Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 02, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ELLIE MAE INC | |
Entity Central Index Key | 1,122,388 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,346,729 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 117,342 | $ 137,698 |
Short-term investments | 113,931 | 103,345 |
Accounts receivable, net | 45,123 | 43,121 |
Prepaid expenses and other current assets | 31,864 | 18,474 |
Total current assets | 308,260 | 302,638 |
Property and equipment, net | 198,907 | 186,991 |
Long-term investments | 83,627 | 107,363 |
Intangible assets, net | 74,568 | 80,874 |
Deposits and other assets | 30,602 | 9,290 |
Goodwill | 144,279 | 144,451 |
Total assets | 840,243 | 831,607 |
Current liabilities: | ||
Accounts payable | 20,924 | 24,913 |
Accrued and other current liabilities | 24,338 | 26,188 |
Deferred revenues | 17,975 | 26,287 |
Total current liabilities | 63,237 | 77,388 |
Other long-term liabilities | 19,727 | 18,880 |
Total liabilities | 82,964 | 96,268 |
Stockholders' equity: | ||
Common stock | 3 | 3 |
Additional paid-in capital | 659,114 | 649,817 |
Accumulated other comprehensive loss | (1,417) | (880) |
Retained earnings | 99,579 | 86,399 |
Total stockholders' equity | 757,279 | 735,339 |
Total liabilities and stockholders' equity | $ 840,243 | $ 831,607 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Revenues | $ 117,912 | $ 93,002 |
Cost of revenues | 49,347 | 34,768 |
Gross profit | 68,565 | 58,234 |
Operating expenses: | ||
Sales and marketing | 23,064 | 19,380 |
Research and development | 22,489 | 17,407 |
General and administrative | 26,314 | 16,942 |
Total operating expenses | 71,867 | 53,729 |
Income (loss) from operations | (3,302) | 4,505 |
Other income, net | 848 | 501 |
Income (loss) before income taxes | (2,454) | 5,006 |
Income tax benefit | (4,658) | (4,593) |
Net income | $ 2,204 | $ 9,599 |
Net income per share of common stock: | ||
Basic (in usd per share) | $ 0.06 | $ 0.28 |
Diluted (in usd per share) | $ 0.06 | $ 0.27 |
Weighted average common shares used in computing net income per share of common stock: | ||
Basic (shares) | 34,143,000 | 33,702,000 |
Diluted (shares) | 35,602,000 | 35,609,000 |
Other comprehensive income, net of taxes: | ||
Net income | $ 2,204 | $ 9,599 |
Unrealized gain (loss) on investments | (537) | 58 |
Comprehensive income | $ 1,667 | $ 9,657 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,204 | $ 9,599 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 11,366 | 7,339 |
Amortization of acquisition-related intangibles | 6,306 | 1,078 |
Stock-based compensation expense | 9,532 | 7,851 |
Deferred income taxes | (4,658) | (4,647) |
Amortization (accretion) of investments | 181 | (164) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,002) | (511) |
Prepaid expenses and other current assets | (5,203) | (973) |
Deposits and other assets | (4,331) | (89) |
Accounts payable | 121 | 1,860 |
Accrued, other current and other long-term liabilities | (2,928) | (19,442) |
Deferred revenues | (4,187) | (3,323) |
Net cash provided by (used in) operating activities | 6,401 | (1,422) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (8,544) | (11,327) |
Acquisition of internal-use software | (17,153) | (11,439) |
Purchases of investments | (23,599) | (38,907) |
Maturities of investments | 36,031 | 13,851 |
Other investing activities, net | 172 | 0 |
Net cash used in investing activities | (13,093) | (47,822) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of capital lease obligations | (30) | (111) |
Proceeds from issuance of common stock under employee stock plans | 7,829 | 7,283 |
Payment of issuance costs relating to common stock issued in public offering | 0 | (15) |
Payments for repurchase of common stock | (14,740) | 0 |
Tax payments related to shares withheld for vested restricted stock units | (6,723) | (3,894) |
Net cash provided by (used in) financing activities | (13,664) | 3,263 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (20,356) | (45,981) |
CASH AND CASH EQUIVALENTS, Beginning of period | 137,698 | 380,907 |
CASH AND CASH EQUIVALENTS, End of period | $ 117,342 | $ 334,926 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Ellie Mae, Inc. (“Ellie Mae,” and the “Company”) is the leading cloud-based platform provider for the mortgage finance industry. The Company’s technology solutions enable lenders to originate and close residential mortgage loans. Banks, credit unions and mortgage lenders use the Company’s Encompass® all-in-one mortgage management solution (“Encompass”) to originate and fund mortgages and improve compliance, loan quality and efficiency. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“ U.S. GAAP ”) and applicable rules and regulations of the Securities and Exchange Commission (“ SEC ”) regarding interim financial reporting. Certain information and note disclosures included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , which was filed with the SEC on March 1, 2018 (“ 2017 Form 10-K ”). The condensed consolidated balance sheet as of December 31, 2017 , included herein, was derived from the audited financial statements as of that date but does not include all disclosures, including notes, required by U.S. GAAP . In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year ending December 31, 2018 or any future period. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates estimates on a regular basis including those relating to revenue recognition, allowance for doubtful accounts, goodwill, intangible assets, valuation of deferred income taxes, stock-based compensation, and unrecognized tax benefits, among others. Actual results could differ from those estimates, and such differences may have a material impact on the Company’s condensed consolidated financial statements and footnotes. Segment Information The Company operates in one industry—mortgage-related software and services. The Company’s chief operating decision maker is its chief executive officer, who makes decisions about resource allocation and reviews financial information presented on a consolidated basis. Accordingly, the Company has determined that it has a single reporting segment and operating unit structure, specifically technology-enabled solutions to help streamline and automate the residential mortgage origination process in the United States. Significant Accounting Policies Except for the accounting policies described below that were updated as a result of adopting Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) , as amended (“Topic 606” ), there have been no significant changes to the Company’s significant accounting policies described in Note 2 of the Notes to Consolidated Financial Statements in its 2017 Form 10-K . Revenue Recognition The Company applies the provisions of Topic 606 for revenue recognition on contracts with customers. Pursuant to Topic 606, the Company recognizes revenues under the core principle to depict the transfer of control to the Company’s customers in an amount reflecting the consideration to which the Company expects to be entitled. In order to achieve that core principle, the following five step approach is applied: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company generates revenues primarily from hosted software services, transaction-based fees and related services including professional services and its annual user conference, and recognizes revenues as performance obligations are satisfied. For services where the customer simultaneously receives and consumes the benefit from the Company's performance, revenue is recognized over time using an output method based on the passage of time as this provides a faithful depiction of the transfer of control. Under Company-hosted Encompass software subscriptions that customers access through the Internet, revenues are comprised of fees for software services sold both as a subscription and on a transactional basis. Transaction fees include fees based on a per closed loan, or success basis, subject to monthly base fees, which the Company refers to as Success-Based Pricing, as well as Ellie Mae Network fees and transaction fees charged for other services. Revenues are also comprised of fees for loan product, policy and guideline data and analytics services under the AllRegs brand, fees for lead management, marketing and customer relationship management, and fees for professional services which include consulting, implementation and education and training services. Sales taxes assessed by governmental authorities are excluded from the transaction price. In contracts where variable consideration is required to be estimated and included in the transaction price, the Company estimates such amounts at contract inception considering historical trends, industry data, and contract specific factors to determine an expected amount to which the Company expects to be entitled. Estimates are included in the transaction price to the extent that it is considered probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The assessment of whether such an estimate is constrained requires the Company to consider methods, inputs, and assumptions relating to the nature of the underlying products, customer-specific trends, and economic factors including industry data. Other forms of variable consideration such as refunds and penalties, which are recorded in accrued and other current liabilities, are estimated at contract inception and are allocated to the performance obligations to which they relate. The Company enters into arrangements that generally include multiple subscriptions and professional services. For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources and whether the service is separately identifiable from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the contract. When agreements involve multiple distinct performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an arrangement based on the relative standalone selling prices of each performance obligation. Where the Company has standalone sales data for its performance obligations which are indicative of the price at which the Company sells a promised good or service separately to a customer, such data is used to establish standalone selling prices. In instances where standalone sales data is not available for a particular performance obligation, the Company estimates standalone selling prices by maximizing the use of observable market and cost-based inputs. When estimating standalone selling prices, the Company reviews company-specific factors used to determine list price and makes adjustments as appropriate to reflect current market conditions and pricing behavior. The Company’s process for establishing list price includes assessing the cost to provide a particular product or service, surveying customers to determine market expectations, analyzing customer demographics, and taking into account similar products and services historically sold by the Company. The Company continues to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective basis. Hosted Software Services Revenues. Hosted software services generally include a combination of the Company’s products delivered as software-as-a-service (“SaaS”) subscriptions that are a performance obligation consisting of a series of distinct services and support services. These arrangements are generally non-cancelable and do not contain refund-type provisions. These revenues typically include the following: Encompass Revenues. The Company offers web-based, on-demand access to its Encompass loan origination software for a monthly recurring fee. Customers under SaaS arrangements do not take control of the underlying software at any time during the term of the agreement. Fixed fees for subscription revenues are recognized over time, using an output method of the passage of time (or ratably) over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Contracts generally range from one year to five years . Alternatively, customers can elect to pay on a success basis. Success basis contracts are subject to monthly billing calculations whereby customers are obligated to pay the greater of a contractual base fee or variable closed loan fee, which is based on the number of closed loan transactions processed by the customer in the specific month. Monthly base fees are recognized ratably over the contract terms as subscription performance obligations are satisfied. Closed loans fees in excess of base fees are considered variable consideration. For the majority of contracts that include variable consideration, these fees are recognized in the month in which they are earned because the terms of the variable payments relate specifically to the outcome from transferring the distinct time increment (month) of service, which is consistent with the allocation objective when considering all of the performance obligations and payment terms in the contract (i.e., where “the allocation objective is met”). For certain contracts where the allocation objective would not be met by allocating variable consideration in this way, total variable consideration to be received is estimated at contract inception and recognized ratably over the contract term, with estimates of variable consideration being updated at each reporting date. For these contracts, variable consideration is estimated using the expected value method, utilizing forecast data for each contract to determine the expected value. Services Revenues. The Company provides a variety of mortgage-related and other business