DEI Information Document
DEI Information Document - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 28, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NetSuite Inc. | |
Entity Central Index Key | 1,117,106 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | N | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 79,488,559 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 281,555 | $ 367,769 |
Short-term marketable securities | 90,025 | 82,622 |
Accounts receivable, net of allowances of $1,287 and $1,886 as of September 30, 2015 and December 31, 2014, respectively | 156,792 | 139,221 |
Deferred commissions | 58,387 | 53,377 |
Other current assets | 33,863 | 30,012 |
Total current assets | 620,622 | 673,001 |
Marketable securities, non-current | 1,409 | 9,143 |
Property and equipment, net | 82,893 | 58,539 |
Deferred commissions, non-current | 15,148 | 13,499 |
Goodwill | 293,116 | 123,049 |
Other intangible assets, net | 66,468 | 32,404 |
Other assets | 13,614 | 12,604 |
Total assets | 1,093,270 | 922,239 |
Current liabilities: | ||
Accounts payable | 17,437 | 5,082 |
Deferred revenue | 353,373 | 300,884 |
Accrued compensation | 45,212 | 41,081 |
Accrued expenses | 34,652 | 30,975 |
Other current liabilities (including note payable to related party of $2,868 and $2,774 as of September 30, 2015 and December 31, 2014, respectively) | 17,444 | 14,751 |
Total current liabilities | 468,118 | 392,773 |
Long-term liabilities: | ||
Convertible 0.25% senior notes, net | 274,833 | 265,710 |
Deferred revenue, non-current | 23,792 | 13,622 |
Other long-term liabilities (including note payable to related party of $3,765 and $5,928 as of September 30, 2015 and December 31, 2014, respectively) | 15,721 | 15,900 |
Total long-term liabilities | 314,346 | 295,232 |
Total liabilities | $ 782,464 | 688,005 |
Commitments and contingencies (Note 4) | ||
Total equity: | ||
Common stock, par value $0.01, 500,000,000 shares authorized; 79,443,908 and 77,031,827 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 794 | 770 |
Additional paid-in capital | 962,471 | 788,583 |
Accumulated other comprehensive loss | (10,912) | (5,912) |
Accumulated deficit | (641,547) | (549,207) |
Total equity | 310,806 | 234,234 |
Total liabilities and total equity | $ 1,093,270 | $ 922,239 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) Condensed Consolidated Balance Sheet (Unaudited) Parentheticals - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Balance Sheet Parenthetical [Abstract] | ||
Allowance for Doubtful Accounts Receivable, Current | $ 1,287 | $ 1,886 |
Current liabilities: | ||
Notes Payable, Related Parties | 2,868 | 2,774 |
Notes Payable, Related Parties, Noncurrent | $ 3,765 | $ 5,928 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 79,443,908 | 77,031,827 |
Common Stock, Shares, Outstanding | 79,443,908 | 77,031,827 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue: | ||||
Subscription and support | $ 154,661 | $ 115,831 | $ 428,557 | $ 321,077 |
Professional services and other | 38,162 | 27,829 | 106,363 | 77,338 |
Total revenue | 192,823 | 143,660 | 534,920 | 398,415 |
Cost of revenue: | ||||
Subscription and support | 25,983 | 18,522 | 69,427 | 51,966 |
Professional services and other | 40,113 | 27,477 | 108,171 | 74,307 |
Total cost of revenue | 66,096 | 45,999 | 177,598 | 126,273 |
Gross profit | 126,727 | 97,661 | 357,322 | 272,142 |
Operating expenses: | ||||
Product development | 36,112 | 28,610 | 98,368 | 78,158 |
Sales and marketing | 102,145 | 74,699 | 281,202 | 208,105 |
General and administrative | 21,824 | 20,097 | 65,899 | 48,236 |
Total operating expenses | 160,081 | 123,406 | 445,469 | 334,499 |
Operating loss | (33,354) | (25,745) | (88,147) | (62,357) |
Other income / (expense), net: | ||||
Interest income | 100 | 79 | 316 | 134 |
Interest expense | (3,756) | (3,625) | (10,909) | (10,667) |
Other expense, net | (214) | (132) | (478) | (441) |
Total other income / (expense), net | (3,870) | (3,678) | (11,071) | (10,974) |
Loss before income taxes | (37,224) | (29,423) | (99,218) | (73,331) |
Provision for / (benefit from) income taxes | 116 | (128) | (6,878) | 1,361 |
Net loss | $ (37,340) | $ (29,295) | $ (92,340) | $ (74,692) |
Net loss per common share, basic and diluted | $ (0.47) | $ (0.38) | $ (1.18) | $ (0.98) |
Weighted average number of shares used in computing net loss per common share | 79,186 | 76,477 | 78,153 | 75,947 |
Comprehensive Loss | ||||
Foreign currency translation gains / (loss), net of taxes | $ (3,763) | $ (3,668) | $ (5,174) | $ (3,688) |
Marketable Securities, Unrealized Gain (Loss) | 13 | 0 | 29 | 0 |
Accumulated pension liability | 47 | 47 | 145 | 141 |
Comprehensive loss | $ (41,043) | $ (32,916) | $ (97,340) | $ (78,239) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (92,340) | $ (74,692) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 21,637 | 14,468 |
Amortization of other intangible assets | 12,449 | 6,904 |
Amortization of Financing Costs and Discounts | 10,088 | 9,619 |
Provision for accounts receivable allowances | 942 | 846 |
Stock-based compensation | 81,686 | 70,256 |
Amortization of deferred commissions | 72,951 | 53,478 |
Excess tax benefit on stock-based compensation | (207) | (519) |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | ||
Accounts receivable | (13,993) | (17,650) |
Deferred commissions | (79,616) | (61,892) |
Other current assets | 2,783 | (1,745) |
Other assets | 3,944 | (1,631) |
Accounts payable | 8,097 | (1,395) |
Accrued compensation | 1,919 | 8,920 |
Deferred revenue | 58,645 | 46,500 |
Other current liabilities | 1,879 | 2,465 |
Other long-term liabilities | (11,511) | 40 |
Net cash provided operating activities | 79,353 | 53,972 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (32,831) | (15,469) |
Capitalized internal use software | (2,262) | (1,125) |
Cash paid in business combination, net of amounts received | (130,560) | (39,209) |
Purchases of marketable securities | (93,795) | (59,815) |
Maturities of marketable securities | 92,463 | 0 |
Sales of marketable securities | 1,504 | 799 |
Net cash used in investing activities | (165,481) | (114,819) |
Cash flows from financing activities: | ||
Payments under capital leases | (166) | (300) |
Payments under capital leases and long-term debt - related party | (2,069) | (2,379) |
Payments related to business combinations | (1,335) | (5,890) |
RSU acquired to settle employee withholding liability | (7,028) | (96) |
Excess tax benefit on stock-based compensation | 207 | 519 |
Proceeds from issuance of common stock | 11,969 | 5,573 |
Net cash provided by financing activities | 1,578 | (2,573) |
Effect of exchange rate changes on cash and cash equivalents | (1,664) | (735) |
Net change in cash and cash equivalents | (86,214) | (64,155) |
Cash and cash equivalents at beginning of period | 367,769 | 451,577 |
Cash and cash equivalents at end of period | 281,555 | 387,422 |
Supplemental cash flow disclosure: | ||
Cash paid for interest to related parties | 271 | 359 |
Cash paid for interest to other parties | 498 | 510 |
Cash paid for income taxes, net of tax refunds | 1,632 | 1,008 |
Noncash financing and investing activities: | ||
Common stock issued in connection with business combination | $ 85,881 | $ 22,785 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2015 | |
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, the Company offers a broad suite of applications, including financial management, Customer Relationship Management (“CRM”), ecommerce and retail management, commerce marketing automation, Professional Services Automation (“PSA”) and Human Capital Management ("HCM") 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, Australia and Uruguay. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation [Text Block] | Basis of Presentation The Condensed Consolidated Financial Statements as of and for the nine months ended September 30, 2015 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, 2014 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, 2014 filed on March 2, 2015. 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, 2014 filed on March 2, 2015. 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. Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board ("FASB") issued new accounting guidance: Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments. The guidance requires the acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustment amounts are determined. The business combination guidance is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted, and is to be applied on a prospective basis. The Company has elected not to early adopt. The adoption of the business combination guidance is not expected to have a material impact on the Company's condensed consolidated financial statements. In April 2015, the Financial Accounting Standard Board ("FASB") issued new accounting guidance Simplifying the Presentation of Debt Issuance Costs . The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The debt issuance costs guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. The Company has elected not to early adopt. The adoption of the debt guidance is not expected to have a material impact on the Company's condensed consolidated financial statements. In April 2015, the FASB issued new accounting guidance Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. This guidance is intended to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement, primarily to determine whether the arrangement includes a sale or license of software. The new guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company has elected not to early adopt. The adoption of the guidance is not expected to have a material impact on the Company's condensed consolidated financial statements. In May 2014, the FASB issued new accounting guidance related to revenue recognition, Revenue from Contracts with Customers . This new standard will replace most existing U.S. GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB approved a one-year deferral of the effective date for the new revenue reporting standard for entities reporting under U.S. GAAP. In accordance with the deferral, this guidance will be effective for the Company beginning January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted beginning January 1, 2017. The Company is evaluating the impact of adopting this new accounting standard on its financial statements and has not selected a transition method. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its 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. 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 generally 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, marketable securities, 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, 2015 and December 31, 2014 , 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, 2015 and December 31, 2014 , 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, 2015 2014 2015 2014 (dollars in thousands) United States $ 398,311 $ 299,071 $ 143,673 $ 107,007 International 136,609 99,344 49,150 36,653 Total revenue $ 534,920 $ 398,415 $ 192,823 $ 143,660 Percentage of revenue generated outside of the United States 26 % 25 % 25 % 26 % No single country outside the United States represented more than 10% of revenue during the nine months ended September 30, 2015 or 2014 . 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 participated in a government subsidy program for employing local residents. Under the program, the Czech government would reimburse the Company for certain operating expenses it incurs. In the period the Company incurs the reimbursable operating expense, it would record a reduction in product development expense and a receivable from the Czech government. During the nine months ended September 30, 2015 , the Company's product development operating expenses were reduced by $569,000 for reimbursement of eligible operating expenses incurred during this time period. During the nine and three months ended September 30, 2014 , the Company's product development operating expenses were reduced by $1.2 million and $355,000 , respectively, for reimbursement of eligible operating expenses incurred. During the nine and three months ended September 30, 2015 , the Company received $1.2 million and $654,000 , respectively, from the Czech government. During the nine and three months ended September 30, 2014 , the Company received $1.9 million and $589,000 , respectively, from the Czech government. As of September 30, 2015 , no reimbursements were due the Company. The Company has reached its subsidy reimbursement limit under this program. Currently, the Company is evaluating alternative subsidy employment programs offered by the Czech Republic and other countries. Business Combinations Monexa Software On August 5, 2015, the Company completed the purchase of all the outstanding equity of Monexa Services Inc. ("Monexa"), a private company that provides cloud-based invoicing and payment services for its customers. Monexa functionality will enhance the Company’s existing invoicing and payment solution. Beginning in the third quarter of 2015, Monexa assets, liabilities and operating results are reflected in the Company’s condensed consolidated financial statements from the date of acquisition. On the closing date, the Company paid approximately $33.1 million in cash. Of the consideration paid, $5.7 million is being held in escrow for up to 15 months following the close of the transaction in the event of certain breaches of representations, warranties and potential tax obligations covered in the purchase agreement. In connection with the transaction, the Monexa Board of Directors accelerated the vesting of certain Monexa employee stock options that were exercised shortly before the closing date. Since Monexa accelerated the stock option vesting in contemplation of the business combination, the Company was required to record the $1.8 million in net proceeds received by Monexa employees as compensation cost in the general and administrative expense line of the Company's financial statements. Acquisition related transaction costs amounted to $2.0 million in the period ended September 30, 2015 , and are reflected as general and administrative expense in the statement of operations. 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, multiple period excess earnings method for customer relationships, relief of royalty for trademarks, and replacement cost and relief from royalty methods 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. $7.3 million of the acquired Monexa goodwill is expected to be deductible for tax purposes. The Company did not record any in-process research and development intangible assets in connection with the acquisition. The following table summarizes the preliminary allocation of the consideration to the fair value of assets acquired and liabilities assumed at the acquisition date: (dollars in thousands) Cash $ 594 Accounts receivable 301 Fixed assets 231 Developed technology 8,700 Customer relationships 4,200 Trademarks 400 Goodwill 18,717 Other assets / liabilities, net (23 ) Fair value of assets acquired and liabilities assumed $ 33,120 The Company will amortize certain intangible assets on a straight-line basis over the following periods: Fair Value Amount Useful Life (dollars in thousands) (in years) Developed technology $ 8,700 5 Customer relationships 4,200 4 Trademarks 400 2 The initial accounting for Monexa accounts receivable, fixed assets, intangible assets, other customer related liabilities, vendor obligations and employee related liabilities is incomplete because the Company is in the process of determining the fair value of these assets and liabilities. The Company is also undertaking an analysis of certain tax matters associated with the Monexa acquisition which could result in an adjustment to the acquisition price allocation. Comparative pro forma financial information for this acquisition has not been presented because Monexa historical financial results are not material to the Company's condensed consolidated results of operations. Bronto Software On June 8, 2015, the Company completed the purchase of all the outstanding equity of Bronto Software, Inc. (“Bronto"), a private company that provides a cloud-based marketing platform for its customers to drive revenue through their email, mobile and social campaigns. Bronto functionality will enhance the Company’s existing email marketing solution and its existing omnichannel commerce platform. Beginning in the second quarter of 2015, Bronto assets, liabilities and operating results are reflected in the Company’s condensed consolidated financial statements from the date of acquisition. The Company paid approximately $98.2 million in cash and issued 1,030,508 unregistered shares of the Company's common stock with a fair value of $85.9 million , inclusive of a discount from the quoted market price due to certain trading restrictions associated with the shares. Of the consideration paid, $39.6 million is being held in escrow for up to 18 months following the close of the transaction in the event of certain breaches of representations and warranties covered in the purchase agreement. Another $3.9 million is being held in escrow for up to two years as protection against tax contingencies and losses. Acquisition related transaction costs amounted to $4.7 million and are reflected as general and administrative expense in the statement of operations. 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 and multiple period excess earnings method 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. Goodwill is not expected to be deductible for tax purposes. The Company did not record any in-process research and development intangible assets in connection with the acquisition. The following table summarizes the allocation of the consideration to the fair value of assets acquired and liabilities assumed at the acquisition date: (dollars in thousands) Cash $ 1,667 Accounts receivable 4,139 Fixed assets 4,009 Deferred tax assets 5,547 Developed technology 13,400 Customer relationships 13,100 Customer relationships - backlog 3,000 Trademarks 3,060 Goodwill 156,385 Deferred tax liabilities (13,792 ) Taxes payable (2,358 ) Other assets / liabilities, net (4,051 ) Fair value of assets acquired and liabilities assumed $ 184,106 The fair value of the 1,030,508 unregistered shares of common stock issued as part of the consideration paid for Bronto ( $85.9 million ) was determined on the basis of the closing market price of the Company’s common stock on the acquisition date less a discount for lack of marketability due to the 6-month restriction of resale as a result of SEC Rule 144 for issuance of unregistered shares to a non-affiliate as such term is defined therein. The Company will amortize certain intangible assets on a straight-line basis, except for customer relationship - backlog, which is amortized in proportion to the related revenue recognition, over the following periods: Fair Value Amount Useful Life (dollars in thousands) (in years) Developed technology $ 13,400 5 Customer relationships 13,100 7 Customer relationships - backlog 3,000 1.5 Trademarks 3,060 3 The initial accounting for Bronto accounts receivable, fixed assets, other customer related liabilities, vendor obligations and employee related liabilities is incomplete because the Company is in the process of determining the fair value of these assets and liabilities. The Company is also undertaking an analysis of certain tax matters