and wireless network set-up, and automation system onboarding and support. We offer technology services to consumers and SMBs, primarily through our partners (which include communications providers, retailers, technology companies and others) and to a lesser degree directly through our website at www.support.com. We transact with customers via reseller programs, referral programs and direct transactions. In reseller programs, the partner generally executes the financial transactions with the customer and pays a fee to us which we recognize as revenue when the service is delivered. In referral programs, we transact with the customer directly and pay a referral fee to the referring party. Referral fees are generally expensed in the period in which revenues are recognized. In such referral programs, since we are the primary obligor and bear substantially all risks associated with the transaction, we record the gross amount of revenue. In direct transactions, we sell directly to the customer at the retail price. The technology services described above include four types of offerings: · Hourly-Based Services - In connection with the provisions of certain services programs, fees are calculated based on contracted hourly rates with partners. For these programs, we recognize revenue as services are performed, based on billable hours of work delivered by our technology specialists. These services programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred. · Subscription-Based Services - Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods. · Incident-Based Services - Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery. · Service Cards / Gift Cards - Customers purchase a service card or a gift card, which entitles the cardholder to redeem a certain service at a time of their choosing. For these sales, revenue is deferred until the card has been redeemed and the service has been provided. In certain cases, we are paid for services that are sold but not yet delivered. We initially record such balances as deferred revenue, and recognize revenue when the service has been provided or, on the non-subscription portion of these balances, when the likelihood of the service being redeemed by the customer is remote (“services breakage”). Based on our historical redemption patterns for these relationships, we believe that the likelihood of a service being delivered more than 90 days after sale is remote. We therefore recognize non-subscription deferred revenue balances older than 90 days as services revenue. For the three and nine month periods ended September 30, 2016 and September 30, 2015, services breakage revenue accounted for less than 1% of our total revenue. Partners are generally invoiced monthly. Fees from customers via referral programs and direct transactions are generally paid with a credit card at the time of sale. Revenue is recognized net of any applicable sales tax. We generally provide a refund period on services, during which refunds may be granted to customers under certain circumstances, including inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5 and 14 days. For referral programs and direct transactions, the refund period is generally 5 days. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material. Services revenue also includes fees from licensing of Support.com In addition, s Software and Other Revenue Software and other revenue is comprised primarily of fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. Our software is sold to customers as a perpetual license or as a fixed period subscription. We act as the primary obligor and generally control fulfillment, pricing, product requirements, and collection risk and therefore we record the gross amount of revenue. For certain end-user software products, we sell perpetual licenses. We provide a limited amount of free technical support to customers. Since the cost of providing this free technical support is insignificant and free product enhancements are minimal and infrequent, we do not defer the recognition of revenue associated with sales of these products. For certain of our end-user software products (principally SUPERAntiSpyware), we sell licenses for a fixed subscription period. We provide regular, significant updates over the subscription period and therefore recognize revenue for these products ratably over the subscription period. Other revenue consists primarily of revenue generated through partners advertising to our customer base in various forms, including toolbar advertising, email marketing, and free trial offers. |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments All liquid instruments with an original maturity at the date of purchase of 90 days or less are classified as cash equivalents. Cash equivalents and short-term investments consist primarily of money market funds, certificates of deposit, commercial paper, corporate and municipal bonds. Our interest income on cash, cash equivalents and investments is recorded monthly and reported as interest income and other in our condensed consolidated statements of operations. Our cash equivalents and short-term investments are classified as available-for-sale, and are reported at fair value with unrealized gains/losses included in accumulated other comprehensive loss within stockholders’ equity on the condensed consolidated balance sheets. We view our available-for-sale portfolio as available for use in our current operations, and therefore we present our marketable securities as short-term assets. We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is other-than-temporary by considering factors such as current economic and market conditions, the credit rating of the security’s issuer, the length of time an investment’s fair value has been below our carrying value, the Company’s intent to sell the security and the Company’s belief that it will not be required to sell the security before the recovery of its amortized cost. If an investment’s decline in fair value is deemed to be other-than-temporary, we reduce its carrying value to its estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be other-than-temporary, if any, are recorded in operations as incurred. At September 30, 2016, we evaluated our unrealized gains/losses on available-for-sale securities and determined them to be temporary. We currently do not intend to sell securities with unrealized losses and we concluded that we will not be required to sell these securities before the recovery of their amortized cost basis. At September 30, 2016 and December 31, 2015, the fair value of cash, cash equivalents and investments was $54.5 million and $65.7 million, respectively. The following is a summary of cash, cash equivalents and investments at September 30, 2016 and December 31, 2015 (in thousands): As of September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 