Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 03, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | BOINGO WIRELESS INC | ||
Entity Central Index Key | 1169988 | ||
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 | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $242,471,919 | ||
Entity Common Stock, Shares Outstanding | 36,358,513 | ||
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 | $8,849 | $27,338 |
Restricted cash | 0 | 545 |
Marketable securities | 1,614 | 32,962 |
Accounts receivable, net | 27,917 | 16,326 |
Prepaid expenses and other current assets | 3,916 | 2,566 |
Deferred tax assets | 787 | 1,192 |
Total current assets | 43,083 | 80,929 |
Property and equipment, net | 111,772 | 67,560 |
Goodwill | 42,403 | 42,403 |
Intangible assets, net | 19,676 | 23,413 |
Other assets | 2,468 | 1,210 |
Total assets | 219,402 | 215,515 |
Current liabilities: | ||
Accounts payable | 4,004 | 11,642 |
Accrued expenses and other liabilities | 26,109 | 16,529 |
Deferred revenue | 25,488 | 19,292 |
Current portion of long-term debt | 875 | |
Current portion of capital leases | 309 | 526 |
Total current liabilities | 56,785 | 47,989 |
Deferred revenue, net of current portion | 27,267 | 21,591 |
Long-term debt | 2,625 | |
Long-term portion of capital leases | 381 | 473 |
Deferred tax liabilities | 3,432 | 3,369 |
Other liabilities | 1,482 | 1,660 |
Total liabilities | 91,972 | 75,082 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 5,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.0001 par value; 100,000 shares authorized; 36,267 and 35,226 shares issued and outstanding for 2014 and 2013, respectively | 4 | 4 |
Additional paid-in capital | 189,725 | 182,927 |
Accumulated deficit | -62,884 | -43,363 |
Accumulated other comprehensive loss | -443 | |
Total common stockholders' equity | 126,402 | 139,568 |
Non-controlling interests | 1,028 | 865 |
Total stockholders' equity | 127,430 | 140,433 |
Total liabilities and stockholders' equity | $219,402 | $215,515 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000 | 5,000 |
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 | 100,000 |
Common stock, shares issued | 36,267 | 35,226 |
Common stock, shares outstanding | 36,267 | 35,226 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Consolidated Statements of Operations | |||
Revenue | $119,297 | $106,746 | $102,506 |
Costs and operating expenses: | |||
Network access | 59,411 | 47,245 | 42,289 |
Network operations | 25,475 | 18,402 | 14,541 |
Development and technology | 14,879 | 11,432 | 10,772 |
Selling and marketing | 16,382 | 14,244 | 10,255 |
General and administrative | 17,460 | 15,067 | 12,700 |
Amortization of intangible assets | 3,716 | 2,250 | 1,103 |
Total costs and operating expenses | 137,323 | 108,640 | 91,660 |
(Loss) income from operations | -18,026 | -1,894 | 10,846 |
Interest and other (expense) income, net | -41 | 37 | 143 |
(Loss) income before income taxes | -18,067 | -1,857 | 10,989 |
Income tax expense | 700 | 1,461 | 2,965 |
Net (loss) income | -18,767 | -3,318 | 8,024 |
Net income attributable to non-controlling interests | 754 | 650 | 729 |
Net (loss) income attributable to common stockholders | ($19,521) | ($3,968) | $7,295 |
Net (loss) income per share attributable to common stockholders: | |||
Basic (in dollars per share) | ($0.55) | ($0.11) | $0.21 |
Diluted (in dollars per share) | ($0.55) | ($0.11) | $0.20 |
Weighted average shares used in computing net (loss) income per share attributable to common stockholders: | |||
Basic (in shares) | 35,753 | 35,578 | 34,774 |
Diluted (in shares) | 35,753 | 35,578 | 37,317 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Consolidated Statements of Comprehensive Income (Loss) | |||
Net (loss) income | ($18,767) | ($3,318) | $8,024 |
Other comprehensive loss, net of tax | |||
Foreign currency translation adjustments | -411 | ||
Comprehensive (loss) income | -19,178 | -3,318 | 8,024 |
Comprehensive income attributable to non-controlling interest | 786 | 650 | 729 |
Comprehensive (loss) income attributable to common stockholders | ($19,964) | ($3,968) | $7,295 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non-controlling Interest | Total |
In Thousands, except Share data | ||||||
Balance at Dec. 31, 2011 | $3 | $170,721 | ($41,842) | $197 | $129,079 | |
Balance (in shares) at Dec. 31, 2011 | 33,584,000 | |||||
Issuance of common stock upon exercise of stock options | 1 | 2,573 | 2,574 | |||
Issuance of common stock upon exercise of stock options (in shares) | 1,899,000 | 1,899,000 | ||||
Stock-based compensation expense | 2,735 | 2,735 | ||||
Excess (deficient) tax benefits from stock-based compensation | 2,190 | 2,190 | ||||
Non-controlling interests distributions | -103 | -103 | ||||
Net (loss) income | 7,295 | 729 | 8,024 | |||
Balance at Dec. 31, 2012 | 4 | 178,219 | -34,547 | 823 | 144,499 | |
Balance (in shares) at Dec. 31, 2012 | 35,483,000 | |||||
Issuance of common stock upon exercise of stock options (in shares) | 461,000 | |||||
Issuance of common stock under stock incentive plans | 599 | 599 | ||||
Issuance of common stock under stock incentive plans (in shares) | 465,000 | |||||
Repurchase and retirement of common stock | -4,848 | -4,848 | ||||
Repurchase and retirement of common stock (in shares) | -722,000 | -722,000 | ||||
Stock-based compensation expense | 4,506 | 4,506 | ||||
Excess (deficient) tax benefits from stock-based compensation | -397 | -397 | ||||
Non-controlling interests distributions | -608 | -608 | ||||
Net (loss) income | -3,968 | 650 | -3,318 | |||
Balance at Dec. 31, 2013 | 4 | 182,927 | -43,363 | 865 | 140,433 | |
Balance (in shares) at Dec. 31, 2013 | 35,226,000 | |||||
Issuance of common stock upon exercise of stock options (in shares) | 458,000 | |||||
Issuance of common stock under stock incentive plans | 1,158 | 1,158 | ||||
Issuance of common stock under stock incentive plans (in shares) | 1,041,000 | |||||
Shares withheld for taxes | -1,922 | -1,922 | ||||
Stock-based compensation expense | 7,562 | 7,562 | ||||
Non-controlling interests distributions | -623 | -623 | ||||
Net (loss) income | -19,521 | 754 | -18,767 | |||
Other comprehensive loss | -443 | 32 | -411 | |||
Balance at Dec. 31, 2014 | $4 | $189,725 | ($62,884) | ($443) | $1,028 | $127,430 |
Balance (in shares) at Dec. 31, 2014 | 36,267,000 |
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 |
Cash flows from operating activities | |||
Net (loss) income | ($18,767) | ($3,318) | $8,024 |
Adjustments to reconcile net (loss) income including non-controlling interests to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 27,446 | 18,940 | 15,958 |
Amortization of intangible assets | 3,716 | 2,250 | 1,103 |
Impairment loss | 959 | ||
Stock-based compensation | 7,164 | 4,506 | 2,735 |
Excess tax benefits from stock-based compensation | -55 | 1,818 | |
Change in fair value of contingent consideration | -811 | -367 | |
Change in deferred income taxes | 468 | 1,615 | 989 |
Changes in operating assets and liabilities, net of effect of acquisition: | |||
Accounts receivable | -11,392 | -2,403 | -3,011 |
Prepaid expenses and other assets | -1,935 | 1,648 | -347 |
Accounts payable | -2,252 | -242 | -290 |
Accrued expenses and other liabilities | 4,739 | -1,307 | -2,506 |
Deferred revenue | 11,872 | -596 | 123 |
Net cash provided by operating activities | 21,207 | 20,671 | 24,596 |
Cash flows from investing activities | |||
Decrease in restricted cash | 545 | 435 | |
Purchases of marketable securities | -27,163 | -33,430 | -70,185 |
Proceeds from sales of marketable securities | 58,511 | 42,026 | 28,627 |
Purchases of property and equipment | -70,945 | -29,500 | -18,000 |
Payments for business acquisition, net of cash acquired | -147 | -19,459 | -3,185 |
Other | -40 | -160 | |
Net cash used in investing activities | -39,199 | -40,403 | -62,468 |
Cash flows from financing activities | |||
Proceeds from Term Loan | 3,500 | ||
Debt issuance costs | -711 | ||
Proceeds from exercise of stock options | 1,158 | 614 | 2,573 |
Repurchase and retirement of common stock | -4,848 | ||
Excess tax benefits from stock-based compensation | 55 | 372 | |
Payments of capital leases and notes payable | -627 | -187 | -190 |
Payments of acquired notes payable and financed liabilities | -6,079 | ||
Payment of other acquisition related consideration | -1,255 | ||
Payments of withholding tax on net issuance of restricted stock units | -1,922 | -15 | |
Payments to non-controlling interests | -623 | -608 | -678 |
Net cash (used in) provided by financing activities | -480 | -11,068 | 2,077 |
Effect of exchange rates on cash | -17 | ||
Net decrease in cash and cash equivalents | -18,489 | -30,800 | -35,795 |
Cash and cash equivalents at beginning of period | 27,338 | 58,138 | 93,933 |
Cash and cash equivalents at end of period | 8,849 | 27,338 | 58,138 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 33 | 32 | 11 |
Cash (received) paid for taxes, net of refunds | -53 | 96 | 737 |
Supplemental disclosure of non-cash investing and financing activities | |||
Property and equipment costs in accounts payable, accrued expenses and other liabilities | 11,647 | 10,283 | 2,607 |
Acquisition of equipment under capital leases | 361 | ||
Assets acquired in business acquisition | 39,794 | ||
Liabilities assumed in business acquisition | $16,151 |
The_business
The business | 12 Months Ended |
Dec. 31, 2014 | |
The business | |
The business | 1. The business |
Boingo Wireless, Inc. and its subsidiaries (collectively "we, "us", "our" or "the Company") is a leading global provider of mobile Internet solutions for smartphones, tablet computers, laptops, and other wireless-enabled consumer devices. The Company has more than a million small cell networks for cellular distributed antenna system ("DAS") and Wi-Fi access that reach more than one billion consumers annually. Boingo Wireless, Inc. was incorporated in April 16, 2001 in the State of Delaware. We have a diverse monetization model that enables us to generate revenues from wholesale partnerships, retail sales, and advertising across these small cell networks. Wholesale offerings include Wi-Fi roaming, private label Wi-Fi, location based services, and DAS, which are cellular extension networks. Retail products include Wi-Fi subscriptions and day passes that provide access to more than one million commercial hotspots worldwide, and Internet Protocol television ("IPTV") services and broadband for military barracks. Advertising revenue is driven by Wi-Fi sponsorships at airports, hotels, cafes and restaurants, and public spaces. Our customers include some of the world's largest carriers, telecommunications service providers and global consumer brands, as well as Internet savvy consumers on the go and troops stationed at U.S. military bases. | |
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 | |||||||||||
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). | |||||||||||
The accompanying consolidated financial statements include our accounts and the accounts of our majority owned subsidiaries. We consolidate our 70% ownership of Concourse Communications Detroit, LLC, our 70% ownership of Chicago Concourse Development Group, LLC and our 75% ownership of Boingo Holding Participacoes Ltda. in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation. Other parties' interests in consolidated entities are reported as non-controlling interests. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
During the year ended December 31, 2013, the Company recorded certain out-of-period adjustments that decreased net loss attributable to common stockholders by $217. The impact of these out-of-period adjustments is not considered material, individually and in the aggregate, to any of the current or prior annual periods. | |||||||||||
Use of estimates | |||||||||||
The preparation of accompanying consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the accompanying consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to significant judgment and the use of estimates include the allowance for doubtful accounts, recoverability of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, uncertain tax positions, useful lives associated with property and equipment, valuation and useful lives of intangible assets, valuation of contingent consideration, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, we evaluate our estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. | |||||||||||
Concentrations of credit risk | |||||||||||
Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable securities and accounts receivable. We maintain our cash and cash equivalents, restricted cash and marketable securities with institutions with high credit ratings. We extend credit based upon the evaluation of the customer's financial condition and generally collateral is not required. We maintain an allowance for doubtful accounts based upon expected collectability of accounts receivable. We primarily estimate our allowance for doubtful accounts based on a specific review of significant outstanding accounts receivable. For the year ended December 31, 2014, one group of affiliated entities accounted for 15% of total revenue. For the year ended December 31, 2013, two groups of affiliated entities each accounted for 14% of total revenue. For the year ended December 31, 2012, those same two groups of affiliated entities accounted for 17% and 15% of total revenue, respectively. At December 31, 2014, two groups of affiliated entities accounted for 30% and 17% of the total accounts receivable, respectively. At December 31, 2013, one group of affiliated entities accounted for 12% of the total accounts receivable. | |||||||||||
Cash and cash equivalents | |||||||||||
Cash and cash equivalents include highly liquid investments that are readily convertible into known amounts of cash with original maturities of three months or less when acquired. At December 31, 2014 and 2013, cash equivalents consisted of money market funds. | |||||||||||
Marketable securities | |||||||||||
Our marketable securities consist of available-for-sale securities with original maturities exceeding three months. In accordance with FASB ASC 320, Investments—Debt and Equity Securities, we have classified securities, which have readily determinable fair values and are highly liquid, as short-term because such securities are expected to be realized within a one- year period. At December 31, 2014 and 2013, we had $1,614 and $32,962, respectively, in marketable securities. | |||||||||||
Marketable securities are reported at fair value with the related unrealized gains and losses reported as other comprehensive income (loss) until realized or until a determination is made that an other-than-temporary decline in market value has occurred. No significant unrealized gains and losses have been reported during the years presented. Factors considered by us in assessing whether an other-than-temporary impairment has occurred include the nature of the investment, whether the decline in fair value is attributable to specific adverse conditions affecting the investment, the financial condition of the investee, the severity and the duration of the impairment and whether we have the ability to hold the investment to maturity. When it is determined that an other-than-temporary impairment has occurred, the investment is written down to its market value at the end of the period in which it is determined that an other-than-temporary decline has occurred. The cost of marketable securities sold is based upon the specific identification method. Any realized gains or losses on the sale of investments are reflected as a component of interest and other (expense) income, net. | |||||||||||
For the years ended December 31, 2014, 2013 and 2012, we had no significant realized or unrealized gains or losses from investments in marketable securities classified as available-for-sale. As of December 31, 2014 and 2013, we had no unrealized gains or losses in accumulated other comprehensive income (loss). | |||||||||||
Restricted cash | |||||||||||
Restricted cash consists of letters of credit with our landlords, municipalities or venues for which we have operating agreements. Letters of credit are supported by cash deposits made by us and invested into bank certificates of deposit. At December 31, 2014, we had no restricted cash. At December 31, 2013, we had $545 classified as short-term restricted cash and no long-term restricted cash. | |||||||||||
Fair value of financial instruments | |||||||||||
Fair value is defined as the price that would be received from selling an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact, and we consider assumptions that market participants would use when pricing the asset or liability. | |||||||||||
The accounting guidance for fair value measurement also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: | |||||||||||
• | Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||||
• | Level 2—Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly. | ||||||||||
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||
The carrying amount reflected in the accompanying consolidated balance sheets for cash and cash equivalents, restricted cash, marketable securities, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other liabilities approximates fair value due to the short-term nature of these financial instruments. | |||||||||||
As of December 31, 2014, the carrying amount reflected in the accompanying consolidated balance sheets for the current portion of long-term debt and long-term debt approximates fair value based on the variable nature of the interest rates and the proximity to the issuance date. | |||||||||||
Business combinations | |||||||||||
The results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. | |||||||||||
The Company performs valuations of assets acquired and liabilities assumed from a business acquisition and will allocate the purchase price to its respective net tangible and intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, royalty rates and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with fair values of assets and liabilities assumed in a business combination. | |||||||||||
Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expenses in the consolidated statements of operations. There were no transaction costs for the year ended December 31, 2014. Transaction costs were $354 and $50 for the years ended December 31, 2013 and 2012, respectively. | |||||||||||
Property and equipment | |||||||||||
Property and equipment are generally stated at historical cost, less accumulated depreciation and amortization. The Company's cost basis includes property and equipment acquired in business combinations that were initially recorded at fair value as of the date of acquisition. Maintenance and repairs are charged to expense as incurred and the cost of additions and betterments that increase the useful lives of the assets are capitalized. Depreciation and amortization is computed over the estimated useful lives of the related asset type using the straight-line method. | |||||||||||
The estimated useful lives for property and equipment are as follows: | |||||||||||
Computer equipment | 2 to 5 years | ||||||||||
Software | 2 to 5 years | ||||||||||
Office equipment | 3 to 5 years | ||||||||||
Leasehold improvements | The shorter of the estimated useful life or the remaining term of the agreements, generally ranging from 2 to 15 years | ||||||||||
Leasehold improvements are principally comprised of network equipment located at various managed and operated locations, primarily airports, under exclusive, long-term, non-cancelable contracts to provide wireless communication network access. | |||||||||||
Equipment and software under capital lease | |||||||||||
We lease certain data communications equipment, other equipment and software under capital lease agreements. The assets and liabilities under capital lease are recorded at the lesser of the present value of aggregate future minimum lease payments, including estimated bargain purchase options, or the fair value of the asset under lease. Assets under capital lease are depreciated using the straight-line method over the shorter of the estimated useful lives of the assets or the term of the lease agreements. | |||||||||||
Software development costs | |||||||||||
We capitalize costs associated with software developed or obtained for internal use when the preliminary project stage is completed and it is determined that the software will provide significantly enhanced capabilities and modifications. These capitalized costs are included in property and equipment and include external direct cost of services procured in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with, and who devote time to internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended use. Once the software is ready for its intended use, the costs are amortized over the useful life of the software. Post-configuration training and maintenance costs are expensed as incurred. | |||||||||||
Long-lived assets | |||||||||||
Intangible assets consist of acquired venue contracts, technology, advertiser relationships, non-compete agreements and patents and trademarks. We record intangible assets at fair value as of the date of acquisition and amortize these finite-lived assets over the shorter of the contractual life or the estimated useful life on a straight-line basis. We estimate the useful lives of acquired intangible assets based on factors that include the planned use of each acquired intangible asset, the expected pattern of future cash flows to be derived from each acquired intangible asset and contractual periods specified in the related agreements. As such, we account for each of the venue contracts individually. We include amortization of acquired intangibles in amortization of intangible assets in the accompanying consolidated statements of operations. | |||||||||||
We perform an impairment review of long-lived assets held and used whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include, but are not limited to: significant under-performance relative to projected future operating results, significant changes in the manner of our use of the acquired assets or our overall business and product strategies and significant industry or economic trends. When we determine that the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of these indicators, we determine the recoverability by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate or other indices of fair value. We would then recognize an impairment charge equal to the amount by which the carrying amount exceeds the fair market value of the asset. | |||||||||||
Goodwill | |||||||||||
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in connection with the acquisition of Concourse Communication Group, LLC in June 2006, Cloud 9 Wireless, Inc. in August 2012, Endeka Group, Inc. in February 2013, and Electronic Media Systems, Inc. and Advanced Wireless Group, LLC in October 2013. | |||||||||||
We test goodwill for impairment in accordance with guidance provided by FASB ASC 350, Intangibles—Goodwill and Other ("ASC 350"). Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. We perform our impairment test annually as of December 31st. | |||||||||||
Entities have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in FASB ASC 350. If, after assessing qualitative factors, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If deemed necessary, a two-step test is used to identify the potential impairment and to measure the amount of goodwill impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, there is an indication that goodwill may be impaired and the amount of the loss, if any, is measured by performing step two. Under step two, the impairment loss, if any, is measured by comparing the implied fair value of the reporting unit goodwill with the carrying amount of goodwill. | |||||||||||
Currently, we have one reporting unit, one operating segment and one reportable segment. At December 31, 2014 and 2013, all of the goodwill was attributed to our reporting unit. We tested our goodwill for impairment using a market based approach and no impairment was identified as the fair value of our reporting unit was substantially in excess of its carrying amount. To date, we have not recorded any goodwill impairment charges. | |||||||||||
Revenue recognition | |||||||||||
We generate revenue from several sources including: (i) retail and military customers under subscription plans for month-to-month network access that automatically renew, and retail and military single-use access from sales of hourly, daily or other single-use access plans, (ii) DAS customers that are telecom operators under long-term contracts for access to our DAS at our managed and operated locations, (iii) arrangements with wholesale Wi-Fi customers that provide software licensing, network access, and/or professional services fees, and (iv) display advertisements and sponsorships on our walled garden sign-in pages. Software licensed by our wholesale platform services customers can only be used during the term of the service arrangements and has no utility to them upon termination of the service arrangement. | |||||||||||
We recognize revenue when an arrangement exists, services have been rendered, fees are fixed or determinable, no significant obligations remain related to the earned fees and collection of the related receivable is reasonably assured. | |||||||||||