associated with the Bronto acquisition which could result in an adjustment to the acquisition price allocation. In accordance with the Bronto acquisition agreement, in the third quarter of 2015, the Company granted $15.0 million in restricted stock units to certain former employees of Bronto that were hired by the Company, and will grant another $10.0 million in restricted stock units on the one year anniversary of the close date to certain employees of the Company that are working on the Bronto business. The restricted stock units vest over four years in accordance with the terms of the Company's equity compensation plan. The fair value of the equity grants will be recognized as stock-based compensation expense in the Company's statement of operations over the four-year vesting period. Bronto revenue included in the Company's condensed consolidated financial statements for nine and three months ended September 30, 2015 was $10.6 million and $8.9 million , respectively. Bronto's operations have been integrated into the Company's operations so it is impractical to determine Bronto's results of operations on a standalone basis. The financial information in the table below summarizes the combined results of operations of the Company and Bronto, on a pro forma basis, as though the companies had been combined as of January 1, 2014. The pro forma financial information for Bronto is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2014 or of results that may occur in the future. The pro forma results include adjustments primarily related to amortization of developed technology, customer relationships and trademarks. The pro forma results also include a one-time adjustment to exclude $3.1 million in Bronto transaction costs. Supplemental information on a pro forma basis, as if Bronto had been acquired on January 1, 2014, is presented as follows: Nine Months Ended September 30, 2015 2014 (dollars in thousands) Pro forma total revenue $ 554,010 $ 425,423 Pro forma net loss $ (99,378 ) $ (82,522 ) Pro forma loss per share - basic and diluted $ (1.26 ) $ (1.07 ) Venda On July 17, 2014, the Company completed the purchase of all the outstanding equity of Venda, a private company that provides Ecommerce solutions to its customers. On the closing date, the Company paid $25.7 million in cash and issued 304,364 unregistered shares of the Company's common stock with a fair value of $22.8 million inclusive of a discount from the quoted market price due to certain trading restrictions associated with the shares. Of the cash consideration paid, $10.1 million is being held in escrow for up to two years following the close of the transaction as protection against tax contingencies and losses the Company may incur in the event of certain breaches of representations and warranties covered in the purchase agreement. In the first quarter of 2015, the Company completed the valuation of intangible assets with definitive lives which resulted in $1.2 million being reallocated from goodwill to developed technology. Following this reallocation, the amount allocated to developed technology is $8.9 million . In the third quarter of 2015, the Company completed the initial accounting for Venda by making a $1.0 million working capital adjustment and other adjustments totaling $368,000 . Other Intangible Assets Gross carrying amount Accumulated amortization Net carrying amount September 30, 2015 (dollars in thousands) Developed technology $ 50,417 $ (19,756 ) $ 30,661 Trade name 8,702 (4,008 ) 4,694 Customer relationships 53,013 (21,900 ) 31,113 Total $ 112,132 $ (45,664 ) $ 66,468 December 31, 2014 (dollars in thousands) Developed technology $ 27,432 $ (15,073 ) $ 12,359 Trade name 5,305 (2,696 ) 2,609 Customer relationships 32,959 (15,622 ) 17,337 Non-competition agreements 962 (863 ) 99 Total $ 66,658 $ (34,254 ) $ 32,404 Goodwill The following table details the Company's goodwill activity during the nine months ended September 30, 2015 : (dollars in thousands) Balance as of January 1, 2015 $ 123,049 Acquisition of Bronto 156,385 Acquisition of Monexa 18,717 Other adjustments to goodwill (1,844 ) Foreign exchange adjustment (3,191 ) Balance as of September 30, 2015 $ 293,116 Accumulated Other Comprehensive Loss Accumulated other comprehensive loss is comprised of foreign currency translation gains and losses, net of tax, marketable securities unrealized gains and losses and an accumulated pension liability for employees located in the Philippines. There were no significant reclassification adjustments out of accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Hedging Activity [Abstract] | |
Fair Value Disclosures [Text Block] | Financial Instruments The Company invests primarily in money market funds, commercial paper, highly liquid debt instruments of the U.S. government and its agencies, U.S. municipal obligations, and U.S. and foreign corporate debt securities. All highly liquid investments with maturities of 90 days or less from date of purchase are classified as cash equivalents and all highly liquid investments with maturities of greater than 90 days but less than a year from date of purchase are classified as short-term marketable securities. Highly liquid investments with maturities of greater than a year from the balance sheet date are classified as marketable securities, non-current. Short-term marketable securities and marketable securities, non-current are also classified as available-for-sale. The Company intends to hold marketable securities, non-current, until maturity; however, it may sell these securities at any time for use in current operations or for other purposes, such as consideration for acquisition. Consequently, the Company may or may not hold securities with stated maturities greater than twelve months until maturity. The Company carries its fixed income investments at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive loss, a component of total equity. Realized gains or losses are included in other income / (expense), net section of the condensed consolidated statement of operations and comprehensive loss. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in the other income / (expense), net section of the consolidated statement of operations and comprehensive loss. Cash equivalents and Marketable securities consist of the following investments: September 30, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: (in thousands) Money market funds $ 15,883 $ — $ — $ 15,883 Commercial paper 8,473 1 — 8,474 Marketable securities: Commercial paper 36,419 11 — 36,430 Corporate notes and obligations 21,076 — (2 ) 21,074 U.S. agency bonds 7,410 — — 7,410 U.S. treasury securities 26,506 14 — 26,520 Total $ 115,767 $ 26 $ (2 ) $ 115,791 December 31, 2014 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: (in thousands) Money market funds $ 152,673 $ — $ — $ 152,673 Commercial paper 8,149 — — 8,149 Marketable securities: Commercial paper 70,737 8 — 70,745 Corporate notes and obligations 11,886 — (9 ) 11,877 U.S. treasury securities 9,147 — (4 ) 9,143 Total $ 252,592 $ 8 $ (13 ) $ 252,587 The Company does not believe any of the unrealized losses represent an other-than-temporary impairment based on its evaluation of available evidence as of September 30, 2015 . The Company expects to receive the full principal and interest on the following cash equivalents and marketable securities as of September 30, 2015 : Fair Value (in thousands) Due within one year $ 114,382 Due within two years 1,409 Total $ 115,791 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. Level 1 Measurements The Company's cash equivalents held in money market funds and available-for-sale United States Treasury securities are measured at fair value using level 1 inputs. Level 2 Measurements The Company's available-for-sale corporate debt securities, commercial paper and United States government agency securities are measured at fair value using level 2 inputs. The Company obtains the fair values of its level 2 available-for-sale securities from a professional pricing service. The Company’s foreign currency forward contracts are measured at fair value using 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. The fair value of these financial assets and liabilities was determined using the following inputs as of September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 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: Cash and cash equivalents Cash $ 257,198 $ — $ — $ 257,198 $ 206,947 $ — $ — $ 206,947 Money market funds 15,883 — — 15,883 152,673 — — 152,673 Commercial paper — 8,474 — 8,474 — 8,149 — 8,149 Marketable securities Commercial paper — 36,430 — 36,430 — 70,745 — 70,745 Corporate notes and obligations — 21,074 — 21,074 — 11,877 — 11,877 U.S. agency bonds — 7,410 — 7,410 — — — — U.S. treasury securities 26,520 — — 26,520 9,143 — — 9,143 Foreign exchange contracts — 554 — 554 — 1,231 — 1,231 Total $ 299,601 $ 73,942 $ — $ 373,543 $ 368,763 $ 92,002 $ — $ 460,765 Liabilities: Foreign exchange contracts $ — $ 49 $ — $ 49 $ — $ 1 $ — $ 1 Total $ — $ 49 $ — $ 49 $ — $ 1 $ — $ 1 Balance Sheet Hedging - Hedging of Foreign Currency Assets and Liabilities During the nine months ended September 30, 2015 , 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 condensed consolidated statements of operations. The notional amount of derivative instruments acquired during the period was $242.4 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, 2015 and December 31, 2014 , the Company had the following outstanding foreign exchange forward contracts: September 30, 2015 December 31, 2014 Notional Value Sold Notional Value Purchased Notional Value Sold Notional Value Purchased (US dollars in thousands) (US dollars in thousands) Australian dollar $ 13,705 $ 6,853 $ 16,004 $ 7,494 British