Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 03, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MCHX | |
Entity Registrant Name | MARCHEX INC | |
Entity Central Index Key | 1,224,133 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 5,232,636 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 36,832,385 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 108,936 | $ 80,032 |
Accounts receivable, net | 25,862 | 25,941 |
Prepaid expenses and other current assets | 1,996 | 3,143 |
Refundable taxes | 135 | 131 |
Total current assets | 136,929 | 109,247 |
Property and equipment, net | 6,238 | 5,430 |
Intangible and other assets, net | 233 | 313 |
Goodwill | 63,305 | 65,679 |
Total assets | 206,705 | 180,669 |
Current liabilities: | ||
Accounts payable | 12,105 | 13,766 |
Accrued expenses and other current liabilities | 7,743 | 7,515 |
Deferred revenue | 1,328 | 2,117 |
Total current liabilities | 21,176 | 23,398 |
Other non-current liabilities | 779 | 1,118 |
Total liabilities | 21,955 | 24,516 |
Stockholders' equity: | ||
Treasury stock | (91) | (2,503) |
Additional paid-in capital | 349,194 | 348,467 |
Accumulated deficit | (164,777) | (190,239) |
Total stockholders' equity | 184,750 | 156,153 |
Total liabilities and stockholders' equity | 206,705 | 180,669 |
Class A | ||
Stockholders' equity: | ||
Common stock | 55 | 55 |
Class B | ||
Stockholders' equity: | ||
Common stock | $ 369 | $ 373 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenue | $ 36,852 | $ 47,238 | $ 108,113 | $ 142,374 | |
Expenses: | |||||
Service costs | [1] | 20,003 | 31,270 | 59,166 | 94,226 |
Sales and marketing | 4,266 | 2,814 | 11,969 | 8,759 | |
Product development | 7,769 | 7,581 | 23,608 | 22,599 | |
General and administrative | 4,721 | 5,380 | 14,925 | 16,127 | |
Amortization of intangible assets from acquisitions | [2] | 434 | |||
Acquisition and disposition related costs | 81 | 199 | (68) | ||
Total operating expenses | 36,840 | 47,045 | 109,867 | 142,077 | |
Income (loss) from operations | 12 | 193 | (1,754) | 297 | |
Other income (expense): | |||||
Interest and line of credit expense, net | (11) | (19) | (48) | (56) | |
Other | (1) | (4) | 13 | ||
Total other expense | (12) | (19) | (52) | (43) | |
Income (loss) from continuing operations before provision for income taxes | 174 | (1,806) | 254 | ||
Income tax expense | 191 | 22,642 | 11 | 22,901 | |
Net loss from continuing operations | (191) | (22,468) | (1,817) | (22,647) | |
Discontinued operations: | |||||
Income from discontinued operations, net of tax | 37 | 694 | 5,084 | 2,708 | |
Gain on sale of discontinued operations, net of tax | 163 | 278 | 22,195 | 278 | |
Discontinued operations, net of tax | 200 | 972 | 27,279 | 2,986 | |
Net income (loss) | 9 | (21,496) | 25,462 | (19,661) | |
Dividends paid to participating securities | (29) | (37) | (98) | ||
Net income (loss) applicable to common stockholders | $ 9 | $ (21,525) | $ 25,425 | $ (19,759) | |
Basic and diluted net income (loss) per share applicable to Class A and Class B common stockholders: | |||||
Continuing operations | $ 0 | $ (0.55) | $ (0.04) | $ (0.57) | |
Discontinued operations, net of tax | 0 | 0.03 | 0.66 | 0.07 | |
Basic and diluted net income (loss) per share applicable to Class A and Class B common stockholders | 0 | (0.52) | 0.62 | (0.50) | |
Dividends paid per share | $ 0 | $ 0.02 | $ 0.04 | $ 0.06 | |
Class A | |||||
Other income (expense): | |||||
Net loss from continuing operations | $ (24) | $ (2,852) | $ (235) | $ (3,479) | |
Discontinued operations: | |||||
Net income (loss) applicable to common stockholders | $ 1 | $ (2,729) | $ 3,229 | $ (3,022) | |
Shares used to calculate basic net income (loss) per share applicable to common stockholders: | |||||
Shares used to calculate basic net income (loss) per share applicable to common stockholders | 5,233 | 5,233 | 5,233 | 6,062 | |
Shares used to calculate diluted net income (loss) per share applicable to common stockholders: | |||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | 5,233 | 5,233 | 5,233 | 6,062 | |
Class B | |||||
Other income (expense): | |||||
Net loss from continuing operations | $ (167) | $ (19,616) | $ (1,582) | $ (19,168) | |
Discontinued operations: | |||||
Dividends paid to participating securities | (29) | (37) | (98) | ||
Net income (loss) applicable to common stockholders | $ 8 | $ (18,796) | $ 22,196 | $ 16,737 | |
Shares used to calculate basic net income (loss) per share applicable to common stockholders: | |||||
Shares used to calculate basic net income (loss) per share applicable to common stockholders | 36,120 | 36,041 | 35,980 | 33,546 | |
Shares used to calculate diluted net income (loss) per share applicable to common stockholders: | |||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | 41,353 | 41,274 | 41,213 | 39,608 | |
[1] | Excludes amortization of intangible assets from acquisitions | ||||