Subscription fees from retail and military customers are paid monthly in advance and revenue is deferred for the portions of monthly recurring subscription fees collected in advance. We provide refunds for our retail and military services on a case-by-case basis. These amounts are not significant and are recorded as contra-revenue in the period the refunds are made. Subscription fee revenue is recognized ratably over the subscription period. Revenue generated from retail and military single-use access is recognized when access is provided. | |||||||||||
Revenue generated from access to our DAS networks consists of build-out fees and recurring access fees under certain long-term contracts with telecom operators. Build-out fees paid upfront are generally deferred and recognized ratably over the term of the estimated customer relationship period, once the build-out is complete. Periodically, we install and sell Wi-Fi and DAS networks to customers where we do not have service contracts or remaining obligations beyond the installation of those networks and we recognize build-out fees for such projects as revenue when the installation work is completed and the network has been accepted by the customer. Minimum monthly access fees for usage of the DAS networks are non-cancellable and generally escalate on an annual basis. These minimum monthly access fees are recognized ratably over the term of the telecom operator agreement. The initial term of our contracts with telecom operators generally range from five to ten years and the agreements generally contain renewal clauses. Revenue from DAS network access fees in excess of the monthly minimums is recognized when earned. | |||||||||||
Services provided to wholesale Wi-Fi partners generally contain several elements including: (i) a term license to use our software to access our Wi-Fi network, (ii) access fees for Wi-Fi network usage, and/or (iii) professional services for software integration and customization and to maintain the Wi-Fi service. The term license, monthly minimum network access fees and professional services are billed on a monthly basis based upon predetermined fixed rates. Once the term license for integration and customization are delivered, the fees from the arrangement are recognized ratably over the remaining term of the service arrangement. The initial term of the license agreements is generally between one to five years and the agreements generally contain renewal clauses. Revenue for Wi-Fi network access fees in excess of the monthly minimum amounts is recognized when earned. All elements within existing service arrangements are generally delivered and earned concurrently throughout the term of the respective service arrangement. | |||||||||||
In instances where the minimum monthly Wi-Fi and DAS network access fees escalate over the term of the wholesale service arrangement, an unbilled receivable is recognized when performance is within our control and when we have reasonable assurance that the unbilled receivable balance will be collected. | |||||||||||
We adopted the provisions of Accounting Standards Update ("ASU") 2009- 13, Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements ("ASU 2009-13"), on a prospective basis on January 1, 2011. For multiple-deliverable arrangements entered into prior to January 1, 2011 that are accounted for under ASC 605-25, Revenue Recognition—Multiple-Deliverable Revenue Arrangements, we defer recognition of revenue for the full arrangement and recognize all revenue ratably over the wholesale service period for Wi-Fi platform service arrangements and the term of the estimated customer relationship period for DAS arrangements, as we do not have evidence of fair value for the undelivered elements in the arrangement. For multiple-deliverable arrangements entered into or materially modified after January 1, 2011 that are accounted for under ASC 605-25, we evaluate whether or not separate units of accounting exist and then allocate the arrangement consideration to all units of accounting based on the relative selling price method using estimated selling prices if vendor specific objective evidence and third party evidence is not available. We recognize the revenue associated with the separate units of accounting upon completion of such services or ratably over the wholesale service period for Wi-Fi platform service arrangements and the term of the estimated customer relationship period for DAS arrangements. | |||||||||||
Advertising revenue is generated from advertisements on our managed and operated or partner networks. In determining whether an arrangement exists, we ensure that a binding arrangement is in place, such as a standard insertion order or a fully executed customer-specific agreement. Obligations pursuant to our advertising revenue arrangements typically include a minimum number of units or the satisfaction of certain performance criteria. Advertising and other revenue is recognized when the services are performed. | |||||||||||
Foreign currency translation | |||||||||||
Our Brazilian subsidiary uses the Brazilian Real as its functional currency. Assets and liabilities of our Brazilian subsidiary are translated to U.S. dollars at period-end rates of exchange, and revenues and expenses are translated at average exchange rates prevailing for each month. The resulting translation adjustments are made directly to a separate component of other comprehensive loss, which is reflected in stockholders' equity in our consolidated balance sheets. As of December 31, 2014 and December 31, 2013, the Company had $(443) and $0, respectively, of cumulative foreign currency translation adjustments, net of tax, which was $0 as of December 31, 2014 and December 31, 2013 due to the full valuation allowance established against our deferred tax assets, in accumulated other comprehensive loss. | |||||||||||
Some of our subsidiaries also enter into transactions and have monetary assets and liabilities that are denominated in a currency other than the entities' respective functional currencies. Gains and losses from the revaluation of foreign currency transactions and monetary assets and liabilities are included in the consolidated statements of operations. | |||||||||||
Network access | |||||||||||
Network access costs consist primarily of revenue share payments to venue owners where our managed and operated hotspots are located, usage-based fees to our roaming network partners for access to their networks, depreciation of equipment related to network build-out projects in our managed and operated locations, and bandwidth and other Internet connectivity expenses in our managed and operated locations. | |||||||||||
Advertising, marketing and promotion costs | |||||||||||
Advertising production costs are expensed the first time the advertisement is run. No advertising production costs were capitalized for the years ended December 31, 2014, 2013 and 2012. All other costs of advertising, marketing and promotion are expensed as incurred. Advertising expenses charged to operations totaled $1,350, $2,302 and $2,374 for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||
Stock-based compensation | |||||||||||
Our stock-based compensation consists of stock options and restricted stock units ("RSU") granted to employees and non-employees. | |||||||||||
We recognize stock-based compensation expense in accordance with guidance provided by FASB ASC 718, Compensation—Stock Compensation ("ASC 718"). We measure employee stock-based compensation cost at grant date, based on the estimated fair value of the award and recognize the cost on a straight-line basis, net of estimated forfeitures, over the employee requisite service period. We estimate the fair value of stock options using a Black-Scholes option pricing model. The model requires input of assumptions regarding expected term, expected volatility, dividend yield, and a risk-free interest rate. The weighted average assumptions that were used to calculate the grant date fair value of our employee stock option grants for the following periods are as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Expected term (years) | 6.25 | 6.25 | 5.9 | ||||||||
Expected volatility | 48.6 | % | 49.31 | % | 48.9 | % | |||||
Risk-free interest rate | 1.8 | % | 1.34 | % | 0.9 | % | |||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||
The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. In estimating the expected term for options granted to employees, we applied the simplified method from the Security Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") Topic 14, Share-Based Payment ("SAB Topic 14"), where options are granted at-the-money. Where options were not granted at-the-money, the expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding and is calculated based upon actual historical exercise and post-vesting cancellations, adjusted for expected future exercise behavior. | |||||||||||
We determined the fair value of common stock underlying the stock option awards by reference to third party sales of our common stock. We determined the expected volatility assumption using the frequency of daily historical prices of comparable public companies' common stock for a period equal to the expected term of the options in accordance with guidance in ASC 718 and SAB Topic 14. We will continue to monitor peer companies and other relevant factors, including our volatility after there is enough history, used to measure expected volatility for future stock option grants. The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the expected term of our employee stock options. The dividend yield assumption is based on our history and expectation of dividend payouts for which no cash dividends have been declared or paid on our common stock, and for which none are anticipated in the foreseeable future. | |||||||||||
As stock-based compensation expense recognized in our accompanying consolidated statements of operations is based on awards ultimately expected to vest, the amount has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on our historical experience and future expectations. | |||||||||||
Compensation expense for non-employee stock-based awards is recognized in accordance with ASC 718 and FASB ASC 505, Equity. Stock option awards issued to non-employees are accounted for at fair value using the Black-Scholes option pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. We record compensation expense based on the then-current fair value of the stock options at each financial reporting date. Compensation recorded during the service period is adjusted in subsequent periods for changes in the stock options' fair value until the earlier of the date at which the non-employee's performance is complete or a performance commitment is reached, which is generally when the stock award vests. We did not recognize any stock-based compensation for non-employee stock-based awards for the year ended December 31, 2014. There was $30 and $372 of stock-based compensation expense recognized for non-employee stock-based awards for the years ended December 31, 2013 and 2012, respectively. | |||||||||||
Income taxes | |||||||||||
We account for income taxes in accordance with FASB ASC 740, Accounting for Income Taxes ("ASC 740"), which requires the recognition of deferred tax assets and liabilities for the future consequences of events that have been recognized in our accompanying consolidated financial statements or tax returns. The measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and the tax bases of our assets and liabilities result in a deferred tax asset, ASC 740 requires an evaluation of the probability of being able to realize the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or the entire deferred tax asset will not be realized. As part of the process of preparing our accompanying consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. We also assess temporary differences resulting from differing treatment of items, such as deferred revenue, for tax and accounting differences. We record a valuation allowance to reduce the deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. | |||||||||||
ASC 740 prescribes a recognition threshold and measurement methodology to recognize and measure an income tax position taken, or expected to be taken, in a tax return. The evaluation of a tax position is based on a two-step approach. The first step requires an entity to evaluate whether the tax position would "more likely than not" be sustained upon examination by the appropriate taxing authority. The second step requires the tax position be measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. In addition, previously recognized benefits from tax positions that no longer meet the new criteria would no longer be recognized. Changes in recognition or measurement are reflected in the period in which the change occurs. | |||||||||||
Non-controlling interests | |||||||||||
Non-controlling interests are comprised of minority holdings in Concourse Communications Detroit, LLC ("CCG Detroit"), Chicago Concourse Development Group, LLC ("CCDG") and Boingo Holding Participacoes Ltda ("BHPL"). | |||||||||||
Under the terms of the limited liability company ("LLC") agreement for CCG Detroit ("Detroit Operating Agreement") profits and losses are allocated to the controlling and non-controlling owners based on specified terms in the Detroit Operating Agreement which reflect the relative risk and reward of each owner. The profit and loss allocation in the Detroit Operating Agreement specifies that the non-controlling owners' allocated profits are limited to the fixed distribution amounts and losses are limited to the non-controlling owners capital account balance with losses in excess of their capital account being fully allocated to the controlling common unit holder. There is no specified term in the Detroit Operating Agreement, but the term of the annual fixed distribution obligation to the non-controlling owner is the same as the term of the venue agreement between CCG Detroit and Detroit Metropolitan Wayne County Airport—which has a seven year initial term with options to extend for an additional four years. We allocate profits and losses in CCG Detroit based on the attribution in the Detroit Operating Agreement. CCG Detroit has generated losses which reduced the non-controlling owners capital account to zero in 2009 resulting in an allocation to the controlling interest holder all operating losses and deficits created by the annual fixed distributions to the non-controlling interest holder. The fixed distributions were terminated during September 2013 concurrent with the termination of CCG Detroit's agreement with Detroit Metropolitan Wayne County Airport. For the years ended December 31, 2013 and 2012, we made distributions of $48 and $121, respectively, to non-controlling interest holders of CCG Detroit. | |||||||||||
Under the terms of the LLC agreement for CCDG, we are required to distribute annually to the CCDG non-controlling interest holders 30% of allocated net profits less capital expenditures of the preceding year. For the years ended December 31, 2014, 2013 and 2012, we made distributions of $623, $560 and $557, respectively, to non-controlling interest holders of CCDG. | |||||||||||
BHPL was formed at the end of 2012. Under the terms of the LLC agreement for BHPL, we attributed profits and losses to the non-controlling interest in BHPL in proportion to their holdings. For the years ended December 31, 2014 and 2013, we made no distributions to the non-controlling interest holder of BHPL. | |||||||||||
Net (loss) income per share attributable to common stockholders | |||||||||||
Basic net (loss) income per share attributable to common stockholders is calculated by dividing (loss) income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share attributable to common stockholders adjusts the basic weighted average number of shares of common stock outstanding for the potential dilution that could occur if stock options and RSUs were exercised or converted into common stock. Our common stockholders are not entitled to receive any dividends. | |||||||||||
Segment and geographic information | |||||||||||
We operate as one reportable segment; a service provider of mobile Internet solutions across our managed and operated network and aggregated network for mobile devices such as laptops, smartphones, tablet computers and other wireless-enabled consumer devices. This single segment is consistent with the internal organization structure and the manner in which operations are reviewed and managed by our Chief Executive Officer, the chief operating decision maker. | |||||||||||
All significant long-lived tangible assets are held in the United States of America. We do not disclose sales by geographic area because to do so would be impracticable. In 2014, we updated our presentation of retail and wholesale revenue sources to provide increased visibility into the revenue streams that are the focus of our current and future operational and development efforts. Our retail revenue sources were previously differentiated based on our retail plan types—subscription or single-use. We believe that it would be more relevant to differentiate our individual users based on the nature of the users—retail users who purchase Internet access at our managed and operated hotspots and select partner locations or military users who purchase Internet access or IPTV services for individual use on U.S. military bases. We also previously combined our wholesale DAS and Wi-Fi revenues and we believe that it would be better to disaggregate these wholesale product revenues going forward by DAS and Wi-Fi given the current development of these products. The revenue sources are consistent with how our chief operating decision maker monitors and reviews our operations. As a result, we have also reclassified our 2013 and 2012 revenues by primary revenue source for comparability purposes. | |||||||||||
The following is a summary of our revenue by primary revenue source: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenue: | |||||||||||
Retail | $ | 40,336 | $ | 43,194 | $ | 46,145 | |||||
DAS | 38,259 | 32,681 | 30,751 | ||||||||
Wholesale—Wi-Fi | 15,209 | 17,261 | 18,744 | ||||||||
Military | 4,486 | 1,260 | — | ||||||||
Advertising and other | 21,007 | 12,350 | 6,866 | ||||||||
| | | | | | | | | | | |
Total revenue | $ | 119,297 | $ | 106,746 | $ | 102,506 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Recent accounting pronouncements | |||||||||||
In January 2015, the FASB issued ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, which eliminates the separate presentation of extraordinary items, net of tax and the related earnings per share, but does not affect the requirement to disclose material items that are unusual in nature or infrequently occurring. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. An entity may choose to adopt the new standard either prospectively or retrospectively. We do not expect that this standard will have a material impact on our consolidated financial statements. | |||||||||||
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which explicitly requires management to assess an entity's ability to continue as a going concern in connection with each annual and interim period. Management will assess if there is substantial doubt about an entity's ability to continue as a going concern within one year of the date the financial statements are issued. Disclosures will be required if conditions give rise to substantial doubt. The standard will be effective for the first annual period ending after December 15, 2016. Early adoption is permitted. We are currently evaluating the expected impact of this new standard. | |||||||||||
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. An entity may choose to adopt the new standard either prospectively or retrospectively. We do not expect that this standard will have a material impact on our consolidated financial statements as we have not issued any share-based payments with performance targets that could be achieved after the requisite service period. | |||||||||||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which is intended to improve and converge the financial reporting requirements for revenue from contracts with customers between U.S. GAAP and International Accounting Standards. In accordance with this new standard, an entity would recognize revenue to depict the transfer of promised goods or services. The standard establishes a five-step model and related application guidance, which will replace most existing revenue recognition guidance in U.S. GAAP. The standard will be effective for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is not permitted. An entity may choose to adopt the new standard either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the new standard. We are currently evaluating the expected impact of this new standard on our reporting of revenue contracts in our consolidated financial statements. | |||||||||||
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This standard requires the netting of unrecognized tax benefits (UTBs) against a deferred tax asset for a loss or other carryforward that would apply in the settlement of the uncertain tax positions. The UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. The standard will require prospective application with optional retrospective application, and will be effective for reporting periods beginning after December 15, 2013. Early adoption is permitted. We have effectively adopted the provisions of this requirement as of the date of issuance of this standard as we have historically presented our UTBs as a reduction of our deferred tax assets for a loss or other carryforward rather than as a liability when the uncertain tax position would reduce the loss or other carryforward under the tax law. | |||||||||||
Acquisitions
Acquisitions | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquisitions | ||||||||
Acquisitions | 3. Acquisitions | |||||||
Electronic Media Systems, Inc. and Advanced Wireless Group, LLC | ||||||||
On October 31, 2013, we acquired all outstanding stock of Electronic Media Systems, Inc. and all membership interests in its subsidiary, Advanced Wireless Group, LLC, not otherwise owned by Electronic Media Systems, Inc. such that we are now the beneficial owner of all membership interests of Advanced Wireless Group, LLC (collectively, "AWG"). AWG operated public Wi-Fi in seventeen U.S. airports including Los Angeles International, Charlotte/Douglas International, Miami International, Minneapolis-St. Paul International, Detroit Metropolitan Airport, and Boston's Logan International. We have included the operating results of AWG in our consolidated financial statements since the date of acquisition. | ||||||||
The acquisition has been accounted for under the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. As such, the assets acquired and liabilities assumed are recorded at their acquisition-date fair values. The total purchase price was $17,527, which includes cash paid at closing, net equity adjustments, holdback consideration to be paid and the fair value of additional contingent consideration that would be due and payable upon the successful extension of a specified airport Wi-Fi contract. On July 29, 2014, we paid $147 to the previous AWG shareholders as settlement for the net equity adjustments that were not finalized as of the acquisition date. | ||||||||
The fair value of the contingent consideration is based on Level 3 inputs, which are discussed in Note 9. Further changes in the fair value of the contingent consideration are recorded through operating (loss) income. On July 29, 2014, we paid the contingent consideration in the amount of $1,000 to the previous AWG shareholders. We allocated the excess of the purchase price over the fair value of assets acquired and liabilities assumed to goodwill, which is primarily not deductible for tax purposes. The goodwill arising from the AWG acquisition is attributable primarily to expected synergies and other benefits, including the acquired workforce, from combining AWG with us. | ||||||||
The contingent consideration was valued at the date of acquisition using a discount rate of 3.1%. The identifiable intangible assets were primarily valued using the excess earnings, relief from royalty, with-and-without and replacement cost methods using discount rates ranging from 12.0% to 14.0% and royalty rates of 0.5%. | ||||||||
During the year ended December 31, 2014, we finalized our purchase price allocation, which was preliminary as of December 31, 2013 due to estimated net equity adjustments and the filing of AWG's final short period 2013 tax returns, both of which impacted the final purchase price allocation. As these purchase accounting adjustments were finalized during the measurement period, we retrospectively adjusted the provisional amounts recognized at the acquisition date to reflect the new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. As a result, goodwill decreased by $28, accrued expenses increased by $147, and accumulated deficit increased by $175 as of December 31, 2013 as compared to the audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on March 17, 2014. The increase in accumulated deficit was the result of the valuation allowance that was established by the Company against its deferred tax assets as of December 31, 2013. The final purchase price allocation resulted in a $175 decrease in deferred tax liabilities and goodwill; accordingly, the Company had to increase the valuation allowance for deferred tax assets by $175, resulting in additional deferred tax expense for the year ended December 31, 2013. | ||||||||
The amortizable intangible assets are being amortized straight-line over their estimated useful lives. The following summarizes the final purchase price allocation: | ||||||||
Estimated | Weighted Average | |||||||
Fair Value | Estimated Useful | |||||||
