Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | ||
Mar. 31, 2014 | 7-May-14 | 7-May-14 | |
Class A | Class B | ||
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
Trading Symbol | 'MCHX | ' | ' |
Entity Registrant Name | 'MARCHEX INC | ' | ' |
Entity Central Index Key | '0001224133 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 5,232,636 | 37,089,304 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $38,526 | $30,912 |
Accounts receivable, net | 35,045 | 30,005 |
Prepaid expenses and other current assets | 2,810 | 2,943 |
Refundable taxes | 86 | 97 |
Deferred tax assets | 1,292 | 1,016 |
Total current assets | 77,759 | 64,973 |
Property and equipment, net | 5,441 | 5,440 |
Deferred tax assets | 23,750 | 25,138 |
Intangible and other assets, net | 1,440 | 484 |
Goodwill | 65,679 | 65,679 |
Intangible assets from acquisitions, net | 31 | 434 |
Total assets | 174,100 | 162,148 |
Current liabilities: | ' | ' |
Accounts payable | 22,094 | 15,922 |
Accrued expenses and other current liabilities | 9,974 | 7,988 |
Deferred revenue | 1,631 | 1,388 |
Total current liabilities | 33,699 | 25,298 |
Other non-current liabilities | 1,455 | 2,095 |
Total liabilities | 35,154 | 27,393 |
Stockholders' equity: | ' | ' |
Treasury stock | ' | -2 |
Additional paid-in capital | 308,850 | 305,517 |
Accumulated deficit | -170,294 | -171,149 |
Total stockholders' equity | 138,946 | 134,755 |
Total liabilities and stockholders' equity | 174,100 | 162,148 |
Class A | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 58 | 80 |
Class B | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | $332 | $309 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Revenue | $50,496 | $34,732 | ||
Expenses: | ' | ' | ||
Service costs | 32,354 | [1] | 20,148 | [1] |
Sales and marketing | 3,382 | [1] | 2,644 | [1] |
Product development | 7,560 | 6,808 | ||
General and administrative | 5,361 | 4,797 | ||
Amortization of intangible assets from acquisitions | 403 | [2] | 1,055 | [2] |
Separation related costs | ' | 345 | ||
Total operating expenses | 49,060 | 35,797 | ||
Gain on sales and disposals of intangible assets, net | ' | 1,362 | ||
Income from operations | 1,436 | 297 | ||
Other income (expense): | ' | ' | ||
Interest income | ' | 3 | ||
Interest and line of credit expense | -19 | -19 | ||
Other | 17 | -1 | ||
Total other income (expense) | -2 | -17 | ||
Income from continuing operations before provision for income taxes | 1,434 | 280 | ||
Income tax expense | 588 | 164 | ||
Net income from continuing operations | 846 | 116 | ||
Discontinued operations, net of tax | 9 | -31 | ||
Net income | 855 | 85 | ||
Dividends paid to participating securities | -36 | ' | ||
Net income applicable to common stockholders | 819 | 85 | ||
Basic and diluted net income per share applicable to Class A and Class B common stockholders: | ' | ' | ||
Continuing operations | $0.02 | $0 | ||
Discontinued operations, net of tax | $0 | $0 | ||
Basic and diluted net income applicable to Class A and Class B common stockholders | $0.02 | $0 | ||
Dividends paid per share | $0.02 | ' | ||
Class A | ' | ' | ||
Other income (expense): | ' | ' | ||
Net income from continuing operations | 170 | 30 | ||
Shares used to calculate basic net income per share applicable to common stockholders | ' | ' | ||
Shares used to calculate basic net income per share applicable to common stockholders | 7,741 | 9,570 | ||
Shares used to calculate diluted net income per share applicable to common stockholders | ' | ' | ||
Shares used to calculate diluted net income per share applicable to common stockholders | 7,741 | 9,570 | ||
Class B | ' | ' | ||
Other income (expense): | ' | ' | ||
Net income from continuing operations | 676 | 86 | ||
Dividends paid to participating securities | ($36) | ' | ||
Shares used to calculate basic net income per share applicable to common stockholders | ' | ' | ||
Shares used to calculate basic net income per share applicable to common stockholders | 29,035 | 25,585 | ||
Shares used to calculate diluted net income per share applicable to common stockholders | ' | ' | ||
Shares used to calculate diluted net income per share applicable to common stockholders | 39,761 | 35,550 | ||
[1] | Excludes amortization of intangible assets from acquisitions | |||
[2] | Components of amortization of intangible assets from acquisitions: |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Operations (Parenthetical) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Service costs | $403 | $748 | ||
Sales and marketing | ' | 307 | ||
Total | $403 | [1] | $1,055 | [1] |
[1] | Components of amortization of intangible assets from acquisitions: |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $855 | $85 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Amortization and depreciation | 1,356 | 1,968 |
Gain on sales and disposals of intangible assets, net | ' | -1,362 |
Allowance for doubtful accounts and advertiser credits | 701 | 373 |
Stock-based compensation | 2,883 | 1,919 |
Deferred income taxes | 576 | -43 |
Excess tax benefit related to stock-based compensation | ' | -7 |
Change in certain assets and liabilities: | ' | ' |
Accounts receivable, net | -5,741 | -2,936 |
Refundable taxes | 12 | -46 |
Prepaid expenses, other current assets and other assets | 187 | -223 |
Accounts payable | 5,976 | 1,966 |
Accrued expenses and other current liabilities | 1,135 | 381 |
Deferred revenue | 243 | -27 |
Other non-current liabilities | -105 | 93 |
Net cash provided by operating activities | 8,078 | 2,141 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -672 | -810 |
Proceeds from sales of intangible assets | ' | 1,362 |
Purchases of intangible assets and changes in other non-current assets | -135 | -40 |
Net cash provided by (used in) investing activities | -807 | 512 |
Cash flows from financing activities: | ' | ' |
Excess tax benefit related to stock-based compensation | ' | 7 |
Deferred offering costs | -67 | ' |
Tax withholding related to restricted stock awards | -148 | -1,384 |
Common stock dividend payments | -771 | ' |
Repurchase of Class B common stock | ' | -119 |
Proceeds from exercises of stock options and issuance of restricted stock to employees, net of repurchases of forfeited unvested restricted stock | 1,329 | 2 |
Proceeds from employee stock purchase plan | ' | 11 |
Net cash provided by (used in) financing activities | 343 | -1,483 |
Net increase in cash and cash equivalents | 7,614 | 1,170 |
Cash and cash equivalents at beginning of period | 30,912 | 15,930 |
Cash and cash equivalents at end of period | 38,526 | 17,100 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid during the period for income taxes, net of refunds | $5 | $43 |
Description_of_Business_and_Ba
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Description of Business and Basis of Presentation | ' |
(1) Description of Business and Basis of Presentation | |
Marchex, Inc. (the “Company”) was incorporated in the state of Delaware on January 17, 2003. The Company is a mobile and call advertising technology company. The Company provides products and services for businesses of all sizes that depend on consumer phone calls to drive sales. The Company’s technology platform delivers performance-based, pay-for-call advertising across numerous mobile and online publishers to connect high-intent consumers with business over the phone while its technology facilitates call quality, analyzes calls in real time and measures the outcomes of calls. The Company through its Archeo division enables the buying, selling and development of domain names. The Company also provides performance-based online advertising that connects advertisers with consumers across our owned web sites as well as third party web sites. | |
The accompanying unaudited condensed consolidated financial statements of Marchex, Inc. and its wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other period. The balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC. | |
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Acquisitions are included in the Company’s consolidated financial statements as of and from the date of acquisition. All inter-company transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the condensed consolidated financial statements in the prior period to conform to the current period presentation. The Company’s condensed consolidated financial statements presented include the condensed consolidated balance sheets as of December 31, 2013 and March 31, 2014, the condensed consolidated statements of operations for the three months ended March 31, 2013 and 2014 and the condensed consolidated statements of cash flows for the three months ended March 31, 2013 and 2014. | |
In July 2013, the Company sold certain assets related to Archeo’s pay per click advertising services. As a result, the operating results related to these certain pay per click assets are shown as discontinued operations in the condensed consolidated statements of operations for all periods presented (see Note 15. Discontinued Operations). |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Significant Accounting Policies | ' | ||||||||
(2) Significant Accounting Policies | |||||||||
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These judgments are difficult as matters that are inherently uncertain directly impact their valuation and accounting. Actual results may vary from management’s estimates and assumptions. | |||||||||
On September 10, 2013, the Company launched its Domains Marketplace, which provides domain names available for sale and initiated plans to facilitate the active buying and transacting of domain names. Domain name sales occurring after this launch have been recognized as revenue in the condensed consolidated financial statements. Historically, the sale of domain names were not a core operation of the Company and were peripheral to the generation of advertising revenue from domain names held for use and as such domain name sales were reported as gains on sales and disposals of intangible assets, net in the condensed consolidated financial statements. Substantially all of the Company’s domain names that are available for sale are also used to generate advertising revenue. The Company also continues to maintain a portfolio of domain names which are solely held for use primarily to generate advertising revenue. | |||||||||
