Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 23, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | SYNCHRONOSS TECHNOLOGIES INC | ||
Entity Central Index Key | 1131554 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1 | ||
Entity Common Stock, Shares Outstanding | 43,027,001 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $235,967 | $63,512 |
Marketable securities | 51,097 | 9,105 |
Accounts receivable, net of allowance for doubtful accounts of $88 and $237 at December 31, 2014 and 2013, respectively | 118,371 | 64,933 |
Prepaid expenses and other assets | 35,023 | 19,451 |
Deferred tax assets | 1,475 | 4,626 |
Total current assets | 441,933 | 161,627 |
Marketable securities | 3,313 | 4,988 |
Property and equipment, net | 151,171 | 106,106 |
Goodwill | 147,135 | 137,743 |
Intangible assets, net | 99,489 | 101,963 |
Deferred tax assets | 1,232 | 4,210 |
Other assets | 18,549 | 10,382 |
Total assets | 862,822 | 527,019 |
Current liabilities: | ||
Accounts payable | 25,059 | 9,528 |
Accrued expenses | 42,657 | 37,919 |
Deferred revenues | 11,897 | 15,372 |
Contingent consideration obligation | 8,022 | 22 |
Total current liabilities | 87,635 | 62,841 |
Lease financing obligation - long-term | 9,204 | 9,252 |
Contingent consideration obligation - long-term | 4,468 | |
Convertible debt | 230,000 | |
Deferred tax liability | 3,698 | |
Other liabilities | 3,178 | 2,819 |
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding at December 31, 2014 and 2013 | ||
Common stock, $0.0001 par value; 100,000 shares authorized, 46,444 and 44,456 shares issued; 42,711 and 40,663 outstanding at December 31, 2014 and December 31, 2013, respectively | 4 | 4 |
Treasury stock, at cost (3,733 and 3,793 shares at December 31, 2014 and 2013, respectively) | -66,336 | -67,104 |
Additional paid-in capital | 454,740 | 393,644 |
Accumulated other comprehensive loss | -20,014 | -723 |
Retained earnings | 160,713 | 121,818 |
Total stockholders' equity | 529,107 | 447,639 |
Total liabilities and stockholders' equity | $862,822 | $527,019 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $88 | $237 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 46,444,000 | 44,456,000 |
Common stock, shares outstanding | 42,711,000 | 40,663,000 |
Treasury stock, shares | 3,733,000 | 3,793,000 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||
Net revenues | $457,314 | $349,047 | $273,692 | |||
Costs and expenses: | ||||||
Cost of services | 184,414 | [1] | 146,238 | [1] | 115,670 | [1] |
Research and development | 73,620 | 64,845 | 52,307 | |||
Selling, general and administrative | 79,227 | 62,096 | 46,680 | |||
Net change in contingent consideration obligation | 1,799 | -5,324 | -6,235 | |||
Restructuring charges | 5,172 | |||||
Depreciation and amortization | 55,956 | 41,126 | 23,812 | |||
Total costs and expenses | 395,016 | 314,153 | 232,234 | |||
Income from operations | 62,298 | 34,894 | 41,458 | |||
Interest income | 838 | 557 | 1,315 | |||
Interest expense | -3,003 | -1,089 | -998 | |||
Other income | 441 | 217 | 889 | |||
Income before income tax expense | 60,574 | 34,579 | 42,664 | |||
Income tax expense | -21,679 | -11,228 | -15,581 | |||
Net income | $38,895 | $23,351 | $27,083 | |||
Net income per common share: | ||||||
Basic (in dollars per share) | $0.96 | [2] | $0.60 | [2] | $0.71 | [2] |
Diluted (in dollars per share) | $0.92 | [2] | $0.58 | [2] | $0.69 | [2] |
Weighted-average common shares outstanding: | ||||||
Basic (in shares) | 40,418 | [2] | 38,891 | [2] | 38,195 | [2] |
Diluted (in shares) | 43,297 | [2] | 40,009 | [2] | 39,126 | [2] |
[1] | Cost of services excludes depreciation and amortization which is shown separately | |||||
[2] | See notes to financial statement footnote 2 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $38,895 | $23,351 | $27,083 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | -12,849 | -3,779 | 211 |
Unrealized gain (loss) on securities, (net of tax) | -166 | 2 | 123 |
Net (loss) on intra-entity foreign currency transactions | -6,276 | 3,419 | |
Total other comprehensive income (loss) | -19,291 | -358 | 334 |
Total other comprehensive income (loss) | $19,604 | $22,993 | $27,417 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2011 | $4 | ($43,712) | $307,586 | ($699) | $71,384 | $334,563 |
Balance (in shares) at Dec. 31, 2011 | 41,063 | -2,669 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock based compensation | 10,186 | 10,186 | ||||
Issuance of restricted stock | 9,782 | 9,782 | ||||
Issuance of restricted stock (in shares) | 760 | |||||
Issuance of common stock on exercise of options | 7,949 | 7,949 | ||||
Issuance of common stock on exercise of options (in shares) | 634 | |||||
Issuance of common stock related to acquisition | 1,386 | 1,386 | ||||
Issuance of common stock related to acquisition (in shares) | 76 | |||||
ESPP compensation | 457 | 457 | ||||
Repurchase of treasury stock | -24,615 | -24,615 | ||||
Repurchase of treasury stock (in shares) | -1,223 | |||||
Sale of Treasury Stock in connection with an employee stock purchase plan | 409 | 203 | 612 | |||
Sale of Treasury Stock in connection with an employee stock purchase plan (in shares) | 33 | |||||
Comprehensive income: | ||||||
Net income | 27,083 | 27,083 | ||||
Foreign currency translation | 211 | 211 | ||||
Unrealized loss on investments in marketable securities, net of tax benefits of $18, $2 and $82 during the period 2013, 2012 and 2011, respectively | 123 | 123 | ||||
Total other comprehensive income (loss) | 27,417 | |||||
Tax benefit from stock option exercise | 6,920 | 6,920 | ||||
Balance at Dec. 31, 2012 | 4 | -67,918 | 344,469 | -365 | 98,467 | 374,657 |
Balance (in shares) at Dec. 31, 2012 | 42,533 | -3,859 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock based compensation | 10,035 | 10,035 | ||||
Issuance of restricted stock | 14,539 | 14,539 | ||||
Issuance of restricted stock (in shares) | 734 | |||||
Issuance of common stock on exercise of options | 19,196 | 19,196 | ||||
Issuance of common stock on exercise of options (in shares) | 1,156 | |||||
Issuance of common stock related to acquisition | 1,144 | 1,144 | ||||
Issuance of common stock related to acquisition (in shares) | 33 | |||||
ESPP compensation | 640 | 640 | ||||
Sale of Treasury Stock in connection with an employee stock purchase plan | 814 | 660 | 1,474 | |||
Sale of Treasury Stock in connection with an employee stock purchase plan (in shares) | 66 | |||||
Comprehensive income: | ||||||
Net income | 23,351 | 23,351 | ||||
Foreign currency translation | -3,779 | -3,779 | ||||
Unrealized loss on investments in marketable securities, net of tax benefits of $18, $2 and $82 during the period 2013, 2012 and 2011, respectively | 2 | 2 | ||||
Net (loss) on intra-entity foreign currency transactions | 3,419 | 3,419 | ||||
Total other comprehensive income (loss) | 22,993 | |||||
Tax benefit from stock option exercise | 2,961 | 2,961 | ||||
Balance at Dec. 31, 2013 | 4 | -67,104 | 393,644 | -723 | 121,818 | 447,639 |
Balance (in shares) at Dec. 31, 2013 | 44,456 | -3,793 | 44,456 | |||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock based compensation | 9,992 | 9,992 | ||||
Issuance of restricted stock | 18,353 | 18,353 | ||||
Issuance of restricted stock (in shares) | 765 | |||||
Issuance of common stock on exercise of options | 30,003 | 30,003 | ||||
Issuance of common stock on exercise of options (in shares) | 1,223 | |||||
ESPP compensation | 642 | 642 | ||||
Sale of Treasury Stock in connection with an employee stock purchase plan | 768 | 909 | 1,677 | |||
Sale of Treasury Stock in connection with an employee stock purchase plan (in shares) | 60 | |||||
Comprehensive income: | ||||||
Net income | 38,895 | 38,895 | ||||
Foreign currency translation | -12,849 | -12,849 | ||||
Unrealized loss on investments in marketable securities, net of tax benefits of $18, $2 and $82 during the period 2013, 2012 and 2011, respectively | -166 | -166 | ||||
Net (loss) on intra-entity foreign currency transactions | -6,276 | -6,276 | ||||
Total other comprehensive income (loss) | 19,604 | |||||
Tax benefit from stock option exercise | 1,197 | 1,197 | ||||
Balance at Dec. 31, 2014 | $4 | ($66,336) | $454,740 | ($20,014) | $160,713 | $529,107 |
Balance (in shares) at Dec. 31, 2014 | 46,444 | -3,733 | 46,444 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||
Unrealized loss on investments in marketable securities, tax benefit | $18 | $2 | $82 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities: | |||
Net income | $38,895 | $23,351 | $27,083 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 55,956 | 41,126 | 23,812 |
Amortization of debt issuance costs | 618 | ||
Loss on disposal of asset | 33 | 230 | |
Amortization of bond premium | 384 | 294 | 1,216 |
Deferred income taxes | 3,207 | 1,575 | 1,475 |
Non-cash interest on leased facility | 946 | 921 | 921 |
Stock-based compensation | 28,987 | 25,214 | 20,425 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net of allowance for doubtful accounts | -50,924 | 10,167 | -11,611 |
Prepaid expenses and other current assets | -14,660 | 8,022 | 8,129 |
Other assets | -1,930 | -7,376 | -496 |
Accounts payable | 4,169 | 348 | -1,915 |
Accrued expenses | 1,263 | -7,155 | 1,284 |
Contingent consideration obligation | 3,532 | -6,214 | -8,211 |
Excess tax benefit from the exercise of stock options | -1,203 | -2,961 | -6,920 |
Other liabilities | 5,825 | -320 | -497 |
Deferred revenues | -4,119 | -5,900 | 949 |
Net cash provided by operating activities | 70,979 | 81,092 | 55,874 |
Investing activities: | |||
Purchases of fixed assets | -73,885 | -73,434 | -33,234 |
Purchases of marketable securities available-for-sale | -50,275 | -8,366 | -13,146 |
Sales and maturities of marketable securities available-for-sale | 9,265 | 14,825 | 74,334 |
Business acquired, net of cash | -38,085 | -6,677 | -105,177 |
Net cash used in investing activities | -152,980 | -73,652 | -77,223 |
Financing activities: | |||
Proceeds from the exercise of stock options | 30,003 | 19,196 | 7,949 |
Payments on contingent consideration obligation | -1,926 | -2,268 | |
Debt issuance costs related to convertible notes | -7,065 | ||
Proceeds from issuance of convertible notes | 230,000 | ||
Borrowings on revolving line of credit | 40,000 | ||
Repayment of revolving line of credit | -40,000 | ||
Excess tax benefit from the exercise of stock options | 1,203 | 2,961 | 6,920 |
Repurchase of common stock | -24,615 | ||
Proceeds from the sale of treasury stock in connection with an employee stock purchase plan | 1,677 | 1,474 | 612 |
Repayments of capital obligations | -1,515 | -1,597 | -1,015 |
Net cash provided by (used in) financing activities | 254,303 | 20,108 | -12,417 |
Effect of exchange rate changes on cash | 153 | -64 | 364 |
Net increase (decrease) in cash and cash equivalents | 172,455 | 27,484 | -33,402 |
Cash and cash equivalents at beginning of period | 63,512 | 36,028 | 69,430 |
Cash and cash equivalents at end of period | 235,967 | 63,512 | 36,028 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 2,290 | 168 | 77 |
Cash paid for income taxes | 19,342 | 1,773 | 3,396 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Issuance of common stock in connection with the acquisition | $1,144 | $1,386 |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2014 | |
Description of Business | |
Description of Business | 1. Description of Business |
Synchronoss Technologies, Inc. (the “Company” or “Synchronoss”) is a mobile innovation company that provides software-based cloud and activation solutions for connected devices to enterprise customers on a global scale. The Company’s software creates innovative consumer and enterprise solutions that drive billions of transactions on a wide range of connected devices across the world’s leading networks. The Company’s solutions include: intelligent connectivity management and content synchronization, backup and sharing service procurement, provisioning, activation, and support that enable communications service providers (CSPs), cable operators/multi-services operators (MSOs), original equipment manufacturers (OEMs) with embedded connectivity (e.g. smartphones, laptops, tablets and mobile Internet devices, such as automobiles, wearables for personal health and wellness, and connected homes), multi-channel retailers and other customers to accelerate and monetize value-add services for connected devices. This includes automating subscriber activation, order management, upgrades, service provisioning and connectivity and content management from any sales channel to any communication service (wireless or wireline), across any connected device type and managing the content transfer, synchronization and share. | |
The Company’s Synchronoss Personal Cloud™ platform is specifically designed to power the activation of the devices and technologies that seamlessly connect today’s consumer and leverage the Company’s cloud assets to manage these devices and content associated with them. Synchronoss WorkSpace™ platform focuses on providing a secure, integrated file sharing and collaboration solution for small and medium businesses. The Company’s consumer and small business platforms and solutions enable Synchronoss to drive a natural extension of the Company’s mobile activations and cloud services with leading wireless networks around the world to link other non-traditional devices (i.e., automobiles, wearables for personal health and wellness, and connected homes). | |
The Company’s Activation Services, Synchronoss Personal Cloud™ and Synchronoss WorkSpace™ platforms provide end-to-end seamless integration between customer-facing channels/applications, communication services or devices and “back-office” infrastructure-related systems and processes. The Company’s customers rely on the Company’s solutions and technology to automate the process of activation and content and settings management for their subscriber’s devices while delivering additional communication services. The Company’s Integrated Life™ platform brings together the capabilities of device/service activation with content and settings management to provide a seamless experience of activating and managing both traditional and non-traditional devices. The Company’s platforms also support automated customer care processes through use of accurate and effective speech processing technology and enable the Company’s customers to offer their subscribers the ability to store in and retrieve from the Cloud their personal and work content and data which resides on their connected mobile devices, such as personal computers, smartphones and tablets. The Company’s platforms are designed to be carrier-grade, highly available, flexible and scalable to enable multiple converged communication services to be managed across multiple distribution channels including e-commerce, m-commerce, telesales, customer stores, indirect and other retail outlets allowing the Company to meet the rapidly changing and converging services and connected devices offered by the Company’s customers. Synchronoss enables its customers to acquire, retain and service subscribers quickly, reliably and cost-effectively by enabling backup, restore, synchronization and sharing of subscriber content. Through the use of the Company’s platforms, the Company’s customers can simplify the processes associated with managing the customer experience for procuring, activating, connecting, backing-up, synchronizing and social media and enterprise-wide sharing/collaboration with connected devices and contents from these devices and associated services. The extensibility, scalability, reliability and relevance of the Company’s platforms enable new revenue streams and retention opportunities for the Company’s customers through new subscriber acquisitions, sale of new devices, accessories and new value-added service offerings in the Cloud, while optimizing their cost of operations and enhancing customer experience. The Company currently operates in and markets its solutions and services directly through the Company’s sales organizations in North America, Europe and Asia-Pacific. | |
The Company’s industry-leading customers include Tier 1 mobile service providers such as AT&T Inc., Verizon Wireless, Vodafone, Orange, Sprint, Telstra and U.S. Cellular, Tier 1 cable operators/MSOs and wireline operators like AT&T Inc., Comcast, Cablevision, Charter, CenturyLink, Mediacom and Level 3 Communications and large OEMs such as Apple and Ericsson. These customers utilize the Company’s platforms, technology and services to service both consumer and business customers. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Summary of Significant Accounting Policies | |||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||
Basis of Presentation and Consolidation | |||||||||||
The consolidated financial statements include the accounts of the Company and its wholly‑owned subsidiaries. All material intercompany transactions and accounts are eliminated in consolidation. | |||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | |||||||||||
Revenue Recognition and Deferred Revenue | |||||||||||
The Company provides services principally on a transactional or subscription basis or, at times, on a fixed fee basis and recognizes the revenues as the services are performed or delivered as described below: | |||||||||||
Transactional and Subscription Service Arrangements: Transaction and subscription revenues consist of revenues derived from the processing of transactions through the Company’s service platforms, providing enterprise portal management services on a subscription basis and maintenance agreements on software licenses. Transaction service arrangements include services such as processing equipment orders, new account set‑up and activation, number port requests, credit checks and inventory management. Subscription services include hosting and storage and the related maintenance support for those services. | |||||||||||
Transaction revenues are principally based on a contractual price per transaction and are recognized based on the number of transactions processed during each reporting period. Revenues are recorded based on the total number of transactions processed at the applicable price established in the relevant contract. The total amount of revenues recognized is based primarily on the volume of transactions. Subscription revenues are recorded on a straight‑line basis over the life of the contract for subscription services and maintenance agreements. | |||||||||||
Many of the Company’s contracts guarantee minimum volume transactions from the customer. In these instances, if the customer’s total transaction volume for the period is less than the contractual amount, the Company records revenues at the minimum guaranteed amount. At times, transaction revenues may also include billings to customers that reimburse the Company based on the number of individuals dedicated to processing transactions. Set‑up fees for transactional service arrangements are deferred and recognized on a straight‑line basis over the life of the contract since these amounts would not have been paid by the customer without the related transactional service arrangement. Revenues are presented net of discounts, which are volume level driven, or credits, which are performance driven, and are determined in the period in which the volume thresholds are met or the services are provided. | |||||||||||
Professional Service and Software License Arrangements: Professional services include process and workflow consulting services and development services. Professional services, when sold with non‑software transactional or subscription service arrangements, are accounted for separately when the professional services have value to the customer on a standalone basis. Professional services, when sold with software transactional or subscription service arrangements are accounted for separately when the professional services have value to the customer on a standalone basis and there is objective and reliable evidence of fair value of the professional services. When accounted for separately, professional service revenues are recognized as services are performed and all other elements of revenue recognition have been satisfied. | |||||||||||
In determining whether professional service revenues can be accounted for separately from transaction or subscription service revenues, the Company considers the following factors for each professional services agreement: availability of the professional services from other vendors, whether objective and reliable evidence of fair value exists of the undelivered elements, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the transaction or subscription service start date and the contractual independence of the transactional or subscription service from the professional services. | |||||||||||
If a professional service arrangement were not to qualify for separate accounting, the Company would recognize the professional service revenues ratably over the remaining term of the transaction or subscription agreement. | |||||||||||
