ChannelAdvisor (ECOM) 10-Q 5 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 21, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Entity Registrant Name	CHANNELADVISOR CORP
Entity Central Index Key	1,169,652
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		25,472,851

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 61,671	$ 60,474
Accounts receivable, net of allowance of $907 and $785 as of March 31, 2016 and December 31, 2015, respectively	18,057	18,949
Prepaid expenses and other current assets	6,532	9,356
Total current assets	86,260	88,779
Property and equipment, net	15,561	16,696
Goodwill	21,632	21,632
Intangible assets, net	3,100	3,246
Other assets	722	603
Total assets	127,275	130,956
Current liabilities:
Accounts payable	1,096	2,435
Accrued expenses	7,892	9,908
Deferred revenue	21,663	19,835
Other current liabilities	4,364	4,188
Total current liabilities	35,015	36,366
Long-term capital leases, net of current portion	2,031	2,031
Lease incentive obligation	4,864	5,084
Other long-term liabilities	3,232	3,551
Total liabilities	$ 45,142	$ 47,032
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of March 31, 2016 and December 31, 2015	$ 0	$ 0
Common stock, $0.001 par value, 100,000,000 shares authorized, 25,435,213 and 25,230,958 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively	25	25
Additional paid-in capital	242,997	240,360
Accumulated other comprehensive loss	(758)	(893)
Accumulated deficit	(160,131)	(155,568)
Total stockholders’ equity	82,133	83,924
Total liabilities and stockholders’ equity	$ 127,275	$ 130,956

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable, current	$ 907	$ 785
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	25,435,213	25,230,958
Common stock, shares outstanding (in shares)	25,435,213	25,230,958

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Revenue	$ 26,347	$ 22,590
Cost of revenue	6,913	6,416
Gross profit	19,434	16,174
Operating expenses:
Sales and marketing	13,346	15,636
Research and development	4,155	4,131
General and administrative	6,572	5,463
Total operating expenses	24,073	25,230
Loss from operations	(4,639)	(9,056)
Other income (expense):
Interest expense, net	(21)	(44)
Other income (expense), net	55	6
Total other income (expense)	34	(38)
Loss before income taxes	(4,605)	(9,094)
Income tax benefit	(42)	(138)
Net loss	$ (4,563)	$ (8,956)
Net loss per share:
Basic and diluted (in dollars per share)	$ (0.18)	$ (0.36)
Weighted average common shares outstanding:
Basic and diluted (in shares)	25,292,405	24,930,451

Unaudited Condensed Consolidat5

Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (4,563)	$ (8,956)
Other comprehensive loss:
Foreign currency translation adjustments	135	(1,037)
Total comprehensive loss	$ (4,428)	$ (9,993)

Unaudited Condensed Consolidat6

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities
Net loss	$ (4,563)	$ (8,956)
Adjustments to reconcile net loss to cash and cash equivalents provided by (used in) operating activities:
Depreciation and amortization	2,095	1,933
Bad debt expense	289	486
Stock-based compensation expense	3,425	2,890
Other items, net	(270)	34
Changes in assets and liabilities:
Accounts receivable	489	(2,883)
Prepaid expenses and other assets	2,507	(1,332)
Accounts payable and accrued expenses	(3,121)	2,708
Deferred revenue	1,867	965
Cash and cash equivalents provided by (used in) operating activities	2,718	(4,155)
Cash flows from investing activities
Purchases of property and equipment	(637)	(548)
Payment of internal-use software development costs	(100)	(775)
Cash and cash equivalents used in investing activities	(737)	(1,323)
Cash flows from financing activities
Repayment of capital leases	(55)	(342)
Proceeds from exercise of stock options	272	75
Payment of contingent consideration	(132)	0
Payment of statutory tax withholding related to net-share settlement of restricted stock units	(1,060)	0
Cash and cash equivalents used in financing activities	(975)	(267)
Effect of currency exchange rate changes on cash and cash equivalents	191	267
Net increase (decrease) in cash and cash equivalents	1,197	(5,478)
Cash and cash equivalents, beginning of period	60,474	68,366
Cash and cash equivalents, end of period	61,671	62,888
Supplemental disclosure of cash flow information
Cash paid for interest	1	36
Cash paid for income taxes, net	49	0
Supplemental disclosure of noncash investing and financing activities
Accrued capital expenditures	$ 182	$ 0