[2] | Components of amortization of intangible assets from acquisitions: Service costs $ 434 $ - $ - $ - |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Operations (Parenthetical) $ in Thousands | 9 Months Ended | |
Sep. 30, 2014USD ($) | ||
Amortization of intangible asset included in service costs | $ 434 | [1] |
Service Costs | Business Acquisition | ||
Amortization of intangible asset included in service costs | $ 434 | |
[1] | Components of amortization of intangible assets from acquisitions: Service costs $ 434 $ - $ - $ - |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 25,462 | $ (19,661) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Amortization and depreciation | 2,735 | 3,195 |
Acquisition and disposition related costs | 199 | (68) |
Allowance for doubtful accounts and advertiser credits | 678 | 949 |
Gain on sale of discontinued operations | (22,195) | (422) |
Stock-based compensation | 7,809 | 9,024 |
Deferred income taxes | 24,390 | |
Change in certain assets and liabilities: | ||
Accounts receivable, net | (599) | (4,475) |
Refundable taxes | (4) | 5 |
Prepaid expenses, other current assets and other assets | 484 | (26) |
Accounts payable | (1,472) | 4,628 |
Accrued expenses and other current liabilities | 230 | 646 |
Deferred revenue | (789) | 204 |
Other non-current liabilities | (339) | (272) |
Net cash provided by operating activities | 12,000 | 18,117 |
Cash flows from investing activities: | ||
Proceeds from sale of discontinued operations, net of costs | 25,249 | 304 |
Purchases of property and equipment | (3,623) | (2,297) |
Purchases of intangible assets and changes in other non-current assets | (46) | (185) |
Net cash provided by (used in) investing activities | 21,580 | (2,178) |
Cash flows from financing activities: | ||
Proceeds from offering, net | 32,527 | |
Tax withholding related to restricted stock awards | (74) | (467) |
Common stock dividend payments | (1,685) | (2,474) |
Repurchase of Class B common stock | (3,201) | |
Proceeds from exercises of stock options and issuance of restricted stock to employees, net of repurchases of forfeited unvested restricted stock | 204 | 4,166 |
Proceeds from employee stock purchase plan | 80 | 49 |
Net cash provided by (used in) financing activities | (4,676) | 33,801 |
Net increase in cash and cash equivalents | 28,904 | 49,740 |
Cash and cash equivalents at beginning of period | 80,032 | 30,912 |
Cash and cash equivalents at end of period | $ 108,936 | $ 80,652 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
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 advertising analytics company that helps connect online behavior to real-world, offline actions. The Company provides products and services for businesses of all sizes that focus on consumer phone calls to drive sales. The Company’s technology can facilitate call quality, analyze phone calls in real time and measure the outcomes of calls while its technology platform delivers performance-based, pay-for-call advertising across numerous mobile and online publishers to connect consumers with businesses over the phone. The Company also provides performance-based online advertising that connects advertisers with consumers across our owned websites as well as third party websites. 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 and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or for any other period. The consolidated balance sheet at December 31, 2014 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, 2014 filed with the SEC. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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. In July 2013, the Company sold certain assets related to Archeo’s pay-per-click advertising services and, in April 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. The operating results related to these dispositions are shown as discontinued operations in the condensed consolidated statements of operations for all periods presented (see Note 14. Discontinued Operations |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
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. Recent Accounting Pronouncement(s) Not Yet Effective In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) ASU 2014-09 may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. We are currently in the process of evaluating the impact of adoption of ASU 2014-09 on our consolidated financial statements. Revenues The following table presents the Company’s revenues by segment for the periods presented (in thousands): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Call-Driven $ 137,728 $ 105,621 $ 46,379 $ 36,135 Archeo 4,646 2,492 859 717 Total Revenue $ 142,374 $ 108,113 $ 47,238 $ 36,852 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 reseller partners for use of the Company’s 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 the Company’s network of owned and operated websites and third-party distribution. See Note 6. Segment Reporting and Geographic Information The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Partner and Other Revenue Sources $ 140,304 $ 