Adoption of New Accounting Pronouncement | |||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11). The amendments in this update require an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. In the first quarter of 2014, the Company adopted ASU 2013-11on a prospective basis, which did not have a material impact on the Company’s financial statements. | |||||||||
Revenues | |||||||||
The following table presents the Company’s revenues by segment for the periods presented (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Call-driven | $ | 31,108 | $ | 45,492 | |||||
Archeo | 3,624 | 5,004 | |||||||
Total Revenue | $ | 34,732 | $ | 50,496 | |||||
Call-driven revenue consists of payments from advertisers for pay-for-call marketing services and for use of the Company’s Call Analytics technology. Call-driven revenue also consists of payments from our reseller partners for use of our technology platform and marketing services, which they offer to their small business customers, as well as payments from advertisers for cost-per-action marketing services. Archeo revenue includes revenue generated from advertisements on our network of owned and operated websites and third-party distribution, as well as from the sale of domain names occurring after the launch of the Company’s Domains Marketplace in September 2013. Prior to the launch of Domains Marketplace, the sale of domain names were reported as gains on sales and disposals of intangible assets, net in the condensed consolidated financial statements and totaled $1.4 million for the three months ended March 31, 2013 compared to $1.9 million of domain sales revenue for the three months ended March 31, 2014. See Note 6. Segment Reporting and Geographic Information for further discussion regarding the Company’s operating segments. | |||||||||
The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Partner and Other Revenue Sources | $ | 32,841 | $ | 46,870 | |||||
Proprietary Web site Traffic Sources and Domain Names | 1,891 | 3,626 | |||||||
Total Revenue | $ | 34,732 | $ | 50,496 | |||||
The Company’s partner network revenues are primarily generated using third party distribution networks to deliver the advertisers’ listings. The distribution network includes mobile and online search engines and applications, directories, destination sites, shopping engines, third party Internet domains or web sites, other targeted Web-based content, mobile carriers and other offline sources. The Company generates revenue upon delivery of qualified and reported phone calls or click-throughs to our advertisers or to advertising services providers’ listings. The Company pays a revenue share to the distribution partners to access their mobile, online, offline and other user traffic. Other revenues include the Company’s call provisioning and call tracking services, presence management services, and campaign management services. | |||||||||
The Company’s proprietary web site traffic revenues are generated from the Company’s portfolio of owned web sites which are monetized with pay-for-call or pay-per-click listings that are relevant to the web sites, and other forms of advertising, including banner advertising and sponsorships. When an online user navigates to one of the Company’s owned and operated web sites and calls or clicks on a particular listing or completes the specified action, the Company receives a fee. Other proprietary web site traffic revenues include domain name sales which were recognized as revenue with the launch of its Domains Marketplace in September 2013. |
Stockbased_Compensation_Plans
Stock-based Compensation Plans | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Stock-based Compensation Plans | ' | ||||||||||||||||
(3) Stock-based Compensation Plans | |||||||||||||||||
Stock-based compensation expense has been included in the same lines as compensation paid to the same employees in the condensed consolidated statement of operations. Stock-based compensation expense was included in the following operating expense categories as follows (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Service costs | $ | 180 | $ | 282 | |||||||||||||
Sales and marketing | 60 | 204 | |||||||||||||||
Product development | 372 | 659 | |||||||||||||||
General and administrative | 1,295 | 1,738 | |||||||||||||||
Total stock-based compensation | $ | 1,907 | $ | 2,883 | |||||||||||||
Income tax benefit related to stock-based compensation included in net income from continuing operations | $ | 509 | $ | 908 | |||||||||||||
FASB ASC 718 requires the benefits of tax deductions in excess of the stock-based compensation cost to be classified as financing cash inflows and is shown as “Excess tax benefit related to stock-based compensation” on the consolidated statement of cash flows. In addition, a tax benefit and a credit to additional paid-in capital for the excess deductions are not recognized until that deduction reduces taxes payable. For the three months ended March 31, 2014, the Company incurred an excess tax deduction of $1.3 million for which the tax benefit was not recorded because the Company is in a cumulative loss carryforward position for income taxes. | |||||||||||||||||
The Company uses the Black-Scholes option pricing model to estimate the per share fair value of stock option grants with time-based vesting. The Black-Scholes model relies on a number of key assumptions to calculate estimated fair values. For the quarters ended March 31, 2013 and 2014, the expected life of each award granted was determined based on historical experience with similar awards, giving consideration to contractual terms, anticipated exercise patterns, vesting schedules and forfeitures. Expected volatility is based on historical volatility levels of the Company’s Class B common stock and the expected volatility of companies in similar industries that have similar vesting and contractual terms. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to the expected life of the option. The Company uses an expected annual dividend yield in consideration of the Company’s common stock dividend payments. | |||||||||||||||||
The following weighted average assumptions were used in determining the fair value of time-vested stock option grants for the periods presented: | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Expected life (in years) | 4 | 4 | |||||||||||||||
Risk-free interest rate | 0.57% | 1.32 | % | ||||||||||||||
Expected volatility | 57% | 55%-60 | % | ||||||||||||||
Expected dividend yield | 2.33% | 0.76 | % | ||||||||||||||
Stock option activity during the three months ended March 31, 2014 is summarized as follows: | |||||||||||||||||
Shares | Weighted average | Weighted average | Aggregate | ||||||||||||||
exercise price | remaining | intrinsic value | |||||||||||||||
contractual term | (in thousands) | ||||||||||||||||
(in years) | |||||||||||||||||
Balance at December 31, 2013 | 7,707,713 | $ | 7.48 | $ | 6.99 | $ | 17,148 | ||||||||||
Options granted | 86,000 | 10.12 | |||||||||||||||
Options forfeited | (58,073 | ) | 5.39 | ||||||||||||||
Options expired | (37,061 | ) | 12.13 | ||||||||||||||
Options exercised | (206,811 | ) | 6.65 | ||||||||||||||
Balance at March 31, 2014 | 7,491,768 | $ | 7.52 | $ | 6.81 | $ | 27,477 | ||||||||||
The Company issues restricted stock awards and restricted stock units to employees for future services and/or in connection with acquisitions. Restricted stock units entitle the holder to receive one share of the Company’s Class B common stock upon satisfaction of certain vesting conditions. Restricted stock award and restricted stock unit grants are generally measured at fair value on the date of grant based on the number of awards granted and the quoted price of the Company’s common stock. Restricted shares issued are accounted for under FASB ASC 718 using the straight-line method net of estimated forfeitures. | |||||||||||||||||
Restricted stock awards and restricted stock units activity during the three months ended March 31, 2014 is summarized as follows: | |||||||||||||||||
Shares/ | Weighted average | ||||||||||||||||
Units | grant date | ||||||||||||||||
fair value | |||||||||||||||||
Unvested balance at December 31, 2013 | 2,709,443 | $ | 5.41 | ||||||||||||||
Granted | 10,000 | 9.86 | |||||||||||||||
Vested | (146,875 | ) | 6.1 | ||||||||||||||
Forfeited | (25,750 | ) | 3.89 | ||||||||||||||
Unvested balance at March 31, 2014 | 2,546,818 | $ | 5.4 | ||||||||||||||
The Company repurchased 12,008 shares from certain executives for minimum withholding taxes on 41,000 restricted stock awards that vested during 2014. The number of shares repurchased was based on the value on the vesting date of the restricted stock awards equivalent to the value of the executives’ minimum withholding taxes of $148,000, which was remitted in cash to the appropriate taxing authorities. The payments are reflected as a financing activity within the condensed consolidated statement of cash flows when paid. |
Net_Income_Per_Share
Net Income Per Share | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Net Income Per Share | ' | ||||||||||||||||
(4) Net Income Per Share | |||||||||||||||||
The Company computes net income per share of Class A and Class B common stock using the two class method. Under the provisions of the two class method, basic net income per share is computed by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income applicable to common stockholders by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the diluted net income per share of Class B common stock assumes the conversion of Class A common stock to Class B common stock, while the diluted net income per share of Class A common stock does not assume the conversion of those shares. | |||||||||||||||||
In accordance with the two class method, the undistributed earnings for each period are allocated based on the contractual participation rights of the Class A and Class B common shares and the restricted shares as if the earnings for the year had been distributed. Considering the terms of the Company’s charter which provides that, if and when dividends are declared on our common stock in accordance with Delaware General Corporation Law, equivalent dividends shall be paid with respect to the shares of Class A common stock and Class B common stock and that both classes of common stock have identical dividend rights and would share equally in our net assets in the event of liquidation, we have allocated undistributed losses on a proportionate basis. Additionally, the Company has paid dividends equally to both classes of common stock and the unvested restricted shares since it initiated a quarterly cash dividend in November 2006. | |||||||||||||||||