Description of the Business

Description of the Business	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of the Business	Description of the Business ChannelAdvisor Corporation (“ChannelAdvisor” or the “Company”) was incorporated in the state of Delaware and capitalized in June 2001. The Company began operations in July 2001. ChannelAdvisor is a provider of software-as-a-service, or SaaS, solutions that allow retailers and branded manufacturers to integrate, manage and monitor their merchandise sales across hundreds of online channels. The Company is headquartered in Morrisville, North Carolina and has international offices in England, Ireland, Germany, Australia, Brazil and China.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Interim Condensed Consolidated Financial Information The accompanying condensed consolidated financial statements and footnotes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of financial position, the results of operations, comprehensive loss and cash flows. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited interim financial statements should be read in conjunction with the audited financial statements and related footnotes for the year ended December 31, 2015 ("fiscal 2015"), which are included in the Company’s Annual Report on Form 10-K for fiscal 2015. There have been no material changes to the Company’s significant accounting policies from those described in the footnotes to the audited financial statements contained in the Company’s Annual Report on Form 10-K for fiscal 2015. Reclassification Certain prior period amounts included on the condensed consolidated statements of operations have been reclassified to conform to the current period’s presentation. Previously, depreciation and amortization expense was presented separately from cost of revenue and operating expenses in the condensed consolidated statements of operations. Beginning in the first quarter of 2016, the Company included depreciation and amortization expense in cost of revenue and operating expenses in the condensed consolidated statements of operations. The Company will now present depreciation and amortization expense included in each financial statement line item in the notes to its unaudited condensed consolidated financial statements. These reclassifications had no effect on the Company's reported gross profit and net loss for the three months ended March 31, 2015 . The table below summarizes these reclassifications (in thousands): Three Months Ended March 31, 2015 As Previously Reported Reclassification As Reclassified Cost of revenue $ 5,368 $ 1,048 $ 6,416 Depreciation - Cost of revenue 1,048 (1,048 ) — Sales and marketing 15,358 278 15,636 Research and development 4,026 105 4,131 General and administrative 4,961 502 5,463 Depreciation and amortization 885 (885 ) — Depreciation and amortization expense is included in the following line items in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Cost of revenue $ 1,243 $ 1,048 Sales and marketing 307 278 Research and development 122 105 General and administrative 423 502 Total depreciation and amortization expense $ 2,095 $ 1,933 Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") , which provides new guidance for revenue recognition. ASU 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. In March 2016, the FASB issued ASU 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) , which clarifies implementation guidance on principal versus agent considerations in ASU 2014-09. In addition, in April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , which clarifies the identification of performance obligations and the licensing implementation guidance in ASU 2014-09. These updates are effective for fiscal years beginning after December 15, 2017. Early adoption for these standards is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that fiscal year. The Company is currently evaluating the impact the adoption of these standards will have on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) ("ASU 2015-17"), which requires that all deferred tax assets and liabilities, including any related valuation allowance, be classified as noncurrent on the balance sheet. The update is effective for fiscal years beginning after December 15, 2016 and early adoption is permitted. The guidance may be applied either prospectively or retrospectively. The Company elected to adopt ASU 2015-17 prospectively in the first quarter of 2016. As such, prior period results in the Company's consolidated financial statements have not been retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position. ASU 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) ("ASU 2016-09"), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2016, including interim reporting periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. The Company has reviewed other new accounting pronouncements that were issued as of March 31, 2016 and does not believe that these pronouncements are applicable to the Company, or that they will have a material impact on its financial position or results of operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable allowance, the useful lives of long-lived assets and other intangible assets, income taxes and assumptions used for purposes of determining stock-based compensation, among others. Estimates and assumptions are also required to value assets acquired and liabilities assumed as well as contingent consideration, where applicable, in conjunction with business combinations. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2016
Stockholders' Equity Attributable to Parent [Abstract]
Stockholders' Equity	Stockholders' Equity The following table summarizes the stockholders' equity activity for the three months ended March 31, 2016 (in thousands): Balance as of December 31, 2015 $ 83,924 Exercise of stock options and vesting of restricted stock units 272 Stock-based compensation expense 3,425 Statutory tax withholding related to net-share settlement of restricted stock units (1,060 ) Net loss (4,563 ) Foreign currency translation adjustments 135 Balance as of March 31, 2016 $ 82,133