services, including: automated documentation; fraud detection, valuation, validation, and risk analysis; income verification; lead management; marketing and customer relationship management; product and pricing; flood zone certifications; website and electronic document management; and compliance reports. Services that include fixed fee subscriptions are a single performance obligation consisting of a series of distinct services. The fixed fees are recognized ratably over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Variable fees are recognized either over time in the month in which the allocation objective is met or at the point in time when control is transferred. Subscriptions to Online Research and Data Resources. The Company provides mortgage originators and underwriters with access to online databases of various federal and state laws and regulations and forms as well as investor product guidelines. Fixed fees are recognized over time, using an output method of the passage of time or ratably over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Ellie Mae Network Revenues. The Company has entered into agreements with various lenders, service providers and certain government-sponsored entities participating in the mortgage origination process to provide those suppliers with access to, and ability to interoperate with, mortgage originators on the Ellie Mae Network. The services are delivered via subscriptions that are comprised of a performance obligation consisting of a series of distinct services. The Company acts as an agent when it arranges for services to be provided by the supplier to the customer. Fixed fees are recognized ratably over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Variable fees are recognized over time in the month in which the allocation objective is met. Professional Services Revenues. Professional services, including implementation services for our subscription products, are performance obligations which are capable of being distinct and are distinct within the context of the contract. Such services are generally provided on a time and materials or fixed price basis. The majority of the Company’s professional services are provided on a fixed price basis and the Company recognizes revenue over time as the performance obligations are satisfied utilizing an input method based on the proportion of hours incurred to total estimated hours. Any changes in the estimate of progress towards completion are accounted for in the period of change using the cumulative catch-up method. Revenues from professional services contracts provided on a time and materials basis are recognized when invoiced as amounts correspond directly with the value of the services. Deferred Revenues Deferred revenues represent billings or payments received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of prepaid subscription services and professional and training services not yet provided as of the balance sheet date. Deferred revenues that will be recognized during the succeeding 12-month period are recorded as current deferred revenues, and the remaining portion is recorded as other non-current liabilities. Contract Assets Contract assets represent amounts recognized as revenues for which the Company does not have the unconditional right to consideration. Amounts related to invoices expected to be issued during the succeeding 12-month period are recorded as prepaid expenses and other current assets, and the remaining portion is recorded as deposits and other non-current assets. Deferred Costs Deferred costs mainly consist of sales commissions and related fringe benefits that are incremental costs of obtaining contracts with customers. The Company amortizes the costs incurred on initial contracts on a straight-line basis over a period of benefit determined to be approximately five years. The period of benefit is determined based on a review of customer churn rates and technological lifecycles of the underlying product offerings. All deferred costs on renewal contracts are amortized on a straight-line basis over the applicable renewal period. Additionally, the Company exercises the practical expedient to expense commissions on arrangements in which the amortization period is expected to be one year or less. Deferred costs that will be recognized during the succeeding 12-month period are recorded as prepaid expenses and other current assets, and the remaining portion is recorded as deposits and other non-current assets. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), as subsequently amended, which requires lessees to put most leases on their balance sheets, but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company currently does not intend to early adopt and is evaluating the impact of this accounting standard update on its consolidated financial statements. Standards Adopted ASU No. 2014-09 In May 2014, the FASB issued ASU 2014-09 (“Topic 606”), as subsequently amended, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This standard requires expanded disclosures about revenue recognition to better communicate the nature, amount, timing, and uncertainty of the Company’s revenues and cash flows, including significant judgments and estimates. The standard also provides guidance on the recognition of costs related to obtaining customer contracts under Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers . The effective date for public entities is fiscal years beginning after December 15, 2017 and early adoption was permitted. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method and applied Topic 606 to those contracts which were not completed as of January 1, 2018. On January 1, 2018, the Company recognized the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of retained earnings and the corresponding balance sheet accounts, which resulted in a net increase to retained earnings of $22.7 million , which includes the tax effect of approximately $7.2 million in deferred tax liabilities recorded in other long-term liabilities and corresponding adjustments to selected consolidated balance sheet line items. The impact on the Company’s opening balances primarily is related to its straight-line calculations for subscription revenue and the capitalization of additional commission costs under Topic 606. The comparative information has not been restated and continues to be reported under the accounting standards in effect in those prior periods. Refer to the tables below and Note 3 “Revenue Recognition” for additional accounting policy and transition disclosures. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to retained earnings in the balance sheet as of January 1, 2018 as follows: Selected Consolidated Balance Sheet Line Items Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 (in thousands) Current assets: Prepaid expenses and other current assets $ 18,474 $ 8,187 $ 26,661 Non-current assets: Deposits and other assets $ 9,290 $ 18,859 $ 28,149 Current liabilities: Accrued and other current liabilities $ 26,188 $ 810 $ 26,998 Deferred revenues $ 26,287 $ (4,435 ) $ 21,852 Non-current liabilities: Other long-term liabilities $ 18,880 $ 7,991 $ 26,871 Stockholders' equity: Retained earnings $ 86,399 $ 22,680 $ 109,079 The following tables summarize the impacts of Topic 606 adoption on the Company's condensed consolidated financial statements for the quarter ended March 31, 2018. Selected Consolidated Balance Sheet Line Items March 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Current assets: Prepaid expenses and other current assets $ 31,864 $ (9,938 ) $ 21,926 Non-current assets: Deposits and other assets $ 30,602 $ (15,636 ) $ 14,966 Current liabilities: Accrued and other current liabilities $ 24,338 $ (824 ) $ 23,514 Deferred revenues $ 17,975 $ 2,688 $ 20,663 Non-current liabilities: Other long-term liabilities $ 19,727 $ (2,829 ) $ 16,898 Stockholders' equity: Retained earnings $ 99,579 $ (24,609 ) $ 74,970 Selected Consolidated Statement of Comprehensive Income Line Items Three Months ended March 31, 2018 (in thousands, except per share amounts) As Reported Adjustments Balances without adoption of Topic 606 Revenues $ 117,912 $ (1,929 ) $ 115,983 Gross profit $ 68,565 $ (1,929 ) $ 66,636 Operating expenses: Sales and marketing $ 23,064 $ 78 $ 23,142 Loss from operations $ (3,302 ) $ (2,007 ) $ (5,309 ) Income tax benefit $ (4,658 ) $ (79 ) $ (4,737 ) Net income $ 2,204 $ (1,928 ) $ 276 Basic income per share of common stock $ 0.06 $ (0.05 ) $ 0.01 Diluted income per share of common stock $ 0.06 $ (0.05 ) $ 0.01 Selected Consolidated Statement of Cash Flows Line Items Three Months ended March 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Net income $ 2,204 $ (1,928 ) $ 276 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes $ (4,658 ) $ (79 ) $ (4,737 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets $ (5,203 ) $ 1,752 $ (3,451 ) Deposits and other assets $ (4,331 ) $ 1,851 $ (2,480 ) Accrued, other current and other long-term liabilities $ (2,928 ) $ (14 ) $ (2,942 ) Deferred revenues $ (4,187 ) $ (1,582 ) $ (5,769 ) Net cash provided by operating activities $ 6,401 $ — $ 6,401 ASU No. 2018-05 In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 addresses certain circumstances arising in accounting for the income tax effects of the Tax Cuts and Job Act (“Tax Act”) in conformity with SEC Staff Accounting Bulletin No. 118 (“SAB 118”) including provisional estimates of those effects. The Company adopted SAB 118 in the fourth quarter of 2017 and continues to analyze the impact of the Tax Act on an ongoing basis. Due to the timing of the enactment and the complexity in applying the provisions of the Tax Act, the provisional net charge is subject to revisions as the Company continues to complete its analysis of the Tax Act. Adjustments may materially impact the Company’s provision for income taxes and effective tax rate in the period in which the adjustments are made. The Company expects to finalize the impact analysis in the fourth quarter of 2018. Additional information regarding the accounting for income taxes for the Tax Act is contained in Note 8 “Income Taxes.” |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue The following table provides information about disaggregated revenue from customers. March 31, (in thousands) Hosted software services $ 97,120 Ellie Mae Network 13,271 Professional services 7,521 Revenues $ 117,912 Contract Balances The following table provides information about receivables, contract assets and deferred revenues from contracts with customers. Balance Sheet Line Reference March 31, (in thousands) Accounts receivables, net Accounts receivables, net $ 45,123 Contract assets - current Prepaid expenses and other current assets $ 7,915 Contract assets - noncurrent Deposits and other assets $ 15,275 Deferred revenues - current Deferred revenue $ 17,975 Deferred revenues - noncurrent Other long-term liabilities $ 900 Changes in the contract assets and the deferred revenues balances during the three months ended March 31, 2018 are as follows: January 1, March 31, $ Change (in thousands) Contract assets $ 19,667 $ 23,190 $ 3,523 Deferred revenues $ 23,062 $ 18,875 $ (4,187 ) The increase in contract assets from $19.7 million to $23.2 million as of March 31, 2018 was primarily driven by the recognition of revenue that has not yet been billed. The decrease in deferred revenues from $23.1 million to $18.9 million was due to additional performance on certain arrangements in which billing occurred in advance. During the three months ended March 31, 2018, $12.1 million of revenue recognized was included in the deferred revenues balance at the beginning of the period, which was offset by additional deferrals during the period. Revenues Allocated to Remaining Performance Obligations Remaining performance obligations represent contracted revenues that have not yet been recognized, which includes deferred revenues and amounts that will be invoiced and recognized as revenues in future periods. The Company expects to recognize revenue on the remaining performance obligations as follows: March 31, (in thousands) Within 1 year $ 291,943 2-3 years 293,805 Thereafter 68,306 $ 654,054 Remaining performance obligations exclude variable consideration allocated entirely to future distinct services as well as variable consideration in arrangements in which revenue recognition under the as-billed practical expedient corresponds directly to the amount the Company has the right to invoice, which includes most arrangements that involve services revenues priced on a transactional basis and professional services invoiced on a time and materials basis. Additionally, in instances where an estimate of variable consideration is constrained, such estimate of variable consideration is not included in revenues allocated to remaining performance obligations. Deferred Costs Deferred costs, which consist of deferred sales commissions, were $15.7 million as of March 31, 2018 and $8.5 million for December 31, 2017. For the three months ended March 31, 2018 and 2017, amortization expense for deferred costs was $1.4 million and $0.8 million , respectively and there was no impairment loss related to the costs capitalized. |
Net Income Per Share of Common
