Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 25, 2013 | |
Entity Information [Line Items] | ||
Entity Registrant Name | NetSuite Inc. | |
Entity Central Index Key | 1117106 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | N | |
Amendment Flag | FALSE | |
Common stock, shares outstanding | 74,684,153 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $467,130 | $185,859 |
Accounts receivable, net of allowances of $501 and $701 as of September 30, 2013 and December 31, 2012, respectively | 65,118 | 64,861 |
Deferred commissions | 30,617 | 26,959 |
Other current assets | 17,276 | 9,049 |
Total current assets | 580,141 | 286,728 |
Property and equipment, net | 42,957 | 27,210 |
Deferred commissions, non-current | 6,782 | 4,784 |
Goodwill | 63,175 | 35,661 |
Other intangible assets, net | 19,524 | 12,420 |
Other assets | 10,159 | 2,972 |
Total assets | 722,738 | 369,775 |
Current liabilities: | ||
Accounts payable | 5,604 | 3,476 |
Deferred revenue | 178,624 | 154,051 |
Accrued compensation | 20,273 | 18,806 |
Accrued expenses | 14,987 | 11,974 |
Other current liabilities (including note payable to related party of $3,005 and $1,584 as of September 30, 2013 and December 31, 2012, respectively) | 16,951 | 9,948 |
Total current liabilities | 236,439 | 198,255 |
Long-term liabilities: | ||
Convertible 0.25% senior notes, net | 251,201 | 0 |
Deferred revenue, non-current | 10,982 | 7,365 |
Other long-term liabilities (including note payable to related party of $9,376 and $401 as of September 30, 2013 and December 31, 2012, respectively) | 15,893 | 5,386 |
Total long-term liabilities | 278,076 | 12,751 |
Total liabilities | 514,515 | 211,006 |
Commitments and contingencies (Note 4) | ||
Total equity: | ||
Common stock, par value $0.01, 500,000,000 shares authorized; 74,681,585 and 72,675,265 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 747 | 727 |
Additional paid-in capital | 636,286 | 535,853 |
Accumulated other comprehensive income | 150 | 950 |
Accumulated deficit | -428,960 | -378,761 |
Total equity | 208,223 | 158,769 |
Total liabilities and total equity | $722,738 | $369,775 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) in thousands, except per share data (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $501 | $701 |
Notes payable to related party, short-term | 3,005 | 1,584 |
Notes payable to related party, long-term | $9,376 | $401 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 74,681,585 | 72,675,265 |
Common stock, shares outstanding | 74,681,585 | 72,675,265 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue: | ||||
Subscription and support | $85,795 | $65,329 | $239,994 | $184,368 |
Professional services and other | 21,080 | 14,462 | 59,506 | 39,451 |
Total revenue | 106,875 | 79,791 | 299,500 | 223,819 |
Cost of revenue: | ||||
Subscription and support | 14,276 | 10,880 | 40,102 | 30,722 |
Professional services and other | 20,916 | 14,211 | 58,141 | 38,218 |
Total cost of revenue | 35,192 | 25,091 | 98,243 | 68,940 |
Gross profit | 71,683 | 54,700 | 201,257 | 154,879 |
Operating expenses: | ||||
Product development | 19,979 | 13,943 | 55,425 | 38,311 |
Sales and marketing | 52,315 | 38,591 | 153,027 | 111,731 |
General and administrative | 12,233 | 9,458 | 37,407 | 28,334 |
Total operating expenses | 84,527 | 61,992 | 245,859 | 178,376 |
Operating loss | -12,844 | -7,292 | -44,602 | -23,497 |
Other income / (expense), net: | ||||
Interest income | 11 | 36 | 51 | 127 |
Interest expense | -3,497 | -52 | -4,924 | -156 |
Other expense, net | -69 | -73 | -251 | -185 |
Total other income / (expense), net | -3,555 | -89 | -5,124 | -214 |
Loss before income taxes | -16,399 | -7,381 | -49,726 | -23,711 |
Income Tax Expense (Benefit) | 373 | 603 | 473 | 1,896 |
Net loss | -16,772 | -7,984 | -50,199 | -25,607 |
Net loss per common share, basic and diluted | ($0.23) | ($0.11) | ($0.68) | ($0.36) |
Weighted average number of shares used in computing net loss per common share | 74,379 | 71,161 | 73,827 | 70,288 |
Comprehensive Loss | ||||
Foreign currency translation gains / (loss), net of taxes | 33 | 295 | -895 | 83 |
Accumulated pension liability | 31 | 1 | 95 | 3 |
Comprehensive loss | ($16,708) | ($7,688) | ($50,999) | ($25,521) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ||
Net loss | ($50,199) | ($25,607) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 11,272 | 8,048 |
Amortization of other intangible assets | 4,761 | 3,393 |
Amortization of Financing Costs and Discounts | 4,179 | 0 |
Provision for accounts receivable allowances | 625 | 505 |
Stock-based compensation | 53,597 | 35,939 |
Amortization of deferred commissions | 39,971 | 33,269 |
Excess tax benefit on stock-based compensation | -330 | -259 |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | ||
Accounts receivable | -153 | -9,476 |
Deferred commissions | -45,627 | -32,876 |
Other current assets | -8,118 | -137 |
Other assets | -520 | 797 |
Accounts payable | 2,111 | 3,241 |
Accrued compensation | 1,784 | -1,398 |
Deferred revenue | 28,307 | 23,842 |
Other current liabilities | 2,426 | 1,790 |
Other long-term liabilities | 811 | -181 |
Net cash provided by operating activities | 44,897 | 40,890 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -11,581 | -7,730 |
Capitalized internal use software | -1,569 | -1,172 |
Cash paid in business combination, net of amounts received, and equity investment | -33,907 | -4,227 |
Net cash used in investing activities | -47,057 | -13,129 |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible 0.25% senior notes | 310,000 | 0 |
Payments of issuance costs on convertible 0.25% senior notes | -8,260 | 0 |
Payments under capital leases | -556 | -542 |
Payments under capital leases and long-term debt - related party | -1,987 | -1,160 |
Payments to repurchase common stock | -30,000 | 0 |
RSU acquired to settle employee withholding liability | -147 | -191 |
Excess tax benefit on stock-based compensation | 330 | 259 |
Proceeds from issuance of common stock | 14,868 | 10,523 |
Net cash provided by financing activities | 284,248 | 8,889 |
Effect of exchange rate changes on cash and cash equivalents | -817 | 354 |
Net change in cash and cash equivalents | 281,271 | 37,004 |
Cash and cash equivalents at beginning of period | 185,859 | 141,448 |
Cash and cash equivalents at end of period | 467,130 | 178,452 |
Supplemental cash flow disclosure: | ||
Cash paid for interest to related parties | 297 | 63 |
Cash paid for interest to other parties | 59 | 29 |
Cash paid for income taxes, net of tax refunds | 908 | 924 |
Noncash financing and investing activities: | ||
Fixed assets acquired related party agreement | $11,581 | $0 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2013 | |
Organization [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Organization |
NetSuite Inc. (the “Company”) provides cloud-based financials/Enterprise Resource Planning (“ERP”) and omnichannel commerce software suites. In addition to financials/ERP and omnichannel commerce software suites, the Company offers a broad suite of applications, including accounting, Customer Relationship Management (“CRM”), Professional Services Automation (“PSA”) and Ecommerce that enable companies to manage most of their core business operations in its single integrated suite. The Company’s "real-time dashboard" technology provides an easy-to-use view into up-to-date, role-specific business information. The Company also offers customer support and professional services related to implementing and supporting its suite of applications. The Company delivers its suite over the Internet as a subscription service using the software-as-a-service ("SaaS") model. The Company’s headquarters are located in San Mateo, California. The Company conducts its business worldwide, with international locations in Canada, Europe, Asia, South America and Australia. |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||||
Basis of Presentation [Text Block] | Basis of Presentation | |||||||||||||||
The Condensed Consolidated Financial Statements as of and for the nine and three months ended September 30, 2013 included in this Quarterly Report on Form 10-Q have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed consolidated balance sheet data as of December 31, 2012 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed on February 28, 2013. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures contained in this Quarterly Report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, for a Quarterly Report on Form 10-Q and are adequate to make the information presented not misleading. These Condensed Consolidated Financial Statements are meant to be, and should be, read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed on February 28, 2013. | ||||||||||||||||
The unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q reflect all adjustments (which include only normal, recurring adjustments and those items discussed in these Notes) that are, in the opinion of management, necessary to state fairly the financial position and results for the dates and periods presented. The results for such periods are not necessarily indicative of the results to be expected for the full fiscal year. | ||||||||||||||||
Principles of Consolidation | ||||||||||||||||
The consolidated financial statements include the accounts of the Company and its majority- and wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. | ||||||||||||||||
Use of Estimates | ||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||
In 2013, the Financial Accounting Standards Board ("FASB") issued new accounting guidance clarifying the accounting for the release of cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations or cash flows. | ||||||||||||||||
In 2013, FASB issued new accounting guidance clarifying the accounting for obligations resulting from joint and several liability arrangements for which the total amount under the arrangement is fixed at the reporting date. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations or cash flows. | ||||||||||||||||
Revenue Recognition | ||||||||||||||||