Life (years) | ||||||||
Consideration: | ||||||||
Cash paid | $ | 14,800 | ||||||
Net equity adjustments | 147 | |||||||
Holdback consideration | 1,600 | |||||||
Contingent consideration | 980 | |||||||
| | | | | | | | |
Total consideration | $ | 17,527 | ||||||
| | | | | | | | |
| | | | | | | | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash | $ | 215 | ||||||
Restricted cash | 515 | |||||||
Accounts receivable | 988 | |||||||
Other current assets | 609 | |||||||
Property and equipment | 2,297 | |||||||
Accounts payable | (563 | ) | ||||||
Accrued expenses | (515 | ) | ||||||
Other current liabilities | (134 | ) | ||||||
Capital lease obligations | (932 | ) | ||||||
Other non-current liabilities | (130 | ) | ||||||
Deferred tax liabilities | (3,386 | ) | ||||||
| | | | | | | | |
Net tangible liabilities acquired | (1,036 | ) | ||||||
Existing contracts and relationships | 4,700 | 6.7 | ||||||
Technology | 270 | 6 | ||||||
Trademark and tradename | 120 | 3 | ||||||
Non-compete agreement | 3,590 | 5 | ||||||
Goodwill | 9,883 | |||||||
| | | | | | | | |
Total purchase price | $ | 17,527 | ||||||
| | | | | | | | |
| | | | | | | | |
Endeka Group, Inc. | ||||||||
On February 22, 2013, we acquired all outstanding stock of Endeka Group, Inc. ("Endeka"). Endeka is a provider of commercial wireless broadband and IPTV services at certain U.S. military bases, as well as Wi-Fi services to certain federal law enforcement training facilities. We acquired Endeka because Endeka's portfolio of venues and management team are natural additions to our managed network business. We have included the operating results of Endeka in our consolidated financial statements since the date of acquisition. | ||||||||
The acquisition has been accounted for under the acquisition method of accounting in accordance with FASB ASC 805. As such, the assets acquired and liabilities assumed are recorded at their acquisition-date fair values. The total purchase price was $6,498, which includes cash paid at closing, holdback consideration to be paid and the fair value of additional contingent consideration comprised of two components: (i) a payment ("Build Payment") if the amount of the capital expenditures incurred for the substantial completion of a specified build project is less than a target; and (ii) a payment ("Milestone Payment") based on revenue generated by certain contracts in fiscal year 2014. There is no maximum to the contingent consideration payments for the Milestone Payment. We do not expect to make any payments associated with the Build Payment. The Milestone Payment will be paid in March 2015. | ||||||||
The fair value of the contingent consideration is based on Level 3 inputs. Further changes in the fair value of the contingent consideration are recorded through operating (loss) income. We allocated the excess of the purchase price over the fair value of assets acquired and liabilities assumed to goodwill, which is not deductible for tax purposes. The goodwill arising from the Endeka acquisition is attributable primarily to expected synergies and other benefits, including the acquired workforce, from combining Endeka with us. | ||||||||
The contingent consideration was valued at the date of acquisition using a discounted cash flow method with probability weighted cash flows and a discount rate of 50.5%. The identifiable intangible assets were primarily valued using the excess earnings, relief from royalty, and replacement cost methods using discount rates ranging from 40.0% to 50.0% and royalty rates ranging from 0.5% to 1.5%, where applicable. | ||||||||
The amortizable intangible assets are being amortized straight-line over their estimated useful lives. The following summarizes the final purchase price allocation: | ||||||||
Estimated | Estimated Useful | |||||||
Fair Value | Life (years) | |||||||
Consideration: | ||||||||
Cash paid | $ | 4,894 | ||||||
Holdback consideration | 275 | |||||||
Contingent consideration | 1,329 | |||||||
| | | | | | | | |
Total consideration | $ | 6,498 | ||||||
| | | | | | | | |
| | | | | | | | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash | $ | 20 | ||||||
Other current assets | 44 | |||||||
Property and equipment | 4,617 | |||||||
Other assets | 12 | |||||||
Accounts payable | (992 | ) | ||||||
Other current liabilities | (211 | ) | ||||||
Notes payable and financed liabilities | (6,476 | ) | ||||||
Deferred tax liabilities | (2,637 | ) | ||||||
| | | | | | | | |
Net tangible liabilities acquired | (5,623 | ) | ||||||
Existing contracts and relationships | 4,770 | 10 | ||||||
Technology | 930 | 6 | ||||||
Trademark and tradename | 300 | 10 | ||||||
Non-compete agreement | 250 | 2 | ||||||
Other intangibles | 95 | 10 | ||||||
Goodwill | 5,776 | |||||||
| | | | | | | | |
Total purchase price | $ | 6,498 | ||||||
| | | | | | | | |
| | | | | | | | |
During the year ended December 31, 2014, we paid the holdback consideration in the amount of $275 to the previous Endeka shareholders. | ||||||||
Pro forma results (Unaudited) | ||||||||
The following table presents the unaudited pro forma results of the Company for the years ended December 31, 2013 and 2012 as if the acquisitions of Endeka and AWG had occurred on January 1, 2012. These results are not intended to reflect the actual operations of the Company had the acquisition occurred on January 1, 2012. We did not record any incremental income taxes for pro forma net (loss) income because we established a valuation allowance in 2013. Income taxes for purposes of the 2012 pro forma net (loss) income were computed based on the statutory tax rates. | ||||||||
For the Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
Revenue | $ | 114,492 | $ | 110,957 | ||||
Net (loss) income | $ | (4,945 | ) | $ | 5,991 | |||
Cloud 9 Wireless, Inc. | ||||||||
On August 6, 2012, we acquired the assets of Cloud 9 Wireless, Inc. ("Cloud 9") for $3,500 plus the assumption of certain liabilities. Cloud 9 provides Wi-Fi sponsorship and location-based advertising at airports, hotels, bars and restaurants, and recreational areas in the U.S. and Canada. The acquisition has been accounted for under the acquisition method of accounting in accordance with the FASB ASC 805. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed is allocated to goodwill, which is deductible for tax purposes. Goodwill is attributable primarily to expected synergies and other benefits, including the acquired workforce, from combining Cloud 9 with us. Cloud 9 was consolidated into our results of operations starting August 6, 2012, the acquisition date. Cloud 9 has been integrated into the Company's product offering; therefore, it is not practical to disclose actual and pro forma financial results for Cloud 9 since the acquisition. | ||||||||
The following table summarizes the allocation of the total purchase price as of August 6, 2012: | ||||||||
Current assets | $ | 899 | ||||||
Property, plant and equipment | 65 | |||||||
Intangible and other assets | 1,758 | |||||||
Goodwill | 1,232 | |||||||
Current liabilities | (454 | ) | ||||||
| | | | | ||||
Net assets acquired | $ | 3,500 | ||||||
| | | | | ||||
| | | | | ||||
The intangible assets are all definite-lived intangibles and are recognized on a straight-line basis over their weighted average lives of approximately 5 years. | ||||||||
Cash_and_cash_equivalents_and_
Cash and cash equivalents and marketable securities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and cash equivalents and marketable securities | ||||||||
Cash and cash equivalents and marketable securities | 4. Cash and cash equivalents and marketable securities | |||||||
Cash and cash equivalents, and marketable securities consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Cash and cash equivalents: | ||||||||
Cash | $ | 3,247 | $ | 3,655 | ||||
Money market accounts | 5,602 | 23,683 | ||||||
| | | | | | | | |
Total cash and cash equivalents | $ | 8,849 | $ | 27,338 | ||||
| | | | | | | | |
| | | | | | | | |
Short-term marketable securities: | ||||||||
Marketable securities | $ | 1,614 | $ | 32,962 | ||||
| | | | | | | | |
Total short-term marketable securities | $ | 1,614 | $ | 32,962 | ||||
| | | | | | | | |
| | | | | | | | |
All contractual maturities of marketable securities were less than one year at December 31, 2014 and 2013. These consist primarily of corporate securities which include commercial paper and corporate debt instruments including notes issued by foreign or domestic corporations which pay in U.S. dollars and carry a rating of A or better. | ||||||||
For the years ended December 31, 2014, 2013 and 2012, interest income was $114, $181 and $183, respectively, which is included in interest and other (expense) income, net in the accompanying consolidated statements of operations. | ||||||||
Accounts_receivables_net_and_o
Accounts receivables, net and other receivables | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts receivables, net and other receivables | ||||||||
Accounts receivables, net and other receivables | 5. Accounts receivables, net and other receivables | |||||||
Accounts receivable, net of allowances for doubtful accounts and other receivables consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Trade receivables, net of allowances | $ | 25,562 | $ | 12,799 | ||||
Unbilled access fees | 2,142 | 2,036 | ||||||
Unbilled platform service arrangements | 213 | 1,491 | ||||||
| | | | | | | | |
Accounts receivable, net | $ | 27,917 | $ | 16,326 | ||||
| | | | | | | | |
| | | | | | | | |
Unbilled access fees | $ | 115 | $ | 264 | ||||
Unbilled platform service arrangements | — | 16 | ||||||
| | | | | | | | |
Non-current other receivables | $ | 115 | $ | 280 | ||||
| | | | | | | | |
| | | | | | | | |
Access fees are recorded under long-term contracts with our wholesale partners that are telecom operators for access to our DAS at our managed and operated locations. Platform service fees are recorded under long-term contracts with our wholesale partners. These access and platform service fees escalate on an annual basis from which we receive fixed contractual payments and recognize revenue ratably over the term of the contracts. | ||||||||
Included in accounts receivables, net for the periods indicated was the allowance for doubtful accounts which consisted of the following: | ||||||||
Allowance | ||||||||
for | ||||||||
Doubtful | ||||||||
Accounts | ||||||||
Balance, December 31, 2011 | $ | 177 | ||||||
Additions charged to operations | 45 | |||||||
Deductions from reserves, net | (43 | ) | ||||||
| | | | | ||||
Balance, December 31, 2012 | 179 | |||||||
Additions charged to operations | 209 | |||||||
Deductions from reserves, net | (43 | ) | ||||||
| | | | | ||||
Balance, December 31, 2013 | 345 | |||||||
Additions charged to operations | 191 | |||||||
Deductions from reserves, net | (142 | ) | ||||||
| | | | | ||||
Balance, December 31, 2014 | $ | 394 | ||||||
| | | | | ||||
| | | | | ||||
Accrued_expenses_and_other_lia
Accrued expenses and other liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued expenses and other liabilities | ||||||||
Accrued expenses and other liabilities | 6. Accrued expenses and other liabilities | |||||||
Accrued expenses and other liabilities consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Salaries and wages | $ | 2,389 | $ | 3,024 | ||||
Revenue share | 5,683 | 4,598 | ||||||
Accrued partner network | 1,105 | 736 | ||||||
Accrued for construction in progress | 9,438 | 2,717 | ||||||
Settlement liabilities | 1,850 | — | ||||||
Accrued professional fees | 1,241 | 179 | ||||||
Accrued taxes | 327 | 256 | ||||||
Deferred rent | 18 | 853 | ||||||
Holdback liabilities | 1,615 | 1,875 | ||||||
Contingent consideration | 131 | 980 | ||||||
Other | 2,312 | 1,311 | ||||||
| | | | | | | | |
Total accrued expenses and other liabilities | $ | 26,109 | $ | 16,529 | ||||
| | | | | | | | |
| | | | | | | | |
Property_and_equipment
Property and equipment | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property and equipment | |||||||||||
Property and equipment | 7. Property and equipment | ||||||||||
The following is a summary of property and equipment, at cost less accumulated depreciation and amortization: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Leasehold improvements | $ | 152,627 | $ | 97,462 | |||||||
Construction in progress | 20,104 | 18,157 | |||||||||
Computer equipment | 7,909 | 7,372 | |||||||||
Software | 17,827 | 10,452 | |||||||||
Office equipment | 297 | 412 | |||||||||
| | | | | | | | ||||
Total property and equipment | 198,764 | 133,855 | |||||||||
Less: accumulated depreciation and amortization | (86,992 | ) | (66,295 | ) | |||||||
| | | | | | | | ||||
Total property and equipment, net | $ | 111,772 | $ | 67,560 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Included in property and equipment at December 31, 2014 and 2013 was equipment acquired under capital leases totaling $1,209 and $1,220, respectively, and related accumulated depreciation and amortization of $300 and $191, respectively. | |||||||||||
Depreciation and amortization expense, which includes depreciation and amortization for property and equipment under capital leases, is allocated as follows on the accompanying consolidated statements of operations: | |||||||||||
For the Years Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Network access | $ | 18,074 | $ | 12,651 | $ | 11,948 | |||||
Network operations | 5,662 | 4,091 | 2,844 | ||||||||
Development and technology | 3,381 | 1,992 | 1,049 | ||||||||
General and administrative | 329 | 206 | 117 | ||||||||
| | | | | | | | | | | |
Total depreciation and amortization of property and equipment | $ | 27,446 | $ | 18,940 | $ | 15,958 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
During the year ended December 31, 2014, the Company recognized $406 of impairment losses related to a change in the use of certain software developed for internal use that indicated that the carrying value of those assets will not be recoverable, and $494 of net impairment losses related to a venue termination agreement that resulted in the abandonment of our Wi-Fi network assets and the release of the corresponding capital lease obligations associated with those assets. The impairment charges for internal use software and abandoned Wi-Fi network assets are included within development and technology expenses and general and administrative expenses, respectively, in the accompanying consolidated statements of operations. | |||||||||||
Goodwill_and_intangible_assets
Goodwill and intangible assets | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Goodwill and intangible assets | |||||||||||||
Goodwill and intangible assets | 8. Goodwill and intangible assets | ||||||||||||
Goodwill | |||||||||||||
The following table sets forth the changes in our goodwill balance, for all periods presented: | |||||||||||||
Goodwill | |||||||||||||
Balance, December 31, 2012 | $ | 26,744 | |||||||||||
Acquisition of Endeka | 5,776 | ||||||||||||
Acquisition of AWG | 9,883 | ||||||||||||
| | | | | |||||||||
Balance, December 31, 2013 and December 31, 2014 | $ | 42,403 | |||||||||||
| | | | | |||||||||
| | | | | |||||||||
Intangible assets | |||||||||||||
The following table sets forth the changes in our intangible assets balance, for all periods presented: | |||||||||||||
Intangible | |||||||||||||
Assets | |||||||||||||
Balance, December 31, 2012 | $ | 10,594 | |||||||||||
Additions | 15,069 | ||||||||||||
Amortization expense | (2,250 | ) | |||||||||||
| | | | | |||||||||
Balance, December 31, 2013 | 23,413 | ||||||||||||
Amortization expense | (3,682 | ) | |||||||||||
Impairment loss | (55 | ) | |||||||||||
| | | | | |||||||||
Balance, December 31, 2014 | $ | 19,676 | |||||||||||
| | | | | |||||||||
| | | | | |||||||||
During 2014, we recorded impairment losses for certain patent applications that we abandoned. | |||||||||||||
Intangible assets at December 31, 2014 consist of the following: | |||||||||||||
Weighted | Historical | Accumulated | Net | ||||||||||
Average | Cost | Amortization | |||||||||||
Life | |||||||||||||
Venue contracts | 10 years | $ | 36,356 | $ | (21,582 | ) | $ | 14,774 | |||||
Non-compete agreements | 5 years | 3,840 | (1,067 | ) | 2,773 | ||||||||
Technology | 6 years | 2,300 | (863 | ) | 1,437 | ||||||||
Advertiser relationships | 5 years | 70 | (34 | ) | 36 | ||||||||
Patents, trademarks and other | 6 years | 1,353 | (697 | ) | 656 | ||||||||
| | | | | | | | | | | | | |
$ | 43,919 | $ | (24,243 | ) | $ | 19,676 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Intangible assets at December 31, 2013 consist of the following: | |||||||||||||
Weighted | Historical | Accumulated | Net | ||||||||||
Average | Cost | Amortization | |||||||||||
Life | |||||||||||||
Venue contracts | 10 years | $ | 36,356 | $ | (19,314 | ) | $ | 17,042 | |||||
Non-compete agreements | 5 years | 3,840 | (224 | ) | 3,616 | ||||||||
Technology | 6 years | 2,300 | (441 | ) | 1,859 | ||||||||
Advertiser relationships | 5 years | 70 | (20 | ) | 50 | ||||||||
Patents, trademarks and other | 6 years | 1,408 | (562 | ) | 846 | ||||||||
| | | | | | | | | | | | | |
$ | 43,974 | $ | (20,561 | ) | $ | 23,413 | |||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Amortization expense for fiscal years 2015 through 2019 and thereafter is as follows: | |||||||||||||
Year | Amortization | ||||||||||||
Expense | |||||||||||||
2015 | $ | 3,525 | |||||||||||
2016 | 3,451 | ||||||||||||
2017 | 3,218 | ||||||||||||
2018 | 2,370 | ||||||||||||
2019 | 1,625 | ||||||||||||
Thereafter | 5,487 | ||||||||||||
| | | | | |||||||||
$ | 19,676 | ||||||||||||
| | | | | |||||||||
| | | | | |||||||||
Fair_value_measurement
Fair value measurement | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair value measurement | ||||||||||||||
Fair value measurement | 9. Fair value measurement | |||||||||||||
The following table sets forth our financial assets that are measured at fair value on a recurring basis: | ||||||||||||||
At December 31, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 5,602 | $ | — | $ | — | $ | 5,602 | ||||||
Marketable securities | — | 1,614 | — | 1,614 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 5,602 | $ | 1,614 | $ | — | $ | 7,216 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 131 | $ | 131 | ||||||
| | | | | | | | | | | | | | |
Total liabilities | $ | — | $ | — | $ | 131 | $ | 131 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
At December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 23,683 | $ | — | $ | — | $ | 23,683 | ||||||
Marketable securities | — | 32,962 | — | 32,962 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 23,683 | $ | 32,962 | $ | — | $ | 56,645 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 1,942 | $ | 1,942 | ||||||
| | | | | | | | | | | | | | |
Total liabilities | $ | — | $ | — | $ | 1,942 | $ | 1,942 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Our marketable securities utilize Level 2 inputs and consist primarily of corporate securities which include commercial paper and corporate debt instruments including notes issued by foreign or domestic corporations which pay in U.S. dollars and carry a rating of A or better. We have evaluated the various types of securities in our investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Due to variations in trading volumes and the lack of quoted market prices in active markets, our fixed maturities are classified as Level 2 securities. The fair value of our fixed maturity marketable securities is derived through the use of a third party pricing source using recent reported trades for identical or similar securities, making adjustments through the reporting date based upon available market observable data. | ||||||||||||||
The Company used the income approach to value the contingent consideration as of December 31, 2014. The contingent consideration used a discounted cash flow method with probability weighted cash flows for Endeka. The following table presents a reconciliation of the beginning and ending amounts related to the fair value of contingent consideration categorized as Level 3: | ||||||||||||||
Beginning balance, January 1, 2013 | $ | — | ||||||||||||
Contingent consideration for acquisition of businesses | 2,309 | |||||||||||||
Change in fair value | (367 | ) | ||||||||||||
| | | | | ||||||||||
Balance, December 31, 2013 | $ | 1,942 | ||||||||||||
Payment of contingent consideration | (1,000 | ) | ||||||||||||
Change in fair value | (811 | ) | ||||||||||||
| | | | | ||||||||||
Balance, December 31, 2014 | $ | 131 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Stockholders_equity
Stockholders' equity | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Stockholders' equity | ||||||||
Stockholders' equity | 10. Stockholders' equity | |||||||
At December 31, 2014 and 2013, we are authorized to issue up to 100,000,000 shares of common stock. We are required to reserve and keep available out of our authorized but unissued shares of common stock such number of shares sufficient to effect the exercise of all outstanding common stock warrants, plus shares granted and available for grant under our Amended and Restated 2001 Stock Incentive Plan (the "2001 Plan") and 2011 Equity Incentive Plan (the "2011 Plan"). | ||||||||
The amount of such shares of common stock reserved for these purposes is as follows: | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Outstanding stock options under the 2001 Plan | 1,525 | 1,859 | ||||||
Outstanding stock options under the 2011 Plan | 2,816 | 3,096 | ||||||
Outstanding RSUs under the 2011 Plan | 1,385 | 753 | ||||||
Shares available for grant under the 2011 Plan | 4,492 | 3,259 | ||||||
| | | | | | | | |
Total | 10,218 | 8,967 | ||||||
| | | | | | | | |
| | | | | | | | |
Credit_Facility
Credit Facility | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Credit Facility | |||||
Line of Credit | 11. Credit Facility | ||||
On November 21, 2014, we entered into a Credit Agreement (the "Credit Agreement") and related agreements with Bank of America, N.A. acting as agent for lenders named therein, including Bank of America, N.A. and Silicon Valley Bank (the "Lenders"), for a secured credit facility in the form of a revolving line of credit in the initial amount of up to $46,500, with an option to increase the available amount to $86,500 upon the satisfaction of certain conditions (the "Revolving Line of Credit") and a term loan of $3,500 (the "Term Loan" and together with the Revolving Line of Credit, the "Credit Facility"). We may use borrowings under the Credit Facility for general working capital and corporate purposes. In general, amounts borrowed under the Credit Facility are secured by a lien against all of our assets, with certain exclusions. | |||||
As of December 31, 2014, no amounts were outstanding under the Revolving Line of Credit. Subsequent to December 31, 2014, we borrowed $5,000 under the Revolving Line of Credit. The Revolving Line of Credit requires quarterly payments of interest and matures on November 21, 2018, but may be prepaid in whole or part at any time. Amounts borrowed under the Revolving Line of Credit and Term Loan will bear, at the Company's election, a variable interest at LIBOR plus 2.5% - 3.5% or Lender's Prime Rate plus 1.5% - 2.5% per year and we will pay a fee of 0.375% - 0.5% per year on any unused portion of the Revolving Line of Credit. As of December 31, 2014, $3,500 was outstanding under the Tem Loan at a rate of 2.7%. The Term Loan requires quarterly payments of interest and principal, amortizing fully over the four-year-term such that it is repaid in full on the maturity date of November 21, 2018, but may be prepaid in whole or part at any time. Repayment of amounts borrowed under the Credit Facility may be accelerated in the event that we are in violation of the representations, warranties and covenants made in the Credit Agreement, including certain financial covenants set forth therein, and under other specified default events including, but not limited to, non-payment or inability to pay debt, breach of cross default provisions, insolvency provisions, and change of control. | |||||
Principal payments due under our Term Loan for fiscal years 2015 through 2018 is as follows: | |||||
Year | Principal | ||||
Payments | |||||
2015 | $ | 875 | |||
2016 | 875 | ||||
2017 | 875 | ||||
2018 | 875 | ||||
| | | | | |
$ | 3,500 | ||||
| | | | | |
| | | | | |
The Company is subject to customary covenants, including a minimum quarterly consolidated leverage ratio, a maximum quarterly consolidated fixed charge coverage ratio, and monthly liquidity minimums. The Company was in compliance with all such financial covenants as of December 31, 2014. The Company is also subject to certain non-financial covenants, and the Company was also in compliance with all such non-financial covenants as of December 31, 2014. | |||||
The Company incurred debt issuance costs of $711. Debt issuance costs are amortized on a straight-line basis over the four year term of the Credit Facility. Amortization expense related to debt issuance costs are included in interest and other (expense) income in the accompanying consolidated statements of operations for the year ended December 31, 2014. Amortization and interest expense recorded amounted to $34 for the year ended December 31, 2014. | |||||
Amortization expense for our debt issuance costs for fiscal years 2015 through 2018 is as follows: | |||||
Year | Amortization | ||||
Expense | |||||
2015 | $ | 178 | |||
2016 | 178 | ||||
2017 | 178 | ||||
2018 | 158 | ||||
| | | | | |
$ | 692 | ||||
| | | | | |
| | | | | |
Income_taxes
Income taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income taxes | |||||||||||
Income taxes | 12. Income taxes | ||||||||||
