| Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2018 |
| Accounting Policies [Abstract] | |
| Principles of Consolidation | Principles of Consolidation The presentation of the financial statements in this Annual Report on Form 10-K reflects the merger of all wholly-owned subsidiaries of the Company with and into the Company effective December 31, 2017. The Balance Sheet as of December 31, 2017, and the related Statements of Comprehensive Income, Stockholders’ Equity, and Cash Flows for the years ended December 31, 2017 and 2016 are consolidated with Ellie Mae’s then-subsidiaries Velocify, Inc., Mavent Holdings Inc. and Mavent Inc. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain prior period amounts reported in the Company’s financial statements have been reclassified to conform to current period presentation. |
| Use of Estimates | Use of Estimates The preparation of 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 the transaction price of customer contracts, constraints of variable consideration, 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 financial statements and footnotes. |
| Segment Information | 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 as a single segment. 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. |
| Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments with original maturities of 90 days or less are considered to be cash equivalents. Cash equivalents primarily consist of money market funds, government agency obligations, and guaranteed obligations of the U.S. government. |
| Fair Value Measurement of Financial Instruments | Fair Value Measurement of Financial Instruments The Company invests excess cash primarily in money market funds and investment-grade, fixed maturity interest-bearing debt securities, such as certificates of deposit, commercial paper, corporate bonds, municipal and government agency obligations, and guaranteed obligations of the U.S. government. All of the Company’s investments that have maturities of greater than 90 days are classified as available-for-sale and are carried at fair value. The cost of available-for-sale investments sold is based on the specific identification method. Unrealized gains and losses on available-for-sale investments are reported in stockholders’ equity as accumulated other comprehensive income (loss). Realized gains and losses are included in other income (expense), net. Interest and dividends are included in other income (expense), net when they are earned. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following three categories: Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities. Level 2 — Valuations based on other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Valuations based on inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the assets or liabilities. The Company classifies its money market funds 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. When the Company uses observable market prices for identical securities that are traded in less active markets, the Company classifies its marketable financial instruments as Level 2. When observable market prices for identical securities are not available, the Company prices its marketable financial instruments using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments; or pricing models with all significant inputs derived from or corroborated with observable market data. Non-binding market consensus prices are based on the proprietary valuation models of pricing providers. These valuation models incorporate a number of inputs, including non-binding and binding broker quotes; observable market prices for identical or similar securities; and the internal assumptions of pricing providers or brokers that use observable market inputs. The Company corroborates non-binding market consensus prices with observable market data as such data exists. The fair values of the Company’s cash equivalents, accounts receivable, and accounts payable approximate their carrying values due to the short maturities of the instruments. The fair value of the Company’s capital lease obligations approximates the carrying value due to the terms continuing to approximate prevailing market terms. |
| Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable consist of amounts billed to customers in connection with sale of services. The Company analyzes individual trade accounts receivable by considering historical bad debts, customer creditworthiness, current economic trends, changes in customer payment terms, and collection trends when evaluating the adequacy of the allowance for doubtful accounts. Allowances for doubtful accounts are recognized in the period in which the associated receivable balance is not considered recoverable. Any change in the assumptions used in analyzing accounts receivable may result in changes to the allowance for doubtful accounts and is recognized in the period in which the change occurs. The Company writes off a receivable when all rights, remedies, and recourse against the account and its principals are exhausted and records a benefit when previously reserved accounts are collected. |
| Concentration of Credit Risk | Concentration of Credit Risk The financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments, and accounts receivable. The Company’s cash and cash equivalents are deposited with major financial institutions in the United States. At times, such deposits may be in excess of federally insured limits. Management believes that the Company’s investments in cash equivalents and available-for-sale investments are financially sound. The Company’s accounts receivable are derived from revenue earned from customers located in the United States. The Company had no customers that represented 10% or more of revenues for the years ended December 31, 2018, 2017, and 2016 . No customer represented more than 10% of accounts receivable as of December 31, 2018 and 2017 . |
| Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and are depreciated on a straight-line basis over their estimated useful lives, which is generally three to seven years. Leasehold improvements are amortized on a straight-line basis over their estimated useful lives or over the term of the lease, whichever is shorter. |