The Company generates revenue from two sources: (1) subscription and support; and (2) professional services and other. Subscription and support revenue includes subscription fees from customers accessing its on-demand application suite and support fees from customers purchasing support. Arrangements with customers do not provide the customer with the right to take possession of the software supporting the on-demand application service at any time. Professional services and other revenue includes fees generated from training and consulting services such as business process mapping, configuration, data migration and integration. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. For the most part, subscription and support agreements are entered into for 12 to 36 months. In aggregate, more than 90% of the professional services component of the arrangements with customers is performed within 300 days of entering into a contract with the customer. | ||||||||||||||||
The subscription agreements provide service level commitments of 99.5% uptime per period, excluding scheduled maintenance. The failure to meet this level of service availability may require the Company to credit qualifying customers up to the value of an entire month of their subscription and support fees. In light of the Company’s historical experience with meeting its service level commitments, the Company has not accrued any liabilities on its balance sheet for these commitments. | ||||||||||||||||
The Company commences revenue recognition when all of the following conditions are met: | ||||||||||||||||
• | There is persuasive evidence of an arrangement; | |||||||||||||||
• | The service is being provided to the customer; | |||||||||||||||
• | The collection of the fees is reasonably assured; and | |||||||||||||||
• | The amount of fees to be paid by the customer is fixed or determinable. | |||||||||||||||
In most instances, revenue from new customer acquisition is generated under sales agreements with multiple elements, comprised of subscription and support fees from customers accessing the Company's on-demand application suite and professional services associated with consultation services. The Company evaluates each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company’s control. Subscription and support have standalone value because they are routinely sold separately by the Company. Professional services have standalone value because the Company has sold professional services separately and there are several third-party vendors that routinely provide similar professional services to its customers on a standalone basis. | ||||||||||||||||
The Company allocates revenue to each element in an arrangement based on a selling price hierarchy. The selling price for a deliverable is based on its vendor-specific objective evidence (“VSOE”), if available, third-party evidence (“TPE”), if VSOE is not available, or estimated selling price (“ESP”), if neither VSOE nor TPE is available. As the Company has been unable to establish VSOE or TPE for the elements of its arrangements, the Company establishes the ESP for each element primarily by considering the weighted average of actual sales prices of professional services sold on a standalone basis and subscription and support including various add-on modules when sold together without professional services, and other factors such as gross margin objectives, pricing practices and growth strategy. The consideration allocated to subscription and support is recognized as revenue over the contract period commencing when the subscription service is made available to the customer. The consideration allocated to professional services is recognized as revenue using the proportional performance method. | ||||||||||||||||
The total arrangement fee for a multiple element arrangement is allocated based on the relative ESP of each element. However, since the professional services are generally completed prior to completion of delivery of subscription and support services, the revenue recognized for professional services in a given reporting period does not include fees subject to delivery of subscription and support services. This results in the recognition of revenue for professional services that is generally no greater than the contractual fees for those professional services. | ||||||||||||||||
For single element sales agreements, subscription and support revenue is recognized ratably over the contract term beginning on the provisioning date of the contract. The Company recognizes professional services revenue using the proportional performance method for single element arrangements. | ||||||||||||||||
Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenues. | ||||||||||||||||
Concentration of Credit Risk and Significant Customers | ||||||||||||||||
Financial instruments potentially exposing the Company to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash and trade accounts receivable. The Company maintains an allowance for doubtful accounts receivable balances. The allowance is based upon historical loss patterns and an evaluation of the potential risk of loss associated with problem accounts. The Company generally charges off the receivable balances of uncollectible accounts when accounts are 120 days past-due based on the account’s contractual terms. Credit risk arising from accounts receivable is mitigated due to the large number of customers comprising the Company’s customer base and their dispersion across various industries. As of September 30, 2013 and December 31, 2012, there were no customers that represented more than 10% of the net accounts receivable balance. There were no customers that individually exceeded 10% of the Company’s revenue in any of the periods presented. As of September 30, 2013 and December 31, 2012, long-lived assets located outside the United States were not significant. | ||||||||||||||||
Revenue by geographic region, based on the billing address of the customer, was as follows for the periods presented: | ||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
United States | $ | 223,246 | $ | 164,609 | $ | 79,544 | $ | 58,668 | ||||||||
International | 76,254 | 59,210 | 27,331 | 21,123 | ||||||||||||
Total revenue | $ | 299,500 | $ | 223,819 | $ | 106,875 | $ | 79,791 | ||||||||
Percentage of revenue generated outside of the United States | 25 | % | 26 | % | 26 | % | 26 | % | ||||||||
No single country outside the United States represented more than 10% of revenue during the nine and three months ended September 30, 2013 or 2012. | ||||||||||||||||
The Company maintains cash balances at several banks. Accounts located in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”), up to $250,000. Certain operating cash accounts may exceed the FDIC limits. | ||||||||||||||||
Intellectual Property Rights Indemnification | ||||||||||||||||
The Company’s arrangements include provisions indemnifying customers against liabilities if the Company's products infringe a third-party’s intellectual property rights. The Company has not incurred any costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying condensed consolidated financial statements. | ||||||||||||||||
Qualified Operating Expense Reimbursements | ||||||||||||||||
At the Company's product development facility in the Czech Republic, the Company participates in a government subsidy program for employing local residents. Under the program, the Czech government will reimburse the Company for certain operating expenses it incurs. In the period the Company incurs the reimbursable operating expense, it records a reduction in product development expense and a receivable from the Czech government. During the nine and three months ended September 30, 2013, the Company's product development operating expenses were reduced by approximately by $1.9 million and $659,000, respectively, for reimbursement of eligible operating expenses incurred during the period from January 1, 2013 to September 30, 2013. In the first quarter of 2012, the Company determined that the Czech government receivables were collectible and began to reduce operating expenses. During the nine and three months ended September 30, 2012, the Company's product development operating expenses were reduced by approximately by $1.4 million and $421,000, respectively, for reimbursements of eligible operating expenses incurred during the period from November 2010 to September 30, 2012. During the nine and three months ended September 30, 2013, the Company received $1.3 million and $679,000, respectively, from the Czech Republic government. During the nine months and three months ended September 30, 2012, the Company received $652,000 and $353,000, respectively, in payments from the Czech Republic government. As of September 30, 2013, $1.5 million in reimbursements, adjusted for foreign currency valuations, are due the Company and included in other current assets. The Company accrues for the reimbursements as the eligible operating expenses are incurred. | ||||||||||||||||
Business Combination | ||||||||||||||||
On May 3, 2013, the Company completed the purchase of all the outstanding equity of Order Motion ("OM"). OM provides online eCommerce Order Management Services (“OMS”) that performs the back-end process for eCommerce web stores. The OM product augments the Company's existing product offering, which allows the Company to expand its business capabilities in Ecommerce technology and services. The assets and operating results of OM are reflected in the Company’s condensed consolidated financial statements from the date of acquisition. On the closing date, the Company paid the former owners $23.5 million in cash. Additional consideration of $3.5 million in cash is being withheld up to the next 15 months following the close of the transaction as indemnification against certain losses the Company may incur in the event of certain breaches of representations and warranties covered in the purchase agreement. The Company also withheld $1.1 million as indemnification against losses the Company may incur from certain tax related matters of OM. This consideration is restricted until the Company determines that the matters have been properly settled. During the second quarter of 2013, the Company recorded $311,000 in employee termination costs and $1.1 million in operating expenses related to transaction costs associated with this business combination. | ||||||||||||||||
Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value at the date of acquisition. To determine the value of the intangible assets, the Company made various estimates and assumptions. Methodologies used in valuing the intangible assets include, but are not limited to, the with-and-without excess earnings for customer relationships, relief of royalty for trademarks and multiple period excess earnings method for developed technology. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill which includes synergies expected from the expanded service capabilities and the value of the assembled work force in accordance with generally accepted accounting principles. The Company did not record any in-process research and development charges in connection with the acquisition. | ||||||||||||||||
The allocation of the OM consideration to the assets acquired and obligations assumed was as follows: | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Cash | $ | 1,069 | ||||||||||||||
Accounts receivable | 804 | |||||||||||||||
Developed technology | 5,100 | |||||||||||||||
Customer relationships | 3,000 | |||||||||||||||
Trademarks | 400 | |||||||||||||||
Goodwill | 18,176 | |||||||||||||||
Other assets / liabilities, net | (433 | ) | ||||||||||||||
Total purchase price | $ | 28,116 | ||||||||||||||
The Company will amortize the intangible assets on a straight-line basis over the following periods: developed technology, four years, customer relationships, four years and trademarks, two years. The Company is also undertaking an analysis of certain tax matters associated with the OM acquisition which could result in an adjustment to the acquisition price allocation. The allocation of the consideration may be adjusted upon settlement of these matters. Comparative pro forma financial information for this acquisition has not been presented because OM is not material to the Company's consolidated results of operations. | ||||||||||||||||
On March 6, 2013, the Company completed the purchase of all the outstanding equity of a website hosting provider company ("WH") that specializes in Ecommerce technology and services. The WH workforce augments the Company's existing product development teams, which allows the Company to expand its business capabilities in Ecommerce technology and services. The assets and operating results of the WH are reflected in the Company’s condensed consolidated financial statements from the date of acquisition. On the closing date, the Company paid $10.2 million in cash. Additional consideration of $1.8 million in cash is being withheld for various periods up to the next 24 months following the close of the transaction as indemnification against certain losses the Company may incur in the event of certain breaches of representations and warranties covered in the purchase agreement. During the first quarter of 2013, the Company recorded $560,000 in operating expenses related to transaction costs associated with this business combination. | ||||||||||||||||
Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value at the date of acquisition. To determine the value of the intangible assets, the Company made various estimates and assumptions. Methodologies used in valuing the intangible assets include, but are not limited to, the expected costs to recreate the assets, present value of future payments, relief of royalty and multiple period excess earnings. The excess of the purchase price over the total identifiable assets has been recorded as goodwill which includes synergies expected from the expanded service capabilities and the value of the assembled work force in accordance with generally accepted accounting principles. Additionally, the Company recognized $1.1 million in federal and $204,000 in state deferred tax liabilities related to the acquired identifiable intangible assets which resulted in a $1.1 million decrease in the Company's income tax expense in the first quarter of 2013. The Company did not record any in-process research and development charges in connection with the acquisition. | ||||||||||||||||
The allocation of the WH consideration to the assets acquired and obligations assumed was as follows: | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Developed technology | $ | 1,100 | ||||||||||||||
Customer relationships | 2,100 | |||||||||||||||
Trademarks | 200 | |||||||||||||||
Goodwill | 9,721 | |||||||||||||||
Other assets / liabilities, net | 189 | |||||||||||||||
Deferred income tax liabilities | (1,322 | ) | ||||||||||||||
Total purchase price | $ | 11,988 | ||||||||||||||
The Company will amortize the intangible assets on a straight-line basis over the following periods: trademarks, two years; customer relationships, four years and developed technology, three years. Comparative pro forma financial information for this acquisition has not been presented because WH is not material to the Company's consolidated results of operations. | ||||||||||||||||
The following table details the Company's goodwill activity during the nine months ended September 30, 2013: | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Beginning balance as of January 1, 2013 | $ | 35,661 | ||||||||||||||
Acquisition of WH in March 2013 | 9,721 | |||||||||||||||
Acquisition of OM in May 2013 | 18,176 | |||||||||||||||
Foreign currency adjustment | (383 | ) | ||||||||||||||
Ending balance as of September 30, 2013 | $ | 63,175 | ||||||||||||||
The Company does not have a history of goodwill impairments. | ||||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||
Accumulated other comprehensive income is comprised of foreign currency translation gains and losses, net of tax, and an accumulated pension liability for employees located in the Philippines. There were no significant reclassification adjustments out of accumulated other comprehensive income to the condensed consolidated statement of operations and comprehensive loss. |
Financial_Instruments
Financial Instruments | 9 Months Ended | |||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||
Hedging Activity [Abstract] | ||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Financial Instruments | |||||||||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||||||||
The Company measures certain financial assets at fair value on a recurring basis based on a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are: | ||||||||||||||||||||||||||||||||
• | Level 1 - Quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||||||||||||||
• | Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||||||||||||||||
• | Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. | |||||||||||||||||||||||||||||||
The fair value of the Company’s investments in certain money market funds approximates their face value. Such instruments are classified as Level 1 and are included in cash and cash equivalents. | ||||||||||||||||||||||||||||||||
The fair value of the Company’s foreign currency forward contracts is based on foreign currency rates quoted by banks or foreign currency dealers and other public data sources. Such instruments are classified as Level 2 and are included in other current assets and liabilities. | ||||||||||||||||||||||||||||||||
As of September 30, 2013, financial assets stated at fair value on a recurring basis were comprised of money market funds included within cash and cash equivalents and foreign exchange forward contracts included within other current assets and liabilities. The fair value of these financial assets was determined using the following inputs as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||||||||
Fair value measurements at reporting date using | Fair value measurements at reporting date using | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 72,514 | $ | — | $ | — | $ | 72,514 | $ | 72,467 | $ | — | $ | — | $ | 72,467 | ||||||||||||||||
Foreign exchange contracts | — | 20 | $ | — | 20 | $ | — | $ | 97 | $ | — | 97 | ||||||||||||||||||||
Total | $ | 72,514 | $ | 20 | $ | — | $ | 72,534 | $ | 72,467 | $ | 97 | $ | — | $ | 72,564 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | — | $ | 463 | $ | — | $ | 463 | $ | — | $ | 231 | $ | — | $ | 231 | ||||||||||||||||
Total | $ | — | $ | 463 | $ | — | $ | 463 | $ | — | $ | 231 | $ | — | $ | 231 | ||||||||||||||||
Restricted Cash | ||||||||||||||||||||||||||||||||
As of September 30, 2013, restricted cash consisted of $715,000 in long-term other assets. As of December 31, 2012, restricted cash was $541,000. Of the $541,000 restricted cash balance as of December 31, 2012, $266,000 is classified as other current assets and $275,000 is classified as long-term other assets. These restricted cash accounts secure letters of credit applied against certain of the Company’s facility lease agreements. | ||||||||||||||||||||||||||||||||
Balance Sheet Hedging - Hedging of Foreign Currency Assets and Liabilities | ||||||||||||||||||||||||||||||||
During the nine months ended September 30, 2013, the Company hedged certain of its nonfunctional currency denominated assets and liabilities to reduce the risk that earnings would be adversely affected by changes in exchange rates. Gains and losses from these forward contracts are recorded each period as a component of other income / (expense) in the consolidated statements of operations. The notional amount of derivative instruments acquired during the period was $142.4 million. The Company accounts for derivative instruments as other current assets and liabilities on the balance sheet and measures them at fair value with changes in the fair value recorded as other income / (expense). These derivative instruments do not subject the Company to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being economically hedged. | ||||||||||||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company had the following outstanding foreign exchange forward contracts: | ||||||||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||||||||
Notional Value Sold | Notional Value Purchased | Notional Value Sold | Notional Value Purchased | |||||||||||||||||||||||||||||
(US dollars in thousands) | (US dollars in thousands) | |||||||||||||||||||||||||||||||
British pound | $ | 6,577 | $ | 4,301 | $ | 7,188 | $ | 3,435 | ||||||||||||||||||||||||
Australian dollar | 8,556 | 5,156 | 9,360 | 4,793 | ||||||||||||||||||||||||||||
Philippines peso | 5,440 | 5,440 | 4,085 | 4,085 | ||||||||||||||||||||||||||||
Euro | 1,214 | 527 | 883 | 256 | ||||||||||||||||||||||||||||
Canadian dollar | 983 | 1,279 | 531 | 515 | ||||||||||||||||||||||||||||
Japanese yen | 1,895 | — | 1,260 | — | ||||||||||||||||||||||||||||
Czech crown | 4,150 | 2,580 | 3,440 | 1,895 | ||||||||||||||||||||||||||||
Mexican peso | 161 | — | 161 | — | ||||||||||||||||||||||||||||
New Zealand dollar | 272 | — | 73 | — | ||||||||||||||||||||||||||||
Total | $ | 29,248 | $ | 19,283 | $ | 26,981 | $ | 14,979 | ||||||||||||||||||||||||