Revenue from software license arrangements is recognized when the license is delivered to its customers and all of the software revenue recognition criteria are met. When software arrangements include multiple elements, the arrangement consideration is allocated at the inception to all deliverables using the residual method providing the Company has vendor specific objective evidence (VSOE) on all undelivered elements. The Company determines VSOE for each element based on historical stand‑alone sales to third parties. When sold with non‑software transaction or subscription service arrangements, the arrangement consideration is allocated at the inception of an arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionally to each deliverable on the basis of each deliverable’s selling price. The selling price used for each deliverable will be based on VSOE if available, third‑party evidence (TPE) if vendor‑specific objective evidence is not available, or estimated selling price (ESP) if neither vendor‑specific objective evidence nor third‑party evidence is available. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand‑alone basis. The Company determines ESP by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives, and pricing practices. ESP is generally used for offerings that are not typically sold on a stand‑alone basis or for new or highly customized offerings. | |||||||||||
While the Company follows specific and detailed rules and guidelines related to revenue recognition, it makes and uses management judgments and estimates in connection with the revenue recognized in any reporting period, particularly in the areas described above, as well as collectability. If management made different estimates or judgments, differences in the timing of the recognition of revenue could occur. | |||||||||||
Deferred Revenue: Deferred revenues primarily represent billings to customers for services in advance of the performance of services, with revenues recognized as the services are rendered, and also includes the fair value of deferred revenues recorded as a result of acquisitions. | |||||||||||
Service Level Standards | |||||||||||
Pursuant to certain contracts, the Company is subject to service level standards and to corresponding penalties for failure to meet those standards. All performance‑related penalties are reflected as a corresponding reduction of the Company’s revenues. These penalties, if applicable, are recorded in the month incurred and were insignificant for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||
Concentration of Credit Risk | |||||||||||
The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalents at several major financial institutions. The Company has not experienced any realized losses in such accounts and believes it is not exposed to any significant credit risk related to cash, cash equivalents and securities. The Company’s cash equivalents and short‑term marketable securities consist primarily of money market funds, certificates of deposit, commercial paper, and municipal and corporate bonds. The Company believes that concentration of credit risk with respect to accounts receivable is limited because of the creditworthiness of the Company’s major customers. | |||||||||||
AT&T and Verizon Wireless in the aggregate accounted for 73%, 66% and 67% of net revenues for 2014, 2013 and 2012, respectively. AT&T and Verizon accounted for 68% and 64% of accounts receivable at December 31, 2014 and 2013, respectively. The loss of either AT&T or Verizon as a customer would have a material negative impact on the Company. The Company believes that if either AT&T or Verizon terminated their relationships with Synchronoss, AT&T and Verizon would encounter substantial costs in replacing Synchronoss’ solutions. | |||||||||||
Fair Value of Financial Instruments and Liabilities | |||||||||||
The Company includes disclosures of fair value information about financial instruments and liabilities, whether or not recognized on the balance sheet, for which it is practicable to estimate that value. Due to their short‑term nature, the carrying amounts reported in the financial statements approximate the fair value for cash and cash equivalents, marketable securities, accounts receivable and accounts payable. | |||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. | |||||||||||
Marketable Securities | |||||||||||
Marketable securities consist of fixed income investments with a maturity of greater than three months and enhanced money market funds. These investments are classified as available‑for‑sale and are reported at fair value on the Company’s balance sheet. The Company classifies its securities with maturity dates of 12 months or more as long term. Unrealized holding gains and losses are reported within accumulated other comprehensive loss as a separate component of stockholders’ equity. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write‑down is included in earnings as an impairment charge. The Company has recorded temporary changes in fair value of the marketable securities but has not recorded other‑than‑temporary charges for the periods presented herein. | |||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | |||||||||||
Accounts receivable consist of amounts due to the Company from normal business activities. The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment and leasehold improvements are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, which range from 3 to 5 years, or the lesser of the related initial term of the lease or useful life for leasehold improvements. Amortization of property and equipment recorded under a capital lease is included with depreciation expense. Expenditures for routine maintenance and repairs are charged against operations. Major replacements, improvements and additions are capitalized. | |||||||||||
In connection with the Company’s ongoing review of the estimated remaining average useful lives of plant, property and equipment, the Company determined that the actual lives of certain data center equipment were longer than the estimated useful lives used for depreciation purposes in the Company’s financial statements. As a result, effective October 1, 2014, the Company changed its estimates of the useful lives of its data center equipment to better reflect the estimated period during which these assets will remain in service and economically viable. The estimated useful lives of the data center equipment that previously averaged three years were increased to five years. The effect of the change in estimate reduced the 2014 depreciation expense by $3.6 million, increased net income by $2.3 million and increased basic and diluted earnings per share by $.06 and $.05, respectively. | |||||||||||
Business Combinations | |||||||||||
The Company accounts for business combinations in accordance with the acquisition method. The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their fair values on the date of a business acquisition. The Company’s consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition. | |||||||||||
The judgments that the Company makes in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following a business combination. The Company generally uses either the income, cost or market approach to aid in its conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information. | |||||||||||
The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as an adjustment to net change in contingent consideration obligation within the consolidated statement of income. Changes in the fair value of the contingent consideration obligation can result from updates in the achievement of financial targets and changes to the weighted probability of achieving those future financial targets. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, any change in the assumptions described above, could have a material impact on the amount of the net change in contingent consideration obligation that the Company records in any given period. | |||||||||||
Goodwill and Other Intangible Assets | |||||||||||
Goodwill represents the excess of the purchase price over the fair value of assets acquired, including other definite‑lived intangible assets. Goodwill is not amortized, but reviewed annually for impairment or upon the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of the reporting unit below its carrying amount. There were no impairment charges recognized during the years ended December 31, 2014, 2013 and 2012. | |||||||||||
Intangible assets that do not have indefinite lives (primarily technology and customer relationships) are amortized over their useful lives. All intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company reevaluates the useful life determinations for these intangible assets each year to determine whether events and circumstances warrant a revision in their remaining useful lives. | |||||||||||
Impairment of Long‑Lived Assets | |||||||||||
A review of long‑lived assets for impairment is performed when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If an indication of impairment is present, the Company compares the estimated undiscounted future cash flows to be generated by the asset to the asset’s carrying amount. If the undiscounted future cash flows are less than the carrying amount of the asset, the Company records an impairment loss equal to the amount by which the asset’s carrying amount exceeds its fair value. The fair value is determined based on valuation techniques such as a comparison to fair values of similar assets or using a discounted cash flow analysis. There were no impairment charges recognized during the years ended December 31, 2014, 2013 and 2012. | |||||||||||
Cost of Services | |||||||||||
Cost of services includes all direct materials, direct labor and those indirect costs related to revenues such as indirect labor, materials and supplies and facilities cost, exclusive of depreciation expense. | |||||||||||
Research and Development | |||||||||||
Research and development costs are expensed as incurred, unless they meet U.S. GAAP criteria for deferral and amortization. Software development costs incurred prior to the establishment of technological feasibility do not meet these criteria, and are expensed as incurred. Amortization of software development costs is computed using the straight‑line method over the estimated useful lives of the assets, 3 and 5 years. As of December 31, 2014, the Company had $6.1 million of unamortized software development costs and $837 thousand of amortization expense which was recognized during 2014. As of December 31, 2013, the Company had $1.8 million of unamortized software development costs and $1.2 million of amortization expense which was recognized during 2013. As of December 31, 2012, the Company had $2.0 million of unamortized software development costs and $1.3 million of amortization expense which was recognized during 2012. Research and development expense consists primarily of costs related to personnel, including salaries and other personnel‑related expenses, consulting fees and the cost of facilities, computer and support services used in service technology development. The Company also expenses costs relating to developing modifications and minor enhancements of its existing technology and services. | |||||||||||
Income Taxes | |||||||||||
Since the Company conducts operations on a global basis, its effective tax rate has and will depend upon the geographic distribution of its pre‑tax earnings among locations with varying tax rates. The Company accounts for the effects of income taxes that result from its activities during the current and preceding years. Under this method, deferred income tax liabilities and assets are based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse or be utilized. The realization of deferred tax assets is contingent upon the generation of future taxable income. A valuation allowance is recorded if it is “more likely than not” that a portion or all of a deferred tax asset will not be realized. | |||||||||||
In evaluating the Company’s ability to recover their deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results adjusted for the results of discontinued operations and incorporates assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income (loss). | |||||||||||
The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured by determining the amount that has a greater than 50 percent likelihood of being realized upon the settlement of the position. Components of the reserve are classified as a current or a long‑term liability in the consolidated balance sheets based on when the Company expects each of the items to be settled. The Company records interest and penalties accrued in relation to uncertain tax benefits as a component of interest expense. The Company expects that the amount of unrecognized tax benefits will change during 2014; however, the Company does not expect the change to have a significant impact on its results of operations or financial position. | |||||||||||
While the Company believes it has identified all reasonably identifiable exposures and that the reserve that the Company has established for identifiable exposures is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved. It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserves. In general, tax returns for the year 2010 and thereafter are subject to future examination by tax authorities. | |||||||||||
The Company’s policy has been to leave its cumulative unremitted foreign earnings invested indefinitely outside the United States, and the Company intends to continue this policy. As such, taxes have not been provided on any of the remaining accumulated foreign unremitted earnings. If the cumulative unremitted foreign earnings exceed the amount the Company intends to reinvest in foreign countries in the future, the Company would provide for taxes on such excess amount. | |||||||||||
Foreign Currency | |||||||||||
Prior to the third quarter of 2013, several of the Company’s subsidiaries that operate outside the U.S. used the U.S. dollar as the functional currency. Effective July 1, 2013, the Company changed the functional currencies of those subsidiaries that operate outside the U.S. to their local currency. This change was the result of a change in the Company’s international operations and economic strategies driven by the implementation of a global financial system that has allowed the Company’s foreign operations to become self‑contained and integrated within their resident countries and to the local currency. | |||||||||||
The functional currency is translated into U.S. dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity within accumulated other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of income. The effects of the change in functional currency were not material to the Company’s consolidated financial statements for all years presented. | |||||||||||
Comprehensive Income | |||||||||||
Reporting on comprehensive income requires components of other comprehensive income, including unrealized gains or losses on available‑for‑sale securities, to be included as part of total comprehensive income. Comprehensive income is comprised of net income, translation adjustments and unrealized gains and losses on available‑for‑sale securities. The components of comprehensive income are included in the statements of comprehensive income. | |||||||||||
Basic and Diluted Net Income Attributable to Common Stockholders per Common Share | |||||||||||
Basic earnings per share is calculated by using the weighted-average number of common shares outstanding during the period. | |||||||||||
The diluted earnings per share calculation is based on the weighted-average number of shares of common stock outstanding adjusted for the number of additional shares that would have been outstanding had all potentially dilutive common shares been issued. | |||||||||||
Potentially dilutive shares of common stock include stock options, convertible debt and unvested share awards. The dilutive effects of stock options and restricted stock awards are based on the treasury stock method. The dilutive effect of the assumed conversion of convertible debt is determined using the if-converted method. The after-tax effect of interest expense related to the convertible securities is added back to net income, and the convertible debt is assumed to have been converted into common shares at the beginning of the period. | |||||||||||
The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. Stock options that are anti‑dilutive and excluded from the following table totaled 1.1 million, 1.4 million and 1.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income attributable to common stockholders | $ | 38,895 | $ | 23,351 | $ | 27,083 | |||||
Income effect for interest on convertible debt, net of tax | 754 | — | — | ||||||||
Net income applicable to shares of common stock for earnings per share | $ | 39,649 | $ | 23,351 | $ | 27,083 | |||||
Denominator: | |||||||||||
Weighted-average common shares outstanding — basic | 40,418 | 38,891 | 38,195 | ||||||||
Dilutive effect of: | |||||||||||
Shares from assumed conversion of convertible debt | 1,682 | — | — | ||||||||
Options and unvested restricted shares | 1,197 | 1,118 | 931 | ||||||||
Weighted-average common shares outstanding — diluted | 43,297 | 40,009 | 39,126 | ||||||||
Stock‑Based Compensation | |||||||||||
As of December 31, 2014, the Company maintains three stock‑based compensation plans. The Company utilizes the Black‑Scholes pricing model to determine the fair value of stock options on the dates of grant. Restricted stock awards are measured based on the fair market values of the underlying stock on the dates of grant, unless the awards are subject to market conditions, in which case the Company uses a binomial‑lattice model (e.g., Monte Carlo simulation model). The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. The Company recognizes stock‑based compensation over the requisite service period with an offsetting credit to additional paid‑in capital. | |||||||||||
For the Company’s performance restricted stock awards the Company estimates the number of shares the recipient is to receive by applying a probability of achieving the performance goals. The actual number of shares the recipient receives is determined at the end of the annual performance period based on the results achieved versus goals based on its annual performance targets, such as operating income. Once the number of awards is determined, the compensation cost is fixed and continues to be recognized using the accelerated attribution recognition over the requisite service period for each vesting tranche. | |||||||||||
The Company classifies benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) as a financing cash inflow with a corresponding operating cash outflow. The Company included $1.2 million, $3.0 million and $6.9 million of excess tax benefits as a financing cash inflow for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||
Impact of Recently Issued Accounting Standards | |||||||||||
In November 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-17 Business Combinations (Topic 805), Pushdown Accounting. The amendment provides that acquired entities have the option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of an acquired entity. The acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period and would be treated as a change in accounting principle. Additional disclosures are required to enable the users of the financial statements to evaluate the effect of pushdown accounting. The standard was adopted on November 18, 2014 and did not have an impact on the Company’s current period consolidated financial statements and related disclosures. | |||||||||||
In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Management of public and private companies will be required to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, disclose that fact. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. The standard is effective for annual periods ending after December 15, 2016 and interim periods ending after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect adoption of this ASU to significantly impact its consolidated financial statements. | |||||||||||
In May 2014, the FASB and the International Accounting Standards Board (“IASB”) (collectively, the “Boards”) jointly issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under US GAAP and IFRS. The standard’s core principle (issued as ASU 2014-09 by the FASB and as IFRS 15 by the IASB), is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The effective date is fiscal years beginning after December 15, 2016. Early application is not permitted. The Company is currently evaluating the methods of adoption and the impact that ASU 2014-09 will have on its consolidated financial statements. | |||||||||||
Segment and Geographic Information | |||||||||||
The Company’s chief operating decision‑maker is the Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. Accordingly, the Company has determined that it currently operates in one business segment: providing cloud solutions and software‑based activation for connected devices globally. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker who comprehensively manages the entire business. The Company does not operate any separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate a complete set of discrete financial information with respect to separate service lines and does not have separately reportable segments. Although the Company operates in North America, Europe and Asia‑Pacific a majority of the Company’s revenue and long lived assets are in the U.S. | |||||||||||