Instruments granted in unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities prior to vesting. As such, the Company’s restricted stock awards are considered participating securities for purposes of calculating earnings per share. Under the two class method, dividends paid on unvested restricted stock are allocated to these participating securities and therefore impacts the calculation of amounts allocated to common stock. | |||||||||||||||||
The following table calculates net income applicable to common stockholders used to compute basic net income per share for the periods ended (in thousands, except per share amounts): | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||||
Numerator: | |||||||||||||||||
Net income from continuing operations | $ | 30 | $ | 86 | $ | 170 | $ | 676 | |||||||||
Dividends paid to participating securities | — | — | — | (36 | ) | ||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 30 | $ | 86 | $ | 170 | $ | 640 | |||||||||
Discontinued operations, net of tax | (9 | ) | (22 | ) | 2 | 7 | |||||||||||
Net income applicable to common stockholders | $ | 21 | $ | 64 | $ | 172 | $ | 647 | |||||||||
Denominator: | |||||||||||||||||
Weighted average number of shares outstanding used to calculate basic net income per share | 9,570 | 25,585 | 7,741 | 29,035 | |||||||||||||
Basic net income per share: | |||||||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
Discontinued operations, net of tax | (0.00 | ) | (0.00 | ) | 0 | 0 | |||||||||||
Basic net income per share applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
The following table calculates net income to diluted net income applicable to common stockholders used to compute diluted net income per share for the periods ended (in thousands, except per share amounts): | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||||
Numerator: | |||||||||||||||||
Net income from continuing operations | $ | 30 | $ | 86 | $ | 170 | $ | 676 | |||||||||
Dividends paid to participating securities | — | — | — | (36 | ) | ||||||||||||
Reallocation of net income for Class A shares as a result of conversion of Class A to Class B shares | — | 30 | — | 170 | |||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 30 | $ | 116 | $ | 170 | $ | 810 | |||||||||
Discontinued operations, net of tax | (9 | ) | (22 | ) | 2 | 7 | |||||||||||
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares | — | (9 | ) | — | 2 | ||||||||||||
Discontinued operations, net of tax | $ | (9 | ) | $ | (31 | ) | $ | 2 | $ | 9 | |||||||
Net income applicable to common stockholders | $ | 21 | $ | 85 | $ | 172 | $ | 819 | |||||||||
Denominator: | |||||||||||||||||
Weighted average number of shares outstanding used to calculate basic net income per share | 9,570 | 25,585 | 7,741 | 29,035 | |||||||||||||
Weighted average stock options and common shares subject to repurchase or cancellation | — | 395 | — | 2,985 | |||||||||||||
Conversion of Class A to Class B common shares outstanding | — | 9,570 | — | 7,741 | |||||||||||||
Weighted average number of shares outstanding used to calculate diluted net income per share | 9,570 | 35,550 | 7,741 | 39,761 | |||||||||||||
Diluted net income per share: | |||||||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
Discontinued operations, net of tax | (0.00 | ) | (0.00 | ) | 0 | 0 | |||||||||||
Diluted net income per share applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
The weighted average number of shares used to calculate the diluted net income per share includes the weighted average number of shares from the assumed conversion of Class A common stock to Class B common stock. | |||||||||||||||||
The computation of diluted net income per share excludes the following because their effect would be anti-dilutive (in thousands): | |||||||||||||||||
• | For the three months ended March 31, 2013, outstanding options to acquire 6,665 shares of Class B common stock. For the three months ended March 31, 2014, outstanding options to acquire 1,998 shares of Class B common stock. | ||||||||||||||||
• | For the three months ended March 31, 2013 and 2014, 1,279 and 51 shares of unvested Class B restricted common shares, respectively, issued to employees and in connection with acquisitions. These shares were for future services that vest over periods ranging from one to six years. | ||||||||||||||||
• | For the three months ended March 31, 2013, 131 restricted stock units. |
Concentrations
Concentrations | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Concentrations | ' | ||||||||
(5) Concentrations | |||||||||
The Company maintains substantially all of its cash and cash equivalents with one financial institution. | |||||||||
A significant majority of the Company’s revenue earned from advertisers is generated through arrangements with distribution partners. The Company may not be successful in renewing any of these agreements, or if they are renewed, they may not be on terms as favorable as current agreements. The Company may not be successful in entering into agreements with new distribution partners or advertisers on commercially acceptable terms. In addition, several of these distribution partners or advertisers may be considered potential competitors. The Company’s largest distribution partner was paid less than 20% of consolidated revenue for the three months ended March 31, 2013 and 2014. | |||||||||
The advertisers representing more than 10% of consolidated revenue are as follows: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Advertiser A | 26 | % | 21 | % | |||||
Advertiser B | 12 | % | * | ||||||
Advertiser C | 10 | % | 34 | % | |||||
Advertiser A is also a distribution partner. | |||||||||
The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows: | |||||||||
At December 31, | At March 31, | ||||||||
2013 | 2014 | ||||||||
Advertiser A | 41 | % | 29 | % | |||||
Advertiser B | 14 | % | * | ||||||
Advertiser C | 13 | % | 33 | % | |||||
* | Less than 10% |
Segment_Reporting_and_Geograph
Segment Reporting and Geographic Information | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Segment Reporting and Geographic Information | ' | ||||||||||||
(6) Segment Reporting and Geographic Information | |||||||||||||
Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally for the Company’s management. In July 2013, the Company sold certain assets related to Archeo’s pay per click advertising services. As a result, the operating results related to these certain pay per click assets are shown as discontinued operations, net of tax in the condensed consolidated statements of operations for all periods presented and are excluded from segment reporting. See Note15. Discontinued Operations for further discussion. | |||||||||||||
The Company’s Call-driven segment comprises its performance-based advertising business focused on driving phone calls. The Archeo segment comprises the Company’s click-based advertising and Internet domain name businesses. Call-driven segment expenses include both direct costs incurred by the segment business as well as corporate overhead costs. Archeo segment expenses only include direct costs incurred by the segment. Segment expenses exclude the following: stock-based compensation, amortization of intangible assets from acquisitions, separation related costs, and other income (expense). | |||||||||||||
A measure of segment assets is not currently provided to the Company’s chief operating decision maker and has therefore not been disclosed. The carrying amount of goodwill by operating segment at March 31, 2014 was approximately $63.3 million and $2.4 million for Call-driven and Archeo, respectively. | |||||||||||||
Selected segment information (in thousands): | |||||||||||||
Three months ended March 31, 2014 | |||||||||||||
Call-driven | Archeo | Total | |||||||||||
Revenue | $ | 45,492 | $ | 5,004 | $ | 50,496 | |||||||
Operating expenses | 43,081 | 2,693 | 45,774 | ||||||||||
Segment profit | $ | 2,411 | $ | 2,311 | $ | 4,722 | |||||||
Less reconciling items: | |||||||||||||
Stock based compensation | 2,883 | ||||||||||||
Amortization of intangible assets from acquisitions | 403 | ||||||||||||
Other expense (income) | 2 | ||||||||||||
Income from continuing operations before provision for income taxes | $ | 1,434 | |||||||||||
Three months ended March 31, 2013 | |||||||||||||
Call-driven | Archeo | Total | |||||||||||
Revenue | $ | 31,108 | $ | 3,624 | $ | 34,732 | |||||||
Operating expenses | 29,737 | 2,753 | 32,490 | ||||||||||
Gain on sales of intangible assets, net | — | 1,362 | 1,362 | ||||||||||
Segment profit | $ | 1,371 | $ | 2,233 | $ | 3,604 | |||||||
Less reconciling items: | |||||||||||||
Stock based compensation | 1,907 | ||||||||||||
Amortization of intangible assets from acquisitions | 1,055 | ||||||||||||
Separation related costs | 345 | ||||||||||||
Other expense (income) | 17 | ||||||||||||
Income from continuing operations before provision for income taxes | $ | 280 | |||||||||||
Revenues from advertisers by geographical areas are tracked on the basis of the location of the advertiser. The vast majority of the Company’s revenue and accounts receivable are derived from domestic sales to advertisers engaged in various mobile, online and other activities. | |||||||||||||
Revenues by geographic region are as follows (in percentages): | |||||||||||||
Three months ended | |||||||||||||
March 31, | |||||||||||||
2013 | 2014 | ||||||||||||
United States | 94 | % | 96 | % | |||||||||
Canada | 6 | % | 4 | % | |||||||||
Other countries | * | * | |||||||||||
100 | % | 100 | % | ||||||||||
* | Less than 1% of revenue. |
Property_and_Equipment
Property and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Property and Equipment | ' | ||||||||
(7) Property and Equipment | |||||||||
Property and equipment consisted of the following (in thousands): | |||||||||
At December 31, | At March 31, | ||||||||
2013 | 2014 | ||||||||
Computer and other related equipment | $ | 17,794 | $ | 18,550 | |||||
Purchased and internally developed software | 7,672 | 7,733 | |||||||
Furniture and fixtures | 1,319 | 1,329 | |||||||
Leasehold improvements | 1,829 | 1,834 | |||||||
$ | 28,614 | $ | 29,446 | ||||||