| Software and Website Development Costs | Software and Website Development Costs The Company capitalizes internal and external costs incurred to develop internal-use software and website applications. Capitalized internal costs include salaries, benefits, and stock-based compensation charges for employees that are directly involved in developing the software or website application, and depreciation of assets used in the development process. Capitalized external costs include third-party consultants involved in the development process, as well as other direct costs incurred therein. Capitalization of costs begins when the preliminary project stage has been completed, management authorizes and commits to funding a project and it is probable that the project will be completed and the software or website application will be used to perform the function intended. Internal and external costs incurred as part of the preliminary project stage are expensed as incurred. Capitalization ceases at the point at which the project is substantially complete and ready for its intended use. Internal and external training costs and maintenance costs during the post-implementation operation stage are expensed as incurred. Internal-developed core software is amortized on a straight-line basis over its estimated useful life of five years. Amortization of product related internal-use software and website applications is typically recorded to cost of revenues, and amortization of other internal-use software and website applications is typically recorded to the operating expense line to which it most closely relates. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The capitalized costs are included in property and equipment, net on the balance sheet. |
| Business Combinations | Business Combinations The Company recognizes and measures the identifiable assets acquired in a business combination, the liabilities assumed, and any non-controlling interest in the acquiree at their fair values as of the acquisition date. The Company recognizes contingent consideration arrangements at their acquisition-date fair values with subsequent changes in fair value reflected in earnings, recognizes pre-acquisition loss and gain contingencies at their acquisition-date fair values, capitalizes in-process research and development assets, and expenses acquisition-related transaction costs as incurred. Due to the inherent uncertainty in the estimates and assumptions used by the Company in its fair value measurements, recorded amounts may be subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding offset to goodwill. Any subsequent adjustments, including changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period, are recognized in current period earnings. |
| Goodwill | Goodwill The Company records goodwill in a business combination when the consideration paid exceeds the fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually, or whenever changes in circumstances indicate that the fair value of a reporting unit is less than its carrying amount, including goodwill. The annual test is performed at the reporting unit level using a fair-value based approach. The Company’s operations are organized as one reporting unit. In testing for a potential impairment of goodwill, the Company first compares the net aggregate carrying value of assets and liabilities to the aggregate estimated fair value of the Company. If estimated fair value is less than carrying value, then potential impairment exists. Impairment is equivalent to any excess of goodwill carrying value over its implied fair value. The process of evaluating the potential impairment of goodwill requires significant judgment at many points during the analysis, including calculating fair value of the reporting unit based on estimated future cash flows and discount rates to be applied. |
| Intangible Assets | Intangible Assets Intangible assets are stated at cost less accumulated amortization. Intangible assets include developed technology, trade names, customer relationships, and order backlog. Intangible assets with finite lives are amortized on a straight-line basis over the estimated periods of benefit, as follows: Developed technology 2-8 years Trade names with finite lives 2-3 years Customer relationships 4-10 years Order backlog 1 year The AllRegs tradename is the only intangible asset with an indefinite useful life. The Company evaluates the remaining useful life of indefinite-lived intangible assets each reporting period to determine whether events and circumstances continue to support an indefinite useful life. The Company tests intangible assets with indefinite lives at least annually or if events or circumstances indicate that such assets might be impaired. If potential impairment exists, the amount of any impairment is calculated by using a discounted cash flow model, which is based on the assumptions the Company believes hypothetical marketplace participants would use. For indefinite-lived intangible assets, other than goodwill, if the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. The Company evaluates its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to future undiscounted net cash flows expected to be generated by the asset or asset group. If such assets or asset groups are considered to be impaired, the impairment loss to be recognized is measured by the amount by which the carrying amounts of the assets or asset groups exceed the fair value of the assets or asset groups. Assets to be disposed of are reported at the lower of the carrying amount and fair value less costs to sell. |
| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates its long-lived assets for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