Net Income Per Share of Common Stock | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share of Common Stock | Net Income Per Share of Common Stock Net income per share of common stock is calculated by dividing net income by the weighted average shares of common stock outstanding during the period. Diluted net income per share of common stock is calculated by dividing net income by the weighted average shares of common stock outstanding and potential shares of common stock during the period. Potential shares of common stock include dilutive shares attributable to the assumed exercise of stock options, restricted stock unit awards (“ RSU s”), performance-vesting RSUs, performance share awards (“ Performance Awards ”), and Employee Stock Purchase Plan (“ ESPP ”) shares using the treasury stock method, if dilutive. The components of net income per share of common stock were as follows: Three Months ended March 31, 2018 2017 (in thousands, except per share amounts) Net income $ 2,204 $ 9,599 Weighted average common shares outstanding used to compute basic net income per share 34,143 33,702 Effect of potentially dilutive securities: Employee stock options, RSUs, performance-vesting RSUs, Performance Awards and ESPP shares 1,459 1,907 Weighted average common shares outstanding used to compute diluted net income per share 35,602 35,609 Net income per share: Basic $ 0.06 $ 0.28 Diluted $ 0.06 $ 0.27 The following potential weighted average common shares were excluded from the computation of diluted net income per share, as their effect would have been anti-dilutive: Three Months ended March 31, 2018 2017 (in thousands) Employee stock options and awards 10 73 Performance-vesting RSUs and Performance Awards are included in the diluted shares outstanding for each period if the established performance criteria have been met at the end of the respective periods. However, if none of the required performance criteria have been met for such awards, the Company includes the number of shares that would be issuable if the end of the reporting period were the end of the contingency period. Accordingly, in addition to the employee stock options and awards noted above, 129,079 and 71,939 shares underlying performance-vesting RSUs and Performance Awards were excluded from the dilutive shares outstanding for each of the three months ended March 31, 2018 and 2017 , respectively. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurement | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurement As of March 31, 2018 and December 31, 2017 , the Company’s cash, cash equivalents and investments were primarily comprised of cash and investment-grade, fixed maturity interest-bearing debt securities, such as money market funds, certificates of deposit, commercial paper, corporate bonds, municipal and government agency obligations, and guaranteed obligations of the United States government. Cash equivalents and investments are recorded at fair value. All investments are considered available for sale. The following table summarizes cash and investments in financial instruments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy by investment type: March 31, 2018 December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Carrying or Fair Value Amortized Unrealized Gains Unrealized Losses Carrying or (in thousands) (in thousands) Cash $ 85,193 $ — $ — $ 85,193 $ 119,035 $ — $ — $ 119,035 Level 1: Money market funds 2,970 — — 2,970 3,623 — — 3,623 U.S. government and government agency obligations 61,176 — (438 ) 60,738 52,255 — (266 ) 51,989 149,339 — (438 ) 148,901 174,913 — (266 ) 174,647 Level 2: Corporate notes and obligations 79,065 — (636 ) 78,429 81,062 — (304 ) 80,758 Certificates of deposit 5,628 1 — 5,629 6,527 2 — 6,529 Municipal obligations 8,381 — (38 ) 8,343 10,274 — (46 ) 10,228 U.S. government and government agency obligations 73,903 — (305 ) 73,598 76,510 — (266 ) 76,244 Total financial instruments 316,316 1 (1,417 ) 314,900 349,286 2 (882 ) 348,406 Less investments 198,974 1 (1,417 ) 197,558 211,588 2 (882 ) 210,708 Cash and cash equivalents $ 117,342 $ — $ — $ 117,342 $ 137,698 $ — $ — $ 137,698 The Company classifies its money market funds that are specifically backed by debt securities and U.S. government obligations as Level 1 instruments due to the use of observable market prices for identical securities that are traded in active markets. Valuation of the Company’s marketable securities investments classified as Level 2 is achieved primarily through broker quotes when such investments exist in a non-active market. At March 31, 2018 and December 31, 2017 , the Company did not have any assets or liabilities that were valued using Level 3 inputs. Realized gains and losses from the sale of investments were immaterial during the three months ended March 31, 2018 and 2017 . The following table shows the gross unrealized losses and the related fair values of the Company’s investments that have been in a continuous unrealized loss position. The Company did not identify any investments as other-than-temporarily impaired at March 31, 2018 or December 31, 2017 based on its evaluation of available evidence, such as the Company’s intent to hold and whether it is more likely than not that the Company will be required to sell the investment before recovery of the investment’s amortized basis. The Company expects to receive the full principal and interest on these investments. March 31, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) Corporate notes and obligations $ 60,690 $ (571 ) $ 6,935 $ (66 ) $ 67,625 $ (637 ) Certificates of deposit — — 1,480 — 1,480 — U.S. government, government agency, and municipal obligations 119,011 (672 ) 12,933 (108 ) 131,944 (780 ) $ 179,701 $ (1,243 ) $ 21,348 $ (174 ) $ 201,049 $ (1,417 ) December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) Corporate notes and obligations $ 62,099 $ (253 ) $ 7,574 $ (51 ) $ 69,673 $ (304 ) Certificates of deposit 482 — 1,348 — 1,830 — U.S. government, government agency, and municipal obligations 119,456 (492 ) 13,070 (86 ) 132,526 (578 ) $ 182,037 $ (745 ) $ 21,992 $ (137 ) $ 204,029 $ (882 ) The following table summarizes the contractual maturities of the Company’s investments at March 31, 2018 : Amortized Cost Carrying or Fair Value (in thousands) Due within one year $ 114,254 $ 113,931 Due after one year through three years (1) 84,720 83,627 Total $ 198,974 $ 197,558 ________________ (1) Maximum maturity of individual investments is three years. Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net, consisted of the following: March 31, December 31, 2018 2017 (in thousands) Computer equipment and software $ 72,627 $ 67,068 Internal-use software 117,758 108,710 Furniture and fixtures 8,284 8,311 Leasehold improvements 27,310 27,356 Internal-use software and other assets not placed in service 60,575 52,659 Property and equipment, gross 286,554 264,104 Accumulated depreciation and amortization (87,647 ) (77,113 ) Property and equipment, net $ 198,907 $ 186,991 Depreciation and amortization expense for the three months ended March 31, 2018 and 2017 was $11.4 million and $7.3 million , respectively. These amounts include amortization of assets under capital leases of $0.6 million and $0.8 million for the three months ended March 31, 2018 and 2017 , respectively. |
Intangible Assets, net
Intangible Assets, net | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | Intangible Assets, net Intangible assets, net, consisted of the following: March 31, 2018 Gross Carrying Accumulated Net Intangibles Weighted Average Remaining Useful Life (in thousands) (in years) Assets subject to amortization: Developed technology $ 53,535 $ (12,402 ) $ 41,133 7.2 Trade names 1,931 (598 ) 1,333 2.5 Customer relationships 34,900 (13,981 ) 20,919 7.6 Order backlog 14,370 (7,226 ) 7,144 0.5 Total assets subject to amortization 104,736 (34,207 ) 70,529 6.6 Assets not subject to amortization: Trade name 4,039 — 4,039 $ 108,775 $ (34,207 ) $ 74,568 December 31, 2017 Gross Carrying Accumulated Net Intangibles Weighted Average Remaining Useful Life (in thousands) (in years) Assets subject to amortization: Developed technology $ 53,535 $ (10,810 ) $ 42,725 7.5 Trade names 1,931 (464 ) 1,467 2.8 Customer relationships 34,900 (13,050 ) 21,850 7.7 Order backlog 14,370 (3,577 ) 10,793 0.8 Total assets subject to amortization 104,736 (27,901 ) 76,835 6.5 Assets not subject to amortization: Trade name 4,039 — 4,039 $ 108,775 $ (27,901 ) $ 80,874 Amortization expense associated with intangible assets for the three months ended March 31, 2018 and 2017 was $6.3 million and $1.1 million , respectively. Future amortization expense for intangible assets at March 31, 2018 was as follows: Amortization (in thousands) Remainder of 2018 $ 15,083 2019 10,499 2020 8,978 2021 7,114 2022 7,055 2023 6,800 Thereafter 15,000 $ 70,529 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates the estimate of the annual effective tax rate and, if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s income tax benefit, and its effective tax rate, for the periods ended March 31, 2018 and 2017 are as follows: Three Months ended March 31, 2018 2017 (dollars in thousands) Income tax benefit $ (4,658 ) $ (4,593 ) Effective tax rate 189.8 % (91.7 )% The Company’s effective tax rate was 189.8% and (91.7)% for the three months ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018, the Company’s effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the discrete impact of the excess tax benefits from stock-based compensation and the reduced state blended income tax rate. For the three months ended March 31, 2017, the Company’s effective tax rate differs from the U.S. federal statutory rate of 35% primarily due to the discrete impact of excess tax benefits from stock-based compensation as well as non-deductible stock-based compensation and federal R&D credits. The Company regularly assesses the realizability of the deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of the Company's deferred tax assets will not be realized. The Company evaluates and weighs all available positive and negative evidence such as historic results, future reversals of existing deferred tax liabilities, as well as projected future taxable income. Generally, more weight is given to objectively verifiable evidence. The Company will continue to assess the realizability of the deferred tax assets in each of the applicable jurisdictions. The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions. The Company accounts for uncertain tax positions and believes that it has provided adequate reserves for its unrecognized tax benefits for all tax years still open for assessment. The Company also believes that it does not have any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. The Company has a policy to classify accrued interest and penalties associated with uncertain tax positions together with the related liability in the balance sheet, and to include the expenses incurred related to such accruals in the provision for income taxes. There were no interest or penalties included in the provision for income taxes during the three months ended March 31, 2018 and 2017 . The SEC staff issued SAB 118, which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Act in the period of enactment. The guidance allows the Company to record provisional amounts to the extent a reasonable estimate can be made and provides the Company with up to one year from enactment date to finalize the accounting for the impact of the Tax Act. The Tax Act is effective in the Company’s fourth quarter of 2017. As of March 31, 2018, we have not completed our accounting for the tax effects of the Tax Act. During the quarter, no material revision has been made to the Company’s provisional assessments made as of December 31, 2017. In order to complete the accounting for the impact of the Tax Act, the Company continues to obtain, analyze and interpret additional guidance as such guidance becomes available from the U.S. Treasury Department, the Internal Revenue Service (“IRS”), state taxing jurisdictions, the FASB, and other standard-setting and regulatory bodies. New guidance or interpretations may materially impact the Company’s provision for income taxes in future periods. Additional information that is needed to complete the analysis but is currently unavailable includes, but is not limited to, the final determination of certain net deferred tax assets and liabilities subject to remeasurement and when the related temporary differences will be settled or realized, and the tax treatment of such provisions of the Tax Act by various state tax authorities. In addition, we do not currently have sufficient information and guidance to determine the impact of “transition rule” related to the Company’s covered employees’ compensation stemming from written binding contracts entered on or before November 2, 2017. The provisional accounting impacts may change in future reporting periods until our accounting analysis is finalized, which is expected to be completed by the Company’s fourth quarter of 2018. For additional information related to the impact of the 2017 Tax Act on our tax provision and tax rate, please see Note 8 of our consolidated financial on our Annual Report on Form 10-K, for the calendar year ended December 30, 2017, filed with the SEC on March 01, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases As of March 31, 2018 , the Company leased nine facilities under operating lease arrangements. The lease expiration dates range from September 2019 to December 2025 . Certain leases contain escalation clauses calling for increased rents. The Company recognizes rent expense on a straight-line basis over the lease period. Legal Proceedings On December 1, 2017, a pension fund and stockholder purporting to act on the Company’s behalf filed a derivative lawsuit in the Superior Court of California for the County of Alameda, captioned United Association of Plumbers and Pipefitters, Journeymen, Local #38 Defined Benefit Pension Plan v. Jonathan H. Corr, et al. (Case No. RG17884445). The lawsuit purports to assert claims against certain of the Company’s officers and directors for insider trading under California law, breach of fiduciary duty, corporate waste, and unjust enrichment based on allegations that: (1) the Company overstated its financial prospects in public filings between February 10, 2017 and July 27, 2017; and (2) certain of the Company’s officers and directors sold shares during this same period. Plaintiff seeks unspecified monetary damages, attorneys’ fees and costs, as well as certain changes to the Company’s corporate governance and internal procedures. The Company’s demurrer to plaintiff’s complaint was filed on February 15, 2018. Plaintiff has opposed the Company’s demurrer and the Company has filed a reply in support of its demurrer. On May 8, 2018, the court sustained the Company’s demurrer with leave to amend within 30 days. At this time, the Company is unable to estimate a probable loss for this matter, if any, and accordingly has not accrued for any amount. From time to time, the Company is involved in litigation that it believes is of the type common to companies engaged in the Company’s line of business, including commercial and employment disputes. As of the date of this Quarterly Report on Form 10-Q, the Company is not involved in any other pending legal proceedings whose outcome the Company expects to have a material adverse effect on its financial position, results of operations or cash flows. |