Less: accumulated depreciation and amortization | (23,174 | ) | (24,005 | ) | |||||
Property and equipment, net | $ | 5,440 | $ | 5,441 | |||||
The Company has capitalized certain costs of internally developed software for internal use. The estimated useful life of costs capitalized is evaluated for each specific project. Amortization begins in the period in which the software is ready for its intended use. The Company has not capitalized any internally developed costs for the three months ended March 31, 2013 and 2014. | |||||||||
Depreciation and amortization expense, related to property and equipment was approximately $844,000 and $865,000 for the three months ended March 31, 2013 and 2014, respectively. |
Commitments
Commitments | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Commitments | ' | ||||||||||||
(8) Commitments | |||||||||||||
The Company has commitments for future payments related to office facilities leases and other contractual obligations. The Company leases its office facilities under operating lease agreements expiring through 2018. The Company recognizes rent expense under such agreements on a straight-line basis over the lease term with any lease incentive amortized as a reduction of rent expense over the lease term. The Company also has other contractual obligations expiring over varying time periods through 2016. Other contractual obligations primarily relate to minimum contractual payments due to distribution partners and other outside service providers. Future minimum payments are approximately as follows (in thousands): | |||||||||||||
(in thousands) | Facilities | Other | Total | ||||||||||
operating | contractual | ||||||||||||
leases | obligations | ||||||||||||
2014 | $ | 1,754 | $ | 2,173 | $ | 3,927 | |||||||
2015 | 2,271 | 1,500 | 3,771 | ||||||||||
2016 | 2,313 | 934 | 3,247 | ||||||||||
2017 | 2,372 | — | 2,372 | ||||||||||
2018 | 577 | — | 577 | ||||||||||
Total minimum payments | $ | 9,287 | $ | 4,607 | $ | 13,894 | |||||||
Rent expense incurred by the Company was approximately $465,000 and $462,000 for the three months ended March 31, 2013 and 2014, respectively. |
Credit_Agreement
Credit Agreement | 3 Months Ended |
Mar. 31, 2014 | |
Credit Agreement | ' |
(9) Credit Agreement | |
In April 2008, the Company entered into a credit agreement providing for a senior secured $30 million revolving credit facility (“Credit Agreement”). In 2011, the Company signed an amendment to the Credit Agreement which extended the maturity period through to April 1, 2014. During the first quarter of 2014, the Company signed an amendment to the Credit Agreement which extended the maturity period to April 1, 2017. Interest on outstanding balances under the Credit Agreement will accrue at LIBOR plus an applicable margin rate, as determined under the agreement and has an unused commitment fee. The Credit Agreement contains certain customary representations and warranties, financial covenants, events of default and is secured by substantially all of the assets of the Company. During the three months ended March 31, 2013 and 2014, the Company had no borrowings under the Credit Agreement. |
Contingencies_and_Taxes
Contingencies and Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Contingencies and Taxes | ' |
(10) Contingencies and Taxes | |
(a) Contingencies | |
The Company is involved in legal and administrative proceedings and claims of various types from time to time. While any litigation contains an element of uncertainty, the Company is not aware of any legal proceedings or claims which are pending that the Company believes, based on current knowledge, will have, individually or taken together, a material adverse effect on the Company’s financial condition or results of operations or liquidity. | |
In some agreements to which we are a party, we have agreed to indemnification provisions of varying scope and terms with advertisers, vendors and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of agreements or representations and warranties made by the Company, services to be provided by the Company and intellectual property infringement claims made by third parties. As a result of these provisions, we may from time to time provide certain levels of financial support to our contract parties to seek to minimize the impact of any associated litigation in which they may be involved. To date, there have been no known events or circumstances that have resulted in any material costs related to these indemnification provisions and no liabilities therefore have been recorded in the accompanying unaudited condensed consolidated financial statements. However, the maximum potential amount of the future payments we could be required to make under these indemnification provisions could be material. | |
(b) Taxes | |
During the first quarter of 2014 the Company’s gross deferred tax assets decreased by approximately $1.1 million due primarily to taxable income generated during the three months ended March 31, 2014 and the reclass of uncertain tax positions of $534,000 from other non-current liabilities in the condensed consolidated balance sheet with the adoption of ASU 2011-13 in the first quarter of 2014. | |
From time to time, various state, federal and other jurisdictional tax authorities undertake audits of the Company and its filings. In evaluating the exposure associated with various tax filing positions, the Company on occasion accrues charges for uncertain positions. The Company adjusts these contingencies in light of changing facts and circumstances, such as the outcome of tax audits. The Company does not have any significant interest or penalty accruals. The provision for income taxes includes the impact of contingency provisions and changes to contingencies that are considered appropriate. The Company files U.S. federal, certain U.S. states, and certain foreign tax returns. Generally, U.S. federal, U.S. state, and foreign tax returns filed for years after 2009 are within the statute of limitations and are under examination or may be subject to examination. |
Intangible_Assets_from_Acquisi
Intangible Assets from Acquisitions | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Intangible Assets from Acquisitions | ' | ||||||||||||
(11) Intangible Assets from Acquisitions | |||||||||||||
Intangible assets from acquisitions consisted of the following (in thousands): | |||||||||||||
As of December 31, 2013 | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying Amount | Amortization(1) | ||||||||||||
Distribution partner relationship | $ | 4,830 | $ | (4,396 | ) | $ | 434 | ||||||
As of March 31, 2014 | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying Amount | Amortization(1) | ||||||||||||
Distribution partner relationship | $ | 4,830 | $ | (4,799 | ) | $ | 31 | ||||||
-1 | Excludes the original cost and accumulated amortization of fully-amortized intangible assets which were $87.7 million and $87.6 million at December 31, 2013 and March 31, 2014, respectively. | ||||||||||||
Amortizable intangible assets are amortized on a straight-line basis over their useful lives. Amortization expense incurred by the Company was approximately $1.1 million and $403,000 for the three months ended March 31, 2013 and 2014, respectively. Based upon the current amount of intangible assets subject to amortization, the estimated amortization expense for the next five years is as follows: $31,000 for the remainder of 2014, and $0 thereafter. |
Goodwill
Goodwill | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Goodwill | ' | ||||||||
(12) Goodwill | |||||||||
There was no change in goodwill during the three months ended March 31, 2014. The following table outlines our goodwill by segment (in thousands): | |||||||||
December 31, | March 31, | ||||||||
2013 | 2014 | ||||||||
Call-Driven | $ | 63,305 | $ | 63,305 | |||||
Archeo | 2,374 | 2,374 | |||||||
Total | $ | 65,679 | $ | 65,679 | |||||
The Company reviews goodwill for impairment annually on November 30 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than its carrying amount. The testing of goodwill and other intangible assets for impairment requires the Company to make significant estimates about its future performance and cash flows, as well as other assumptions. These estimates can be affected by numerous factors, including changes in economic, industry or market conditions, changes in business operations, changes in competition or changes in the share price of the Company’s common stock and market capitalization. Significant and sustained declines in the Company’s stock price and market capitalization, a significant decline in its expected future cash flows or a significant adverse change in the Company’s business climate, among other factors, could result in the need to perform an impairment analysis in future periods. The Company cannot accurately predict the amount and timing of any future impairment of goodwill or other intangible assets. Should the value of goodwill or other intangible assets become impaired, the Company would record an impairment charge, which could have an adverse effect on its financial condition and results of operations. | |||||||||
The current business environment is subject to evolving market conditions and requires significant management judgment to interpret the potential impact to our assumptions. To the extent that changes in the current business environment impact the Company’s ability to achieve levels of forecasted operating results and cash flows, or should other events occur indicating the remaining carrying value of its assets might be impaired, the Company would test its goodwill and intangible assets for impairment and may recognize an additional impairment loss. |
Intangible_and_other_assets_ne
Intangible and other assets, net | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Intangible and other assets, net | ' | ||||||||
(13) Intangible and other assets, net | |||||||||
Intangible and other assets, net consisted of the following (in thousands): | |||||||||
At December 31, | At March 31, | ||||||||
2013 | 2014 | ||||||||
Internet domain names | $ | 14,514 | $ | 14,598 | |||||
Less accumulated amortization | (14,376 | ) | (14,414 | ) | |||||
Internet domain names, net | 138 | 184 | |||||||
Other assets: | |||||||||
Registration fees, net | 12 | 4 | |||||||
Other | 334 | 1,252 | |||||||
Total intangibles and other assets, net | $ | 484 | $ | 1,440 | |||||