pound 11,290 7,991 16,939 7,284 Philippines peso 9,440 9,440 7,540 5,020 Czech crown 6,060 6,080 6,510 4,710 Japan yen 4,105 — 3,355 — Canadian dollar 3,154 1,330 796 1,267 Euro 6,870 638 2,344 547 New Zealand dollar 677 414 258 — Mexican peso 398 — 268 110 Total $ 55,699 $ 32,746 $ 54,014 $ 26,432 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, 2015 December 31, 2014 Balance Sheet Location September 30, 2015 December 31, 2014 Derivatives and forward contracts Fair Value Fair Value Fair Value Fair Value (in thousands) (in thousands) Foreign exchange contracts Other current assets $ 554 $ 1,231 Other current liabilities $ 49 $ 1 Total $ 554 1,231 $ 49 $ 1 The effect of derivative instruments on the Company's Condensed Consolidated 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 2015 2014 2015 2014 (in thousands) Foreign exchange contracts Other income/ (expense), net $ 843 $ 446 $ 126 $ 1,099 Total $ 843 $ 446 $ 126 $ 1,099 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, 2015 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [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. In May 2015, the Company amended its headquarters lease in San Mateo, California to extend the term for existing office space and to expand the facilities to accommodate expected growth. The amended lease terms expires in May 2022. Over the amended lease term, the Company will make minimum lease payments totaling $27.0 million , net of any lessor lease incentives. In connection with acquisition of Bronto, the Company assumed lease agreements related to Bronto offices in North Carolina and the United Kingdom. The leases expire at various dates through 2023. Over the lease term, the Company will make minimum lease payments totaling $19.7 million . Also, during May 2015, the Company renewed its Manila, Philippines, office lease for three years. The renewal term expires in April 2018. Over the lease term, the Company will make minimum lease payments totaling $4.5 million . During the three months ended September 30, 2015 , the Company amended its lease in Denver, Colorado to expand the facilities to accommodate expected growth. The amended lease terms expires in October 2019. Over the amended lease term, the Company will make minimum lease payments totaling $ 5.0 million , net of any lessor lease incentives. Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of September 30, 2015 are as follows: Operating leases (dollars in thousands) Years ending: Remainder of 2015 $ 4,458 2016 23,486 2017 21,591 2018 20,558 2019 16,934 Thereafter 30,400 Future minimum lease payments $ 117,427 |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Stock-based Compensation [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock-based Compensation During the first quarter of 2015, the Company granted 91,929 performance shares (“PS”), with a fair value of $92.58 per share, to selected executives and other key employees. The PS vesting is contingent upon the Company meeting certain company-wide revenue performance goals (performance-based) in 2015 and 2017. The Company's Board of Directors ("BOD") set the performance metrics in the first quarter of 2015. These shares are subject to term vesting conditions. The PS fair value and the related stock-based compensation expense are determined based on the value of the underlying shares on the date of grant and are 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 are known at December 31, 2015 and 2017, respectively. The Company also awarded an equal number of PS for 2016 and 2017 for which the performance metrics have not yet been set by the Company's Board of Directors. As such, there is no accounting for these awards until the period the performance metrics are set. |
Debt (Notes)
Debt (Notes) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [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 ended 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, 2015 , 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 $3.7 million as of September 30, 2015 . The Notes consisted of the following as of September 30, 2015 : (in thousands) Equity component (1) $ 60,931 Liability component: Principal $ 310,000 Less: debt discount, net (35,167 ) Net carrying amount $ 274,833 Fair value - level 2 $ 313,565 (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, 2015 , the remaining life of the Notes is approximately 2.7 years . The following table sets forth total interest expense recognized related to the Notes: Nine Months Ended September 30, Three Months Ended September 30, 2015 2014 2015 2014 (dollars in thousands) Contractual interest expense $ 581 $ 581 $ 194 $ 194 Amortization of debt issuance costs 965 923 325 311 Amortization of debt discount 9,123 8,697 3,122 2,976 Total $ 10,669 $ 10,201 $ 3,641 $ 3,481 Effective interest rate 5.4% |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
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 three months ended June 30, 2015, the Company recorded approximately $8.0 million of additional net deferred tax liabilities related to the Bronto 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 three months ended June 30, 2015 of approximately $8.0 million . The Company recorded an additional reduction in income tax expense of approximately $350,000 related to a revision of estimates during the three months ended September 30, 2015. As of September 30, 2015, the Company had net deferred tax liabilities in foreign jurisdictions of approximately $33,000 . Based on available evidence, both positive and negative, the Company believes that it is more likely than not that the benefits of the foreign deferred tax assets will be realized in full with the exception of the Japanese deferred tax assets and the deferred tax asset related to the Canadian Scientific Research and Developmental "SR&ED" that exceeds the current utilization. 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. As of September 30, 2015, the Company has not provided for residual U.S. taxes on any of its income from foreign jurisdictions since it intends to indefinitely reinvest the net undistributed earnings of its foreign subsidiaries offshore. 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, 2008 through the current taxable year remain subject to examination by their respective tax authorities. |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 2014 2015 2014 (dollars and shares in thousands, except per share amounts) Numerator: Net loss $ (92,340 ) $ (74,692 ) $ (37,340 ) $ (29,295 ) Denominator: Weighted-average number of shares of common stock outstanding used in computing basic and diluted net loss per share of common stock 78,153 75,947 79,186 76,477 Net loss per share of common stock, basic and diluted $ (1.18 ) $ (0.98 ) $ (0.47 ) $ (0.38 ) 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, 2015 2014 2015 2014 (Shares in thousands) Options to purchase shares of common stock 2,200 2,087 2,126 2,206 Unvested RSUs, PSUs and PS awards 2,976 2,701 3,081 2,803 Total 5,176 4,788 5,207 5,009 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, 2015 , 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, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions The Company has entered into various software license agreements with Oracle USA, Inc., an affiliate of Oracle Corporation. Lawrence J. Ellison, who beneficially owns a significant portion of the Company’s common stock, is the Chief Technology Officer, a director and a principal stockholder of Oracle Corporation. 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 paid $2.4 million for the support services from February 28, 2013 to February 27, 2014. During the first quarters of 2014 and 2015, the Company renewed the support service agreement for $4.3 million per annum and may renew support services for the two subsequent annual periods at the same rate. 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 as of September 30, 2015 are as follows: (dollars in thousands) Years ending: Remainder of 2015 $ 780 2016 3,119 2017 3,119 Future debt payments 7,018 Amount representing interest 385 Present value of future debt payments $ 6,633 The following table details payments to Oracle USA and Oracle Credit Corporation for support services and license fees related to the following periods: Nine Months Ended September 30, Three Months Ended September 30, 2015 2014 2015 2014 (dollars in thousands) License fee $ 2,069 $ 2,379 $ 698 $ 667 Support 3,225 3,225 1,075 1,075 Interest 271 363 83 113 Total paid $ 5,565 $ 5,967 $ 1,856 $ 1,855 The Company has also entered into various other software license agreements with Oracle Corporation. During the nine months ended September 30, 2015 and 2014, the Company received payments totaling $143,000 and $232,000 , respectively, from Oracle Corporation for services it performed. Commencing in 2004, the Company entered into a verbal agreement with Oracle Racing, Inc. ("Oracle Racing"), a sailboat racing syndicate. Lawrence J. Ellison, is the primary source of funding for Oracle Racing. Under the terms of the agreement, the Company agreed to supply certain of its cloudbased application services to Oracle Racing in exchange for advertising. During the third quarter of 2015, the Company entered into a $ 875,000 sponsorship renewal agreement with Oracle Racing, Inc. The Company will recognized revenue related to this agreement based on the pricing for similar licenses to unaffiliated third parties. 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. As of September 30, 2015 , the Company's accounts receivable related to these customers totaled $393,000 . 