Revenues by geography are based on the billing addresses of the Company’s customers. The following tables set forth revenues and property and equipment, net by geographic area: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | |||||||||||
Domestic | $ | 405,235 | $ | 309,322 | $ | 252,292 | |||||
Foreign | 52,079 | 39,725 | 21,400 | ||||||||
Total | $ | 457,314 | $ | 349,047 | $ | 273,692 | |||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Property and equipment, net: | |||||||||||
Domestic | $ | 141,944 | $ | 96,558 | |||||||
Foreign | 9,227 | 9,548 | |||||||||
Total | $ | 151,171 | $ | 106,106 | |||||||
Acquisition
Acquisition | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Acquisition | ||||||
Acquisition | 3. Acquisition | |||||
Voxmobili SA (“Vox”) | ||||||
On July 11, 2014, the Company acquired all outstanding shares of Vox, a French company, for $25.1 million, net of cash acquired and liabilities assumed, subject to certain working capital adjustments. The Company believes that this acquisition will further enable its position as the leading provider of personal cloud solutions to the world’s largest mobile operators. | ||||||
Management determined the preliminary fair value of the net assets acquired during the third quarter of 2014 as follows: | ||||||
Preliminary | ||||||
Purchase Price | ||||||
Allocation | ||||||
Cash | $ | 1,414 | ||||
Prepaid expenses and other assets | 220 | |||||
Accounts receivable | 3,750 | |||||
Intangible assets: | Wtd. Avg. | |||||
Technology | 4,900 | 5 years | ||||
Customer relationships | 5,000 | 5 years | ||||
Goodwill | 17,188 | |||||
Total assets acquired | 32,472 | |||||
Accounts payable and accrued liabilities | 2,118 | |||||
Deferred revenues | 457 | |||||
Deferred taxes | 3,338 | |||||
Net assets acquired | $ | 26,559 | ||||
The goodwill recorded in connection with this acquisition is based on operating synergies and other benefits expected to result from the combined operations and the assembled workforce acquired. The goodwill acquired will not be deductible for tax purposes. | ||||||
Clarity OSS Limited (“Clarity”) | ||||||
On July 2, 2014, the Company acquired certain assets, liabilities and workforce from Clarity, an Australian company, for cash consideration of $6.6 million net of liabilities assumed. The Company believes that the assets and customer contracts acquired from Clarity will assist the Company’s access to new markets in the Asia Pacific region. | ||||||
The Company accounted for this business combination by applying the acquisition method and accordingly, the purchase price was allocated to the tangible assets acquired and liabilities assumed based upon their fair values as of the acquisition date. The excess of the purchase price over the net tangible assets and liabilities, approximately $372 thousand, was recorded as goodwill, which represents the assembled workforce acquired, with the remaining preliminary purchase price attributed to technology and customer relationships. The goodwill is not tax deductible. | ||||||
Digi-Data Corporation (“Digi-Data”) | ||||||
On May 12, 2014, the Company acquired certain assets and workforce from Digi-Data, a U.S. company, for total consideration of $6.3 million. The Company believes that the assets and workforce acquired from Digi-Data will expedite the Company’s integration of broadband technologies into the Company’s wireless cloud offerings. | ||||||
The Company accounted for this business combination by applying the acquisition method and accordingly, the purchase price was allocated to the tangible assets acquired and liabilities assumed based upon their fair values as of the acquisition date. The excess of the purchase price over the net tangible assets and liabilities, approximately $3.1 million, was recorded as goodwill, which is not tax deductible, with the remaining preliminary purchase price attributed to technology and customer relationships. | ||||||
Strumsoft, Inc. ("Strumsoft") | ||||||
On November 6, 2013, the Company acquired 100% of the capital stock of Strumsoft (USA), Inc., a California corporation and Strumsoft (India) Pvt. Ltd., an India company for total cash consideration of $11.0 million and issued approximately 33 thousand shares of the Company's Common Stock. The total cash consideration was comprised of $10.2 million for the purchase of all the shares of Strumsoft and $774 thousand for the estimated surplus working capital on the date of purchase. The 33 thousand shares of the Company's Common Stock were valued at approximately $1.1 million based on the Company's November 6, 2013 closing stock price per shares. In addition, the Company may make payments ("Strumsoft Earn-out") totaling up to approximately $6.0 million based on the ability to achieve a range of business objectives for the period from January 1, 2014 through December 31, 2014. The maximum that could be paid to existing employees of Strumsoft is $2.0 million and actual amounts will be recorded as compensation expense over the service period. Strumsoft is engaged in the business of providing consultancy services for software development and data processing. | ||||||
The Company believes that Strumsoft will help strengthen its user design and messaging development and augment the Company's cloud services offerings and mobile development. In addition, the acquisition of Strumsoft is expected to help increase the Company's penetration of its domestic customer base. | ||||||
As of December 31, 2014 all of the business objectives for the Strumsoft Earn-out have been met and accordingly the Company recorded $8 million on the balance sheet related to the Strumsoft Earn-out. The $8 million was subsequently paid on February 20, 2015. | ||||||
The following table summarizes the estimated fair values of the assets and liabilities assumed at the acquisition date: | ||||||
Purchase Price | ||||||
Allocation | ||||||
Cash and cash equivalents | $ | 4,284 | ||||
Accounts receivable | 115 | |||||
Prepaid expenses and other assets | 129 | |||||
Intangible assets: | Wtd. Avg. | |||||
Tradename | 102 | 2 years | ||||
Order Backlog | 918 | 2 months | ||||
Customer Relationship | 3,663 | 3 years | ||||
Property and equipment | 62 | |||||
Goodwill | 12,381 | |||||
Total assets acquired | 21,654 | |||||
Accounts payable and accrued liabilities | 3,603 | |||||
Deferred tax liability | 1,746 | |||||
Net assets acquired | $ | 16,305 | ||||
The goodwill recorded in connection with this acquisition is based on (i) the expertise in cloud computing held by key leaders of Strumsoft, and (ii) intangible assets that do not qualify for separate recognition such as Strumsoft's assembled workforce. The goodwill acquired will not be deductible for tax purposes. The results of Strumsoft's operations have been included in the consolidated financial statements since the acquisition date. Pro forma results of operations for the acquisition have not been presented because the effects of the acquisition were not material to the Company's prior financial statements. | ||||||
Acquisition‑related Costs | ||||||
Acquisition‑related costs recognized during the years ended December 31, 2014, 2013 and 2012 including transaction costs such as employee retention, legal, accounting, valuation and other professional services, were $2.5 million, $1.7 million, and $2.9 million respectively. | ||||||
Fair_Value_Measurements_of_Ass
Fair Value Measurements of Assets and Liabilities | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Fair Value Measurements of Assets and Liabilities | |||||||||||
Fair Value Measurements of Assets and Liabilities | 4. Fair Value Measurements of Assets and Liabilities | ||||||||||
The Company classifies marketable securities as available‑for‑sale. The fair value hierarchy established in the guidance adopted by the Company prioritizes the inputs used in valuation techniques into three levels as follows: | |||||||||||
· | Level 1—Observable inputs—quoted prices in active markets for identical assets and liabilities; | ||||||||||
· | Level 2—Observable inputs other than the quoted prices in active markets for identical assets and liabilities—includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and | ||||||||||
· | Level 3—Unobservable inputs—includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions. | ||||||||||
The following is a summary of assets and liabilities held by the Company and their related classifications under the fair value hierarchy at December 31, 2014 and 2013: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Level 1 (A) | $ | 241,364 | $ | 68,911 | |||||||
Level 2 (B) | 49,013 | 8,694 | |||||||||
Level 3 (C) | -8,022 | -4,490 | |||||||||
Total | $ | 282,355 | $ | 73,115 | |||||||
(A) | Level 1 assets include money market funds and enhanced income money market funds which are classified as cash equivalents and marketable securities, respectively. | ||||||||||
(B) | Level 2 assets include certificates of deposit, municipal bonds, commercial papers and corporate bonds which are classified as marketable securities. | ||||||||||
(C) | Level 3 liabilities include the contingent consideration obligation. | ||||||||||
The Company utilizes the market approach to measure fair value for its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The Company’s marketable securities investments classified as Level 2 primarily utilize broker quotes in a non‑active market for valuation of these securities. No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the year ended December 31, 2014. | |||||||||||
The aggregate fair value of available for sale securities and aggregate amount of unrealized gains and losses for available for sale securities at December 31, 2014 were as follows: | |||||||||||
Aggregate | |||||||||||
Amount | |||||||||||
Aggregate | of Unrealized | ||||||||||
Fair Value | Gains | Losses | |||||||||
Due in one year or less | $ | 51,097 | $ | 10 | $ | -72 | |||||
Due after one year, less than five years | 3,313 | 2 | -3 | ||||||||
$ | 54,410 | $ | 12 | $ | -75 | ||||||
The aggregate fair value of available for sale securities and aggregate amount of unrealized gains and losses for available for sale securities at December 31, 2013 were as follows: | |||||||||||
Aggregate | |||||||||||
Amount | |||||||||||
Aggregate | of Unrealized | ||||||||||
Fair Value | Gains | Losses | |||||||||
Due in one year or less | $ | 9,105 | $ | 5 | $ | -32 | |||||
Due after one year, less than five years | 4,988 | 11 | -2 | ||||||||
$ | 14,093 | $ | 16 | $ | -34 | ||||||
Unrealized gains and losses are reported as a component of accumulated other comprehensive loss in stockholders’ equity. The net unrealized (loss) gain net of tax was ($166) thousand and $2 thousand as of December 31, 2014 and 2013, respectively. There were no sales of marketable securities during the years ended December 31, 2014 and 2013. The cost of securities sold is based on the specific identification method. The Company evaluates investments with unrealized losses to determine if the losses are other than temporary. The Company has determined that the gross unrealized losses at December 31, 2014 and 2013 are temporary. In making this determination, the Company considered the financial condition, credit ratings and near‑term prospects of the issuers, the underlying collateral of the investments, and the magnitude of the losses as compared to the cost and the length of time the investments have been in an unrealized loss position. Additionally, while the Company classifies the securities as available for sale, the Company does not currently intend to sell such investments and it is more likely than not to recover the carrying value prior to being required to sell such investments. | |||||||||||
The Company determined the fair value of the contingent consideration obligation based on a probability‑weighted income approach derived from quarterly revenue estimates and a probability assessment with respect to the likelihood of achieving the various performance criteria. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration obligation are the probabilities of achieving certain financial targets and contractual milestones. Significant increases (decreases) in any of those probabilities in isolation may result in a higher (lower) fair value measurement. No changes in valuation techniques occurred during the year ended December 31, 2014. During the year ended December 31, 2014, the Company recognized a $1.8 million increase of the contingent consideration obligation driven by the achievement of the quarterly and annual Strumsoft Inc. (“Strumsoft”) revenue milestones. | |||||||||||
The changes in fair value of the Company’s Level 3 contingent consideration obligation during the year ended December 31, 2014 were as follows: | |||||||||||
Level 3 | |||||||||||
Balance at December 31, 2013 | $ | 4,490 | |||||||||
Fair value adjustment to contingent consideration obligation included in net income | 1,799 | ||||||||||
Earn-out compensation due to Strumsoft employees | 1,733 | ||||||||||
Balance at December 31, 2014 | $ | 8,022 | |||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Property and Equipment | 5. Property and Equipment | |||||||
Property and equipment consist of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Computer hardware | $ | 134,328 | $ | 70,501 | ||||
Computer software | 28,661 | 22,640 | ||||||
Construction in-progress | 37,989 | 30,440 | ||||||
Furniture and fixtures | 3,669 | 3,579 | ||||||
Building | 8,808 | 8,808 | ||||||
Leasehold improvements | 11,533 | 10,250 | ||||||
224,988 | 146,218 | |||||||
Less: Accumulated depreciation | -73,817 | -40,112 | ||||||
$ | 151,171 | $ | 106,106 | |||||
Depreciation expense was approximately $36.1 million, $24.6 million, and $14.5 million for 2014, 2013, and 2012, respectively. Amortization of property and equipment recorded under a capital lease is included with depreciation expense. | ||||||||
Accrued_Expenses
Accrued Expenses | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Expenses | ||||||||
Accrued Expenses | 6. Accrued Expenses | |||||||
Accrued expenses consist of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accrued compensation and benefits | $ | 23,480 | $ | 12,868 | ||||
Accrued third party processing fees | — | 5,284 | ||||||
Accrued accounting fees | 1,362 | 1,296 | ||||||
Accrued consulting fees | 5,169 | 1,263 | ||||||
Accrued acquisition costs | — | 40 | ||||||
Accrued other | 8,791 | 14,520 | ||||||
Accrued income tax payable | 3,855 | 2,648 | ||||||
$ | 42,657 | $ | 37,919 | |||||
Capital_Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2014 | |
Capital Structure | |
Capital Structure | 7. Capital Structure |
As of December 31, 2014, the Company’s authorized capital stock was 110 million shares of stock with a par value of $0.0001, of which 100 million shares were designated as common stock and 10 million shares were designated as preferred stock. | |
Common Stock | |
Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. Dividends on common stock will be paid when, and if, declared by the Company’s Board of Directors. No dividends have ever been declared or paid by the Company. | |
Preferred Stock | |
There are no shares of preferred stock outstanding as of December 31, 2014 or 2013. The Board of Directors is authorized to issue preferred shares and has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of preferred stock. | |
Registration Rights | |
Holders of shares of common stock which were issued upon conversion of the Company’s Series A preferred stock are entitled to have their shares registered under the Securities Act of 1933, as amended (the “Securities Act”). Under the terms of an agreement between the Company and the holders of these securities which include registration rights, if the Company proposes to register any of its securities under the Securities Act, either for its own account or for the account of others, these stockholders are entitled to notice of such registration and are entitled to include their shares in such registration. | |
Stock_Plans
Stock Plans | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Stock Plans | |||||||||||
Stock Plans | 8. Stock Plans | ||||||||||
As of December 31, 2014, the Company maintains three stock based incentive plans, the 2000 Stock Plan (the “2000 Plan”), the 2006 Equity Incentive Plan (the “2006 Plan”) and the 2010 New Hire Equity Incentive Plan (the “2010 Plan”) collectively, (the “Plans”). The Company reserved for issuance 5.1 million shares of common stock under the 2000 Plan, 13.0 million shares under the 2006 Plan, and 0 shares under the 2010 Plan. The Company’s Board of Directors administers the Plans and is responsible for determining the individuals to be granted options or shares, the number of options or shares each individual will receive, the price per share and the exercise period of each option. As of December 31, 2014, there were 1.9 million shares available for grant or award under the Company’s Plans. | |||||||||||
Under the 2000 Plan, the Company has the ability to provide employees, outside directors and consultants an opportunity to acquire a proprietary interest in the success of the Company or to increase such interest by receiving options or purchasing shares of the Company’s stock at a price not less than the fair market value at the date of grant for incentive stock options and a price not less than 30% of the fair market value at the date of grant for non‑qualified options. | |||||||||||
Under the 2006 Plan and 2010 Plan, the Company may grant to its employees, outside directors and consultants awards in the form of incentive stock options, non‑qualified stock options, shares of restricted stock, stock units, or stock appreciation rights. | |||||||||||
Under the Company’s Plans, options may be exercised in whole or in part for 100% of the shares subject to vesting at any time after the date of grant. Options under the Company’s 2000 and 2006 Plans generally vest 25% on the first year anniversary of the date of grant plus an additional 1/48th for each month of continuous service thereafter. Options under the Company’s 2010 Plan generally vest the first 50% on the second year anniversary from July 19, 2010 and an additional 1/48th for each month of continuous service thereafter. | |||||||||||
Restricted stock awards under the Company’s 2006 Plan generally vest 25% of the applicable shares on the first anniversary of the date of grant and thereafter an additional 1/16th for each three months of continuous service. | |||||||||||
Performance stock awards under the Company’s 2006 Plan generally vest with respect to the first 1/3rd of the applicable shares on the date that the goals under the performance stock awards are achieved and thereafter an additional 1/3rd for each year of continuous service. | |||||||||||
Stock Options | |||||||||||
The Company utilizes the Black‑Scholes option pricing model for determining the estimated fair value for stock option awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on a weighted‑average of the Company’s historical stock information. The average expected life was determined using the Company’s historical data. The risk‑free interest rate is based on U.S. Treasury zero‑coupon issues with a remaining term equal to the expected life assumed at the date of grant. The Company has never declared or paid cash dividends on its common or preferred equity and does not anticipate paying any cash dividends in the foreseeable future. Forfeitures are estimated based on voluntary termination behavior, as well as a historical analysis of actual option forfeitures. The weighted‑average assumptions used in the Black‑Scholes option pricing model are as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Expected stock price volatility | 57 | % | 66 | % | 68 | % | |||||
Risk-free interest rate | 1.43 | % | 0.87 | % | 0.80 | % | |||||
Expected life of options (in years) | 4.2 | 4.5 | 4.8 | ||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||
The weighted‑average fair value (as of the date of grant) of the options granted during the year ended December 31, 2014, 2013 and 2012 was $14.67, $15.79 and $13.47, respectively. | |||||||||||
The following table summarizes information about stock options outstanding. | |||||||||||
Weighted- | |||||||||||
Average | |||||||||||
Weighted- | Remaining | Aggregate | |||||||||
Number of | Average | Contractual | Intrinsic | ||||||||
Options | Options | Exercise Price | Term (Years) | Value | |||||||
Outstanding at December 31, 2013 | 3,315 | $ | 23.97 | ||||||||
Options Granted | 815 | 31.85 | |||||||||
Options Exercised | -1,223 | 24.53 | |||||||||
Options Cancelled | -140 | 28.89 | |||||||||
Outstanding at December 31, 2014 | 2,767 | $ | 25.81 | 4.34 | $ | 44,479 | |||||
Vested or expected to vest at December 31, 2014 | 2,578 | $ | 25.40 | 4.24 | $ | 42,479 | |||||
Exercisable at December 31, 2014 | 1,473 | $ | 21.38 | 3.29 | $ | 30,172 | |||||