6,737 $ — $ — $ 6,737 Money market funds 8,994 — — 8,994 Certificates of deposit 1,780 1 — 1,781 Commercial paper 5,976 — — 5,976 Corporate notes and bonds 21,061 7 (24 ) 21,044 U.S. government agency securities 9,958 7 — 9,965 $ 54,506 $ 15 $ (24 ) $ 54,497 Classified as: Cash and cash equivalents $ 15,731 $ — $ — $ 15,731 Short-term investments 38,775 15 (24 ) 38,766 $ 54,506 $ 15 $ (24 ) $ 54,497 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value As of December 31, 2015 Cash $ 8,486 $ — $ — $ 8,486 Money market funds 19,112 — — 19,112 Certificates of deposit 2,980 — (1 ) 2,979 Commercial paper 996 — — 996 Corporate notes and bonds 31,255 — (83 ) 31,172 U.S. government agency securities 2,996 — (7 ) 2,989 $ 65,825 $ — $ (91 ) $ 65,734 Classified as: Cash and cash equivalents $ 27,598 $ — $ — $ 27,598 Short-term investments 38,227 — (91 ) 38,136 $ 65,825 $ — $ (91 ) $ 65,734 The following table summarizes the estimated fair value of our available-for-sale securities classified by the stated maturity date of the security (in thousands): September 30, December 31, Due within one year $ 27,713 $ 23,588 Due within two years 11,053 14,548 $ 38,766 $ 38,136 |
Fair Value Measurements | Fair Value Measurements Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In accordance with ASC 820, the following table represents our fair value hierarchy for our financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 (in thousands): As of September 30, 2016 Level 1 Level 2 Level 3 Total Money market funds $ 8,994 $ — $ — $ 8,994 Certificates of deposit — 1,781 — 1,781 Commercial paper — 5,976 — 5,976 Corporate notes and bonds — 21,044 — 21,044 U.S. government agency securities — 9,965 — 9,965 Total $ 8,994 $ 38,766 $ — $ 47,760 As of December 31, 2015 Level 1 Level 2 Level 3 Total Money market funds $ 19,112 $ — $ — $ 19,112 Certificates of deposit — 2,979 — 2,979 Commercial paper — 996 — 996 Corporate notes and bonds — 31,172 — 31,172 U.S. government agency securities — 2,989 — 2,989 Total $ 19,112 $ 38,136 $ — $ 57,248 For short-term investments, measured at fair value using Level 2 inputs, we review trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. Our policy is to recognize the transfer of financial instruments between levels at the end of our quarterly reporting period. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, investments and trade accounts receivable. Our investment portfolio consists of investment grade securities. Except for obligations of the United States government and securities issued by agencies of the United States government, we diversify our investments by limiting our holdings with any individual issuer. We are exposed to credit risks in the event of default by the issuers to the extent of the amount recorded on the consolidated balance sheets. The credit risk in our trade accounts receivable is substantially mitigated by our evaluation of the customers’ financial condition at the time we enter into business and reasonably short payment terms. For the three months ended September 30, 2016, Comcast and Office Depot accounted for 60% and 15%, respectively, Comcast and Office Depot accounted for 67% and 17%, respectively, For the nine months ended September 30, 2016, Comcast and Office Depot accounted for 59% and 16%, respectively, of our total revenue. For the nine months ended September 30, 2015, Comcast and Office Depot accounted for 68% and 15%, respectively, of our total revenue. The credit risk in our trade accounts receivable is substantially mitigated by our evaluation of the customers’ financial conditions at the time we enter into business and reasonably short payment terms. As of September 30, 2016, Comcast and Office Depot accounted for 72% and 9%, respectively, of our total accounts receivable. As of December 31, 2015, Comcast and Office Depot accounted for 73% and 13%, respectively, of our total accounts receivable. |
Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial conditions and generally do not require collateral. We make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables when collection becomes doubtful. Reserves are made based on a specific review of all significant outstanding invoices. For those invoices not specifically provided for, reserves are recorded at differing rates, based on the age of the receivable. In determining these rates, we analyze our historical collection experience and current payment trends. The determination of past-due accounts is based on contractual terms. At September 30, 2016 and December 31, 2015, we had an allowance for doubtful accounts of approximately |
Goodwill | Goodwill We test goodwill for impairment annually on September 30 and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other For the quarter ended June 30, 2015, based on various quantitative and qualitative factors which included, among others, the continuing decline in the Company’s market capitalization, the Company determined that sufficient indicators existed warranting a review to determine if the fair value of its single reporting unit had been reduced to below its carrying value. As a result, the Company performed goodwill impairment testing using the required two-step process. The Company determined the fair value of its single reporting unit by using a weighted combination of income-based approach and market-based approach, as this combination was deemed the most indicative of the Company’s fair value in an orderly transaction between market participants. Under the income-based approach, the Company used a discounted cash flow methodology which recognizes that current value is premised on the expected receipt of future economic benefits. Indications of value are developed by discounting projected future net cash flows to their present value at a rate that reflects both the current return requirements of the market and the risks inherent in the specific investment. The discounted cash flow methodology requires significant judgment by management in selecting an appropriate discount rate, terminal growth rate, weighted average cost of capital, and projection of future net cash flows, which are inherently uncertain. The inputs and assumptions used in this test are classified as Level 3 inputs within the fair value hierarchy. Due to these significant judgments, the fair value of the Company’s single reporting unit determined in connection with the goodwill impairment test may not necessarily be indicative of the actual value that would be recognized in a future transaction. Under the market-based approach, the Company considered its market capitalization and estimated control premium which was based on a review of comparative market transactions. The result of the Company’s step one test indicated that the carrying value of the Company’s single reporting unit exceeded its estimated fair value. Accordingly, the Company performed the second step test and concluded that its goodwill was fully impaired and thus recorded a non-cash impairment charge of $14.2 million for the quarter ended June 30, 2015. The goodwill impairment charge was reported as a separate line item in the consolidated statements of operations. The tax benefit associated with the goodwill impairment charge was $1.3 million for the three months ended June 30, 2015. The goodwill impairment charge and the associated tax benefit are non-cash in nature and do not affect the Company’s current or future liquidity. |