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, 2015 2014 2015 2014 (dollars in thousands) Revenue earned from related party $ 2,111 $ 2,395 $ 656 $ 842 Fees NetSuite paid for services $ 618 $ 665 $ 497 $ 314 The Company's President and Chief Operating Officer, Jim McGeever, is a member of the Cornerstone on Demand board of directors. During the second quarter of 2015, the Company entered into a $185,000 consulting agreement for the Company to provide services to Cornerstone on Demand. During the third quarter of 2015 the Company entered into a $ 245,000 agreement for Cornerstone on Demand to provide services to the Company. The Company's President and Chief Operating Officer, Jim McGeever, is a member of the Twilio Inc. board of directors. During the second quarter of 2015, the Company entered into a $238,000 agreement for the Company to provide services to Twilio Inc. A member of the Company’s board of directors, Catherine Kinney, is a member of the MetLife board of directors. During the second quarter of 2015, the Company and MetLife renewed a $139,000 agreement for the Company to provide services to MetLife. A member of the Company’s board of directors, Kevin Thompson, is the President and Chief Executive Officer of SolarWinds. During the first quarter of 2015, the Company and SolarWinds renewed a $3.0 million multiple year agreement for the Company to provide services to SolarWinds. A member of the Company's board of directors, William Beane III, is the General Manager of the Oakland Athletics. During the first quarter of 2015, the Company entered into a $495,000 amendment to the agreement with the Oakland Athletics to purchase in-stadium sponsorship. A member of the Company's board of directors, Steven Gomo, is a member of the SanDisk board of directors. During the first quarter of 2015, the Company entered into a $209,000 agreement for the Company to provide services to SanDisk. The Company's Chief Financial Officer, Ronald Gill, is a member of the Hubspot board of directors. During the third quarter of 2015, the Company entered into a $ 207,000 agreement for the Company to provide services to Hubspot. Additional related party transactions entered into prior to December 31, 2014 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, 2014 filed on March 2, 2015. |
Basis of Presentation Significa
Basis of Presentation Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation [Abstract] | |
Marketable Securities, Available-for-sale Securities, Policy [Policy Text Block] | Financial Instruments The Company invests primarily in money market funds, commercial paper, highly liquid debt instruments of the U.S. government and its agencies, U.S. municipal obligations, and U.S. and foreign corporate debt securities. All highly liquid investments with maturities of 90 days or less from date of purchase are classified as cash equivalents and all highly liquid investments with maturities of greater than 90 days but less than a year from date of purchase are classified as short-term marketable securities. Highly liquid investments with maturities of greater than a year from the balance sheet date are classified as marketable securities, non-current. Short-term marketable securities and marketable securities, non-current are also classified as available-for-sale. The Company intends to hold marketable securities, non-current, until maturity; however, it may sell these securities at any time for use in current operations or for other purposes, such as consideration for acquisition. Consequently, the Company may or may not hold securities with stated maturities greater than twelve months until maturity. The Company carries its fixed income investments at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive loss, a component of total equity. Realized gains or losses are included in other income / (expense), net section of the condensed consolidated statement of operations and comprehensive loss. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in the other income / (expense), net section of the consolidated statement of operations and comprehensive loss. |
Principles of Consolidation [Policy Text Block] | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its 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 generally 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) | 9 Months Ended |
Sep. 30, 2015 | |
Business Acquisition [Line Items] | |
Schedule of Goodwill [Table Text Block] | The following table details the Company's goodwill activity during the nine months ended September 30, 2015 : (dollars in thousands) Balance as of January 1, 2015 $ 123,049 Acquisition of Bronto 156,385 Acquisition of Monexa 18,717 Other adjustments to goodwill (1,844 ) Foreign exchange adjustment (3,191 ) Balance as of September 30, 2015 $ 293,116 |
Business Acquisition, Pro Forma Information [Table Text Block] | Supplemental information on a pro forma basis, as if Bronto had been acquired on January 1, 2014, is presented as follows: Nine Months Ended September 30, 2015 2014 (dollars in thousands) Pro forma total revenue $ 554,010 $ 425,423 Pro forma net loss $ (99,378 ) $ (82,522 ) Pro forma loss per share - basic and diluted $ (1.26 ) $ (1.07 ) |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Gross carrying amount Accumulated amortization Net carrying amount September 30, 2015 (dollars in thousands) Developed technology $ 50,417 $ (19,756 ) $ 30,661 Trade name 8,702 (4,008 ) 4,694 Customer relationships 53,013 (21,900 ) 31,113 Total $ 112,132 $ (45,664 ) $ 66,468 December 31, 2014 (dollars in thousands) Developed technology $ 27,432 $ (15,073 ) $ 12,359 Trade name 5,305 (2,696 ) 2,609 Customer relationships 32,959 (15,622 ) 17,337 Non-competition agreements 962 (863 ) 99 Total $ 66,658 $ (34,254 ) $ 32,404 |
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, 2015 2014 2015 2014 (dollars in thousands) United States $ 398,311 $ 299,071 $ 143,673 $ 107,007 International 136,609 99,344 49,150 36,653 Total revenue $ 534,920 $ 398,415 $ 192,823 $ 143,660 Percentage of revenue generated outside of the United States 26 % 25 % 25 % 26 % No single country outside the United States represented more than 10% of revenue during the nine months ended September 30, 2015 or 2014 |
Monexa [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the preliminary allocation of the consideration to the fair value of assets acquired and liabilities assumed at the acquisition date: (dollars in thousands) Cash $ 594 Accounts receivable 301 Fixed assets 231 Developed technology 8,700 Customer relationships 4,200 Trademarks 400 Goodwill 18,717 Other assets / liabilities, net (23 ) Fair value of assets acquired and liabilities assumed $ 33,120 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The Company will amortize certain intangible assets on a straight-line basis over the following periods: Fair Value Amount Useful Life (dollars in thousands) (in years) Developed technology $ 8,700 5 Customer relationships 4,200 4 Trademarks 400 2 |
Bronto Business Combination [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the allocation of the consideration to the fair value of assets acquired and liabilities assumed at the acquisition date: (dollars in thousands) Cash $ 1,667 Accounts receivable 4,139 Fixed assets 4,009 Deferred tax assets 5,547 Developed technology 13,400 Customer relationships 13,100 Customer relationships - backlog 3,000 Trademarks 3,060 Goodwill 156,385 Deferred tax liabilities (13,792 ) Taxes payable (2,358 ) Other assets / liabilities, net (4,051 ) Fair value of assets acquired and liabilities assumed $ 184,106 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The Company will amortize certain intangible assets on a straight-line basis, except for customer relationship - backlog, which is amortized in proportion to the related revenue recognition, over the following periods: Fair Value Amount Useful Life (dollars in thousands) (in years) Developed technology $ 13,400 5 Customer relationships 13,100 7 Customer relationships - backlog 3,000 1.5 Trademarks 3,060 3 |
Basis of Presentation Goodwill
Basis of Presentation Goodwill Rollforward Table (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill [Line Items] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Gross carrying amount Accumulated amortization Net carrying amount September 30, 2015 (dollars in thousands) Developed technology $ 50,417 $ (19,756 ) $ 30,661 Trade name 8,702 (4,008 ) 4,694 Customer relationships 53,013 (21,900 ) 31,113 Total $ 112,132 $ (45,664 ) $ 66,468 December 31, 2014 (dollars in thousands) Developed technology $ 27,432 $ (15,073 ) $ 12,359 Trade name 5,305 (2,696 ) 2,609 Customer relationships 32,959 (15,622 ) 17,337 Non-competition agreements 962 (863 ) 99 Total $ 66,658 $ (34,254 ) $ 32,404 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Hedging Activity [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The fair value of these financial assets and liabilities was determined using the following inputs as of September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 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: Cash and cash equivalents Cash $ 257,198 $ — $ — $ 257,198 $ 206,947 $ — $ — $ 206,947 Money market funds 15,883 — — 15,883 152,673 — — 152,673 Commercial paper — 8,474 — 8,474 — 8,149 — 8,149 Marketable securities Commercial paper — 36,430 — 36,430 — 70,745 — 70,745 Corporate notes and obligations — 21,074 — 21,074 — 11,877 — 11,877 U.S. agency bonds — 7,410 — 7,410 — — — — U.S. treasury securities 26,520 — — 26,520 9,143 — — 9,143 Foreign exchange contracts — 554 — 554 — 1,231 — 1,231 Total $ 299,601 $ 73,942 $ — $ 373,543 $ 368,763 $ 92,002 $ — $ 460,765 Liabilities: Foreign exchange contracts $ — $ 49 $ — $ 49 $ — $ 1 $ — $ 1 Total $ — $ 49 $ — $ 49 $ — $ 1 $ — $ 1 |
