Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Support.com, Inc. | |
Entity Central Index Key | 1,104,855 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 18,913,333 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 16,112 | $ 18,050 |
Short-term investments | 31,806 | 31,183 |
Accounts receivable, net | 12,539 | 11,951 |
Prepaid expenses and other current assets | 980 | 802 |
Total current assets | 61,437 | 61,986 |
Property and equipment, net | 846 | 1,133 |
Intangible assets, net | 250 | 250 |
Other assets | 725 | 984 |
Total assets | 63,258 | 64,353 |
Current liabilities: | ||
Accounts payable | 408 | 504 |
Accrued compensation | 2,446 | 3,157 |
Other accrued liabilities | 1,212 | 1,330 |
Accrued legal settlement | 10,000 | 0 |
Short-term deferred revenue | 1,244 | 2,006 |
Total current liabilities | 15,310 | 6,997 |
Long-term deferred revenue | 0 | 13 |
Other long-term liabilities | 725 | 885 |
Total liabilities | 16,035 | 7,895 |
Commitments and contingencies (Note 3) | ||
Stockholders' equity: | ||
Common stock; par value $0.0001, 50,000,000 shares authorized; 19,396,247 issued and 18,913,333 outstanding at September 30, 2018; 19,211,826 issued and 18,728,912 outstanding at December 31, 2017 | 2 | 2 |
Additional paid-in capital | 268,600 | 267,857 |
Treasury stock, at cost (482,914 shares at September 30, 2018 and December 31, 2017) | (5,297) | (5,297) |
Accumulated other comprehensive loss | (2,568) | (2,108) |
Accumulated deficit | (213,514) | (203,996) |
Total stockholders' equity | 47,223 | 56,458 |
Total liabilities and stockholders' equity | $ 63,258 | $ 64,353 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Stockholders' equity: | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,396,247 | 19,211,826 |
Common stock, shares outstanding | 18,913,333 | 18,728,912 |
Treasury stock (in shares) | 482,914 | 482,914 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Revenue | $ 18,017 | $ 15,032 | $ 52,007 | $ 43,829 |
Costs of revenue: | ||||
Total cost of revenue | 14,463 | 11,625 | 43,137 | 34,012 |
Gross profit | 3,554 | 3,407 | 8,870 | 9,817 |
Operating expenses: | ||||
Research and development | 690 | 631 | 2,082 | 2,429 |
Sales and marketing | 424 | 621 | 1,383 | 2,011 |
General and administrative | 1,800 | 1,996 | 5,623 | 6,847 |
Legal settlement | 10,000 | 0 | 10,000 | 0 |
Amortization of intangible assets and other | 0 | 0 | 0 | 16 |
Restructuring | 0 | 128 | 0 | 128 |
Total operating expenses | 12,914 | 3,376 | 19,088 | 11,431 |
Income (loss) from operations | (9,360) | 31 | (10,218) | (1,614) |
Interest income and other, net | 241 | 164 | 676 | 451 |
Income (loss) before income taxes | (9,119) | 195 | (9,542) | (1,163) |
Income tax provision (benefit) | 29 | (36) | (24) | 57 |
Net income (loss) | $ (9,148) | $ 231 | $ (9,518) | $ (1,220) |
Basic and diluted earnings (loss) per share: | ||||
Net income (loss) | $ (0.49) | $ 0.01 | $ (0.51) | $ (0.07) |
Shares used in computing basic net earnings (loss) per share | 18,805 | 18,692 | 18,786 | 18,613 |
Shares used in computing diluted net earnings (loss) per share | 18,805 | 18,714 | 18,786 | 18,613 |
Service [Member] | ||||
Revenue: | ||||
Revenue | $ 16,759 | $ 13,682 | $ 48,179 | $ 39,744 |
Costs of revenue: | ||||
Total cost of revenue | 14,412 | 11,559 | 42,985 | 33,760 |
Software and Other [Member] | ||||
Revenue: | ||||
Revenue | 1,258 | 1,350 | 3,828 | 4,085 |
Costs of revenue: | ||||
Total cost of revenue | $ 51 | $ 66 | $ 152 | $ 252 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (9,148) | $ 231 | $ (9,518) | $ (1,220) |
Other comprehensive income: | ||||
Change in foreign currency translation adjustment | (194) | 9 | (473) | 175 |
Change in net unrealized gain (loss) on investments | 32 | 12 | 13 | 18 |
Other comprehensive income (loss) | (162) | 21 | (460) | 193 |
Comprehensive income (loss) | $ (9,310) | $ 252 | $ (9,978) | $ (1,027) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities: | ||
Net loss | $ (9,518) | $ (1,220) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 478 | 479 |
Amortization of premiums and discounts on investments | 129 | 65 |
Amortization of intangible assets and other | 0 | 16 |
Stock-based compensation | 586 | 295 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (588) | (2,188) |
Prepaid expenses and other current assets | (191) | 572 |
Other long-term assets | 180 | 123 |
Accounts payable | (95) | (292) |
Accrued compensation | (721) | (632) |
Accrued legal settlement | 10,000 | 0 |
Other accrued liabilities | (122) | (585) |
Other long-term liabilities | (160) | (48) |
Deferred revenue | (775) | (664) |
Net cash used in operating activities | (797) | (4,079) |
Investing Activities: | ||
Purchases of property and equipment | (191) | (32) |
Purchases of investments | (22,893) | (14,939) |
Maturities of investments | 22,154 | 23,273 |
Net cash (used in) provided by investing activities | (930) | 8,302 |
Financing Activities | ||
Proceeds from employee stock purchase plan | 35 | 27 |
Proceeds from exercise of stock | 121 | 0 |
Repurchase of common stock | 0 | (2) |
Net cash provided by financing activities | 156 | 25 |
Effect of exchange rate changes on cash and cash equivalents | (367) | 116 |
Net (decrease) increase in cash and cash equivalents | (1,938) | 4,364 |
Cash and cash equivalents at beginning of period | 18,050 | 16,890 |
Cash and cash equivalents at end of period | 16,112 | 21,254 |
Supplemental schedule of cash flow information: | ||
Income taxes paid | $ 89 | $ 85 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements include the accounts of Support.com, Inc. (the “Company”, “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, 2018 and the consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017 and the consolidated statements of cash flows for the nine months ended Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 and litigation accruals, the valuation 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 On January 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606"). As a result, the Company has changed its accounting policy for revenue recognition and applied ASC 606 using the modified retrospective method. Typically, this approach would result in recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening retained earnings at January 1, 2018, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic revenue recognition methodology under ASC 605, Revenue Recognition Disaggregation of Revenue We generate revenue from the sale of services and sale of software fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. The following table depicts the disaggregation of revenue (in thousands) according to revenue type and is consistent with how we evaluate our financial performance: Revenue from Contracts with Customers: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Services $ 16,759 $ 13,682 $ 48,179 $ 39,744 Software and other 1,258 1,350 3,828 4,085 Total revenue $ 18,017 $ 15,032 $ 52,007 $ 43,829 We do not believe that further disaggregation of revenue is necessary as it would not depict information concerning the nature, amount, timing and uncertainties of revenue and cash flows that are affected by economic factors nor the financial performance evaluations performed by our chief operating decision maker. 