The Company capitalizes costs incurred to acquire domain names or URLs, which include the initial registration fees, to other intangible assets which excludes intangible assets acquired through business combinations. The capitalized costs are amortized over the expected useful life of the domain names on a straight-line basis. | |||||||||
On September 10, 2013, the Company launched its Domains Marketplace, which provides domain names available for sale and initiated plans to facilitate the active buying and transacting of domain names. Domain name sales occurring after this launch have been recognized as revenue in the condensed consolidated financial statements. The net carrying value of Internet domain names as of March 31, 2014 related to both domain names held for use and available for sale. | |||||||||
The Company also capitalizes costs incurred to renew or extend the term of the domain names or URLs to prepaid expenses and other current assets or registration fees, net. The capitalized costs are amortized over the renewal or extended period on a straight-line basis. The total amount of costs incurred for the three months ended March 31, 2014 to renew or extend the term for domain names was $460,000. The weighted average renewal period for registration fees as of March 31, 2014 was approximately one year. | |||||||||
Amortization expense for internet domain names was approximately $69,000 and $88,000 for the three months ended March 31, 2013 and 2014, respectively. Based upon the current amount of domains subject to amortization, the estimated expense for the next five years is as follows: $121,000 for the remainder of 2014, $53,000 in 2015, $10,000 in 2016, and $0 thereafter. |
Common_Stock
Common Stock | 3 Months Ended |
Mar. 31, 2014 | |
Common Stock | ' |
(14) Common Stock | |
In November 2006, the Company’s board of directors authorized a share repurchase program for the Company to repurchase up to 3 million shares of the Company’s Class B common stock as well as the initiation of a quarterly cash dividend for the holders of the Class A and Class B common stock. The Company’s board of directors has authorized increases to the share repurchase program for the Company to repurchase up to 13 million shares in the aggregate (less shares previously repurchased under the share repurchase program) of the Company’s Class B common stock. Under the share repurchase program, repurchases may take place in the open market and in privately negotiated transactions and at times and in such amounts as the Company deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions. This stock repurchase program does not have an expiration date and may be expanded, limited or terminated at any time without prior notice. During the three months ended March 31, 2014, the Company did not repurchase any shares of Class B common stock as part of the stock repurchase program. | |
During the three months ended March 31, 2014, the Company’s board of directors approved the retirement of approximately 174,808 shares of treasury stock. |
Discontinued_Operations
Discontinued Operations | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Discontinued Operations | ' | ||||||||
(15) Discontinued Operations | |||||||||
On July 19, 2013, we completed the sale of certain pay-per-click advertising services to an unrelated third party. Accordingly, we have presented the results of operations of these certain pay-per-click assets in the condensed consolidated financial statements as discontinued operations, net of tax. The operating results for the discontinued operations were as follows: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Revenue | $ | 1,481 | $ | — | |||||
Income (loss) before provision for income taxes | (50 | ) | 14 | ||||||
Income tax expense (benefit) | (19 | ) | 5 | ||||||
Discontinued operations, net of tax | $ | (31 | ) | $ | 9 | ||||
The net cash proceeds from the sale were approximately $1.1 million. The net carrying value of liabilities assumed net of goodwill associated with the component sold was approximately $435,000 resulting in a net gain of $1.5 million from the sale. The sale includes contingent earn-out consideration payments that depend upon the achievement of certain thresholds and will be recognized as income when received. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events | ' |
(16) Subsequent Events | |
In April 2014, the Company completed a follow-on public offering in which the Company sold an aggregate of 3.4 million shares of the Company’s Class B common stock, which includes the exercise of the underwriters’ option to purchase 514,100 additional shares, at a public offering price of $10.50 per share. In addition, another 3.2 million shares were sold by the selling stockholders, which includes the exercise of the underwriter’s option to purchase 343,000 additional shares. The Company received aggregate net proceeds of $32.5 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company did not receive any of the proceeds from the sales of shares by the selling stockholders. | |
In April 2014, the Company’s board of directors declared a regular quarterly dividend in the amount of $0.02 per share on the Company’s Class A and Class B common stock. The Company will pay these dividends on May 15, 2014 to the holders of record as of the close of business on May 5, 2014. The Company expects to pay approximately $845,000 for these quarterly dividends. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Adoption of New Accounting Pronouncement | ' | ||||||||
Adoption of New Accounting Pronouncement | |||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11). The amendments in this update require an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. In the first quarter of 2014, the Company adopted ASU 2013-11on a prospective basis, which did not have a material impact on the Company’s financial statements. | |||||||||
Revenues | ' | ||||||||
Revenues | |||||||||
The following table presents the Company’s revenues by segment for the periods presented (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Call-driven | $ | 31,108 | $ | 45,492 | |||||
Archeo | 3,624 | 5,004 | |||||||
Total Revenue | $ | 34,732 | $ | 50,496 | |||||
Call-driven revenue consists of payments from advertisers for pay-for-call marketing services and for use of the Company’s Call Analytics technology. Call-driven revenue also consists of payments from our reseller partners for use of our technology platform and marketing services, which they offer to their small business customers, as well as payments from advertisers for cost-per-action marketing services. Archeo revenue includes revenue generated from advertisements on our network of owned and operated websites and third-party distribution, as well as from the sale of domain names occurring after the launch of the Company’s Domains Marketplace in September 2013. Prior to the launch of Domains Marketplace, the sale of domain names were reported as gains on sales and disposals of intangible assets, net in the condensed consolidated financial statements and totaled $1.4 million for the three months ended March 31, 2013 compared to $1.9 million of domain sales revenue for the three months ended March 31, 2014. See Note 6. Segment Reporting and Geographic Information for further discussion regarding the Company’s operating segments. | |||||||||
The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Partner and Other Revenue Sources | $ | 32,841 | $ | 46,870 | |||||
Proprietary Web site Traffic Sources and Domain Names | 1,891 | 3,626 | |||||||
Total Revenue | $ | 34,732 | $ | 50,496 | |||||
The Company’s partner network revenues are primarily generated using third party distribution networks to deliver the advertisers’ listings. The distribution network includes mobile and online search engines and applications, directories, destination sites, shopping engines, third party Internet domains or web sites, other targeted Web-based content, mobile carriers and other offline sources. The Company generates revenue upon delivery of qualified and reported phone calls or click-throughs to our advertisers or to advertising services providers’ listings. The Company pays a revenue share to the distribution partners to access their mobile, online, offline and other user traffic. Other revenues include the Company’s call provisioning and call tracking services, presence management services, and campaign management services. | |||||||||
The Company’s proprietary web site traffic revenues are generated from the Company’s portfolio of owned web sites which are monetized with pay-for-call or pay-per-click listings that are relevant to the web sites, and other forms of advertising, including banner advertising and sponsorships. When an online user navigates to one of the Company’s owned and operated web sites and calls or clicks on a particular listing or completes the specified action, the Company receives a fee. Other proprietary web site traffic revenues include domain name sales which were recognized as revenue with the launch of its Domains Marketplace in September 2013. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Revenues by Segment | ' | ||||||||
The following table presents the Company’s revenues by segment for the periods presented (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Call-driven | $ | 31,108 | $ | 45,492 | |||||
Archeo | 3,624 | 5,004 | |||||||
Total Revenue | $ | 34,732 | $ | 50,496 | |||||
Revenues | ' | ||||||||
The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Partner and Other Revenue Sources | $ | 32,841 | $ | 46,870 | |||||
Proprietary Web site Traffic Sources and Domain Names | 1,891 | 3,626 | |||||||
Total Revenue | $ | 34,732 | $ | 50,496 | |||||
Stockbased_Compensation_Plans_
Stock-based Compensation Plans (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Stock Based Compensation Expense by Operating Expense | ' | ||||||||||||||||
Stock-based compensation expense was included in the following operating expense categories as follows (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Service costs | $ | 180 | $ | 282 | |||||||||||||
Sales and marketing | 60 | 204 | |||||||||||||||
Product development | 372 | 659 | |||||||||||||||
General and administrative | 1,295 | 1,738 | |||||||||||||||
Total stock-based compensation | $ | 1,907 | $ | 2,883 | |||||||||||||