As of December 31, 2014 and 2013, the weighted‑average remaining contractual life of outstanding options was approximately 4.3 and 4.3 years, respectively. The total intrinsic value for stock options exercised in 2014, 2013, and 2012 was approximately $19.0 million, $17.9 million, and $9.5 million, respectively. As of December 31, 2014 and 2013, the weighted‑average remaining contractual life of exercisable options was approximately 3.3 and 3.5 years, respectively. The amount of cash received from the exercise of stock options was approximately $30.0 million in 2014. For the years ended December 31, 2014, 2013 and 2012 the total fair value of vested options was approximately $23.5 million, $11.9 million and $13.6 million, respectively. As of December 31, 2014, 2013 and 2012 the weighted‑average fair value (as of the date of grant) of the unvested options was $13.23, $13.08 and $11.45, respectively. During the year ended December 31, 2014 the weighted‑average fair value (as of the date of grant) of options granted, vested and forfeited was $14.67, $14.87 and $14.78, respectively. | |||||||||||
Awards of Restricted Stock and Performance Stock | |||||||||||
A summary of the Company’s unvested restricted stock activity and the balance at December 31, 2014, is presented below: | |||||||||||
Non-Vested Restricted Stock | Number of Awards | Weighted-Average Grant Date Fair Value | |||||||||
Non-vested at December 31, 2013 | 1,120 | $ | 28.95 | ||||||||
Granted | 908 | $ | 32.09 | ||||||||
Vested | -542 | $ | 28.37 | ||||||||
Forfeited | -144 | $ | 28.84 | ||||||||
Non-vested at December 31, 2014 | 1,342 | $ | 31.24 | ||||||||
Restricted stock awards are granted subject to other service conditions (“restricted stock”) or service and performance conditions (“performance-based awards”). Restricted stock and performance-based awards are measured at the closing stock price at the date of grant and are recognized straight line over the requisite service period. During 2014, the Company issued approximately 219 thousand shares of restricted stock related to the 2013 performance share grant. For certain executives, the 2013 and 2012 performance share grants also contained a market condition that adjusted the number of performance shares otherwise earned based on relative performance of the Company’s common stock. | |||||||||||
During the years ended December 31, 2014, 2013 and 2012, the Company recorded total pre‑tax stock‑based compensation expense of $29.0 million ($19.0 million after tax or $0.44 per diluted share), $25.2 million ($16.8 million after tax or $0.42 per diluted share), and $20.4 million ($12.9 million after tax or $0.33 per diluted share), respectively, which includes the fair value for equity awards issued after January 1, 2006. The total stock‑based compensation cost related to unvested equity awards not yet recognized as an expense as of December 31, 2014 was approximately $41.0 million. That cost is expected to be recognized over a weighted‑average period of approximately 2.64 years. | |||||||||||
Employee Stock Purchase Plan | |||||||||||
On February 1, 2012, the Company established a ten year Employee Stock Purchase Plan (“ESPP” or “the Plan”) for certain eligible employees. The Plan is to be administered by the Company’s Board of Directors. The total number of shares available for purchase under the Plan is 500 thousand shares of the Company’s Common Stock. Employees participate over a six month period through payroll withholdings and may purchase, at the end of the six month period, the Company’s Common Stock at the lower of 85% of the fair market value on the first day of the offering period or the fair market value on the purchase date. No participant will be granted a right to purchase Common Stock under the Plan if such participant would own more than 5% of the total combined voting power of the Company. In addition, no participant may purchase more than a thousand shares of Common Stock within any purchase period. | |||||||||||
The expected life of ESPP shares is the average of the remaining purchase period under each offering period. The weighted‑average assumptions used to value employee stock purchase rights during December 31, 2014 were as follows: | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Expected stock price volatility | 52 | % | 65 | % | |||||||
Risk-free interest rate | 0.60 | % | 1.04 | % | |||||||
Expected life of ESPP shares (in years) | 0.5 | 0.5 | |||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||
During the years ended December 31, 2014 and 2013, the Company recorded $642 thousand and $640 thousand, respectively, of compensation expense related to the ESPP. During the years ended December 31, 2014, 2013 and 2012, the Company sold a total of 60 thousand, 66 thousand and 33 thousand shares, respectively, of its Treasury Stock pursuant to purchases under its ESPP Plan. Cash received from purchases through the ESPP Plan during the years ended December 31, 2014, 2013 and 2012, was approximately $1.7 million, $1.5 million and $612 thousand respectively, and is included within the financing activities section of the consolidated statements of cash flows. The total unrecognized compensation expense related to the ESPP as of December 31, 2014 was approximately $78 thousand, which is expected to be recognized over the remainder of the offering period. | |||||||||||
Treasury Stock | |||||||||||
On May 8, 2012, the Company’s Board of Directors authorized a stock repurchase program to purchase up to $25 million of the Company’s outstanding Common Stock. The duration of the repurchase program was twelve months. Under the program, the Company was able to purchase shares of its Common Stock in the open market, through block trades or otherwise at prices deemed appropriate by the Company. The timing and amount of repurchase transactions under the program depended on available working capital. The Company classifies Common Stock repurchased as Treasury Stock on its balance sheet. The Company repurchased all eligible shares to be repurchased under the stock repurchase plan in 2012. There were no repurchases of Common Stock under the stock repurchase program for the year ended December 31, 2014 and 2013. | |||||||||||
401k_Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2014 | |
401(k) Plan | |
401(k) Plan | 9. 401(k) Plan |
The Company has a 401(k) plan (the “Plan”) covering all eligible employees. The Plan allows for a discretionary employer match. The Company incurred and expensed $2.0 million, $1.5 million, and $1.3 million for the years ended December 31, 2014, 2013 and 2012, respectively, in Plan match contributions. | |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | 10. Income Taxes | ||||||||||
The components of income before income taxes are as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Domestic | $ | 52,850 | $ | 30,437 | $ | 40,680 | |||||
Foreign | 7,724 | 4,142 | 1,984 | ||||||||
Total | $ | 60,574 | $ | 34,579 | $ | 42,664 | |||||
The components of income tax (expense) benefit are as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | -8,673 | $ | -3,709 | $ | -10,544 | |||||
State | -2,463 | -2,661 | -2,409 | ||||||||
Foreign | -2,505 | -3,076 | -1,076 | ||||||||
Deferred: | |||||||||||
Federal | -10,437 | -3,447 | -1,809 | ||||||||
State | -1,301 | -1,324 | -227 | ||||||||
Foreign | 3,700 | 2,989 | 484 | ||||||||
Income tax expense | $ | -21,679 | $ | -11,228 | $ | -15,581 | |||||
Reconciliations of the statutory tax rates and the effective tax rates for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Statutory rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal benefit | 4 | % | 7 | % | 4 | % | |||||
Effect of rates different than statutory | -4 | % | — | % | -1 | % | |||||
Non-deductible stock based compensation | — | % | 3 | % | 1 | % | |||||
Other permanent adjustments | 1 | % | 1 | % | 1 | % | |||||
Fair market value adjustment on Earn-out | 1 | % | -6 | % | -5 | % | |||||
Research and development credit | -2 | % | -5 | % | -1 | % | |||||
Subpart F income | 2 | % | — | % | — | % | |||||
Change in valuation allowance | — | % | -2 | % | — | % | |||||
Other | -1 | % | -1 | % | 3 | % | |||||
Net | 36 | % | 32 | % | 37 | % | |||||
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Accrued liabilities | $ | 23 | $ | 212 | |||||||
Deferred revenue | 213 | 3,555 | |||||||||
Bad debts reserve | 121 | 789 | |||||||||
Deferred compensation | 11,308 | 12,891 | |||||||||
Federal net operating loss carry forwards | 20,089 | 21,139 | |||||||||
State net operating loss carry forwards | 2,120 | 2,568 | |||||||||
Foreign net operating loss carry forwards | 7,800 | 9,202 | |||||||||
Deferred rent | 552 | 532 | |||||||||
Capital loss carry forward | 98 | 115 | |||||||||
Other | 2,818 | 1,020 | |||||||||
Total deferred tax assets | $ | 45,142 | $ | 52,023 | |||||||
Deferred tax liabilities: | |||||||||||
Intangible assets | $ | -26,481 | $ | -29,536 | |||||||
Fixed assets | -17,099 | -10,848 | |||||||||
Total deferred tax liabilities | -43,580 | -40,384 | |||||||||
Less: valuation allowance | -2,553 | -2,803 | |||||||||
Net deferred income tax (liabilities) assets | $ | -991 | $ | 8,836 | |||||||
The following table indicates where net deferred income taxes have been classified on the Balance Sheet: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Current deferred tax assets | $ | 1,475 | $ | 4,728 | |||||||
Less: Valuation allowance | — | -102 | |||||||||
Net current deferred tax assets | 1,475 | 4,626 | |||||||||
Non-current deferred tax assets | 3,785 | 6,911 | |||||||||
Less: Valuation allowance | -2,553 | -2,701 | |||||||||
Net non-current deferred tax assets | 1,232 | 4,210 | |||||||||
Net Deferred Tax Assets | $ | 2,707 | $ | 8,836 | |||||||
Non-current deferred tax liability | $ | 3,698 | $ | — | |||||||
As of December 31, 2014, the Company has federal and state income tax net operating loss (NOL) carryforwards of $57.4 million and $46.0 million, which will expire at various dates from 2015 through 2034. Such NOL carryforwards expire as follows: | |||||||||||
2015-2019 | $ | 8,221 | |||||||||
2020-2024 | 29,908 | ||||||||||
2025-2032 | 65,250 | ||||||||||
$ | 103,379 | ||||||||||
In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results and incorporates assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses. | |||||||||||
The foreign NOL carryforwards in the income tax returns filed included unrecognized tax benefits taken in prior years. The NOLs for which a deferred tax asset is recognized for financial statement purposes in accordance with ASC 740 are presented net of these unrecognized tax benefits. | |||||||||||
In connection with purchase accounting for the acquisition of Spatialinfo, Inc. the Company recorded deferred revenue for the fair value of their assumed future performance obligations. However, this income was previously recognized on the tax return of the previous owner. Accordingly, the Company had set up a net deferred tax asset of $4.4 million for this income less the related expenditures to perform services to produce this income. In evaluating the ability to recover these deferred tax assets the Company considered that there is no carry back potential and no viable tax-planning strategies for recognition of these deferred tax assets. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this, as of December 31, 2014, a valuation allowance of $2.5 million has been recorded to place a full valuation allowance on all deferred tax assets within Spatial U.S. | |||||||||||
In January 2013, the Income Tax Department of India closed the 2009 income tax examination of the Company’s wholly‑owned subsidiary, Synchronoss Technologies India, without changes. Examinations of 2010 and 2011 are in progress. The Company believes the result of these audits will not have a material effect on its financial position or results of operations. | |||||||||||
The Company is currently under income tax examinations in New York and New Jersey but does not believe that the results of these audits will have a material effect on its financial position or results of operations. | |||||||||||
The Company has provided taxes for $3.3 million of royalty fees paid to its Ireland subsidiary as Subpart F income subject to US tax in 2014. The Company has not provided taxes for the remaining $32.9 million of undistributed earnings of its foreign subsidiaries which the Company plans to reinvest indefinitely outside of the United States. Should the Company decide to repatriate the foreign earnings, it would need to adjust its income tax provision in the period it determined that the earnings will no longer be indefinitely invested outside the United States. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts | |||||||||||
A reconciliation of the amounts of unrecognized tax benefits excluding interest are as follows: | |||||||||||
Unrecognized tax benefit at December 31, 2011 | $ | 503 | |||||||||
Increases for tax positions taken during prior year | 141 | ||||||||||
Reduction due to lapse of applicable statute of limitations | -158 | ||||||||||
Increases for tax positions of current period | 25 | ||||||||||
Unrecognized tax benefit at December 31, 2012 | 511 | ||||||||||
Decreases for tax positions taken during prior year | -5 | ||||||||||
Reduction due to lapse of applicable statute of limitations | -66 | ||||||||||
Increases for tax positions of current period | 268 | ||||||||||
Unrecognized tax benefit at December 31, 2013 | 708 | ||||||||||
Decreases for tax positions taken during prior year | -218 | ||||||||||
Reduction due to lapse of applicable statute of limitations | -11 | ||||||||||
Increases for tax positions of current period | 651 | ||||||||||
Unrecognized tax benefit at December 31, 2014 | $ | 1,130 | |||||||||
The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in interest expense. The liability for unrecognized tax benefits excludes accrued interest of $24 thousand, $25 thousand and $18 thousand as of the years ended December 31, 2014, 2013 and 2012, respectively. The Company believes that it is reasonably possible that approximately $72 thousand of its currently unrecognized tax benefits related to research and development credits, which are individually insignificant, may be recognized by the end of 2015 as a result of a lapse of the statute of limitations. | |||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies | ||||
Commitments and Contingencies | 11. Commitments and Contingencies | |||
Leases | ||||
The Company leases office space, automobiles and office equipment under non‑ cancellable lease agreements, which expire through December 2029. Aggregate annual future minimum lease payments under these non‑cancellable leases are as follows: | ||||
Year Ending December 31: | ||||
2015 | $ | 39,100 | ||
2016 | 31,294 | |||
2017 | 22,549 | |||
2018 | 12,790 | |||
2019 and thereafter | 41,403 | |||
$ | 147,136 | |||
Rent expense for the years ended December 31, 2014, 2013 and 2012 was $8.0 million, $6.7 million and $5.7 million respectively. | ||||
Goodwill_and_Intangibles
Goodwill and Intangibles | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
Goodwill and Intangibles | 12. Goodwill and Intangibles | ||||||||||
Goodwill | |||||||||||
The following table shows the adjustments to goodwill during 2014 and 2013: | |||||||||||
Balance at December 31, 2012 | $ | 127,322 | |||||||||
Acquisitions | 12,381 | ||||||||||
Reclassifications, adjustments and other | -1,960 | ||||||||||
Balance at December 31, 2013 | $ | 137,743 | |||||||||
Acquisitions | 20,624 | ||||||||||
Reclassifications, adjustments and other | -1,287 | ||||||||||
Translation adjustments | -9,945 | ||||||||||
Balance at December 31, 2014 | $ | 147,135 | |||||||||
The reclassification, adjustment and other of $1.3 million for the year 2014 is primarily related to an increase in the Company’s deferred taxes in connection with a foreign tax election. The reclassifications, adjustment and other of $2.0 million for the year 2013 is primarily related to purchase accounting adjustments to the Spatial acquisition and to deferred taxes as a result of changes to acquired tax attributes. | |||||||||||
The Company performs an impairment study of the Company’s goodwill annually. There were no impairment charges recognized during the years ended December 31, 2014 and 2013. | |||||||||||
Other Intangible Assets | |||||||||||
The Company’s intangible assets with definite lives consist primarily of trade names, technology, and customer lists and relationships. These intangible assets are being amortized on the straight‑line method over the estimated useful lives of the assets. Amortization expense related to currently existing intangible assets for the years ended December 31, 2014, 2013 and 2012 was $19.8 million, $16.1 million and $8.7 million, respectively. | |||||||||||
The Company’s intangible assets consist of the following: | |||||||||||
Weighted | December 31, 2014 | ||||||||||
Average | Accumulated | ||||||||||
Life | Cost | Amortization | Net | ||||||||
Trade name | 4 | $ | 1,589 | $ | -1,324 | $ | 265 | ||||
Technology | 7 | 71,155 | -28,484 | 42,671 | |||||||
Customer lists and relationships | 9 | 74,601 | -25,283 | 49,318 | |||||||
Capitalized software and patents | — | 9,346 | -2,111 | 7,235 | |||||||
Order Backlog | — | 918 | -918 | — | |||||||
$ | 157,609 | $ | -58,120 | $ | 99,489 | ||||||
Weighted | December 31, 2013 | ||||||||||
Average | Accumulated | ||||||||||
Life | Cost | Amortization | Net | ||||||||
Trade name | 4 | $ | 1,589 | $ | -780 | $ | 809 | ||||
Technology | 8 | 65,280 | -15,328 | 49,952 | |||||||
Customer lists and relationships | 11 | 61,161 | -12,321 | 48,840 | |||||||
Capitalized software and patents | — | 3,634 | -1,272 | 2,362 | |||||||
Order Backlog | — | 918 | -918 | — | |||||||
$ | 132,582 | $ | -30,619 | $ | 101,963 | ||||||
Estimated annual amortization expense of its intangible assets for the next five years is as follows: | |||||||||||
Year ended December 31: | |||||||||||
2015 | $ | 20,850 | |||||||||
2016 | 19,918 | ||||||||||
2017 | 17,526 | ||||||||||
2018 | 14,591 | ||||||||||
2019 | 10,360 | ||||||||||
Restructuring_Charges
Restructuring Charges | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Restructuring Charges | ||||||||||||||||
Restructuring Charges | 13. Restructuring Charges | |||||||||||||||
In January 2013, the Company initiated a work-force reduction of approximately 10 percent as part of a corporate restructuring, with reductions occurring across all levels and departments within the Company. This measure was intended to reduce costs and to align the Company’s resources with its key strategic priorities. Additionally, in relation to the work-force reduction, the Company initiated a facilities consolidation, beginning the process of closing one of its leased locations in Seattle, WA. The Company did not record any additional restructuring charges during the year ended December 31, 2014. At December 31, 2014, there were no unpaid restructuring charges classified under accrued expenses on the balance sheet. | ||||||||||||||||
A summary of the Company’s restructuring accrual at December 31, 2013, and changes during the year ended December 31, 2014, is presented below: | ||||||||||||||||
Balance at | Balance at | |||||||||||||||
December 31, 2013 | Charges | Payments | Adjustments | December 31, 2014 | ||||||||||||
Facilities consolidation | $ | 128 | $ | — | $ | -128 | $ | — | $ | — | ||||||
Total | $ | 128 | $ | — | $ | -128 | $ | — | $ | — | ||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income (Loss). | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) | 14. Accumulated Other Comprehensive Income | |||||||||||||
The changes in accumulated other comprehensive income during the year ended December 31, 2014, are as follows, net of tax: | ||||||||||||||
Unrealized | Net Gain (Loss) | |||||||||||||
Holding Gains on | on Intra-Entity | |||||||||||||
Foreign | Available-for-Sale | Foreign Currency | ||||||||||||
Currency | Securities | Transactions | Total | |||||||||||
Balance at December 31, 2013 | $ | -4,131 | $ | -11 | $ | 3,419 | $ | -723 | ||||||
Other comprehensive loss before reclassifications | -12,849 | -166 | -2,857 | -15,872 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | — | -3,419 | -3,419 | ||||||||||
Total other comprehensive loss | -12,849 | -166 | -6,276 | -19,291 | ||||||||||
Balance at December 31, 2014 | $ | -16,980 | $ | -177 | $ | -2,857 | $ | -20,014 | ||||||
The changes in accumulated other comprehensive income during the year ended December 31, 2013, are as follows, net of tax: | ||||||||||||||
Unrealized | Net Gain (Loss) | |||||||||||||
Holding Gains on | on Intra-Entity | |||||||||||||
Foreign | Available-for-Sale | Foreign Currency | ||||||||||||
Currency | Securities | Transactions | Total | |||||||||||
Balance at December 31, 2012 | $ | -352 | $ | -13 | $ | — | $ | -365 | ||||||
Other comprehensive gain (loss) before reclassifications | -3,779 | 2 | 3,419 | -358 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | ||||||||||
Total other comprehensive loss | -3,779 | 2 | 3,419 | -358 | ||||||||||
Balance at December 31, 2013 | $ | -4,131 | $ | -11 | $ | 3,419 | $ | -723 | ||||||
Debt
Debt | 12 Months Ended |
Dec. 31, 2014 | |
Debt | |
Credit Facility | 15. Debt |
Credit Facility | |