Self-Funded Health Insurance | Self-Funded Health Insurance Effective January 1, 2015, the Company maintains a self-funded health insurance program with a stop-loss umbrella policy with a third party insurer to limit the maximum potential liability for medical claims. With respect to this program, the Company considers historical and projected medical utilization data when estimating its health insurance program liability and related expense. As of September 30, 2016, the Company had approximately $1.0 million in reserve for its self-funded health insurance program. The reserve is included in “other accrued liabilities” in the condensed consolidated balance sheets. The Company regularly analyzes its reserves for incurred but not reported claims and for reported but not paid claims related to its self-funded insurance program. The Company believes its reserves are adequate. However, significant judgment is involved in assessing these reserves such as assessing historical paid claims, average lags between the claims’ incurred date, reported dates and paid dates, and the frequency and severity of claims. There may be differences between actual settlement amounts and recorded reserves and any resulting adjustments are included in expense once a probable amount is known. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, which relate entirely to accumulated foreign currency translation losses associated with our foreign subsidiaries and unrealized losses on investments, consisted of the following (in thousands): Foreign Currency Translation Losses Unrealized Losses on Investments Total Balance as of December 31, 2015 $ (2,211 ) $ (91 ) $ (2,302 ) Current-period other comprehensive income (loss) (13 ) 82 69 Balance as of September 30, 2016 $ (2,224 ) $ (9 ) $ (2,233 ) Realized gains/losses on investments reclassified from accumulated other comprehensive loss are reported as interest income and other, net in our consolidated statements of operations. The amounts noted in the consolidated statements of comprehensive income (loss) are shown before taking into account the related income tax impact. The income tax effect allocated to each component of other comprehensive loss for each of the periods presented is not significant. |
Stock-Based Compensation | Stock-Based Compensation We apply the provisions of ASC 718, Compensation Stock Compensation The fair value of our stock-based awards was estimated using the following weighted average assumptions for the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock Option Plan: Risk-free interest rate 0.99 % 1.33 % 0.92 % 1.25 % Expected term 3.90 years 3.77 years 3.89 years 3.75 years Volatility 48.89 % 51.42 % 48.34 % 54.65 % Expected dividend 0 % 0 % 0 % 0 % Weighted average fair value (per share) $ 0.33 $ 0.51 $ 0.32 $ 0.71 Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Employee Stock Purchase Plan: Risk-free interest rate 0.38 % 0.09 % 0.38 % 0.09 % Expected term 0.5 years 0.5 years 0.5 years 0.5 years Volatility 48.86 % 39.25 % 48.86 % 39.25 % Expected dividend 0 % 0 % 0 % 0 % Weighted average fair value (per share) $ 0.28 $ 0.38 $ 0.28 $ 0.38 We recorded the following stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock-based compensation expense related to grants of: Stock options $ 266 $ 242 $ 679 $ 747 Employee Stock Purchase Plan (“ESPP”) 10 14 32 52 Restricted Stock Units (“RSU”) 385 479 1,065 1,430 $ 661 $ 735 $ 1,776 $ 2,229 Stock-based compensation expense recognized in: Cost of services $ 43 $ 62 $ 134 $ 187 Cost of software and other 1 2 4 8 Research and development 156 156 346 442 Sales and marketing 79 110 121 276 General and administrative 382 405 1,171 1,316 $ 661 $ 735 $ 1,776 $ 2,229 |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding, including the effect of the potential issuance of common stock such as stock issuable pursuant to the exercise of stock options and warrants and vesting of RSUs using the treasury stock method when dilutive. The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net loss $ (2,129 ) $ (3,871 ) $ (12,467 ) $ (21,911 ) Basic: Weighted-average shares of common stock outstanding 55,337 54,637 55,116 54,465 Shares used in computing basic loss per share 55,337 54,637 55,116 54,465 Basic loss per share $ (0.04 ) $ (0.07 ) $ (0.23 ) $ (0.40 ) Diluted: Weighted-average shares of common stock outstanding 55,337 54,637 55,116 54,465 Add: Common equivalent shares outstanding — — — — Shares used in computing diluted loss per share 55,337 54,637 55,116 54,465 Diluted loss per share $ (0.04 ) $ (0.07 ) $ (0.23 ) $ (0.40 ) The following potential common shares outstanding were excluded from the computation of diluted loss per share because including them would have been antidilutive (in thousands): As of September 30, 2016 2015 Stock options 4,475 3,733 RSUs 1,375 1,788 Warrants 324 490 Total common share equivalents 6,174 6,011 |
Warranties and Indemnifications | Warranties and Indemnifications We generally provide a refund period on sales, during which refunds may be granted to consumers under certain circumstances, including our inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5-14 days. For referral programs and direct transactions, the refund period is generally 5 days. For the majority of our end-user software products, we provide a 30-day money back guarantee. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material to date. We generally agree to indemnify our customers against legal claims that our end-user software products infringe certain third-party intellectual property rights. As of September 30, 2016, we have not been required to make any payment resulting from infringement claims asserted against our customers and have not recorded any related accruals. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides guidance for revenue recognition. ASU 2014-09 is applicable to any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to receive in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current U.S. GAAP. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. |
Significant Accounting Polici17
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Significant Accounting Policies [Abstract] | |