Income tax benefit related to stock-based compensation included in net income from continuing operations | $ | 509 | $ | 908 | |||||||||||||
Assumptions to Estimate Fair Value for Stock Options at Grant Date | ' | ||||||||||||||||
The following weighted average assumptions were used in determining the fair value of time-vested stock option grants for the periods presented: | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Expected life (in years) | 4 | 4 | |||||||||||||||
Risk-free interest rate | 0.57% | 1.32 | % | ||||||||||||||
Expected volatility | 57% | 55%-60 | % | ||||||||||||||
Expected dividend yield | 2.33% | 0.76 | % | ||||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
Stock option activity during the three months ended March 31, 2014 is summarized as follows: | |||||||||||||||||
Shares | Weighted average | Weighted average | Aggregate | ||||||||||||||
exercise price | remaining | intrinsic value | |||||||||||||||
contractual term | (in thousands) | ||||||||||||||||
(in years) | |||||||||||||||||
Balance at December 31, 2013 | 7,707,713 | $ | 7.48 | $ | 6.99 | $ | 17,148 | ||||||||||
Options granted | 86,000 | 10.12 | |||||||||||||||
Options forfeited | (58,073 | ) | 5.39 | ||||||||||||||
Options expired | (37,061 | ) | 12.13 | ||||||||||||||
Options exercised | (206,811 | ) | 6.65 | ||||||||||||||
Balance at March 31, 2014 | 7,491,768 | $ | 7.52 | $ | 6.81 | $ | 27,477 | ||||||||||
Summary of Restricted Stock Awards and Restricted Stock Units | ' | ||||||||||||||||
Restricted stock awards and restricted stock units activity during the three months ended March 31, 2014 is summarized as follows: | |||||||||||||||||
Shares/ | Weighted average | ||||||||||||||||
Units | grant date | ||||||||||||||||
fair value | |||||||||||||||||
Unvested balance at December 31, 2013 | 2,709,443 | $ | 5.41 | ||||||||||||||
Granted | 10,000 | 9.86 | |||||||||||||||
Vested | (146,875 | ) | 6.1 | ||||||||||||||
Forfeited | (25,750 | ) | 3.89 | ||||||||||||||
Unvested balance at March 31, 2014 | 2,546,818 | $ | 5.4 | ||||||||||||||
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Computation of Net Income per Share Basic and Diluted | ' | ||||||||||||||||
The following table calculates net income applicable to common stockholders used to compute basic net income per share for the periods ended (in thousands, except per share amounts): | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||||
Numerator: | |||||||||||||||||
Net income from continuing operations | $ | 30 | $ | 86 | $ | 170 | $ | 676 | |||||||||
Dividends paid to participating securities | — | — | — | (36 | ) | ||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 30 | $ | 86 | $ | 170 | $ | 640 | |||||||||
Discontinued operations, net of tax | (9 | ) | (22 | ) | 2 | 7 | |||||||||||
Net income applicable to common stockholders | $ | 21 | $ | 64 | $ | 172 | $ | 647 | |||||||||
Denominator: | |||||||||||||||||
Weighted average number of shares outstanding used to calculate basic net income per share | 9,570 | 25,585 | 7,741 | 29,035 | |||||||||||||
Basic net income per share: | |||||||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
Discontinued operations, net of tax | (0.00 | ) | (0.00 | ) | 0 | 0 | |||||||||||
Basic net income per share applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
The following table calculates net income to diluted net income applicable to common stockholders used to compute diluted net income per share for the periods ended (in thousands, except per share amounts): | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||||
Numerator: | |||||||||||||||||
Net income from continuing operations | $ | 30 | $ | 86 | $ | 170 | $ | 676 | |||||||||
Dividends paid to participating securities | — | — | — | (36 | ) | ||||||||||||
Reallocation of net income for Class A shares as a result of conversion of Class A to Class B shares | — | 30 | — | 170 | |||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 30 | $ | 116 | $ | 170 | $ | 810 | |||||||||
Discontinued operations, net of tax | (9 | ) | (22 | ) | 2 | 7 | |||||||||||
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares | — | (9 | ) | — | 2 | ||||||||||||
Discontinued operations, net of tax | $ | (9 | ) | $ | (31 | ) | $ | 2 | $ | 9 | |||||||
Net income applicable to common stockholders | $ | 21 | $ | 85 | $ | 172 | $ | 819 | |||||||||
Denominator: | |||||||||||||||||
Weighted average number of shares outstanding used to calculate basic net income per share | 9,570 | 25,585 | 7,741 | 29,035 | |||||||||||||
Weighted average stock options and common shares subject to repurchase or cancellation | — | 395 | — | 2,985 | |||||||||||||
Conversion of Class A to Class B common shares outstanding | — | 9,570 | — | 7,741 | |||||||||||||
Weighted average number of shares outstanding used to calculate diluted net income per share | 9,570 | 35,550 | 7,741 | 39,761 | |||||||||||||
Diluted net income per share: | |||||||||||||||||
Net income from continuing operations applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
Discontinued operations, net of tax | (0.00 | ) | (0.00 | ) | 0 | 0 | |||||||||||
Diluted net income per share applicable to common stockholders | $ | 0 | $ | 0 | $ | 0.02 | $ | 0.02 | |||||||||
Concentrations_Tables
Concentrations (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Schedules of Concentration of Risk Based on Consolidated Revenue | ' | ||||||||
The advertisers representing more than 10% of consolidated revenue are as follows: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Advertiser A | 26 | % | 21 | % | |||||
Advertiser B | 12 | % | * | ||||||
Advertiser C | 10 | % | 34 | % | |||||
Schedules of Concentration of Risk Based on Accounts Receivable | ' | ||||||||
The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows: | |||||||||
At December 31, | At March 31, | ||||||||
2013 | 2014 | ||||||||
Advertiser A | 41 | % | 29 | % | |||||
Advertiser B | 14 | % | * | ||||||
Advertiser C | 13 | % | 33 | % | |||||
* | Less than 10% |
Segment_Reporting_and_Geograph1
Segment Reporting and Geographic Information (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Segment Information | ' | ||||||||||||
Selected segment information (in thousands): | |||||||||||||
Three months ended March 31, 2014 | |||||||||||||
Call-driven | Archeo | Total | |||||||||||
Revenue | $ | 45,492 | $ | 5,004 | $ | 50,496 | |||||||
Operating expenses | 43,081 | 2,693 | 45,774 | ||||||||||
Segment profit | $ | 2,411 | $ | 2,311 | $ | 4,722 | |||||||
Less reconciling items: | |||||||||||||
Stock based compensation | 2,883 | ||||||||||||
Amortization of intangible assets from acquisitions | 403 | ||||||||||||
Other expense (income) | 2 | ||||||||||||
Income from continuing operations before provision for income taxes | $ | 1,434 | |||||||||||
Three months ended March 31, 2013 | |||||||||||||
Call-driven | Archeo | Total | |||||||||||
Revenue | $ | 31,108 | $ | 3,624 | $ | 34,732 | |||||||
Operating expenses | 29,737 | 2,753 | 32,490 | ||||||||||
Gain on sales of intangible assets, net | — | 1,362 | 1,362 | ||||||||||
Segment profit | $ | 1,371 | $ | 2,233 | $ | 3,604 | |||||||
Less reconciling items: | |||||||||||||
Stock based compensation | 1,907 | ||||||||||||
Amortization of intangible assets from acquisitions | 1,055 | ||||||||||||
Separation related costs | 345 | ||||||||||||
Other expense (income) | 17 | ||||||||||||
Income from continuing operations before provision for income taxes | $ | 280 | |||||||||||
Revenues by Geographic Region | ' | ||||||||||||
Revenues by geographic region are as follows (in percentages): | |||||||||||||
Three months ended | |||||||||||||
March 31, | |||||||||||||
2013 | 2014 | ||||||||||||
United States | 94 | % | 96 | % | |||||||||
Canada | 6 | % | 4 | % | |||||||||
Other countries | * | * | |||||||||||
100 | % | 100 | % | ||||||||||
* | Less than 1% of revenue. |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Property and Equipment | ' | ||||||||
Property and equipment consisted of the following (in thousands): | |||||||||
At December 31, | At March 31, | ||||||||
2013 | 2014 | ||||||||
Computer and other related equipment | $ | 17,794 | $ | 18,550 | |||||
Purchased and internally developed software | 7,672 | 7,733 | |||||||
Furniture and fixtures | 1,319 | 1,329 | |||||||
Leasehold improvements | 1,829 | 1,834 | |||||||
$ | 28,614 | $ | 29,446 | ||||||
Less: accumulated depreciation and amortization | (23,174 | ) | (24,005 | ) | |||||
Property and equipment, net | $ | 5,440 | $ | 5,441 | |||||
Commitments_Tables
Commitments (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Minimum Contractual Payments | ' | ||||||||||||
Other contractual obligations primarily relate to minimum contractual payments due to distribution partners and other outside service providers. Future minimum payments are approximately as follows (in thousands): | |||||||||||||
(in thousands) | Facilities | Other | Total | ||||||||||
operating | contractual | ||||||||||||
leases | obligations | ||||||||||||
2014 | $ | 1,754 | $ | 2,173 | $ | 3,927 | |||||||
2015 | 2,271 | 1,500 | 3,771 | ||||||||||
2016 | 2,313 | 934 | 3,247 | ||||||||||
2017 | 2,372 | — | 2,372 | ||||||||||
2018 | 577 | — | 577 | ||||||||||
Total minimum payments | $ | 9,287 | $ | 4,607 | $ | 13,894 | |||||||
Intangible_Assets_from_Acquisi1
Intangible Assets from Acquisitions (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Intangible Assets from Acquisitions | ' | ||||||||||||
Intangible assets from acquisitions consisted of the following (in thousands): | |||||||||||||
As of December 31, 2013 | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying Amount | Amortization(1) | ||||||||||||
Distribution partner relationship | $ | 4,830 | $ | (4,396 | ) | $ | 434 | ||||||
As of March 31, 2014 | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying Amount | Amortization(1) | ||||||||||||
Distribution partner relationship | $ | 4,830 | $ | (4,799 | ) | $ | 31 | ||||||
-1 | Excludes the original cost and accumulated amortization of fully-amortized intangible assets which were $87.7 million and $87.6 million at December 31, 2013 and March 31, 2014, respectively. |
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Goodwill by Segment | ' | ||||||||
The following table outlines our goodwill by segment (in thousands): | |||||||||
December 31, | March 31, | ||||||||
2013 | 2014 | ||||||||
Call-Driven | $ | 63,305 | $ | 63,305 | |||||
Archeo | 2,374 | 2,374 | |||||||