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. All of our revenues are from contracts with our customers. Our customers may generally cancel our contract, without cause, upon written notice (typically ninety days). Our service contracts do have defined terms, however due to the facts stated above, our service contracts are recognized on a month-to-month basis. When the service is provided to customers, our performance obligation is typically satisfied. 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 referrals we bear substantially all risks associated with the transaction and 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 three 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 when control transfers to our partners. ● 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. Management has determined control transfers ratably over the contract period. ● 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. In certain cases, we are paid for services that are sold but not yet delivered. We initially record such balances as a contract liability included in 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 months ended September 30, 2018 and 2017, services breakage revenue was less than 1% of our total revenue. During the three and nine month periods ended September 30, 2018, the revenue that the Company recognized that was included in deferred revenue at December 31, 2017 was $0.3 million and $1.9 million, respectively. Partners are generally invoiced monthly and payments are typically due within 30 to 45 days. 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 cloud-based software. In such arrangements, customers receive a right to use our Support.com Cloud applications in their own support organizations. We license our cloud based software using a software-as-a-service (“SaaS”) model under which customers cannot take possession of the technology and pay us on a per-user or usage basis during the term of the arrangement. In addition, services revenue includes fees from implementation services of our cloud-based software. Currently, revenues from implementation services are recognized ratably over the customer life which is estimated as the term of the arrangement once the Support.com Cloud services are made available to customers. We generally charge for these services on a time and material basis. As of September 30, 2018, revenues from implementation services are di minimus. 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 offer when-and-if-available software upgrades to our end-user products. Management has determined that these upgrades are not distinct, as the upgrades are an input into a combined output. In addition, Management has determined that the frequency and timing of the when-and-if-available upgrades are unpredictable and therefore we recognize revenue consistent with the sale of the perpetual license or subscription. We generally control fulfillment, pricing, product requirements, and collection risk and therefore we record the gross amount of revenue. We provide a 30-day money back guarantee for the majority of our end-user software products. 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. We recognize other revenue in the period in which control transfers to our partners. 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 in debt securities are classified as short-term investments, 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 short-term investments 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, 2018, 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. The following is a summary of cash, cash equivalents and investments at September 30, 2018 and December 31, 2017 (in thousands): As of September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 6,933 $ — $ — $ 6,933 Money market funds 5,683 — — 5,683 Certificates of deposit 1,196 — (2 ) 1,194 Commercial paper 7,168 — (3 ) 7,165 Corporate notes and bonds 18,541 — (63 ) 18,478 U.S. government agency securities 8,468 — (3 ) 8,465 $ 47,989 $ — $ (71 ) $ 47,918 Classified as: Cash and cash equivalents $ 16,113 $ — $ (1 ) $ 16,112 Short-term investments 31,876 — (70 ) 31,806 $ 47,989 $ — $ (71 ) $ 47,918 As of December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,408 $ — $ — $ 7,408 Money market funds 10,643 — (1 ) 10,642 Certificates of deposit 1,207 — (1 ) 1,206 Commercial paper 2,494 — (1 ) 2,493 Corporate notes and bonds 22,846 — (77 ) 22,769 U.S. government agency securities 4,719 — (4 ) 4,715 $ 49,317 $ — $ (84 ) $ 49,233 Classified as: Cash and cash equivalents $ 18,051 $ — $ (1 ) $ 18,050 Short-term investments 31,266 — (83 ) 31,183 $ 49,317 $ — $ (84 ) $ 49,233 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, 2018 December 31, 2017 Due within one year $ 29,299 $ 22,228 Due within two years 2,507 8,955 $ 31,806 $ 31,183 Fair Value Measurements Accounting Standards 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, 2018 and December 31, 2017 (in thousands): As of September 30, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 5,683 $ — $ — $ 5.683 Certificates of deposit — 1,194 — 1,194 Commercial paper — 7,165 — 7,165 Corporate notes and bonds — 18,478 — 18,478 U.S. government agency securities — 8,465 — 8,465 Total $ 5,683 $ 35,302 $ — $ 40,985 As of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 10,642 $ — $ — $ 10,642 Certificates of deposit — 1,206 — 1,206 Commercial paper — 2,493 — 2,493 Corporate notes and bonds — 22,769 — 22,769 U.S. government agency securities — 4,715 — 4,715 Total $ 10,642 $ 31,183 $ — $ 41,825 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 conditions at the time we enter into business and reasonably short payment terms. For the three months ended September 30, 2018, Comcast and Cox Communications accounted for 70% and 16%, respectively, of our total revenue. For the three months ended September 30, 2017, Comcast accounted for 62%, of our total revenue. For the nine months ended September 30, 2018, Comcast and Cox Communications accounted for 70% and 14%, respectively, of our total revenue. For the nine months ended September 30, 2017, Comcast accounted for 64% of our total revenue. There were no other customers that accounted for 10% or more of total revenue for the three and nine months ended September 30, 2018 and 2017. As of September 30, 2018, Comcast and Cox Communications accounted for 73% and 17%, respectively, of our total accounts receivable. As of December 31, 2017, Comcast and Cox Communications accounted for 71% and 12% of our total accounts receivable, respectively. There were no other customers that accounted for 10% or more of our total accounts receivable as of September 30, 2018 and December 31, 2017. Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial condition 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. We had an allowance for doubtful accounts of $18,000 and $9,000 at September 30, 2018 and December 31, 2017, respectively. 