The fair value of the derivative instruments reported on the Company’s Condensed Consolidated Balance Sheet were as follows: | ||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||
Balance Sheet Location | September 30, 2013 | December 31, 2012 | Balance Sheet Location | September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||||
Derivatives and forward contracts | Fair Value | Fair Value | Fair Value | Fair Value | ||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Foreign exchange contracts | Other current assets | $ | 20 | 97 | Other current liabilities | $ | 463 | $ | 231 | |||||||||||||||||||||||
Total | $ | 20 | 97 | $ | 463 | $ | 231 | |||||||||||||||||||||||||
The effect of derivative instruments on the Statement of Operations and Comprehensive Loss was as follows for the periods presented: | ||||||||||||||||||||||||||||||||
Location of net gain (loss) recognized in income on derivatives | Amount of net gain (loss) recognized in income on derivatives during the | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||
Derivatives and forward contracts | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other income/ (expense), net | $ | 784 | $ | 56 | $ | (353 | ) | $ | (361 | ) | |||||||||||||||||||||
Total | $ | 784 | $ | 56 | $ | (353 | ) | $ | (361 | ) | ||||||||||||||||||||||
The Company has entered into all of its foreign exchange contracts with a single counterparty. During the periods such contracts are open, the Company is subject to a potential maximum amount of loss due to credit risk equal to the gross fair value of the derivative instrument, if the counterparty to the instruments failed completely to perform according to the terms of the contracts. Generally, the Company has the right of offset for gains earned and losses incurred under these agreements. The agreements with the counterparty do not require either party to provide collateral to mitigate the credit risk of the agreements. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies |
The Company is involved in various legal proceedings and receives claims from time to time, arising from the normal course of business activities. The Company has accrued for estimated losses in the accompanying condensed consolidated financial statements for matters with respect to which it believes the likelihood of an adverse outcome is probable and the amount of the loss is reasonably estimable. | |
During the third quarter of 2013, the Company entered into a consulting agreement with a business consulting firm. The consulting firm will provide various services to assist the Company with growing our business. The agreement is non-cancellable through August 31, 2014 and the Company will pay approximately $5.2 million through this date. The agreement is cancellable at any time after the first 12 months, subject to a small termination fee. | |
During the nine months ended September 30, 2013, the Company entered into various office space leases to expand its operations in San Mateo, CA and other locations within the United states and Australia. The corresponding lease term for these agreements expire at various dates through 2020. The Company will pay a total of $12.6 million, net of any lessor lease incentives, over the corresponding lease terms. | |
Stockbased_Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2013 | |
Stock-based Compensation [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock-based Compensation |
During the first quarter of 2012, the Company awarded certain executives and other key employees a total of 170,875 performance shares (“PS”) related to 2013. In the first quarter of 2013, the Company's Board of Directors ("BoD") set the performance metrics for these PS. The PS vesting is contingent upon the Company meeting certain company-wide revenue performance goals (performance-based) in 2013. These shares are subject to term vesting conditions. The PS fair value of $75.18 per share and the related stock-based compensation expense are determined based on the value of the underlying shares on the date of grant, which is in the first quarter of 2013 when the performance metrics were set by the BoD, and is recognized over the vesting term. During the interim financial periods, management estimates the probable number of PS that will be granted until the achievement of the performance goals is known at year end December 31, 2013. | |
Debt_Notes
Debt (Notes) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt [Abstract] | ||||||||
Long-term Debt [Text Block] | Debt | |||||||
0.25% Convertible Senior Notes | ||||||||
In June 2013, the Company issued at par value $310.0 million of 0.25% convertible senior notes due June 1, 2018 (the “Notes”). Interest is payable semi-annually in arrears on December 1 and June 1 of each year, commencing December 1, 2013. | ||||||||
The Notes are governed by an indenture dated as of June 4, 2013, between the Company, as issuer, and Wells Fargo Bank, National Association, as trustee. The Notes do not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness, or the issuance or repurchase of securities by the Company. The Notes are unsecured and rank senior in right of payment to the Company's future indebtedness that is expressly subordinated in right of payment to the Notes, rank equal in right of payment to the Company's existing and future unsecured indebtedness that is not so subordinated. The Notes are effectively subordinated in right of payment to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all existing and future indebtedness, liabilities incurred by our subsidiaries including trade payables, and preferred stock of the Company. | ||||||||
Upon conversion, the Company may choose to pay or deliver, as the case may be, either cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. If converted, holders will receive, at the Company's election, cash and/or shares of the Company's common stock for the principal amount of the Notes and any amounts in excess of the principal amounts. The Company intends to settle the principal amount of the Notes with cash if converted. | ||||||||
The initial conversion rate is 8.6133 shares of the Company's common stock per $1,000 principal amount of Notes, subject to anti-dilution adjustments. The initial conversion price is approximately $116.10 per share of the Company's common stock and represents a conversion premium of approximately 35% based on the last reported sale price of the Company's common stock of $86.00 on May 29, 2013, the date the Notes offering was priced. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. Holders of the Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a Note unless the conversion date occurs after a regular record date related to the Notes and prior to the related interest payment date. At any time prior to the close of business on the business day immediately preceding March 1, 2018, holders may convert their Notes at their option only under the following circumstances: | ||||||||
● | during any calendar quarter commencing after the calendar quarter ending on September 30, 2013 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; | |||||||
● | during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or | |||||||
● | upon the occurrence of certain corporate transactions described in the indenture governing the Notes. | |||||||
On and after March 1, 2018 until the close of business on the business day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. If a make-whole fundamental change (as defined in the Indenture governing the Notes) occurs when the Company's stock price is between $86.00 and $275.00 per share and a holder elects to convert its Notes in connection with such make-whole fundamental change, such holder may be entitled to an increase in the conversion rate as provided for in the Indenture governing the Notes. | ||||||||
As of September 30, 2013, circumstances that would give rise to a conversion option for the holders of Notes do not exist. | ||||||||
Holders of the Notes have the right to require the Company to purchase with cash all or a portion of the Notes upon the occurrence of any event that constitutes a fundamental change (as defined in the Indenture governing the Notes) at a purchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest. | ||||||||
In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes as a whole. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense using the effective interest method over the term of the Note. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. | ||||||||
In accounting for the $8.4 million in transaction costs related to the Note issuance, the Company allocated the total amount incurred to the liability and equity components based on their relative values. The $6.7 million in transaction costs attributable to the liability component included in other assets are being amortized to interest expense over the term of the Notes, and the $1.7 million in transaction costs attributable to the equity component were netted with the equity component in additional paid-in capital. Debt issuance costs, net of amortization, were $6.2 million as of September 30, 2013. The Notes consisted of the following as of September 30, 2013: | ||||||||
(in thousands) | ||||||||
Equity component (1) | $ | 60,931 | ||||||
Liability component : | ||||||||
Principal | 310,000 | |||||||
Less: debt discount, net | (58,799 | ) | ||||||
Net carrying amount | $ | 251,201 | ||||||
Fair value - level 2 | $ | 354,206 | ||||||
(1) Included in the consolidated balance sheets within additional paid-in capital, net of the $1.7 million in equity issuance costs. | ||||||||
The Notes are carried at face value less any unamortized debt discount and also require disclosure of an estimate of fair value. The Company considers the fair value of the Notes at each balance sheet date to be a level 2 measurement because it is determined based on a recent quoted market price or dealer quote for the Notes. The Notes quoted market price or dealer quote is based on the trading price of the Company's common stock and market activity that is less than an active exchange. | ||||||||
As of September 30, 2013, the remaining life of the Notes is approximately 4.75 years. | ||||||||
The following table sets forth total interest expense recognized related to the Notes during the nine and three months ended September 30, 2013: | ||||||||