Goodwill and Intangible Assets

Goodwill and Intangible Assets	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets The Company acquired intangible assets in connection with its business acquisitions. These assets were recorded at their estimated fair values at the acquisition date and are being amortized over their respective estimated useful lives using the straight-line method. The estimated useful lives and amortization methodology used in computing amortization are as follows: Estimated Useful Life Amortization Methodology Customer relationships 7 years Straight-line Acquired technology 7 years Straight-line Trade names 3 years Straight-line Amortization expense associated with the Company's intangible assets was $0.1 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively. There have been no changes to the Company's goodwill during the three months ended March 31, 2016.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1 . Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 . Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which require the Company to develop its own assumptions. The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their respective fair values due to their short-term nature. The acquisition of E-Tale Holdings Limited ("E-Tale") on October 31, 2014 included a contingent consideration arrangement that allows for adjustment of payments based upon achievement of specified quarterly revenue targets through June 2017. Contingent consideration was measured at fair value at the acquisition date and is remeasured to fair value at each reporting date until the contingency is resolved. The fair value is reported within current and non-current liabilities on the condensed consolidated balance sheets. Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future. Subsequent changes in the fair value of contingent consideration are recognized within general and administrative expenses in the Company’s condensed consolidated statements of operations. The fair value of contingent consideration related to the E-Tale acquisition is based on projected quarterly revenue targets for E-Tale through June 2017. The Company discounted the expected future earn-out payments to net present value using Level 3 inputs. A key assumption used in the measurement of fair value of contingent consideration includes a discount rate of 22% as of March 31, 2016 and December 31, 2015. The Company believes the discount rate used to discount the earn-out payments reflects market participant assumptions. Projected revenue is based on the Company’s internal projections and analysis of the current customer base and expected customer growth, target market and sales potential. The following table presents changes to the Company’s liability for acquisition-related contingent consideration for the three months ended March 31, 2016 (in thousands): Balance as of December 31, 2015 $ 697 Settlement of contingent consideration liability (132 ) Change in contingent consideration fair value (116 ) Balance as of March 31, 2016 $ 449

Guarantee

Guarantee	3 Months Ended
	Mar. 31, 2016
Guarantees [Abstract]
Guarantee	Guarantee In June 2014, the Company assigned its previous lease of office space in London, England to a third party pursuant to an assignment agreement and a transfer agreement. In accordance with the assignment agreement, the Company is not required to collect any payments from the third party and therefore will not recognize any revenue associated with this assignment. All payments associated with the assigned lease will be made directly by the third party to the lessor and appropriate regulatory authorities. However, the Company has guaranteed the lease payments through the remainder of the lease term, which is until February 2022. As of March 31, 2016 , the remaining lease payments under this lease totaled £2.0 million ( $2.9 million based on the exchange rate as of March 31, 2016 ). This amount represents the maximum potential liability for future payments under the guarantee and will decrease over time as payments are made by the third party. In the event of default, the indemnity clauses in the transfer agreement govern the Company's ability to pursue and recover damages incurred. As of March 31, 2016 , the Company does not anticipate any default by the third party. Therefore, no liability associated with this transaction has been recorded on the Company's condensed consolidated balance sheet as of March 31, 2016 .

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation The Company recognizes stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. Stock-based compensation expense is included in the following line items in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Cost of revenue $ 269 $ 263 Sales and marketing 1,102 1,147 Research and development 443 384 General and administrative 1,611 1,096 $ 3,425 $ 2,890 During the three months ended March 31, 2016 , the Company granted the following share-based awards: Number of Shares Underlying Grant Weighted Average Grant Date Fair Value Stock options 362,600 $ 4.61 Restricted stock units ("RSUs") 1,014,337 11.17 Total share-based awards 1,376,937 9.57

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Net Loss Per Share	Net Loss Per Share Diluted loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 Warrants to purchase common stock — 3,743 Stock options 1,788,260 1,539,079 RSUs 2,673,244 1,993,223

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods. The Company’s effective tax rate for the three months ended March 31, 2016 was 0.9% compared to 1.5% for the three months ended March 31, 2015 . The tax benefit for each of the periods was based on state, local and foreign taxes. The Company’s effective tax rate for both periods differed from the expected U.S. federal statutory rate of 34% primarily due to the inability to recognize the tax benefit of operating loss carryforwards. The carryforward benefit cannot be recognized due to uncertainties relating to future taxable income in terms of both its timing and its sufficiency, which would enable the Company to realize the federal carryforward benefit.