The income tax expense (benefit) by jurisdiction consists of the following for the years ended December 31: | |||||||||||
2014 | 2013 | 2012 | |||||||||
U.S. federal: | |||||||||||
Current | $ | 6 | $ | (402 | ) | $ | 1,651 | ||||
Deferred | 328 | 1,158 | 1,189 | ||||||||
| | | | | | | | | | | |
Total U.S. federal | $ | 334 | $ | 756 | $ | 2,840 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
U.S. state and local: | |||||||||||
Current | $ | 226 | $ | 248 | $ | 327 | |||||
Deferred | 140 | 457 | (202 | ) | |||||||
| | | | | | | | | | | |
Total U.S. state and local | $ | 366 | $ | 705 | $ | 125 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income taxes differ from the amounts computed by applying the U.S. federal income tax rate to pretax income before income taxes as a result of the following for the years ended December 31: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal statutory rate | 34 | % | 34 | % | 34 | % | |||||
State and local | 4.6 | (5.7 | ) | 1.1 | |||||||
Foreign rate differential | (0.7 | ) | (3.2 | ) | — | ||||||
Stock options | (0.5 | ) | (0.7 | ) | (2.6 | ) | |||||
Non-controlling interests | 1.9 | 15.2 | (2.2 | ) | |||||||
Valuation allowance | (45.1 | ) | (128.5 | ) | — | ||||||
Transaction costs | — | (6.7 | ) | — | |||||||
Purchase price adjustments | — | 6.6 | — | ||||||||
Revaluation of deferred tax assets | — | 2.8 | — | ||||||||
Uncertain tax positions | (0.1 | ) | (2.9 | ) | — | ||||||
Return to provision | 0.6 | 9.3 | (5.3 | ) | |||||||
Other | 1.4 | 1.1 | 2 | ||||||||
| | | | | | | | | | | |
Income taxes | (3.9 | )% | (78.7 | )% | 27 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
We have a foreign subsidiary in the United Kingdom, which has generated losses since inception resulting in a $1,360 deferred tax asset with a corresponding valuation allowance as of December 31, 2014. We also have a majority owned foreign subsidiary in Brazil, which has generated losses since inception resulting in a $292 deferred tax assets with a corresponding valuation allowance as of December 31, 2014. Foreign loss before income taxes was $1,251, $559, and $61 for 2014, 2013, and 2012, respectively. | |||||||||||
Deferred income tax reflects the tax effects of temporary differences that gave rise to significant portions of our deferred tax assets and liabilities and consisted of the following for the years ended December 31, 2014 and December 31, 2013, respectively: | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 10,115 | $ | 3,508 | |||||||
Outside basis differences for U.S. partnerships | 3,710 | 2,842 | |||||||||
Stock options | 3,348 | 3,018 | |||||||||
Deferred revenue | 648 | 516 | |||||||||
Deferred compensation | 144 | 355 | |||||||||
State taxes | 45 | 34 | |||||||||
Other | 1,341 | 404 | |||||||||
Valuation allowance | (12,470 | ) | (4,101 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 6,881 | 6,576 | |||||||||
Deferred tax liabilities: | |||||||||||
Intangible assets | (6,855 | ) | (6,737 | ) | |||||||
Property and equipment | (2,671 | ) | (2,016 | ) | |||||||
| | | | | | | | ||||
Net deferred tax liabilities | (9,526 | ) | (8,753 | ) | |||||||
| | | | | | | | ||||
Net deferred taxes | $ | (2,645 | ) | $ | (2,177 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2014 and 2013, we had federal net operating loss carryforwards of approximately $35,555 and $20,389, respectively, state net operating loss carryforwards of approximately $55,457 and $37,153, respectively, and foreign net operating loss carryforwards of $7,661 and $3,425, respectively. The federal net operating loss carryforwards will begin to expire in 2025, and our foreign net operating loss carryforwards have an indefinite life. Our state net operating loss carryforwards are principally related to California net operating losses and will begin to expire in 2015. Our ability to utilize certain of our net operating loss carryforwards may be limited in the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future. | |||||||||||
The following table sets forth the changes in the valuation allowance, for all periods presented: | |||||||||||
Valuation | |||||||||||
Allowance | |||||||||||
Balance, December 31, 2011 | $ | 1,822 | |||||||||
Additions charged to operations | 51 | ||||||||||
Decrease credited to operations | (204 | ) | |||||||||
| | | | | |||||||
Balance, December 31, 2012 | 1,669 | ||||||||||
Additions charged to operations | 2,432 | ||||||||||
Decrease credited to operations | — | ||||||||||
| | | | | |||||||
Balance, December 31, 2013 | 4,101 | ||||||||||
Additions charged to operations | 8,369 | ||||||||||
Decrease credited to operations | — | ||||||||||
| | | | | |||||||
Balance, December 31, 2014 | $ | 12,470 | |||||||||
| | | | | |||||||
| | | | | |||||||
During the year ended December 31, 2013, we recorded a $2,432 increase in our valuation allowance on our federal deferred tax assets, primarily due to changes in our expectations regarding our ability to realize these deferred tax assets. This resulted from a determination that it was more likely than not that certain federal net deferred tax assets would not be realized. We won some significant new contracts for the build out of broadband and IPTV networks for troops stationed on U.S. military bases that require us to make investments and incur losses in advance of experiencing any direct benefit from them including generation of revenues. | |||||||||||
In reaching the determination of the valuation allowance, we have evaluated all significant available positive and negative evidence including, but not limited to, our three year cumulative results, trends in our business, expected future results and the character, amount and expiration periods of our net deferred tax assets. The underlying assumptions we used in forecasting future income required significant judgment and took into account our recent performance. | |||||||||||
During 2013 and 2012, we realized excess windfall tax benefits of approximately $55 and $2,190, respectively, from stock option exercises. These benefits decreased income taxes payable and were recorded as an increase to additional paid-in capital in the accompanying consolidated balance sheets. In accordance with the reporting requirements under ASC 718, we did not include excess windfall tax benefits resulting from stock option exercises as components of our gross deferred tax assets and corresponding valuation allowance disclosures, as tax attributes related to those windfall tax benefits should not be recognized until they result in a reduction of taxes payable. The tax effected amount of gross unrealized net operating loss carryforwards excluded under ASC 718 was approximately $6,284 at December 31, 2014. When realized, those excess windfall tax benefits are credited to additional paid-in capital. | |||||||||||
We recognized interest and penalties related to income tax matters in income taxes which were not material during the years ended December 31, 2014, 2013, and 2012. | |||||||||||
We identify, evaluate and measure all uncertain tax positions taken or to be taken on tax returns and record liabilities for the amount of these positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities. Although we believe that our estimates and judgments were reasonable, actual results may differ from these estimates. Some or all of these judgments are subject to review by the taxing authorities. As of December 31, 2014 and 2013, we had $459 and $445 in uncertain tax positions, respectively, $106 of which is a reduction to deferred tax assets, which is presented net of uncertain tax positions, in the accompanying consolidated balance sheets. We accrue interest and penalties related to unrecognized tax benefits as a component of income taxes. As of December 31, 2014 and 2013, we have accrued $67 and $53 for related interest, net of federal income tax benefits, and penalties recorded in income tax expense on our consolidated statements of operations, respectively. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate at December 31, 2014 was $286. | |||||||||||
A reconciliation of our unrecognized tax benefits, excluding interest and penalties, is as follows: | |||||||||||
Uncertain | |||||||||||
Tax | |||||||||||
Positions | |||||||||||
Balance, December 31, 2012 | $ | 392 | |||||||||
Additions for current period tax positions | — | ||||||||||
| | | | | |||||||
Balance, December 31, 2013 and December 31, 2014 | $ | 392 | |||||||||
| | | | | |||||||
| | | | | |||||||
Our annual income taxes and the determination of the resulting deferred tax assets and liabilities involve a significant amount of judgment. Our judgments, assumptions and estimates relative to current income taxes take into account current tax laws, their interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. We operate within federal, state and international taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues which may require an extended period of time to resolve. We are subject to taxation in the United States and in various states. Our tax years 2012 and forward are subject to examination by the IRS and our tax years 2010 and forward are subject to examination by material state jurisdictions. However, due to prior year loss carryovers, the IRS and state tax authorities may examine any tax years for which the carryovers are used to offset future taxable income. | |||||||||||
Commitments_and_contingencies
Commitments and contingencies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and contingencies | ||||||||
Commitments and contingencies | 13. Commitments and contingencies | |||||||
Capital and operating leases | ||||||||
We lease space in managed and operated locations, primarily airports, under exclusive long-term, non-cancellable contracts to provide Wi-Fi connectivity and cellular phone access to our DAS network. Minimum rent expense is recorded on a straight-line basis over the term of the lease. Rent expense related to our leases for the years ended December 31, 2014, 2013 and 2012 was $29,434, $20,234 and $16,760, respectively. | ||||||||
We lease equipment, primarily data communication equipment and database software under non-cancellable capital leases that will expire over the next four years. The leases are collateralized by the equipment under the lease. Interest expense associated with the capital leases for the years ended December 31, 2014, 2013 and 2012 was $33, $15 and $11, respectively. We also lease office space under non-cancellable operating leases. Rent expense for our leases of office facilities for the years ended December 31, 2014, 2013 and 2012 was $1,621, $1,227 and $1,209, respectively. Included in rent expense for the years ended December 31, 2014, 2013 and 2012 was sublease income of $27, $54 and $52, respectively. | ||||||||
Future minimum lease obligations under non-cancellable operating and capital leases at December 31, 2014 are as follows: | ||||||||
Years ended December 31, | Capital | Operating | ||||||
Leases | Leases and | |||||||
Airport | ||||||||
Guarantees | ||||||||
2015 | $ | 331 | $ | 10,038 | ||||
2016 | 259 | 9,842 | ||||||
2017 | 132 | 9,852 | ||||||
2018 | 26 | 8,821 | ||||||
2019 | — | 6,035 | ||||||
Thereafter | — | 33,312 | ||||||
| | | | | | | | |
Minimum lease payments | 748 | $ | 77,900 | |||||
| | | | | | | | |
| | | | | | | | |
Less: Amounts representing interest ranging from 3.1% to 11.1% | (58 | ) | ||||||
| | | | | | | | |
Minimum lease payments | $ | 690 | ||||||
| | | | | | | | |
| | | | | | | | |
Current portion | $ | 309 | ||||||
| | | | | | | | |
| | | | | | | | |
Non-current portion | $ | 381 | ||||||
| | | | | | | | |
| | | | | | | | |
Letters of credit | ||||||||
We have entered into Letter of Credit Authorization agreements (collectively, "Letters of Credit"), which are issued under our Credit Agreement. The Letters of Credit are irrevocable and serve as performance guarantees that will allow our customers to draw upon the available funds if we are in default. As of December 31, 2014, we have Letters of Credit totaling $3,315 that are scheduled to expire over the next eleven-month period. There have been no drafts drawn under these Letters of Credit as of December 31, 2014. Subsequent to December 31, 2014, the Company established additional Letters of Credit totaling $600. | ||||||||
Legal proceedings | ||||||||
From time to time, we may be subject to claims, suits, investigations and proceedings arising out of the normal course of business. We are not currently a party to any litigation that we believe could have a material adverse effect on our business, financial position, results of operations or cash flows. Legal costs are expensed as incurred. | ||||||||
Indemnification | ||||||||
Indemnification provisions in our third-party service provider agreements provide that we will indemnify, hold harmless, and reimburse the indemnified parties on a case-by-case basis for losses suffered or incurred by the indemnified parties in connection with any claim by any third party as a result of our website, advertising, marketing, payment processing, collection or customer service activities. The maximum potential amount of future payments we could be required to make under these indemnification provisions is undeterminable. We have never paid a claim, nor have we been sued in connection with these indemnification provisions. At December 31, 2014 and 2013, we have not accrued a liability for these guarantees, because the likelihood of incurring a payment obligation in connection with these guarantees is not probable. | ||||||||
Employment contracts | ||||||||
We have entered into employment contracts with six of our officers. These contracts generally provide for severance benefits, including salary continuation, if employment is terminated by us for substantial cause or by the officer for convenience. In addition, in order to assure that they would continue to provide independent leadership consistent with our best interests in the event of an actual or threatened change in control, the contract also generally provides for certain protections in the event of such a change in control. These protections include the payment of certain severance benefits, including salary continuation, upon the termination of employment following a change in control. | ||||||||
Other matters | ||||||||
We have received a claim from one of our venue partners with respect to contractual terms on our revenue share payments. We consider this claim to be without merit and plan to defend against such claim; however, we believe it is reasonably possible a loss ranging from $0 to $3,000 has been incurred. We are not currently a party to any other claims that we believe could have a material adverse effect on our business, financial position, results of operations or cash flows. | ||||||||
Stock_repurchases
Stock repurchases | 12 Months Ended |
Dec. 31, 2014 | |
Stock repurchases | |
Stock repurchases | 14. Stock repurchases |
On April 1, 2013, the Company approved a stock repurchase program to repurchase up to $10,000 of the Company's common stock in the open market, exclusive of any commissions, markups or expenses. The stock repurchased will be retired and will resume the status of authorized but unissued shares of common stock. The Company did not repurchase any of our common stock during the year ended December 31, 2014. During the year ended December 31, 2013, we repurchased and retired approximately 722,000 shares under this program for approximately $4,820, excluding commissions paid, at an average price per share of $6.68. As of December 31, 2014, the remaining approved amount for repurchases was approximately $5,180. | |
Stock_incentive_plans
Stock incentive plans | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock incentive plans | ||||||||||||||
Stock incentive plans | 15. Stock incentive plans | |||||||||||||
In March 2011, our board of directors approved the 2011 Plan. The 2011 Plan provides for the grant of incentive and nonstatutory stock options, stock appreciation rights, restricted shares of our common stock, stock units, and performance cash awards. As of January 1st of each year, the number of shares of common stock reserved for issuance under the 2011 Plan shall automatically be increased by a number equal to the lesser of (a) 4.5% of the total number of shares of common stock then outstanding, (b) 3,000,000 shares of common stock or (c) as determined by our board of directors. As of December 31, 2014, 8,693,162 shares of common stock are reserved for issuance. As of December 31, 2014, options to purchase 5,229,486 shares of common stock and 2,449,716 RSUs have been granted under the 2011 Plan. | ||||||||||||||
No further awards will be made under our 2001 Plan and it will be terminated. Options outstanding under the 2001 Plan will continue to be governed by their existing terms. As of December 31, 2014, options to purchase 1,525,335 shares of common stock were outstanding under the 2001 Plan. | ||||||||||||||
The following table summarizes our stock-based compensation expense included in the consolidated statements of operations for 2014, 2013 and 2012: | ||||||||||||||
Years ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Network operations | $ | 1,356 | $ | 888 | $ | 352 | ||||||||
Development and technology | 600 | 380 | 352 | |||||||||||
Selling and marketing | 2,017 | 1,045 | 571 | |||||||||||
General and administrative | 3,191 | 2,193 | 1,460 | |||||||||||
| | | | | | | | | | | ||||
Total stock-based compensation expense | $ | 7,164 | $ | 4,506 | $ | 2,735 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
We capitalized $398 of stock-based compensation expense for the year ended December 31, 2014. | ||||||||||||||
Stock option awards | ||||||||||||||
We grant stock option awards to both employees and non-employee directors. The grant date for these awards is the same as the measurement date. The stock option awards generally vest over a four year service period with 25% vesting when the individual completes 12 months of continuous service and the remaining 75% vesting monthly thereafter. These awards are valued as of the measurement date and the stock-based compensation expense, net of estimated and actual forfeitures, is recognized on a straight-line basis over the requisite service period. A summary of the activity for stock option awards for 2014, 2013 and 2012 is presented below: | ||||||||||||||
Number | Weighted | Weighted- | Aggregate | |||||||||||
of | Average | Average | Intrinsic | |||||||||||
Options | Exercise | Remaining | Value | |||||||||||
(000's) | Price | Contract | ||||||||||||
Life | ||||||||||||||
(years) | ||||||||||||||
Outstanding at December 31, 2011 | 6,601 | $ | 5.5 | 7 | $ | 30,996 | ||||||||
Granted | 1,391 | $ | 8.29 | |||||||||||
Exercised | (1,899 | ) | $ | 1.36 | ||||||||||
Canceled/forfeited | (1,048 | ) | $ | 11.85 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | 5,045 | $ | 6.5 | 6.4 | $ | 14,742 | ||||||||
Granted | 1,351 | $ | 6.73 | |||||||||||
Exercised | (461 | ) | $ | 1.33 | ||||||||||
Canceled/forfeited | (980 | ) | $ | 10.2 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | 4,955 | $ | 6.31 | 6.6 | $ | 9,535 | ||||||||
Granted | 203 | $ | 5.99 | |||||||||||
Exercised | (458 | ) | $ | 2.53 | ||||||||||
Canceled/forfeited | (359 | ) | $ | 7.53 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 4,341 | $ | 6.6 | 5.8 | $ | 11,017 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Vested, exercisable and expected to vest at December 31, 2014 | 4,267 | $ | 6.58 | 5.7 | $ | 10,946 | ||||||||
Exercisable at December 31, 2014 | 3,053 | $ | 5.83 | 4.9 | $ | 10,014 | ||||||||
The aggregate intrinsic value in the table above represents the difference between the estimated fair value of our common stock at December 31, 2014 and the option exercise price, multiplied by the number of in-the-money options at December 31, 2014. The intrinsic value changes are based on the estimated fair value of our common stock. | ||||||||||||||
Stock options to purchase approximately 458,000, 461,000 and 1,899,000 shares of our common stock were exercised during the years ended December 31, 2014, 2013 and 2012 for cash proceeds of $1,158, $614 and $2,573, respectively. The total intrinsic value of stock options exercised for the years ended December 31, 2014, 2013 and 2012 was $2,027, $2,662 and $14,901, respectively. We realized $55 and $2,190 of tax benefits for the deductions from stock option exercises during 2013 and 2012, respectively. | ||||||||||||||
The weighted average grant date fair value of options granted for the years ended December 31, 2014, 2013 and 2012 was $2.92, $3.03 and $3.59, respectively. | ||||||||||||||
At December 31, 2014, the total remaining stock-based compensation expense for unvested stock option awards is $4,479, which is expected to be recognized over a weighted average period of 2.11 years. | ||||||||||||||
Restricted stock unit awards | ||||||||||||||
We grant time-based restricted stock units ("RSU") to executive and non-executive personnel and non-employee directors. The time-based RSUs granted to executive and non-executive personnel generally vest over a two to three year period subject to continuous service on each vesting date. The time-based RSUs for our non-employee directors generally vest over a one year period for existing members and 25% per year over a four-year period for new members subject to continuous service on each vesting date. | ||||||||||||||
During the year ended December 31, 2014, we granted performance-based RSUs to executive personnel. These awards vest subject to certain performance objectives based on the Company's annual revenue growth achieved during the specified performance period and certain long-term service conditions. The maximum number of RSUs that may vest is determined based on actual Company achievement with one-third of the performance-based RSUs vesting when the individual completes 12 months of continuous service and the balance vesting over a series of eight successive equal quarterly installments thereafter subject to continuous service on each vesting date. We recognize stock-based compensation expense for performance-based RSUs when we believe that it is probable that the performance objectives will be met. As of December 31, 2014, the performance condition for these performance-based RSUs has been met. | ||||||||||||||
A summary of the RSU activity in 2014 is as follows: | ||||||||||||||
Number | Weighted | |||||||||||||
of | Average | |||||||||||||
Shares | Grant Date | |||||||||||||
(000's) | Fair Value | |||||||||||||
Nonvested at December 31, 2012 | — | $ | — | |||||||||||
Granted | 799 | $ | 6.21 | |||||||||||
Vested | (6 | ) | $ | 6.39 | ||||||||||
Canceled/forfeited | (40 | ) | $ | 6.05 | ||||||||||
| | | | | | | | |||||||
Nonvested at December 31, 2013 | 753 | $ | 6.22 | |||||||||||
Granted | 1,650 | $ | 6.02 | |||||||||||
Vested | (868 | ) | $ | 6.09 | ||||||||||
Canceled/forfeited | (150 | ) | $ | 6.02 | ||||||||||
| | | | | | | | |||||||
Nonvested at December 31, 2014 | 1,385 | $ | 6.09 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
During the year ended December 31, 2014, 868,211 shares of time-based RSUs vested. The Company issued 581,866 shares and the remaining shares were withheld to pay minimum statutory federal, state, and local employment payroll taxes on those vested awards. | ||||||||||||||
At December 31, 2014, the total remaining stock-based compensation expense for unvested RSU awards is $6,901, which is expected to be recognized over a weighted average period of 2.1 years. | ||||||||||||||
Employee_benefit_plan
Employee benefit plan | 12 Months Ended |
Dec. 31, 2014 | |
Employee benefit plan | |
Employee benefit plan | 16. Employee benefit plan |
We have a defined contribution savings plan in accordance with Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet the IRS requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the board of directors. Employer contributions of $393, $330 and $347 were made to the plan by us in 2014, 2013 and 2012, respectively. | |
Net_loss_income_per_share_attr
Net (loss) income per share attributable to common stockholders | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Net (loss) income per share attributable to common stockholders | |||||||||||
Net (loss) income per share attributable to common stockholders | 17. Net (loss) income per share attributable to common stockholders | ||||||||||
The following table sets forth the computation of basic and diluted net (loss) income per share attributable to common stockholders: | |||||||||||
Years ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(in thousands) | |||||||||||
Numerator: | |||||||||||
Net (loss) income attributable to common stockholders, basic and diluted | $ | (19,521 | ) | $ | (3,968 | ) | $ | 7,295 | |||
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average common stock, basic | 35,753 | 35,578 | 34,774 | ||||||||
Effect of dilutive stock options | — | — | 2,543 | ||||||||
| | | | | | | | | | | |
Weighted average common stock, diluted | 35,753 | 35,578 | 37,317 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Net (loss) income per share attributable to common stockholders: | |||||||||||
Basic | $ | (0.55 | ) | $ | (0.11 | ) | $ | 0.21 | |||
Diluted | $ | (0.55 | ) | $ | (0.11 | ) | $ | 0.2 | |||
For the years ended December 31, 2014 and 2013, we excluded all stock options and RSUs from the computation of diluted net loss per share due to the net loss for the period. For the year ended December 31, 2012, we excluded approximately 2,518,000 stock options in the computation of diluted net income per share as the inclusion would have been anti-dilutive. | |||||||||||
Quarterly_financial_data_unaud