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | dged. As of September 30, 2015 and December 31, 2014 , the Company had the following outstanding foreign exchange forward cont |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | racts: September 30, 2015 December 31, 2014 Notional Value Sold Notional Value Purchased Notional Value Sold Notional Value Purchased (US dollars in thousands) (US dollars in thousands) Australian dollar $ 13,705 $ 6,853 $ 16,004 $ 7,494 British pound 11,290 7,991 16,939 7,284 Philippines peso 9,440 9,440 7,540 5,020 Czech crown 6,060 6,080 6,510 4,710 Japan yen 4,105 — 3,355 — Canadian dollar 3,154 1,330 796 1,267 Euro 6,870 638 2,344 547 New Zealand dollar 677 414 258 — Mexican peso 398 — 268 110 Total $ 55,699 $ 32,746 $ 54,014 $ 26,432 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, 2015 December 31, 2014 Balance Sheet Location September 30, 2015 December 31, 2014 Derivatives and forward contracts Fair Value Fair Value Fair Value Fair Value (in thousands) (in thousands) Foreign exchange contracts Other current assets $ 554 $ 1,231 Other current liabilities $ 49 $ 1 Total $ 554 1,231 $ 49 $ 1 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block] | Asset Derivatives Liability Derivatives Balance Sheet Location September 30, 2015 December 31, 2014 Balance Sheet Location September 30, 2015 December 31, 2014 Derivatives and forward contracts Fair Value Fair Value Fair Value Fair Value (in thousands) (in thousands) Foreign exchange contracts Other current assets $ 554 $ 1,231 Other current liabilities $ 49 $ 1 Total $ 554 1,231 $ 49 $ 1 The effect of derivative instruments on the Company's Condensed Consolidated Statement of Operations and Comprehensive Loss was as follows for the periods pres |
Financial Instruments Marketabl
Financial Instruments Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] | Marketable securities consist of the following investments: September 30, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: (in thousands) Money market funds $ 15,883 $ — $ — $ 15,883 Commercial paper 8,473 1 — 8,474 Marketable securities: Commercial paper 36,419 11 — 36,430 Corporate notes and obligations 21,076 — (2 ) 21,074 U.S. agency bonds 7,410 — — 7,410 U.S. treasury securities 26,506 14 — 26,520 Total $ 115,767 $ 26 $ (2 ) $ 115,791 December 31, 2014 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: (in thousands) Money market funds $ 152,673 $ — $ — $ 152,673 Commercial paper 8,149 — — 8,149 Marketable securities: Commercial paper 70,737 8 — 70,745 Corporate notes and obligations 11,886 — (9 ) 11,877 U.S. treasury securities 9,147 — (4 ) 9,143 Total $ 252,592 $ 8 $ (13 ) $ 252,587 |
Investments Classified by Contractual Maturity Date [Table Text Block] | Fair Value (in thousands) Due within one year $ 114,382 Due within two years 1,409 Total $ 115,791 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of September 30, 2015 are as follows: Operating leases (dollars in thousands) Years ending: Remainder of 2015 $ 4,458 2016 23,486 2017 21,591 2018 20,558 2019 16,934 Thereafter 30,400 Future minimum lease payments $ 117,427 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | The following table sets forth total interest expense recognized related to the Notes: Nine Months Ended September 30, Three Months Ended September 30, 2015 2014 2015 2014 (dollars in thousands) Contractual interest expense $ 581 $ 581 $ 194 $ 194 Amortization of debt issuance costs 965 923 325 311 Amortization of debt discount 9,123 8,697 3,122 2,976 Total $ 10,669 $ 10,201 $ 3,641 $ 3,481 Effective interest rate 5.4% |
Schedule of Debt [Table Text Block] | The Notes consisted of the following as of September 30, 2015 : (in thousands) Equity component (1) $ 60,931 Liability component: Principal $ 310,000 Less: debt discount, net (35,167 ) Net carrying amount $ 274,833 Fair value - level 2 $ 313,565 Future debt payments under notes payable as of September 30, 2015 are as follows: (dollars in thousands) Years ending: Remainder of 2015 $ 780 2016 3,119 2017 3,119 Future debt payments 7,018 Amount representing interest 385 Present value of future debt payments $ 6,633 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 2014 2015 2014 (dollars and shares in thousands, except per share amounts) Numerator: Net loss $ (92,340 ) $ (74,692 ) $ (37,340 ) $ (29,295 ) Denominator: Weighted-average number of shares of common stock outstanding used in computing basic and diluted net loss per share of common stock 78,153 75,947 79,186 76,477 Net loss per share of common stock, basic and diluted $ (1.18 ) $ (0.98 ) $ (0.47 ) $ (0.38 ) 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, 2015 2014 2015 2014 (Shares in thousands) Options to purchase shares of common stock 2,200 2,087 2,126 2,206 Unvested RSUs, PSUs and PS awards 2,976 2,701 3,081 2,803 Total 5,176 4,788 5,207 5,009 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, 2015 , 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, 2015 | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions [Table Text Block] | Nine Months Ended September 30, Three Months Ended September 30, 2015 2014 2015 2014 (dollars in thousands) License fee $ 2,069 $ 2,379 $ 698 $ 667 Support 3,225 3,225 1,075 1,075 Interest 271 363 83 113 Total paid $ 5,565 $ 5,967 $ 1,856 $ 1,855 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, 2015 2014 2015 2014 (dollars in thousands) Revenue earned from related party $ 2,111 $ 2,395 $ 656 $ 842 Fees NetSuite paid for services $ 618 $ 665 $ 497 $ 314 |
Schedule of Debt [Table Text Block] | The Notes consisted of the following as of September 30, 2015 : (in thousands) Equity component (1) $ 60,931 Liability component: Principal $ 310,000 Less: debt discount, net (35,167 ) Net carrying amount $ 274,833 Fair value - level 2 $ 313,565 Future debt payments under notes payable as of September 30, 2015 are as follows: (dollars in thousands) Years ending: Remainder of 2015 $ 780 2016 3,119 2017 3,119 Future debt payments 7,018 Amount representing interest 385 Present value of future debt payments $ 6,633 |
Basis of Presentation Revenue b
Basis of Presentation Revenue by Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue by Region [Line Items] | ||||
Revenues | $ 192,823 | $ 143,660 | $ 534,920 | $ 398,415 |
International Revenue as a Percentage of Total Revenue | 25.00% | 26.00% | 26.00% | 25.00% |
United States | ||||
Revenue by Region [Line Items] | ||||
Revenues | $ 143,673 | $ 107,007 | $ 398,311 | $ 299,071 |
International | ||||
Revenue by Region [Line Items] | ||||
Revenues | $ 49,150 | $ 36,653 | $ 136,609 | $ 99,344 |
Basis of Presentation Qualified
Basis of Presentation Qualified Operating Expense Reimbursements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basis of Presentation [Abstract] | ||||
Government subsidy - expense reimbursement | $ 355,000 | $ 569,000 | $ 1,200,000 | |
Payments received from Czech Republic government | $ 654,000 | $ 589,000 | $ 1,200,000 | $ 1,900,000 |
Basis of Presentation Business
Basis of Presentation Business Combination (Details) - USD ($) | Jun. 08, 2015 | Jul. 31, 2014 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Aug. 05, 2015 | Dec. 31, 2014 | Jul. 17, 2014 |
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Payments received from Czech Republic government | $ 654,000 | $ 589,000 | $ 1,200,000 | $ 1,900,000 | |||||||
Goodwill | 293,116,000 | 293,116,000 | $ 123,049,000 | ||||||||
Goodwill, Translation Adjustments | (3,191,000) | ||||||||||
Goodwill, Other Changes | (1,844,000) | ||||||||||
Monexa [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Cash | $ 594,000 | ||||||||||
Accounts Receivable | 301,000 | ||||||||||
Fixed assets | 231,000 | ||||||||||
Goodwill | 18,717,000 | ||||||||||
Other assets / liabilities | (23,000) | ||||||||||
Total purchase price | 33,120,000 | ||||||||||
Cash payment to former owners | 33,100,000 | ||||||||||
Consideration held in escrow | 5,700,000 | ||||||||||
Business transaction costs | 2,000,000 | ||||||||||
Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Cash | $ 1,667,000 | ||||||||||
Accounts Receivable | 4,139,000 | ||||||||||
Deferred tax assets | 5,547,000 | ||||||||||
Goodwill | 156,385,000 | ||||||||||
Deferred tax liabilities, net | (13,792,000) | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Taxes payable | (2,358,000) | ||||||||||
Other assets / liabilities | (4,051,000) | ||||||||||
Total purchase price | 184,106,000 | ||||||||||
Cash payment to former owners | $ 98,200,000 | ||||||||||
Unregistered company shares issued as consideration | 1,030,508 | ||||||||||
Unregistered Company shares issued as consideration fair value | $ 85,900,000 | ||||||||||
Consideration held in escrow | 39,600,000 | ||||||||||
Business combination consideration withheld for tax matters | $ 3,900,000 | ||||||||||
Business transaction costs | $ 4,700,000 | ||||||||||
Venda Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Cash payment to former owners | $ 25,700,000 | ||||||||||
Unregistered company shares issued as consideration | 304,364 | ||||||||||
Unregistered Company shares issued as consideration fair value | $ 22,800,000 | ||||||||||
Consideration held in escrow | $ 10,100,000 | ||||||||||
Goodwill, Other Changes | $ 1,000,000 | $ (1,200,000) | $ 368,000 | ||||||||
Developed Technology Rights [Member] | Monexa [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible asset, useful life | 5 years | ||||||||||
Intangible assets | 8,700,000 | ||||||||||
Developed Technology Rights [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible asset, useful life | 5 years | ||||||||||
Intangible assets | $ 13,400,000 | ||||||||||
Developed Technology Rights [Member] | Venda Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible assets | $ 8,900,000 | ||||||||||
Customer Relationships [Member] | Monexa [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible asset, useful life | 4 years | ||||||||||