107,470 $ 46,914 $ 36,678 Proprietary Website Traffic Sources 2,070 643 324 174 Total Revenue $ 142,374 $ 108,113 $ 47,238 $ 36,852 The Company’s partner network revenues are primarily generated using third party distribution networks to deliver the pay-for-call and pay-for-click advertisers’ listings. The distribution network includes mobile and online search engines and applications, directories, destination sites, shopping engines, third party Internet domains or websites, other targeted web and mobile-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 also generates revenue from cost-per-action services, which occurs when a user makes a phone call from the Company’s advertiser’s listing or is redirected from one of the Company’s websites or a third party website in the Company’s distribution network to an advertiser website and completes the specified action. The Company pays a revenue share to the distribution partners to access their mobile, online, offline and other user traffic. Other revenues include call provisioning and call tracking services, presence management services, campaign management services and outsourced search marketing platforms. The Company’s proprietary website traffic revenues are generated from its portfolio of owned websites which are monetized with pay-for-call or pay-per-click listings that are relevant to the websites, as well as other forms of advertising, including banner advertising and sponsorships. When an online user navigates to one of the Company’s owned and operated websites and calls or clicks on a particular listing or completes the specified action, the Company receives a fee. |
Stock-based Compensation Plans
Stock-based Compensation Plans | 9 Months Ended |
Sep. 30, 2015 | |
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): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Service costs $ 1,010 $ 1,046 $ 371 $ 273 Sales and marketing 659 893 224 339 Product development 2,017 1,843 666 620 General and administrative 5,327 4,027 1,759 1,119 Total stock-based compensation $ 9,013 $ 7,809 $ 3,020 $ 2,351 FASB ASC 718 requires the benefits of tax deductions in excess of the stock-based compensation cost to be classified as financing cash inflows in the condensed consolidated statement of cash flows. In addition, a tax benefit and a credit to additional paid-in capital for the excess deductions is not recognized until that deduction reduces taxes payable. For the nine months ended September 30, 2014 and 2015, the Company incurred excess tax deductions of $6.5 million and $323,000, respectively, which were 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 September 30, 2014 and 2015, 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: Nine months ended September 30, Three months ended 2014 2015 2014 2015 Expected life (in years) 4.0 4.0-6.25 4.0 4.0-6.25 Risk-free interest rate 1.26% 1.13%-1.56% 1.45% 1.15%-1.56% Expected volatility 55%-62% 59%-65% 62% 59%-60% Expected dividend yield 0.76% 0.00%-0.36% 0.76% 0.00% Stock option activity during the nine months ended September 30, 2015 is summarized as follows: Shares Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Balance at December 31, 2014 7,797,228 $ 7.90 6.58 $ 800 Options granted 1,921,215 4.05 Options forfeited (233,750 ) 6.27 Options expired (277,991 ) 7.43 Options exercised (48,654 ) 3.95 Balance at September 30, 2015 9,158,048 $ 7.07 6.53 $ 119 The Company issues restricted stock awards and restricted stock units to employees for future services and 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 service conditions. Restricted stock awards and restricted stock units 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 stock awards and restricted stock units are accounted for under FASB ASC 718 using the straight-line method net of estimated forfeitures. Restricted stock awards and restricted stock unit activity during the nine months ended September 30, 2015 is summarized as follows: Shares/ Units Weighted average grant date fair value Unvested balance at December 31, 2014 2,140,762 $ 6.55 Granted 1,193,837 4.26 Vested (727,716 ) 7.51 Forfeited (127,707 ) 5.64 Unvested balance at September 30, 2015 2,479,176 $ 5.21 In the nine months ended September 30, 2014 and 2015, the Company repurchased 41,287 shares and 14,754 shares, respectively, from certain executives for minimum withholding taxes on 143,650 and 54,600 restricted stock award vests, respectively. 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 $467,000 and $74,000, respectively, which was remitted in cash to the appropriate taxing authorities. The payments are reflected as a financing activity within the consolidated statement of cash flows when paid. The payments had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued on the vesting date and were recorded as a reduction of additional paid-in capital. In February 2015, vesting of approximately 139,000 stock options and 108,000 restricted stock awards were fully accelerated in connection with an executive’s employment agreement. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2015 | |