Segment and Geographic Informat

Segment and Geographic Information	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Segment and Geographic Information	Segment and Geographic Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The Company’s CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company’s operations constitute a single operating segment and one reportable segment. Substantially all assets were held in the United States during the three months ended March 31, 2016 and 2015 . The table below summarizes revenue by geography for the three months ended March 31, 2016 and 2015 (in thousands). The Company categorizes domestic and international customers based on their billing address. Three Months Ended March 31, 2016 2015 Domestic $ 20,424 $ 17,313 International 5,923 5,277 Total revenue $ 26,347 $ 22,590

Significant Accounting Polici17

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Principles of Consolidation	The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Interim Condensed Consolidated Financial Information	The accompanying condensed consolidated financial statements and footnotes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of financial position, the results of operations, comprehensive loss and cash flows. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited interim financial statements should be read in conjunction with the audited financial statements and related footnotes for the year ended December 31, 2015 ("fiscal 2015"), which are included in the Company’s Annual Report on Form 10-K for fiscal 2015. There have been no material changes to the Company’s significant accounting policies from those described in the footnotes to the audited financial statements contained in the Company’s Annual Report on Form 10-K for fiscal 2015.
Reclassification	Certain prior period amounts included on the condensed consolidated statements of operations have been reclassified to conform to the current period’s presentation. Previously, depreciation and amortization expense was presented separately from cost of revenue and operating expenses in the condensed consolidated statements of operations. Beginning in the first quarter of 2016, the Company included depreciation and amortization expense in cost of revenue and operating expenses in the condensed consolidated statements of operations. The Company will now present depreciation and amortization expense included in each financial statement line item in the notes to its unaudited condensed consolidated financial statements. These reclassifications had no effect on the Company's reported gross profit and net loss for the three months ended March 31, 2015 .
Recent Accounting Pronouncements	In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") , which provides new guidance for revenue recognition. ASU 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. In March 2016, the FASB issued ASU 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) , which clarifies implementation guidance on principal versus agent considerations in ASU 2014-09. In addition, in April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , which clarifies the identification of performance obligations and the licensing implementation guidance in ASU 2014-09. These updates are effective for fiscal years beginning after December 15, 2017. Early adoption for these standards is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that fiscal year. The Company is currently evaluating the impact the adoption of these standards will have on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) ("ASU 2015-17"), which requires that all deferred tax assets and liabilities, including any related valuation allowance, be classified as noncurrent on the balance sheet. The update is effective for fiscal years beginning after December 15, 2016 and early adoption is permitted. The guidance may be applied either prospectively or retrospectively. The Company elected to adopt ASU 2015-17 prospectively in the first quarter of 2016. As such, prior period results in the Company's consolidated financial statements have not been retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position. ASU 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) ("ASU 2016-09"), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2016, including interim reporting periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. The Company has reviewed other new accounting pronouncements that were issued as of March 31, 2016 and does not believe that these pronouncements are applicable to the Company, or that they will have a material impact on its financial position or results of operations.
Use of Estimates	The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable allowance, the useful lives of long-lived assets and other intangible assets, income taxes and assumptions used for purposes of determining stock-based compensation, among others. Estimates and assumptions are also required to value assets acquired and liabilities assumed as well as contingent consideration, where applicable, in conjunction with business combinations. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities.
Goodwill and Intangible Assets	The Company acquired intangible assets in connection with its business acquisitions. These assets were recorded at their estimated fair values at the acquisition date and are being amortized over their respective estimated useful lives using the straight-line method. The estimated useful lives and amortization methodology used in computing amortization are as follows: Estimated Useful Life Amortization Methodology Customer relationships 7 years Straight-line Acquired technology 7 years Straight-line Trade names 3 years Straight-line
Fair Value of Financial Instruments	The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1 . Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 . Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which require the Company to develop its own assumptions. The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their respective fair values due to their short-term nature.
Stock-Based Compensation	The Company recognizes stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche.
Earnings Per Share	Diluted loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss.
Income Taxes	At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods.