Summary of Cash, Cash Equivalents and Investments | The following is a summary of cash, cash equivalents and investments at September 30, 2016 and December 31, 2015 (in thousands): As of September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 6,737 $ — $ — $ 6,737 Money market funds 8,994 — — 8,994 Certificates of deposit 1,780 1 — 1,781 Commercial paper 5,976 — — 5,976 Corporate notes and bonds 21,061 7 (24 ) 21,044 U.S. government agency securities 9,958 7 — 9,965 $ 54,506 $ 15 $ (24 ) $ 54,497 Classified as: Cash and cash equivalents $ 15,731 $ — $ — $ 15,731 Short-term investments 38,775 15 (24 ) 38,766 $ 54,506 $ 15 $ (24 ) $ 54,497 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value As of December 31, 2015 Cash $ 8,486 $ — $ — $ 8,486 Money market funds 19,112 — — 19,112 Certificates of deposit 2,980 — (1 ) 2,979 Commercial paper 996 — — 996 Corporate notes and bonds 31,255 — (83 ) 31,172 U.S. government agency securities 2,996 — (7 ) 2,989 $ 65,825 $ — $ (91 ) $ 65,734 Classified as: Cash and cash equivalents $ 27,598 $ — $ — $ 27,598 Short-term investments 38,227 — (91 ) 38,136 $ 65,825 $ — $ (91 ) $ 65,734 |
Summary of Estimated Fair Value of Available-for-sale Securities Classified by Stated Maturity Date | The following table summarizes the estimated fair value of our available-for-sale securities classified by the stated maturity date of the security (in thousands): September 30, December 31, Due within one year $ 27,713 $ 23,588 Due within two years 11,053 14,548 $ 38,766 $ 38,136 |
Financial Assets (Cash Equivalents and Investments) Measured at Fair Value on Recurring Basis | In accordance with ASC 820, the following table represents our fair value hierarchy for our financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 (in thousands): As of September 30, 2016 Level 1 Level 2 Level 3 Total Money market funds $ 8,994 $ — $ — $ 8,994 Certificates of deposit — 1,781 — 1,781 Commercial paper — 5,976 — 5,976 Corporate notes and bonds — 21,044 — 21,044 U.S. government agency securities — 9,965 — 9,965 Total $ 8,994 $ 38,766 $ — $ 47,760 As of December 31, 2015 Level 1 Level 2 Level 3 Total Money market funds $ 19,112 $ — $ — $ 19,112 Certificates of deposit — 2,979 — 2,979 Commercial paper — 996 — 996 Corporate notes and bonds — 31,172 — 31,172 U.S. government agency securities — 2,989 — 2,989 Total $ 19,112 $ 38,136 $ — $ 57,248 |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss, which relate entirely to accumulated foreign currency translation losses associated with our foreign subsidiaries and unrealized losses on investments, consisted of the following (in thousands): Foreign Currency Translation Losses Unrealized Losses on Investments Total Balance as of December 31, 2015 $ (2,211 ) $ (91 ) $ (2,302 ) Current-period other comprehensive income (loss) (13 ) 82 69 Balance as of September 30, 2016 $ (2,224 ) $ (9 ) $ (2,233 ) |
Fair Value of Stock-based Awards Valuation Assumptions | The fair value of our stock-based awards was estimated using the following weighted average assumptions for the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock Option Plan: Risk-free interest rate 0.99 % 1.33 % 0.92 % 1.25 % Expected term 3.90 years 3.77 years 3.89 years 3.75 years Volatility 48.89 % 51.42 % 48.34 % 54.65 % Expected dividend 0 % 0 % 0 % 0 % Weighted average fair value (per share) $ 0.33 $ 0.51 $ 0.32 $ 0.71 Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Employee Stock Purchase Plan: Risk-free interest rate 0.38 % 0.09 % 0.38 % 0.09 % Expected term 0.5 years 0.5 years 0.5 years 0.5 years Volatility 48.86 % 39.25 % 48.86 % 39.25 % Expected dividend 0 % 0 % 0 % 0 % Weighted average fair value (per share) $ 0.28 $ 0.38 $ 0.28 $ 0.38 |
Stock-based Compensation Expense | We recorded the following stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock-based compensation expense related to grants of: Stock options $ 266 $ 242 $ 679 $ 747 Employee Stock Purchase Plan (“ESPP”) 10 14 32 52 Restricted Stock Units (“RSU”) 385 479 1,065 1,430 $ 661 $ 735 $ 1,776 $ 2,229 Stock-based compensation expense recognized in: Cost of services $ 43 $ 62 $ 134 $ 187 Cost of software and other 1 2 4 8 Research and development 156 156 346 442 Sales and marketing 79 110 121 276 General and administrative 382 405 1,171 1,316 $ 661 $ 735 $ 1,776 $ 2,229 |
Computation of Basic and Diluted Net Earnings (Loss) per Share | The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net loss $ (2,129 ) $ (3,871 ) $ (12,467 ) $ (21,911 ) Basic: Weighted-average shares of common stock outstanding 55,337 54,637 55,116 54,465 Shares used in computing basic loss per share 55,337 54,637 55,116 54,465 Basic loss per share $ (0.04 ) $ (0.07 ) $ (0.23 ) $ (0.40 ) Diluted: Weighted-average shares of common stock outstanding 55,337 54,637 55,116 54,465 Add: Common equivalent shares outstanding — — — — Shares used in computing diluted loss per share 55,337 54,637 55,116 54,465 Diluted loss per share $ (0.04 ) $ (0.07 ) $ (0.23 ) $ (0.40 ) |
Potential Common Shares Outstanding Excluded from Computation of Diluted Loss per Share | The following potential common shares outstanding were excluded from the computation of diluted loss per share because including them would have been antidilutive (in thousands): As of September 30, 2016 2015 Stock options 4,475 3,733 RSUs 1,375 1,788 Warrants 324 490 Total common share equivalents 6,174 6,011 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets [Abstract] | |
Summary of Components of Intangible Assets | The following table summarizes the components of intangible assets (in thousands): Non- compete Partner Relationships Customer Base Technology Rights Tradenames Indefinite Life Intangibles Total As of September 30, 2016 Gross carrying value $ 593 $ 145 $ 641 $ 5,330 $ 760 $ 250 $ 7,719 Accumulated amortization (575 ) (145 ) (614 ) (5,144 ) (748 ) — (7,226 ) Net carrying value $ 18 $ — $ 27 $ 186 $ 12 $ 250 $ 493 As of December 31, 2015 Gross carrying value $ 593 $ 145 $ 641 $ 5,330 $ 760 $ 250 $ 7,719 Accumulated amortization (555 ) (145 ) (545 ) (4,474 ) (706 ) — (6,425 ) Net carrying value $ 38 $ — $ 96 $ 856 $ 54 $ 250 $ 1,294 |
Estimated Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets, with the exception of the indefinite-life intangible assets as of September 30, 2016 is as follows (in thousands): Fiscal Year Amount 2016 (October-December) $ 227 2017 16 Total $ 243 Weighted average remaining useful life 0.26 years |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities consist of the following (in thousands): As of September 30, 2016 As of December 31, 2015 Accrued expenses $ 836 $ 2,490 Self-insurance accruals 1,023 953 Customer deposits 541 570 Restructuring obligations 31 - Other accrued liabilities 170 122 Total other accrued liabilities $ 2,601 $ 4,135 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity [Abstract] | |