| Revenue Recognition | Revenue Recognition The Company applies the provisions of ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), as amended (“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 cloud-based subscription services, transaction-based fees, and related services including professional services and its annual user conference, and recognizes revenues as performance obligations are satisfied. For subscription services where the customer simultaneously receives and consumes the benefit from the Company's performance, revenues are 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 Encompass subscriptions that customers access through the Internet, revenues are comprised of software services sold both as a subscription and on a variable basis. Variable fees include fees billed on a per closed loan, or success basis, subject to monthly base fees, which the Company refers to as Success-Based Pricing. Other cloud-based subscription services consist of policy, guideline, data and analytics, lead management, marketing, and customer relationship management. Transaction-based fees are comprised of Ellie Mae Network fees and transaction fees charged for other services, including fees for loan products and the annual user conference. Fees for professional services include consulting, implementation, and education and training services. Sales taxes assessed by governmental authorities are excluded from the transaction price. In contracts where recognizing variable consideration in the month it is earned does not meet the allocation objective of Topic 606, variable consideration is 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. Cloud-Based Subscription Revenues. Cloud-based subscription revenues 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 cloud-based Encompass platform which has been determined to be a stand-ready obligation. Revenues are recognized 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 . Some Encompass customers 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 based on the number of closed loan transactions processed by the customer in the specific month. Under success basis contracts, monthly base fees are recognized ratably over the contract terms as subscription performance obligations are satisfied and any closed loan fees in excess of base fees are considered variable consideration. For the majority of Encompass contracts that include variable consideration, such 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 and because such amounts reflect the fees to which the Company expects to be entitled for providing access to the Encompass platform for that period, consistent with the allocation objective of Topic 606. 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. The estimates of the total variable consideration expected to be received under such agreements is 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. The Company evaluates its ability to accurately estimate such variable consideration considering all relevant facts and circumstances associated with both the likelihood of a downward adjustment in the estimate of variable consideration and the potential magnitude of a significant revenue reversal relative to the cumulative revenue recognized to-date under the contract. Because the amount of consideration is highly susceptible to broad economic factors outside the Company’s influence, have a broad range of possible consideration amounts, and the uncertainty is not expected to be resolved for a long period of time, the Company’s ability to accurately estimate the variable consideration is limited. Therefore, the amount of variable consideration included in the transactions price is constrained to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the amount of variable consideration is subsequently resolved. Other Subscription Revenues. The Company provides a variety of mortgage-related and other business services, including lead management, marketing, compliance services and customer relationship management. Such services include fixed fee subscriptions and are a single performance obligation consisting of a series of distinct services. These fixed fees are recognized ratably over the contract terms as this method best depicts the Company’s pattern of performance for such services. Variable 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 and because such amounts reflect the fees to which the Company expects to be entitled for providing the access to services for that period, consistent with the allocation objective. Online Research and Data Resources Subscription Revenues. 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 this method best depicts the Company’s pattern of performance for such services. Transactional Revenues. Transactional revenues include the following: 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 delivered 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 this method best depicts the Company’s pattern of performance for such services. Variable fees are recognized in the month in which they are earned because the allocation objective is met by allocating the fees to each distinct month in the series. Other Transactional Revenues. The Company provides other services delivered on a transactional basis including automated documentation; fraud detection, valuation, validation, and risk analysis; income verification; flood zone certifications; website and electronic document management; compliance reports; and the Company’s annual user conference. Fees are recognized as transactions occur which is the point in time when control is transferred. Variable 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 and because such amounts reflect the fees to which the Company expects to be entitled for providing the access to services for that period, consistent with the allocation objective. Professional Services Revenues. Professional services, including implementation services for the Company’s subscription products, are performance obligations which are determined to be distinct from our subscription services and other performance obligations. Such services are generally provided on a time and materials or fixed price basis and the customer simultaneously receives and consumes the benefit from the Company’s performance. 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 under the practical expedient as amounts correspond directly with the value of the services rendered to date. Contract Liabilities Contract liabilities represent billings or payments received in advance of revenue recognition and are 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. Contract liabilities that will be recognized during the succeeding 12-month period are recorded as current contract liabilities, and the remaining portion is recorded as other long-term 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 long-term assets. Deferred Contract Costs Deferred contract costs mainly consist of sales commissions and related fringe benefits that are incremental costs of obtaining contracts with customers, as well as partners’ referral fees. 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 contract 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 contract 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 long-term assets. |