Equity and Stock Incentive Plan
Equity and Stock Incentive Plans | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity and Stock Incentive Plans | Equity and Stock Incentive Plans The 2011 Equity Incentive Award Plan (the “2011 Plan”) serves as the successor to the Company’s 2009 Stock Option and Incentive Plan (together with the 2011 Plan, the “Stock Plans”). The Company recognized stock-based compensation expense related to awards granted under the Stock Plans and ESPP . Total stock-based compensation expense recognized consisted of: Three Months ended March 31, 2018 2017 (in thousands) Cost of revenues $ 1,894 $ 1,444 Sales and marketing 1,556 1,176 Research and development 2,534 1,861 General and administrative 3,548 3,370 $ 9,532 $ 7,851 Stock Plans Stock Options The following table summarizes the Company’s stock option activity under the Stock Plans: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Outstanding at January 1, 2018 1,436,031 $ 27.06 5.43 $ 89,554 Granted 4,641 $ 92.28 Exercised (92,838 ) $ 23.57 Forfeited or expired (4,298 ) $ 43.69 Outstanding at March 31, 2018 1,343,536 $ 27.47 5.18 $ 86,631 Ending vested and expected to vest at March 31, 2018 1,341,283 $ 27.43 5.18 $ 86,551 Exercisable at March 31, 2018 1,212,913 $ 24.82 4.98 $ 81,411 The aggregate intrinsic value of the stock options outstanding at March 31, 2018 represents the value of the Company’s closing stock price of $91.94 on March 31, 2018 in excess of the exercise price multiplied by the number of options outstanding for options that were in-the-money. As of March 31, 2018 , total unrecognized stock-based compensation expense related to unvested stock options, adjusted for estimated forfeitures, was $3.0 million and is expected to be recognized over a weighted average period of 1.1 years. Restricted Stock Units, Performance-Vesting Restricted Stock Units, and Performance Awards The following table summarizes the Company’s RSU , Performance Award, and performance-vesting RSU activity: RSUs Performance Awards and Performance-Vesting RSUs Number of Shares Weighted Average Grant Date Fair Value Per Share Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 2018 1,179,458 $ 82.84 294,464 $ 56.17 Granted 104,142 $ 91.33 121,102 $ 92.28 Released (73,171 ) $ 61.21 (115,325 ) $ 43.95 Forfeited or expired (30,094 ) $ 79.74 (20,645 ) $ 61.11 Outstanding at March 31, 2018 1,180,335 $ 85.01 279,596 $ 76.48 Ending vested and expected to vest at March 31, 2018 1,065,414 279,593 RSU s, performance-vesting RSUs, and Performance Awards that are expected to vest are presented net of estimated future forfeitures. RSU s released during the three months ended March 31, 2018 and 2017 had an aggregate intrinsic value of $6.6 million and $5.3 million , respectively, and had an aggregate grant-date fair value of $4.5 million and $2.7 million , respectively. Performance-vesting RSUs and Performance Awards released during the three months ended March 31, 2018 and 2017 had an aggregate intrinsic value of $10.6 million and $13.7 million , respectively, and had an aggregate grant-date fair value of $5.1 million and $5.8 million , respectively. The number of RSU s released includes shares that the Company withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. As of March 31, 2018 , total unrecognized compensation expense related to unvested RSU s, performance-vesting RSUs, and Performance Awards was $83.7 million and is expected to be recognized over a weighted average period of 2.5 years. Employee Stock Purchase Plan For the three months ended March 31, 2018 and 2017 , employees purchased 77,339 shares and 52,619 shares, respectively, under the ESPP , resulting in cash proceeds of $5.6 million and $4.3 million , respectively. As of March 31, 2018 , unrecognized compensation expense related to the current semi-annual ESPP offering period, which ends on August 31, 2018 , was $1.5 million and is expected to be recognized over five months. Valuation Information The fair value of stock options and stock purchase rights granted under the Stock Plans, and the ESPP were estimated at the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions: Three Months ended March 31, 2018 2017 Stock option plans: Risk-free interest rate 2.63 % 2.04 % Expected life of options (in years) 6.08 6.08 Expected dividend yield — % — % Volatility 45 % 48 % Employee Stock Purchase Plan: Risk-free interest rate 1.86 % 0.69 % Expected life of options (in years) 0.50 0.50 Expected dividend yield — % — % Volatility 27 % 35 % Common Stock The following numbers of shares of common stock were reserved and available for future issuance at March 31, 2018 : Reserved Shares Options and awards outstanding under the Stock Plans 2,803,467 Shares available for future grant under the 2011 Plan 6,730,095 Shares available under the ESPP 1,879,626 Total 11,413,188 In March 2018 , 342,276 additional shares were reserved under the ESPP , and 1,711,384 additional shares were reserved under the 2011 Plan , pursuant to the automatic increase provisions in each plan. Stock Repurchase Program In August 2017 , the Company’s audit committee, under the authority delegated to it by the Company’s board of directors, approved a new stock repurchase program under which the Company is authorized to repurchase up to $250.0 million of its common stock. This authorization expires in August 2020 . All shares are retired upon repurchase. During the three months ended March 31, 2018 , the Company repurchased a total of 159,141 shares for $14.7 million . As of March 31, 2018 , $200.0 million remained available for future repurchases under the program. |
Basis of Presentation and Sig15
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates estimates on a regular basis including those relating to revenue recognition, allowance for doubtful accounts, goodwill, intangible assets, valuation of deferred income taxes, stock-based compensation, and unrecognized tax benefits, among others. Actual results could differ from those estimates, and such differences may have a material impact on the Company’s condensed consolidated financial statements and footnotes. |
Significant Accounting Policies | Significant Accounting Policies Except for the accounting policies described below that were updated as a result of adopting Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) , as amended (“Topic 606” ), there have been no significant changes to the Company’s significant accounting policies described in Note 2 of the Notes to Consolidated Financial Statements in its 2017 Form 10-K . |
Revenue Recognition | Revenue Recognition The Company applies the provisions of Topic 606 for revenue recognition on contracts with customers. Pursuant to Topic 606, the Company recognizes revenues under the core principle to depict the transfer of control to the Company’s customers in an amount reflecting the consideration to which the Company expects to be entitled. In order to achieve that core principle, the following five step approach is applied: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company generates revenues primarily from hosted software services, transaction-based fees and related services including professional services and its annual user conference, and recognizes revenues as performance obligations are satisfied. For services where the customer simultaneously receives and consumes the benefit from the Company's performance, revenue is recognized over time using an output method based on the passage of time as this provides a faithful depiction of the transfer of control. Under Company-hosted Encompass software subscriptions that customers access through the Internet, revenues are comprised of fees for software services sold both as a subscription and on a transactional basis. Transaction fees include fees based on a per closed loan, or success basis, subject to monthly base fees, which the Company refers to as Success-Based Pricing, as well as Ellie Mae Network fees and transaction fees charged for other services. Revenues are also comprised of fees for loan product, policy and guideline data and analytics services under the AllRegs brand, fees for lead management, marketing and customer relationship management, and fees for professional services which include consulting, implementation and education and training services. Sales taxes assessed by governmental authorities are excluded from the transaction price. In contracts where variable consideration is required to be estimated and included in the transaction price, the Company estimates such amounts at contract inception considering historical trends, industry data, and contract specific factors to determine an expected amount to which the Company expects to be entitled. Estimates are included in the transaction price to the extent that it is considered probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The assessment of whether such an estimate is constrained requires the Company to consider methods, inputs, and assumptions relating to the nature of the underlying products, customer-specific trends, and economic factors including industry data. Other forms of variable consideration such as refunds and penalties, which are recorded in accrued and other current liabilities, are estimated at contract inception and are allocated to the performance obligations to which they relate. The Company enters into arrangements that generally include multiple subscriptions and professional services. For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources and whether the service is separately identifiable from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the contract. When agreements involve multiple distinct performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an arrangement based on the relative standalone selling prices of each performance obligation. Where the Company has standalone sales data for its performance obligations which are indicative of the price at which the Company sells a promised good or service separately to a customer, such data is used to establish standalone selling prices. In instances where standalone sales data is not available for a particular performance obligation, the Company estimates standalone selling prices by maximizing the use of observable market and cost-based inputs. When estimating standalone selling prices, the Company reviews company-specific factors used to determine list price and makes adjustments as appropriate to reflect current market conditions and pricing behavior. The Company’s process for establishing list price includes assessing the cost to provide a particular product or service, surveying customers to determine market expectations, analyzing customer demographics, and taking into account similar products and services historically sold by the Company. The Company continues to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective basis. Hosted Software Services Revenues. Hosted software services generally include a combination of the Company’s products delivered as software-as-a-service (“SaaS”) subscriptions that are a performance obligation consisting of a series of distinct services and support services. These arrangements are generally non-cancelable and do not contain refund-type provisions. These revenues typically include the following: Encompass Revenues. The Company offers web-based, on-demand access to its Encompass loan origination software for a monthly recurring fee. Customers under SaaS arrangements do not take control of the underlying software at any time during the term of the agreement. Fixed fees for subscription revenues are recognized over time, using an output method of the passage of time (or ratably) over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Contracts generally range from one year to five years . Alternatively, customers