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, 2018, the Company had approximately $633,000 in reserve for its self-funded health insurance program. As of December 31, 2017, the Company had approximately $679,000 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, 2017 $ (2,024 ) $ (84 ) $ (2,108 ) Current-period other comprehensive gain (loss) (473 ) 13 (460 ) Balance as of September 30, 2018 $ (2,497 ) $ (71 ) $ (2,568 ) 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 condensed consolidated statements of comprehensive 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 months and nine months ended September 30, 2018 and 2017. There were stock option grants during the three months ended September 30, 2018. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock Option Plan: Risk-free interest rate 2.9% — 2.4% 1.43% Expected term 3.2 years — 3.0 years 3.58 years Volatility 39.5% — 41.2% 46.21% Expected dividend 0% — 0% 0% Weighted average fair value (per share) $ 0.88 — $ 0.84 $ 0.96 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Employee Stock Purchase Plan: Risk-free interest rate 2.09% 1.02% 2.09% 1.02 Expected term 0.5 years 0.5 years 0.5 years 0.5 years Volatility 32.55% 33.66% 32.55% 33.66 Expected dividend 0% 0% 0% 0% Weighted average fair value (per share) $ 0.72 $ 0.59 $ 0.72 $ 0.59 We recorded the following stock-based compensation expense for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock-based compensation expense related to grants of: Stock options $ 38 $ 27 $ 358 $ 86 Employee Stock Purchase Plan (“ESPP”) - 5 11 16 Restricted Stock Units (“RSU”) 64 (4 ) 217 193 $ 102 $ 28 $ 586 $ 295 Stock-based compensation expense recognized in: Cost of services $ 11 $ 19 $ 49 $ 83 Cost of software and other — — — 3 Research and development 9 (18 ) 33 62 Sales and marketing 14 12 40 34 General and administrative 68 15 464 113 $ 102 $ 28 $ 586 $ 295 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. For the three months ended September 30, 2018 and September 30, 2017 and nine months ended September 30, 2018, diluted earnings per share was computed using our net income 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. For the nine months ended September 30, 2017, we were in a loss position, therefore all shares were anti-dilutive. The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts): Three Months Nine Months Ended Ended September 30, September 30, 2018 2017 2018 2017 Net income (loss) $ (9,148 ) $ 231 $ (9,518 ) $ (1,220 ) Basic: Weighted-average shares of common stock outstanding 18,805 18,692 18,786 18,613 Shares used in computing basic income (loss) per share 18,805 18,692 18,786 18,613 Basic earnings (loss) per share (0.49 ) 0.01 (0.51 ) (0.07 ) Diluted: Weighted-average shares of common stock outstanding 18,805 18,692 18,786 18,613 Add: Common equivalent shares outstanding - 22 - - Shares used in computing diluted earnings (loss) per share 18,805 18,714 18,786 18,613 Diluted earnings (loss) per share $ (0.49 ) $ 0.01 $ (0.51 ) $ (0.07 ) The following potential common shares outstanding were excluded from the computation of diluted earnings (loss) per share because including them would have been antidilutive (in thousands): As of September 30, 2018 2017 Stock options 872 417 RSUs 96 - 968 417 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, 2018, 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 Accounting Standards Adopted in the Current Period Revenue Recognition We have implemented all new accounting pronouncements that are in effect and that management believes would materially affect our financial statements. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Deferral of the Effective Date Financial Instruments In January 2016, The FASB issued ASU No. 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) Income Taxes In March 2018, the Company adopted Accounting Standards Update No. 2018-05 – Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which updates the income tax accounting in U.S. GAAP to reflect the Securities and Exchange Commission (“SEC”) interpretive guidance released on December 22, 2017, when the Tax Cuts and Jobs Act was signed into law. New Accounting Standards to be adopted in Future Periods Restricted cash In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows Lease Accounting In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | We recorded an income tax provision (benefit) of $27,000 and ($25,000) for the three and nine months ended September 30, 2018, respectively. The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws and settlements with taxing authorities and foreign currency fluctuations. As of September 30, 2018, 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 as of September 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Legal contingencies Federal Trade Commission Consent Order. As previously disclosed, on December 20, 2016 the Federal Trade Commission (“FTC”) issued a confidential Civil Investigative Demand, or CID, to the Company requiring the Company to produce certain documents and materials and to answer certain interrogatories relating to PC Healthcheck, an obsolete software program that the Company developed on behalf of a third party for their use with their customers. The investigation relates to the Company providing software like PC Healthcheck to third parties for their use prior to December 31, 2016, when the Company was under management of the previous Board and executive team. Since issuing the CID, the FTC has sought additional written and testimonial evidence from the Company. We have cooperated fully with the FTC’s investigation and provided all requested information. In addition, the Company has not used PC Healthcheck nor provided it to any customers since December 2016. On March 9, 2018, the FTC notified the Company that the FTC was willing to engage in settlement discussions. On November 6, 2018, the Company and the FTC entered into a proposed Stipulation to Entry of Order for Permanent Injunction and Monetary Judgment, or the Consent Order. The Consent Order is to be lodged with the U.S. District Court for the Southern District of Florida. Upon final entry by the Court, the Consent Order resolves the FTC’s multi-year investigation of the Company. Pursuant to the Consent Order, under which the Company neither admitted nor denied the FTC’s allegations (except as to the Court having jurisdiction over the matter), the FTC has agreed to accept a payment of $10 million in settlement of the $35 million judgement, subject to the factual accuracy of the information the Company has provided as part of our financial representations. The $10 million payment is made within seven (7) days of the entry of the Consent Order in the Southern District of Florida and is recognized in operating expenses within the Company’s consolidated statements of operations for the three and nine months ended September 30, 2018. Additionally, pursuant to the Consent Order, the Company has agreed to implement certain new procedures and enhance certain existing procedures. For example, the Consent Order necessitates that the Company cooperate with representatives of the Commission on associated investigations if needed; imposes requirements on the Company regarding obtaining acknowledgements of the Consent Order and compliance certification, including record creation and maintenance; and prohibits the Company from making misrepresentations and misleading claims or providing the means for others to make such claims regarding, among other things, detection of security or performance issues on consumer’s Electronic Devices. Electronic