Quarterly financial data (unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly financial data (unaudited) | ||||||||||||||
Quarterly financial data (unaudited) | 18. Quarterly financial data (unaudited) | |||||||||||||
Summarized unaudited quarterly financial data are as follows: | ||||||||||||||
2014 | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Revenue | $ | 26,452 | $ | 28,396 | $ | 30,822 | $ | 33,627 | ||||||
Loss from operations | $ | (5,173 | ) | $ | (3,352 | ) | $ | (3,487 | ) | $ | (6,014 | ) | ||
Net loss attributable to common stockholders | $ | (5,448 | ) | $ | (3,734 | ) | $ | (3,815 | ) | $ | (6,524 | ) | ||
Basic loss per share | $ | (0.15 | ) | $ | (0.10 | ) | $ | (0.11 | ) | $ | (0.18 | ) | ||
Diluted loss per share | $ | (0.15 | ) | $ | (0.10 | ) | $ | (0.11 | ) | $ | (0.18 | ) | ||
2013 | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Revenue | $ | 23,134 | $ | 26,239 | $ | 28,607 | $ | 28,766 | ||||||
(Loss) income from operations | $ | (1,502 | ) | $ | (424 | ) | $ | 784 | $ | (752 | ) | |||
Net (loss) income attributable to common stockholders | $ | (1,121 | ) | $ | (399 | ) | $ | 354 | $ | (2,802 | ) | |||
Basic (loss) earnings per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.08 | ) | |||
Diluted (loss) earnings per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.08 | ) | |||
Earnings (loss) per share are computed separately for each quarter and the full year using the respective weighted average shares. Therefore, the sum of the quarterly (loss) earnings per share amounts may not equal the annual amounts reported. | ||||||||||||||
Subsequent_events
Subsequent events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent events | |
Subsequent events | 19. Subsequent events |
In March 2015, we granted 1,264,608 RSUs to executive and non- executive personnel. | |
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 | ||||||||||
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). | |||||||||||
The accompanying consolidated financial statements include our accounts and the accounts of our majority owned subsidiaries. We consolidate our 70% ownership of Concourse Communications Detroit, LLC, our 70% ownership of Chicago Concourse Development Group, LLC and our 75% ownership of Boingo Holding Participacoes Ltda. in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation. Other parties' interests in consolidated entities are reported as non-controlling interests. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
During the year ended December 31, 2013, the Company recorded certain out-of-period adjustments that decreased net loss attributable to common stockholders by $217. The impact of these out-of-period adjustments is not considered material, individually and in the aggregate, to any of the current or prior annual periods. | |||||||||||
Use of estimates | Use of estimates | ||||||||||
The preparation of accompanying consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the accompanying consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to significant judgment and the use of estimates include the allowance for doubtful accounts, recoverability of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, uncertain tax positions, useful lives associated with property and equipment, valuation and useful lives of intangible assets, valuation of contingent consideration, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, we evaluate our estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. | |||||||||||
Concentrations of credit risk | Concentrations of credit risk | ||||||||||
Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable securities and accounts receivable. We maintain our cash and cash equivalents, restricted cash and marketable securities with institutions with high credit ratings. We extend credit based upon the evaluation of the customer's financial condition and generally collateral is not required. We maintain an allowance for doubtful accounts based upon expected collectability of accounts receivable. We primarily estimate our allowance for doubtful accounts based on a specific review of significant outstanding accounts receivable. For the year ended December 31, 2014, one group of affiliated entities accounted for 15% of total revenue. For the year ended December 31, 2013, two groups of affiliated entities each accounted for 14% of total revenue. For the year ended December 31, 2012, those same two groups of affiliated entities accounted for 17% and 15% of total revenue, respectively. At December 31, 2014, two groups of affiliated entities accounted for 30% and 17% of the total accounts receivable, respectively. At December 31, 2013, one group of affiliated entities accounted for 12% of the total accounts receivable. | |||||||||||
Cash and cash equivalents | Cash and cash equivalents | ||||||||||
Cash and cash equivalents include highly liquid investments that are readily convertible into known amounts of cash with original maturities of three months or less when acquired. At December 31, 2014 and 2013, cash equivalents consisted of money market funds. | |||||||||||
Marketable securities | Marketable securities | ||||||||||
Our marketable securities consist of available-for-sale securities with original maturities exceeding three months. In accordance with FASB ASC 320, Investments—Debt and Equity Securities, we have classified securities, which have readily determinable fair values and are highly liquid, as short-term because such securities are expected to be realized within a one- year period. At December 31, 2014 and 2013, we had $1,614 and $32,962, respectively, in marketable securities. | |||||||||||
Marketable securities are reported at fair value with the related unrealized gains and losses reported as other comprehensive income (loss) until realized or until a determination is made that an other-than-temporary decline in market value has occurred. No significant unrealized gains and losses have been reported during the years presented. Factors considered by us in assessing whether an other-than-temporary impairment has occurred include the nature of the investment, whether the decline in fair value is attributable to specific adverse conditions affecting the investment, the financial condition of the investee, the severity and the duration of the impairment and whether we have the ability to hold the investment to maturity. When it is determined that an other-than-temporary impairment has occurred, the investment is written down to its market value at the end of the period in which it is determined that an other-than-temporary decline has occurred. The cost of marketable securities sold is based upon the specific identification method. Any realized gains or losses on the sale of investments are reflected as a component of interest and other (expense) income, net. | |||||||||||
For the years ended December 31, 2014, 2013 and 2012, we had no significant realized or unrealized gains or losses from investments in marketable securities classified as available-for-sale. As of December 31, 2014 and 2013, we had no unrealized gains or losses in accumulated other comprehensive income (loss). | |||||||||||
Restricted cash | Restricted cash | ||||||||||
Restricted cash consists of letters of credit with our landlords, municipalities or venues for which we have operating agreements. Letters of credit are supported by cash deposits made by us and invested into bank certificates of deposit. At December 31, 2014, we had no restricted cash. At December 31, 2013, we had $545 classified as short-term restricted cash and no long-term restricted cash. | |||||||||||
Fair value of financial instruments | Fair value of financial instruments | ||||||||||
Fair value is defined as the price that would be received from selling an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact, and we consider assumptions that market participants would use when pricing the asset or liability. | |||||||||||
The accounting guidance for fair value measurement also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: | |||||||||||
• | Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||||
• | Level 2—Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly. | ||||||||||
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||
The carrying amount reflected in the accompanying consolidated balance sheets for cash and cash equivalents, restricted cash, marketable securities, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other liabilities approximates fair value due to the short-term nature of these financial instruments. | |||||||||||
As of December 31, 2014, the carrying amount reflected in the accompanying consolidated balance sheets for the current portion of long-term debt and long-term debt approximates fair value based on the variable nature of the interest rates and the proximity to the issuance date. | |||||||||||
Business combinations | Business combinations | ||||||||||
The results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. | |||||||||||
The Company performs valuations of assets acquired and liabilities assumed from a business acquisition and will allocate the purchase price to its respective net tangible and intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, royalty rates and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with fair values of assets and liabilities assumed in a business combination. | |||||||||||
Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expenses in the consolidated statements of operations. There were no transaction costs for the year ended December 31, 2014. Transaction costs were $354 and $50 for the years ended December 31, 2013 and 2012, respectively. | |||||||||||
Property and equipment | Property and equipment | ||||||||||
Property and equipment are generally stated at historical cost, less accumulated depreciation and amortization. The Company's cost basis includes property and equipment acquired in business combinations that were initially recorded at fair value as of the date of acquisition. Maintenance and repairs are charged to expense as incurred and the cost of additions and betterments that increase the useful lives of the assets are capitalized. Depreciation and amortization is computed over the estimated useful lives of the related asset type using the straight-line method. | |||||||||||
The estimated useful lives for property and equipment are as follows: | |||||||||||
Computer equipment | 2 to 5 years | ||||||||||
Software | 2 to 5 years | ||||||||||
Office equipment | 3 to 5 years | ||||||||||
Leasehold improvements | The shorter of the estimated useful life or the remaining term of the agreements, generally ranging from 2 to 15 years | ||||||||||
Leasehold improvements are principally comprised of network equipment located at various managed and operated locations, primarily airports, under exclusive, long-term, non-cancelable contracts to provide wireless communication network access. | |||||||||||
Equipment and software under capital lease | Equipment and software under capital lease | ||||||||||
We lease certain data communications equipment, other equipment and software under capital lease agreements. The assets and liabilities under capital lease are recorded at the lesser of the present value of aggregate future minimum lease payments, including estimated bargain purchase options, or the fair value of the asset under lease. Assets under capital lease are depreciated using the straight-line method over the shorter of the estimated useful lives of the assets or the term of the lease agreements. | |||||||||||
Software development costs | Software development costs | ||||||||||
We capitalize costs associated with software developed or obtained for internal use when the preliminary project stage is completed and it is determined that the software will provide significantly enhanced capabilities and modifications. These capitalized costs are included in property and equipment and include external direct cost of services procured in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with, and who devote time to internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended use. Once the software is ready for its intended use, the costs are amortized over the useful life of the software. Post-configuration training and maintenance costs are expensed as incurred. | |||||||||||
Long-lived assets | Long-lived assets | ||||||||||
Intangible assets consist of acquired venue contracts, technology, advertiser relationships, non-compete agreements and patents and trademarks. We record intangible assets at fair value as of the date of acquisition and amortize these finite-lived assets over the shorter of the contractual life or the estimated useful life on a straight-line basis. We estimate the useful lives of acquired intangible assets based on factors that include the planned use of each acquired intangible asset, the expected pattern of future cash flows to be derived from each acquired intangible asset and contractual periods specified in the related agreements. As such, we account for each of the venue contracts individually. We include amortization of acquired intangibles in amortization of intangible assets in the accompanying consolidated statements of operations. | |||||||||||
We perform an impairment review of long-lived assets held and used whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include, but are not limited to: significant under-performance relative to projected future operating results, significant changes in the manner of our use of the acquired assets or our overall business and product strategies and significant industry or economic trends. When we determine that the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of these indicators, we determine the recoverability by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate or other indices of fair value. We would then recognize an impairment charge equal to the amount by which the carrying amount exceeds the fair market value of the asset. | |||||||||||
Goodwill | Goodwill | ||||||||||
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in connection with the acquisition of Concourse Communication Group, LLC in June 2006, Cloud 9 Wireless, Inc. in August 2012, Endeka Group, Inc. in February 2013, and Electronic Media Systems, Inc. and Advanced Wireless Group, LLC in October 2013. | |||||||||||
We test goodwill for impairment in accordance with guidance provided by FASB ASC 350, Intangibles—Goodwill and Other ("ASC 350"). Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. We perform our impairment test annually as of December 31st. | |||||||||||
Entities have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in FASB ASC 350. If, after assessing qualitative factors, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If deemed necessary, a two-step test is used to identify the potential impairment and to measure the amount of goodwill impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, there is an indication that goodwill may be impaired and the amount of the loss, if any, is measured by performing step two. Under step two, the impairment loss, if any, is measured by comparing the implied fair value of the reporting unit goodwill with the carrying amount of goodwill. | |||||||||||
Currently, we have one reporting unit, one operating segment and one reportable segment. At December 31, 2014 and 2013, all of the goodwill was attributed to our reporting unit. We tested our goodwill for impairment using a market based approach and no impairment was identified as the fair value of our reporting unit was substantially in excess of its carrying amount. To date, we have not recorded any goodwill impairment charges. | |||||||||||
Revenue recognition | Revenue recognition | ||||||||||
We generate revenue from several sources including: (i) retail and military customers under subscription plans for month-to-month network access that automatically renew, and retail and military single-use access from sales of hourly, daily or other single-use access plans, (ii) DAS customers that are telecom operators under long-term contracts for access to our DAS at our managed and operated locations, (iii) arrangements with wholesale Wi-Fi customers that provide software licensing, network access, and/or professional services fees, and (iv) display advertisements and sponsorships on our walled garden sign-in pages. Software licensed by our wholesale platform services customers can only be used during the term of the service arrangements and has no utility to them upon termination of the service arrangement. | |||||||||||
We recognize revenue when an arrangement exists, services have been rendered, fees are fixed or determinable, no significant obligations remain related to the earned fees and collection of the related receivable is reasonably assured. | |||||||||||
Subscription fees from retail and military customers are paid monthly in advance and revenue is deferred for the portions of monthly recurring subscription fees collected in advance. We provide refunds for our retail and military services on a case-by-case basis. These amounts are not significant and are recorded as contra-revenue in the period the refunds are made. Subscription fee revenue is recognized ratably over the subscription period. Revenue generated from retail and military single-use access is recognized when access is provided. | |||||||||||
Revenue generated from access to our DAS networks consists of build-out fees and recurring access fees under certain long-term contracts with telecom operators. Build-out fees paid upfront are generally deferred and recognized ratably over the term of the estimated customer relationship period, once the build-out is complete. Periodically, we install and sell Wi-Fi and DAS networks to customers where we do not have service contracts or remaining obligations beyond the installation of those networks and we recognize build-out fees for such projects as revenue when the installation work is completed and the network has been accepted by the customer. Minimum monthly access fees for usage of the DAS networks are non-cancellable and generally escalate on an annual basis. These minimum monthly access fees are recognized ratably over the term of the telecom operator agreement. The initial term of our contracts with telecom operators generally range from five to ten years and the agreements generally contain renewal clauses. Revenue from DAS network access fees in excess of the monthly minimums is recognized when earned. | |||||||||||
Services provided to wholesale Wi-Fi partners generally contain several elements including: (i) a term license to use our software to access our Wi-Fi network, (ii) access fees for Wi-Fi network usage, and/or (iii) professional services for software integration and customization and to maintain the Wi-Fi service. The term license, monthly minimum network access fees and professional services are billed on a monthly basis based upon predetermined fixed rates. Once the term license for integration and customization are delivered, the fees from the arrangement are recognized ratably over the remaining term of the service arrangement. The initial term of the license agreements is generally between one to five years and the agreements generally contain renewal clauses. Revenue for Wi-Fi network access fees in excess of the monthly minimum amounts is recognized when earned. All elements within existing service arrangements are generally delivered and earned concurrently throughout the term of the respective service arrangement. | |||||||||||
In instances where the minimum monthly Wi-Fi and DAS network access fees escalate over the term of the wholesale service arrangement, an unbilled receivable is recognized when performance is within our control and when we have reasonable assurance that the unbilled receivable balance will be collected. | |||||||||||
We adopted the provisions of Accounting Standards Update ("ASU") 2009- 13, Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements ("ASU 2009-13"), on a prospective basis on January 1, 2011. For multiple-deliverable arrangements entered into prior to January 1, 2011 that are accounted for under ASC 605-25, Revenue Recognition—Multiple-Deliverable Revenue Arrangements, we defer recognition of revenue for the full arrangement and recognize all revenue ratably over the wholesale service period for Wi-Fi platform service arrangements and the term of the estimated customer relationship period for DAS arrangements, as we do not have evidence of fair value for the undelivered elements in the arrangement. For multiple-deliverable arrangements entered into or materially modified after January 1, 2011 that are accounted for under ASC 605-25, we evaluate whether or not separate units of accounting exist and then allocate the arrangement consideration to all units of accounting based on the relative selling price method using estimated selling prices if vendor specific objective evidence and third party evidence is not available. We recognize the revenue associated with the separate units of accounting upon completion of such services or ratably over the wholesale service period for Wi-Fi platform service arrangements and the term of the estimated customer relationship period for DAS arrangements. | |||||||||||
Advertising revenue is generated from advertisements on our managed and operated or partner networks. In determining whether an arrangement exists, we ensure that a binding arrangement is in place, such as a standard insertion order or a fully executed customer-specific agreement. Obligations pursuant to our advertising revenue arrangements typically include a minimum number of units or the satisfaction of certain performance criteria. Advertising and other revenue is recognized when the services are performed. | |||||||||||
Foreign Currency Translation | Foreign currency translation | ||||||||||
Our Brazilian subsidiary uses the Brazilian Real as its functional currency. Assets and liabilities of our Brazilian subsidiary are translated to U.S. dollars at period-end rates of exchange, and revenues and expenses are translated at average exchange rates prevailing for each month. The resulting translation adjustments are made directly to a separate component of other comprehensive loss, which is reflected in stockholders' equity in our consolidated balance sheets. As of December 31, 2014 and December 31, 2013, the Company had $(443) and $0, respectively, of cumulative foreign currency translation adjustments, net of tax, which was $0 as of December 31, 2014 and December 31, 2013 due to the full valuation allowance established against our deferred tax assets, in accumulated other comprehensive loss. | |||||||||||
Some of our subsidiaries also enter into transactions and have monetary assets and liabilities that are denominated in a currency other than the entities' respective functional currencies. Gains and losses from the revaluation of foreign currency transactions and monetary assets and liabilities are included in the consolidated statements of operations. | |||||||||||
Network access | Network access | ||||||||||
Network access costs consist primarily of revenue share payments to venue owners where our managed and operated hotspots are located, usage-based fees to our roaming network partners for access to their networks, depreciation of equipment related to network build-out projects in our managed and operated locations, and bandwidth and other Internet connectivity expenses in our managed and operated locations. | |||||||||||
Advertising, marketing and promotion costs | Advertising, marketing and promotion costs | ||||||||||
Advertising production costs are expensed the first time the advertisement is run. No advertising production costs were capitalized for the years ended December 31, 2014, 2013 and 2012. All other costs of advertising, marketing and promotion are expensed as incurred. Advertising expenses charged to operations totaled $1,350, $2,302 and $2,374 for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||
Stock-based compensation | Stock-based compensation | ||||||||||
Our stock-based compensation consists of stock options and restricted stock units ("RSU") granted to employees and non-employees. | |||||||||||
We recognize stock-based compensation expense in accordance with guidance provided by FASB ASC 718, Compensation—Stock Compensation ("ASC 718"). We measure employee stock-based compensation cost at grant date, based on the estimated fair value of the award and recognize the cost on a straight-line basis, net of estimated forfeitures, over the employee requisite service period. We estimate the fair value of stock options using a Black-Scholes option pricing model. The model requires input of assumptions regarding expected term, expected volatility, dividend yield, and a risk-free interest rate. The weighted average assumptions that were used to calculate the grant date fair value of our employee stock option grants for the following periods are as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Expected term (years) | 6.25 | 6.25 | 5.9 | ||||||||
Expected volatility | 48.6 | % | 49.31 | % | 48.9 | % | |||||
Risk-free interest rate | 1.8 | % | 1.34 | % | 0.9 | % | |||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||
The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. In estimating the expected term for options granted to employees, we applied the simplified method from the Security Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") Topic 14, Share-Based Payment ("SAB Topic 14"), where options are granted at-the-money. Where options were not granted at-the-money, the expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding and is calculated based upon actual historical exercise and post-vesting cancellations, adjusted for expected future exercise behavior. | |||||||||||