can elect to pay on a success basis. Success basis contracts are subject to monthly billing calculations whereby customers are obligated to pay the greater of a contractual base fee or variable closed loan fee, which is based on the number of closed loan transactions processed by the customer in the specific month. Monthly base fees are recognized ratably over the contract terms as subscription performance obligations are satisfied. Closed loans fees in excess of base fees are considered variable consideration. For the majority of contracts that include variable consideration, these fees are recognized in the month in which they are earned because the terms of the variable payments relate specifically to the outcome from transferring the distinct time increment (month) of service, which is consistent with the allocation objective when considering all of the performance obligations and payment terms in the contract (i.e., where “the allocation objective is met”). For certain contracts where the allocation objective would not be met by allocating variable consideration in this way, total variable consideration to be received is estimated at contract inception and recognized ratably over the contract term, with estimates of variable consideration being updated at each reporting date. For these contracts, variable consideration is estimated using the expected value method, utilizing forecast data for each contract to determine the expected value. Services Revenues. The Company provides a variety of mortgage-related and other business services, including: automated documentation; fraud detection, valuation, validation, and risk analysis; income verification; lead management; marketing and customer relationship management; product and pricing; flood zone certifications; website and electronic document management; and compliance reports. Services that include fixed fee subscriptions are a single performance obligation consisting of a series of distinct services. The fixed fees are recognized ratably over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Variable fees are recognized either over time in the month in which the allocation objective is met or at the point in time when control is transferred. Subscriptions to Online Research and Data Resources. The Company provides mortgage originators and underwriters with access to online databases of various federal and state laws and regulations and forms as well as investor product guidelines. Fixed fees are recognized over time, using an output method of the passage of time or ratably over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Ellie Mae Network Revenues. The Company has entered into agreements with various lenders, service providers and certain government-sponsored entities participating in the mortgage origination process to provide those suppliers with access to, and ability to interoperate with, mortgage originators on the Ellie Mae Network. The services are delivered via subscriptions that are comprised of a performance obligation consisting of a series of distinct services. The Company acts as an agent when it arranges for services to be provided by the supplier to the customer. Fixed fees are recognized ratably over the contract terms as performance obligations are satisfied as this method best depicts the Company’s pattern of performance for such services. Variable fees are recognized over time in the month in which the allocation objective is met. Professional Services Revenues. Professional services, including implementation services for our subscription products, are performance obligations which are capable of being distinct and are distinct within the context of the contract. Such services are generally provided on a time and materials or fixed price basis. The majority of the Company’s professional services are provided on a fixed price basis and the Company recognizes revenue over time as the performance obligations are satisfied utilizing an input method based on the proportion of hours incurred to total estimated hours. Any changes in the estimate of progress towards completion are accounted for in the period of change using the cumulative catch-up method. Revenues from professional services contracts provided on a time and materials basis are recognized when invoiced as amounts correspond directly with the value of the services. Deferred Revenues Deferred revenues represent billings or payments received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of prepaid subscription services and professional and training services not yet provided as of the balance sheet date. Deferred revenues that will be recognized during the succeeding 12-month period are recorded as current deferred revenues, and the remaining portion is recorded as other non-current liabilities. Contract Assets Contract assets represent amounts recognized as revenues for which the Company does not have the unconditional right to consideration. Amounts related to invoices expected to be issued during the succeeding 12-month period are recorded as prepaid expenses and other current assets, and the remaining portion is recorded as deposits and other non-current assets. Deferred Costs Deferred costs mainly consist of sales commissions and related fringe benefits that are incremental costs of obtaining contracts with customers. The Company amortizes the costs incurred on initial contracts on a straight-line basis over a period of benefit determined to be approximately five years. The period of benefit is determined based on a review of customer churn rates and technological lifecycles of the underlying product offerings. All deferred costs on renewal contracts are amortized on a straight-line basis over the applicable renewal period. Additionally, the Company exercises the practical expedient to expense commissions on arrangements in which the amortization period is expected to be one year or less. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), as subsequently amended, which requires lessees to put most leases on their balance sheets, but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company currently does not intend to early adopt and is evaluating the impact of this accounting standard update on its consolidated financial statements. Standards Adopted ASU No. 2014-09 In May 2014, the FASB issued ASU 2014-09 (“Topic 606”), as subsequently amended, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This standard requires expanded disclosures about revenue recognition to better communicate the nature, amount, timing, and uncertainty of the Company’s revenues and cash flows, including significant judgments and estimates. The standard also provides guidance on the recognition of costs related to obtaining customer contracts under Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers . The effective date for public entities is fiscal years beginning after December 15, 2017 and early adoption was permitted. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method and applied Topic 606 to those contracts which were not completed as of January 1, 2018. On January 1, 2018, the Company recognized the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of retained earnings and the corresponding balance sheet accounts, which resulted in a net increase to retained earnings of $22.7 million , which includes the tax effect of approximately $7.2 million in deferred tax liabilities recorded in other long-term liabilities and corresponding adjustments to selected consolidated balance sheet line items. The impact on the Company’s opening balances primarily is related to its straight-line calculations for subscription revenue and the capitalization of additional commission costs under Topic 606. The comparative information has not been restated and continues to be reported under the accounting standards in effect in those prior periods. Refer to the tables below and Note 3 “Revenue Recognition” for additional accounting policy and transition disclosures. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to retained earnings in the balance sheet as of January 1, 2018 as follows: Selected Consolidated Balance Sheet Line Items Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 (in thousands) Current assets: Prepaid expenses and other current assets $ 18,474 $ 8,187 $ 26,661 Non-current assets: Deposits and other assets $ 9,290 $ 18,859 $ 28,149 Current liabilities: Accrued and other current liabilities $ 26,188 $ 810 $ 26,998 Deferred revenues $ 26,287 $ (4,435 ) $ 21,852 Non-current liabilities: Other long-term liabilities $ 18,880 $ 7,991 $ 26,871 Stockholders' equity: Retained earnings $ 86,399 $ 22,680 $ 109,079 The following tables summarize the impacts of Topic 606 adoption on the Company's condensed consolidated financial statements for the quarter ended March 31, 2018. Selected Consolidated Balance Sheet Line Items March 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Current assets: Prepaid expenses and other current assets $ 31,864 $ (9,938 ) $ 21,926 Non-current assets: Deposits and other assets $ 30,602 $ (15,636 ) $ 14,966 Current liabilities: Accrued and other current liabilities $ 24,338 $ (824 ) $ 23,514 Deferred revenues $ 17,975 $ 2,688 $ 20,663 Non-current liabilities: Other long-term liabilities $ 19,727 $ (2,829 ) $ 16,898 Stockholders' equity: Retained earnings $ 99,579 $ (24,609 ) $ 74,970 Selected Consolidated Statement of Comprehensive Income Line Items Three Months ended March 31, 2018 (in thousands, except per share amounts) As Reported Adjustments Balances without adoption of Topic 606 Revenues $ 117,912 $ (1,929 ) $ 115,983 Gross profit $ 68,565 $ (1,929 ) $ 66,636 Operating expenses: Sales and marketing $ 23,064 $ 78 $ 23,142 Loss from operations $ (3,302 ) $ (2,007 ) $ (5,309 ) Income tax benefit $ (4,658 ) $ (79 ) $ (4,737 ) Net income $ 2,204 $ (1,928 ) $ 276 Basic income per share of common stock $ 0.06 $ (0.05 ) $ 0.01 Diluted income per share of common stock $ 0.06 $ (0.05 ) $ 0.01 Selected Consolidated Statement of Cash Flows Line Items Three Months ended March 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Net income $ 2,204 $ (1,928 ) $ 276 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes $ (4,658 ) $ (79 ) $ (4,737 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets $ (5,203 ) $ 1,752 $ (3,451 ) Deposits and other assets $ (4,331 ) $ 1,851 $ (2,480 ) Accrued, other current and other long-term liabilities $ (2,928 ) $ (14 ) $ (2,942 ) Deferred revenues $ (4,187 ) $ (1,582 ) $ (5,769 ) Net cash provided by operating activities $ 6,401 $ — $ 6,401 ASU No. 2018-05 In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 addresses certain circumstances arising in accounting for the income tax effects of the Tax Cuts and Job Act (“Tax Act”) in conformity with SEC Staff Accounting Bulletin No. 118 (“SAB 118”) including provisional estimates of those effects. The Company adopted SAB 118 in the fourth quarter of 2017 and continues to analyze the impact of the Tax Act on an ongoing basis. Due to the timing of the enactment and the complexity in applying the provisions of the Tax Act, the provisional net charge is subject to revisions as the Company continues to complete its analysis of the Tax Act. Adjustments may materially impact the Company’s provision for income taxes and effective tax rate in the period in which the adjustments are made. The Company expects to finalize the impact analysis in the fourth quarter of 2018. Additional information regarding the accounting for income taxes for the Tax Act is contained in Note 8 “Income Taxes.” |
Basis of Presentation and Sig16
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Impact of New Accounting Pronouncement | The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to retained earnings in the balance sheet as of January 1, 2018 as follows: Selected Consolidated Balance Sheet Line Items Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 (in thousands) Current assets: Prepaid expenses and other current assets $ 18,474 $ 8,187 $ 26,661 Non-current assets: Deposits and other assets $ 9,290 $ 18,859 $ 28,149 Current liabilities: Accrued and other current liabilities $ 26,188 $ 810 $ 26,998 Deferred revenues $ 26,287 $ (4,435 ) $ 21,852 Non-current liabilities: Other long-term liabilities $ 18,880 $ 7,991 $ 26,871 Stockholders' equity: Retained earnings $ 86,399 $ 22,680 $ 109,079 The following tables summarize the impacts of Topic 606 adoption on the Company's condensed consolidated financial statements for the quarter ended March 31, 2018. Selected Consolidated Balance Sheet Line Items March 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Current assets: Prepaid expenses and other current assets $ 31,864 $ (9,938 ) $ 21,926 Non-current assets: Deposits and other assets $ 30,602 $ (15,636 ) $ 14,966 Current liabilities: Accrued and other current liabilities $ 24,338 $ (824 ) $ 23,514 Deferred revenues $ 17,975 $ 2,688 $ 20,663 Non-current liabilities: Other long-term liabilities $ 19,727 $ (2,829 ) $ 16,898 Stockholders' equity: Retained earnings $ 99,579 $ (24,609 ) $ 74,970 Selected Consolidated Statement of Comprehensive Income Line Items Three Months ended March 31, 2018 (in thousands, except per share amounts) As Reported Adjustments Balances without adoption of Topic 606 Revenues $ 117,912 $ (1,929 ) $ 115,983 Gross profit $ 68,565 $ (1,929 ) $ 66,636 Operating expenses: Sales and marketing $ 23,064 $ 78 $ 23,142 Loss from operations $ (3,302 ) $ (2,007 ) $ (5,309 ) Income tax benefit $ (4,658 ) $ (79 ) $ (4,737 ) Net income $ 2,204 $ (1,928 ) $ 276 Basic income per share of common stock $ 0.06 $ (0.05 ) $ 0.01 Diluted income per share of common stock $ 0.06 $ (0.05 ) $ 0.01 Selected Consolidated Statement of Cash Flows Line Items Three Months ended March 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Net income $ 2,204 $ (1,928 ) $ 276 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes $ (4,658 ) $ (79 ) $ (4,737 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets $ (5,203 ) $ 1,752 $ (3,451 ) Deposits and other assets $ (4,331 ) $ 1,851 $ (2,480 ) Accrued, other current and other long-term liabilities $ (2,928 ) $ (14 ) $ (2,942 ) Deferred revenues $ (4,187 ) $ (1,582 ) $ (5,769 ) Net cash provided by operating activities $ 6,401 $ — $ 6,401 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated Revenue from Customers | The following table provides information about disaggregated revenue from customers. March 31, (in thousands) Hosted software services $ 97,120 Ellie Mae Network 13,271 Professional services 7,521 Revenues $ 117,912 |