Devices include, but are not limited to, cell phones, tablets and computers. The Company intends to monitor the impact of the Consent Order regularly and, while the Company currently does not expect the settlement to have a long-term and materially adverse impact on its business, the Company’s business may be negatively impacted as the Company adjusts to some of the changes. If the Company is unable to comply with the Consent Order, then this could result in a material and adverse impact to the Company’s results of operations and financial condition. Other Matters. We are also subject to other 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 any pending claims of any type (alone or combined) will materially affect our financial position, results of operations or cash flows. The ultimate outcome of any litigation is uncertain, however, any 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. Lease Commitments Headquarters office lease. Total facility rent expense pursuant to all operating lease agreements was $114,000 and $290,000 for the three and nine months ended September 30, 2018. Guarantees We have identified guarantees in accordance with ASC 450, Contingencies |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | The Company amortizes intangible assets, which consist of purchased technologies that have estimated useful lives ranging from 1 to 6 years, using the straight-line method when the consumption pattern of the asset is not apparent. The Company reviews such assets for impairment whenever an impairment indicator exists and continually monitors events and changes in circumstances that could indicate carrying amounts of the intangible assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses recoverability by determining whether the carrying value of such assets exceed the estimates of future undiscounted future cash flows expected to be generated by such assets. Should impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s estimated fair value. There was no impairment of intangible assets recorded for the nine months ended September 30, 2018. Amortization of intangible assets and other for the three and nine months ended September 30, 2018 was $0. Amortization of intangible assets and other for the three and nine months ended September 30, 2017 was $0 and $16,000, respectively. The following table summarizes the components of intangible assets (in thousands): Indefinite Life Intangibles As of September 30, 2018 Gross carrying value $ 250 Accumulated amortization — Net carrying value $ 250 As of December 31, 2017 Gross carrying value $ 250 Accumulated amortization — Net carrying value $ 250 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. |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities consist of the following (in thousands): September 30, 2018 December 31, 2017 Accrued expenses $ 408 $ 462 Self-insurance accruals 633 679 Other accrued liabilities 171 189 Total other accrued liabilities $ 1,212 $ 1,330 |
Stockholder's Equity
Stockholder's Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stock Options The following table represents the stock option activity for the nine months ended September 30, 2018: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding options at December 31, 2017 732,190 $ 3.72 8.17 $ 56 Granted 330,000 $ 2.75 Exercised (49,043 ) $ 2.47 Forfeited (140,712 ) $ 6.53 Outstanding options at September 30, 2018 872,435 $ 2.97 8.61 $ 311 Options vested and expected to vest 848,495 $ 2.99 8.60 $ 297 Exercisable at September 30, 2018 555,707 $ 3.32 8.42 $ 143 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, 2018. 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 $3,000 and $20,000 during the three and nine months ended September 30, 2018, respectively, and zero during the three and nine months ended September 30, 2017. Total fair value of options vested was $24,000 and $48,000 during both three and nine months ended September 30, 2018, respectively, and $36,000 and $169,000 during the three and nine months ended September 30, 2017, respectively. At September 30, 2018, there was $213,000 of unrecognized compensation cost related to existing options outstanding which is expected to be recognized over a weighted average period of 1.9 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 (the “Board”) and stockholders approved an ESPP and reserved 333,333 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 nine-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, 2018, 15,435 shares were purchased under ESPP. Restricted Stock Units The following table represents RSU activity for the nine months ended September 30, 2018: 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, 2017 136,329 $ 2.80 0.80 $ 329 Awarded 90,905 2.20 Released (119,943 ) 2.71 Forfeited (10,937 ) 2.67 Outstanding RSUs at September 30, 2018 96,354 $ 2.36 0.84 $ 279 At September 30, 2018, there was $164,000 of unrecognized compensation cost related to RSUs which is expected to be recognized over a weighted average period of 0.84 years. Stock Repurchase Program On April 27, 2005, our Board authorized the repurchase of up to 666,666 outstanding shares of our common stock. As of September 30, 2018 the maximum number of shares remaining that can be repurchased under this program was 602,467. The Company does not intend to repurchase shares without further approval from its Board. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited interim condensed consolidated financial statements include the accounts of Support.com, Inc. (the “Company”, “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, 2018 and the consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017 and the consolidated statements of cash flows for the nine months ended |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles 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 and litigation accruals, the valuation 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 | On January 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606"). As a result, the Company has changed its accounting policy for revenue recognition and applied ASC 606 using the modified retrospective method. Typically, this approach would result in recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening retained earnings at January 1, 2018, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic revenue recognition methodology under ASC 605, Revenue Recognition Disaggregation of Revenue We generate revenue from the sale of services and sale of software fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. The following table depicts the disaggregation of revenue (in thousands) according to revenue type and is consistent with how we evaluate our financial performance: Revenue from Contracts with Customers: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Services $ 16,759 $ 13,682 $ 48,179 $ 39,744 Software and other 1,258 1,350 3,828 4,085 Total revenue $ 18,017 $ 15,032 $ 52,007 $ 43,829 We do not believe that further disaggregation of revenue is necessary as it would not depict information concerning the nature, amount, timing and uncertainties of revenue and cash flows that are affected by economic factors nor the financial performance evaluations performed by our chief operating decision maker. 