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 (loss) applicable to common stockholders used to compute basic net income per share for the periods ended (in thousands, except per share amounts): Nine months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (3,479 ) $ (19,168 ) $ (235 ) $ (1,582 ) Dividends paid to participating securities — (98 ) — (37 ) Net loss from continuing operations applicable to common stockholders $ (3,479 ) $ (19,266 ) $ (235 ) $ (1,619 ) Discontinued operations, net of tax 457 2,529 3,464 23,815 Net income (loss) applicable to common stockholders $ (3,022 ) $ (16,737 ) $ 3,229 $ 22,196 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 6,062 33,546 5,233 35,980 Basic net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.57 ) $ (0.57 ) $ (0.04 ) $ (0.04 ) Discontinued operations, net of tax 0.07 0.07 0.66 0.66 Basic net income (loss) per share applicable to common stockholders $ (0.50 ) $ (0.50 ) $ 0.62 $ 0.62 Three months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (2,852 ) $ (19,616 ) $ (24 ) $ (167 ) Dividends paid to participating securities — (29 ) — — Net loss from continuing operations applicable to common stockholders $ (2,852 ) $ (19,645 ) $ (24 ) $ (167 ) Discontinued operations, net of tax 123 849 25 175 Net income (loss) applicable to common stockholders $ (2,729 ) $ (18,796 ) $ 1 $ 8 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 36,041 5,233 36,120 Basic net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.55 ) $ (0.55 ) $ (0.00 ) $ (0.00 ) Discontinued operations, net of tax 0.03 0.03 0.00 0.00 Basic net income (loss) per share applicable to common stockholders $ (0.52 ) $ (0.52 ) $ 0.00 $ 0.00 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): Nine months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (3,479 ) $ (19,168 ) $ (235 ) $ (1,582 ) Dividends paid to participating securities — (98 ) — (37 ) Reallocation of net income for Class A shares as a result of conversion of Class A to Class B shares — (3,479 ) — (235 ) Net loss from continuing operations applicable to common stockholders $ (3,479 ) $ (22,745 ) $ (235 ) $ (1,854 ) Discontinued operations, net of tax 457 2,529 3,464 23,815 Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares — 457 — 3,464 Discontinued operations, net of tax $ 457 $ 2,986 $ 3,464 $ 27,279 Net income (loss) applicable to common stockholders $ (3,022 ) $ (19,759 ) $ 3,229 $ 25,425 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 6,062 33,546 5,233 35,980 Conversion of Class A to Class B common shares outstanding — 6,062 — 5,233 Weighted average number of shares outstanding used to calculate diluted net income (loss) per share 6,062 39,608 5,233 41,213 Diluted net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.57 ) $ (0.57 ) $ (0.04 ) $ (0.04 ) Discontinued operations, net of tax 0.07 0.07 0.66 0.66 Diluted net income (loss) per share applicable to common stockholders $ (0.50 ) $ (0.50 ) $ 0.62 $ 0.62 Three months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (2,852 ) $ (19,616 ) $ (24 ) $ (167 ) Dividends paid to participating securities — (29 ) — — Reallocation of net loss for Class A shares as a result of conversion of Class A to Class B shares — (2,852 ) — (24 ) Net loss from continuing operations applicable to common stockholders $ (2,852 ) $ (22,497 ) $ (24 ) $ (191 ) Discontinued operations, net of tax 123 849 25 175 Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares — 123 — 25 Discontinued operations, net of tax $ 123 $ 972 $ 25 $ 200 Net income (loss) applicable to common stockholders $ (2,729 ) $ (21,525 ) $ 1 $ 9 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 36,041 5,233 36,120 Conversion of Class A to Class B common shares outstanding — 5,233 — 5,233 Weighted average number of shares outstanding used to calculate diluted net income (loss) per share 5,233 41,274 5,233 41,353 Diluted net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.55 ) $ (0.55 ) $ (0.00 ) $ (0.00 ) Discontinued operations, net of tax 0.03 0.03 0.00 0.00 Diluted net income (loss) per share applicable to common stockholders $ (0.52 ) $ (0.52 ) $ 0.00 $ 0.00 The computation of diluted net income (loss) per share excludes the following because their effect would be anti-dilutive (in thousands): • For both the three and nine months ended September 30, 2014 outstanding options to acquire 7,833 shares of Class B common stock. For both the three and nine months ended September 30, 2015, outstanding options to acquire 9,158 shares of outstanding Class B common stock. • For the three and nine months ended September 30, 2014 and 2015, 1,503 and 1,052 shares of unvested Class B restricted common shares, respectively. • For the three and nine months ended September 30, 2014 and 2015 1,103 and 1,427 restricted stock units, respectively. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2015 | |