We determined the fair value of common stock underlying the stock option awards by reference to third party sales of our common stock. We determined the expected volatility assumption using the frequency of daily historical prices of comparable public companies' common stock for a period equal to the expected term of the options in accordance with guidance in ASC 718 and SAB Topic 14. We will continue to monitor peer companies and other relevant factors, including our volatility after there is enough history, used to measure expected volatility for future stock option grants. The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the expected term of our employee stock options. The dividend yield assumption is based on our history and expectation of dividend payouts for which no cash dividends have been declared or paid on our common stock, and for which none are anticipated in the foreseeable future. | |||||||||||
As stock-based compensation expense recognized in our accompanying consolidated statements of operations is based on awards ultimately expected to vest, the amount has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on our historical experience and future expectations. | |||||||||||
Compensation expense for non-employee stock-based awards is recognized in accordance with ASC 718 and FASB ASC 505, Equity. Stock option awards issued to non-employees are accounted for at fair value using the Black-Scholes option pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. We record compensation expense based on the then-current fair value of the stock options at each financial reporting date. Compensation recorded during the service period is adjusted in subsequent periods for changes in the stock options' fair value until the earlier of the date at which the non-employee's performance is complete or a performance commitment is reached, which is generally when the stock award vests. We did not recognize any stock-based compensation for non-employee stock-based awards for the year ended December 31, 2014. There was $30 and $372 of stock-based compensation expense recognized for non-employee stock-based awards for the years ended December 31, 2013 and 2012, respectively. | |||||||||||
Income taxes | Income taxes | ||||||||||
We account for income taxes in accordance with FASB ASC 740, Accounting for Income Taxes ("ASC 740"), which requires the recognition of deferred tax assets and liabilities for the future consequences of events that have been recognized in our accompanying consolidated financial statements or tax returns. The measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and the tax bases of our assets and liabilities result in a deferred tax asset, ASC 740 requires an evaluation of the probability of being able to realize the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or the entire deferred tax asset will not be realized. As part of the process of preparing our accompanying consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. We also assess temporary differences resulting from differing treatment of items, such as deferred revenue, for tax and accounting differences. We record a valuation allowance to reduce the deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. | |||||||||||
ASC 740 prescribes a recognition threshold and measurement methodology to recognize and measure an income tax position taken, or expected to be taken, in a tax return. The evaluation of a tax position is based on a two-step approach. The first step requires an entity to evaluate whether the tax position would "more likely than not" be sustained upon examination by the appropriate taxing authority. The second step requires the tax position be measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. In addition, previously recognized benefits from tax positions that no longer meet the new criteria would no longer be recognized. Changes in recognition or measurement are reflected in the period in which the change occurs. | |||||||||||
Non-controlling interests | Non-controlling interests | ||||||||||
Non-controlling interests are comprised of minority holdings in Concourse Communications Detroit, LLC ("CCG Detroit"), Chicago Concourse Development Group, LLC ("CCDG") and Boingo Holding Participacoes Ltda ("BHPL"). | |||||||||||
Under the terms of the limited liability company ("LLC") agreement for CCG Detroit ("Detroit Operating Agreement") profits and losses are allocated to the controlling and non-controlling owners based on specified terms in the Detroit Operating Agreement which reflect the relative risk and reward of each owner. The profit and loss allocation in the Detroit Operating Agreement specifies that the non-controlling owners' allocated profits are limited to the fixed distribution amounts and losses are limited to the non-controlling owners capital account balance with losses in excess of their capital account being fully allocated to the controlling common unit holder. There is no specified term in the Detroit Operating Agreement, but the term of the annual fixed distribution obligation to the non-controlling owner is the same as the term of the venue agreement between CCG Detroit and Detroit Metropolitan Wayne County Airport—which has a seven year initial term with options to extend for an additional four years. We allocate profits and losses in CCG Detroit based on the attribution in the Detroit Operating Agreement. CCG Detroit has generated losses which reduced the non-controlling owners capital account to zero in 2009 resulting in an allocation to the controlling interest holder all operating losses and deficits created by the annual fixed distributions to the non-controlling interest holder. The fixed distributions were terminated during September 2013 concurrent with the termination of CCG Detroit's agreement with Detroit Metropolitan Wayne County Airport. For the years ended December 31, 2013 and 2012, we made distributions of $48 and $121, respectively, to non-controlling interest holders of CCG Detroit. | |||||||||||
Under the terms of the LLC agreement for CCDG, we are required to distribute annually to the CCDG non-controlling interest holders 30% of allocated net profits less capital expenditures of the preceding year. For the years ended December 31, 2014, 2013 and 2012, we made distributions of $623, $560 and $557, respectively, to non-controlling interest holders of CCDG. | |||||||||||
BHPL was formed at the end of 2012. Under the terms of the LLC agreement for BHPL, we attributed profits and losses to the non-controlling interest in BHPL in proportion to their holdings. For the years ended December 31, 2014 and 2013, we made no distributions to the non-controlling interest holder of BHPL. | |||||||||||
Net (loss) income per share attributable to common stockholders | Net (loss) income per share attributable to common stockholders | ||||||||||
Basic net (loss) income per share attributable to common stockholders is calculated by dividing (loss) income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share attributable to common stockholders adjusts the basic weighted average number of shares of common stock outstanding for the potential dilution that could occur if stock options and RSUs were exercised or converted into common stock. Our common stockholders are not entitled to receive any dividends. | |||||||||||
Segment and geographic information | Segment and geographic information | ||||||||||
We operate as one reportable segment; a service provider of mobile Internet solutions across our managed and operated network and aggregated network for mobile devices such as laptops, smartphones, tablet computers and other wireless-enabled consumer devices. This single segment is consistent with the internal organization structure and the manner in which operations are reviewed and managed by our Chief Executive Officer, the chief operating decision maker. | |||||||||||
All significant long-lived tangible assets are held in the United States of America. We do not disclose sales by geographic area because to do so would be impracticable. In 2014, we updated our presentation of retail and wholesale revenue sources to provide increased visibility into the revenue streams that are the focus of our current and future operational and development efforts. Our retail revenue sources were previously differentiated based on our retail plan types—subscription or single-use. We believe that it would be more relevant to differentiate our individual users based on the nature of the users—retail users who purchase Internet access at our managed and operated hotspots and select partner locations or military users who purchase Internet access or IPTV services for individual use on U.S. military bases. We also previously combined our wholesale DAS and Wi-Fi revenues and we believe that it would be better to disaggregate these wholesale product revenues going forward by DAS and Wi-Fi given the current development of these products. The revenue sources are consistent with how our chief operating decision maker monitors and reviews our operations. As a result, we have also reclassified our 2013 and 2012 revenues by primary revenue source for comparability purposes. | |||||||||||
The following is a summary of our revenue by primary revenue source: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenue: | |||||||||||
Retail | $ | 40,336 | $ | 43,194 | $ | 46,145 | |||||
DAS | 38,259 | 32,681 | 30,751 | ||||||||
Wholesale—Wi-Fi | 15,209 | 17,261 | 18,744 | ||||||||
Military | 4,486 | 1,260 | — | ||||||||
Advertising and other | 21,007 | 12,350 | 6,866 | ||||||||
| | | | | | | | | | | |
Total revenue | $ | 119,297 | $ | 106,746 | $ | 102,506 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Recent accounting pronouncements | Recent accounting pronouncements | ||||||||||
In January 2015, the FASB issued ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, which eliminates the separate presentation of extraordinary items, net of tax and the related earnings per share, but does not affect the requirement to disclose material items that are unusual in nature or infrequently occurring. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. An entity may choose to adopt the new standard either prospectively or retrospectively. We do not expect that this standard will have a material impact on our consolidated financial statements. | |||||||||||
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which explicitly requires management to assess an entity's ability to continue as a going concern in connection with each annual and interim period. Management will assess if there is substantial doubt about an entity's ability to continue as a going concern within one year of the date the financial statements are issued. Disclosures will be required if conditions give rise to substantial doubt. The standard will be effective for the first annual period ending after December 15, 2016. Early adoption is permitted. We are currently evaluating the expected impact of this new standard. | |||||||||||
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. An entity may choose to adopt the new standard either prospectively or retrospectively. We do not expect that this standard will have a material impact on our consolidated financial statements as we have not issued any share-based payments with performance targets that could be achieved after the requisite service period. | |||||||||||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which is intended to improve and converge the financial reporting requirements for revenue from contracts with customers between U.S. GAAP and International Accounting Standards. In accordance with this new standard, an entity would recognize revenue to depict the transfer of promised goods or services. The standard establishes a five-step model and related application guidance, which will replace most existing revenue recognition guidance in U.S. GAAP. The standard will be effective for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is not permitted. An entity may choose to adopt the new standard either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the new standard. We are currently evaluating the expected impact of this new standard on our reporting of revenue contracts in our consolidated financial statements. | |||||||||||
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This standard requires the netting of unrecognized tax benefits (UTBs) against a deferred tax asset for a loss or other carryforward that would apply in the settlement of the uncertain tax positions. The UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. The standard will require prospective application with optional retrospective application, and will be effective for reporting periods beginning after December 15, 2013. Early adoption is permitted. We have effectively adopted the provisions of this requirement as of the date of issuance of this standard as we have historically presented our UTBs as a reduction of our deferred tax assets for a loss or other carryforward rather than as a liability when the uncertain tax position would reduce the loss or other carryforward under the tax law. | |||||||||||
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Summary of significant accounting policies | |||||||||||
Schedule of estimated useful lives for property and equipment | |||||||||||
Computer equipment | 2 to 5 years | ||||||||||
Software | 2 to 5 years | ||||||||||
Office equipment | 3 to 5 years | ||||||||||
Leasehold improvements | The shorter of the estimated useful life or the remaining term of the agreements, generally ranging from 2 to 15 years | ||||||||||
Schedule of weighted average assumptions used to calculate the grant date fair values of employee stock option grants | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Expected term (years) | 6.25 | 6.25 | 5.9 | ||||||||
Expected volatility | 48.6 | % | 49.31 | % | 48.9 | % | |||||
Risk-free interest rate | 1.8 | % | 1.34 | % | 0.9 | % | |||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||
Summary of the entity's revenue by primary revenue source | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenue: | |||||||||||
Retail | $ | 40,336 | $ | 43,194 | $ | 46,145 | |||||
DAS | 38,259 | 32,681 | 30,751 | ||||||||
Wholesale—Wi-Fi | 15,209 | 17,261 | 18,744 | ||||||||
Military | 4,486 | 1,260 | — | ||||||||
Advertising and other | 21,007 | 12,350 | 6,866 | ||||||||
| | | | | | | | | | | |
Total revenue | $ | 119,297 | $ | 106,746 | $ | 102,506 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquisition | ||||||||
Schedule of the unaudited pro forma results | ||||||||
For the Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
Revenue | $ | 114,492 | $ | 110,957 | ||||
Net (loss) income | $ | (4,945 | ) | $ | 5,991 | |||
AWG | ||||||||
Acquisition | ||||||||
Summary of the purchase price allocation | ||||||||
Estimated | Weighted Average | |||||||
Fair Value | Estimated Useful | |||||||
Life (years) | ||||||||
Consideration: | ||||||||
Cash paid | $ | 14,800 | ||||||
Net equity adjustments | 147 | |||||||
Holdback consideration | 1,600 | |||||||
Contingent consideration | 980 | |||||||
| | | | | | | | |
Total consideration | $ | 17,527 | ||||||
| | | | | | | | |
| | | | | | | | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash | $ | 215 | ||||||
Restricted cash | 515 | |||||||
Accounts receivable | 988 | |||||||
Other current assets | 609 | |||||||
Property and equipment | 2,297 | |||||||
Accounts payable | (563 | ) | ||||||
Accrued expenses | (515 | ) | ||||||
Other current liabilities | (134 | ) | ||||||
Capital lease obligations | (932 | ) | ||||||
Other non-current liabilities | (130 | ) | ||||||
Deferred tax liabilities | (3,386 | ) | ||||||
| | | | | | | | |
Net tangible liabilities acquired | (1,036 | ) | ||||||
Existing contracts and relationships | 4,700 | 6.7 | ||||||
Technology | 270 | 6 | ||||||
Trademark and tradename | 120 | 3 | ||||||
Non-compete agreement | 3,590 | 5 | ||||||
Goodwill | 9,883 | |||||||
| | | | | | | | |
Total purchase price | $ | 17,527 | ||||||
| | | | | | | | |
| | | | | | | | |
Endeka Group Inc | ||||||||
Acquisition | ||||||||
Summary of the purchase price allocation | ||||||||
Estimated | Estimated Useful | |||||||
Fair Value | Life (years) | |||||||
Consideration: | ||||||||
Cash paid | $ | 4,894 | ||||||
Holdback consideration | 275 | |||||||
Contingent consideration | 1,329 | |||||||
| | | | | | | | |
Total consideration | $ | 6,498 | ||||||
| | | | | | | | |
| | | | | | | | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash | $ | 20 | ||||||
Other current assets | 44 | |||||||
Property and equipment | 4,617 | |||||||
Other assets | 12 | |||||||
Accounts payable | (992 | ) | ||||||
Other current liabilities | (211 | ) | ||||||
Notes payable and financed liabilities | (6,476 | ) | ||||||
Deferred tax liabilities | (2,637 | ) | ||||||
| | | | | | | | |
Net tangible liabilities acquired | (5,623 | ) | ||||||
Existing contracts and relationships | 4,770 | 10 | ||||||
Technology | 930 | 6 | ||||||
Trademark and tradename | 300 | 10 | ||||||
Non-compete agreement | 250 | 2 | ||||||
Other intangibles | 95 | 10 | ||||||
Goodwill | 5,776 | |||||||
| | | | | | | | |
Total purchase price | $ | 6,498 | ||||||
| | | | | | | | |
| | | | | | | | |
Cloud 9 Wireless Inc | ||||||||
Acquisition | ||||||||
Summary of the purchase price allocation | ||||||||
The following table summarizes the allocation of the total purchase price as of August 6, 2012: | ||||||||
Current assets | $ | 899 | ||||||
Property, plant and equipment | 65 | |||||||
Intangible and other assets | 1,758 | |||||||
Goodwill | 1,232 | |||||||
Current liabilities | (454 | ) | ||||||
| | | | | ||||
Net assets acquired | $ | 3,500 | ||||||
| | | | | ||||
| | | | | ||||
Cash_and_cash_equivalents_and_1
Cash and cash equivalents and marketable securities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and cash equivalents and marketable securities | ||||||||
Schedule of cash and cash equivalents, and marketable securities | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Cash and cash equivalents: | ||||||||
Cash | $ | 3,247 | $ | 3,655 | ||||
Money market accounts | 5,602 | 23,683 | ||||||
| | | | | | | | |
Total cash and cash equivalents | $ | 8,849 | $ | 27,338 | ||||
| | | | | | | | |
| | | | | | | | |
Short-term marketable securities: | ||||||||
Marketable securities | $ | 1,614 | $ | 32,962 | ||||
| | | | | | | | |
Total short-term marketable securities | $ | 1,614 | $ | 32,962 | ||||
| | | | | | | | |
| | | | | | | | |
Accounts_receivables_net_and_o1
Accounts receivables, net and other receivables (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts receivables, net and other receivables | ||||||||
Schedule of accounts receivable, net of allowances for doubtful accounts and other receivables | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Trade receivables, net of allowances | $ | 25,562 | $ | 12,799 | ||||
Unbilled access fees | 2,142 | 2,036 | ||||||
Unbilled platform service arrangements | 213 | 1,491 | ||||||
| | | | | | | | |
Accounts receivable, net | $ | 27,917 | $ | 16,326 | ||||
| | | | | | | | |
| | | | | | | | |
Unbilled access fees | $ | 115 | $ | 264 | ||||
Unbilled platform service arrangements | — | 16 | ||||||
| | | | | | | | |
Non-current other receivables | $ | 115 | $ | 280 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of allowance for doubtful accounts | ||||||||
Allowance | ||||||||
for | ||||||||
Doubtful | ||||||||
Accounts | ||||||||
Balance, December 31, 2011 | $ | 177 | ||||||
Additions charged to operations | 45 | |||||||
Deductions from reserves, net | (43 | ) | ||||||
| | | | | ||||
Balance, December 31, 2012 | 179 | |||||||
Additions charged to operations | 209 | |||||||
Deductions from reserves, net | (43 | ) | ||||||
| | | | | ||||
Balance, December 31, 2013 | 345 | |||||||
Additions charged to operations | 191 | |||||||
Deductions from reserves, net | (142 | ) | ||||||
| | | | | ||||
Balance, December 31, 2014 | $ | 394 | ||||||
| | | | | ||||
| | | | | ||||
Accrued_expenses_and_other_lia1
Accrued expenses and other liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued expenses and other liabilities | ||||||||
Schedule of accrued expenses and other liabilities | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Salaries and wages | $ | 2,389 | $ | 3,024 | ||||
Revenue share | 5,683 | 4,598 | ||||||
Accrued partner network | 1,105 | 736 | ||||||
Accrued for construction in progress | 9,438 | 2,717 | ||||||
Settlement liabilities | 1,850 | — | ||||||
Accrued professional fees | 1,241 | 179 | ||||||
Accrued taxes | 327 | 256 | ||||||
Deferred rent | 18 | 853 | ||||||
Holdback liabilities | 1,615 | 1,875 | ||||||
Contingent consideration | 131 | 980 | ||||||
Other | 2,312 | 1,311 | ||||||
| | | | | | | | |
Total accrued expenses and other liabilities | $ | 26,109 | $ | 16,529 | ||||
| | | | | | | | |
| | | | | | | | |
Property_and_equipment_Tables
Property and equipment (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property and equipment | |||||||||||
Summary of property and equipment, at cost less accumulated depreciation and amortization | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Leasehold improvements | $ | 152,627 | $ | 97,462 | |||||||
Construction in progress | 20,104 | 18,157 | |||||||||
Computer equipment | 7,909 | 7,372 | |||||||||
Software | 17,827 | 10,452 | |||||||||
Office equipment | 297 | 412 | |||||||||
| | | | | | | | ||||
Total property and equipment | 198,764 | 133,855 | |||||||||
Less: accumulated depreciation and amortization | (86,992 | ) | (66,295 | ) | |||||||
| | | | | | | | ||||
Total property and equipment, net | $ | 111,772 | $ | 67,560 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of depreciation and amortization expense of property and equipment | |||||||||||
For the Years Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Network access | $ | 18,074 | $ | 12,651 | $ | 11,948 | |||||
Network operations | 5,662 | 4,091 | 2,844 | ||||||||
Development and technology | 3,381 | 1,992 | 1,049 | ||||||||
General and administrative | 329 | 206 | 117 | ||||||||
| | | | | | | | | | | |
Total depreciation and amortization of property and equipment | $ | 27,446 | $ | 18,940 | $ | 15,958 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Goodwill_and_intangible_assets1
Goodwill and intangible assets (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and intangible assets | ||||||||||||||
Schedule of changes in goodwill | ||||||||||||||
Goodwill | ||||||||||||||
Balance, December 31, 2012 | $ | 26,744 | ||||||||||||
Acquisition of Endeka | 5,776 | |||||||||||||
Acquisition of AWG | 9,883 | |||||||||||||
| | | | | ||||||||||
Balance, December 31, 2013 and December 31, 2014 | $ | 42,403 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Schedule of changes in intangible assets | ||||||||||||||
Intangible | ||||||||||||||
Assets | ||||||||||||||
Balance, December 31, 2012 | $ | 10,594 | ||||||||||||
Additions | 15,069 | |||||||||||||
Amortization expense | (2,250 | ) | ||||||||||||
| | | | | ||||||||||
Balance, December 31, 2013 | 23,413 | |||||||||||||
Amortization expense | (3,682 | ) | ||||||||||||
Impairment loss | (55 | ) | ||||||||||||
| | | | | ||||||||||
Balance, December 31, 2014 | $ | 19,676 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Schedule of intangible assets | ||||||||||||||
Intangible assets at December 31, 2014 consist of the following: | ||||||||||||||
Weighted | Historical | Accumulated | Net | |||||||||||
Average | Cost | Amortization | ||||||||||||
Life | ||||||||||||||
Venue contracts | 10 years | $ | 36,356 | $ | (21,582 | ) | $ | 14,774 | ||||||
Non-compete agreements | 5 years | 3,840 | (1,067 | ) | 2,773 | |||||||||
Technology | 6 years | 2,300 | (863 | ) | 1,437 | |||||||||
Advertiser relationships | 5 years | 70 | (34 | ) | 36 | |||||||||
Patents, trademarks and other | 6 years | 1,353 | (697 | ) | 656 | |||||||||
$ | 43,919 | $ | (24,243 | ) | $ | 19,676 | ||||||||
Intangible assets at December 31, 2013 consist of the following: | ||||||||||||||
Weighted | Historical | Accumulated | Net | |||||||||||
Average | Cost | Amortization | ||||||||||||
Life | ||||||||||||||
Venue contracts | 10 years | $ | 36,356 | $ | (19,314 | ) | $ | 17,042 | ||||||
Non-compete agreements | 5 years | 3,840 | (224 | ) | 3,616 | |||||||||
Technology | 6 years | 2,300 | (441 | ) | 1,859 | |||||||||
Advertiser relationships | 5 years | 70 | (20 | ) | 50 | |||||||||
Patents, trademarks and other | 6 years | 1,408 | (562 | ) | 846 | |||||||||
| | | | | | | | | | | | |||
$ | 43,974 | $ | (20,561 | ) | $ | 23,413 | ||||||||
| | | | | | | | | | | | |||
Schedule of amortization expense for fiscal years 2015 through 2019 and thereafter | ||||||||||||||
Year | Amortization | |||||||||||||
Expense | ||||||||||||||
2015 | $ | 3,525 | ||||||||||||
2016 | 3,451 | |||||||||||||
2017 | 3,218 | |||||||||||||
2018 | 2,370 | |||||||||||||
2019 | 1,625 | |||||||||||||
Thereafter | 5,487 | |||||||||||||
| | | | | ||||||||||
$ | 19,676 | |||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Fair_value_measurement_Tables
Fair value measurement (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair value measurement | ||||||||||||||
Schedule of financial assets and liabilities that are measured at fair value on a recurring basis | ||||||||||||||
At December 31, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 5,602 | $ | — | $ | — | $ | 5,602 | ||||||
Marketable securities | — | 1,614 | — | 1,614 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 5,602 | $ | 1,614 | $ | — | $ | 7,216 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 131 | $ | 131 | ||||||