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. All of our revenues are from contracts with our customers. Our customers may generally cancel our contract, without cause, upon written notice (typically ninety days). Our service contracts do have defined terms, however due to the facts stated above, our service contracts are recognized on a month-to-month basis. When the service is provided to customers, our performance obligation is typically satisfied. 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 referrals we bear substantially all risks associated with the transaction and 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 three 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 when control transfers to our partners. ● 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. Management has determined control transfers ratably over the contract period. ● 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. In certain cases, we are paid for services that are sold but not yet delivered. We initially record such balances as a contract liability included in 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 months ended September 30, 2018 and 2017, services breakage revenue was less than 1% of our total revenue. During the three and nine month periods ended September 30, 2018, the revenue that the Company recognized that was included in deferred revenue at December 31, 2017 was $0.3 million and $1.9 million, respectively. Partners are generally invoiced monthly and payments are typically due within 30 to 45 days. 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 cloud-based software. In such arrangements, customers receive a right to use our Support.com Cloud applications in their own support organizations. We license our cloud based software using a software-as-a-service (“SaaS”) model under which customers cannot take possession of the technology and pay us on a per-user or usage basis during the term of the arrangement. In addition, services revenue includes fees from implementation services of our cloud-based software. Currently, revenues from implementation services are recognized ratably over the customer life which is estimated as the term of the arrangement once the Support.com Cloud services are made available to customers. We generally charge for these services on a time and material basis. As of September 30, 2018, revenues from implementation services are di minimus. 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 offer when-and-if-available software upgrades to our end-user products. Management has determined that these upgrades are not distinct, as the upgrades are an input into a combined output. In addition, Management has determined that the frequency and timing of the when-and-if-available upgrades are unpredictable and therefore we recognize revenue consistent with the sale of the perpetual license or subscription. We generally control fulfillment, pricing, product requirements, and collection risk and therefore we record the gross amount of revenue. We provide a 30-day money back guarantee for the majority of our end-user software products. 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. We recognize other revenue in the period in which control transfers to our partners. |
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 in debt securities are classified as short-term investments, 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 short-term investments 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, 2018, 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. The following is a summary of cash, cash equivalents and investments at September 30, 2018 and December 31, 2017 (in thousands): As of September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 6,933 $ — $ — $ 6,933 Money market funds 5,683 — — 5,683 Certificates of deposit 1,196 — (2 ) 1,194 Commercial paper 7,168 — (3 ) 7,165 Corporate notes and bonds 18,541 — (63 ) 18,478 U.S. government agency securities 8,468 — (3 ) 8,465 $ 47,989 $ — $ (71 ) $ 47,918 Classified as: Cash and cash equivalents $ 16,113 $ — $ (1 ) $ 16,112 Short-term investments 31,876 — (70 ) 31,806 $ 47,989 $ — $ (71 ) $ 47,918 As of December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,408 $ — $ — $ 7,408 Money market funds 10,643 — (1 ) 10,642 Certificates of deposit 1,207 — (1 ) 1,206 Commercial paper 2,494 — (1 ) 2,493 Corporate notes and bonds 22,846 — (77 ) 22,769 U.S. government agency securities 4,719 — (4 ) 4,715 $ 49,317 $ — $ (84 ) $ 49,233 Classified as: Cash and cash equivalents $ 18,051 $ — $ (1 ) $ 18,050 Short-term investments 31,266 — (83 ) 31,183 $ 49,317 $ — $ (84 ) $ 49,233 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, 2018 December 31, 2017 Due within one year $ 29,299 $ 22,228 Due within two years 2,507 8,955 $ 31,806 $ 31,183 |
Fair Value Measurements | Accounting Standards 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, 2018 and December 31, 2017 (in thousands): As of September 30, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 5,683 $ — $ — $ 5.683 Certificates of deposit — 1,194 — 1,194 Commercial paper — 7,165 — 7,165 Corporate notes and bonds — 18,478 — 18,478 U.S. government agency securities — 8,465 — 8,465 Total $ 5,683 $ 35,302 $ — $ 40,985 As of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 10,642 $ — $ — $ 10,642 Certificates of deposit — 1,206 — 1,206 Commercial paper — 2,493 — 2,493 Corporate notes and bonds — 22,769 — 22,769 U.S. government agency securities — 4,715 — 4,715 Total $ 10,642 $ 31,183 $ — $ 41,825 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 conditions at the time we enter into business and reasonably short payment terms. For the three months ended September 30, 2018, Comcast and Cox Communications accounted for 70% and 16%, respectively, of our total revenue. For the three months ended September 30, 2017, Comcast accounted for 62%, of our total revenue. For the nine months ended September 30, 2018, Comcast and Cox Communications accounted for 70% and 14%, respectively, of our total revenue. For the nine months ended September 30, 2017, Comcast accounted for 64% of our total revenue. There were no other customers that accounted for 10% or more of total revenue for the three and nine months ended September 30, 2018 and 2017. As of September 30, 2018, Comcast and Cox Communications accounted for 73% and 17%, respectively, of our total accounts receivable. As of December 31, 2017, Comcast and Cox Communications accounted for 71% and 12% of our total accounts receivable, respectively. There were no other customers that accounted for 10% or more of our total accounts receivable as of September 30, 2018 and December 31, 2017. |
Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial condition 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. We had an allowance for doubtful accounts of $18,000 and $9,000 at September 30, 2018 and December 31, 2017, respectively. |