Intangible assets | 4,200,000 | ||||||||||
Customer Relationships [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible asset, useful life | 7 years | ||||||||||
Intangible assets | $ 13,100,000 | ||||||||||
Customer Relationships, Backlog [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible asset, useful life | 1 year 6 months | ||||||||||
Intangible assets | $ 3,000,000 | ||||||||||
Trademarks [Member] | Monexa [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible asset, useful life | 2 years | ||||||||||
Intangible assets | $ 400,000 | ||||||||||
Trademarks [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Intangible asset, useful life | 3 years | ||||||||||
Intangible assets | $ 3,060,000 | ||||||||||
Property, Plant and Equipment [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Fixed assets | $ 4,009,000 | ||||||||||
Restricted Stock Units (RSUs) [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Award vesting period | 4 years | ||||||||||
Restricted Stock Units (RSUs) [Member] | Third Quarter of 2015 [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Stock granted | $ 15,000,000 | ||||||||||
Restricted Stock Units (RSUs) [Member] | One Year from Acquisition Date [Member] | Bronto Business Combination [Member] | |||||||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||||||
Stock granted | $ 10,000,000 |
Basis of Presentation Intangibl
Basis of Presentation Intangible Assets with Definitive Lives (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015 | Aug. 05, 2015 | Dec. 31, 2014 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Accumulated Amortization | $ (45,664) | $ (34,254) | |
Finite-Lived Intangible Assets, Net | 66,468 | 32,404 | |
Finite-Lived Intangible Assets, Gross | 112,132 | 66,658 | |
Developed Technology Rights [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Other Finite-Lived Intangible Assets, Gross | 50,417 | 27,432 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (19,756) | (15,073) | |
Finite-Lived Intangible Assets, Net | 30,661 | 12,359 | |
Customer Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Accumulated Amortization | (21,900) | (15,622) | |
Finite-Lived Intangible Assets, Net | 31,113 | 17,337 | |
Finite-Lived Customer Relationships, Gross | 53,013 | 32,959 | |
Trade Names [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Accumulated Amortization | (4,008) | (2,696) | |
Finite-Lived Intangible Assets, Net | 4,694 | 2,609 | |
Finite-Lived Trade Names, Gross | $ 8,702 | 5,305 | |
Noncompete Agreements [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Accumulated Amortization | (863) | ||
Finite-Lived Intangible Assets, Net | 99 | ||
Finite-Lived Customer Relationships, Gross | $ 962 | ||
Monexa [Member] | Developed Technology Rights [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 8,700 | ||
Intangible asset, useful life | 5 years | ||
Monexa [Member] | Customer Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 4,200 | ||
Intangible asset, useful life | 4 years | ||
Monexa [Member] | Trademarks [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 400 | ||
Intangible asset, useful life | 2 years |
Basis of Presentation Pro Forma
Basis of Presentation Pro Forma Data (Details) - Bronto Business Combination [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Revenue since acquisition date | $ 8,900 | $ 10,600 | ||
Pro forma total revenue | 554,010 | $ 425,423 | ||
Pro forma net loss | $ (99,378) | $ (82,522) | ||
Pro forma loss per share - basic and diluted | $ (1.26) | $ (1.07) | ||
Acquisition-related Costs [Member] | ||||
Business Acquisition [Line Items] | ||||
Transaction Costs | $ 3,100 |
Basis of Presentation Goodwil29
Basis of Presentation Goodwill Rollforward (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | |
Goodwill [Roll Forward] | ||||
Balance as of January 1, 2015 | $ 123,049,000 | $ 123,049,000 | ||
Goodwill, Other Changes | (1,844,000) | |||
Foreign exchange adjustment | (3,191,000) | |||
Balance as of September 30, 2015 | $ 293,116,000 | 293,116,000 | ||
Venda Business Combination [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Other Changes | 1,000,000 | $ (1,200,000) | $ 368,000 | |
Bronto Business Combination [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Acquired During Period | $ 156,385,000 | |||
Monexa [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Acquired During Period | $ 18,717,000 |
Financial Instruments Marketa30
Financial Instruments Marketable Securities Available for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Due within one year | $ 114,382 | |
Available-for-sale Securities, Debt Maturities, Rolling Year Two Through Five, Fair Value | 1,409 | |
Available-for-sale Securities, Debt Maturities, Single Maturity Date | 115,791 | |
Commercial Paper - Marketable Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 36,419 | $ 70,737 |
Unrealized gains | 11 | 8 |
Unrealized losses | 0 | 0 |
Fair Value | 36,430 | 70,745 |
Corporate notes and obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 21,076 | 11,886 |
Unrealized gains | 0 | 0 |
Unrealized losses | (2) | (9) |
Fair Value | 21,074 | 11,877 |
U.S. agency bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 7,410 | |
Unrealized gains | 0 | |
Unrealized losses | 0 | |
Fair Value | 7,410 | |
U.S. treasury securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 26,506 | 9,147 |
Unrealized gains | 14 | 0 |
Unrealized losses | 0 | (4) |
Fair Value | 26,520 | 9,143 |
Major Types of Debt Securities [Domain] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 115,767 | 252,592 |
Unrealized gains | 26 | 8 |
Unrealized losses | (2) | (13) |
Fair Value | 115,791 | 252,587 |
Commercial paper - cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 8,473 | 8,149 |
Unrealized gains | 1 | 0 |
Unrealized losses | 0 | 0 |
Fair Value | 8,474 | 8,149 |
Money market funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 15,883 | 152,673 |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | 0 |
Fair Value | $ 15,883 | $ 152,673 |
Financial Instruments Fair valu
Financial Instruments Fair value measures (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contract, other current assets | $ 554 | $ 1,231 |
Assets, Fair Value Disclosure | 373,543 | 460,765 |
Foreign exchange contracts, other liabilities | 49 | 1 |
Liabilities, Fair Value Disclosure | 49 | 1 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contract, other current assets | 0 | 0 |
Assets, Fair Value Disclosure | 299,601 | 368,763 |
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] | ||
Foreign exchange contract, other current assets | 554 | 1,231 |
Assets, Fair Value Disclosure | 73,942 | 92,002 |
Foreign exchange contracts, other liabilities | 49 | 1 |
Liabilities, Fair Value Disclosure | 49 | 1 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
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 |
Convertible Debt [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Fair Value | 313,565 | |
Cash [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 257,198 | 206,947 |
Cash [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 257,198 | 206,947 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 15,883 | 152,673 |
Money market funds | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 15,883 | 152,673 |
Commercial paper - cash equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 8,474 | 8,149 |
Commercial paper - cash equivalents | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial paper - cash equivalents | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 8,474 | 8,149 |
Commercial paper - cash equivalents | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial Paper - Marketable Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 36,430 | 70,745 |
Commercial Paper - Marketable Securities | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 0 | 0 |
Commercial Paper - Marketable Securities | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 36,430 | 70,745 |
Commercial Paper - Marketable Securities | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 0 | 0 |
Corporate notes and obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 21,074 | 11,877 |
Corporate notes and obligations | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 0 | 0 |
Corporate notes and obligations | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 21,074 | 11,877 |
Corporate notes and obligations | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 0 | 0 |
U.S. agency bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 7,410 | 0 |
U.S. agency bonds | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 0 | 0 |
U.S. agency bonds | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 7,410 | 0 |
U.S. agency bonds | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 0 | 0 |
U.S. treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 26,520 | 9,143 |
U.S. treasury securities | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 26,520 | 9,143 |
U.S. treasury securities | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 0 | 0 |
U.S. treasury securities | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | $ 0 | $ 0 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Derivative [Line Items] | |||||
Notional amount of derivative activity | $ 242,400 | $ 242,400 | |||
Foreign exchange contract, other current assets | 554 | 554 | $ 1,231 | ||
Foreign exchange contracts, other liabilities | 49 | 49 | 1 | ||
Foreign exchange contracts - other income/(expense), net | 126 | $ 1,099 | 843 | $ 446 | |
Other current assets [Member] | Total [Member] | |||||
Derivative [Line Items] | |||||
Total foreign exchange contracts - other current assets | 554 | 554 | 1,231 | ||
Other current liabilities [Member] | Total [Member] | |||||
Derivative [Line Items] | |||||