Total | $ | 65,679 | $ | 65,679 | |||||
Intangible_and_other_assets_ne1
Intangible and other assets, net (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Intangible and Other Assets, Net | ' | ||||||||
Intangible and other assets, net consisted of the following (in thousands): | |||||||||
At December 31, | At March 31, | ||||||||
2013 | 2014 | ||||||||
Internet domain names | $ | 14,514 | $ | 14,598 | |||||
Less accumulated amortization | (14,376 | ) | (14,414 | ) | |||||
Internet domain names, net | 138 | 184 | |||||||
Other assets: | |||||||||
Registration fees, net | 12 | 4 | |||||||
Other | 334 | 1,252 | |||||||
Total intangibles and other assets, net | $ | 484 | $ | 1,440 | |||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Operating Results for Discontinued Operations | ' | ||||||||
The operating results for the discontinued operations were as follows: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2013 | 2014 | ||||||||
Revenue | $ | 1,481 | $ | — | |||||
Income (loss) before provision for income taxes | (50 | ) | 14 | ||||||
Income tax expense (benefit) | (19 | ) | 5 | ||||||
Discontinued operations, net of tax | $ | (31 | ) | $ | 9 | ||||
Revenues_by_Segment_Detail
Revenues by Segment (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information | ' | ' |
Total Revenue | $50,496 | $34,732 |
Call driven | ' | ' |
Segment Reporting Information | ' | ' |
Total Revenue | 45,492 | 31,108 |
Archeo | ' | ' |
Segment Reporting Information | ' | ' |
Total Revenue | $5,004 | $3,624 |
Significant_Accounting_Policie3
Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Significant Accounting Policies [Line Items] | ' | ' |
Gain on sales and disposals of intangible assets, net | ' | $1,362 |
Revenues | 50,496 | 34,732 |
Domain Names | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Revenues | $1,900 | ' |
Revenues_by_Revenue_Sources_De
Revenues by Revenue Sources (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue [Line Items] | ' | ' |
Total Revenue | $50,496 | $34,732 |
Partner and Other Revenue Sources | ' | ' |
Revenue [Line Items] | ' | ' |
Total Revenue | 46,870 | 32,841 |
Proprietary Web site Traffic Sources and Domain Names | ' | ' |
Revenue [Line Items] | ' | ' |
Total Revenue | $3,626 | $1,891 |
StockBased_Compensation_Expens
Stock-Based Compensation Expense by Operating Expense (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation | $2,883 | $1,907 |
Income tax benefit related to stock-based compensation included in net income from continuing operations | 908 | 509 |
Service Costs | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation | 282 | 180 |
Sales and Marketing | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation | 204 | 60 |
Product Development | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation | 659 | 372 |
General and Administrative | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation | $1,738 | $1,295 |
Stock_Based_Compensation_Plans
Stock Based Compensation Plans - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Excess tax benefit | $1,300,000 |
Restricted Stock | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares received for withholding taxes | 12,008 |
Equity awards vested | 41,000 |
Minimum withholding tax | $148,000 |
Assumptions_to_Estimate_Fair_V
Assumptions to Estimate Fair Value for Stock Options at Grant Date (Detail) (Time Vested Stock Options) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Time Vested Stock Options | ' | ' |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | ' | ' |
Expected life (in years) | '4 years | '4 years |
Risk-free interest rate | 1.32% | 0.57% |
Expected volatility | ' | 57.00% |
Expected volatility, minimum | 55.00% | ' |
Expected volatility, maximum | 60.00% | ' |
Expected dividend yield | 0.76% | 2.33% |
Summary_of_Stock_Option_Activi
Summary of Stock Option Activity (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of shares, Beginning Balance | 7,707,713 | ' |
Options granted, Shares | 86,000 | ' |
Options forfeited, Shares | -58,073 | ' |
Options expired, Shares | -37,061 | ' |
Options exercised, Shares | -206,811 | ' |
Number of shares, Ending Balance | 7,491,768 | 7,707,713 |
Weighted average exercise price, Beginning Balance | $7.48 | ' |
Options granted, Weighted average exercise price | $10.12 | ' |
Options forfeited, Weighted average exercise price | $5.39 | ' |
Options expired, Weighted average exercise price | $12.13 | ' |
Options exercised, Weighted average exercise price | $6.65 | ' |
Weighted average exercise price, Ending Balance | $7.52 | $7.48 |
Weighted average remaining contractual term, End of the period | '6 years 9 months 22 days | '6 years 11 months 27 days |
Aggregate intrinsic value, Outstanding Ending Balance | $27,477 | $17,148 |
Summary_of_Restricted_Stock_Aw
Summary of Restricted Stock Awards and Restricted Stock Units (Detail) (Restricted Stock and Restricted Stock Units, USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Restricted Stock and Restricted Stock Units | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Unvested Shares, Beginning Balance | 2,709,443 |
Granted, Shares | 10,000 |
Vested, Shares | -146,875 |
Forfeited, Shares | -25,750 |
Unvested Shares, Ending Balance | 2,546,818 |
Weighted average grant date fair value, Beginning Balance | $5.41 |
Granted, Weighted average grant date fair value | $9.86 |
Vested, Weighted average grant date fair value | $6.10 |
Forfeited, Weighted average grant date fair value | $3.89 |
Weighted average grant date fair value, Ending Balance | $5.40 |
Computation_of_Net_Income_Per_
Computation of Net Income Per Share Basic and Diluted (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Numerator: | ' | ' |
Net income from continuing operations | $846 | $116 |
Dividends paid to participating securities | -36 | ' |
Class A | ' | ' |
Numerator: | ' | ' |
Net income from continuing operations | 170 | 30 |
Net income from continuing operations applicable to common stockholders | 170 | 30 |
Discontinued operations, net of tax | 2 | -9 |
Net income applicable to common stockholders | 172 | 21 |
Net income from continuing operations | 170 | 30 |
Net income from continuing operations applicable to common stockholders | 170 | 30 |
Discontinued operations, net of tax | 2 | -9 |
Discontinued operations, net of tax | 2 | -9 |
Net income applicable to common stockholders | 172 | 21 |
Denominator: | ' | ' |
Weighted average number of shares outstanding used to calculate basic net income per share | 7,741 | 9,570 |
Weighted average number of shares outstanding used to calculate diluted net income per share | 7,741 | 9,570 |
Basic net income per share: | ' | ' |
Net income from continuing operations applicable to common stockholders | $0.02 | $0 |
Discontinued operations, net of tax | $0 | $0 |
Basic net income per share applicable to common stockholders | $0.02 | $0 |
Diluted net income per share: | ' | ' |
Net income from continuing operations applicable to common stockholders | $0.02 | $0 |
Discontinued operations, net of tax | $0 | $0 |
Diluted net income per share applicable to common stockholders | $0.02 | $0 |
Class B | ' | ' |
Numerator: | ' | ' |
Net income from continuing operations | 676 | 86 |
Dividends paid to participating securities | -36 | ' |
Net income from continuing operations applicable to common stockholders | 640 | 86 |
Discontinued operations, net of tax | 7 | -22 |
Net income applicable to common stockholders | 647 | 64 |
Net income from continuing operations | 676 | 86 |
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares | 170 | 30 |
Net income from continuing operations applicable to common stockholders | 810 | 116 |
Discontinued operations, net of tax | 7 | -22 |
Discontinued operations, net of tax | 9 | -31 |
Net income applicable to common stockholders | 819 | 85 |
Denominator: | ' | ' |
Weighted average number of shares outstanding used to calculate basic net income per share | 29,035 | 25,585 |
Weighted average stock options and common shares subject to repurchase or cancellation | 2,985 | 395 |
Conversion of Class A to Class B common shares outstanding | 7,741 | 9,570 |
Weighted average number of shares outstanding used to calculate diluted net income per share | 39,761 | 35,550 |
Basic net income per share: | ' | ' |
Net income from continuing operations applicable to common stockholders | $0.02 | $0 |
Discontinued operations, net of tax | $0 | $0 |
Basic net income per share applicable to common stockholders | $0.02 | $0 |
Diluted net income per share: | ' | ' |
Net income from continuing operations applicable to common stockholders | $0.02 | $0 |
Discontinued operations, net of tax | $0 | $0 |
Diluted net income per share applicable to common stockholders | $0.02 | $0 |
Class B | Discontinued Operations | ' | ' |
Numerator: | ' | ' |
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares | $2 | ($9) |
Net_Income_Per_Share_Additiona
Net Income Per Share - Additional Information (Detail) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock Options | Class B | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive shares | 1,998 | 6,665 |
Unvested Restricted Shares | Class B | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive shares | 51 | 1,279 |
Unvested Restricted Shares | Class B | Minimum | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Shares Vesting period | '1 year | ' |
Unvested Restricted Shares | Class B | Maximum | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Shares Vesting period | '6 years | ' |
Restricted Stock Units | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive shares | ' | 131 |
Concentrations_Additional_Info
Concentrations - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Concentration Risk [Line Items] | ' | ' |
Percentage of revenue as criteria for major distribution partners | 20.00% | 20.00% |
Schedules_of_Concentration_of_
Schedules of Concentration of Risk Based on Consolidated Revenue (Detail) (Consolidated Revenue) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | ||
Advertiser A | ' | ' | |
Concentration Risk [Line Items] | ' | ' | |
Concentration Risk, Percentage | 21.00% | 26.00% | |
Advertiser B | ' | ' | |
Concentration Risk [Line Items] | ' | ' | |
Concentration Risk, Percentage | ' | [1] | 12.00% |
Advertiser C | ' | ' | |
Concentration Risk [Line Items] | ' | ' | |
Concentration Risk, Percentage | 34.00% | 10.00% | |
[1] | Less than 10% |
Schedules_of_Concentration_of_1