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, 2018, the Company had approximately $633,000 in reserve for its self-funded health insurance program. As of December 31, 2017, the Company had approximately $679,000 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, 2017 $ (2,024 ) $ (84 ) $ (2,108 ) Current-period other comprehensive gain (loss) (473 ) 13 (460 ) Balance as of September 30, 2018 $ (2,497 ) $ (71 ) $ (2,568 ) 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 condensed consolidated statements of comprehensive 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 months and nine months ended September 30, 2018 and 2017. There were stock option grants during the three months ended September 30, 2018. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock Option Plan: Risk-free interest rate 2.9% — 2.4% 1.43% Expected term 3.2 years — 3.0 years 3.58 years Volatility 39.5% — 41.2% 46.21% Expected dividend 0% — 0% 0% Weighted average fair value (per share) $ 0.88 — $ 0.84 $ 0.96 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Employee Stock Purchase Plan: Risk-free interest rate 2.09% 1.02% 2.09% 1.02 Expected term 0.5 years 0.5 years 0.5 years 0.5 years Volatility 32.55% 33.66% 32.55% 33.66 Expected dividend 0% 0% 0% 0% Weighted average fair value (per share) $ 0.72 $ 0.59 $ 0.72 $ 0.59 We recorded the following stock-based compensation expense for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock-based compensation expense related to grants of: Stock options $ 38 $ 27 $ 358 $ 86 Employee Stock Purchase Plan (“ESPP”) - 5 11 16 Restricted Stock Units (“RSU”) 64 (4 ) 217 193 $ 102 $ 28 $ 586 $ 295 Stock-based compensation expense recognized in: Cost of services $ 11 $ 19 $ 49 $ 83 Cost of software and other — — — 3 Research and development 9 (18 ) 33 62 Sales and marketing 14 12 40 34 General and administrative 68 15 464 113 $ 102 $ 28 $ 586 $ 295 |
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. For the three months ended September 30, 2018 and September 30, 2017 and nine months ended September 30, 2018, diluted earnings per share was computed using our net income 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. For the nine months ended September 30, 2017, we were in a loss position, therefore all shares were anti-dilutive.” The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts): Three Months Nine Months Ended Ended September 30, September 30, 2018 2017 2018 2017 Net income (loss) $ (9,148 ) $ 231 $ (9,518 ) $ (1,220 ) Basic: Weighted-average shares of common stock outstanding 18,805 18,692 18,786 18,613 Shares used in computing basic income (loss) per share 18,805 18,692 18,786 18,613 Basic earnings (loss) per share (0.49 ) 0.01 (0.51 ) (0.07 ) Diluted: Weighted-average shares of common stock outstanding 18,805 18,692 18,786 18,613 Add: Common equivalent shares outstanding - 22 - - Shares used in computing diluted earnings (loss) per share 18,805 18,714 18,786 18,613 Diluted earnings (loss) per share $ (0.49 ) $ 0.01 $ (0.51 ) $ (0.07 ) The following potential common shares outstanding were excluded from the computation of diluted earnings (loss) per share because including them would have been antidilutive (in thousands): As of September 30, 2018 2017 Stock options 872 417 RSUs 96 - 968 417 |
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, 2018, 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 | Accounting Standards Adopted in the Current Period Revenue Recognition We have implemented all new accounting pronouncements that are in effect and that management believes would materially affect our financial statements. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Deferral of the Effective Date Financial Instruments In January 2016, The FASB issued ASU No. 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) Income Taxes In March 2018, the Company adopted Accounting Standards Update No. 2018-05 – Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which updates the income tax accounting in U.S. GAAP to reflect the Securities and Exchange Commission (“SEC”) interpretive guidance released on December 22, 2017, when the Tax Cuts and Jobs Act was signed into law. New Accounting Standards to be adopted in Future Periods Restricted cash In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows Lease Accounting In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Services $ 16,759 $ 13,682 $ 48,179 $ 39,744 Software and other 1,258 1,350 3,828 4,085 Total revenue $ 18,017 $ 15,032 $ 52,007 $ 43,829 |
Summary of Cash, Cash Equivalents and Investments | As of September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 6,933 $ — $ — $ 6,933 Money market funds 5,683 — — 5,683 Certificates of deposit 1,196 — (2 ) 1,194 Commercial paper 7,168 — (3 ) 7,165 Corporate notes and bonds 18,541 — (63 ) 18,478 U.S. government agency securities 8,468 — (3 ) 8,465 $ 47,989 $ — $ (71 ) $ 47,918 Classified as: Cash and cash equivalents $ 16,113 $ — $ (1 ) $ 16,112 Short-term investments 31,876 — (70 ) 31,806 $ 47,989 $ — $ (71 ) $ 47,918 As of December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,408 $ — $ — $ 7,408 Money market funds 10,643 — (1 ) 10,642 Certificates of deposit 1,207 — (1 ) 1,206 Commercial paper 2,494 — (1 ) 2,493 Corporate notes and bonds 22,846 — (77 ) 22,769 U.S. government agency securities 4,719 — (4 ) 4,715 $ 49,317 $ — $ (84 ) $ 49,233 Classified as: Cash and cash equivalents $ 18,051 $ — $ (1 ) $ 18,050 Short-term investments 31,266 — (83 ) 31,183 $ 49,317 $ — $ (84 ) $ 49,233 |
Summary of Estimated Fair Value of Available-for-sale Securities Classified by Stated Maturity Date | September 30, 2018 December 31, 2017 Due within one year $ 29,299 $ 22,228 Due within two years 2,507 8,955 $ 31,806 $ 31,183 |
Financial Assets (Cash Equivalents and Investments) Measured at Fair Value on Recurring Basis | As of September 30, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 5,683 $ — $ — $ 5.683 Certificates of deposit — 1,194 — 1,194 Commercial paper — 7,165 — 7,165 Corporate notes and bonds — 18,478 — 18,478 U.S. government agency securities — 8,465 — 8,465 Total $ 5,683 $ 35,302 $ — $ 40,985 As of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 10,642 $ — $ — $ 10,642 Certificates of deposit — 1,206 — 1,206 Commercial paper — 2,493 — 2,493 Corporate notes and bonds — 22,769 — 22,769 U.S. government agency securities — 4,715 — 4,715 Total $ 10,642 $ 31,183 $ — $ 41,825 |
Components of Accumulated Other Comprehensive Loss | Foreign Currency Translation Losses Unrealized Losses on Investments Total Balance as of December 31, 2017 $ (2,024 ) $ (84 ) $ (2,108 ) Current-period other comprehensive gain (loss) (473 ) 13 (460 ) Balance as of September 30, 2018 $ (2,497 ) $ (71 ) $ (2,568 ) |
Fair Value of Stock-based Awards Valuation Assumptions | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock Option Plan: Risk-free interest rate 2.9% — 2.4% 1.43% Expected term 3.2 years — 3.0 years 3.58 years Volatility 39.5% — 41.2% 46.21% Expected dividend 0% — 0% 0% Weighted average fair value (per share) $ 0.88 — $ 0.84 $ 0.96 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Employee Stock Purchase Plan: Risk-free interest rate 2.09% 1.02% 2.09% 1.02% Expected term 0.5 years 0.5 years 0.5 years 0.5 years Volatility 32.55% 33.66% 32.55% 33.66% Expected dividend 0% 0% 0% 0% Weighted average fair value (per share) $ 0.72 $ 0.59 $ 0.72 $ 0.59 |