Summary of Stock Option Activity | The following table represents the stock option activity for the nine months ended September 30, 2016: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding options at December 31, 2015 3,669,469 $ 2.74 6.66 $ - Granted 1,962,093 $ 0.84 Exercised (555 ) $ 0.84 Forfeited (1,155,747 ) $ 2.56 Outstanding options at September 30, 2016 4,475,260 $ 1.95 7.36 $ 23 Options vested and expected to vest 4,278,402 $ 1.99 7.28 $ 21 Exercisable at September 30, 2016 2,031,446 $ 2.72 5.34 $ 3 |
Summary of Restricted Stock Units Activity | The following table represents RSU activity for the nine months ended September 30, 2016 Number of Shares Weighted Average Grant-Date Fair Value per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding RSUs at December 31, 2015 1,697,897 $ 2.25 1.41 $ 1,715 Awarded 610,349 $ 0.88 Released (556,832 ) $ 2.09 Forfeited (376,463 ) $ 1.97 Outstanding RSUs at September 30, 2016 1,374,951 $ 1.79 1.23 $ 1,155 |
Restructuring Obligations and21
Restructuring Obligations and Charges (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring Obligations and Charges [Abstract] | |
Restructuring Obligations | For the three and nine months ended September 30, 2016, the Company recorded $0 and $113,000 of contract termination costs, respectively, included in restructuring related costs in the condensed consolidated statement of operations, related to the termination of contracts as a result of cost reduction efforts. As of September 30, 2016, approximately $31,000 of unpaid costs is included in accrued liabilities in the condensed consolidated balance sheet. The Company expects all remaining obligations to be paid by March 31, 2017. Contract Terminations Severance Total Restructuring obligations, March 31, 2016 - - - Restructuring costs incurred 113,000 310,000 423,000 Cash payments (82,000 ) (286,000 ) (368,000 ) Restructuring obligations, June 30, 2016 31,000 24,000 55,000 Restructuring costs incurred - - - Cash payments - (24,000 ) (24,000 ) Restructuring obligations, September 30, 2016 31,000 - 31,000 |
Significant Accounting Polici22
Significant Accounting Policies, Revenue Recognition (Details) - Type | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Deferred Revenue Arrangement [Line Items] | ||||
Number of types of offerings | 4 | |||
Minimum [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Payment terms for arrangements to be considered fixed or determinable | 90 days | |||
Maximum [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Services breakage revenue | 1.00% | 1.00% | 1.00% | 1.00% |
End-User Software Products [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Refund period | 30 days | |||
Partnerships [Member] | Minimum [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Refund period | 5 days | |||
Partnerships [Member] | Maximum [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Refund period | 14 days | |||
Referral Programs and Direct Transactions [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Refund period | 5 days |
Significant Accounting Polici23
Significant Accounting Policies, Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | $ 54,506 | $ 65,825 |
Gross unrealized gains | 15 | 0 |
Gross unrealized losses | (24) | (91) |
Fair value | 54,497 | 65,734 |
Short-term Investments [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 38,775 | 38,227 |
Gross unrealized gains | 15 | 0 |
Gross unrealized losses | (24) | (91) |
Fair value | 38,766 | 38,136 |
Commercial Paper [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 5,976 | 996 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 5,976 | 996 |
Corporate Notes and Bonds [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 21,061 | 31,255 |
Gross unrealized gains | 7 | 0 |
Gross unrealized losses | (24) | (83) |
Fair value | 21,044 | 31,172 |
U.S. Government Agency Securities [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 9,958 | 2,996 |
Gross unrealized gains | 7 | 0 |
Gross unrealized losses | 0 | (7) |
Fair value | 9,965 | 2,989 |
Cash and Cash Equivalents [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 15,731 | 27,598 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 15,731 | 27,598 |
Cash [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 6,737 | 8,486 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 6,737 | 8,486 |
Money Market Funds [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 8,994 | 19,112 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 8,994 | 19,112 |
Certificates of Deposit [Member] | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized cost | 1,780 | 2,980 |
Gross unrealized gains | 1 | 0 |
Gross unrealized losses | 0 | (1) |
Fair value | $ 1,781 | $ 2,979 |
Significant Accounting Polici24
Significant Accounting Policies, Investment Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Summary of estimated fair value of available-for-sale securities classified by stated maturity date [Abstract] | ||
Due within one year | $ 27,713 | $ 23,588 |
Due within two years | 11,053 | 14,548 |
Total fair value | $ 38,766 | $ 38,136 |
Significant Accounting Polici25
Significant Accounting Policies, Fair Value Disclosures (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | $ 54,497 | $ 65,734 |
Recurring [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 47,760 | 57,248 |
Recurring [Member] | Level 1 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 8,994 | 19,112 |
Recurring [Member] | Level 2 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 38,766 | 38,136 |
Recurring [Member] | Level 3 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Money Market Funds [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 8,994 | 19,112 |
Recurring [Member] | Money Market Funds [Member] | Level 1 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 8,994 | 19,112 |
Recurring [Member] | Money Market Funds [Member] | Level 2 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Money Market Funds [Member] | Level 3 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Certificates of Deposit [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 1,781 | 2,979 |
Recurring [Member] | Certificates of Deposit [Member] | Level 1 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Certificates of Deposit [Member] | Level 2 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 1,781 | 2,979 |
Recurring [Member] | Certificates of Deposit [Member] | Level 3 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Commercial Paper [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 5,976 | 996 |
Recurring [Member] | Commercial Paper [Member] | Level 1 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Commercial Paper [Member] | Level 2 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 5,976 | 996 |