In September 2013, the Company entered into a Credit Agreement (the “Credit Facility”) with JP Morgan Chase Bank, N.A., as the administrative agent, Wells Fargo Bank, National Association, as the syndication agent and Capital One, National Association and KeyBank National Association, as co-documentation agents. The Credit Facility, which can be used for general corporate purposes, is a $100 million unsecured revolving line of credit that matures on September 27, 2018. The Company pays a commitment fee of 25 basis points on the unused balance of the revolving credit facility. Commitment fees totaled $215 thousand during the year ended December 31, 2014. Synchronoss has the right to request an increase in the aggregate principal amount of the Credit Facility to $150 million. | |
On July 2, 2014, the Company borrowed $40 million under the Credit Facility to fund acquisitions and capital asset purchases. Interest on the borrowing was based upon LIBOR plus a 175 basis point margin. | |
On September 4, 2014, the Company repaid the full amount borrowed under the Credit Facility plus interest of approximately $136 thousand. | |
The Credit Facility is subject to certain financial covenants. As of December 31, 2014, the Company was in compliance with all required covenants and there were no outstanding balances on the Credit Facility. | |
Convertible Senior Notes | |
On August 12, 2014, the Company issued $230.0 million aggregate principal amount of its 0.75% Convertible Senior Notes due in 2019 (the “2019 Notes”). The 2019 Notes mature on August 15, 2019, and bear interest at a rate of 0.75% per annum payable semi-annually in arrears on February 15 and August 15 of each year. The Company accounted for the $230 million face value of the debt as a liability and capitalized approximately $7.1 million of financing fees, related to the issuance. | |
The 2019 Notes are senior, unsecured obligations of the Company, and are convertible into shares of its common stock based on a conversion rate of 18.8072 shares per $1,000 principal amount of 2019 Notes which is equivalent to an initial conversion price of approximately $53.17 per share. The Company will satisfy any conversion of the 2019 Notes with shares of the Company’s common stock. The 2019 Notes are convertible at the note holders’ option prior to their maturity and if specified corporate transactions occur. The issue price of the 2019 Notes was equal to their face amount. | |
Holders of the 2019 Notes, who convert their notes in connection with a qualifying fundamental change, as defined in the related indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, following the occurrence of a fundamental change, holders may require that the Company repurchase some or all of the 2019 Notes for cash at a repurchase price equal to 100% of the principal amount of the 2019 Notes being repurchased, plus accrued and unpaid interest, if any. As of December 31, 2014, none of these conditions existed with respect to the 2019 Notes and as a result, the 2019 Notes are classified as long term. | |
The 2019 Notes are the Company’s direct senior unsecured obligations and rank equal in right of payment to all of the Company’s existing and future unsecured and unsubordinated indebtedness. | |
At December 31, 2014, the carrying amount of the liability and the outstanding principal of the 2019 Notes was $230.0 million, with an effective interest rate of approximately 1.36%. The fair value of the 2019 Notes was $254.3 million at December 31, 2014. The fair value of the liability of the 2019 Notes was determined using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair-value hierarchy. | |
The interest expense of the Company’s 2019 Notes related to the contractual interest coupon was $647 thousand for the year ended December 31, 2014. There was no interest expense related to the 2019 Notes for the twelve months ended December 31, 2013. | |
Legal_Matters
Legal Matters | 12 Months Ended |
Dec. 31, 2014 | |
Legal Matters | |
Legal Matters | 16. Legal Matters |
On October 7, 2014, the company filed an amended complaint in the United States District Court for the District of New Jersey (Civ Act. No. 3:14-cv-06220) against F-Secure Corporation and F-Secure, Inc. (collectively, “F-Secure"), claiming that F-Secure has infringed, and continues to infringe, several of the Company’s patents. In February 2015, Synchronoss entered into a patent license and settlement agreement with F-Secure Corporation and F-Secure, Inc. whereby the Company granted each of these companies (but not their subsidiaries or affiliates) a limited license to Synchronoss’ patents. As a result of entering into the patent license and settlement agreement, the parties filed a joint stipulation to dismiss the above complaint. | |
The Company’s 2011 acquisition agreement with Miyowa SA provided that former shareholders of Miyowa SA would be eligible for earn-out payments, to the extent specified business milestones were achieved following the acquisition. In December 2013, Eurowebfund and Bakamar, two former shareholders of Miyowa SA, filed a complaint against the Company in the Commercial Court of Paris, France claiming that they are entitled to certain earn-out payments under the acquisition agreement. The Company was served with a copy of this complaint in January 2014. The Company believes Miyowa SA failed to meet the criteria required for it to pay the claimed amounts and that no earn-out payments are owed. Although the Company cannot predict the outcome of the lawsuit due to the inherent uncertainties of litigation, it believes the positions of Eurowebfund and Bakamar are without merit, and the Company intends to vigorously defend against all claims brought by them. | |
The Company is not currently subject to any legal proceedings that could have a material adverse effect on its operations; however, it may from time to time become a party to various legal proceedings arising in the ordinary course of its business. The Company is currently the plaintiff in several patent infringement cases. The defendants in several of these cases have filed counterclaims. Although the Company cannot predict the outcome of the cases at this time due to the inherent uncertainties of litigation, the Company continues to pursue its claims and believes that the counterclaims are without merit, and the Company intends to defend all of such counterclaims. | |
Subsequent_Events_Review
Subsequent Events Review | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events | |
Subsequent Events | 17. Subsequent Events Review |
On February 4, 2015, the Company acquired certain cloud assets from F-Secure Corporation, an online security and privacy company from Finland, for cash consideration of $60.0 million, net of liabilities assumed. The Company believes that the purchase will expand the Company’s cloud services customer base. Since this acquisition occurred subsequent to December 31, 2014, it is not included in the results of operations for any of the periods presented. The preliminary purchase price allocations are not yet available. | |
On February 18, 2015, the Company entered into a patent license and settlement agreement whereby the Company granted F-Secure a limited license to the Company's patents for $10 million. As part of the business combination accounting rules, the Company will calculate the fair value of the license and settlement agreement using an income approach derived from historical and estimated future cash flow information. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation |
The consolidated financial statements include the accounts of the Company and its wholly‑owned subsidiaries. All material intercompany transactions and accounts are eliminated in consolidation. | |
Use of Estimates | |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | |
Revenue Recognition and Deferred Revenue | |
Revenue Recognition and Deferred Revenue | |
The Company provides services principally on a transactional or subscription basis or, at times, on a fixed fee basis and recognizes the revenues as the services are performed or delivered as described below: | |
Transactional and Subscription Service Arrangements: Transaction and subscription revenues consist of revenues derived from the processing of transactions through the Company’s service platforms, providing enterprise portal management services on a subscription basis and maintenance agreements on software licenses. Transaction service arrangements include services such as processing equipment orders, new account set‑up and activation, number port requests, credit checks and inventory management. Subscription services include hosting and storage and the related maintenance support for those services. | |
Transaction revenues are principally based on a contractual price per transaction and are recognized based on the number of transactions processed during each reporting period. Revenues are recorded based on the total number of transactions processed at the applicable price established in the relevant contract. The total amount of revenues recognized is based primarily on the volume of transactions. Subscription revenues are recorded on a straight‑line basis over the life of the contract for subscription services and maintenance agreements. | |
Many of the Company’s contracts guarantee minimum volume transactions from the customer. In these instances, if the customer’s total transaction volume for the period is less than the contractual amount, the Company records revenues at the minimum guaranteed amount. At times, transaction revenues may also include billings to customers that reimburse the Company based on the number of individuals dedicated to processing transactions. Set‑up fees for transactional service arrangements are deferred and recognized on a straight‑line basis over the life of the contract since these amounts would not have been paid by the customer without the related transactional service arrangement. Revenues are presented net of discounts, which are volume level driven, or credits, which are performance driven, and are determined in the period in which the volume thresholds are met or the services are provided. | |
Professional Service and Software License Arrangements: Professional services include process and workflow consulting services and development services. Professional services, when sold with non‑software transactional or subscription service arrangements, are accounted for separately when the professional services have value to the customer on a standalone basis. Professional services, when sold with software transactional or subscription service arrangements are accounted for separately when the professional services have value to the customer on a standalone basis and there is objective and reliable evidence of fair value of the professional services. When accounted for separately, professional service revenues are recognized as services are performed and all other elements of revenue recognition have been satisfied. | |
In determining whether professional service revenues can be accounted for separately from transaction or subscription service revenues, the Company considers the following factors for each professional services agreement: availability of the professional services from other vendors, whether objective and reliable evidence of fair value exists of the undelivered elements, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the transaction or subscription service start date and the contractual independence of the transactional or subscription service from the professional services. | |
If a professional service arrangement were not to qualify for separate accounting, the Company would recognize the professional service revenues ratably over the remaining term of the transaction or subscription agreement. | |
Revenue from software license arrangements is recognized when the license is delivered to its customers and all of the software revenue recognition criteria are met. When software arrangements include multiple elements, the arrangement consideration is allocated at the inception to all deliverables using the residual method providing the Company has vendor specific objective evidence (VSOE) on all undelivered elements. The Company determines VSOE for each element based on historical stand‑alone sales to third parties. When sold with non‑software transaction or subscription service arrangements, the arrangement consideration is allocated at the inception of an arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionally to each deliverable on the basis of each deliverable’s selling price. The selling price used for each deliverable will be based on VSOE if available, third‑party evidence (TPE) if vendor‑specific objective evidence is not available, or estimated selling price (ESP) if neither vendor‑specific objective evidence nor third‑party evidence is available. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand‑alone basis. The Company determines ESP by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives, and pricing practices. ESP is generally used for offerings that are not typically sold on a stand‑alone basis or for new or highly customized offerings. | |
While the Company follows specific and detailed rules and guidelines related to revenue recognition, it makes and uses management judgments and estimates in connection with the revenue recognized in any reporting period, particularly in the areas described above, as well as collectability. If management made different estimates or judgments, differences in the timing of the recognition of revenue could occur. | |
Deferred Revenue: Deferred revenues primarily represent billings to customers for services in advance of the performance of services, with revenues recognized as the services are rendered, and also includes the fair value of deferred revenues recorded as a result of acquisitions. | |
Service Level Standards | . |
Service Level Standards | |
Pursuant to certain contracts, the Company is subject to service level standards and to corresponding penalties for failure to meet those standards. All performance‑related penalties are reflected as a corresponding reduction of the Company’s revenues. These penalties, if applicable, are recorded in the month incurred and were insignificant for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Concentration of Credit Risk | |
Concentration of Credit Risk | |
The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalents at several major financial institutions. The Company has not experienced any realized losses in such accounts and believes it is not exposed to any significant credit risk related to cash, cash equivalents and securities. The Company’s cash equivalents and short‑term marketable securities consist primarily of money market funds, certificates of deposit, commercial paper, and municipal and corporate bonds. The Company believes that concentration of credit risk with respect to accounts receivable is limited because of the creditworthiness of the Company’s major customers. | |
AT&T and Verizon Wireless in the aggregate accounted for 73%, 66% and 67% of net revenues for 2014, 2013 and 2012, respectively. AT&T and Verizon accounted for 68% and 64% of accounts receivable at December 31, 2014 and 2013, respectively. The loss of either AT&T or Verizon as a customer would have a material negative impact on the Company. The Company believes that if either AT&T or Verizon terminated their relationships with Synchronoss, AT&T and Verizon would encounter substantial costs in replacing Synchronoss’ solutions. | |
Fair Value of Financial Instruments and Liabilities | |
Fair Value of Financial Instruments and Liabilities | |
The Company includes disclosures of fair value information about financial instruments and liabilities, whether or not recognized on the balance sheet, for which it is practicable to estimate that value. Due to their short‑term nature, the carrying amounts reported in the financial statements approximate the fair value for cash and cash equivalents, marketable securities, accounts receivable and accounts payable. | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | |
The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. | |
Marketable Securities | |
Marketable Securities | |
Marketable securities consist of fixed income investments with a maturity of greater than three months and enhanced money market funds. These investments are classified as available‑for‑sale and are reported at fair value on the Company’s balance sheet. The Company classifies its securities with maturity dates of 12 months or more as long term. Unrealized holding gains and losses are reported within accumulated other comprehensive loss as a separate component of stockholders’ equity. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write‑down is included in earnings as an impairment charge. The Company has recorded temporary changes in fair value of the marketable securities but has not recorded other‑than‑temporary charges for the periods presented herein. | |
Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts receivable consist of amounts due to the Company from normal business activities. The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. | |
Property and Equipment | |
Property and Equipment | |
Property and equipment and leasehold improvements are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, which range from 3 to 5 years, or the lesser of the related initial term of the lease or useful life for leasehold improvements. Amortization of property and equipment recorded under a capital lease is included with depreciation expense. Expenditures for routine maintenance and repairs are charged against operations. Major replacements, improvements and additions are capitalized. | |
In connection with the Company’s ongoing review of the estimated remaining average useful lives of plant, property and equipment, the Company determined that the actual lives of certain data center equipment were longer than the estimated useful lives used for depreciation purposes in the Company’s financial statements. As a result, effective October 1, 2014, the Company changed its estimates of the useful lives of its data center equipment to better reflect the estimated period during which these assets will remain in service and economically viable. The estimated useful lives of the data center equipment that previously averaged three years were increased to five years. The effect of the change in estimate reduced the 2014 depreciation expense by $3.6 million, increased net income by $2.3 million and increased basic and diluted earnings per share by $.06 and $.05, respectively. | |
Business Combinations | Business Combinations |
The Company accounts for business combinations in accordance with the acquisition method. The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their fair values on the date of a business acquisition. The Company’s consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition. | |
The judgments that the Company makes in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following a business combination. The Company generally uses either the income, cost or market approach to aid in its conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information. | |
The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as an adjustment to net change in contingent consideration obligation within the consolidated statement of income. Changes in the fair value of the contingent consideration obligation can result from updates in the achievement of financial targets and changes to the weighted probability of achieving those future financial targets. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, any change in the assumptions described above, could have a material impact on the amount of the net change in contingent consideration obligation that the Company records in any given period. | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | |
Goodwill represents the excess of the purchase price over the fair value of assets acquired, including other definite‑lived intangible assets. Goodwill is not amortized, but reviewed annually for impairment or upon the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of the reporting unit below its carrying amount. There were no impairment charges recognized during the years ended December 31, 2014, 2013 and 2012. | |
Intangible assets that do not have indefinite lives (primarily technology and customer relationships) are amortized over their useful lives. All intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company reevaluates the useful life determinations for these intangible assets each year to determine whether events and circumstances warrant a revision in their remaining useful lives. | |
Impairment of Long-Lived Assets | |
Impairment of Long‑Lived Assets | |
A review of long‑lived assets for impairment is performed when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If an indication of impairment is present, the Company compares the estimated undiscounted future cash flows to be generated by the asset to the asset’s carrying amount. If the undiscounted future cash flows are less than the carrying amount of the asset, the Company records an impairment loss equal to the amount by which the asset’s carrying amount exceeds its fair value. The fair value is determined based on valuation techniques such as a comparison to fair values of similar assets or using a discounted cash flow analysis. There were no impairment charges recognized during the years ended December 31, 2014, 2013 and 2012. | |