Nine Months Ended September 30, 2013 | Three Months Ended September 30, 2013 | |||||||
(in thousands) | ||||||||
Contractual interest expense | $ | 258 | $ | 194 | ||||
Amortization of debt issuance costs | 396 | 286 | ||||||
Amortization of debt discount | 3,783 | 2,837 | ||||||
Total | $ | 4,437 | $ | 3,317 | ||||
Effective interest rate | 5.40% | |||||||
In connection with issuing at par value $310.0 million of 0.25% convertible senior notes due June 1, 2018, our Board of Directors approved the use of $30.0 million of the net proceeds to repurchase 348,837 shares of our common stock for $30.0 million or $86.00 per share. The Company has since retired these shares. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes |
The Company has incurred annual operating losses since inception. As a result of those continuing losses, management has determined insufficient evidence exists to support that it is more likely than not that the Company will realize the benefits of its U.S. net deferred tax assets and therefore has recorded a valuation allowance to reduce the net carrying value of these deferred tax assets to zero. Accordingly, the Company has not recorded a provision for income taxes for any of the periods presented other than provisions for state and foreign income taxes. | |
During the nine months ended September 30, 2013, the Company recorded approximately $1.1 million of additional net deferred tax liabilities related to the WH acquisition. These additional deferred tax liabilities create a new source of taxable income, thereby requiring us to release a portion of our deferred tax asset valuation allowance with a related reduction in income tax expense for the nine months ended September 30, 2013 of approximately $1.1 million. Additionally, the Company recorded $204,000 in state deferred tax liabilities related to the WH acquisition that did not affect the Company's income tax expense for the nine months ended September 30, 2013. | |
As of September 30, 2013, the Company had net deferred tax assets in certain foreign jurisdictions of $406,000 included primarily in other assets. Based on all available evidence, both positive and negative, management believes that it is more likely than not that the benefits of those foreign deferred tax assets will be realized in full. The Company also had deferred tax assets of $4.3 million for Japan where it had a full valuation allowance as of September 30, 2013, reducing its carrying value to zero. | |
The Company does not anticipate a material change in the total amount or composition of its unrecognized tax benefits within 12 months of the reporting date. | |
The Company files federal, state and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to the carry forward of net operating losses, the Company's income tax returns generally remain subject to examination by federal and most state tax authorities. In most of the Company's significant foreign jurisdictions, the 2007 through 2012 tax years remain subject to examination by their respective tax authorities. |
Net_Loss_Per_Common_Share
Net Loss Per Common Share | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Net Loss Per Common Share [Abstract] | ||||||||||||||||
Earnings Per Share [Text Block] | Net Loss Per Share of Common Stock | |||||||||||||||
Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock is computed by giving effect to all potential dilutive shares of common stock, including options, restricted stock units ("RSUs"), performance share units ("PSUs"), performance shares ("PS") and convertible debt shares. Basic and diluted net loss per share of common stock were the same for all periods presented as the impact of all potentially dilutive securities outstanding was anti-dilutive. | ||||||||||||||||
The following table presents the calculation of the numerator and denominator used in the basic and diluted net loss per share of common stock: | ||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(dollars and shares in thousands, except per share amounts) | ||||||||||||||||
Numerator: | ||||||||||||||||
Net loss | $ | (50,199 | ) | $ | (25,607 | ) | $ | (16,772 | ) | $ | (7,984 | ) | ||||
Denominator: | ||||||||||||||||
Weighted-average number of shares of common stock outstanding used in computing basic and diluted net loss per share of common stock | 73,827 | 70,288 | 74,379 | 71,161 | ||||||||||||
Net loss per share of common stock, basic and diluted | $ | (0.68 | ) | $ | (0.36 | ) | $ | (0.23 | ) | $ | (0.11 | ) | ||||
The Company’s unvested RSUs, PSUs and PS do not contain non-forfeitable rights to dividends and dividend equivalents. As such, unvested RSUs, PSUs and PS are not participating securities and the Company is not required to use the two-class method to calculate diluted earnings per share in periods when the Company has net income. | ||||||||||||||||
The following table presents the weighted average potential shares that are excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti‑dilutive effect: | ||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(Shares in thousands) | ||||||||||||||||
Options to purchase shares of common stock | 2,276 | 3,795 | 2,072 | 3,415 | ||||||||||||
Unvested RSUs, PSUs and PS awards | 3,120 | 3,796 | 3,031 | 3,623 | ||||||||||||
Total | 5,396 | 7,591 | 5,103 | 7,038 | ||||||||||||
The effect of the convertible Notes is reflected in diluted earnings per share by application of the treasury stock method as the Company intends to settle the principal amount of the Note in cash upon conversion. During the nine and three months ended September 30, 2013, the Company's weighted average common stock price was below the Notes conversion price for the periods during which the Notes were outstanding. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||
Related Party Transactions Disclosure [Text Block] | Related Party Transactions | |||||||||||||||
On February 28, 2013, the Company entered into the third amendment to the perpetual software license agreement with Oracle USA ("Amendment"). The Amendment provides for a 48 month extension to the May 2010 second amendment to the Oracle unlimited license agreement. The Amendment provides that the Company will pay a one-time fee of $13.1 million to extend the term for unlimited licenses from May 31, 2014 to May 31, 2018. The Amendment also provides for technical support services. The Company will pay $2.4 million for the support services from February 28, 2013 to February 27, 2014. The Company may renew support services for four subsequent annual periods for a fee of $4.3 million per year. The support services to be provided to the Company by Oracle automatically renew unless the Company provides written notice of cancellation at least 60 days prior to the support renewal date. The Company financed the license fees due under the Amendment pursuant to a note issued to Oracle Credit Corporation. The note bears interest at a rate of 2.00% per annum with payments scheduled over the term of the amendment. The Company discounted the note at a rate of 4.5% because it approximates the interest rate the Company would obtain on the open market. The $12.4 million discounted note value was recorded as an asset addition to property and equipment that will be depreciated over seven years. | ||||||||||||||||
Future debt payments under notes payable (including $807,000 in payments related to the May 10, 2010 second amendment) as of September 30, 2013 are as follows: | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Years ending: | ||||||||||||||||
Remainder of 2013 | $ | 760 | ||||||||||||||
2014 | 3,522 | |||||||||||||||
2015 | 3,119 | |||||||||||||||
2016 | 3,119 | |||||||||||||||
2017 | 3,119 | |||||||||||||||
Future debt payments | 13,639 | |||||||||||||||
Amount representing interest | 1,258 | |||||||||||||||
Present value of future debt payments | $ | 12,381 | ||||||||||||||
The following table details payments to Oracle USA and Oracle Credit Corporation: | ||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
License fee | $ | 1,987 | $ | 1,200 | 621 | $ | 389 | |||||||||
Support | 1,787 | 1,800 | 593 | 589 | ||||||||||||
Interest | 297 | 64 | 139 | 24 | ||||||||||||
Total paid | $ | 4,071 | $ | 3,064 | $ | 1,353 | $ | 1,002 | ||||||||
The Company has entered into various software license agreements with RightNow Technologies. In October 2011, RightNow Technologies was acquired by Oracle Corporation. During the nine and three months ended September 30, 2013, the Company purchased $411,000 and $319,000, respectively, in services from RightNow Technologies. During the nine months ended September 30, 2013 and 2012, the Company received payments totaling $123,000 and $112,000, respectively, from RightNow Technologies for services it performed. During nine months ended September 30, 2013 and 2012, the Company paid RightNow Technologies $239,000 and $214,000, respectively, for services it received or expects to receive. | ||||||||||||||||
In addition to the companies affiliated with Lawrence J. Ellison, the Company enters into sales and purchases agreements with various companies that have a relationship with the Company's executive officers or members of the Company's board of directors. The relationships are typically an equity investment by the executive officer or board member in the customer / vendor company or the Company's executive officer or board member is a member of the customer / vendor company's board of directors. The Company has renewed the license agreements and sold additional services to these customers or purchased services from these vendors at various points in time. Below is a summary of transactions between the Company and related parties other than Mr. Ellison: | ||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Revenue earned from related party | $ | 1,692 | $ | 1,714 | $ | 727 | $ | 549 | ||||||||
Fees NetSuite paid for services | $ | 591 | $ | 539 | $ | 194 | $ | 457 | ||||||||
Additional related party transactions entered into prior to December 31, 2012 are described in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed on February 28, 2013. |
Basis_of_Presentation_Signific
Basis of Presentation Significant Accounting Policies (Policies) | 9 Months Ended | |
Sep. 30, 2013 | ||
Basis of Presentation [Abstract] | ||
Principles of Consolidation [Policy Text Block] | Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its majority- and wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. | ||