| | | | | | | | | | | | | | |
Total liabilities | $ | — | $ | — | $ | 131 | $ | 131 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
At December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 23,683 | $ | — | $ | — | $ | 23,683 | ||||||
Marketable securities | — | 32,962 | — | 32,962 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 23,683 | $ | 32,962 | $ | — | $ | 56,645 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 1,942 | $ | 1,942 | ||||||
| | | | | | | | | | | | | | |
Total liabilities | $ | — | $ | — | $ | 1,942 | $ | 1,942 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of reconciliation of the beginning and ending amounts related to the fair value of contingent consideration for the Endeka and AWG acquisitions, categorized as Level 3 | ||||||||||||||
Beginning balance, January 1, 2013 | $ | — | ||||||||||||
Contingent consideration for acquisition of businesses | 2,309 | |||||||||||||
Change in fair value | (367 | ) | ||||||||||||
| | | | | ||||||||||
Balance, December 31, 2013 | $ | 1,942 | ||||||||||||
Payment of contingent consideration | (1,000 | ) | ||||||||||||
Change in fair value | (811 | ) | ||||||||||||
| | | | | ||||||||||
Balance, December 31, 2014 | $ | 131 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Stockholders_equity_Tables
Stockholders' equity (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Stockholders' equity | ||||||||
Schedule of amount of shares of common stock reserved | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Outstanding stock options under the 2001 Plan | 1,525 | 1,859 | ||||||
Outstanding stock options under the 2011 Plan | 2,816 | 3,096 | ||||||
Outstanding RSUs under the 2011 Plan | 1,385 | 753 | ||||||
Shares available for grant under the 2011 Plan | 4,492 | 3,259 | ||||||
| | | | | | | | |
Total | 10,218 | 8,967 | ||||||
| | | | | | | | |
| | | | | | | | |
Credit_Facility_Tables
Credit Facility (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Credit Facility | |||||
Schedule of maturities of long term debt | |||||
Year | Principal | ||||
Payments | |||||
2015 | $ | 875 | |||
2016 | 875 | ||||
2017 | 875 | ||||
2018 | 875 | ||||
| | | | | |
$ | 3,500 | ||||
| | | | | |
| | | | | |
Schedule of amortization expense for debt issuance costs | |||||
Year | Amortization | ||||
Expense | |||||
2015 | $ | 178 | |||
2016 | 178 | ||||
2017 | 178 | ||||
2018 | 158 | ||||
| | | | | |
$ | 692 | ||||
| | | | | |
| | | | | |
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income taxes | |||||||||||
Schedule of income tax expense (benefit) by jurisdiction | |||||||||||
2014 | 2013 | 2012 | |||||||||
U.S. federal: | |||||||||||
Current | $ | 6 | $ | (402 | ) | $ | 1,651 | ||||
Deferred | 328 | 1,158 | 1,189 | ||||||||
| | | | | | | | | | | |
Total U.S. federal | $ | 334 | $ | 756 | $ | 2,840 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
U.S. state and local: | |||||||||||
Current | $ | 226 | $ | 248 | $ | 327 | |||||
Deferred | 140 | 457 | (202 | ) | |||||||
| | | | | | | | | | | |
Total U.S. state and local | $ | 366 | $ | 705 | $ | 125 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of tax rates | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal statutory rate | 34 | % | 34 | % | 34 | % | |||||
State and local | 4.6 | (5.7 | ) | 1.1 | |||||||
Foreign rate differential | (0.7 | ) | (3.2 | ) | — | ||||||
Stock options | (0.5 | ) | (0.7 | ) | (2.6 | ) | |||||
Non-controlling interests | 1.9 | 15.2 | (2.2 | ) | |||||||
Valuation allowance | (45.1 | ) | (128.5 | ) | — | ||||||
Transaction costs | — | (6.7 | ) | — | |||||||
Purchase price adjustments | — | 6.6 | — | ||||||||
Revaluation of deferred tax assets | — | 2.8 | — | ||||||||
Uncertain tax positions | (0.1 | ) | (2.9 | ) | — | ||||||
Return to provision | 0.6 | 9.3 | (5.3 | ) | |||||||
Other | 1.4 | 1.1 | 2 | ||||||||
| | | | | | | | | | | |
Income taxes | (3.9 | )% | (78.7 | )% | 27 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of deferred tax assets and liabilities | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 10,115 | $ | 3,508 | |||||||
Outside basis differences for U.S. partnerships | 3,710 | 2,842 | |||||||||
Stock options | 3,348 | 3,018 | |||||||||
Deferred revenue | 648 | 516 | |||||||||
Deferred compensation | 144 | 355 | |||||||||
State taxes | 45 | 34 | |||||||||
Other | 1,341 | 404 | |||||||||
Valuation allowance | (12,470 | ) | (4,101 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 6,881 | 6,576 | |||||||||
Deferred tax liabilities: | |||||||||||
Intangible assets | (6,855 | ) | (6,737 | ) | |||||||
Property and equipment | (2,671 | ) | (2,016 | ) | |||||||
| | | | | | | | ||||
Net deferred tax liabilities | (9,526 | ) | (8,753 | ) | |||||||
| | | | | | | | ||||
Net deferred taxes | $ | (2,645 | ) | $ | (2,177 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of changes in the valuation allowance | |||||||||||
Valuation | |||||||||||
Allowance | |||||||||||
Balance, December 31, 2011 | $ | 1,822 | |||||||||
Additions charged to operations | 51 | ||||||||||
Decrease credited to operations | (204 | ) | |||||||||
| | | | | |||||||
Balance, December 31, 2012 | 1,669 | ||||||||||
Additions charged to operations | 2,432 | ||||||||||
Decrease credited to operations | — | ||||||||||
| | | | | |||||||
Balance, December 31, 2013 | 4,101 | ||||||||||
Additions charged to operations | 8,369 | ||||||||||
Decrease credited to operations | — | ||||||||||
| | | | | |||||||
Balance, December 31, 2014 | $ | 12,470 | |||||||||
| | | | | |||||||
| | | | | |||||||
Schedule of reconciliation of unrecognized tax benefits, excluding interest and penalties | |||||||||||
Uncertain | |||||||||||
Tax | |||||||||||
Positions | |||||||||||
Balance, December 31, 2012 | $ | 392 | |||||||||
Additions for current period tax positions | — | ||||||||||
| | | | | |||||||
Balance, December 31, 2013 and December 31, 2014 | $ | 392 | |||||||||
| | | | | |||||||
| | | | | |||||||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and contingencies | ||||||||
Schedule of future minimum lease obligations under non-cancellable operating and capital leases | ||||||||
Future minimum lease obligations under non-cancellable operating and capital leases at December 31, 2014 are as follows: | ||||||||
Years ended December 31, | Capital | Operating | ||||||
Leases | Leases and | |||||||
Airport | ||||||||
Guarantees | ||||||||
2015 | $ | 331 | $ | 10,038 | ||||
2016 | 259 | 9,842 | ||||||
2017 | 132 | 9,852 | ||||||
2018 | 26 | 8,821 | ||||||
2019 | — | 6,035 | ||||||
Thereafter | — | 33,312 | ||||||
| | | | | | | | |
Minimum lease payments | 748 | $ | 77,900 | |||||
| | | | | | | | |
| | | | | | | | |
Less: Amounts representing interest ranging from 3.1% to 11.1% | (58 | ) | ||||||
| | | | | | | | |
Minimum lease payments | $ | 690 | ||||||
| | | | | | | | |
| | | | | | | | |
Current portion | $ | 309 | ||||||
| | | | | | | | |
| | | | | | | | |
Non-current portion | $ | 381 | ||||||
| | | | | | | | |
| | | | | | | | |
Stock_incentive_plans_Tables
Stock incentive plans (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock incentive plans | ||||||||||||||
Schedule of stock-based compensation expense | ||||||||||||||
Years ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Network operations | $ | 1,356 | $ | 888 | $ | 352 | ||||||||
Development and technology | 600 | 380 | 352 | |||||||||||
Selling and marketing | 2,017 | 1,045 | 571 | |||||||||||
General and administrative | 3,191 | 2,193 | 1,460 | |||||||||||
| | | | | | | | | | | ||||
Total stock-based compensation expense | $ | 7,164 | $ | 4,506 | $ | 2,735 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Summary of stock option activity | ||||||||||||||
Number | Weighted | Weighted- | Aggregate | |||||||||||
of | Average | Average | Intrinsic | |||||||||||
Options | Exercise | Remaining | Value | |||||||||||
(000's) | Price | Contract | ||||||||||||
Life | ||||||||||||||
(years) | ||||||||||||||
Outstanding at December 31, 2011 | 6,601 | $ | 5.5 | 7 | $ | 30,996 | ||||||||
Granted | 1,391 | $ | 8.29 | |||||||||||
Exercised | (1,899 | ) | $ | 1.36 | ||||||||||
Canceled/forfeited | (1,048 | ) | $ | 11.85 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | 5,045 | $ | 6.5 | 6.4 | $ | 14,742 | ||||||||
Granted | 1,351 | $ | 6.73 | |||||||||||
Exercised | (461 | ) | $ | 1.33 | ||||||||||
Canceled/forfeited | (980 | ) | $ | 10.2 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | 4,955 | $ | 6.31 | 6.6 | $ | 9,535 | ||||||||
Granted | 203 | $ | 5.99 | |||||||||||
Exercised | (458 | ) | $ | 2.53 | ||||||||||
Canceled/forfeited | (359 | ) | $ | 7.53 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 4,341 | $ | 6.6 | 5.8 | $ | 11,017 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Vested, exercisable and expected to vest at December 31, 2014 | 4,267 | $ | 6.58 | 5.7 | $ | 10,946 | ||||||||
Exercisable at December 31, 2014 | 3,053 | $ | 5.83 | 4.9 | $ | 10,014 | ||||||||
Summary of nonvested RSU activity under the 2014 Plan | ||||||||||||||
Number | Weighted | |||||||||||||
of | Average | |||||||||||||
Shares | Grant Date | |||||||||||||
(000's) | Fair Value | |||||||||||||
Nonvested at December 31, 2012 | — | $ | — | |||||||||||
Granted | 799 | $ | 6.21 | |||||||||||
Vested | (6 | ) | $ | 6.39 | ||||||||||
Canceled/forfeited | (40 | ) | $ | 6.05 | ||||||||||
| | | | | | | | |||||||
Nonvested at December 31, 2013 | 753 | $ | 6.22 | |||||||||||
Granted | 1,650 | $ | 6.02 | |||||||||||
Vested | (868 | ) | $ | 6.09 | ||||||||||
Canceled/forfeited | (150 | ) | $ | 6.02 | ||||||||||
| | | | | | | | |||||||
Nonvested at December 31, 2014 | 1,385 | $ | 6.09 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Net_loss_income_per_share_attr1
Net (loss) income per share attributable to common stockholders (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Net (loss) income per share attributable to common stockholders | |||||||||||
Schedule of computation of basic and diluted net (loss) income per share attributable to common stockholders | |||||||||||
Years ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(in thousands) | |||||||||||
Numerator: | |||||||||||
Net (loss) income attributable to common stockholders, basic and diluted | $ | (19,521 | ) | $ | (3,968 | ) | $ | 7,295 | |||
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average common stock, basic | 35,753 | 35,578 | 34,774 | ||||||||
Effect of dilutive stock options | — | — | 2,543 | ||||||||
| | | | | | | | | | | |
Weighted average common stock, diluted | 35,753 | 35,578 | 37,317 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Net (loss) income per share attributable to common stockholders: | |||||||||||
Basic | $ | (0.55 | ) | $ | (0.11 | ) | $ | 0.21 | |||
Diluted | $ | (0.55 | ) | $ | (0.11 | ) | $ | 0.2 | |||
Quarterly_financial_data_unaud1
Quarterly financial data (unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly financial data (unaudited) | ||||||||||||||
Schedule of quarterly financial data | ||||||||||||||
2014 | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Revenue | $ | 26,452 | $ | 28,396 | $ | 30,822 | $ | 33,627 | ||||||
Loss from operations | $ | (5,173 | ) | $ | (3,352 | ) | $ | (3,487 | ) | $ | (6,014 | ) | ||
Net loss attributable to common stockholders | $ | (5,448 | ) | $ | (3,734 | ) | $ | (3,815 | ) | $ | (6,524 | ) | ||
Basic loss per share | $ | (0.15 | ) | $ | (0.10 | ) | $ | (0.11 | ) | $ | (0.18 | ) | ||
Diluted loss per share | $ | (0.15 | ) | $ | (0.10 | ) | $ | (0.11 | ) | $ | (0.18 | ) | ||
2013 | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Revenue | $ | 23,134 | $ | 26,239 | $ | 28,607 | $ | 28,766 | ||||||
(Loss) income from operations | $ | (1,502 | ) | $ | (424 | ) | $ | 784 | $ | (752 | ) | |||
Net (loss) income attributable to common stockholders | $ | (1,121 | ) | $ | (399 | ) | $ | 354 | $ | (2,802 | ) | |||
Basic (loss) earnings per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.08 | ) | |||
Diluted (loss) earnings per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.08 | ) | |||
The_business_Details
The business (Details) (Minimum) | 12 Months Ended |
Dec. 31, 2014 | |
item | |
Minimum | |
The business | |
Number of small cell networks for cellular distributed antenna system and Wi-Fi access | 1,000,000 |
Number of consumers | 1,000,000,000 |
Number of commercial hotspots worldwide to which Wi-Fi subscriptions and day passes provide access | 1,000,000 |
Summary_of_significant_account3
Summary of significant accounting policies (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
Basis of presentation | ||
Decrease in net loss attributable to common stockholders due to certain out-of-period adjustments | $217 | |
Concourse Communications Detroit, LLC | ||
Principles of consolidation | ||
Percentage of ownership in subsidiaries | 70.00% | |
Chicago Concourse Development Group LLC | ||
Principles of consolidation | ||
Percentage of ownership in subsidiaries | 70.00% | |
Boingo Holding Participacoes Ltda | ||
Principles of consolidation | ||
Percentage of ownership in subsidiaries | 75.00% |
Summary_of_significant_account4
Summary of significant accounting policies (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Marketable securities | |||
Short-term marketable securities | $1,614 | $32,962 | |
Long-term marketable securities | 0 | 0 | 0 |
Unrealized gains or losses in accumulated other comprehensive income (loss) | 0 | 0 | |
Restricted cash | |||
Restricted cash | 0 | 545 | |
Short-term restricted cash related to letters of credit | 545 | ||
Restricted cash classified as long-term | 0 | ||
Business combinations | |||
Transaction costs associated with business combinations | $0 | $354 | $50 |
Total Revenue | Affiliated entities | |||
Concentrations of credit risk | |||
Concentration risk percentage | 15.00% | ||
Number of groups of affiliated entities | 1 | 2 | 2 |
Total Revenue | Affiliated entities group one | |||
Concentrations of credit risk | |||
Concentration risk percentage | 14.00% | 17.00% | |
Total Revenue | Affiliated entities group two | |||
Concentrations of credit risk | |||
Concentration risk percentage | 14.00% | 15.00% | |
Total accounts receivable | Affiliated entities | |||
Concentrations of credit risk | |||
Concentration risk percentage | 12.00% | ||
Number of groups of affiliated entities | 2 | 1 | |
Total accounts receivable | Affiliated entities group one | |||
Concentrations of credit risk | |||
Concentration risk percentage | 30.00% | ||
Total accounts receivable | Affiliated entities group two | |||
Concentrations of credit risk | |||
Concentration risk percentage | 17.00% |
Summary_of_significant_account5
Summary of significant accounting policies (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
item | ||
Goodwill | ||
Number of reporting units | 1 | |
Number of operating segments | 1 | |
Number of reportable segments | 1 | |
Goodwill impairment charges | $0 | $0 |
Computer equipment | Minimum | ||
Property and equipment | ||
Estimated useful lives | 2 years | |
Computer equipment | Maximum | ||
Property and equipment | ||
Estimated useful lives | 5 years | |
Software | Minimum | ||
Property and equipment | ||
Estimated useful lives | 2 years | |
Software | Maximum | ||
Property and equipment | ||
Estimated useful lives | 5 years | |
Office equipment | Minimum | ||
Property and equipment | ||
Estimated useful lives | 3 years | |
Office equipment | Maximum | ||
Property and equipment | ||
Estimated useful lives | 5 years | |
Leasehold improvements | Minimum | ||
Property and equipment | ||
Estimated useful lives | 2 years | |
Leasehold improvements | Maximum | ||
Property and equipment | ||
Estimated useful lives | 15 years |
Summary_of_significant_account6
Summary of significant accounting policies (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||
Foreign currency translation | |||
Cummulative foreign currency translation adjustments, net of tax in accumulated other comprehensive income | ($443) | $0 | |
Income tax expense related to foreign currency translation adjustments | 0 | 0 | |
Advertising, marketing and promotion costs | |||
Capitalized advertising production costs | 0 | 0 | 0 |
Advertising expenses | 1,350 | 2,302 | 2,374 |
Assumptions that were used to calculate the grant date fair value of employee stock option grants | |||
Expected term | 6 years 3 months | 6 years 3 months | 5 years 10 months 24 days |
Expected volatility (as a percent) | 48.60% | 49.31% | 48.90% |
Risk-free interest rate (as a percent) | 1.80% | 1.34% | 0.90% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Dividends declared on common stock (in dollars per share) | $0 | ||
Dividends paid on common stock (in dollars per share) | $0 | ||
Number of dividend payouts anticipated in the foreseeable future | 0 | ||
Stock-based compensation expense recognized for non-employee | $30 | $372 | |
License agreements | Minimum | |||
Revenue recognition | |||
Term of the arrangement used to determine revenue recognition | 1 year | ||
License agreements | Maximum | |||
Revenue recognition | |||
Term of the arrangement used to determine revenue recognition | 5 years | ||
Wholesale Wi-Fi | Minimum | |||
Revenue recognition | |||
Term of the arrangement used to determine revenue recognition | 5 years | ||
Wholesale Wi-Fi | Maximum | |||
Revenue recognition | |||
Term of the arrangement used to determine revenue recognition | 10 years |
Summary_of_significant_account7
Summary of significant accounting policies (Details 5) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 |
Non-controlling interests | ||||
Non-controlling owners capital account amount | 1,028 | $865 | ||
Distributions to non-controlling interest holders | 623 | 608 | 678 | |
Concourse Communications Detroit, LLC | ||||
Non-controlling interests | ||||
Initial term of Detroit Operating Agreement | 7 years | |||
Optional extension period of Detroit Operating Agreement | 4 years | |||
Non-controlling owners capital account amount | 0 | |||
Distributions to non-controlling interest holders | 48 | 121 | ||
Chicago Concourse Development Group LLC | ||||
Non-controlling interests | ||||
Percentage of net profits less capital expenditures of the preceding year allocated to non-controlling interest holders | 30.00% | |||
Distributions to non-controlling interest holders | 623 | 560 | 557 | |
Boingo Holding Participacoes Ltda | ||||
Non-controlling interests | ||||
Distributions to non-controlling interest holders | 0 | $0 |
Summary_of_significant_account8
Summary of significant accounting policies (Details 6) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||||||||||
Primary revenue source | |||||||||||
Number of reportable segments | 1 | ||||||||||
Revenue | $33,627 | $30,822 | $28,396 | $26,452 | $28,766 | $28,607 | $26,239 | $23,134 | $119,297 | $106,746 | $102,506 |
Retail | |||||||||||
Primary revenue source | |||||||||||
Revenue | 40,336 | 43,194 | 46,145 | ||||||||
DAS | |||||||||||
Primary revenue source | |||||||||||
Revenue | 38,259 | 32,681 | 30,751 | ||||||||
Wholesale Wi-Fi | |||||||||||
Primary revenue source | |||||||||||
Revenue | 15,209 | 17,261 | 18,744 | ||||||||
Military | |||||||||||
Primary revenue source | |||||||||||
Revenue | 4,486 | 1,260 | |||||||||
Advertising and other | |||||||||||
Primary revenue source | |||||||||||
Revenue | $21,007 | $12,350 | $6,866 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 22, 2013 | Dec. 31, 2014 | Jul. 29, 2014 | Oct. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 06, 2012 | Dec. 31, 2011 |
Acquisition | ||||||||
Retained Earnings (Accumulated Deficit) | ($62,884) | ($43,363) | ||||||
Increase (Decrease) the Valuation Allowance for Deferred Tax Assets | 12,470 | 4,101 | 1,669 | 1,822 | ||||
Estimated Fair Value | ||||||||
Contingent consideration | 131 | 980 | ||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Goodwill | 42,403 | 42,403 | 26,744 | |||||
Endeka Group Inc | ||||||||
Estimated Fair Value | ||||||||
Cash paid | 4,894 | |||||||
Holdback consideration | 275 | |||||||
Contingent consideration | 1,329 | |||||||
Total purchase price | 6,498 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash | 20 | |||||||
Other current assets | 44 | |||||||
Property and equipment | 4,617 | |||||||
Other assets | 12 | |||||||
Accounts payable | -992 | |||||||
Other current liabilities | -211 | |||||||
Notes payable and financed liabilities | -6,476 | |||||||
Deferred tax liabilities | -2,637 | |||||||
Net tangible liabilities acquired | -5,623 | |||||||
Goodwill | 5,776 | |||||||
Total purchase price | 6,498 | |||||||
Holdback consideration paid | 275 | |||||||
Endeka Group Inc | Existing contracts and relationships | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 4,770 | |||||||
Estimated Useful Life | 10 years | |||||||
Endeka Group Inc | Technology | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 930 | |||||||
Estimated Useful Life | 6 years | |||||||
Endeka Group Inc | Trademark and tradename | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 300 | |||||||
Estimated Useful Life | 10 years | |||||||
Endeka Group Inc | Non-compete agreement | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 250 | |||||||
Estimated Useful Life | 2 years | |||||||
Endeka Group Inc | Other intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 95 | |||||||
Estimated Useful Life | 10 years | |||||||
Endeka Group Inc | Identifiable intangible assets | Minimum | ||||||||
Acquisition | ||||||||
Discount rate (as a percent) | 40.00% | |||||||
Royalty rates (as a percent) | 0.50% | |||||||
Endeka Group Inc | Identifiable intangible assets | Maximum | ||||||||
Acquisition | ||||||||
Discount rate (as a percent) | 50.00% | |||||||
Royalty rates (as a percent) | 1.50% | |||||||
Endeka Group Inc | Contingent consideration | ||||||||
Acquisition | ||||||||
Number of components of contingent consideration | 2 | |||||||
Discount rate (as a percent) | 50.50% | |||||||
AWG | ||||||||
Acquisition | ||||||||
Number of U.S. airports where the acquired entity operates public Wi-Fi | 17 | |||||||
Amount paid for settlement of the net equity adjustments | 147 | |||||||
Contingent consideration paid to AWG shareholders | 1,000 | |||||||
Change in Goodwill | -28 | |||||||
Increase in Accrued and Other Liabilities | 147 | |||||||
Retained Earnings (Accumulated Deficit) | -175 | |||||||
Increase (Decrease) in Deferred Tax Liabilities | -175 | |||||||
Increase (Decrease) the Valuation Allowance for Deferred Tax Assets | 175 | |||||||
Estimated Fair Value | ||||||||
Cash paid | 14,800 | |||||||
Net equity adjustments | 147 | |||||||
Holdback consideration | 1,600 | |||||||
Contingent consideration | 980 | |||||||
Total purchase price | 17,527 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash | 215 | |||||||
Restricted cash | 515 | |||||||
Accounts receivable | 988 | |||||||
Other current assets | 609 | |||||||
Property and equipment | 2,297 | |||||||
Accounts payable | -563 | |||||||
Accrued expenses | -515 | |||||||
Other current liabilities | -134 | |||||||
Capital lease obligations | -932 | |||||||
Other non-current liabilities | -130 | |||||||
Deferred tax liabilities | -3,386 | |||||||
Net tangible liabilities acquired | -1,036 | |||||||
Goodwill | 9,883 | |||||||
Total purchase price | 17,527 | |||||||
AWG | Existing contracts and relationships | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 4,700 | |||||||
Estimated Useful Life | 6 years 8 months 12 days | |||||||
AWG | Technology | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 270 | |||||||
Estimated Useful Life | 6 years | |||||||
AWG | Trademark and tradename | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 120 | |||||||
Estimated Useful Life | 3 years | |||||||
AWG | Non-compete agreement | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Intangibles | 3,590 | |||||||
Estimated Useful Life | 5 years | |||||||
AWG | Identifiable intangible assets | ||||||||
Acquisition | ||||||||
Royalty rates (as a percent) | 0.50% | |||||||
AWG | Identifiable intangible assets | Minimum | ||||||||
Acquisition | ||||||||
Discount rate (as a percent) | 12.00% | |||||||
AWG | Identifiable intangible assets | Maximum | ||||||||
Acquisition | ||||||||
Royalty rates (as a percent) | 14.00% | |||||||
AWG | Contingent consideration | ||||||||
Acquisition | ||||||||
Discount rate (as a percent) | 3.10% | |||||||
AWG and Endeka | ||||||||
Pro forma results | ||||||||
Revenue | 114,492 | 110,957 | ||||||
Net loss | -4,945 | 5,991 | ||||||
Cloud 9 Wireless Inc | ||||||||
Estimated Fair Value | ||||||||
Cash paid | 3,500 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Current assets | 899 | |||||||
Property and equipment | 65 | |||||||
Intangible and other assets | 1,758 | |||||||
Current liabilities | -454 | |||||||
Goodwill | 1,232 | |||||||
Net assets acquired | $3,500 | |||||||
Estimated Useful Life | 5 years |
Cash_and_cash_equivalents_and_2
Cash and cash equivalents and marketable securities (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash and cash equivalents: | ||||
Cash | $3,247 | $3,655 | ||
Money market accounts | 5,602 | 23,683 | ||
Total cash and cash equivalents | 8,849 | 27,338 | 58,138 | 93,933 |
Short-term marketable securities: | ||||
Marketable securities | 1,614 | 32,962 | ||
Total short-term marketable securities | 1,614 | 32,962 | ||
Interest income | $114 | $181 | $183 |
Accounts_receivables_net_and_o2
Accounts receivables, net and other receivables (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts receivables, net and other receivables | |||
Trade receivables, net of allowances | $25,562 | $12,799 | |
Unbilled access fees | 2,142 | 2,036 | |
Unbilled platform service arrangements | 213 | 1,491 | |
Accounts receivable, net | 27,917 | 16,326 | |
Unbilled access fees | 115 | 264 | |
Unbilled platform service arrangements | 16 | ||
Non-current other receivables | 115 | 280 | |