Stock-based Compensation Expense | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock-based compensation expense related to grants of: Stock options $ 38 $ 27 $ 358 $ 86 Employee Stock Purchase Plan (“ESPP”) - 5 11 16 Restricted Stock Units (“RSU”) 64 (4 ) 217 193 $ 102 $ 28 $ 586 $ 295 Stock-based compensation expense recognized in: Cost of services $ 11 $ 19 $ 49 $ 83 Cost of software and other — — — 3 Research and development 9 (18 ) 33 62 Sales and marketing 14 12 40 34 General and administrative 68 15 464 113 $ 102 $ 28 $ 586 $ 295 |
Computation of basic and diluted earnings (loss) per share | Three Months Nine Months Ended Ended September 30, September 30, 2018 2017 2018 2017 Net income (loss) $ (9,148 ) $ 231 $ (9,518 ) $ (1,220 ) Basic: Weighted-average shares of common stock outstanding 18,805 18,692 18,786 18,613 Shares used in computing basic income (loss) per share 18,805 18,692 18,786 18,613 Basic earnings (loss) per share (0.49 ) 0.01 (0.51 ) (0.07 ) Diluted: Weighted-average shares of common stock outstanding 18,805 18,692 18,786 18,613 Add: Common equivalent shares outstanding - 22 - - Shares used in computing diluted earnings (loss) per share 18,805 18,714 18,786 18,613 Diluted earnings (loss) per share $ (0.49 ) $ 0.01 $ (0.51 ) $ (0.07 ) |
Potential Common Shares Outstanding Excluded from Computation of Diluted Loss per Share | As of September 30, 2018 2017 Stock options 872 417 RSUs 96 - 968 417 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Components of Intangible Assets | Indefinite Life Intangibles As of September 30, 2018 Gross carrying value $ 250 Accumulated amortization — Net carrying value $ 250 As of December 31, 2017 Gross carrying value $ 250 Accumulated amortization — Net carrying value $ 250 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities | September 30, 2018 December 31, 2017 Accrued expenses $ 408 $ 462 Self-insurance accruals 633 679 Other accrued liabilities 171 189 Total other accrued liabilities $ 1,212 $ 1,330 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Summary of Stock Option Activity | Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding options at December 31, 2017 732,190 $ 3.72 8.17 $ 56 Granted 330,000 $ 2.75 Exercised (49,043 ) $ 2.47 Forfeited (140,712 ) $ 6.53 Outstanding options at September 30, 2018 872,435 $ 2.97 8.61 $ 311 Options vested and expected to vest 848,495 $ 2.99 8.60 $ 297 Exercisable at September 30, 2018 555,707 $ 3.32 8.42 $ 143 |
Summary of Restricted Stock Units Activity | 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, 2017 136,329 $ 2.80 0.80 $ 329 Awarded 90,905 2.20 Released (119,943 ) 2.71 Forfeited (10,937 ) 2.67 Outstanding RSUs at September 30, 2018 96,354 $ 2.36 0.84 $ 279 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | $ 18,017 | $ 15,032 | $ 52,007 | $ 43,829 |
Service [Member] | ||||
Revenue | 16,759 | 13,682 | 48,179 | 39,744 |
Software and Other [Member] | ||||
Revenue | $ 1,258 | $ 1,350 | $ 3,828 | $ 4,085 |
Significant Accounting Polici_5
Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Amortized cost | $ 47,989 | $ 49,317 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (71) | (84) |
Fair value | 47,918 | 49,233 |
Commercial Paper [Member] | ||
Amortized cost | 7,168 | 2,494 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (3) | (1) |
Fair value | 7,165 | 2,493 |
Corporate Debt Securities [Member] | ||
Amortized cost | 18,541 | 22,846 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (63) | (77) |
Fair value | 18,478 | 22,769 |
US Government Agencies Debt Securities [Member] | ||
Amortized cost | 8,468 | 4,719 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (3) | (4) |
Fair value | 8,465 | 4,715 |
Short-term Investments [Member] | ||
Amortized cost | 31,876 | 31,266 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (70) | (83) |
Fair value | 31,806 | 31,183 |
Cash [Member] | ||
Amortized cost | 6,933 | 7,408 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 6,933 | 7,408 |
Money Market Funds [Member] | ||
Amortized cost | 5,683 | 10,643 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | (1) |
Fair value | 5,683 | 10,642 |
Certificates of Deposit [Member] | ||
Amortized cost | 1,196 | 1,207 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (2) | (1) |
Fair value | 1,194 | 1,206 |
Cash Equivalents [Member] | ||
Amortized cost | 16,113 | 18,051 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (1) | (1) |
Fair value | $ 16,112 | $ 18,050 |
Significant Accounting Polici_6
Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Summary of estimated fair value of available-for-sale securities classified by stated maturity date [Abstract] | ||
Due within one year | $ 29,299 | $ 22,228 |
Due within two years | 2,507 | 8,955 |
Total fair value | $ 31,806 | $ 31,183 |
Significant Accounting Polici_7
Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair value for financial assets | $ 47,918 | $ 49,233 |
Level 1 [Member] | ||
Fair value for financial assets | 5,683 | 10,642 |
Level 2 [Member] | ||
Fair value for financial assets | 35,302 | 31,183 |
Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Money Market Funds [Member] | ||
Fair value for financial assets | 5,683 | 10,642 |
Money Market Funds [Member] | Level 1 [Member] | ||
Fair value for financial assets | 5,683 | 10,642 |
Money Market Funds [Member] | Level 2 [Member] | ||
Fair value for financial assets | 0 | 0 |
Money Market Funds [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Certificates of Deposit [Member] | ||
Fair value for financial assets | 1,194 | 1,206 |
Certificates of Deposit [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
Certificates of Deposit [Member] | Level 2 [Member] | ||
Fair value for financial assets | 1,194 | 1,206 |
Certificates of Deposit [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Commercial Paper [Member] | ||
Fair value for financial assets | 7,165 | 2,493 |
Commercial Paper [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
Commercial Paper [Member] | Level 2 [Member] | ||
Fair value for financial assets | 7,165 | 2,493 |
Commercial Paper [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Corporate Debt Securities [Member] | ||
Fair value for financial assets | 18,478 | 22,769 |
Corporate Debt Securities [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
Corporate Debt Securities [Member] | Level 2 [Member] | ||
Fair value for financial assets | 18,478 | 22,769 |
Corporate Debt Securities [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
US Government Agencies Debt Securities [Member] | ||
Fair value for financial assets | 8,465 | 4,715 |
US Government Agencies Debt Securities [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
US Government Agencies Debt Securities [Member] | Level 2 [Member] | ||
Fair value for financial assets | 8,465 | 4,715 |
US Government Agencies Debt Securities [Member] | Level 3 [Member] | ||
Fair value for financial assets | $ 0 | $ 0 |
Significant Accounting Polici_8
Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Balance, beginning of period | $ 56,458 | |||
Current-period other comprehensive loss | $ (162) | $ 21 | (460) | $ 193 |
Balance, end of period | 47,223 | 47,223 | ||
Foreign Currency Translation Losses [Member] | ||||
Balance, beginning of period | (2,024) | |||
Current-period other comprehensive loss | (473) | |||
Balance, end of period | (2,497) | (2,497) | ||
Unrealized Losses on Investments [Member] | ||||
Balance, beginning of period | (84) | |||