Concentrations | (5) Concentrations The Company maintains substantially all of its cash and cash equivalents with one financial institution. During the three months ended September 30, 2015, the Company held cash equivalents in a commercial paper sweep account with the same financial institution, which were fully liquidated prior to September 30, 2015. 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. There were no distribution partners representing more than 10% of consolidated revenue for the nine months ended September 30, 2015. One distribution partner was paid less than 20% of consolidated revenue for the nine months ended September 30, 2014. The advertisers representing more than 10% of consolidated revenue are as follows (in percentages): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Advertiser A 23 % 30 % 24 % 28 % Advertiser B * 20 % * 19 % Advertiser C 34 % * 33 % * Advertiser A is also a distribution partner. The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows (in percentages): At December 31, 2014 At September 30, 2015 Advertiser A 41 % 34 % Advertiser B 16 % 18 % * Less than 10% In certain cases, the Company may engage directly with one or more advertising agencies who act on an advertiser’s behalf. In addition, an advertising agency may represent more than one advertiser that utilizes the Company’s products and services. For the three and nine months ended September 30, 2014, no advertising agency represented more than 10% of consolidated revenue, and, as of December 31, 2014, one advertising agency represented 13% of consolidated accounts receivable. For the three and nine months ended September 30, 2015, there was one advertising agency which represented 17% and 19%, respectively, of consolidated revenue and, as of September 30, 2015, represented 15% of the consolidated accounts receivable balance. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 9 Months Ended |
Sep. 30, 2015 | |
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 and, in April 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. As a result, the operating results related to these dispositions 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 Note 14. Discontinued Operations The Company’s Call-Driven segment comprises its performance-based advertising business focused on driving, analyzing and measuring phone calls and the related outcomes. The Archeo segment comprises the Company’s click-based advertising business. 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, acquisition and disposition 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 September 30, 2015 was approximately $63.3 million and $0 for Call-Driven and Archeo, respectively. Selected segment information (in thousands): Nine months ended September 30, 2015 Call-Driven Archeo Total Revenue $ 105,621 $ 2,492 $ 108,113 Operating expenses 99,412 2,447 101,859 Segment profit $ 6,209 $ 45 $ 6,254 Less reconciling items: Stock based compensation 7,809 Acquisition and disposition related costs 199 Other expense 52 Loss from continuing operations before provision for income taxes $ (1,806 ) Nine months ended September 30, 2014 Call-Driven Archeo Total Revenue $ 137,728 $ 4,646 $ 142,374 Operating expenses 129,140 3,558 132,698 Segment profit $ 8,588 $ 1,088 $ 9,676 Less reconciling items: Stock based compensation 9,013 Amortization of intangible assets from acquisitions 434 Acquisition and disposition related costs (68 ) Other expense 43 Income from continuing operations before provision for income taxes $ 254 Three months ended September 30, 2015 Call-Driven Archeo Total Revenue $ 36,135 $ 717 $ 36,852 Operating expenses 33,958 450 34,408 Segment profit $ 2,177 $ 267 $ 2,444 Less reconciling items: Stock based compensation 2,351 Acquisition and disposition related costs 81 Other expense 12 Loss from continuing operations before provision for income taxes $ — Three months ended September 30, 2014 Call-Driven Archeo Total Revenue $ 46,379 $ 859 $ 47,238 Operating expenses 43,100 925 44,025 Segment profit (loss) $ 3,279 $ (66 ) $ 3,213 Less reconciling items: Stock based compensation 3,020 Other expense 19 Income from continuing operations before provision for income taxes $ 174 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): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 United States 97 % 97 % 97 % 97 % Canada 3 % 3 % 3 % 3 % Other countries * * * * 100 % 100 % 100 % 100 % * Less than 1% of revenue. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property and Equipment | (7) Property and Equipment Property and equipment consisted of the following (in thousands): At December 31, 2014 At September 30, 2015 Computer and other related equipment $ 18,662 $ 21,190 Purchased and internally developed software 7,836 7,890 Furniture and fixtures 1,416 1,733 Leasehold improvements 1,834 2,081 $ 29,748 $ 32,894 Less: accumulated depreciation and amortization (24,318 ) (26,656 ) Property and equipment, net $ 5,430 $ 6,238 Depreciation and amortization expense related to property and equipment was approximately $863,000 and $885,000 for the three months ended September 30, 2014 and 2015, respectively, and was approximately $2.6 million for both the nine months ended September 30, 2014 and 2015. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2015 | |