Cost of Services | |
Cost of Services | |
Cost of services includes all direct materials, direct labor and those indirect costs related to revenues such as indirect labor, materials and supplies and facilities cost, exclusive of depreciation expense. | |
Research and Development | |
Research and Development | |
Research and development costs are expensed as incurred, unless they meet U.S. GAAP criteria for deferral and amortization. Software development costs incurred prior to the establishment of technological feasibility do not meet these criteria, and are expensed as incurred. Amortization of software development costs is computed using the straight‑line method over the estimated useful lives of the assets, 3 and 5 years. As of December 31, 2014, the Company had $6.1 million of unamortized software development costs and $837 thousand of amortization expense which was recognized during 2014. As of December 31, 2013, the Company had $1.8 million of unamortized software development costs and $1.2 million of amortization expense which was recognized during 2013. As of December 31, 2012, the Company had $2.0 million of unamortized software development costs and $1.3 million of amortization expense which was recognized during 2012. Research and development expense consists primarily of costs related to personnel, including salaries and other personnel‑related expenses, consulting fees and the cost of facilities, computer and support services used in service technology development. The Company also expenses costs relating to developing modifications and minor enhancements of its existing technology and services. | |
Income Taxes | . |
Income Taxes | |
Since the Company conducts operations on a global basis, its effective tax rate has and will depend upon the geographic distribution of its pre‑tax earnings among locations with varying tax rates. The Company accounts for the effects of income taxes that result from its activities during the current and preceding years. Under this method, deferred income tax liabilities and assets are based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse or be utilized. The realization of deferred tax assets is contingent upon the generation of future taxable income. A valuation allowance is recorded if it is “more likely than not” that a portion or all of a deferred tax asset will not be realized. | |
In evaluating the Company’s ability to recover their deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results adjusted for the results of discontinued operations and incorporates assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income (loss). | |
The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured by determining the amount that has a greater than 50 percent likelihood of being realized upon the settlement of the position. Components of the reserve are classified as a current or a long‑term liability in the consolidated balance sheets based on when the Company expects each of the items to be settled. The Company records interest and penalties accrued in relation to uncertain tax benefits as a component of interest expense. The Company expects that the amount of unrecognized tax benefits will change during 2014; however, the Company does not expect the change to have a significant impact on its results of operations or financial position. | |
While the Company believes it has identified all reasonably identifiable exposures and that the reserve that the Company has established for identifiable exposures is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved. It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserves. In general, tax returns for the year 2010 and thereafter are subject to future examination by tax authorities. | |
The Company’s policy has been to leave its cumulative unremitted foreign earnings invested indefinitely outside the United States, and the Company intends to continue this policy. As such, taxes have not been provided on any of the remaining accumulated foreign unremitted earnings. If the cumulative unremitted foreign earnings exceed the amount the Company intends to reinvest in foreign countries in the future, the Company would provide for taxes on such excess amount. | |
Foreign Currency | . |
Foreign Currency | |
Prior to the third quarter of 2013, several of the Company’s subsidiaries that operate outside the U.S. used the U.S. dollar as the functional currency. Effective July 1, 2013, the Company changed the functional currencies of those subsidiaries that operate outside the U.S. to their local currency. This change was the result of a change in the Company’s international operations and economic strategies driven by the implementation of a global financial system that has allowed the Company’s foreign operations to become self‑contained and integrated within their resident countries and to the local currency. | |
The functional currency is translated into U.S. dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity within accumulated other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of income. The effects of the change in functional currency were not material to the Company’s consolidated financial statements for all years presented. | |
Comprehensive Income | |
Comprehensive Income | |
Reporting on comprehensive income requires components of other comprehensive income, including unrealized gains or losses on available‑for‑sale securities, to be included as part of total comprehensive income. Comprehensive income is comprised of net income, translation adjustments and unrealized gains and losses on available‑for‑sale securities. The components of comprehensive income are included in the statements of comprehensive income. | |
Basic and Diluted Net Income Attributable to Common Stockholders per Common Share | Basic and Diluted Net Income Attributable to Common Stockholders per Common Share |
Basic earnings per share is calculated by using the weighted-average number of common shares outstanding during the period. | |
The diluted earnings per share calculation is based on the weighted-average number of shares of common stock outstanding adjusted for the number of additional shares that would have been outstanding had all potentially dilutive common shares been issued. | |
Potentially dilutive shares of common stock include stock options, convertible debt and unvested share awards. The dilutive effects of stock options and restricted stock awards are based on the treasury stock method. The dilutive effect of the assumed conversion of convertible debt is determined using the if-converted method. The after-tax effect of interest expense related to the convertible securities is added back to net income, and the convertible debt is assumed to have been converted into common shares at the beginning of the period. | |
Stock-Based Compensation | Stock‑Based Compensation |
As of December 31, 2014, the Company maintains three stock‑based compensation plans. The Company utilizes the Black‑Scholes pricing model to determine the fair value of stock options on the dates of grant. Restricted stock awards are measured based on the fair market values of the underlying stock on the dates of grant, unless the awards are subject to market conditions, in which case the Company uses a binomial‑lattice model (e.g., Monte Carlo simulation model). The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. The Company recognizes stock‑based compensation over the requisite service period with an offsetting credit to additional paid‑in capital. | |
For the Company’s performance restricted stock awards the Company estimates the number of shares the recipient is to receive by applying a probability of achieving the performance goals. The actual number of shares the recipient receives is determined at the end of the annual performance period based on the results achieved versus goals based on its annual performance targets, such as operating income. Once the number of awards is determined, the compensation cost is fixed and continues to be recognized using the accelerated attribution recognition over the requisite service period for each vesting tranche. | |
The Company classifies benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) as a financing cash inflow with a corresponding operating cash outflow. The Company included $1.2 million, $3.0 million and $6.9 million of excess tax benefits as a financing cash inflow for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards |
In November 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-17 Business Combinations (Topic 805), Pushdown Accounting. The amendment provides that acquired entities have the option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of an acquired entity. The acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period and would be treated as a change in accounting principle. Additional disclosures are required to enable the users of the financial statements to evaluate the effect of pushdown accounting. The standard was adopted on November 18, 2014 and did not have an impact on the Company’s current period consolidated financial statements and related disclosures. | |
In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Management of public and private companies will be required to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, disclose that fact. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. The standard is effective for annual periods ending after December 15, 2016 and interim periods ending after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect adoption of this ASU to significantly impact its consolidated financial statements. | |
In May 2014, the FASB and the International Accounting Standards Board (“IASB”) (collectively, the “Boards”) jointly issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under US GAAP and IFRS. The standard’s core principle (issued as ASU 2014-09 by the FASB and as IFRS 15 by the IASB), is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The effective date is fiscal years beginning after December 15, 2016. Early application is not permitted. The Company is currently evaluating the methods of adoption and the impact that ASU 2014-09 will have on its consolidated financial statements. | |
Segment and Geographic Information | Segment and Geographic Information |
The Company’s chief operating decision‑maker is the Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. Accordingly, the Company has determined that it currently operates in one business segment: providing cloud solutions and software‑based activation for connected devices globally. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker who comprehensively manages the entire business. The Company does not operate any separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate a complete set of discrete financial information with respect to separate service lines and does not have separately reportable segments. Although the Company operates in North America, Europe and Asia‑Pacific a majority of the Company’s revenue and long lived assets are in the U.S. | |
Revenues by geography are based on the billing addresses of the Company’s customers. | |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Summary of Significant Accounting Policies | |||||||||||
Schedule of reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income attributable to common stockholders | $ | 38,895 | $ | 23,351 | $ | 27,083 | |||||
Income effect for interest on convertible debt, net of tax | 754 | — | — | ||||||||
Net income applicable to shares of common stock for earnings per share | $ | 39,649 | $ | 23,351 | $ | 27,083 | |||||
Denominator: | |||||||||||
Weighted-average common shares outstanding — basic | 40,418 | 38,891 | 38,195 | ||||||||
Dilutive effect of: | |||||||||||
Shares from assumed conversion of convertible debt | 1,682 | — | — | ||||||||
Options and unvested restricted shares | 1,197 | 1,118 | 931 | ||||||||
Weighted-average common shares outstanding — diluted | 43,297 | 40,009 | 39,126 | ||||||||
Schedule of revenues and property and equipment, net by geographic area | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | |||||||||||
Domestic | $ | 405,235 | $ | 309,322 | $ | 252,292 | |||||
Foreign | 52,079 | 39,725 | 21,400 | ||||||||
Total | $ | 457,314 | $ | 349,047 | $ | 273,692 | |||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Property and equipment, net: | |||||||||||
Domestic | $ | 141,944 | $ | 96,558 | |||||||
Foreign | 9,227 | 9,548 | |||||||||
Total | $ | 151,171 | $ | 106,106 | |||||||
Acquisition_Tables
Acquisition (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Vox mobili ("Vox") | ||||||
Acquisition | ||||||
Summary of fair values of assets and liabilities assumed at acquisition date | ||||||
Preliminary | ||||||
Purchase Price | ||||||
Allocation | ||||||
Cash | $ | 1,414 | ||||
Prepaid expenses and other assets | 220 | |||||
Accounts receivable | 3,750 | |||||
Intangible assets: | Wtd. Avg. | |||||
Technology | 4,900 | 5 years | ||||
Customer relationships | 5,000 | 5 years | ||||
Goodwill | 17,188 | |||||
Total assets acquired | 32,472 | |||||
Accounts payable and accrued liabilities | 2,118 | |||||
Deferred revenues | 457 | |||||
Deferred taxes | 3,338 | |||||
Net assets acquired | $ | 26,559 | ||||
Strumsoft, Inc. (Strumsoft) | ||||||
Acquisition | ||||||
Summary of fair values of assets and liabilities assumed at acquisition date | ||||||
Purchase Price | ||||||
Allocation | ||||||
Cash and cash equivalents | $ | 4,284 | ||||
Accounts receivable | 115 | |||||
Prepaid expenses and other assets | 129 | |||||
Intangible assets: | Wtd. Avg. | |||||
Tradename | 102 | 2 years | ||||
Order Backlog | 918 | 2 months | ||||
Customer Relationship | 3,663 | 3 years | ||||
Property and equipment | 62 | |||||
Goodwill | 12,381 | |||||
Total assets acquired | 21,654 | |||||
Accounts payable and accrued liabilities | 3,603 | |||||
Deferred tax liability | 1,746 | |||||
Net assets acquired | $ | 16,305 | ||||
Fair_Value_Measurements_of_Ass1
Fair Value Measurements of Assets and Liabilities (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Fair Value Measurements of Assets and Liabilities | |||||||||||
Schedule of assets and liabilities held and their related classifications under the fair value hierarchy | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Level 1 (A) | $ | 241,364 | $ | 68,911 | |||||||
Level 2 (B) | 49,013 | 8,694 | |||||||||
Level 3 (C) | -8,022 | -4,490 | |||||||||
Total | $ | 282,355 | $ | 73,115 | |||||||
(A) | Level 1 assets include money market funds and enhanced income money market funds which are classified as cash equivalents and marketable securities, respectively. | ||||||||||
(B) | Level 2 assets include certificates of deposit, municipal bonds, commercial papers and corporate bonds which are classified as marketable securities. | ||||||||||
(C) | Level 3 liabilities include the contingent consideration obligation. | ||||||||||
Schedule of aggregate fair value of available-for-sale securities and aggregate amount of unrealized gains and losses for available-for-sale securities | |||||||||||
The aggregate fair value of available for sale securities and aggregate amount of unrealized gains and losses for available for sale securities at December 31, 2014 were as follows: | |||||||||||
Aggregate | |||||||||||
Amount | |||||||||||
Aggregate | of Unrealized | ||||||||||
Fair Value | Gains | Losses | |||||||||
Due in one year or less | $ | 51,097 | $ | 10 | $ | -72 | |||||
Due after one year, less than five years | 3,313 | 2 | -3 | ||||||||
$ | 54,410 | $ | 12 | $ | -75 | ||||||
The aggregate fair value of available for sale securities and aggregate amount of unrealized gains and losses for available for sale securities at December 31, 2013 were as follows: | |||||||||||
Aggregate | |||||||||||
Amount | |||||||||||
Aggregate | of Unrealized | ||||||||||
Fair Value | Gains | Losses | |||||||||
Due in one year or less | $ | 9,105 | $ | 5 | $ | -32 | |||||
Due after one year, less than five years | 4,988 | 11 | -2 | ||||||||
$ | 14,093 | $ | 16 | $ | -34 | ||||||
Schedule of changes in fair value of Level 3 contingent consideration obligation | |||||||||||
Level 3 | |||||||||||
Balance at December 31, 2013 | $ | 4,490 | |||||||||
Fair value adjustment to contingent consideration obligation included in net income | 1,799 | ||||||||||
Earn-out compensation due to Strumsoft employees | 1,733 | ||||||||||
Balance at December 31, 2014 | $ | 8,022 | |||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Schedule of components of property and equipment | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Computer hardware | $ | 134,328 | $ | 70,501 | ||||
Computer software | 28,661 | 22,640 | ||||||
Construction in-progress | 37,989 | 30,440 | ||||||
Furniture and fixtures | 3,669 | 3,579 | ||||||
Building | 8,808 | 8,808 | ||||||
Leasehold improvements | 11,533 | 10,250 | ||||||
224,988 | 146,218 | |||||||
Less: Accumulated depreciation | -73,817 | -40,112 | ||||||
$ | 151,171 | $ | 106,106 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Expenses | ||||||||
Schedule of components of accrued expenses | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accrued compensation and benefits | $ | 23,480 | $ | 12,868 | ||||
Accrued third party processing fees | — | 5,284 | ||||||
Accrued accounting fees | 1,362 | 1,296 | ||||||
Accrued consulting fees | 5,169 | 1,263 | ||||||
Accrued acquisition costs | — | 40 | ||||||
Accrued other | 8,791 | 14,520 | ||||||
Accrued income tax payable | 3,855 | 2,648 | ||||||
$ | 42,657 | $ | 37,919 | |||||
Stock_Plans_Tables
Stock Plans (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Stock Plans | |||||||||||
Schedule of weighted-average assumptions used in the Black-Scholes option pricing model | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Expected stock price volatility | 57 | % | 66 | % | 68 | % | |||||
Risk-free interest rate | 1.43 | % | 0.87 | % | 0.80 | % | |||||
Expected life of options (in years) | 4.2 | 4.5 | 4.8 | ||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||
Schedule of information about stock options outstanding | |||||||||||
Weighted- | |||||||||||
Average | |||||||||||
Weighted- | Remaining | Aggregate | |||||||||
Number of | Average | Contractual | Intrinsic | ||||||||
Options | Options | Exercise Price | Term (Years) | Value | |||||||
Outstanding at December 31, 2013 | 3,315 | $ | 23.97 | ||||||||
Options Granted | 815 | 31.85 | |||||||||
Options Exercised | -1,223 | 24.53 | |||||||||
Options Cancelled | -140 | 28.89 | |||||||||
Outstanding at December 31, 2014 | 2,767 | $ | 25.81 | 4.34 | $ | 44,479 | |||||
Vested or expected to vest at December 31, 2014 | 2,578 | $ | 25.40 | 4.24 | $ | 42,479 | |||||
Exercisable at December 31, 2014 | 1,473 | $ | 21.38 | 3.29 | $ | 30,172 | |||||
Schedule of non-vested restricted stock and changes | |||||||||||
Non-Vested Restricted Stock | Number of Awards | Weighted-Average Grant Date Fair Value | |||||||||
Non-vested at December 31, 2013 | 1,120 | $ | 28.95 | ||||||||
Granted | 908 | $ | 32.09 | ||||||||
Vested | -542 | $ | 28.37 | ||||||||
Forfeited | -144 | $ | 28.84 | ||||||||
Non-vested at December 31, 2014 | 1,342 | $ | 31.24 | ||||||||
Schedule of weighted-average assumptions used to value employee stock purchase rights | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Expected stock price volatility | 52 | % | 65 | % | |||||||
Risk-free interest rate | 0.60 | % | 1.04 | % | |||||||
Expected life of ESPP shares (in years) | 0.5 | 0.5 | |||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of components of income before income taxes | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Domestic | $ | 52,850 | $ | 30,437 | $ | 40,680 | |||||
Foreign | 7,724 | 4,142 | 1,984 | ||||||||
Total | $ | 60,574 | $ | 34,579 | $ | 42,664 | |||||
Schedule of components of income tax (expense) benefit | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | -8,673 | $ | -3,709 | $ | -10,544 | |||||
State | -2,463 | -2,661 | -2,409 | ||||||||
Foreign | -2,505 | -3,076 | -1,076 | ||||||||
Deferred: | |||||||||||
Federal | -10,437 | -3,447 | -1,809 | ||||||||
State | -1,301 | -1,324 | -227 | ||||||||
Foreign | 3,700 | 2,989 | 484 | ||||||||
Income tax expense | $ | -21,679 | $ | -11,228 | $ | -15,581 | |||||
Schedule of reconciliations of the statutory tax rates and the effective tax rates | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Statutory rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal benefit | 4 | % | 7 | % | 4 | % | |||||
Effect of rates different than statutory | -4 | % | — | % | -1 | % | |||||
Non-deductible stock based compensation | — | % | 3 | % | 1 | % | |||||
Other permanent adjustments | 1 | % | 1 | % | 1 | % | |||||
Fair market value adjustment on Earn-out | 1 | % | -6 | % | -5 | % | |||||
Research and development credit | -2 | % | -5 | % | -1 | % | |||||
Subpart F income | 2 | % | — | % | — | % | |||||
Change in valuation allowance | — | % | -2 | % | — | % | |||||
Other | -1 | % | -1 | % | 3 | % | |||||