Current-period other comprehensive loss | 13 | |||
Balance, end of period | $ (71) | $ (71) |
Significant Accounting Polici_9
Significant Accounting Policies (Details 5) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Options [Member] | ||||
Risk-free interest rate | 2.90% | 0.00% | 2.40% | 1.43% |
Expected term | 3 years 73 days | 3 years | 3 years 211 days | |
Volatility | 39.50% | 0.00% | 41.20% | 46.21% |
Expected dividend | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted average grant-date fair value (in dollars per share) | $ 0.88 | $ 0 | $ 0.84 | $ 0.96 |
Employee Stock Purchase Plan [Member] | ||||
Risk-free interest rate | 2.09% | 1.02% | 2.09% | 1.02% |
Expected term | 6 months | 6 months | 6 months | 6 months |
Volatility | 32.55% | 33.66% | 32.55% | 33.66% |
Expected dividend | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted average grant-date fair value (in dollars per share) | $ 0.72 | $ 0.59 | $ 0.72 | $ 0.59 |
Significant Accounting Polic_10
Significant Accounting Policies (Details 6) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based compensation expense | $ 102 | $ 28 | $ 586 | $ 295 |
Cost of Sales [Member] | Service [Member] | ||||
Stock-based compensation expense | 11 | 19 | 49 | 83 |
Cost of Sales [Member] | Software and Other [Member] | ||||
Stock-based compensation expense | 0 | 0 | 0 | 3 |
Research and Development Expense [Member] | ||||
Stock-based compensation expense | 9 | (18) | 33 | 62 |
Selling and Marketing Expense [Member] | ||||
Stock-based compensation expense | 14 | 12 | 40 | 34 |
General and Administrative Expense [Member] | ||||
Stock-based compensation expense | 68 | 15 | 464 | 113 |
Stock Options [Member] | ||||
Stock-based compensation expense | 38 | 27 | 358 | 86 |
Employee Stock Purchase Plan [Member] | ||||
Stock-based compensation expense | 0 | 5 | 11 | 16 |
RSUs [Member] | ||||
Stock-based compensation expense | $ 64 | $ (4) | $ 217 | $ 193 |
Significant Accounting Polic_11
Significant Accounting Policies (Details 7) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Net income (loss) | $ (9,148) | $ 231 | $ (9,518) | $ (1,220) |
Basic: | ||||
Weighted-average shares of common stock outstanding | 18,805 | 18,692 | 18,786 | 18,613 |
Shares used in computing basic loss per share | 18,805 | 18,692 | 18,786 | 18,613 |
Basic earnings (loss) per share | $ (0.49) | $ 0.01 | $ (0.51) | $ (0.07) |
Diluted: | ||||
Weighted average shares of common stock outstanding | 18,805 | 18,692 | 18,786 | 18,613 |
Add: Common equivalent shares outstanding | 0 | 22 | 0 | 0 |
Shares used in computing diluted earnings (loss) per share | 18,805 | 18,714 | 18,786 | 18,613 |
Diluted earnings (loss) per share | $ (0.49) | $ 0.01 | $ (0.51) | $ (0.07) |
Significant Accounting Polic_12
Significant Accounting Policies (Details 8) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Potential common shares outstanding excluded from computation of diluted loss per share | 968 | 417 |
Stock Options [Member] | ||
Potential common shares outstanding excluded from computation of diluted loss per share | 872 | 417 |
RSUs [Member] | ||
Potential common shares outstanding excluded from computation of diluted loss per share | 96 | 0 |
Significant Accounting Polic_13
Significant Accounting Policies (Details Narrative) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Sales Revenue, Goods, Net [Member] | Comcast [Member] | |||||
Customer concentration risk | 70.00% | 62.00% | 70.00% | 64.00% | |
Sales Revenue, Goods, Net [Member] | Coxcom [Member] | |||||
Customer concentration risk | 16.00% | 14.00% | |||
Trade Accounts Receivable [Member] | Comcast [Member] | |||||
Customer concentration risk | 73.00% | 71.00% | |||
Trade Accounts Receivable [Member] | Coxcom [Member] | |||||
Customer concentration risk | 17.00% | 12.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) provision | $ 29 | $ (36) | $ (24) | $ 57 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 114 | $ 290 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying value | $ 250 | $ 250 |
Accumulated amortization | 0 | 0 |
Net carrying value | $ 250 | $ 250 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Amortization of intangible assets and other | $ 0 | $ 0 | $ 0 | $ 16 |
Minimum [Member] | Purchased Technology [Member] | ||||
Estimated useful life | 1 year | |||
Maximum [Member] | Purchased Technology [Member] | ||||
Estimated useful life | 6 years |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Accrued expenses | $ 408 | $ 462 |
Self-insurance accruals | 633 | 679 |
Other accrued liabilities | 171 | 189 |
Total other accrued liabilities | $ 1,212 | $ 1,330 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Stock option activity, number of shares | |
Outstanding options, beginning of period | shares | 732,190 |
Granted | shares | 330,000 |
Exercised | shares | (49,043) |
Forfeited | shares | (140,712) |
Outstanding options, end of period | shares | 872,435 |
Options vested and expected to vest | shares | 848,495 |
Exercisable | shares | 555,707 |
Weighted average exercise price per share | |
Outstanding options, beginning of period | $ / shares | $ 3.72 |
Granted | $ / shares | 2.75 |
Exercised | $ / shares | 2.47 |
Forfeited | $ / shares | 6.53 |
Outstanding options, end of period | $ / shares | 2.97 |
Options vested and expected to vest | $ / shares | 2.99 |
Exercisable | $ / shares | $ 3.32 |
Additional disclosure | |
Options outstanding, weighted average remaining contractual term | 8 years 222 days |
Options vested and expected to vest, weighted average remaining contractual term | 8 years 219 days |
Options exercisable, weighted average remaining contractual term | 8 years 153 days |
Options outstanding, aggregate intrinsic value | $ | $ 311 |
Options vested and expected to vest, aggregate intrinsic value | $ | 297 |
Options exercisable, aggregate intrinsic value | $ | $ 143 |
Stockholder's Equity (Details 1
Stockholder's Equity (Details 1) - RSUs [Member] - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018 | |
Restricted stock units, number of shares | |
Outstanding RSUs, beginning of period | 136,329 |
Awarded | 90,905 |
Released | (119,943) |
Forfeited | (10,937) |
Outstanding RSUs, end of period | 96,354 |
Restricted stock units, weighted average grant-date fair value | |
Outstanding RSUs, beginning of period | $ 2.8 |
Awarded | 2.2 |
Released | 2.71 |
Forfeited | 2.67 |
Outstanding RSUs, end of period | $ 2.36 |
Restricted stock units, additional disclosures | |
Outstanding RSUs, weighted average remaining contractual term | 306 days |
Outstanding RSUs, aggregate intrinsic value | $ 279 |
Stockholder's Equity (Details N
Stockholder's Equity (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | ||||
Fair value of options vested | $ 24 | $ 36 | $ 48 | $ 169 |
Unrecognized compensation cost related to stock options | 213 | $ 213 | ||
Weighted average period of recognition for unrecognized compensation cost | 1 year 328 days | |||
Employee stock purchase plan, shares purchased | 15,435 | |||
Unrecognized compensation cost related to restricted stock units | $ 164 | $ 164 | ||
Weighted average period of recognition for unrecognized compensation cost | 306 days | |||
Stock repurchase program, remaining number of shares authorized to be repurchased | 602,467 | 602,467 |