Significant Accounting Polici18

Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Schedule of Reclassifications	The table below summarizes these reclassifications (in thousands): Three Months Ended March 31, 2015 As Previously Reported Reclassification As Reclassified Cost of revenue $ 5,368 $ 1,048 $ 6,416 Depreciation - Cost of revenue 1,048 (1,048 ) — Sales and marketing 15,358 278 15,636 Research and development 4,026 105 4,131 General and administrative 4,961 502 5,463 Depreciation and amortization 885 (885 ) —
Schedule of Depreciation and Amortization	Depreciation and amortization expense is included in the following line items in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Cost of revenue $ 1,243 $ 1,048 Sales and marketing 307 278 Research and development 122 105 General and administrative 423 502 Total depreciation and amortization expense $ 2,095 $ 1,933

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2016
Stockholders' Equity Attributable to Parent [Abstract]
Schedule of Stockholders Equity	The following table summarizes the stockholders' equity activity for the three months ended March 31, 2016 (in thousands): Balance as of December 31, 2015 $ 83,924 Exercise of stock options and vesting of restricted stock units 272 Stock-based compensation expense 3,425 Statutory tax withholding related to net-share settlement of restricted stock units (1,060 ) Net loss (4,563 ) Foreign currency translation adjustments 135 Balance as of March 31, 2016 $ 82,133

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	The estimated useful lives and amortization methodology used in computing amortization are as follows: Estimated Useful Life Amortization Methodology Customer relationships 7 years Straight-line Acquired technology 7 years Straight-line Trade names 3 years Straight-line

Fair Value of Financial Instr21

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value Level 3 Liability Reconciliation	The following table presents changes to the Company’s liability for acquisition-related contingent consideration for the three months ended March 31, 2016 (in thousands): Balance as of December 31, 2015 $ 697 Settlement of contingent consideration liability (132 ) Change in contingent consideration fair value (116 ) Balance as of March 31, 2016 $ 449

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock-Based Compensation Expense	Stock-based compensation expense is included in the following line items in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Cost of revenue $ 269 $ 263 Sales and marketing 1,102 1,147 Research and development 443 384 General and administrative 1,611 1,096 $ 3,425 $ 2,890
Summary of Awards Granted in Period	During the three months ended March 31, 2016 , the Company granted the following share-based awards: Number of Shares Underlying Grant Weighted Average Grant Date Fair Value Stock options 362,600 $ 4.61 Restricted stock units ("RSUs") 1,014,337 11.17 Total share-based awards 1,376,937 9.57

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Schedule of Securities Excluded from Calculation of Weighted Average Common Shares Outstanding	The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 Warrants to purchase common stock — 3,743 Stock options 1,788,260 1,539,079 RSUs 2,673,244 1,993,223

Segment and Geographic Inform24

Segment and Geographic Information (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Summary of Revenue by Geography	The table below summarizes revenue by geography for the three months ended March 31, 2016 and 2015 (in thousands). The Company categorizes domestic and international customers based on their billing address. Three Months Ended March 31, 2016 2015 Domestic $ 20,424 $ 17,313 International 5,923 5,277 Total revenue $ 26,347 $ 22,590

Significant Accounting Polici25

Significant Accounting Policies - Reclassifications (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of revenue	$ 6,913	$ 6,416
Depreciation - Cost of revenue		0
Sales and marketing	13,346	15,636
Research and development	4,155	4,131
General and administrative	$ 6,572	5,463
Depreciation and amortization		0
As Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of revenue		5,368
Depreciation - Cost of revenue		1,048
Sales and marketing		15,358
Research and development		4,026
General and administrative		4,961
Depreciation and amortization		885
Reclassification [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of revenue		1,048
Depreciation - Cost of revenue		(1,048)
Sales and marketing		278
Research and development		105
General and administrative		502
Depreciation and amortization		$ (885)