Net | 36 | % | 32 | % | 37 | % | |||||
Schedule of significant components of the Company's deferred tax assets and liabilities | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Accrued liabilities | $ | 23 | $ | 212 | |||||||
Deferred revenue | 213 | 3,555 | |||||||||
Bad debts reserve | 121 | 789 | |||||||||
Deferred compensation | 11,308 | 12,891 | |||||||||
Federal net operating loss carry forwards | 20,089 | 21,139 | |||||||||
State net operating loss carry forwards | 2,120 | 2,568 | |||||||||
Foreign net operating loss carry forwards | 7,800 | 9,202 | |||||||||
Deferred rent | 552 | 532 | |||||||||
Capital loss carry forward | 98 | 115 | |||||||||
Other | 2,818 | 1,020 | |||||||||
Total deferred tax assets | $ | 45,142 | $ | 52,023 | |||||||
Deferred tax liabilities: | |||||||||||
Intangible assets | $ | -26,481 | $ | -29,536 | |||||||
Fixed assets | -17,099 | -10,848 | |||||||||
Total deferred tax liabilities | -43,580 | -40,384 | |||||||||
Less: valuation allowance | -2,553 | -2,803 | |||||||||
Net deferred income tax (liabilities) assets | $ | -991 | $ | 8,836 | |||||||
Schedule of classification of net deferred income taxes | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Current deferred tax assets | $ | 1,475 | $ | 4,728 | |||||||
Less: Valuation allowance | — | -102 | |||||||||
Net current deferred tax assets | 1,475 | 4,626 | |||||||||
Non-current deferred tax assets | 3,785 | 6,911 | |||||||||
Less: Valuation allowance | -2,553 | -2,701 | |||||||||
Net non-current deferred tax assets | 1,232 | 4,210 | |||||||||
Net Deferred Tax Assets | $ | 2,707 | $ | 8,836 | |||||||
Non-current deferred tax liability | $ | 3,698 | $ | — | |||||||
Schedule of net operating loss expiration | |||||||||||
2015-2019 | $ | 8,221 | |||||||||
2020-2024 | 29,908 | ||||||||||
2025-2032 | 65,250 | ||||||||||
$ | 103,379 | ||||||||||
Schedule of reconciliation of the amounts of unrecognized tax benefits excluding interest | |||||||||||
Unrecognized tax benefit at December 31, 2011 | $ | 503 | |||||||||
Increases for tax positions taken during prior year | 141 | ||||||||||
Reduction due to lapse of applicable statute of limitations | -158 | ||||||||||
Increases for tax positions of current period | 25 | ||||||||||
Unrecognized tax benefit at December 31, 2012 | 511 | ||||||||||
Decreases for tax positions taken during prior year | -5 | ||||||||||
Reduction due to lapse of applicable statute of limitations | -66 | ||||||||||
Increases for tax positions of current period | 268 | ||||||||||
Unrecognized tax benefit at December 31, 2013 | 708 | ||||||||||
Decreases for tax positions taken during prior year | -218 | ||||||||||
Reduction due to lapse of applicable statute of limitations | -11 | ||||||||||
Increases for tax positions of current period | 651 | ||||||||||
Unrecognized tax benefit at December 31, 2014 | $ | 1,130 | |||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies | ||||
Schedule of aggregate annual future minimum lease payments under non-cancellable leases | ||||
Year Ending December 31: | ||||
2015 | $ | 39,100 | ||
2016 | 31,294 | |||
2017 | 22,549 | |||
2018 | 12,790 | |||
2019 and thereafter | 41,403 | |||
$ | 147,136 | |||
Goodwill_and_Intangibles_Table
Goodwill and Intangibles (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
Schedule of changes in goodwill | |||||||||||
Balance at December 31, 2012 | $ | 127,322 | |||||||||
Acquisitions | 12,381 | ||||||||||
Reclassifications, adjustments and other | -1,960 | ||||||||||
Balance at December 31, 2013 | $ | 137,743 | |||||||||
Acquisitions | 20,624 | ||||||||||
Reclassifications, adjustments and other | -1,287 | ||||||||||
Translation adjustments | -9,945 | ||||||||||
Balance at December 31, 2014 | $ | 147,135 | |||||||||
Schedule of composition of intangible assets | |||||||||||
Weighted | December 31, 2014 | ||||||||||
Average | Accumulated | ||||||||||
Life | Cost | Amortization | Net | ||||||||
Trade name | 4 | $ | 1,589 | $ | -1,324 | $ | 265 | ||||
Technology | 7 | 71,155 | -28,484 | 42,671 | |||||||
Customer lists and relationships | 9 | 74,601 | -25,283 | 49,318 | |||||||
Capitalized software and patents | — | 9,346 | -2,111 | 7,235 | |||||||
Order Backlog | — | 918 | -918 | — | |||||||
$ | 157,609 | $ | -58,120 | $ | 99,489 | ||||||
Weighted | December 31, 2013 | ||||||||||
Average | Accumulated | ||||||||||
Life | Cost | Amortization | Net | ||||||||
Trade name | 4 | $ | 1,589 | $ | -780 | $ | 809 | ||||
Technology | 8 | 65,280 | -15,328 | 49,952 | |||||||
Customer lists and relationships | 11 | 61,161 | -12,321 | 48,840 | |||||||
Capitalized software and patents | — | 3,634 | -1,272 | 2,362 | |||||||
Order Backlog | — | 918 | -918 | — | |||||||
$ | 132,582 | $ | -30,619 | $ | 101,963 | ||||||
Schedule of estimated annual amortization expense of intangible assets for the next five years | |||||||||||
Year ended December 31: | |||||||||||
2015 | $ | 20,850 | |||||||||
2016 | 19,918 | ||||||||||
2017 | 17,526 | ||||||||||
2018 | 14,591 | ||||||||||
2019 | 10,360 | ||||||||||
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Restructuring Charges | ||||||||||||||||
Summary of the restructuring accrual and changes | ||||||||||||||||
Balance at | Balance at | |||||||||||||||
December 31, 2013 | Charges | Payments | Adjustments | December 31, 2014 | ||||||||||||
Facilities consolidation | $ | 128 | $ | — | $ | -128 | $ | — | $ | — | ||||||
Total | $ | 128 | $ | — | $ | -128 | $ | — | $ | — | ||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income (Loss). | ||||||||||||||
Schedule of changes in accumulated other comprehensive income (loss) | The changes in accumulated other comprehensive income during the year ended December 31, 2014, are as follows, net of tax: | |||||||||||||
Unrealized | Net Gain (Loss) | |||||||||||||
Holding Gains on | on Intra-Entity | |||||||||||||
Foreign | Available-for-Sale | Foreign Currency | ||||||||||||
Currency | Securities | Transactions | Total | |||||||||||
Balance at December 31, 2013 | $ | -4,131 | $ | -11 | $ | 3,419 | $ | -723 | ||||||
Other comprehensive loss before reclassifications | -12,849 | -166 | -2,857 | -15,872 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | — | -3,419 | -3,419 | ||||||||||
Total other comprehensive loss | -12,849 | -166 | -6,276 | -19,291 | ||||||||||
Balance at December 31, 2014 | $ | -16,980 | $ | -177 | $ | -2,857 | $ | -20,014 | ||||||
The changes in accumulated other comprehensive income during the year ended December 31, 2013, are as follows, net of tax: | ||||||||||||||
Unrealized | Net Gain (Loss) | |||||||||||||
Holding Gains on | on Intra-Entity | |||||||||||||
Foreign | Available-for-Sale | Foreign Currency | ||||||||||||
Currency | Securities | Transactions | Total | |||||||||||
Balance at December 31, 2012 | $ | -352 | $ | -13 | $ | — | $ | -365 | ||||||
Other comprehensive gain (loss) before reclassifications | -3,779 | 2 | 3,419 | -358 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | ||||||||||
Total other comprehensive loss | -3,779 | 2 | 3,419 | -358 | ||||||||||
Balance at December 31, 2013 | $ | -4,131 | $ | -11 | $ | 3,419 | $ | -723 | ||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Basis of Presentation and Consolidation (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Summary of Significant Accounting Policies | |||
Accounts receivable | $118,371 | $64,933 | |
Prepaid expenses and other assets | 35,023 | 19,451 | |
Goodwill | 147,135 | 137,743 | 127,322 |
Accrued expenses | 42,657 | 37,919 | |
Deferred revenues | $11,897 | $15,372 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) (Top Customers) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net Revenues | Customer Concentration | |||
Concentration of Credit Risk | |||
Percentage of concentration risk | 73.00% | 66.00% | 67.00% |
Accounts Receivable | Credit Concentration | |||
Concentration of Credit Risk | |||
Percentage of concentration risk | 68.00% | 64.00% |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Cash, Marketable Securities, and Property, Plant and Equipment (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 01, 2014 | ||||
Cash and Cash Equivalents | |||||||
Maximum time period for which an investment is considered a cash equivalent | 3 months | ||||||
Property and Equipment | |||||||
Depreciation | $36,100,000 | $24,600,000 | $14,500,000 | ||||
Net Income (Loss) Attributable to Parent | 38,895,000 | 23,351,000 | 27,083,000 | ||||
Earnings Per Share, Basic | $0.96 | [1] | $0.60 | [1] | $0.71 | [1] | |
Earnings Per Share, Diluted | $0.92 | [1] | $0.58 | [1] | $0.69 | [1] | |
Estimated Useful Lives | Data Center Equipment | |||||||
Property and Equipment | |||||||
Estimated useful life of property and equipment and leasehold improvements | 5 years | ||||||
Useful life before change | 3 years | ||||||
Depreciation | -3,600,000 | ||||||
Net Income (Loss) Attributable to Parent | $2,300,000 | ||||||
Earnings Per Share, Basic | $0.06 | ||||||
Earnings Per Share, Diluted | $0.05 | ||||||
Minimum | |||||||
Marketable Securities | |||||||
Maturity period of fixed income investments | 3 months | ||||||
Maturity period of marketable securities to be classified as long-term | 12 months | ||||||
Minimum | Property, Equipment, and Leasehold Improvements | |||||||
Property and Equipment | |||||||
Estimated useful life of property and equipment and leasehold improvements | 3 years | ||||||
Maximum | Property, Equipment, and Leasehold Improvements | |||||||
Property and Equipment | |||||||
Estimated useful life of property and equipment and leasehold improvements | 5 years | ||||||
[1] | See notes to financial statement footnote 2 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and Other Intangible Assets | |||
Impairment charges on goodwill | $0 | $0 | $0 |
Impairment of Long-Lived Assets | |||
Impairment charges on long lived assets | 0 | 0 | 0 |
Research and Development | |||
Unamortized software development costs | 6,100,000 | 1,800,000 | 2,000,000 |
Amortization expenses of capital software development costs | $837,000 | $1,200,000 | $1,300,000 |
Income Taxes | |||
Historical period used in future taxable income assumptions | 3 years | ||
Minimum | Software Development | |||
Research and Development | |||
Estimated minimum useful life of software development costs | 3 years | ||
Maximum | Software Development | |||
Research and Development | |||
Estimated maximum useful life of software development costs | 5 years |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies - Basic and Diluted Net Income (Details) (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Basic and Diluted Net Income Attributable to Common Stockholders per Common Share | ||||||
Stock options that are anti-dilutive and excluded from calculation of diluted earnings per share (in shares) | 1,100,000 | 1,400,000 | 1,800,000 | |||
Numerator: | ||||||
Net income attributable to common stockholders | $38,895 | $23,351 | $27,083 | |||
Income effect for interest on convertible debt, net of tax | 754 | |||||
Numerator for diluted EPS- Income to common stockholders after assumed conversions | $39,649 | $23,351 | $27,083 | |||
Denominator: | ||||||
Weighted average common shares outstanding - basic | 40,418,000 | [1] | 38,891,000 | [1] | 38,195,000 | [1] |
Dilutive effect of: | ||||||
Shares from assumed conversion of convertible debt | 1,682,000 | |||||
Options and unvested restricted shares | 1,197,000 | 1,118,000 | 931,000 | |||
Weighted average common shares outstanding - diluted | 43,297,000 | [1] | 40,009,000 | [1] | 39,126,000 | [1] |
[1] | See notes to financial statement footnote 2 |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
plan | |||
Stock-Based Compensation | |||
Number of stock-based compensation plans | 3 | ||
Excess tax benefits included as a financing cash inflow | $1,203 | $2,961 | $6,920 |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies - Segment and Geographic Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||
segment | |||
Segment and Geographic Information | |||
Number of business segments | 1 | ||
Number of businesses the entity is managed and operated as | 1 | ||
Revenues and property and equipment, net by geographic area | |||
Revenues | $457,314 | $349,047 | $273,692 |
Property and equipment, net | 151,171 | 106,106 | |
Geographic area | |||
Revenues and property and equipment, net by geographic area | |||
Revenues | 457,314 | 349,047 | 273,692 |
Property and equipment, net | 151,171 | 106,106 | |
Geographic area | Domestic | |||
Revenues and property and equipment, net by geographic area | |||
Revenues | 405,235 | 309,322 | 252,292 |
Property and equipment, net | 141,944 | 96,558 | |
Geographic area | Foreign | |||
Revenues and property and equipment, net by geographic area | |||
Revenues | 52,079 | 39,725 | 21,400 |
Property and equipment, net | $9,227 | $9,548 |
Acquisition_2014_Acquisitions_
Acquisition - 2014 Acquisitions (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 11, 2014 | Jul. 02, 2014 | 12-May-14 | Sep. 30, 2014 |
Acquisition | |||||||
Payments to acquire business, net of cash acquired | $38,085 | $6,677 | $105,177 | ||||
Preliminary Purchase Price Allocation | |||||||
Goodwill | 147,135 | 137,743 | 127,322 | ||||
Vox mobili ("Vox") | |||||||
Acquisition | |||||||
Payments to acquire business, net of cash acquired | 25,100 | ||||||
Preliminary Purchase Price Allocation | |||||||
Cash | 1,414 | ||||||
Prepaid expenses and other assets | 220 | ||||||
Accounts receivable | 3,750 | ||||||
Goodwill | 17,188 | ||||||
Total assets acquired | 32,472 | ||||||
Accounts payable and accrued liabilities | 2,118 | ||||||
Deferred revenues | 457 | ||||||
Deferred taxes | 3,338 | ||||||
Net assets acquired | 26,559 | ||||||
Goodwill acquired | |||||||
Purchase price, tax deductible portion of goodwill | 0 | ||||||
Clarity OSS Limited ("Clarity") | |||||||
Acquisition | |||||||
Payments to acquire business, net of cash acquired | 6,600 | ||||||
Preliminary Purchase Price Allocation | |||||||
Goodwill | 372 | ||||||
Goodwill acquired | |||||||
Purchase price, tax deductible portion of goodwill | 0 | ||||||
Digi-Data | |||||||
Acquisition | |||||||
Payments to acquire business, net of cash acquired | 6,300 | ||||||
Preliminary Purchase Price Allocation | |||||||
Goodwill | 3,100 | ||||||
Goodwill acquired | |||||||
Purchase price, tax deductible portion of goodwill | 0 | ||||||
Technology | |||||||
Preliminary Purchase Price Allocation | |||||||
Estimated useful life | 7 years | 8 years | |||||
Technology | Vox mobili ("Vox") | |||||||
Preliminary Purchase Price Allocation | |||||||
Intangible assets | 4,900 | ||||||
Estimated useful life | 5 years | ||||||
Customer relationships | Vox mobili ("Vox") | |||||||
Preliminary Purchase Price Allocation | |||||||
Intangible assets | $5,000 | ||||||
Estimated useful life | 5 years |
Acquisition_2013_Acquisitions_
Acquisition - 2013 Acquisitions (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
Share data in Thousands, unless otherwise specified | Feb. 20, 2015 | Nov. 06, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allocation of Consideration Transferred | |||||
Contingent consideration obligation | 8,022,000 | 22,000 | |||
Preliminary Purchase Price Allocation | |||||
Goodwill | 147,135,000 | 137,743,000 | 127,322,000 | ||
Strumsoft, Inc. (Strumsoft) | |||||
Acquisition | |||||
Capital interest acquired (as a percent) | 100.00% | ||||
Allocation of Consideration Transferred | |||||
Total cash consideration | 11,000,000 | ||||
Cash consideration paid for shares | 10,200,000 | ||||
Working capital surplus | 774,000 | ||||
Number of common shares issued for acquisition | 33 | ||||
Value of Synchronoss common stock issued | 1,100,000 | ||||
Contingent consideration obligation | 8,000,000 | ||||
Earn-out paid | 8,000,000 | ||||
Preliminary Purchase Price Allocation | |||||
Cash | 4,284,000 | ||||
Accounts receivable | 115,000 | ||||
Prepaid expenses and other assets | 129,000 | ||||
Property and equipment | 62,000 | ||||
Goodwill | 12,381,000 | ||||
Total assets acquired | 21,654,000 | ||||
Accounts payable and accrued liabilities | 3,603,000 | ||||
Deferred tax liability | 1,746,000 | ||||
Net assets acquired | 16,305,000 | ||||
Goodwill acquired | |||||
Purchase price, tax deductible portion of goodwill | 0 | ||||
Strumsoft, Inc. (Strumsoft) | Maximum | |||||
Allocation of Consideration Transferred | |||||
Earn-out contingent consideration | -6,000,000 | ||||
Strumsoft, Inc. (Strumsoft) | Employees | Maximum | |||||
Allocation of Consideration Transferred | |||||
Earn-out contingent consideration | -2,000,000 | ||||
Trade Name | |||||
Preliminary Purchase Price Allocation | |||||
Estimated useful life | 4 years | 4 years | |||
Trade Name | Strumsoft, Inc. (Strumsoft) | |||||
Preliminary Purchase Price Allocation | |||||
Intangible assets | 102,000 | ||||
Estimated useful life | 2 years | ||||
Order Backlog | Strumsoft, Inc. (Strumsoft) | |||||
Preliminary Purchase Price Allocation | |||||
Intangible assets | 918,000 | ||||
Estimated useful life | 2 months | ||||
Customer relationships | Strumsoft, Inc. (Strumsoft) | |||||
Preliminary Purchase Price Allocation | |||||
Intangible assets | $3,663,000 | ||||
Estimated useful life | 3 years |
Acquisition_Other_information_
Acquisition - Other information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Acquisition | |||
Acquisition-related costs | $2.50 | $1.70 | $2.90 |
Fair_Value_Measurements_of_Ass2
Fair Value Measurements of Assets and Liabilities (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of assets and liabilities held by the Company and their related classifications under the fair value hierarchy | |||
Fair value of asset transfers from Level 1 to Level 2 | $0 | ||
Fair value of asset transfers from Level 2 to Level 1 | 0 | ||
Aggregate Fair Value | |||
Due in one year or less | 51,097 | 9,105 | |
Due after one year, less than five years | 3,313 | 4,988 | |
Total | 54,410 | 14,093 | |
Aggregate Amount of Unrealized Gains | |||
Due in one year or less | 10 | 5 | |
Due after one year, less than five years | 2 | 11 | |
Total | 12 | 16 | |
Aggregate Amount of Unrealized Losses | |||
Due in one year or less | -72 | -32 | |
Due after one year, less than five years | -3 | -2 | |
Total | -75 | -34 | |
Net unrealized (loss) gain net of tax reported as a component of accumulated other comprehensive (loss) income | -166 | 2 | 123 |
Proceeds from sale of marketable securities | 0 | ||
Change in the contingent consideration obligation | 1,799 | -5,324 | -6,235 |
Level 1 | |||
Summary of assets and liabilities held by the Company and their related classifications under the fair value hierarchy | |||
Fair value of net assets | 241,364 | 68,911 | |
Level 2 | |||
Summary of assets and liabilities held by the Company and their related classifications under the fair value hierarchy | |||
Fair value of net assets | 49,013 | 8,694 | |
Level 3 | |||
Summary of assets and liabilities held by the Company and their related classifications under the fair value hierarchy | |||
Contingent consideration obligation | -8,022 | -4,490 | |
Total | |||
Summary of assets and liabilities held by the Company and their related classifications under the fair value hierarchy | |||
Fair value of net assets | $282,355 | $73,115 |
Fair_Value_Measurements_of_Ass3
Fair Value Measurements of Assets and Liabilities - Level 3 Reconciliation (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in fair value of the Company's Level 3 contingent consideration obligation | |||
Fair value adjustment to contingent obligation included in net income | $1,799 | ($5,324) | ($6,235) |
Level 3 | Contingent Consideration Obligation | |||
Changes in fair value of the Company's Level 3 contingent consideration obligation | |||
Balance as at the beginning of the period | 4,490 | ||
Fair value adjustment to contingent obligation included in net income | 1,799 | ||
Balance as at the end of the period | 8,022 | ||
Level 3 | Contingent Consideration Obligation | Strumsoft, Inc. (Strumsoft) | |||
Changes in fair value of the Company's Level 3 contingent consideration obligation | |||
Earn-out compensation due to employees | $1,733 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property and Equipment | |||
Property and Equipment, gross | $224,988,000 | $146,218,000 | |
Less: Accumulated depreciation | -73,817,000 | -40,112,000 | |
Property and equipment, net | 151,171,000 | 106,106,000 | |
Depreciation expense | 36,100,000 | 24,600,000 | 14,500,000 |
Computer hardware | |||
Property and Equipment | |||
Property and Equipment, gross | 134,328,000 | 70,501,000 | |
Computer software | |||
Property and Equipment | |||
Property and Equipment, gross | 28,661,000 | 22,640,000 | |
Construction-in-progress | |||
Property and Equipment | |||
Property and Equipment, gross | 37,989,000 | 30,440,000 | |
Furniture and fixtures | |||
Property and Equipment | |||
Property and Equipment, gross | 3,669,000 | 3,579,000 | |
Building | |||
Property and Equipment | |||
Property and Equipment, gross | 8,808,000 | 8,808,000 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and Equipment, gross | $11,533,000 | $10,250,000 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses | ||
Accrued compensation and benefits | $23,480 | $12,868 |
Accrued third party processing fees | 5,284 | |
Accrued accounting fees | 1,362 | 1,296 |