Use of Estimates [Policy Text Block] | Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | ||
Revenue Recognition [Policy Text Block] | Revenue Recognition | |
The Company generates revenue from two sources: (1) subscription and support; and (2) professional services and other. Subscription and support revenue includes subscription fees from customers accessing its on-demand application suite and support fees from customers purchasing support. Arrangements with customers do not provide the customer with the right to take possession of the software supporting the on-demand application service at any time. Professional services and other revenue includes fees generated from training and consulting services such as business process mapping, configuration, data migration and integration. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. For the most part, subscription and support agreements are entered into for 12 to 36 months. In aggregate, more than 90% of the professional services component of the arrangements with customers is performed within 300 days of entering into a contract with the customer. | ||
The subscription agreements provide service level commitments of 99.5% uptime per period, excluding scheduled maintenance. The failure to meet this level of service availability may require the Company to credit qualifying customers up to the value of an entire month of their subscription and support fees. In light of the Company’s historical experience with meeting its service level commitments, the Company has not accrued any liabilities on its balance sheet for these commitments. | ||
The Company commences revenue recognition when all of the following conditions are met: | ||
• | There is persuasive evidence of an arrangement; | |
• | The service is being provided to the customer; | |
• | The collection of the fees is reasonably assured; and | |
• | The amount of fees to be paid by the customer is fixed or determinable. | |
In most instances, revenue from new customer acquisition is generated under sales agreements with multiple elements, comprised of subscription and support fees from customers accessing the Company's on-demand application suite and professional services associated with consultation services. The Company evaluates each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company’s control. Subscription and support have standalone value because they are routinely sold separately by the Company. Professional services have standalone value because the Company has sold professional services separately and there are several third-party vendors that routinely provide similar professional services to its customers on a standalone basis. | ||
The Company allocates revenue to each element in an arrangement based on a selling price hierarchy. The selling price for a deliverable is based on its vendor-specific objective evidence (“VSOE”), if available, third-party evidence (“TPE”), if VSOE is not available, or estimated selling price (“ESP”), if neither VSOE nor TPE is available. As the Company has been unable to establish VSOE or TPE for the elements of its arrangements, the Company establishes the ESP for each element primarily by considering the weighted average of actual sales prices of professional services sold on a standalone basis and subscription and support including various add-on modules when sold together without professional services, and other factors such as gross margin objectives, pricing practices and growth strategy. The consideration allocated to subscription and support is recognized as revenue over the contract period commencing when the subscription service is made available to the customer. The consideration allocated to professional services is recognized as revenue using the proportional performance method. | ||
The total arrangement fee for a multiple element arrangement is allocated based on the relative ESP of each element. However, since the professional services are generally completed prior to completion of delivery of subscription and support services, the revenue recognized for professional services in a given reporting period does not include fees subject to delivery of subscription and support services. This results in the recognition of revenue for professional services that is generally no greater than the contractual fees for those professional services. | ||
For single element sales agreements, subscription and support revenue is recognized ratably over the contract term beginning on the provisioning date of the contract. The Company recognizes professional services revenue using the proportional performance method for single element arrangements. | ||
Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenues. | ||
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||||||||||||
Mar. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | ||||||||||||||||||||||
Concentration Risks, Types, No Concentration Percentage [Abstract] | ||||||||||||||||||||||||
Revenue by geographic region [Table Text Block] | Revenue by geographic region, based on the billing address of the customer, was as follows for the periods presented: | |||||||||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
United States | $ | 223,246 | $ | 164,609 | $ | 79,544 | $ | 58,668 | ||||||||||||||||
International | 76,254 | 59,210 | 27,331 | 21,123 | ||||||||||||||||||||
Total revenue | $ | 299,500 | $ | 223,819 | $ | 106,875 | $ | 79,791 | ||||||||||||||||
Percentage of revenue generated outside of the United States | 25 | % | 26 | % | 26 | % | 26 | % | ||||||||||||||||
No single country outside the United States represented more than 10% of revenue during the nine and three months ended September 30, 2013 or 2012 | ||||||||||||||||||||||||
Schedule of Purchase Price Allocation [Table Text Block] | The allocation of the WH consideration to the assets acquired and obligations assumed was as follows: | The allocation of the OM consideration to the assets acquired and obligations assumed was as follows: | ||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||
Developed technology | $ | 1,100 | Cash | $ | 1,069 | |||||||||||||||||||
Customer relationships | 2,100 | Accounts receivable | 804 | |||||||||||||||||||||
Trademarks | 200 | Developed technology | 5,100 | |||||||||||||||||||||
Goodwill | 9,721 | Customer relationships | 3,000 | |||||||||||||||||||||
Other assets / liabilities, net | 189 | Trademarks | 400 | |||||||||||||||||||||
Deferred income tax liabilities | (1,322 | ) | Goodwill | 18,176 | ||||||||||||||||||||
Total purchase price | $ | 11,988 | ||||||||||||||||||||||
Other assets / liabilities, net | (433 | ) | ||||||||||||||||||||||
Total purchase price | $ | 28,116 | ||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | he following table details the Company's goodwill activity during the nine months ended September 30, 2013: | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Beginning balance as of January 1, 2013 | $ | 35,661 | ||||||||||||||||||||||
Acquisition of WH in March 2013 | 9,721 | |||||||||||||||||||||||
Acquisition of OM in May 2013 | 18,176 | |||||||||||||||||||||||
Foreign currency adjustment | (383 | ) | ||||||||||||||||||||||
Ending balance as of September 30, 2013 | $ | 63,175 | ||||||||||||||||||||||
The Company does not have a history of goodwill impairments |
Financial_Instruments_Tables
Financial Instruments (Tables) | 3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Hedging Activity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | As of September 30, 2013, financial assets stated at fair value on a recurring basis were comprised of money market funds included within cash and cash equivalents and foreign exchange forward contracts included within other current assets and liabilities. The fair value of these financial assets was determined using the following inputs as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements at reporting date using | Fair value measurements at reporting date using | ||||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Money market funds | $ | 72,514 | $ | — | $ | — | $ | 72,514 | $ | 72,467 | $ | — | $ | — | $ | 72,467 | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | — | 20 | $ | — | 20 | $ | — | $ | 97 | $ | — | 97 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 72,514 | $ | 20 | $ | — | $ | 72,534 | $ | 72,467 | $ | 97 | $ | — | $ | 72,564 | |||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | — | $ | 463 | $ | — | $ | 463 | $ | — | $ | 231 | $ | — | $ | 231 | |||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 463 | $ | — | $ | 463 | $ | — | $ | 231 | $ | — | $ | 231 | |||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | As of September 30, 2013 and December 31, 2012, the Company had the following outstanding foreign exchange forward contracts: | ||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Notional Value Sold | Notional Value Purchased | Notional Value Sold | Notional Value Purchased | ||||||||||||||||||||||||||||||||||||||||||||||||
(US dollars in thousands) | (US dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
British pound | $ | 6,577 | $ | 4,301 | $ | 7,188 | $ | 3,435 | |||||||||||||||||||||||||||||||||||||||||||
Australian dollar | 8,556 | 5,156 | 9,360 | 4,793 | |||||||||||||||||||||||||||||||||||||||||||||||
Philippines peso | 5,440 | 5,440 | 4,085 | 4,085 | |||||||||||||||||||||||||||||||||||||||||||||||
Euro | 1,214 | 527 | 883 | 256 | |||||||||||||||||||||||||||||||||||||||||||||||
Canadian dollar | 983 | 1,279 | 531 | 515 | |||||||||||||||||||||||||||||||||||||||||||||||
Japanese yen | 1,895 | — | 1,260 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Czech crown | 4,150 | 2,580 | 3,440 | 1,895 | |||||||||||||||||||||||||||||||||||||||||||||||
Mexican peso | 161 | — | 161 | — | |||||||||||||||||||||||||||||||||||||||||||||||