Allowance for doubtful accounts | |||
Balance at the beginning of the period | 345 | 179 | 177 |
Additions charged to operations | 191 | 209 | 45 |
Deductions from reserves, net | -142 | -43 | -43 |
Balance at the end of the period | $394 | $345 | $179 |
Accrued_expenses_and_other_lia2
Accrued expenses and other liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued expenses and other liabilities | ||
Salaries and wages | $2,389 | $3,024 |
Revenue share | 5,683 | 4,598 |
Accrued partner network | 1,105 | 736 |
Accrued for construction in progress | 9,438 | 2,717 |
Settlement liabilities | 1,850 | |
Accrued professional fees | 1,241 | 179 |
Accrued taxes | 327 | 256 |
Deferred rent | 18 | 853 |
Holdback liabilities | 1,615 | 1,875 |
Contingent consideration | 131 | 980 |
Other | 2,312 | 1,311 |
Total accrued expenses and other liabilities | $26,109 | $16,529 |
Property_and_equipment_Details
Property and equipment (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property and equipment | |||
Total property and equipment | $198,764 | $133,855 | |
Less: accumulated depreciation and amortization | -86,992 | -66,295 | |
Total property and equipment, net | 111,772 | 67,560 | |
Depreciation, Depletion and Amortization. | |||
Depreciation, Depletion and Amortization | 27,446 | 18,940 | 15,958 |
Asset impairment charge | |||
Impairment losses related to a change in the use of certain software developed for internal use | 406 | ||
Impairment losses related to a venue termination agreement | 494 | ||
Network access | |||
Depreciation, Depletion and Amortization. | |||
Depreciation, Depletion and Amortization | 18,074 | 12,651 | 11,948 |
Network operations | |||
Depreciation, Depletion and Amortization. | |||
Depreciation, Depletion and Amortization | 5,662 | 4,091 | 2,844 |
Development and technology | |||
Depreciation, Depletion and Amortization. | |||
Depreciation, Depletion and Amortization | 3,381 | 1,992 | 1,049 |
General and administrative | |||
Depreciation, Depletion and Amortization. | |||
Depreciation, Depletion and Amortization | 329 | 206 | 117 |
Leasehold improvements | |||
Property and equipment | |||
Total property and equipment | 152,627 | 97,462 | |
Construction in progress | |||
Property and equipment | |||
Total property and equipment | 20,104 | 18,157 | |
Computer equipment | |||
Property and equipment | |||
Total property and equipment | 7,909 | 7,372 | |
Software | |||
Property and equipment | |||
Total property and equipment | 17,827 | 10,452 | |
Office equipment | |||
Property and equipment | |||
Total property and equipment | 297 | 412 | |
Equipment acquired under capital leases | |||
Property and equipment | |||
Total property and equipment | 1,209 | 1,220 | |
Less: accumulated depreciation and amortization | ($300) | ($191) |
Goodwill_and_intangible_assets2
Goodwill and intangible assets (Details) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2012 | Feb. 22, 2013 | Oct. 31, 2013 |
Changes in goodwill | |||||
Balance at the beginning of the period | $42,403 | $26,744 | |||
Balance at the end of the period | 42,403 | 42,403 | 26,744 | ||
Endeka Group Inc | |||||
Changes in goodwill | |||||
Balance at the beginning of the period | 5,776 | ||||
Additions | 5,776 | ||||
Balance at the end of the period | 5,776 | ||||
AWG | |||||
Changes in goodwill | |||||
Balance at the beginning of the period | 9,883 | ||||
Additions | 9,883 | ||||
Balance at the end of the period | $9,883 |
Goodwill_and_intangible_assets3
Goodwill and intangible assets (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Changes in intangible assets | ||
Balance at the beginning of the period | $23,413 | $10,594 |
Additions | 15,069 | |
Amortization expense | -3,682 | -2,250 |
Impairment loss | -55 | |
Balance at the end of the period | $19,676 | $23,413 |
Goodwill_and_intangible_assets4
Goodwill and intangible assets (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible assets | |||
Historical cost | $43,919 | $43,974 | |
Accumulated Amortization | -24,243 | -20,561 | |
Net Book Value | 19,676 | 23,413 | 10,594 |
Amortization expense for fiscal years 2015 through 2019 and thereafter | |||
2015 | 3,525 | ||
2016 | 3,451 | ||
2017 | 3,218 | ||
2018 | 2,370 | ||
2019 | 1,625 | ||
Thereafter | 5,487 | ||
Net Book Value | 19,676 | 23,413 | 10,594 |
Venue contracts | |||
Intangible assets | |||
Weighted Average Life | 10 years | 10 years | |
Historical cost | 36,356 | 36,356 | |
Accumulated Amortization | -21,582 | -19,314 | |
Net Book Value | 14,774 | 17,042 | |
Amortization expense for fiscal years 2015 through 2019 and thereafter | |||
Net Book Value | 14,774 | 17,042 | |
Non-compete agreement | |||
Intangible assets | |||
Weighted Average Life | 5 years | 5 years | |
Historical cost | 3,840 | 3,840 | |
Accumulated Amortization | -1,067 | -224 | |
Net Book Value | 2,773 | 3,616 | |
Amortization expense for fiscal years 2015 through 2019 and thereafter | |||
Net Book Value | 2,773 | 3,616 | |
Technology | |||
Intangible assets | |||
Weighted Average Life | 6 years | 6 years | |
Historical cost | 2,300 | 2,300 | |
Accumulated Amortization | -863 | -441 | |
Net Book Value | 1,437 | 1,859 | |
Amortization expense for fiscal years 2015 through 2019 and thereafter | |||
Net Book Value | 1,437 | 1,859 | |
Advertiser relationships | |||
Intangible assets | |||
Weighted Average Life | 5 years | 5 years | |
Historical cost | 70 | 70 | |
Accumulated Amortization | -34 | -20 | |
Net Book Value | 36 | 50 | |
Amortization expense for fiscal years 2015 through 2019 and thereafter | |||
Net Book Value | 36 | 50 | |
Patents, trademarks and other | |||
Intangible assets | |||
Weighted Average Life | 6 years | 6 years | |
Historical cost | 1,353 | 1,408 | |
Accumulated Amortization | -697 | -562 | |
Net Book Value | 656 | 846 | |
Amortization expense for fiscal years 2015 through 2019 and thereafter | |||
Net Book Value | $656 | $846 |
Fair_value_measurement_Details
Fair value measurement (Details) (Recurring basis, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Level 1 | ||
Assets: | ||
Money market accounts | $5,602 | $23,683 |
Total assets | 5,602 | 23,683 |
Level 2 | ||
Assets: | ||
Marketable securities | 1,614 | 32,962 |
Total assets | 1,614 | 32,962 |
Level 3 | ||
Liabilities: | ||
Contingent consideration | -131 | -1,942 |
Total liabilities | -131 | -1,942 |
Total | ||
Assets: | ||
Money market accounts | 5,602 | 23,683 |
Marketable securities | 1,614 | 32,962 |
Total assets | 7,216 | 56,645 |
Liabilities: | ||
Contingent consideration | -131 | -1,942 |
Total liabilities | ($131) | ($1,942) |
Fair_value_measurement_Details1
Fair value measurement (Details 2) (Contingent consideration, AWG and Endeka, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Contingent consideration | AWG and Endeka | ||
Reconciliation between the beginning and ending balances related to the fair value of contingent consideration | ||
Balance at the beginning of the period | $1,942 | |
Contingent consideration for acquisition of businesses | 2,309 | |
Payment of contingent consideration | -1,000 | |
Change in fair value | -811 | -367 |
Balance at the end of the period | $131 | $1,942 |
Stockholders_equity_Details
Stockholders' equity (Details) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Stockholders' equity (deficit) | ||||
Common stock authorized (in shares) | 100,000 | 100,000 | ||
Shares of Common Stock reserved | ||||
Outstanding stock options (in shares) | 4,341 | 4,955 | 5,045 | 6,601 |
Total (in shares) | 10,218 | 8,967 | ||
2001 Plan | ||||
Shares of Common Stock reserved | ||||
Outstanding stock options (in shares) | 1,525 | 1,859 | ||
2011 Plan | ||||
Shares of Common Stock reserved | ||||
Outstanding stock options (in shares) | 2,816 | 3,096 | ||
Outstanding RSUs (in shares) | 1,385 | 753 | ||
Number of shares available for grant (in shares) | 4,492 | 3,259 |
Credit_Facility_Details
Credit Facility (Details) (USD $) | 12 Months Ended | 0 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Nov. 21, 2014 |
Maturities of current and long-term debt | ||
Long-term Debt, Total | $2,625 | |
Amortization of debt issuance costs | ||
2015 | 178 | |
2016 | 178 | |
2017 | 178 | |
2018 | 158 | |
Amortization of debt issuance costs | 692 | |
Revolving Line of Credit | ||
Credit Facility. | ||
Deferred finance costs | 711 | |
Amortization and interest expense | 34 | |
Amortization period for deferred finance cost | 4 years | |
Revolving Line of Credit | LIBOR | ||
Credit Facility. | ||
Floating interest rate, basis | LIBOR | |
Revolving Line of Credit | LIBOR | Minimum | ||
Credit Facility. | ||
Spread on floating interest rate (as a percent) | 2.50% | |
Revolving Line of Credit | LIBOR | Maximum | ||
Credit Facility. | ||
Spread on floating interest rate (as a percent) | 3.50% | |
Revolving Line of Credit | Prime Rate | ||
Credit Facility. | ||
Floating interest rate, basis | Prime Rate | |
Revolving Line of Credit | Prime Rate | Minimum | ||
Credit Facility. | ||
Spread on floating interest rate (as a percent) | 1.50% | |
Revolving Line of Credit | Prime Rate | Maximum | ||
Credit Facility. | ||
Spread on floating interest rate (as a percent) | 2.50% | |
Revolving Line of Credit | ||
Credit Facility. | ||
Maximum borrowing capacity | 46,500 | |
Maximum borrowing capacity with an option to increase the available amount upon the satisfaction of certain conditions | 86,500 | |
Outstanding balance | 0 | |
Revolving Line of Credit | Minimum | ||
Credit Facility. | ||
Fee on unused portion of Revolving Line of Credit(as a percent) | 0.38% | |
Revolving Line of Credit | Maximum | ||
Credit Facility. | ||
Fee on unused portion of Revolving Line of Credit(as a percent) | 0.50% | |
Term Loan | ||
Credit Facility. | ||
Maximum borrowing capacity | 3,500 | |
Amortization period for interest and principal | 4 years | |
Outstanding balance | 3,500 | |
Interest rate percentage | 2.70% | |
Maturities of current and long-term debt | ||
2015 | 875 | |
2016 | 875 | |
2017 | 875 | |
2018 | 875 | |
Long-term Debt, Total | 3,500 | |
Subsequent Event | Revolving Line of Credit | ||
Credit Facility. | ||
Outstanding balance | $5,000 |
Income_taxes_Details
Income taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
U.S. federal: | |||
Current | $6 | ($402) | $1,651 |
Deferred | 328 | 1,158 | 1,189 |
Total U.S. federal | 334 | 756 | 2,840 |
U.S. state and local: | |||
Current | 226 | 248 | 327 |
Deferred | 140 | 457 | -202 |
Total U.S. state and local | 366 | 705 | 125 |
Reconciliation from U.S. federal statutory tax rate to effective income taxes rate | |||
Federal statutory rate (as a percent) | 34.00% | 34.00% | 34.00% |
State and local (as a percent) | 4.60% | -5.70% | 1.10% |
Foreign rate differential (as a percent) | -0.70% | -3.20% | |
Stock options (as a percent) | -0.50% | -0.70% | -2.60% |
Non-controlling interests (as a percent) | 1.90% | 15.20% | -2.20% |
Valuation allowance (as a percent) | -45.10% | -128.50% | |
Transaction costs (as a percent) | -6.70% | ||
Purchase price adjustments (as a percent) | 6.60% | ||
Revaluation of deferred tax assets (as a percent) | 2.80% | ||
Uncertain tax positions (as a percent) | -0.10% | -2.90% | |
Return to provision (as a percent) | 0.60% | 9.30% | -5.30% |
Other (as a percent) | 1.40% | 1.10% | 2.00% |
Income taxes (as a percent) | -3.90% | -78.70% | 27.00% |
Deferred tax assets: | |||
Net operating loss carryforwards | 10,115 | 3,508 | |
Outside basis differences for U.S. partnerships | 3,710 | 2,842 | |
Stock options | 3,348 | 3,018 | |
Deferred revenue | 648 | 516 | |
Deferred compensation | 144 | 355 | |
State taxes | 45 | 34 | |
Other | 1,341 | 404 | |
Valuation allowance | -12,470 | -4,101 | -1,669 |
Net Deferred Tax Assets | 6,881 | 6,576 | |
Deferred tax liabilities: | |||
Intangible assets | -6,855 | -6,737 | |
Property and equipment | -2,671 | -2,016 | |
Net deferred tax liabilities | -9,526 | -8,753 | |
Net deferred taxes | -2,645 | -2,177 | |
Net operating loss carryforwards | |||
The tax effected amount of gross unnrealized net operating loss carryforwards excluded under ASC 718 | 6,284 | ||
Foreign loss before income taxes | 1,251 | 559 | 61 |
Period of cumulative results for determination of releasing valuation allowance | 3 years | ||
Changes in the valuation allowance | |||
Balance at the beginning of the period | 4,101 | 1,669 | 1,822 |
Increase in valuation allowances on deferred tax assets | 8,369 | 2,432 | 51 |
Decrease credited to operations | -204 | ||
Balance at the end of the period | 12,470 | 4,101 | 1,669 |
Windfall Tax Benefits from Stock Option Exercises | 55 | 2,190 | |
United Kingdom | |||
Net operating loss carryforwards | |||
Foreign subsidiary deferred tax asset | 1,360 | ||
Brazil | |||
Net operating loss carryforwards | |||
Foreign subsidiary deferred tax asset | 292 | ||
Federal | |||
Net operating loss carryforwards | |||
The tax effected amount of gross unnrealized net operating loss carryforwards excluded under ASC 718 | 35,555 | 20,389 | |
State | |||
Net operating loss carryforwards | |||
The tax effected amount of gross unnrealized net operating loss carryforwards excluded under ASC 718 | 55,457 | 37,153 | |
Foreign | |||
Net operating loss carryforwards | |||
The tax effected amount of gross unnrealized net operating loss carryforwards excluded under ASC 718 | $7,661 | $3,425 |
Income_taxes_Details_2
Income taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Income taxes | |||
Uncertain tax positions | $459 | $445 | |
Uncertain tax positions, reduction to deferred tax assets | 106 | ||
Accrued interest, net of federal income tax benefits, and penalties | 67 | 53 | |
Unrecognized tax benefits that would affect the effective tax rate | 286 | ||
Reconciliation of unrecognized tax benefits | |||
Balance at the beginning of the period | 392 | 392 | |
Balance at the end of the period | $392 | $392 |
Commitments_and_contingencies_1
Commitments and contingencies (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and contingencies | |||
Rent expense for leases | $29,434 | $20,234 | $16,760 |
Interest expense associated with the capital leases | 33 | 15 | 11 |
Rent expense for leases of office facilities | 1,621 | 1,227 | 1,209 |
Sublease income included in rent expenses | 27 | 54 | 52 |
Capital Leases | |||
2015 | 331 | ||
2016 | 259 | ||
2017 | 132 | ||
2018 | 26 | ||
Minimum lease payments | 748 | ||
Less: Amounts representing interest ranging from 3.1% to 11.1% | -58 | ||
Capital leases minimum lease payments | 690 | ||
Current portion | 309 | 526 | |
Non-current portion | 381 | 473 | |
Operating Leases and Airport Guarantees | |||
2015 | 10,038 | ||
2016 | 9,842 | ||
2017 | 9,852 | ||
2018 | 8,821 | ||
2019 | 6,035 | ||
Thereafter | 33,312 | ||
Minimum lease payments | $77,900 | ||
Minimum | |||
Capital Leases | |||
Interest rate (as a percent) | 3.10% | ||
Maximum | |||
Capital Leases | |||
Interest rate (as a percent) | 11.10% |
Commitments_and_contingencies_2
Commitments and contingencies (Details 2) (USD $) | 12 Months Ended | 0 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Jan. 01, 2015 |
item | ||
Employment contracts | ||
Number of officers with whom the entity entered into employment contracts | 6 | |
Other matters | ||
Number of claims related to venue partners | 1 | |
Minimum | ||
Other matters | ||
Reasonably possible loss | 0 | |
Maximum | ||
Other matters | ||
Reasonably possible loss | 3,000 | |
Letter of Credit | Silicon Valley Bank ("SVB") Agreement | ||
Letters of credit | ||
Amount of Letters of Credit that allows entity to draw | 3,315 | |
Term period of Letters of Credit agreements | 11 months | |
Number of drafts drawn under Letters of Credit | 0 | |
Subsequent Event | Letter of Credit | Silicon Valley Bank ("SVB") Agreement | ||
Letters of credit | ||
Increase in borrowing capacity | $600 |
Stock_repurchases_Details
Stock repurchases (Details) (USD $) | 12 Months Ended | 0 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Apr. 01, 2013 | Dec. 31, 2014 |
Equity, Class of Treasury Stock | |||
Number of shares repurchased and retired under the stock repurchase program | 722,000 | ||
Value of shares repurchased and retired under the stock repurchase program excluding commissions paid | $4,820 | ||
Average price under the stock repurchase program (in dollars per share) | $6.68 | ||
Remaining amount authorized for the share repurchase program | 5,180 | ||
Maximum | |||
Equity, Class of Treasury Stock | |||
Amount of common stock approved by the entity for a stock repurchase program | $10,000 |
Stock_incentive_plans_Details
Stock incentive plans (Details) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock incentive plans | ||||
Number of stock options granted | 203,000 | 1,351,000 | 1,391,000 | |
Number of stock options outstanding | 4,341,000 | 4,955,000 | 5,045,000 | 6,601,000 |
RSUs | ||||
Stock incentive plans | ||||
Number of RSUs granted (in shares) | 1,650,000 | 799,000 | ||
2011 Plan | ||||
Stock incentive plans | ||||
Common stock shares reserved for issuance | 8,693,162 | |||
Annual percentage increase alternative, increase in common stock reserved for issuance as a percentage of common stock outstanding | 4.50% | |||
Annual fixed increase alternative, increase in shares of common stock reserved for issuance (in shares) | 3,000,000 | |||
Number of stock options outstanding | 2,816,000 | 3,096,000 | ||
2011 Plan | Options | ||||
Stock incentive plans | ||||
Number of stock options granted | 5,229,486 | |||
2011 Plan | RSUs | ||||
Stock incentive plans | ||||
Number of RSUs granted (in shares) | 2,449,716 | |||
2001 Plan | ||||
Stock incentive plans | ||||
Number of stock options outstanding | 1,525,000 | 1,859,000 |
Stock_incentive_plans_Details_
Stock incentive plans (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Recognized stock-based compensation expense | |||
Total stock-based compensation | $7,164 | $4,506 | $2,735 |
Stock-based compensation expense capitalized | 398 | ||
Network operations | |||
Recognized stock-based compensation expense | |||
Total stock-based compensation | 1,356 | 888 | 352 |
Development and technology | |||
Recognized stock-based compensation expense | |||
Total stock-based compensation | 600 | 380 | 352 |
Selling and marketing | |||
Recognized stock-based compensation expense | |||
Total stock-based compensation | 2,017 | 1,045 | 571 |
General and administrative | |||
Recognized stock-based compensation expense | |||
Total stock-based compensation | $3,191 | $2,193 | $1,460 |
Stock_incentive_plans_Details_1
Stock incentive plans (Details 3) (Options) | 12 Months Ended |
Dec. 31, 2014 | |
Options | |
Stock incentive plans | |
Vesting period | 4 years |
Vesting percentage when the individual completes 12 months of continuous service | 25.00% |
Continuous service period of individual | 12 months |
Vesting percentage on a monthly basis | 75.00% |
Stock_incentive_plans_Details_2
Stock incentive plans (Details 4) (USD $) | 12 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Number of Options | ||||
Outstanding at the beginning of the period (in shares) | 4,955 | 5,045 | 6,601 | |
Granted (in shares) | 203 | 1,351 | 1,391 | |
Exercised (in shares) | -458 | -461 | -1,899 | |
Canceled/forfeited (in shares) | -359 | -980 | -1,048 | |
Outstanding at the end of the period (in shares) | 4,341 | 4,955 | 5,045 | 6,601 |
Vested, exercisable and expected to vest at the end of the period (in shares) | 4,267 | |||
Exercisable at the end of the period (in shares) | 3,053 | |||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $6.31 | $6.50 | $5.50 | |
Granted (in dollars per share) | $5.99 | $6.73 | $8.29 | |
Exercised (in dollars per share) | $2.53 | $1.33 | $1.36 | |
Canceled/forfeited (in dollars per share) | $7.53 | $10.20 | $11.85 | |
Outstanding at the end of the period (in dollars per share) | $6.60 | $6.31 | $6.50 | $5.50 |
Vested and expected to vest at the end of the period (in dollars per share) | $6.58 | |||
Exercisable at the end of the period (in dollars per share) | $5.83 | |||
Weighted-Average Remaining Contract Life (years) | ||||
Outstanding | 5 years 9 months 18 days | 6 years 7 months 6 days | 6 years 4 months 24 days | 7 years |
Vested and expected to vest at the end of the period | 5 years 8 months 12 days | |||
Exercisable at the end of the period | 4 years 10 months 24 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at the beginning of the period | $9,535 | $14,742 | $30,996 | |
Outstanding at the end of the period | 11,017 | 9,535 | 14,742 | 30,996 |
Vested and expected to vest at the end of the period | 10,946 | |||
Exercisable at the end of the period | 10,014 | |||
Cash proceeds from exercise of stock option | 1,158 | 614 | 2,573 | |
Total intrinsic value of stock options exercised (in dollars) | 2,027 | 2,662 | 14,901 | |
Tax benefits for the deductions from stock option exercises | $55 | $2,190 | ||
Weighted average grant-date fair value of stock options granted (in dollars per share) | $2.92 | $3.03 | $3.59 |
Stock_incentive_plans_Details_3
Stock incentive plans (Details 5) (Unvested stock option, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Unvested stock option | |
Stock incentive plans | |
Total stock-based compensation expense | $4,479 |
Weighted average period over which unrecognized compensation expense is expected to be recognized | 2 years 1 month 10 days |
Stock_incentive_plans_Details_4
Stock incentive plans (Details 6) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
RSUs | ||
Number of Shares | ||
Nonvested at the beginning of the period (in shares) | 753,000 | |
Granted (in shares) | 1,650,000 | 799,000 |
Vested (in shares) | -868,000 | -6,000 |
Canceled/forfeited (in shares) | -150,000 | -40,000 |
Nonvested at the end of the period (in shares) | 1,385,000 | 753,000 |
Weighted Average Grant-Date Fair Value | ||
Nonvested at the beginning of the period (In dollars per share) | $6.22 | |
Granted (In dollars per share) | $6.02 | $6.21 |
Vested (In dollars per share) | $6.09 | $6.39 |
Canceled/forfeited (In dollars per share) | $6.02 | $6.05 |
Nonvested at the end of the period (In dollars per share) | $6.09 | $6.22 |
Total stock-based compensation expense | $6,901 | |
Weighted average period over which unrecognized compensation expense is expected to be recognized | 2 years 1 month 6 days | |
Time-based restricted stock unit awards | ||
Weighted Average Grant-Date Fair Value | ||
Shares vested | 868,211 | |
Shares issued | 581,866 | |
Time-based restricted stock unit awards | Executive and non executive personnel | Minimum | ||
Stock incentive plans | ||
Vesting period | 2 years | |
Time-based restricted stock unit awards | Executive and non executive personnel | Maximum | ||
Stock incentive plans | ||
Vesting period | 3 years | |
Time-based restricted stock unit awards | Existing board members | ||
Stock incentive plans | ||
Vesting period | 1 year | |
Time-based restricted stock unit awards | New board members | ||
Stock incentive plans | ||
Vesting period | 4 years | |
Vesting percentage when the individual completes 12 months of continuous service | 25.00% | |
Performance-based restricted stock unit awards | ||
Stock incentive plans | ||
Vesting percentage when the individual completes 12 months of continuous service | 33.00% | |
Continuous service period of individual | 12 months | |
Number of equal quarterly installments for remaining award vesting | 8 |
Employee_benefit_plan_Details
Employee benefit plan (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee benefit plan | |||
Employer contributions made to the plan | $393 | $330 | $347 |
Net_loss_income_per_share_attr2
Net (loss) income per share attributable to common stockholders (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||||||||||
Net loss attributable to common stockholders, basic and diluted | ($19,521) | ($3,968) | $7,295 | ||||||||
Denominator: | |||||||||||
Weighted Average Number of Shares Outstanding, Basic | 35,753,000 | 35,578,000 | 34,774,000 | ||||||||
Effect of dilutive stock options | 2,543,000 | ||||||||||
Weighted average common stock, diluted | 35,753,000 | 35,578,000 | 37,317,000 | ||||||||
Net (loss) income per share attributable to common stockholders: | |||||||||||
Basic (in dollars per share) | ($0.18) | ($0.11) | ($0.10) | ($0.15) | ($0.08) | $0.01 | ($0.01) | ($0.03) | ($0.55) | ($0.11) | $0.21 |
Diluted (in dollars per share) | ($0.18) | ($0.11) | ($0.10) | ($0.15) | ($0.08) | $0.01 | ($0.01) | ($0.03) | ($0.55) | ($0.11) | $0.20 |
Options | |||||||||||
Anti-dilutive securities | |||||||||||
Anti-dilutive securities excluded from the computation of diluted net income per share | 2,518,000 |
Quarterly_financial_data_unaud2
Quarterly financial data (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly financial data (unaudited) | |||||||||||
Revenue | $33,627 | $30,822 | $28,396 | $26,452 | $28,766 | $28,607 | $26,239 | $23,134 | $119,297 | $106,746 | $102,506 |
(Loss) income from operations | -6,014 | -3,487 | -3,352 | -5,173 | -752 | 784 | -424 | -1,502 | -18,026 | -1,894 | 10,846 |
Net (loss) income attributable to common stockholders | ($6,524) | ($3,815) | ($3,734) | ($5,448) | ($2,802) | $354 | ($399) | ($1,121) | ($19,521) | ($3,968) | $7,295 |
Basic (loss) earnings per share (in dollars per share) | ($0.18) | ($0.11) | ($0.10) | ($0.15) | ($0.08) | $0.01 | ($0.01) | ($0.03) | ($0.55) | ($0.11) | $0.21 |
Diluted (loss) earnings per share (in dollars per share) | ($0.18) | ($0.11) | ($0.10) | ($0.15) | ($0.08) | $0.01 | ($0.01) | ($0.03) | ($0.55) | ($0.11) | $0.20 |
Subsequent_events_Details
Subsequent events (Details) (RSUs) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2015 | |
Subsequent events | |||
Issued (in shares) | 1,650,000 | 799,000 | |
Subsequent Event | Executive and non executive personnel | |||
Subsequent events | |||
Issued (in shares) | 1,264,608 |