| Warranties and Indemnification | Warranties and Indemnification The Company provides a warranty for its software products and services to its customers and accounts for its warranties as a contingent liability. The Company’s software is generally warranted to perform substantially as described in the associated product documentation and to satisfy defined levels of uptime reliability. The Company’s services are generally warranted to be performed consistent with industry standards. The Company has not provided for a warranty accrual as of December 31, 2018 or 2017 . To date, the Company’s product warranty expense has not been significant. The Company generally agrees to indemnify its customers against legal claims that the Company’s software products infringe certain third-party intellectual property rights and accounts for its indemnification obligations as a contingent liability. In addition, the Company may also incur a liability under its contracts if it breaches its warranties, as well as under certain data security and/or confidentiality obligations. To date, the Company has not been required to make any payment resulting from either infringement claims asserted against its customers or from claims in connection with a breach of the data security and/or confidentiality obligations in the Company’s contracts. The Company has not recorded a liability for related costs as of December 31, 2018 or 2017 . The Company has obligations under certain circumstances to indemnify each executive officer and member of the Company’s board of directors against judgments, fines, settlements, and expenses related to claims against such executive officer or director and otherwise to the fullest extent permitted under Delaware law and the Company’s bylaws and certificate of incorporation. |
| Cost of Revenues | Cost of Revenues The Company’s cost of revenues consists primarily of: salaries and benefits, including stock-based compensation expense; data center operating costs; depreciation on data center computer equipment; amortization of internal-use software and acquired intangible assets such as developed technology; customer support; professional services associated with implementation of the Company’s software; third-party royalty expenses; and allocated facilities costs. |
| Research and Development Costs | Research and Development Costs The Company’s research and development expenses consist primarily of: salaries and benefits, including bonuses and stock-based compensation expense; fees to contractors engaged in the development and support of the Ellie Mae Network, Encompass software and other products; and allocated facilities costs. Research and development costs that are not capitalized as internal-use software are expensed as they are incurred. |
| Advertising Expenses | Advertising Expenses The Company expenses advertising costs as incurred. |
| Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense related to restricted stock units (“RSUs”), performance shares, and performance-vesting restricted stock units based on the fair market value of the underlying shares of common stock as of the date of grant. Expense related to the RSUs is recognized on a straight-line basis over the requisite service period of the award, which generally equals the vesting period. Expense related to the performance shares and performance-vesting RSUs is recognized under the graded vesting method over the requisite service period of the award, which results in the recognition of a larger portion of the expense during the beginning of the vesting period than in the end of the vesting period. Management evaluates the probability of performance attainment, estimates the number of shares of common stock that will be granted, and records the expense accordingly. The Company recognizes compensation expense related to stock option grants that are ultimately expected to vest and shares issued under the Employee Stock Purchase Plan (“ESPP”) based on estimated fair values on the date of grant using the Black-Scholes option-pricing model. Expense related to stock options is recognized on a straight-line basis over the requisite service period, which generally equals the vesting period. Expense related to shares issued under the ESPP is recognized on a straight-line basis over the offering period. The date of grant is the date at which the Company and the employee reach a mutual understanding of the key terms and conditions of the award, appropriate approvals are received by the equity incentive committee of the board of directors and the Company becomes contingently obligated to issue equity instruments to the employee who renders the requisite service. The Company estimates potential forfeitures of stock grants and adjusts recorded compensation cost accordingly. The estimate of forfeitures is based on historical experience and is adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from the prior estimates. Changes in estimated forfeitures will be recognized in the period of change and will impact the amount of stock-based compensation expense to be recognized in future periods. |
| Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of taxes payable or refundable for the current year, and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The measurement of current and deferred tax liabilities and assets is based on provisions of the enacted tax law. The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on estimates of future sources of taxable income for the jurisdictions in which the Company operates and the periods over which the deferred tax assets will be realizable. To the extent the Company establishes a valuation allowance or changes the valuation allowance in a period, the Company reflects the change with a corresponding increase or decrease to the tax provision in the statement of comprehensive income. |
| Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes certain changes in equity that are excluded from net income, specifically unrealized gains (losses) on marketable securities. Except for net realized gain (loss) on investments, which was not significant, there were no reclassifications out of accumulated other comprehensive income that affected net income during the years ended December 31, 2018, 2017, and 2016 . |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU No. 2016-02 In February 2016, the FASB issued Accounting Standards Update (“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 right-of-use (“ROU”) asset for the right to use the underlying asset for the lease term and a lease liability for the obligation to make lease payments. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company plans to adopt this new standard on January 1, 2019 and use the effective date as its date of initial application. Consequently, the Company will not restate comparative periods. While the Company is finalizing all of the effects of adoption including changes to its processes, the most significant effects of the standard are expected to be related to (1) recognition of new ROU assets of approximately $60.6 million and lease liabilities of approximately $75.0 million on its balance sheet for its operating leases, and (2) providing significant new disclosures about its leasing activities. The Company does not expect the adoption to have a significant impact to its results of operations or cash flows. ASU No. 2018-07 In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 supersedes the guidance in ASC 505-50, Equity-Based Payments to Non-Employees, which previously included the accounting for non-employee awards. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company does not believe the adoption of this standard will have a material impact on its financial statements and related disclosures. ASU No. 2018-13 In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. This standard removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The standard is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The Company does not believe the adoption of this standard will have a material impact on its financial statements and related disclosures. ASU No. 2018-15 I n August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for interim and annual reporting periods beginning after December 15, 2019, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. Early adoption is permitted. The Company is currently gathering information and evaluating the impact of this accounting standard update on its financial statements and related disclosures. Standards Adopted ASU No. 2014-09 On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), as amended (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. The impact on the Company’s opening balances is primarily related to the Company’s straight-line calculations for subscription revenue, the estimation of variable consideration associated with certain of its contracts and the capitalization of additional commission costs under Topic 606. Prior to the adoption of Topic 606, billings that were contingent upon future performance were deferred, variable consideration was not estimated and the capitalization of contract acquisition costs was more limited. 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 Topic 606 as an adjustment to retained earnings in the balance sheet as of January 1, 2018 as follows: Selected Balance Sheet Line Items Balance at December 31, 2017 Adjustments Balance at January 1, 2018 (in thousands) Current assets: Prepaid expenses and other current assets $ 18,474 $ 8,900 $ 27,374 Non-current assets: Deposits and other long-term assets $ 9,290 $ 22,013 $ 31,303 Current liabilities: Accrued and other current liabilities $ 26,188 $ 3,138 $ 29,326 Contract liabilities $ 26,287 $ (1,706 ) $ 24,581 Non-current liabilities: Other long-term liabilities $ 18,880 $ 16,546 $ 35,426 Stockholders' equity: Retained earnings $ 86,399 $ 12,935 $ 99,334 The following tables summarize the impacts of Topic 606 adoption on the Company's financial statements for the periods ended December 31, 2018 : Selected Balance Sheet Line Items December 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Current assets: Accounts receivable, net $ 43,876 $ (140 ) $ 43,736 Prepaid expenses and other current assets $ 32,905 $ (10,716 ) $ 22,189 Non-current assets: Deposits and other long-term assets $ 36,031 $ (15,526 ) $ 20,505 Current liabilities: Accrued and other current liabilities $ 39,247 $ (2,584 ) $ 36,663 Contract liabilities $ 24,357 $ 233 $ 24,590 Non-current liabilities: Other long-term liabilities $ 25,398 $ (8,365 ) $ 17,033 Stockholders' equity: Retained earnings $ 110,205 $ (15,666 ) $ 94,539 Selected Statement of Comprehensive Income Line Items Year Ended December 31, 2018 (in thousands, except per share amounts) As Reported Adjustments Balances without adoption of Topic 606 Revenues $ 480,266 $ (2,064 ) $ 478,202 Gross profit $ 280,341 $ (2,064 ) $ 278,277 Operating expenses: Sales and marketing $ 84,234 $ 1,548 $ 85,782 Income from operations $ 10,880 $ (3,612 ) $ 7,268 Income tax benefit $ (7,775 ) $ (882 ) $ (8,657 ) Net income $ 22,575 $ (2,730 ) $ 19,845 Basic net income per share of common stock $ 0.66 $ (0.08 ) $ 0.58 Diluted net income per share of common stock $ 0.63 $ (0.08 ) $ 0.55 Selected Statement of Cash Flows Line Items Year Ended December 31, 2018 (in thousands) As Reported Adjustments Balances without adoption of Topic 606 Net income $ 22,575 $ (2,730 ) $ 19,845 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of deferred contract costs $ 8,927 $ (4,733 ) $ 4,194 Deferred income taxes $ (8,238 ) $ (881 ) $ (9,119 ) Other $ 504 $ (114 ) $ 390 Changes in operating assets and liabilities: Accounts receivable, net $ (755 ) $ 140 $ (615 ) Prepaid expenses, other current assets, and other long-term assets $ (7,503 ) $ 1,088 $ (6,415 ) Deferred contract costs $ (9,107 ) $ 6,114 $ (2,993 ) Accrued liabilities, other current liabilities, and other long-term liabilities $ 8,779 $ 1,093 $ 9,872 Contract liabilities $ (1,897 ) $ 23 $ (1,874 ) Net cash provided by operating activities 123,673 $ — $ 123,673 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 Jobs Act (the “Tax Act”) in conformity with the Securities and Exchange Commission (“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. In December 2018, the Company finalized the accounting for the Tax Act which resulted in an additional $1.2 million tax expense for the remeasurement of deferred tax assets. |