Recurring [Member] | Commercial Paper [Member] | Level 3 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Corporate Notes and Bonds [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 21,044 | 31,172 |
Recurring [Member] | Corporate Notes and Bonds [Member] | Level 1 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | Corporate Notes and Bonds [Member] | Level 2 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 21,044 | 31,172 |
Recurring [Member] | Corporate Notes and Bonds [Member] | Level 3 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | U.S. Government Agency Securities [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 9,965 | 2,989 |
Recurring [Member] | U.S. Government Agency Securities [Member] | Level 1 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 0 | 0 |
Recurring [Member] | U.S. Government Agency Securities [Member] | Level 2 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | 9,965 | 2,989 |
Recurring [Member] | U.S. Government Agency Securities [Member] | Level 3 [Member] | ||
Fair value hierarchy for financial assets measured at fair value [Abstract] | ||
Fair value for financial assets | $ 0 | $ 0 |
Significant Accounting Polici26
Significant Accounting Policies, Concentrations of Credit Risk, Revenue (Details) - Revenue [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Comcast [Member] | ||||
Concentration Risk [Line Items] | ||||
Customer concentration risk | 60.00% | 67.00% | 59.00% | 68.00% |
Office Depot [Member] | ||||
Concentration Risk [Line Items] | ||||
Customer concentration risk | 15.00% | 17.00% | 16.00% | 15.00% |
Significant Accounting Polici27
Significant Accounting Policies, Concentrations of Credit Risk, Accounts Receivable (Details) - Trade Accounts Receivable [Member] - Customer Concentration Risk [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Comcast [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentration risk | 72.00% | 73.00% |
Office Depot [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentration risk | 9.00% | 13.00% |
Significant Accounting Polici28
Significant Accounting Policies, Trade Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 8,000 | $ 6,000 |
Significant Accounting Polici29
Significant Accounting Policies, Goodwill (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Sep. 30, 2016USD ($)Segment | Sep. 30, 2015USD ($) | |
Goodwill [Abstract] | |||||
Number of reporting segments | Segment | 1 | ||||
Non-cash impairment charge | $ 0 | $ 0 | $ 14,240 | $ 0 | $ 14,240 |
Tax benefit associated with goodwill impairment charge | $ (1,300) |
Significant Accounting Polici30
Significant Accounting Policies, Self-Funded Health Insurance (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Self-Funded Health Insurance [Abstract] | ||
Reserve for self-funded health insurance program | $ 1,023 | $ 953 |
Significant Accounting Polici31
Significant Accounting Policies, Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Components of accumulated other comprehensive loss [Roll Forward] | |||||
Balance, beginning of period | [1] | $ 71,346 | |||
Current-period other comprehensive income (loss) | $ (15) | $ (110) | 69 | $ (124) | |
Balance, end of period | 60,697 | 60,697 | |||
Accumulated Other Comprehensive Loss [Member] | |||||
Components of accumulated other comprehensive loss [Roll Forward] | |||||
Balance, beginning of period | (2,302) | ||||
Balance, end of period | (2,233) | (2,233) | |||
Foreign Currency Translation Losses [Member] | |||||
Components of accumulated other comprehensive loss [Roll Forward] | |||||
Balance, beginning of period | (2,211) | ||||
Current-period other comprehensive income (loss) | (13) | ||||
Balance, end of period | (2,224) | (2,224) | |||
Unrealized Losses on Investments [Member] | |||||
Components of accumulated other comprehensive loss [Roll Forward] | |||||
Balance, beginning of period | (91) | ||||
Current-period other comprehensive income (loss) | 82 | ||||
Balance, end of period | $ (9) | $ (9) | |||
[1] | Derived from the December 31, 2015 audited Consolidated Financial Statements included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission ("SEC") on March 7, 2016. |
Significant Accounting Polici32
Significant Accounting Policies, Fair Value of Stock-based Awards Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock Options [Member] | ||||
Weighted average assumptions used for estimating fair value of stock-based awards [Abstract] | ||||
Risk free interest rate | 0.99% | 1.33% | 0.92% | 1.25% |
Expected term | 3 years 10 months 24 days | 3 years 9 months 7 days | 3 years 10 months 20 days | 3 years 9 months |
Volatility | 48.89% | 51.42% | 48.34% | 54.65% |
Expected dividend | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted average fair value (per share) (in dollars per share) | $ 0.33 | $ 0.51 | $ 0.32 | $ 0.71 |
Employee Stock Purchase Plan ("ESPP") [Member] | ||||
Weighted average assumptions used for estimating fair value of stock-based awards [Abstract] | ||||
Risk free interest rate | 0.38% | 0.09% | 0.38% | 0.09% |
Expected term | 6 months | 6 months | 6 months | 6 months |
Volatility | 48.86% | 39.25% | 48.86% | 39.25% |
Expected dividend | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted average fair value (per share) (in dollars per share) | $ 0.28 | $ 0.38 | $ 0.28 | $ 0.38 |
Significant Accounting Polici33
Significant Accounting Policies, Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 661 | $ 735 | $ 1,776 | $ 2,229 |
Cost of Services [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 43 | 62 | 134 | 187 |
Cost of Software and Other [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 1 | 2 | 4 | 8 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 156 | 156 | 346 | 442 |
Sales and Marketing [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 79 | 110 | 121 | 276 |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 382 | 405 | 1,171 | 1,316 |
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 266 | 242 | 679 | 747 |
Employee Stock Purchase Plan ("ESPP") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 10 | 14 | 32 | 52 |
Restricted Stock Units ("RSU") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 385 | $ 479 | $ 1,065 | $ 1,430 |
Significant Accounting Polici34
Significant Accounting Policies, Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings (loss) per share [Abstract] | ||||
Net loss | $ (2,129) | $ (3,871) | $ (12,467) | $ (21,911) |
Basic [Abstract] | ||||
Weighted-average shares of common stock outstanding (in shares) | 55,337 | 54,637 | 55,116 | 54,465 |
Shares used in computing basic loss per share (in shares) | 55,337 | 54,637 | 55,116 | 54,465 |
Basic loss per share (in dollars per share) | $ (0.04) | $ (0.07) | $ (0.23) | $ (0.40) |
Diluted [Abstract] | ||||
Weighted-average shares of common stock outstanding (in shares) | 55,337 | 54,637 | 55,116 | 54,465 |