Schedules of Concentration of Risk Based on Accounts Receivable (Detail) (Accounts Receivable) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | ||
Advertiser A | ' | ' | |
Concentration Risk [Line Items] | ' | ' | |
Concentration Risk, Percentage | 29.00% | 41.00% | |
Advertiser B | ' | ' | |
Concentration Risk [Line Items] | ' | ' | |
Concentration Risk, Percentage | ' | [1] | 14.00% |
Advertiser C | ' | ' | |
Concentration Risk [Line Items] | ' | ' | |
Concentration Risk, Percentage | 33.00% | 13.00% | |
[1] | Less than 10% |
Segment_Reporting_and_Geograph2
Segment Reporting and Geographic Information - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information | ' | ' |
Goodwill | $65,679 | $65,679 |
Call driven | ' | ' |
Segment Reporting Information | ' | ' |
Goodwill | 63,305 | 63,305 |
Archeo | ' | ' |
Segment Reporting Information | ' | ' |
Goodwill | $2,374 | $2,374 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Segment Reporting Information | ' | ' | ||
Revenue | $50,496 | $34,732 | ||
Operating expenses | 49,060 | 35,797 | ||
Gain on sales of intangible assets, net | ' | 1,362 | ||
Income from operations | 1,436 | 297 | ||
Less reconciling items: | ' | ' | ||
Stock based compensation | 2,883 | 1,919 | ||
Amortization of intangible assets from acquisitions | 403 | [1] | 1,055 | [1] |
Separation related costs | ' | 345 | ||
Income from continuing operations before provision for income taxes | 1,434 | 280 | ||
Call driven | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue | 45,492 | 31,108 | ||
Archeo | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue | 5,004 | 3,624 | ||
Operating Segments | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue | 50,496 | 34,732 | ||
Operating expenses | 45,774 | 32,490 | ||
Gain on sales of intangible assets, net | ' | 1,362 | ||
Income from operations | 4,722 | 3,604 | ||
Less reconciling items: | ' | ' | ||
Stock based compensation | 2,883 | 1,907 | ||
Amortization of intangible assets from acquisitions | 403 | 1,055 | ||
Separation related costs | ' | 345 | ||
Other expense (income) | 2 | 17 | ||
Income from continuing operations before provision for income taxes | 1,434 | 280 | ||
Operating Segments | Call driven | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue | 45,492 | 31,108 | ||
Operating expenses | 43,081 | 29,737 | ||
Income from operations | 2,411 | 1,371 | ||
Operating Segments | Archeo | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue | 5,004 | 3,624 | ||
Operating expenses | 2,693 | 2,753 | ||
Gain on sales of intangible assets, net | ' | 1,362 | ||
Income from operations | $2,311 | $2,233 | ||
[1] | Components of amortization of intangible assets from acquisitions: |
Revenues_by_Geographic_Region_
Revenues by Geographic Region (Detail) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Segment Reporting Information | ' | ' | ||
Revenue by geographic region | 100.00% | 100.00% | ||
United States | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue by geographic region | 96.00% | 94.00% | ||
Canada | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue by geographic region | 4.00% | 6.00% | ||
Other Countries | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Revenue by geographic region | ' | [1] | ' | [1] |
[1] | Less than 1% of revenue. |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $29,446 | $28,614 |
Less: accumulated depreciation and amortization | -24,005 | -23,174 |
Property and equipment, net | 5,441 | 5,440 |
Computer and Other Related Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 18,550 | 17,794 |
Purchased and Internally Developed Software | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 7,733 | 7,672 |
Furniture and Fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 1,329 | 1,319 |
Leasehold Improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $1,834 | $1,829 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Depreciation and amortization expense | $865,000 | $844,000 |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Schedule Of Contractual Commitments [Line Items] | ' | ' |
Expiration of operating lease agreements | 'Through 2018 | ' |
Expiration of other contractual obligations | 'Through 2016 | ' |
Rent expense | $462,000 | $465,000 |
Commitments_Detail
Commitments (Detail) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Schedule Of Contractual Commitments [Line Items] | ' |
Facilities operating leases 2014 | $1,754 |
Facilities operating leases 2015 | 2,271 |
Facilities operating leases 2016 | 2,313 |
Facilities operating leases 2017 | 2,372 |
Facilities operating leases 2018 | 577 |
Facilities operating leases Total minimum payments | 9,287 |
Other contractual obligations 2014 | 2,173 |
Other contractual obligations 2015 | 1,500 |
Other contractual obligations 2016 | 934 |
Other contractual obligations 2017 | ' |
Other contractual obligations 2018 | ' |
Other contractual obligations, Total minimum payments | 4,607 |
Total 2014 | 3,927 |
Total 2015 | 3,771 |
Total 2016 | 3,247 |
Total 2017 | 2,372 |
Total 2018 | 577 |
Total minimum payments | $13,894 |
Credit_Agreement_Additional_In
Credit Agreement - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 | Apr. 30, 2008 | Mar. 31, 2014 |
In Millions, unless otherwise specified | Amended Credit Agreement | |||
Debt And Credit Agreements [Line Items] | ' | ' | ' | ' |
Secured revolving credit facility | ' | ' | $30 | ' |
Maturity period | 'Through to April 1, 2014 | ' | ' | ' |
Borrowings under the credit agreement | $0 | $0 | ' | ' |
Maturity period | ' | ' | ' | 1-Apr-17 |
Contingencies_and_Taxes_Additi
Contingencies and Taxes - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Components Of Deferred Tax Assets And Liabilities [Line Items] | ' |
Gross decrease in deferred tax assets | $1,100,000 |
Uncertain tax positions from other non-current liabilities | $534,000 |
Intangible_Assets_from_Acquisi2
Intangible Assets from Acquisitions (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ||
Net | $31 | $434 | ||
Distribution partner relationship | ' | ' | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ||
Gross Carrying Amount | 4,830 | 4,830 | ||
Less accumulated amortization | -4,799 | [1] | -4,396 | [1] |
Net | $31 | $434 | ||
[1] | (1) Excludes the original cost and accumulated amortization of fully-amortized intangible assets which were $87.7 million and $87.6 million at December 31, 2013 and March 31, 2014, respectively. |
Intangible_Assets_from_Acquisi3
Intangible Assets from Acquisitions (Parenthetical) (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Original cost and accumulated amortization of fully amortized intangible assets | $87.60 | $87.70 |
Intangible_Assets_from_Acquisi4
Intangible Assets from Acquisitions - Additional Information (Detail) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Acquisition Goodwill And Other Intangible Assets [Line Items] | ' | ' | ||
Amortization expense for intangible assets | $403,000 | [1] | $1,055,000 | [1] |
Estimated amortization expense, remainder of 2014 | 31,000 | ' | ||
Estimated amortization expense, thereafter | $0 | ' | ||
[1] | Components of amortization of intangible assets from acquisitions: |
Goodwill_by_Segment_Detail
Goodwill by Segment (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Goodwill [Line Items] | ' | ' |
Goodwill | $65,679 | $65,679 |
Call driven | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill | 63,305 | 63,305 |
Archeo | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill | $2,374 | $2,374 |
Recovered_Sheet1
Intangible and Other Assets Net (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Schedule of Intangible Assets Disclosure [Line Items] | ' | ' |
Internet domain names | $14,598 | $14,514 |
Less accumulated amortization | -14,414 | -14,376 |
Internet domain names, net | 184 | 138 |
Registration fees, net | 4 | 12 |
Other | 1,252 | 334 |
Total intangibles and other assets, net | $1,440 | $484 |
Recovered_Sheet2
Intangible and Other Assets Net - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Intangible Assets by Major Class [Line Items] | ' | ' |
Cost incurred to renew or extend term for domain names | $460,000 | ' |
Weighted average renewal period for registration fees | '1 year | ' |
Amortization expense for internet domains | 88,000 | 69,000 |
Estimated amortization expense based on current amount of domains, remainder of 2014 | 121,000 | ' |
Estimated amortization expense based on current amount of domains, 2015 | 53,000 | ' |
Estimated amortization expense based on current amount of domains, 2016 | 10,000 | ' |
Estimated amortization expense based on current amount of domains, thereafter | $0 | ' |
Common_Stock_Additional_Inform
Common Stock - Additional Information (Detail) | 3 Months Ended | ||
Mar. 31, 2014 | Nov. 30, 2006 | Nov. 30, 2006 | |
Class B | Class B | ||
Minimum | Maximum | ||
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' |
Number of additional shares authorized to be repurchased | ' | 3,000,000 | 13,000,000 |
Treasury stock shares retired | 174,808 | ' | ' |
Operating_Results_for_Disconti
Operating Results for Discontinued Operations (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Revenue | ' | $1,481 |
Income (loss) before provision for income taxes | 14 | -50 |
Income tax expense (benefit) | 5 | -19 |
Discontinued operations, net of tax | $9 | ($31) |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' |
Net cash proceeds from sale of discontinued operations | $1,100,000 |
Discontinued operations, net carrying value of liabilities net of goodwill | 435,000 |
Net gain from sale of discontinued operations | $1,500,000 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Subsequent Event, USD $) | 1 Months Ended |
Apr. 30, 2014 | |
Subsequent Event [Line Items] | ' |
Proceeds from sale of stock | $32,500,000 |
Per share dividend | $0.02 |
Payment date | 15-May-14 |
Date of record | 5-May-14 |
Dividend payable | $845,000 |
Public Offering One | Class B | ' |
Subsequent Event [Line Items] | ' |
Shares sold | 3,400,000 |
Public Offering One | Class B | Underwriters Option To Purchase Units | ' |
Subsequent Event [Line Items] | ' |
Shares sold | 514,100 |
Shares sold, price per share | $10.50 |
Public Offering Two | ' |
Subsequent Event [Line Items] | ' |
Shares sold | 3,200,000 |
Public Offering Two | Underwriters Option To Purchase Units | ' |
Subsequent Event [Line Items] | ' |
Shares sold | 343,000 |