Accrued consulting fees | 5,169 | 1,263 |
Accrued acquisition costs | 40 | |
Accrued other | 8,791 | 14,520 |
Accrued income tax payable | 3,855 | 2,648 |
Total | $42,657 | $37,919 |
Capital_Structure_Capitalizati
Capital Structure - Capitalization Information (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Capital Structure | ||
Authorized capital stock (in shares) | 110,000,000 | |
Par value per share of capital stock (in dollars per share) | $0.00 | |
Designated common stock (in shares) | 100,000,000 | 100,000,000 |
Designated preferred stock (in shares) | 10,000,000 | 10,000,000 |
Capital_Structure_Outstanding_
Capital Structure - Outstanding and Stock Incentive Plans (Details) (USD $) | 12 Months Ended | |
Share data in Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Vote | ||
Common Stock | ||
Common stock, shares outstanding | 42,711 | 40,663 |
Preferred stock outstanding | 0 | 0 |
Common Stock | ||
Common Stock | ||
Number of votes per share | 1 | |
Dividends declared or paid | $0 | |
Common Stock | 2000 Plan | ||
Common Stock | ||
Shares of common stock reserved for issuance | 5,100 | |
Common Stock | 2006 Plan | ||
Common Stock | ||
Shares of common stock reserved for issuance | 13,000 | |
Common Stock | 2010 Plan | ||
Common Stock | ||
Shares of common stock reserved for issuance | 0 |
Stock_Plans_General_Details
Stock Plans - General (Details) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Stockholder's Equity | |
Number of stock incentive plans | 3 |
Number of shares available for grant | 1.9 |
2000 and 2006 Stock incentive plans | Monthly vesting after first anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 2.10% |
2010 Plan | Monthly vesting after second anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 2.10% |
Stock Options | |
Stockholder's Equity | |
Percentage of exercisable options to shares subject to vesting | 100.00% |
Stock Options | 2000 Plan | |
Stockholder's Equity | |
Minimum price at which interest can be acquired as a percentage of grant date fair market value | 30.00% |
Stock Options | 2000 and 2006 Stock incentive plans | First Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 25.00% |
Stock Options | 2010 Plan | Second Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 50.00% |
Restricted Stock | 2006 Plan | |
Stockholder's Equity | |
Number of months of continuous service | 3 months |
Restricted Stock | 2006 Plan | First Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 25.00% |
Restricted Stock | 2006 Plan | Quarterly Vesting after first anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 6.25% |
Performance Stock Awards | 2006 Plan | Performance Goal Achievement | |
Stockholder's Equity | |
Percentage of awards vesting | 33.30% |
Performance Stock Awards | 2006 Plan | Annual Vesting of Performance Awards After Initial Achievement | |
Stockholder's Equity | |
Percentage of awards vesting | 33.30% |
Stock_Plans_BlackScholes_Detai
Stock Plans - Black-Scholes (Details) (Stock Options) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Options | |||
Weighted-average assumptions used in the Black-Scholes option pricing model | |||
Expected stock price volatility (as a percent) | 57.00% | 66.00% | 68.00% |
Risk-free interest rate (as a percent) | 1.43% | 0.87% | 0.80% |
Expected life | 4 years 2 months 12 days | 4 years 6 months | 4 years 9 months 18 days |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Stock_Plans_Stock_Options_Deta
Stock Plans - Stock Options (Details) (USD $) | 12 Months Ended | ||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Additional disclosures related to stock options | |||
Cash received from the exercise of stock options | $30,003,000 | $19,196,000 | $7,949,000 |
Stock Options | |||
Number of Options | |||
Options outstanding at the beginning of the period (in shares) | 3,315 | ||
Options Granted (in shares) | 815 | ||
Options Exercised (in shares) | -1,223 | ||
Options Cancelled (in shares) | -140 | ||
Options outstanding at the end of the period (in shares) | 2,767 | 3,315 | |
Vested or expected to vest (in shares) | 2,578 | ||
Exercisable (in shares) | 1,473 | ||
Weighted-Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $23.97 | ||
Options Granted (in dollars per share) | $31.85 | ||
Options Exercised (in dollars per share) | $24.53 | ||
Options Cancelled (in dollars per share) | $28.89 | ||
Balance at the end of the period (in dollars per share) | $25.81 | $23.97 | |
Vested or expected to vest (in dollars per share) | $25.40 | ||
Exercisable (in dollars per share) | $21.38 | ||
Weighted-Average Remaining Contractual Term | |||
Outstanding | 4 years 4 months 2 days | 4 years 3 months 18 days | |
Exercisable | 3 years 3 months 15 days | 3 years 6 months | |
Vested or expected to vest | 4 years 2 months 27 days | ||
Aggregate Intrinsic Value | |||
Outstanding | 44,479,000 | ||
Exercisable | 30,172,000 | ||
Vested or expected to vest | 42,479,000 | ||
Additional disclosures related to stock options | |||
Intrinsic value of stock options exercised during the period | 19,000,000 | 17,900,000 | 9,500,000 |
Cash received from the exercise of stock options | 30,000,000 | ||
Total fair value of vested options | $23,500,000 | $11,900,000 | $13,600,000 |
Weighted-average fair value of non-vested options (in dollars per share) | $13.23 | $13.08 | $11.45 |
Weighted-average fair value (as of the date of grant) of the options granted during the period (in dollars per share) | $14.67 | $15.79 | $13.47 |
Weighted-average fair value (as of date of grant) of options vested (in dollars per share) | $14.87 | ||
Weighted-average fair value (as of date of grant) of options forfeited (in dollars per share) | $14.78 |
Stock_Plans_Restricted_Stock_D
Stock Plans - Restricted Stock (Details) (USD $) | 12 Months Ended | ||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based compensation expense additional disclosures | |||
Pre-tax stock-based compensation expense recorded | $29,000,000 | $25,200,000 | $20,400,000 |
After tax stock-based compensation expense | 19,000,000 | 16,800,000 | 12,900,000 |
Stock-based compensation expense per diluted share (in dollars per share) | $0.44 | $0.42 | $0.33 |
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | $41,000,000 | ||
Weighted-average period over which stock-based compensation cost related to non-vested equity awards is expected to be recognized | 2 years 7 months 21 days | ||
Restricted Stock | |||
Number of Awards | |||
Non-vested at the beginning of the period (in shares) | 1,120 | ||
Granted (in shares) | 908 | ||
Vested (in shares) | -542 | ||
Forfeited (in shares) | -144 | ||
Non-vested at the end of the period (in shares) | 1,342 | ||
Weighted-Average Grant Date Fair Value | |||
Non-vested at the beginning of the period (in dollars per share) | $28.95 | ||
Granted (in dollars per share) | $32.09 | ||
Vested (in dollars per share) | $28.37 | ||
Forfeited (in dollars per share) | $28.84 | ||
Non-vested at the end of the period (in dollars per share) | $31.24 | ||
2013 performance share | Restricted Stock | |||
Share-based compensation expense additional disclosures | |||
Issuance of restricted stock (in shares) | 219 |
Stock_Plans_ESPP_and_Other_Dis
Stock Plans - ESPP and Other Disclosures (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Feb. 01, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 01, 2012 |
Additional disclosures | |||||
After tax stock-based compensation expense | $19,000 | $16,800 | $12,900 | ||
Cash received under program | 1,677 | 1,474 | 612 | ||
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | 41,000 | ||||
ESPP Plan | |||||
Employee Stock Purchase Plan | |||||
Term of Employee Stock Purchase Plan | 10 years | ||||
Total number of shares available for purchase | 500,000 | 500,000 | |||
Employee Stock Purchase Plan Payroll Withholding Period | 6 months | ||||
Percentage of fair market value of common stock | 85.00% | ||||
Maximum Percentage of total combined voting power a participant is allowed to be granted a right to purchase common stock | 5.00% | ||||
Maximum number of shares allowed to be purchased by single participant | 1,000 | ||||
Weighted-average assumptions | |||||
Expected stock price volatility (as a percent) | 52.00% | 65.00% | |||
Risk-free interest rate (as a percent) | 0.60% | 1.04% | |||
Expected life | 6 months | 6 months | |||
Expected dividend yield (as a percent) | 0.00% | 0.00% | |||
Additional disclosures | |||||
After tax stock-based compensation expense | 642 | 640 | |||
Number of shares sold under Employee Stock Purchase Plan | 60,000 | 66,000 | 33,000 | ||
Cash received under program | 1,700 | 1,500 | 612 | ||
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | $78 |
Stock_Plans_Treasury_Stock_Det
Stock Plans - Treasury Stock (Details) (Common, Stock Repurchase Program, USD $) | 0 Months Ended | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | 8-May-12 | Dec. 31, 2013 | 8-May-12 |
Common | Stock Repurchase Program | |||
Treasury Stock | |||
Amount authorized to be purchased under stock repurchase program | $25 | $25 | |
Duration of repurchase program | 12 months | ||
Number of shares repurchased under program | 0 |
401k_Plan_Details
401(k) Plan (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
401(k) Plan | |||
Employer contribution incurred and expensed under 401(k) Plan | $2 | $1.50 | $1.30 |
Income_Taxes_Reconciliation_De
Income Taxes - Reconciliation (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income before income taxes | |||
Domestic | $52,850 | $30,437 | $40,680 |
Foreign | 7,724 | 4,142 | 1,984 |
Income before income tax expense | 60,574 | 34,579 | 42,664 |
Current: | |||
Federal | -8,673 | -3,709 | -10,544 |
State | -2,463 | -2,661 | -2,409 |
Foreign | -2,505 | -3,076 | -1,076 |
Deferred: | |||
Federal | -10,437 | -3,447 | -1,809 |
State | -1,301 | -1,324 | -227 |
Foreign | 3,700 | 2,989 | 484 |
Income tax expense | ($21,679) | ($11,228) | ($15,581) |
Reconciliation of the statutory tax rates and the effective tax rates | |||
Statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit (as a percent) | 4.00% | 7.00% | 4.00% |
Effect of Rates Different than Statutory (as a percent) | -4.00% | -1.00% | |
Non-deductible stock based compensation (as a percent) | 3.00% | 1.00% | |
Other permanent adjustments (as a percent) | 1.00% | 1.00% | 1.00% |
Fair market value adjustment on Earn-out (as a percent) | 1.00% | -6.00% | -5.00% |
Research and development credit (as a percent) | -2.00% | -5.00% | -1.00% |
Subpart F income (as a percent) | 2.00% | ||
Change in valuation allowance (as a percent) | -2.00% | ||
Other (as a percent) | -1.00% | -1.00% | 3.00% |
Net (as a percent) | 36.00% | 32.00% | 37.00% |
Income_Taxes_Components_Detail
Income Taxes - Components (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Accrued liabilities | $23 | $212 |
Deferred revenue | 213 | 3,555 |
Bad debts reserve | 121 | 789 |
Deferred compensation | 11,308 | 12,891 |
Federal net operating loss carry forwards | 20,089 | 21,139 |
State net operating loss carry forwards | 2,120 | 2,568 |
Foreign net operating loss carry forwards | 7,800 | 9,202 |
Deferred rent | 552 | 532 |
Capital loss carryforward | 98 | 115 |
Other | 2,818 | 1,020 |
Total deferred tax assets | 45,142 | 52,023 |
Deferred tax liabilities: | ||
Intangible assets | -26,481 | -29,536 |
Fixed assets | -17,099 | -10,848 |
Total deferred tax liabilities | -43,580 | -40,384 |
Less: valuation allowance | -2,553 | -2,803 |
Net Deferred Income Tax Assets | -991 | 8,836 |
Classification of net deferred income taxes | ||
Current deferred tax assets | 1,475 | 4,728 |
Less: Valuation allowance | -102 | |
Net current deferred tax assets | 1,475 | 4,626 |
Non-current deferred tax assets | 3,785 | 6,911 |
Less : Valuation allowance | -2,553 | -2,701 |
Net non-current deferred tax assets | 1,232 | 4,210 |
Net Deferred Tax Assets | 2,707 | 8,836 |
Non-current deferred tax liability | $3,698 |
Income_Taxes_Carryforwards_Det
Income Taxes - Carryforwards (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Details of net operating loss carryforwards | |
Net operating loss | $103,379 |
2015 - 2019 | |
Details of net operating loss carryforwards | |
Net operating loss | 8,221 |
2020 - 2024 | |
Details of net operating loss carryforwards | |
Net operating loss | 29,908 |
2025 - 2032 | |
Details of net operating loss carryforwards | |
Net operating loss | 65,250 |
Federal | |
Details of net operating loss carryforwards | |
Net operating loss | 57,400 |
State | |
Details of net operating loss carryforwards | |
Net operating loss | $46,000 |
Income_Taxes_Valuation_allowan
Income Taxes - Valuation allowance (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Valuation allowance | ||
Deferred revenue | $213,000 | $3,555,000 |
Valuation allowance | 2,553,000 | 2,803,000 |
Spatial Systems Nominees PTY LTD (Spatial) | ||
Valuation allowance | ||
Deferred revenue | 4,400,000 | |
Spatial Systems Nominees PTY LTD (Spatial) | Deferred Revenue | ||
Valuation allowance | ||
Valuation allowance, after tax | $2,500,000 |
Income_Taxes_Unrecognized_Tax_
Income Taxes - Unrecognized Tax Benefits (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Undistributed foreign earnings | |||
Royalty fees paid | $3,300,000 | ||
Undistributed earnings attributable to foreign subsidiaries considered to be indefinitely invested | 32,900,000 | ||
Reconciliation of beginning and ending amount of unrecognized tax benefits excluding interest | |||
Unrecognized tax benefit at the beginning of the period | 708,000 | 511,000 | 503,000 |
Increases for tax positions taken during prior year | 141,000 | ||
Decreases for tax positions taken during prior year | -218,000 | -5,000 | |
Reduction due to lapse of applicable statute of limitations | -11,000 | -66,000 | -158,000 |
Increases for tax positions of current period | 651,000 | 268,000 | 25,000 |
Unrecognized tax benefit at the end of the period | 1,130,000 | 708,000 | 511,000 |
Accrued interest for unrecognized tax benefits | 24,000 | 25,000 | 18,000 |
Portion of current unrecognized tax benefit expected to be recognized | $72,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Aggregate annual future minimum lease payments under non-cancellable leases | |||
2015 | $39,100,000 | ||
2016 | 31,294,000 | ||
2017 | 22,549,000 | ||
2018 | 12,790,000 | ||
2019 and thereafter | 41,403,000 | ||
Total | 147,136,000 | ||
Rent expense | $8,000,000 | $6,700,000 | $5,700,000 |
Goodwill_and_Intangibles_Goodw
Goodwill and Intangibles - Goodwill (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill | |||
Balance at the beginning of the period | $137,743 | $127,322 | |
Acquisitions | 20,624 | 12,381 | |
Reclassifications, adjustments and other | -1,287 | -1,960 | |
Goodwill, Translation Adjustments | -9,945 | ||
Balance at the end of the period | 147,135 | 137,743 | 127,322 |
Impairment charges on goodwill | $0 | $0 | $0 |
Goodwill_and_Intangibles_Other
Goodwill and Intangibles - Other Intangibles (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible assets | |||
Amortization expense | $19,800,000 | $16,100,000 | $8,700,000 |
Intangible assets: | |||
Gross amount | 157,609,000 | 132,582,000 | |
Accumulated amortization | -58,120,000 | -30,619,000 | |
Net amount | 99,489,000 | 101,963,000 | |
Trade Name | |||
Intangible assets | |||
Estimated useful life of assets | 4 years | 4 years | |
Intangible assets: | |||
Gross amount | 1,589,000 | 1,589,000 | |
Accumulated amortization | -1,324,000 | -780,000 | |
Net amount | 265,000 | 809,000 | |
Technology | |||
Intangible assets | |||
Estimated useful life of assets | 7 years | 8 years | |
Intangible assets: | |||
Gross amount | 71,155,000 | 65,280,000 | |
Accumulated amortization | -28,484,000 | -15,328,000 | |
Net amount | 42,671,000 | 49,952,000 | |
Customer lists and relationships | |||
Intangible assets | |||
Estimated useful life of assets | 9 years | 11 years | |
Intangible assets: | |||
Gross amount | 74,601,000 | 61,161,000 | |
Accumulated amortization | -25,283,000 | -12,321,000 | |
Net amount | 49,318,000 | 48,840,000 | |
Capitalized software and patents | |||
Intangible assets: | |||
Gross amount | 9,346,000 | 3,634,000 | |
Accumulated amortization | -2,111,000 | -1,272,000 | |
Net amount | 7,235,000 | 2,362,000 | |
Order Backlog | |||
Intangible assets: | |||
Gross amount | 918,000 | 918,000 | |
Accumulated amortization | ($918,000) | ($918,000) |
Goodwill_and_Intangibles_Other1
Goodwill and Intangibles - Other Intangibles - Amortization (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Estimated annual amortization expense of the entity's intangible assets for the next five years | |
2015 | $20,850 |
2016 | 19,918 |
2017 | 17,526 |
2018 | 14,591 |
2019 | $10,360 |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2013 |
Restructuring accrual and changes | |||
Balance at the beginning of the period | $128 | ||
Charges | 5,172 | ||
Payments | -128 | ||
Balance at the end of the period | 128 | ||
Employment termination costs | |||
Restructuring accrual and changes | |||
Percent of work-force reduction under corporate restructuring plan | 10.00% | ||
Facilities consolidation | |||
Restructuring accrual and changes | |||
Balance at the beginning of the period | 128 | ||
Payments | ($128) |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | ($723) | ($365) | |
Other comprehensive income before reclassifications | -15,872 | -358 | |
Amounts reclassified to (from) accumulated other comprehensive income | -3,419 | ||
Total other comprehensive income (loss) | -19,291 | -358 | 334 |
Balance at the end of the period | -20,014 | -723 | -365 |
Foreign Currency | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | -4,131 | -352 | |
Other comprehensive income before reclassifications | -12,849 | -3,779 | |
Total other comprehensive income (loss) | -12,849 | -3,779 | |
Balance at the end of the period | -16,980 | -4,131 | |
Unrealized Holding Gains (Losses) on Available-for-Sale Securities | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | -11 | -13 | |
Other comprehensive income before reclassifications | -166 | 2 | |
Total other comprehensive income (loss) | -166 | 2 | |
Balance at the end of the period | -177 | -11 | |
Net Gain (Loss) on Intra-Entity Foreign Currency Transactions | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | 3,419 | ||
Other comprehensive income before reclassifications | -2,857 | 3,419 | |
Amounts reclassified to (from) accumulated other comprehensive income | -3,419 | ||
Total other comprehensive income (loss) | -6,276 | 3,419 | |
Balance at the end of the period | ($2,857) | $3,419 |
Debt_Credit_Facility_Details
Debt - Credit Facility (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 04, 2014 | Jul. 02, 2014 | Sep. 30, 2013 | |
Credit Facility | ||||||
Proceeds from Credit Facility to fund acquisitions | $40,000,000 | |||||
Cash paid for interest | 2,290,000 | 168,000 | 77,000 | |||
Payments on Credit Facility | 40,000,000 | |||||
Credit Facility | ||||||
Credit Facility | ||||||
Borrowing capacity | 100,000,000 | |||||
Commitment fee on unused balance (as a percent) | 0.25% | |||||
Commitment fees | 215,000 | |||||
Amount of borrowing capacity to which the company has a right to request an increase | 150,000,000 | |||||
Proceeds from Credit Facility to fund acquisitions | 40,000,000 | |||||
Cash paid for interest | 136,000 | |||||
Payments on Credit Facility | 40,000,000 | |||||
Amount outstanding | $0 | |||||
Credit Facility | LIBOR | ||||||
Credit Facility | ||||||
Variable rate margin (as a percent) | 1.75% |
Debt_Convertible_Senior_Notes_
Debt - Convertible Senior Notes (Details) (2019 Notes, USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Aug. 12, 2014 | |
Debt | |||
Face amount of debt issued | $230,000,000 | ||
Interest rate, as a percent | 0.75% | ||
Carrying amount of debt | 230,000,000 | 230,000,000 | |
Capitalized finance fees | 7,100,000 | ||
Conversion ratio | 0.0188072 | ||
Conversion price | $53.17 | ||
Repurchase price, expressed as a percentage of principal of debt repurchased | 100.00% | ||
Effective Interest Rate (as a percent) | 1.36% | ||
Interest expense | 647,000 | 0 | |
Level 2 | |||
Debt | |||
Fair value of debt | $254,300,000 |
Legal_Matters_Details
Legal Matters (Details) (Commercial Court of Paris, Earn-out, Miyowa, USD $) | 1 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
plaintiff | ||
Commercial Court of Paris | Earn-out | Miyowa | ||
Legal Matters | ||
Number of former shareholders | 2 | |
Earn-out payments due | $0 |
Subsequent_Events_Review_Detai
Subsequent Events Review (Details) (Subsequent Event, F-Secure Corporation, USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Feb. 18, 2015 | Feb. 04, 2015 |
Subsequent Event | F-Secure Corporation | ||
Subsequent Events | ||
Total purchase price | $60 | |
License revenue | $10 |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful receivables | |||
Allowance for doubtful receivables | |||
Beginning Balance | $237 | $258 | $356 |
Additions | 418 | 1,076 | 230 |
Reductions | -567 | -1,097 | -328 |
Ending Balance | 88 | 237 | 258 |
Valuation allowance for deferred tax assets | |||
Allowance for doubtful receivables | |||
Beginning Balance | 2,803 | 253 | |
Additions | 2,724 | 3,778 | |
Reductions | -2,974 | -975 | -253 |
Ending Balance | $2,553 | $2,803 |