New Zealand dollar | 272 | — | 73 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 29,248 | $ | 19,283 | $ | 26,981 | $ | 14,979 | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The fair value of the derivative instruments reported on the Company’s Condensed Consolidated Balance Sheet were as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Location | September 30, 2013 | December 31, 2012 | Balance Sheet Location | September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and forward contracts | Fair Value | Fair Value | Fair Value | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other current assets | $ | 20 | 97 | Other current liabilities | $ | 463 | $ | 231 | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 20 | 97 | $ | 463 | $ | 231 | ||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block] | The effect of derivative instruments on the Statement of Operations and Comprehensive Loss was as follows for the periods presented: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Location of net gain (loss) recognized in income on derivatives | Amount of net gain (loss) recognized in income on derivatives during the | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and forward contracts | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other income/ (expense), net | $ | 784 | $ | 56 | $ | (353 | ) | $ | (361 | ) | ||||||||||||||||||||||||||||||||||||||||
Total | $ | 784 | $ | 56 | $ | (353 | ) | $ | (361 | ) | |||||||||||||||||||||||||||||||||||||||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt [Abstract] | ||||||||
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | The following table sets forth total interest expense recognized related to the Notes during the nine and three months ended September 30, 2013: | |||||||
Nine Months Ended September 30, 2013 | Three Months Ended September 30, 2013 | |||||||
(in thousands) | ||||||||
Contractual interest expense | $ | 258 | $ | 194 | ||||
Amortization of debt issuance costs | 396 | 286 | ||||||
Amortization of debt discount | 3,783 | 2,837 | ||||||
Total | $ | 4,437 | $ | 3,317 | ||||
Effective interest rate | 5.40% | |||||||
Schedule of Debt [Table Text Block] | The Notes consisted of the following as of September 30, 2013: | |||||||
(in thousands) | ||||||||
Equity component (1) | $ | 60,931 | ||||||
Liability component : | ||||||||
Principal | 310,000 | |||||||
Less: debt discount, net | (58,799 | ) | ||||||
Net carrying amount | $ | 251,201 | ||||||
Fair value - level 2 | $ | 354,206 | ||||||
Future debt payments under notes payable (including $807,000 in payments related to the May 10, 2010 second amendment) as of September 30, 2013 are as follows: | ||||||||
(dollars in thousands) | ||||||||
Years ending: | ||||||||
Remainder of 2013 | $ | 760 | ||||||
2014 | 3,522 | |||||||
2015 | 3,119 | |||||||
2016 | 3,119 | |||||||
2017 | 3,119 | |||||||
Future debt payments | 13,639 | |||||||
Amount representing interest | 1,258 | |||||||
Present value of future debt payments | $ | 12,381 | ||||||
Net_Loss_Per_Common_Share_Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Net Loss Per Common Share [Abstract] | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table presents the calculation of the numerator and denominator used in the basic and diluted net loss per share of common stock: | |||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(dollars and shares in thousands, except per share amounts) | ||||||||||||||||
Numerator: | ||||||||||||||||
Net loss | $ | (50,199 | ) | $ | (25,607 | ) | $ | (16,772 | ) | $ | (7,984 | ) | ||||
Denominator: | ||||||||||||||||
Weighted-average number of shares of common stock outstanding used in computing basic and diluted net loss per share of common stock | 73,827 | 70,288 | 74,379 | 71,161 | ||||||||||||
Net loss per share of common stock, basic and diluted | $ | (0.68 | ) | $ | (0.36 | ) | $ | (0.23 | ) | $ | (0.11 | ) | ||||
The Company’s unvested RSUs, PSUs and PS do not contain non-forfeitable rights to dividends and dividend equivalents. As such, unvested RSUs, PSUs and PS are not participating securities and the Company is not required to use the two-class method to calculate diluted earnings per share in periods when the Company has net income. | ||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table presents the weighted average potential shares that are excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti‑dilutive effect: | |||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(Shares in thousands) | ||||||||||||||||
Options to purchase shares of common stock | 2,276 | 3,795 | 2,072 | 3,415 | ||||||||||||
Unvested RSUs, PSUs and PS awards | 3,120 | 3,796 | 3,031 | 3,623 | ||||||||||||
Total | 5,396 | 7,591 | 5,103 | 7,038 | ||||||||||||
The effect of the convertible Notes is reflected in diluted earnings per share by application of the treasury stock method as the Company intends to settle the principal amount of the Note in cash upon conversion. During the nine and three months ended September 30, 2013, the Company's weighted average common stock price was below the Notes conversion price for the periods during which the Notes were outstanding. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | The following table details payments to Oracle USA and Oracle Credit Corporation: | |||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
License fee | $ | 1,987 | $ | 1,200 | 621 | $ | 389 | |||||||||
Support | 1,787 | 1,800 | 593 | 589 | ||||||||||||
Interest | 297 | 64 | 139 | 24 | ||||||||||||
Total paid | $ | 4,071 | $ | 3,064 | $ | 1,353 | $ | 1,002 | ||||||||
Company's board of directors. The relationships are typically an equity investment by the executive officer or board member in the customer / vendor company or the Company's executive officer or board member is a member of the customer / vendor company's board of directors. The Company has renewed the license agreements and sold additional services to these customers or purchased services from these vendors at various points in time. Below is a summary of transactions between the Company and related parties other than Mr. Ellison: | ||||||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Revenue earned from related party | $ | 1,692 | $ | 1,714 | $ | 727 | $ | 549 | ||||||||
Fees NetSuite paid for services | $ | 591 | $ | 539 | $ | 194 | $ | 457 | ||||||||
Schedule of Debt [Table Text Block] | The Notes consisted of the following as of September 30, 2013: | |||||||||||||||
(in thousands) | ||||||||||||||||
Equity component (1) | $ | 60,931 | ||||||||||||||
Liability component : | ||||||||||||||||
Principal | 310,000 | |||||||||||||||
Less: debt discount, net | (58,799 | ) | ||||||||||||||
Net carrying amount | $ | 251,201 | ||||||||||||||
Fair value - level 2 | $ | 354,206 | ||||||||||||||
Future debt payments under notes payable (including $807,000 in payments related to the May 10, 2010 second amendment) as of September 30, 2013 are as follows: | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Years ending: | ||||||||||||||||
Remainder of 2013 | $ | 760 | ||||||||||||||
2014 | 3,522 | |||||||||||||||
2015 | 3,119 | |||||||||||||||
2016 | 3,119 | |||||||||||||||
2017 | 3,119 | |||||||||||||||
Future debt payments | 13,639 | |||||||||||||||
Amount representing interest | 1,258 | |||||||||||||||
Present value of future debt payments | $ | 12,381 | ||||||||||||||
Basis_of_Presentation_Revenue_
Basis of Presentation Revenue by Region (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue by Region [Line Items] | ||||
Revenues | $106,875 | $79,791 | $299,500 | $223,819 |
International Revenue as a Percentage of Total Revenue | 26.00% | 26.00% | 25.00% | 26.00% |
United States [Member] | ||||
Revenue by Region [Line Items] | ||||
Revenues | 79,544 | 58,668 | 223,246 | 164,609 |
International [Member] | ||||
Revenue by Region [Line Items] | ||||
Revenues | $27,331 | $21,123 | $76,254 | $59,210 |
Basis_of_Presentation_Qualifie
Basis of Presentation Qualified Operating Expense Reimbursements (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Government subsidy - expense reimbursement | $659,000 | $421,000 | $1,900,000 | $1,400,000 |
Czech Republic ICT program receivable | 1,500,000 | 1,500,000 | ||
Payments received from Czech Republic government | $679,000 | $353,000 | $1,300,000 | $652,000 |
Basis_of_Presentation_Business
Basis of Presentation Business Combination (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 30, 2013 | 3-May-13 | Mar. 31, 2013 | Sep. 30, 2013 | Mar. 06, 2013 | Jun. 30, 2013 | 3-May-13 | Mar. 31, 2013 | Mar. 06, 2013 | Jun. 30, 2013 | 3-May-13 | Mar. 31, 2013 | Mar. 06, 2013 | Jun. 30, 2013 | 3-May-13 | Mar. 31, 2013 | Mar. 06, 2013 | Mar. 06, 2013 | Mar. 06, 2013 | |
OM Business Combination [Member] | OM Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | Developed Technology [Member] | Developed Technology [Member] | Developed Technology [Member] | Developed Technology [Member] | Customer Relationships [Member] | Customer Relationships [Member] | Customer Relationships [Member] | Customer Relationships [Member] | Trademarks [Member] | Trademarks [Member] | Trademarks [Member] | Trademarks [Member] | Internal Revenue Service (IRS) [Member] | State and Local Jurisdiction [Member] | ||||||
OM Business Combination [Member] | OM Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | OM Business Combination [Member] | OM Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | OM Business Combination [Member] | OM Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | |||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||
Cash | $1,100,000 | |||||||||||||||||||||||
Accounts receivable | 804,000 | |||||||||||||||||||||||
Acquired intangible asset amortization period in years | 4 years | 3 years | 4 years | 4 years | 2 years | 2 years | ||||||||||||||||||
Cash Paid to Acquiree on Settlement Day | 23,500,000 | 10,200,000 | ||||||||||||||||||||||
Additional cash due former owners | 3,500,000 | 1,800,000 | ||||||||||||||||||||||
Business combination consideration withheld for tax matters | 1,100,000 | |||||||||||||||||||||||
Acquisition transaction costs | 1,100,000 | 560,000 | ||||||||||||||||||||||
Employee termination costs | 311000 | |||||||||||||||||||||||
Intangibles assets | 5,100,000 | 1,100,000 | 3,000,000 | 2,100,000 | 400,000 | 200,000 | ||||||||||||||||||
Goodwill | 63,175,000 | 63,175,000 | 35,661,000 | 18,176,000 | 9,721,000 | |||||||||||||||||||
Other assets / liabilities assumed | -433,000 | 189,000 | ||||||||||||||||||||||
Defered income tax liabilites | -1,322,000 | -1,100,000 | -204,000 | |||||||||||||||||||||
Total purchase price | 28,116,000 | 11,988,000 | ||||||||||||||||||||||
Income Tax Expense (Benefit) | $373,000 | $603,000 | $473,000 | $1,896,000 | $1,100,000 |
Basis_of_Presentation_Goodwill
Basis of Presentation Goodwill Rollforward (Details) (USD $) | 9 Months Ended | 3 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 | Mar. 06, 2013 | Jun. 30, 2013 | 3-May-13 |
WH Business Combination [Member] | WH Business Combination [Member] | OM Business Combination [Member] | OM Business Combination [Member] | ||