Significant Accounting Polici26

Significant Accounting Policies - Depreciation and Amortization (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of Depreciation and Amortization [Line Items]
Depreciation and amortization	$ 2,095	$ 1,933
Cost of Revenue [Member]
Schedule of Depreciation and Amortization [Line Items]
Depreciation and amortization	1,243	1,048
Sales and Marketing [Member]
Schedule of Depreciation and Amortization [Line Items]
Depreciation and amortization	307	278
Research and Development [Member]
Schedule of Depreciation and Amortization [Line Items]
Depreciation and amortization	122	105
General and Administrative [Member]
Schedule of Depreciation and Amortization [Line Items]
Depreciation and amortization	$ 423	$ 502

Stockholders' Equity - Changes

Stockholders' Equity - Changes in Equity (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stockholders' Equity Attributable to Parent [Abstract]
Balance as of December 31, 2015	$ 83,924
Exercise of stock options and vesting of restricted stock units	272
Stock-based compensation expense	3,425
Statutory tax withholding related to net-share settlement of restricted stock units	(1,060)
Net loss	(4,563)	$ (8,956)
Foreign currency translation adjustments	135	$ (1,037)
Balance as of March 31, 2016	$ 82,133

Goodwill and Intangible Asset28

Goodwill and Intangible Assets (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 100,000	$ 200,000
Change in goodwill during the period	$ 0
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life of intangible asset (in years)	7 years
Acquired technology [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life of intangible asset (in years)	7 years
Trade names [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life of intangible asset (in years)	3 years

Fair Value of Financial Instr29

Fair Value of Financial Instruments - Additional Information (Detail)	3 Months Ended	12 Months Ended
	Mar. 31, 2016Rate	Dec. 31, 2015Rate
E-Tale Holdings Limited [Member] | Contingent consideration [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs, discount rate	22.00%	22.00%

Fair Value of Financial Instr30

Fair Value of Financial Instruments - Contingent Consideration Rollforward (Detail) - E-Tale Holdings Limited [Member] - Contingent consideration [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance as of December 31, 2015	$ 697
Settlement of contingent consideration liability	(132)
Change in contingent consideration fair value	(116)
Balance as of March 31, 2016	$ 449

Guarantee (Detail)

Guarantee (Detail) - Mar. 31, 2016 - Property Lease Guarantee [Member] £ in Millions	USD ($)	GBP (£)
Guarantor Obligations [Line Items]
Total remaining lease payments	$ 2,900,000	£ 2
Guarantor obligation, current carrying value	$ 0

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 3,425	$ 2,890
Cost of Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	269	263
Sales and Marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,102	1,147
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	443	384
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,611	$ 1,096

Stock-Based Compensation - Gran

Stock-Based Compensation - Grants in Period (Detail)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Number of Shares Underlying Grant
Stock options (in shares) | shares	362,600
Total share-based awards (in shares) | shares	1,376,937
Weighted Average Grant Date Fair Value
Stock options (in dollars per share) | $ / shares	$ 4.61
Total share-based awards (in dollars per share) | $ / shares	$ 9.57
Restricted Stock Units (RSUs) [Member]
Number of Shares Underlying Grant
Restricted stock units (RSUs) (in shares) | shares	1,014,337
Weighted Average Grant Date Fair Value
Restricted stock units (RSUs) (in dollars per share) | $ / shares	$ 11.17

Net Loss Per Share - Schedule o

Net Loss Per Share - Schedule of Securities Excluded from Calculation of Weighted Average Common Shares Outstanding (Detail) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Warrants to purchase common stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of weighted average common shares outstanding (in shares)	0	3,743
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of weighted average common shares outstanding (in shares)	1,788,260	1,539,079
RSUs [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of weighted average common shares outstanding (in shares)	2,673,244	1,993,223

Income Taxes (Detail)

Income Taxes (Detail)	3 Months Ended
	Mar. 31, 2016Rate	Mar. 31, 2015Rate
Income Tax Disclosure [Abstract]
Effective income tax rate	0.90%	1.50%
U.S. federal statutory tax rate	34.00%	34.00%

Segment and Geographic Inform36

Segment and Geographic Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016segment
Segment Reporting [Abstract]
Number of reportable segment	1
Number of operating segment	1

Segment and Geographic Inform37

Segment and Geographic Information - Summary of Revenue by Geography (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Revenue	$ 26,347	$ 22,590
Domestic [Member]
Segment Reporting Information [Line Items]
Revenue	20,424	17,313
International [Member]
Segment Reporting Information [Line Items]
Revenue	$ 5,923	$ 5,277