Add: Common equivalent shares outstanding (in shares) | 0 | 0 | 0 | 0 |
Shares used in computing diluted loss per share (in shares) | 55,337 | 54,637 | 55,116 | 54,465 |
Diluted loss per share (in dollars per share) | $ (0.04) | $ (0.07) | $ (0.23) | $ (0.40) |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares outstanding excluded from computation of diluted loss per share (in shares) | 6,174 | 6,011 | ||
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares outstanding excluded from computation of diluted loss per share (in shares) | 4,475 | 3,733 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares outstanding excluded from computation of diluted loss per share (in shares) | 1,375 | 1,788 | ||
Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares outstanding excluded from computation of diluted loss per share (in shares) | 324 | 490 |
Significant Accounting Polici35
Significant Accounting Policies, Warranties and Indemnifications (Details) | 9 Months Ended |
Sep. 30, 2016 | |
End-User Software Products [Member] | |
Product Warranty Liability [Line Items] | |
Refund period | 30 days |
Partnerships [Member] | Minimum [Member] | |
Product Warranty Liability [Line Items] | |
Refund period | 5 days |
Partnerships [Member] | Maximum [Member] | |
Product Warranty Liability [Line Items] | |
Refund period | 14 days |
Referral Programs and Direct Transactions [Member] | |
Product Warranty Liability [Line Items] | |
Refund period | 5 days |
Warrants (Details)
Warrants (Details) - Comcast [Member] - Warrants [Member] - USD ($) | Oct. 25, 2010 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2016 | Dec. 31, 2013 |
Class of Warrant or Right [Line Items] | |||||
Warrants issuable, maximum (in shares) | 975,000 | ||||
Warrants, exercise price (in dollars per share) | $ 4.9498 | ||||
Investment warrants expiration period from issuance date | 3 years | ||||
Warrants issued (in shares) | 490,000 | ||||
Warrant-related charges | $ 777,000 | ||||
First Tranche [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 166,000 | ||||
Fair value assumptions for warrants issued [Abstract] | |||||
Risk free interest rate | 0.74% | ||||
Expected term | 3 years | ||||
Volatility | 59.12% | ||||
Expected dividend | 0.00% | ||||
Second Tranche [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 324,000 | ||||
Fair value assumptions for warrants issued [Abstract] | |||||
Risk free interest rate | 0.74% | ||||
Expected term | 3 years | ||||
Volatility | 59.12% | ||||
Expected dividend | 0.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Taxes [Abstract] | ||||||
Income tax provision (benefit) | $ 44,000 | $ 60,000 | $ 132,000 | $ (1,041,000) | ||
Reserves and related interest released due to expiration of statues | $ 284,000 | |||||
Tax benefit associated with non-cash goodwill impairment charge | $ (1,300,000) |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2006 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||
Intangible Assets [Abstract] | |||||||
Amortization of intangible assets and other | $ 267,000 | $ 267,000 | $ 801,000 | $ 802,000 | |||
Finite-lived intangible assets [Abstract] | |||||||
Accumulated amortization | (7,226,000) | (7,226,000) | $ (6,425,000) | ||||
Net carrying value | 243,000 | 243,000 | |||||
Indefinite life intangible assets [Abstract] | |||||||
Gross carrying value | 250,000 | 250,000 | 250,000 | ||||
Net carrying value | 250,000 | 250,000 | 250,000 | ||||
Intangible assets, total [Abstract] | |||||||
Gross carrying value | 7,719,000 | 7,719,000 | 7,719,000 | ||||
Accumulated amortization | (7,226,000) | (7,226,000) | (6,425,000) | ||||
Net carrying value | 493,000 | 493,000 | 1,294,000 | [1] | |||
Indefinite life intangibles acquired | $ 250,000 | ||||||
Non-compete [Member] | |||||||
Finite-lived intangible assets [Abstract] | |||||||
Gross carrying value | 593,000 | 593,000 | 593,000 | ||||
Accumulated amortization | (575,000) | (575,000) | (555,000) | ||||
Net carrying value | 18,000 | 18,000 | 38,000 | ||||
Intangible assets, total [Abstract] | |||||||
Accumulated amortization | (575,000) | (575,000) | (555,000) | ||||
Partner Relationships [Member] | |||||||
Finite-lived intangible assets [Abstract] | |||||||
Gross carrying value | 145,000 | 145,000 | 145,000 | ||||
Accumulated amortization | (145,000) | (145,000) | (145,000) | ||||
Net carrying value | 0 | 0 | 0 | ||||
Intangible assets, total [Abstract] | |||||||
Accumulated amortization | (145,000) | (145,000) | (145,000) | ||||
Customer Base [Member] | |||||||
Finite-lived intangible assets [Abstract] | |||||||
Gross carrying value | 641,000 | 641,000 | 641,000 | ||||
Accumulated amortization | (614,000) | (614,000) | (545,000) | ||||
Net carrying value | 27,000 | 27,000 | 96,000 | ||||
Intangible assets, total [Abstract] | |||||||
Accumulated amortization | (614,000) | (614,000) | (545,000) | ||||
Technology Rights [Member] | |||||||
Finite-lived intangible assets [Abstract] | |||||||
Gross carrying value | 5,330,000 | 5,330,000 | 5,330,000 | ||||
Accumulated amortization | (5,144,000) | (5,144,000) | (4,474,000) | ||||
Net carrying value | 186,000 | 186,000 | 856,000 | ||||
Intangible assets, total [Abstract] | |||||||
Accumulated amortization | (5,144,000) | (5,144,000) | (4,474,000) | ||||
Tradenames [Member] | |||||||
Finite-lived intangible assets [Abstract] | |||||||
Gross carrying value | 760,000 | 760,000 | 760,000 | ||||
Accumulated amortization | (748,000) | (748,000) | (706,000) | ||||
Net carrying value | 12,000 | 12,000 | 54,000 | ||||
Intangible assets, total [Abstract] | |||||||
Accumulated amortization | $ (748,000) | $ (748,000) | $ (706,000) | ||||
[1] | Derived from the December 31, 2015 audited Consolidated Financial Statements included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission ("SEC") on March 7, 2016. |
Intangible Assets, Maturity Sch
Intangible Assets, Maturity Schedule (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Estimated future amortization expense of intangible assets [Abstract] | |
2016 (October-December) | $ 227 |
2,017 | 16 |
Net carrying value | $ 243 |
Weighted average remaining useful life | 3 months 4 days |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Other Accrued Liabilities [Abstract] | |||
Accrued expenses | $ 836 | $ 2,490 | |
Self-insurance accruals | 1,023 | 953 | |
Customer deposits | 541 | 570 | |
Restructuring obligations | 31 | 0 | |
Other accrued liabilities | 170 | 122 | |
Total other accrued liabilities | $ 2,601 | $ 4,135 | [1] |
[1] | Derived from the December 31, 2015 audited Consolidated Financial Statements included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission ("SEC") on March 7, 2016. |
Stockholders' Equity, Stock Opt
Stockholders' Equity, Stock Options (Details) - USD ($) | Jun. 15, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Stock Options [Member] | ||||||