Schedule of Receivables, Contract Assets, and Deferred Revenues from Contracts with Customer | The following table provides information about receivables, contract assets and deferred revenues from contracts with customers. Balance Sheet Line Reference March 31, (in thousands) Accounts receivables, net Accounts receivables, net $ 45,123 Contract assets - current Prepaid expenses and other current assets $ 7,915 Contract assets - noncurrent Deposits and other assets $ 15,275 Deferred revenues - current Deferred revenue $ 17,975 Deferred revenues - noncurrent Other long-term liabilities $ 900 Changes in the contract assets and the deferred revenues balances during the three months ended March 31, 2018 are as follows: January 1, March 31, $ Change (in thousands) Contract assets $ 19,667 $ 23,190 $ 3,523 Deferred revenues $ 23,062 $ 18,875 $ (4,187 ) |
Schedule of Remaining Performance Obligations | The Company expects to recognize revenue on the remaining performance obligations as follows: March 31, (in thousands) Within 1 year $ 291,943 2-3 years 293,805 Thereafter 68,306 $ 654,054 |
Net Income Per Share of Commo18
Net Income Per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Components of net income per share of common stock | The components of net income per share of common stock were as follows: Three Months ended March 31, 2018 2017 (in thousands, except per share amounts) Net income $ 2,204 $ 9,599 Weighted average common shares outstanding used to compute basic net income per share 34,143 33,702 Effect of potentially dilutive securities: Employee stock options, RSUs, performance-vesting RSUs, Performance Awards and ESPP shares 1,459 1,907 Weighted average common shares outstanding used to compute diluted net income per share 35,602 35,609 Net income per share: Basic $ 0.06 $ 0.28 Diluted $ 0.06 $ 0.27 |
Common shares excluded from computation of diluted net income per share | The following potential weighted average common shares were excluded from the computation of diluted net income per share, as their effect would have been anti-dilutive: Three Months ended March 31, 2018 2017 (in thousands) Employee stock options and awards 10 73 |
Financial Instruments and Fai19
Financial Instruments and Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Fair value hierarchy of financial assets on recurring basis | The following table summarizes cash and investments in financial instruments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy by investment type: March 31, 2018 December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Carrying or Fair Value Amortized Unrealized Gains Unrealized Losses Carrying or (in thousands) (in thousands) Cash $ 85,193 $ — $ — $ 85,193 $ 119,035 $ — $ — $ 119,035 Level 1: Money market funds 2,970 — — 2,970 3,623 — — 3,623 U.S. government and government agency obligations 61,176 — (438 ) 60,738 52,255 — (266 ) 51,989 149,339 — (438 ) 148,901 174,913 — (266 ) 174,647 Level 2: Corporate notes and obligations 79,065 — (636 ) 78,429 81,062 — (304 ) 80,758 Certificates of deposit 5,628 1 — 5,629 6,527 2 — 6,529 Municipal obligations 8,381 — (38 ) 8,343 10,274 — (46 ) 10,228 U.S. government and government agency obligations 73,903 — (305 ) 73,598 76,510 — (266 ) 76,244 Total financial instruments 316,316 1 (1,417 ) 314,900 349,286 2 (882 ) 348,406 Less investments 198,974 1 (1,417 ) 197,558 211,588 2 (882 ) 210,708 Cash and cash equivalents $ 117,342 $ — $ — $ 117,342 $ 137,698 $ — $ — $ 137,698 |
Carrying amounts, gross unrealized gains and losses, and estimated fair value of cash and investments | The following table summarizes cash and investments in financial instruments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy by investment type: March 31, 2018 December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Carrying or Fair Value Amortized Unrealized Gains Unrealized Losses Carrying or (in thousands) (in thousands) Cash $ 85,193 $ — $ — $ 85,193 $ 119,035 $ — $ — $ 119,035 Level 1: Money market funds 2,970 — — 2,970 3,623 — — 3,623 U.S. government and government agency obligations 61,176 — (438 ) 60,738 52,255 — (266 ) 51,989 149,339 — (438 ) 148,901 174,913 — (266 ) 174,647 Level 2: Corporate notes and obligations 79,065 — (636 ) 78,429 81,062 — (304 ) 80,758 Certificates of deposit 5,628 1 — 5,629 6,527 2 — 6,529 Municipal obligations 8,381 — (38 ) 8,343 10,274 — (46 ) 10,228 U.S. government and government agency obligations 73,903 — (305 ) 73,598 76,510 — (266 ) 76,244 Total financial instruments 316,316 1 (1,417 ) 314,900 349,286 2 (882 ) 348,406 Less investments 198,974 1 (1,417 ) 197,558 211,588 2 (882 ) 210,708 Cash and cash equivalents $ 117,342 $ — $ — $ 117,342 $ 137,698 $ — $ — $ 137,698 |
Schedule of investments in continuous unrealized loss position | The following table shows the gross unrealized losses and the related fair values of the Company’s investments that have been in a continuous unrealized loss position. The Company did not identify any investments as other-than-temporarily impaired at March 31, 2018 or December 31, 2017 based on its evaluation of available evidence, such as the Company’s intent to hold and whether it is more likely than not that the Company will be required to sell the investment before recovery of the investment’s amortized basis. The Company expects to receive the full principal and interest on these investments. March 31, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) Corporate notes and obligations $ 60,690 $ (571 ) $ 6,935 $ (66 ) $ 67,625 $ (637 ) Certificates of deposit — — 1,480 — 1,480 — U.S. government, government agency, and municipal obligations 119,011 (672 ) 12,933 (108 ) 131,944 (780 ) $ 179,701 $ (1,243 ) $ 21,348 $ (174 ) $ 201,049 $ (1,417 ) December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) Corporate notes and obligations $ 62,099 $ (253 ) $ 7,574 $ (51 ) $ 69,673 $ (304 ) Certificates of deposit 482 — 1,348 — 1,830 — U.S. government, government agency, and municipal obligations 119,456 (492 ) 13,070 (86 ) 132,526 (578 ) $ 182,037 $ (745 ) $ 21,992 $ (137 ) $ 204,029 $ (882 ) |
Summary of the maturities of investments | The following table summarizes the contractual maturities of the Company’s investments at March 31, 2018 : Amortized Cost Carrying or Fair Value (in thousands) Due within one year $ 114,254 $ 113,931 Due after one year through three years (1) 84,720 83,627 Total $ 198,974 $ 197,558 ________________ (1) Maximum maturity of individual investments is three years. |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following: March 31, December 31, 2018 2017 (in thousands) Computer equipment and software $ 72,627 $ 67,068 Internal-use software 117,758 108,710 Furniture and fixtures 8,284 8,311 Leasehold improvements 27,310 27,356 Internal-use software and other assets not placed in service 60,575 52,659 Property and equipment, gross 286,554 264,104 Accumulated depreciation and amortization (87,647 ) (77,113 ) Property and equipment, net $ 198,907 $ 186,991 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net, consisted of the following: March 31, 2018 Gross Carrying Accumulated Net Intangibles Weighted Average Remaining Useful Life (in thousands) (in years) Assets subject to amortization: Developed technology $ 53,535 $ (12,402 ) $ 41,133 7.2 Trade names 1,931 (598 ) 1,333 2.5 Customer relationships 34,900 (13,981 ) 20,919 7.6 Order backlog 14,370 (7,226 ) 7,144 0.5 Total assets subject to amortization 104,736 (34,207 ) 70,529 6.6 Assets not subject to amortization: Trade name 4,039 — 4,039 $ 108,775 $ (34,207 ) $ 74,568 December 31, 2017 Gross Carrying Accumulated Net Intangibles Weighted Average Remaining Useful Life (in thousands) (in years) Assets subject to amortization: Developed technology $ 53,535 $ (10,810 ) $ 42,725 7.5 Trade names 1,931 (464 ) 1,467 2.8 Customer relationships 34,900 (13,050 ) 21,850 7.7 Order backlog 14,370 (3,577 ) 10,793 0.8 Total assets subject to amortization 104,736 (27,901 ) 76,835 6.5 Assets not subject to amortization: Trade name 4,039 — 4,039 $ 108,775 $ (27,901 ) $ 80,874 |
Schedule of Minimum Future Amortization Expense for Intangible Assets | Future amortization expense for intangible assets at March 31, 2018 was as follows: Amortization (in thousands) Remainder of 2018 $ 15,083 2019 10,499 2020 8,978 2021 7,114 2022 7,055 2023 6,800 Thereafter 15,000 $ 70,529 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Provision | Three Months ended March 31, 2018 2017 (dollars in thousands) Income tax benefit $ (4,658 ) $ (4,593 ) Effective tax rate 189.8 % (91.7 )% The Company’s effective tax rate was 189.8% and (91.7)% for the three months ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018, the Company’s effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the discrete impact of the excess tax benefits from stock-based compensation and the reduced state blended income tax rate. For the three months ended March 31, 2017, the Company’s effective tax rate differs from the U.S. federal statutory rate of 35% primarily due to the discrete impact of excess tax benefits from stock-based compensation as well as non-deductible stock-based compensation and federal R&D credits. The Company regularly assesses the realizability of the deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of the Company's deferred tax assets will not be realized. The Company evaluates and weighs all available positive and negative evidence such as historic results, future reversals of existing deferred tax liabilities, as well as projected future taxable income. Generally, more weight is given to objectively verifiable evidence. The Company will continue to assess the realizability of the deferred tax assets in each of the applicable jurisdictions. The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions. The Company accounts for uncertain tax positions and believes that it has provided adequate reserves for its unrecognized tax benefits for all tax years still open for assessment. The Company also believes that it does not have any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. The Company has a policy to classify accrued interest and penalties associated with uncertain tax positions together with the related liability in the balance sheet, and to include the expenses incurred related to such accruals in the provision for income taxes. There were no interest or penalties included in the provision for income taxes during the three months ended March 31, 2018 and 2017 . The SEC staff issued SAB 118, which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Act in the period of enactment. The guidance allows the Company to record provisional amounts to the extent a reasonable estimate can be made and provides the Company with up to one year from enactment date to finalize the accounting for the impact of the Tax Act. The Tax Act is effective in the Company’s fourth quarter of 2017. As of March 31, 2018, we have not completed our accounting for the tax effects of the Tax Act. During the quarter, no material revision has been made to the Company’s provisional assessments made as of December 31, 2017. In order to complete the accounting for the impact of the Tax Act, the Company continues to obtain, analyze and interpret additional guidance as such guidance becomes available from the U.S. Treasury Department, the Internal Revenue Service (“IRS”), state taxing jurisdictions, the FASB, and other standard-setting and regulatory bodies. New guidance or interpretations may materially impact the Company’s provision for income taxes in future periods. Additional information that is needed to complete the analysis but is currently unavailable includes, but is not limited to, the final determination of certain net deferred tax assets and liabilities subject to remeasurement and when the related temporary differences will be settled or realized, and the tax treatment of such provisions of the Tax Act by various state tax authorities. In addition, we do not currently have sufficient information and guidance to determine the impact of “transition rule” related to the Company’s covered employees’ compensation stemming from written binding contracts entered on or before November 2, 2017. The provisional accounting impacts may change in future reporting periods until our accounting analysis is finalized, which is expected to be completed by the Company’s fourth quarter of 2018. For additional information related to the impact of the 2017 Tax Act on our tax provision and tax rate, please see Note 8 of our consolidated financial on our Annual Report on Form 10-K, for the calendar year ended December 30, 2017, filed with the SEC on March 01, 2018. |