Goodwill [Roll Forward] | |||||
Goodwill - January 1, 2013 | $35,661 | $9,721 | $18,176 | ||
Acquisition of WH in March 2013 | 9,721 | 18,176 | |||
Goodwil foreign currency adjustment | -383 | ||||
Goodwill - June 30, 2013 | $63,175 | $9,721 | $18,176 |
Financial_Instruments_Fair_val
Financial Instruments Fair value measures (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market fund | $72,514 | $72,467 |
Foreign exchange contract, other current assets | 20 | 97 |
Assets, Fair Value Disclosure | 72,534 | 72,564 |
Foreign exchange contracts, other liabilities | 463 | 231 |
Liabilities, Fair Value Disclosure | 463 | 231 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market fund | 72,514 | 72,467 |
Foreign exchange contract, other current assets | 0 | 0 |
Assets, Fair Value Disclosure | 72,514 | 72,467 |
Foreign exchange contracts, other liabilities | 0 | 0 |
Liabilities, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market fund | 0 | 0 |
Foreign exchange contract, other current assets | 20 | 97 |
Assets, Fair Value Disclosure | 20 | 97 |
Foreign exchange contracts, other liabilities | 463 | 231 |
Liabilities, Fair Value Disclosure | 463 | 231 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market fund | 0 | 0 |
Foreign exchange contract, other current assets | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Foreign exchange contracts, other liabilities | 0 | 0 |
Liabilities, Fair Value Disclosure | $0 | $0 |
Financial_Instruments_Details
Financial Instruments (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Derivative [Line Items] | |||||
Notional amount of derivative activity during the nine months ended September 30, 2013 | $142,400,000 | $142,400,000 | |||
Notional Value Sold | 29,248,000 | 29,248,000 | 26,981,000 | ||
Notional Value Purchased | 19,283,000 | 19,283,000 | 14,979,000 | ||
Foreign exchange contract, other current assets | 20,000 | 20,000 | 97,000 | ||
Foreign exchange contracts, other liabilities | 463,000 | 463,000 | 231,000 | ||
Foreign exchange contracts - other income/(expense), net | -353,000 | -361,000 | 784,000 | 56,000 | |
Other current assets [Member] | Total [Member] | |||||
Derivative [Line Items] | |||||
Total foreign exchange contracts - other current assets | 20,000 | 20,000 | 97,000 | ||
Other current liabilities [Member] | Total [Member] | |||||
Derivative [Line Items] | |||||
Total foreign exchange contracts - other current liabilities | 463,000 | 463,000 | 231,000 | ||
British pound | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 6,577,000 | 6,577,000 | 7,188,000 | ||
Notional Value Purchased | 4,301,000 | 4,301,000 | 3,435,000 | ||
Australian dollar | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 8,556,000 | 8,556,000 | 9,360,000 | ||
Notional Value Purchased | 5,156,000 | 5,156,000 | 4,793,000 | ||
Philippines, Pesos | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 5,440,000 | 5,440,000 | 4,085,000 | ||
Notional Value Purchased | 5,440,000 | 5,440,000 | 4,085,000 | ||
Euro | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 1,214,000 | 1,214,000 | 883,000 | ||
Notional Value Purchased | 527,000 | 527,000 | 256,000 | ||
Canada dollar | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 983,000 | 983,000 | 531,000 | ||
Notional Value Purchased | 1,279,000 | 1,279,000 | 515,000 | ||
Japan yen | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 1,895,000 | 1,895,000 | 1,260,000 | ||
Notional Value Purchased | 0 | 0 | 0 | ||
Czech crown | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 4,150,000 | 4,150,000 | 3,440,000 | ||
Notional Value Purchased | 2,580,000 | 2,580,000 | 1,895,000 | ||
Mexico pesos | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 161,000 | 161,000 | 161,000 | ||
Notional Value Purchased | 0 | 0 | 0 | ||
New Zealand dollars | |||||
Derivative [Line Items] | |||||
Notional Value Sold | 272,000 | 272,000 | 73,000 | ||
Notional Value Purchased | 0 | 0 | 0 | ||
Foreign Exchange Future [Member] | Total [Member] | |||||
Derivative [Line Items] | |||||
Foreign exchange contracts - other income/(expense), net | ($353,000) | ($361,000) | $784,000 | $56,000 |
Financial_Instruments_Restrict
Financial Instruments Restricted Cash (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Restricted cash [Line Items] | ||
Restricted cash current | $266,000 | |
Restricted cash long-term | 715,000 | 275,000 |
Restricted Cash and Cash Equivalents | $541,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Contractual Obligations [Abstract] | |
Business consulting agreement | $5,200 |
Office building lease obligations entered into during the period | 12600 |
Stockbased_Compensation_Detail
Stock-based Compensation (Details) (2013 Performance Shares [Member], USD $) | 3 Months Ended | |
Mar. 31, 2013 | Mar. 31, 2012 | |
2013 Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
2013 performance shares | 170,875 | |
2013 performance share grant date fair value | $75.18 |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Jun. 01, 2013 | 29-May-13 | |
Debt Instrument [Line Items] | |||||
Notes remaining useful life | 4 years 9 months | ||||
Number of Company's common stock repurchased | 348,837 | ||||
Cash paid to repurchase the Company's common stock | $30,000,000 | ||||
Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible notes equity component | 60,931,000 | 60,931,000 | |||
Convertible .025% senior notes par value | 310,000,000 | 310,000,000 | |||
Coupon interest rate | 0.25% | ||||
Convertible shares per note | 8.6133 | ||||
Principal amount of convertible notes | 1,000 | ||||
Conversion price per share | $116.10 | ||||
Debt Instrument, Convertible, Conversion Price | 35.00% | ||||
Common stock price per share on May 29, 2013 | $86 | ||||
Debt Issuance Cost | 8,400,000 | ||||
Convertible debt issuance cost at note issuance date | 6,700,000 | ||||
Convertible debt unamortized issuance costs | 6200 | ||||
Contractual interest expense | 194,000 | 258,000 | |||
Amortization of debt issuance costs | 286,000 | 396,000 | |||
Amortization of debt discount | 2,837,000 | 3,783,000 | |||
Total | 3,317,000 | 4,437,000 | |||
Debt discount | -58,799,000 | -58,799,000 | |||
Convertible debt | 251,201,000 | 251,201,000 | |||
Effective interest rate | 5.40% | ||||
Fair Value, Inputs, Level 2 [Member] | Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Fair value - level 2 | 354,206,000 | 354,206,000 | |||
Additional Paid-in Capital [Member] | Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible notes equity component | $1,700,000 | $1,700,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 06, 2013 | Mar. 06, 2013 | Mar. 06, 2013 | |
Foreign Country [Member] | WH Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | WH Business Combination [Member] | |||||
Internal Revenue Service (IRS) [Member] | State and Local Jurisdiction [Member] | ||||||||
Defered income tax liabilites | $1,322,000 | $1,100,000 | $204,000 | ||||||
Income Tax Expense (Benefit) | 373,000 | 603,000 | 473,000 | 1,896,000 | 1,100,000 | ||||
Net deferred tax assets | 406,000 | ||||||||
Deferred tax assets | $4,300,000 |
Net_Loss_Per_Common_Share_Deta
Net Loss Per Common Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings per share, basic and diluted, [Line Items] | ||||
Net loss | ($16,772) | ($7,984) | ($50,199) | ($25,607) |
Weighted average number of shares used in computing net loss per common share | 74,379,000 | 71,161,000 | 73,827,000 | 70,288,000 |
Net loss per common share, basic and diluted | ($0.23) | ($0.11) | ($0.68) | ($0.36) |
Antidilutive shares:[Abstract] | ||||
Antidilutive securities excluded from computation of loss per share | 5,103,000 | 7,038,000 | 5,396,000 | 7,591,000 |
Stock Options [Member] | ||||
Antidilutive shares:[Abstract] | ||||
Antidilutive securities excluded from computation of loss per share | 2,072,000 | 3,415,000 | 2,276,000 | 3,795,000 |
Restricted Stock [Member] | ||||
Antidilutive shares:[Abstract] | ||||
Antidilutive securities excluded from computation of loss per share | 3,031,000 | 3,623,000 | 3,120,000 | 3,796,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 01, 2013 | |
Principal Owner [Member] | |||||
Related Party Transaction [Line Items] | |||||
Oracle license fee due on amendment date | $13,100,000 | ||||
Support sevices | -593,000 | -589,000 | -1,787,000 | -1,800,000 | |
Interest paid to Oracle | -139,000 | -24,000 | -297,000 | -64,000 | |
Fees paid to suppliers | 1,353,000 | 1,002,000 | 4,071,000 | 3,064,000 | |
Related Party Company Other Than Oracle [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from Related Parties | 727,000 | 549,000 | 1,692,000 | 1,714,000 | |
Fees paid to suppliers | 194,000 | 457,000 | 591,000 | 539,000 | |
RightNow Technology (Oracle) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchase Obligation | 319 | 411 | |||
Payments received from customers for services performed | 123,000 | 112,000 | |||
Fees paid to suppliers | $214,000 | $239,000 |
Related_Party_Transactions_Rel
Related Party Transactions Related Party Debt Table (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 48 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Feb. 27, 2014 | Feb. 27, 2018 | Mar. 31, 2013 | Mar. 01, 2013 | |
Debt Instrument [Line Items] | ||||||||
License fee | $1,987,000 | $1,160,000 | ||||||
RightNow Technology (Oracle) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Total paid | 214,000 | 239,000 | ||||||
Principal Owner [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Payments 2010 Second amendment | 807,000 | 807,000 | ||||||
Oracle license fee due on amendment date | 13,100,000 | |||||||
Remainder of 2013 | 760,000 | 760,000 | ||||||
2014 | 3,522,000 | 3,522,000 | ||||||
2015 | 3,119,000 | 3,119,000 | ||||||
2016 | 3,119,000 | 3,119,000 | ||||||
2017 | 3,119,000 | 3,119,000 | ||||||
Future debt payments | 13,639,000 | 13,639,000 | ||||||
Amount representing interest | 1,258,000 | 1,258,000 | ||||||
Present value of future debt payments | 12,381,000 | 12,381,000 | ||||||
Oracle support contract | 2,400,000 | 4,300,000 | ||||||
Oracle note annual interest rate | 2.00% | |||||||
Oracle note discount interest rate | 4.50% | |||||||
Oracle license asset addition to property and equipment | 12,400,000 | |||||||
License fee | 621,000 | 389,000 | 1,987,000 | 1,200,000 | ||||
Support sevices | 593,000 | 589,000 | 1,787,000 | 1,800,000 | ||||
Interest paid to Oracle | 139,000 | 24,000 | 297,000 | 64,000 | ||||
Total paid | $1,353,000 | $1,002,000 | $4,071,000 | $3,064,000 |