Stock option activity, number of shares [Roll Forward] | ||||||
Outstanding options, beginning of period (in shares) | 3,669,469 | |||||
Granted (in shares) | 1,962,093 | |||||
Exercised (in shares) | (555) | |||||
Forfeited (in shares) | (1,155,747) | |||||
Outstanding options, end of period (in shares) | 4,475,260 | 4,475,260 | 3,669,469 | |||
Options vested and expected to vest (in shares) | 4,278,402 | 4,278,402 | ||||
Exercisable (in shares) | 2,031,446 | 2,031,446 | ||||
Weighted average exercise price per share [Roll Forward] | ||||||
Outstanding options, beginning of period (in dollars per share) | $ 2.74 | |||||
Granted (in dollars per share) | 0.84 | |||||
Exercised (in dollars per share) | 0.84 | |||||
Forfeited (in dollars per share) | 2.56 | |||||
Outstanding options, end of period (in dollars per share) | $ 1.95 | 1.95 | $ 2.74 | |||
Options vested and expected to vest (in dollars per share) | 1.99 | 1.99 | ||||
Exercisable (in dollars per share) | $ 2.72 | $ 2.72 | ||||
Additional disclosures [Abstract] | ||||||
Options outstanding, weighted average remaining contractual term | 7 years 4 months 10 days | 6 years 7 months 28 days | ||||
Options vested and expected to vest, weighted average remaining contractual term | 7 years 3 months 11 days | |||||
Options exercisable, weighted average remaining contractual term | 5 years 4 months 2 days | |||||
Options outstanding, aggregate intrinsic value | $ 23,000 | $ 23,000 | $ 0 | |||
Options vested and expected to vest, aggregate intrinsic value | 21,000 | 21,000 | ||||
Options exercisable, aggregate intrinsic value | 3,000 | 3,000 | ||||
Options exercised in period, aggregate intrinsic value | 0 | $ 0 | 0 | $ 0 | ||
Fair value of options vested | 270,000 | $ 263,000 | 689,000 | $ 523,000 | ||
Compensation cost not yet recognized [Abstract] | ||||||
Unrecognized compensation cost related to stock options | $ 971,000 | $ 971,000 | ||||
Weighted average period of recognition for unrecognized compensation cost | 2 years 4 months 17 days | |||||
June 15, 2016 Award [Member] | Time-based Stock Options [Member] | Corporate Employees [Member] | ||||||
Stock option activity, number of shares [Roll Forward] | ||||||
Granted (in shares) | 992,000 | |||||
Compensation cost not yet recognized [Abstract] | ||||||
Vesting period | 3 years |
Stockholders' Equity, Employee
Stockholders' Equity, Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan ("ESPP") [Member] - shares | 3 Months Ended | 9 Months Ended |
Jun. 30, 2011 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserved for issuance (in shares) | 1,000,000 | |
Term for employee stock purchase plan | 10 years | |
Offering period of employee stock purchase plan | 6 months | |
Minimum percentage of fair market value of the specified conditions used to determine purchase price of ESPP | 85.00% | |
Employee stock purchase plan, shares purchased (in shares) | 63,311 |
Stockholders' Equity, Restricte
Stockholders' Equity, Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | May 27, 2015 | Apr. 21, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Restricted Stock Units ("RSUs") [Member] | ||||
Restricted stock units, number of shares [Roll Forward] | ||||
Outstanding RSUs, beginning of period (in shares) | 1,697,897 | |||
Awarded (in shares) | 610,349 | |||
Released (in shares) | (556,832) | |||
Forfeited (in shares) | (376,463) | |||
Outstanding RSUs, end of period (in shares) | 1,374,951 | 1,697,897 | ||
Restricted stock units, weighted average grant-date fair value [Roll forward] | ||||
Outstanding RSUs, beginning of period (in dollars per share) | $ 2.25 | |||
Awarded (in dollars per share) | 0.88 | |||
Released (in dollars per share) | 2.09 | |||
Forfeited (in dollars per share) | 1.97 | |||
Outstanding RSUs, end of period (in dollars per share) | $ 1.79 | $ 2.25 | ||
Restricted stock units, additional disclosures [Abstract] | ||||
Outstanding RSUs, weighted average remaining contractual term | 1 year 2 months 23 days | 1 year 4 months 28 days | ||
Outstanding RSUs, aggregate intrinsic value | $ 1,155 | $ 1,715 | ||
Compensation cost not yet recognized [Abstract] | ||||
Unrecognized compensation cost related to restricted stock units | $ 1,600 | |||
Weighted average period of recognition for unrecognized compensation cost | 1 year 10 months 24 days | |||
May 27, 2015 Award [Member] | Time-based RSUs [Member] | Non-employee Directors [Member] | ||||
Restricted stock units, number of shares [Roll Forward] | ||||
Awarded (in shares) | 173,610 | |||
April 21, 2015 Award [Member] | Time-based RSUs [Member] | Corporate Employees [Member] | ||||
Restricted stock units, number of shares [Roll Forward] | ||||
Awarded (in shares) | 397,000 | |||
Compensation cost not yet recognized [Abstract] | ||||
Vesting period | 3 years |
Stockholders' Equity, Stock Rep
Stockholders' Equity, Stock Repurchase Program and Treasury Stock (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Apr. 27, 2005 | |
Stock Repurchase Program [Abstract] | |||
Stock repurchase program, number of shares authorized to be repurchased (in shares) | 2,000,000 | ||
Stock repurchase program, remaining number of shares authorized to be repurchased (in shares) | 1,807,402 | ||
Treasury Stock [Abstract] | |||
Shares repurchased to satisfy withholding tax obligations related to vested RSUs (in shares) | 86,280 | ||
Aggregate costs of shares repurchased to satisfy withholding tax obligations related to vested RSUs | $ 72,000 |
Restructuring Obligations and O
Restructuring Obligations and Other Charges (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016USD ($)Employee | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($)Employee | |
Restructuring Reserve [Roll Forward] | |||
Restructuring obligations, beginning of period | $ 55,000 | $ 0 | |
Restructuring costs incurred | 0 | 423,000 | |
Cash payments | (24,000) | (368,000) | |
Restructuring obligations, end of period | 31,000 | 55,000 | $ 31,000 |
Contract Terminations [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring obligations, beginning of period | 31,000 | 0 | |
Restructuring costs incurred | 0 | 113,000 | 113,000 |
Cash payments | 0 | (82,000) | |
Restructuring obligations, end of period | 31,000 | 31,000 | 31,000 |
Severance [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring obligations, beginning of period | 24,000 | 0 | |
Restructuring costs incurred | 0 | 310,000 | 310,000 |
Cash payments | (24,000) | (286,000) | |
Restructuring obligations, end of period | $ 0 | $ 24,000 | $ 0 |
Reduction in number of employees | Employee | 35 | 35 |
Related Party Transactions (Det
Related Party Transactions (Details) - VIEX Capital Advisors, LLC [Member] | 3 Months Ended |
Jun. 30, 2016USD ($) | |
Related Party Transaction [Line Items] | |
Reimbursement of proxy contest costs | $ 425,000 |
Percentage of voting stock | 5.90% |