Equity and Stock Incentive Pl23
Equity and Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation expense | Total stock-based compensation expense recognized consisted of: Three Months ended March 31, 2018 2017 (in thousands) Cost of revenues $ 1,894 $ 1,444 Sales and marketing 1,556 1,176 Research and development 2,534 1,861 General and administrative 3,548 3,370 $ 9,532 $ 7,851 |
Summary of stock option activity | The following table summarizes the Company’s stock option activity under the Stock Plans: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Outstanding at January 1, 2018 1,436,031 $ 27.06 5.43 $ 89,554 Granted 4,641 $ 92.28 Exercised (92,838 ) $ 23.57 Forfeited or expired (4,298 ) $ 43.69 Outstanding at March 31, 2018 1,343,536 $ 27.47 5.18 $ 86,631 Ending vested and expected to vest at March 31, 2018 1,341,283 $ 27.43 5.18 $ 86,551 Exercisable at March 31, 2018 1,212,913 $ 24.82 4.98 $ 81,411 |
Summary of RSU, Performance Award, and performance-vesting RSU activity | The following table summarizes the Company’s RSU , Performance Award, and performance-vesting RSU activity: RSUs Performance Awards and Performance-Vesting RSUs Number of Shares Weighted Average Grant Date Fair Value Per Share Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 2018 1,179,458 $ 82.84 294,464 $ 56.17 Granted 104,142 $ 91.33 121,102 $ 92.28 Released (73,171 ) $ 61.21 (115,325 ) $ 43.95 Forfeited or expired (30,094 ) $ 79.74 (20,645 ) $ 61.11 Outstanding at March 31, 2018 1,180,335 $ 85.01 279,596 $ 76.48 Ending vested and expected to vest at March 31, 2018 1,065,414 279,593 |
Schedule of stock options and employee stock purchase plan valuation assumptions | The fair value of stock options and stock purchase rights granted under the Stock Plans, and the ESPP were estimated at the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions: Three Months ended March 31, 2018 2017 Stock option plans: Risk-free interest rate 2.63 % 2.04 % Expected life of options (in years) 6.08 6.08 Expected dividend yield — % — % Volatility 45 % 48 % Employee Stock Purchase Plan: Risk-free interest rate 1.86 % 0.69 % Expected life of options (in years) 0.50 0.50 Expected dividend yield — % — % Volatility 27 % 35 % |
Schedule of shares of common stock available for future issuance under stock option plans | The following numbers of shares of common stock were reserved and available for future issuance at March 31, 2018 : Reserved Shares Options and awards outstanding under the Stock Plans 2,803,467 Shares available for future grant under the 2011 Plan 6,730,095 Shares available under the ESPP 1,879,626 Total 11,413,188 |
Basis of Presentation and Sig24
Basis of Presentation and Significant Accounting Policies (Details Textual) | 3 Months Ended |
Mar. 31, 2018segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Number of operating segments | 1 |
Minimum [Member] | |
Basis of Presentation and Significant Accounting Policies [Line Items] | |
Saas Encompass contract term | 1 year |
Maximum [Member] | |
Basis of Presentation and Significant Accounting Policies [Line Items] | |
Saas Encompass contract term | 5 years |
Basis of Presentation and Sig25
Basis of Presentation and Significant Accounting Policies (Cumulative Effect of Initially Applying ASC 606) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Balance Sheet | |||
Prepaid expenses and other current assets | $ 31,864 | $ 26,661 | $ 18,474 |
Deposits and other assets | 30,602 | 28,149 | 9,290 |
Accrued and other current liabilities | 24,338 | 26,998 | 26,188 |
Deferred revenues | 17,975 | 21,852 | 26,287 |
Other long-term liabilities | 19,727 | 26,871 | 18,880 |
Retained earnings | $ 99,579 | 109,079 | $ 86,399 |
Adjustments Due to ASC 606 | |||
Balance Sheet | |||
Retained earnings | 22,700 | ||
ASU No. 2014-09 | Adjustments Due to ASC 606 | |||
Balance Sheet | |||
Prepaid expenses and other current assets | 8,187 | ||
Deposits and other assets | 18,859 | ||
Accrued and other current liabilities | 810 | ||
Deferred revenues | (4,435) | ||
Other long-term liabilities | 7,991 | ||
Retained earnings | $ 22,680 |
Basis of Presentation and Sig26
Basis of Presentation and Significant Accounting Policies (Impact of ASC 606 on Selected Consolidated Balance Sheet Line Items) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Balance Sheet | |||
Prepaid expenses and other current assets | $ 31,864 | $ 26,661 | $ 18,474 |
Deposits and other assets | 30,602 | 28,149 | 9,290 |
Accrued and other current liabilities | 24,338 | 26,998 | 26,188 |
Deferred revenues | 17,975 | 21,852 | 26,287 |
Other long-term liabilities | 19,727 | 26,871 | 18,880 |
Retained earnings | 99,579 | $ 109,079 | $ 86,399 |
ASU No. 2014-09 | Adjustments | |||
Balance Sheet | |||
Prepaid expenses and other current assets | (9,938) | ||
Deposits and other assets | (15,636) | ||
Accrued and other current liabilities | (824) | ||
Deferred revenues | 2,688 | ||
Other long-term liabilities | (2,829) | ||
Retained earnings | (24,609) | ||
ASU No. 2014-09 | Balances without adoption of Topic 606 | |||
Balance Sheet | |||
Prepaid expenses and other current assets | 21,926 | ||
Deposits and other assets | 14,966 | ||
Accrued and other current liabilities | 23,514 | ||
Deferred revenues | 20,663 | ||
Other long-term liabilities | 16,898 | ||
Retained earnings | $ 74,970 |
Basis of Presentation and Sig27
Basis of Presentation and Significant Accounting Policies (Impact of ASC 606 on Selected Consolidated Statement of Comprehensive Income Line Items) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenues | $ 117,912 | $ 93,002 |
Gross profit | 68,565 | 58,234 |
Sales and marketing | 23,064 | 19,380 |
Loss from operations | (3,302) | 4,505 |
Income tax benefit | (4,658) | (4,593) |
Net income | $ 2,204 | $ 9,599 |
Basic income per share of common stock (in usd per share) | $ 0.06 | $ 0.28 |
Diluted income per share common stock (in usd per share) | $ 0.06 | $ 0.27 |
ASU No. 2014-09 | Adjustments | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenues | $ (1,929) | |
Gross profit | (1,929) | |
Sales and marketing | 78 | |
Loss from operations | (2,007) | |
Income tax benefit | (79) | |
Net income | $ (1,928) | |
Basic income per share of common stock (in usd per share) | $ (0.05) | |
Diluted income per share common stock (in usd per share) | $ (0.05) | |
ASU No. 2014-09 | Balances without adoption of Topic 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenues | $ 115,983 | |
Gross profit | 66,636 | |
Sales and marketing | 23,142 | |
Loss from operations | (5,309) | |
Income tax benefit | (4,737) | |
Net income | $ 276 | |
Basic income per share of common stock (in usd per share) | $ 0.01 | |
Diluted income per share common stock (in usd per share) | $ 0.01 |
Basis of Presentation and Sig28
Basis of Presentation and Significant Accounting Policies (Impact of ASC 606 on Selected Consolidated Statement of Cash Flows Line Items) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows | ||
Net income | $ 2,204 | $ 9,599 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income taxes | (4,658) | (4,647) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (5,203) | (973) |
Deposits and other assets | (4,331) | (89) |
Accrued, other current and other long-term liabilities | (2,928) | (19,442) |
Deferred revenues | (4,187) | (3,323) |
Net cash provided by operating activities | 6,401 | $ (1,422) |
ASU No. 2014-09 | Adjustments | ||
Statement of Cash Flows | ||
Net income | (1,928) | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income taxes | (79) | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 1,752 | |
Deposits and other assets | 1,851 | |
Accrued, other current and other long-term liabilities | (14) | |
Deferred revenues | (1,582) | |
Net cash provided by operating activities | 0 | |
ASU No. 2014-09 | Balances without adoption of Topic 606 | ||
Statement of Cash Flows | ||
Net income | 276 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income taxes | (4,737) | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (3,451) | |
Deposits and other assets | (2,480) | |
Accrued, other current and other long-term liabilities | (2,942) | |
Deferred revenues | (5,769) | |
Net cash provided by operating activities | $ 6,401 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenues) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 117,912 | $ 93,002 |
Hosted software services | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 97,120 | |
Ellie Mae Network | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 13,271 | |
Professional services | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 7,521 |
Revenue Recognition (Contract B
Revenue Recognition (Contract Balances) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Revenue From Contract With Customer [Abstract] | ||
Accounts receivable, net | $ 45,123 | $ 43,121 |
Contract assets - current | 7,915 | |
Contract assets - noncurrent | 15,275 | |
Deferred revenues - current | 17,975 | |
Deferred revenues - noncurrent | $ 900 |
Revenue Recognition (Changes in
Revenue Recognition (Changes in Contract Assets and Deferred Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
Revenue From Contract With Customer [Abstract] | ||
Contract assets | $ 23,190 | $ 19,667 |
Change in contract assets | 3,523 | |
Deferred revenues | 18,875 | $ 23,062 |
Change in deferred revenues | $ (4,187) |
Revenue Recognition (Remaining
Revenue Recognition (Remaining Performance Obligations) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Revenue, Performance Obligation Satisfied Over Time | |
Within 1 year | $ 291,943 |
2-3 years | 293,805 |
Thereafter | 68,306 |
Remaining performance obligation | $ 654,054 |
Revenue Recognition (Details Te
Revenue Recognition (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue From Contract With Customer [Abstract] | ||||
Contract assets | $ 23,190 | $ 19,667 | ||
Deferred revenues | 18,875 | $ 23,062 | ||
Revenue recognized that was included in deferred revenue at beginning of period | 12,100 | |||
Deferred costs | 15,700 | $ 8,500 | ||
Amortization expense related to deferred costs | $ 1,400 | $ 800 |
Net Income Per Share of Commo34
Net Income Per Share of Common Stock (Components of Net Income Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Components of net income per share | ||
Net income | $ 2,204 | $ 9,599 |
Basic shares: | ||
Weighted average common shares outstanding used to compute basic net income per share | 34,143,000 | 33,702,000 |
Diluted shares: | ||
Weighted average common shares outstanding used to compute basic net income per share | 34,143,000 | 33,702,000 |
Effect of potentially dilutive securities: | ||
Employee stock options, RSUs, performance-vesting RSUs, Performance Awards and ESPP shares | 1,459,000 | 1,907,000 |
Weighted average common shares outstanding used to compute diluted net income per share | 35,602,000 | 35,609,000 |
Net income per share: | ||
Basic (in usd per share) | $ 0.06 | $ 0.28 |
Diluted (in usd per share) | $ 0.06 | $ 0.27 |
Net Income Per Share of Commo35
Net Income Per Share of Common Stock (Anti-dilutive Shares) (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Stock Options and Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of net income per share | 10,000 | 73,000 |
Performance Based Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of net income per share | 129,079 | 71,939 |
Financial Instruments and Fai36
Financial Instruments and Fair Value Measurement (Investments in Financial Instruments that are Measured at Fair Value) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets Measured on Recurring Basis [Line Items] | ||||
Cash | $ 85,193 | $ 119,035 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 198,974 | 211,588 | ||
Unrealized Gains | 1 | 2 | ||
Unrealized Losses | (1,417) | (882) | ||
Investments | 197,558 | 210,708 | ||
Cash and cash equivalents | 117,342 | 137,698 | $ 334,926 | $ 380,907 |
Cash and cash equivalents | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Cash and cash equivalents, amortized cost | 117,342 | 137,698 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 0 | 0 | ||
Cash and cash equivalents | 117,342 | 137,698 | ||
Fair Value, Measurements, Recurring | Investments [Member] | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 316,316 | 349,286 | ||
Unrealized Gains | 1 | 2 | ||
Unrealized Losses | (1,417) | (882) | ||
Investments | 314,900 | 348,406 | ||
Fair Value, Measurements, Recurring | Level 1 | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 149,339 | 174,913 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | (438) | (266) | ||
Investments | 148,901 | 174,647 | ||
Fair Value, Measurements, Recurring | Level 1 | Money market funds | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 2,970 | 3,623 | ||
Investments | 2,970 | 3,623 | ||
Fair Value, Measurements, Recurring | Level 1 | U.S. government and government agency obligations | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 61,176 | 52,255 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | (438) | (266) | ||
Investments | 60,738 | 51,989 | ||
Fair Value, Measurements, Recurring | Level 2 | Corporate notes and obligations | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 79,065 | 81,062 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | (636) | (304) | ||
Investments | 78,429 | 80,758 | ||