Total foreign exchange contracts - other current liabilities | 49 | 49 | 1 | ||
Foreign Exchange Future [Member] | Total [Member] | |||||
Derivative [Line Items] | |||||
Foreign exchange contracts - other income/(expense), net | $ 126 | $ 1,099 | 843 | $ 446 | |
Sales [Member] | Foreign Exchange Contract [Member] | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 55,699 | 54,014 | |||
Sales [Member] | Foreign Exchange Contract [Member] | Australian dollar | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 13,705 | 16,004 | |||
Sales [Member] | Foreign Exchange Contract [Member] | British pound | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 11,290 | 16,939 | |||
Sales [Member] | Foreign Exchange Contract [Member] | Philippines, Pesos | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 9,440 | 7,540 | |||
Sales [Member] | Foreign Exchange Contract [Member] | Czech crown | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 6,060 | 6,510 | |||
Sales [Member] | Foreign Exchange Contract [Member] | Japan yen | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 4,105 | 3,355 | |||
Sales [Member] | Foreign Exchange Contract [Member] | Canada dollar | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 3,154 | 796 | |||
Sales [Member] | Foreign Exchange Contract [Member] | Euro | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 6,870 | 2,344 | |||
Sales [Member] | Foreign Exchange Contract [Member] | New Zealand, Dollars | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 677 | 258 | |||
Sales [Member] | Foreign Exchange Contract [Member] | Mexico pesos | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 398 | 268 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 32,746 | 26,432 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | Australian dollar | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 6,853 | 7,494 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | British pound | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 7,991 | 7,284 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | Philippines, Pesos | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 9,440 | 5,020 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | Czech crown | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 6,080 | 4,710 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | Japan yen | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 0 | 0 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | Canada dollar | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 1,330 | 1,267 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | Euro | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 638 | 547 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | New Zealand, Dollars | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | 414 | 0 | |||
Purchase [Member] | Foreign Exchange Contract [Member] | Mexico pesos | |||||
Derivative [Line Items] | |||||
Notional amount of derivative activity | $ 0 | $ 110 |
Commitments and Contingencies33
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Jun. 08, 2015 |
Operating Leased Assets [Line Items] | |||
Remainder of 2015 | $ 4,458 | ||
2,015 | 23,486 | ||
2,016 | 21,591 | ||
2,017 | 20,558 | ||
2,018 | 16,934 | ||
Thereafter | 30,400 | ||
Future minimum lease payments | 117,427 | ||
Manila, Philippines Office [Member] | |||
Operating Leased Assets [Line Items] | |||
Future minimum lease payments | $ 4,500 | ||
2955 Campus Drive, San Mateo, CA Headquarters [Member] | |||
Operating Leased Assets [Line Items] | |||
Future minimum lease payments | $ 27,000 | ||
Bronto Business Combination [Member] | |||
Operating Leased Assets [Line Items] | |||
Future minimum lease payments | $ 19,700 | ||
Manila, Philippines Office [Member] | |||
Operating Leased Assets [Line Items] | |||
Future minimum lease payments | $ 5,000 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) | 3 Months Ended |
Mar. 31, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
performance share fair value | $ 92.58 |
2015 Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
2014 performance shares | shares | 91,929 |
Debt (Details)
Debt (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 01, 2013 | May. 29, 2013 | |
Debt Instrument [Line Items] | |||||||
Notes remaining useful life | 2 years 8 months | ||||||
Effective interest rate | 5.40% | 5.40% | |||||
Convertible Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
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 | 3,700,000 | |||||
Convertible notes equity component | 60,931,000 | 60,931,000 | |||||
Convertible debt issuance cost at note issuance date | $ 6,700,000 | ||||||
Debt discount | (35,167,000) | (35,167,000) | |||||
Convertible debt | (274,833,000) | (274,833,000) | |||||
Contractual interest expense | 194,000 | $ 194,000 | 581,000 | $ 581,000 | |||
Amortization of debt issuance costs | 325,000 | 311,000 | 965,000 | 923,000 | |||
Amortization of debt discount | 3,122,000 | 2,976,000 | 9,123,000 | 8,697,000 | |||
Interest Expense, Debt | 3,641,000 | $ 3,481,000 | 10,669,000 | $ 10,201,000 | |||
Fair Value, Inputs, Level 2 [Member] | Convertible Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Fair value - level 2 | 313,565,000 | 313,565,000 | |||||
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 | |
Sep. 30, 2015 | Jun. 30, 2015 | |
Deferred Tax Liabilities, Gross | $ 8,000,000 | |
Provision for / (benefit from) income taxes | $ 350,000 | $ 8,000,000 |
Foreign Country [Member] | ||
Net deferred tax assets | $ 33,000 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings per share, basic and diluted, [Line Items] | ||||
Net loss | $ (37,340) | $ (29,295) | $ (92,340) | $ (74,692) |
Weighted average number of shares used in computing net loss per common share | 79,186 | 76,477 | 78,153 | 75,947 |
Net loss per common share, basic and diluted | $ (0.47) | $ (0.38) | $ (1.18) | $ (0.98) |
Antidilutive shares:[Abstract] | ||||
Antidilutive securities excluded from computation of loss per share | 5,207 | 5,009 | 5,176 | 4,788 |
Stock Options [Member] | ||||
Antidilutive shares:[Abstract] | ||||
Antidilutive securities excluded from computation of loss per share | 2,126 | 2,206 | 2,200 | 2,087 |
Restricted Stock [Member] | ||||
Antidilutive shares:[Abstract] | ||||
Antidilutive securities excluded from computation of loss per share | 3,081 | 2,803 | 2,976 | 2,701 |
Related Party Transactions Rela
Related Party Transactions Related Party Debt Table (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Feb. 27, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 01, 2013 | |
Debt Instrument [Line Items] | |||||||||
Effective interest rate | 5.40% | 5.40% | |||||||
Principal Owner [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Oracle license fee due on amendment date | $ 13,100,000 | ||||||||
Oracle support contract | $ 2,400,000 | ||||||||
Annual support contract cost | $ 4,300,000 | ||||||||
Oracle note annual interest rate | 2.00% | ||||||||
Effective interest rate | 4.50% | ||||||||
Oracle license asset addition to property and equipment | $ 12,400,000 | ||||||||
2,015 | $ 780,000 | $ 780,000 | |||||||
2,016 | 3,119,000 | 3,119,000 | |||||||
2,017 | 3,119,000 | 3,119,000 | |||||||
Future debt payments | 7,018,000 | 7,018,000 | |||||||
Amount representing interest | 385,000 | 385,000 | |||||||
Present value of future debt payments | 6,633,000 | 6,633,000 | |||||||
License fee | 698,000 | $ 667,000 | 2,069,000 | $ 2,379,000 | |||||
Support sevices | 1,075,000 | 1,075,000 | 3,225,000 | 3,225,000 | |||||
Interest paid to Oracle | 83,000 | 113,000 | 271,000 | 363,000 | |||||
Total paid | 1,856,000 | $ 1,855,000 | $ 5,565,000 | $ 5,967,000 | |||||
Services Agreement [Member] | Cornerstone on Demand [Member] | Affiliated Entity [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Related Party Transaction, Agreement, Amount Of Agreement | $ 245,000 | $ 185,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 01, 2013 | |
Principal Owner [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Oracle license fee due on amendment date | $ 13,100,000 | |||||||
Interest paid to Oracle | $ 83,000 | $ 113,000 | $ 271,000 | $ 363,000 | ||||
Fees paid to suppliers | 1,856,000 | 1,855,000 | 5,565,000 | 5,967,000 | ||||
Related Party Company Other Than Oracle [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Accounts Receivable, Related Parties, Current | 393,000 | 393,000 | ||||||
Revenue from Related Parties | 656,000 | 842,000 | 2,111,000 | 2,395,000 | ||||
Fees paid to suppliers | 497,000 | $ 314,000 | $ 618,000 | $ 665,000 | ||||
RightNow Technology (Oracle) [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payments received from customers for services performed | $ 143,000 | $ 232,000 | ||||||
Services Agreement [Member] | RightNow Technology (Oracle) [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | 875,000 | |||||||
Services Agreement [Member] | Cornerstone on Demand [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | 245,000 | 185,000 | ||||||
Services Agreement [Member] | Twilio [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | 238,000 | |||||||
Services Agreement [Member] | Metlife [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | $ 139,000 | |||||||
Services Agreement [Member] | SolarWinds [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | $ 3,000,000 | |||||||
Services Agreement [Member] | SanDisk [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | 209,000 | |||||||
Amendment To In-Stadium Sponsorship [Member] | Oakland Athletics [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | $ 495,000 | |||||||
Amendment To In-Stadium Sponsorship [Member] | Hubstop [Member] | Affiliated Entity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Agreement, Amount Of Agreement | $ 207,000 |