Fair Value, Measurements, Recurring | Level 2 | Certificates of deposit | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 5,628 | 6,527 | ||
Unrealized Gains | 1 | 2 | ||
Unrealized Losses | 0 | 0 | ||
Investments | 5,629 | 6,529 | ||
Fair Value, Measurements, Recurring | Level 2 | Municipal obligations | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 8,381 | 10,274 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | (38) | (46) | ||
Investments | 8,343 | 10,228 | ||
Fair Value, Measurements, Recurring | Level 2 | U.S. government and government agency obligations | ||||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax [Abstract] | ||||
Total | 73,903 | 76,510 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | (305) | (266) | ||
Investments | $ 73,598 | $ 76,244 |
Financial Instruments and Fai37
Financial Instruments and Fair Value Measurement (Gross Unrealized Loss) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 179,701 | $ 182,037 |
Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (1,243) | (745) |
12 Months or Greater, Fair Value | 21,348 | 21,992 |
Continuous Unrealized Loss Position, 12 Months or Greater, Accumulated Loss | (174) | (137) |
Fair Value | 201,049 | 204,029 |
Continuous Unrealized Loss Position, Accumulated Loss | (1,417) | (882) |
Corporate notes and obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | 60,690 | 62,099 |
Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (571) | (253) |
12 Months or Greater, Fair Value | 6,935 | 7,574 |
Continuous Unrealized Loss Position, 12 Months or Greater, Accumulated Loss | (66) | (51) |
Fair Value | 67,625 | 69,673 |
Continuous Unrealized Loss Position, Accumulated Loss | (637) | (304) |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | 0 | 482 |
Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 |
12 Months or Greater, Fair Value | 1,480 | 1,348 |
Continuous Unrealized Loss Position, 12 Months or Greater, Accumulated Loss | 0 | 0 |
Fair Value | 1,480 | 1,830 |
Continuous Unrealized Loss Position, Accumulated Loss | 0 | 0 |
U.S. government, government agency, and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | 119,011 | 119,456 |
Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (672) | (492) |
12 Months or Greater, Fair Value | 12,933 | 13,070 |
Continuous Unrealized Loss Position, 12 Months or Greater, Accumulated Loss | (108) | (86) |
Fair Value | 131,944 | 132,526 |
Continuous Unrealized Loss Position, Accumulated Loss | $ (780) | $ (578) |
Financial Instruments and Fai38
Financial Instruments and Fair Value Measurement (Contractual Maturities of Investments) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Due within one year | $ 114,254 | |
Due after one year through three years | 84,720 | |
Total | 198,974 | $ 211,588 |
Carrying or Fair Value | ||
Due within one year | 113,931 | |
Due after one year through three years | 83,627 | |
Total | $ 197,558 | $ 210,708 |
(Schedule of Property and Equip
(Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property and Equipment, Net | ||
Property and equipment, gross | $ 286,554 | $ 264,104 |
Internal-use software and other assets not placed in service | 60,575 | 52,659 |
Accumulated depreciation and amortization | (87,647) | (77,113) |
Property and equipment, net | 198,907 | 186,991 |
Computer equipment and software [Member] | ||
Property and Equipment, Net | ||
Property and equipment, gross | 72,627 | 67,068 |
Internal-use software [Member] | ||
Property and Equipment, Net | ||
Property and equipment, gross | 117,758 | 108,710 |
Furniture and fixtures [Member] | ||
Property and Equipment, Net | ||
Property and equipment, gross | 8,284 | 8,311 |
Leasehold improvements [Member] | ||
Property and Equipment, Net | ||
Property and equipment, gross | $ 27,310 | $ 27,356 |
Property and Equipment, net (De
Property and Equipment, net (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 11,366 | $ 7,339 |
Capital leases amortization expense | $ 600 | $ 800 |
Intangible Assets, net (Schedul
Intangible Assets, net (Schedule of Intangible Assets, net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 108,775 | $ 108,775 |
Intangible assets, net | 74,568 | 80,874 |
Assets subject to amortization: | ||
Gross Carrying Amount | 104,736 | 104,736 |
Accumulated Amortization | (34,207) | (27,901) |
Net Intangibles, finite-lived | $ 70,529 | $ 76,835 |
Weighted Average Remaining Useful Life (in years) | 78 months 27 days | 78 months 5 days |
Trade Names [Member] | ||
Assets not subject to amortization: | ||
Indefinite-lived intangible assets | $ 4,039 | $ 4,039 |
Developed Technology [Member] | ||
Assets subject to amortization: | ||
Gross Carrying Amount | 53,535 | 53,535 |
Accumulated Amortization | (12,402) | (10,810) |
Net Intangibles, finite-lived | $ 41,133 | $ 42,725 |
Weighted Average Remaining Useful Life (in years) | 86 months 29 days | 89 months 18 days |
Trade Names [Member] | ||
Assets subject to amortization: | ||
Gross Carrying Amount | $ 1,931 | $ 1,931 |
Accumulated Amortization | (598) | (464) |
Net Intangibles, finite-lived | $ 1,333 | $ 1,467 |
Weighted Average Remaining Useful Life (in years) | 30 months | 33 months |
Customer Relationships [Member] | ||
Assets subject to amortization: | ||
Gross Carrying Amount | $ 34,900 | $ 34,900 |
Accumulated Amortization | (13,981) | (13,050) |
Net Intangibles, finite-lived | $ 20,919 | $ 21,850 |
Weighted Average Remaining Useful Life (in years) | 90 months 27 days | 92 months 25 days |
Order Backlog [Member] | ||
Assets subject to amortization: | ||
Gross Carrying Amount | $ 14,370 | $ 14,370 |
Accumulated Amortization | (7,226) | (3,577) |
Net Intangibles, finite-lived | $ 7,144 | $ 10,793 |
Weighted Average Remaining Useful Life (in years) | 6 months 8 days | 9 months 6 days |
Intangible Assets, net (Future
Intangible Assets, net (Future Amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Minimum future amortization expense for intangible assets | ||
Remainder of 2018 | $ 15,083 | |
2,019 | 10,499 | |
2,020 | 8,978 | |
2,021 | 7,114 | |
2,022 | 7,055 | |
2,023 | 6,800 | |
Thereafter | 15,000 | |
Total future amortization | $ 70,529 | $ 76,835 |
Intangible Assets, net (Details
Intangible Assets, net (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 6,306 | $ 1,078 |
Income Taxes (Tax Provision and
Income Taxes (Tax Provision and Effective Tax Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ (4,658) | $ (4,593) |
Effective tax rate (percent) | 189.80% | (91.70%) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (percent) | 189.80% | (91.70%) |
Income tax interest and penalties | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) | Mar. 31, 2018facility |
Commitments and Contingencies Disclosure [Abstract] | |
Number of facilities under operating lease arrangements | 9 |
Equity and Stock Incentive Pl47
Equity and Stock Incentive Plans (Stock-Based Compensation Allocation) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 9,532 | $ 7,851 |
Cost of Revenues [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,894 | 1,444 |
Sales and Marketing [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,556 | 1,176 |
Research and Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 2,534 | 1,861 |
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 3,548 | $ 3,370 |
Equity and Stock Incentive Pl48
Equity and Stock Incentive Plans (Stock Option Activity) (Details) - Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options outstanding, beginning of period, shares | 1,436,031 | |
Options granted, shares | 4,641 | |
Options exercised, shares | (92,838) | |
Options forfeited or expired, shares | (4,298) | |
Options outstanding, end of period, shares | 1,343,536 | 1,436,031 |
Ending vested and expected to vest, end of period, shares | 1,341,283 | |
Options exercisable, end of period, shares | 1,212,913 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning of period, weighted average exercise price | $ 27.06 | |
Options granted, weighted average exercise price | 92.28 | |
Options exercised, weighted average exercise price | 23.57 | |
Options forfeited or expired, weighted average exercise price | 43.69 | |
Outstanding, end of period, weighted average exercise price | 27.47 | $ 27.06 |
Ending vested and expected to vest, Weighted Average Exercise Price at End of Period | 27.43 | |
Stock option exercisable at End of Period, weighted average exercise price, Ending Balance | $ 24.82 | |
Weighted average remaining contractual term at End of Period | 5 years 66 days | 5 years 157 days |
Ending vested and expected to vest, Weighted Average Remaining Contractual Term at End of Period | 5 years 66 days | |
Stock option exercisable, weighted average remaining Contractual term, Ending balance | 4 years 358 days | |
Aggregate Intrinsic value at End of Period | $ 86,631 | $ 89,554 |
Ending vested and expected to vest, Aggregate Intrinsic Value at End of Period | 86,551 | |
Exercisable aggregate Intrinsic Value | $ 81,411 |
Equity and Stock Incentive Pl49
Equity and Stock Incentive Plans (RSU and Performance Award Activity) (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
RSUs [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Outstanding, beginning of period | 1,179,458 |
Granted | 104,142 |
Released | (73,171) |
Forfeited or expired | (30,094) |
Outstanding, end of period | 1,180,335 |
Weighted Average Grant Date Fair Value, beginning of period | $ / shares | $ 82.84 |
Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | 91.33 |
Released in Period, Weighted Average Grant Date Fair Value | $ / shares | 61.21 |
Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | 79.74 |
Weighted Average Grant Date Fair Value, end of period | $ / shares | $ 85.01 |
Ending vested and expected to vest, end of period, shares | 1,065,414 |
Performance Awards and Performance-Vesting RSUs [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Outstanding, beginning of period | 294,464 |
Granted | 121,102 |
Released | (115,325) |
Forfeited or expired | (20,645) |
Outstanding, end of period | 279,596 |
Weighted Average Grant Date Fair Value, beginning of period | $ / shares | $ 56.17 |
Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | 92.28 |
Released in Period, Weighted Average Grant Date Fair Value | $ / shares | 43.95 |
Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | 61.11 |
Weighted Average Grant Date Fair Value, end of period | $ / shares | $ 76.48 |
Ending vested and expected to vest, end of period, shares | 279,593 |
Equity and Stock Incentive Pl50
Equity and Stock Incentive Plans (Fair Value Assumptions) (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock Option [Member] | ||
Schedule of Stock Options and Employee Stock Purchase Plan Valuation Assumptions | ||
Risk-free interest rate | 2.63% | 2.04% |
Expected life of options (in years) | 6 years 29 days | 6 years 29 days |
Expected dividend yield | 0.00% | 0.00% |
Volatility | 45.00% | 48.00% |
Employee Stock Purchase Plan [Member] | ||
Schedule of Stock Options and Employee Stock Purchase Plan Valuation Assumptions | ||
Risk-free interest rate | 1.86% | 0.69% |
Expected life of options (in years) | 183 days | 6 months |
Expected dividend yield | 0.00% | 0.00% |
Volatility | 27.00% | 35.00% |
Equity and Stock Incentive Pl51
Equity and Stock Incentive Plans (Reserved Shares) (Details) | Mar. 31, 2018shares |
Class of Stock [Line Items] | |
Reserved shares | 11,413,188 |
Options and Awards Outstanding [Member] | |
Class of Stock [Line Items] | |
Reserved shares | 2,803,467 |
Shares Available for Future Grant [Member] | |
Class of Stock [Line Items] | |
Reserved shares | 6,730,095 |
Shares Available Under Employee Stock Purchase Plan [Member] | |
Class of Stock [Line Items] | |
Reserved shares | 1,879,626 |
Equity and Stock Incentive Pl52
Equity and Stock Incentive Plans (Details Textual) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 01, 2018 | Aug. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock repurchase program, authorized amount | $ 250,000,000 | |||
Shares repurchased | 159,141 | |||
Cost shares repurchased | $ 14,700,000 | |||
Stock repurchase program, remaining authorized repurchase amount | $ 200,000,000 | |||
Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted, shares | 4,641 | |||
Share price (in usd per share) | $ 91.94 | |||
Unrecognized stock-based compensation expense | $ 3,000,000 | |||
Expected to be recognized over a weighted average period | 1 year 26 days | |||
Annual automatic increase in shares reserved for issuance, shares | 1,711,384 | |||
RSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value of shares released | $ 6,600,000 | $ 5,300,000 | ||
Aggregate grant-date fair value of shares released | 4,500,000 | 2,700,000 | ||
Performance Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value of shares released | 10,600,000 | 13,700,000 | ||
Aggregate grant-date fair value of shares released | 5,100,000 | $ 5,800,000 | ||
Restricted Stock Units and Performance Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | $ 83,700,000 | |||
Expected to be recognized over a weighted average period | 2 years 165 days | |||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual automatic increase in shares reserved for issuance, shares | 342,276 | |||
Employee Stock Purchase Plan [Member] | Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares purchased under ESPP | 77,339 | 52,619 | ||
Purchase price of ESPP shares | $ 5,600,000 | $ 4,300,000 | ||
Unrecognized compensation cost related to employee stock purchase plan | $ 1,500,000 | |||
Expected recognized period under employee stock purchase plan | 5 months |