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 2018. 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): Facilities operating leases Other contractual obligations Total 2015 $ 571 $ 1,291 $ 1,862 2016 2,313 3,054 5,367 2017 2,373 86 2,459 2018 577 1 578 2019 and after — — — Total minimum payments $ 5,834 $ 4,432 $ 10,266 Rent expense incurred by the Company was approximately $467,000 and $460,000 for the three months ended September 30, 2014 and 2015, respectively, and was $1.4 million for both the nine months ended September 30, 2014 and 2015, respectively. |
Credit Agreement
Credit Agreement | 9 Months Ended |
Sep. 30, 2015 | |
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”). The Credit Agreement, as amended, matures on 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 nine months ended September 30, 2014 and 2015, the Company had no borrowings under the Credit Agreement. In April 2015, the Company signed an amendment to the Credit Agreement which clarified the LIBOR rate as determined under the Credit Agreement cannot be below zero percent (0%) and added a financial covenant limiting outstanding balances under the Credit Agreement not to exceed a collateral value as defined in the Credit Agreement. |
Contingencies and Taxes
Contingencies and Taxes | 9 Months Ended |
Sep. 30, 2015 | |
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 the Company is a party, the Company has 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, the Company may from time to time provide certain levels of financial support to its contract parties to seek to minimize the impact of any associated litigation in which it 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 At September 30, 2015, based upon both positive and negative evidence available, we determined that it is not more likely than not that our deferred tax assets of $34.8 million will be realized and accordingly, we have recorded a 100% valuation allowance against these deferred tax assets. We initially increased the valuation allowance to 100% during the third quarter of 2014. In assessing the realizability of deferred tax assets, the Company considered whether it is more likely than not that some or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. The Company considered the future reversal of deferred tax liabilities, carryback potential, projected taxable income, and tax planning strategies as well as its history of taxable income or losses in the relevant jurisdictions in making this assessment. The Company has incurred taxable losses from 2012 to 2014. Based on the level of historical taxable losses and the uncertainty of projections for future taxable income over the periods for which the deferred tax assets are deductible, the Company concluded that it is not more likely than not that the gross deferred tax assets will be realized. 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. Resolution of uncertain tax positions will impact our effective tax rate when settled. 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 2010 are within the statute of limitations and are under examination or may be subject to examination. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill | (11) Goodwill Changes in the carrying amount of goodwill during the nine months ended September 30, 2015 are as follows (in thousands): Call Driven Archeo Total Balance as of December 31, 2014 $ 63,305 $ 2,374 $ 65,679 Sale of certain assets related to domain operations — (2,374 ) (2,374 ) Balance as of September 30, 2015 $ 63,305 $ — $ 63,305 The decrease in goodwill is related to the 2015 sale of certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. The assets sold constitute a business within the Archeo reporting unit. Goodwill was allocated to the sold business based on its relative fair value compared to the remainder of the Archeo reporting unit. 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, the Company 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. Events and circumstances considered in determining whether the carrying value of goodwill may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; and significant changes in competition and market dynamics. These estimates are inherently uncertain and can be affected by numerous factors, including changes in economic, industry or market conditions, changes in business operations, a loss of a significant customer, 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. At various points in time during the nine months ended September 30, 2015 and the period from October 1, 2015 to November 3, 2015, the Company’s stock price approached or dropped below the then book value. 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, if the Company’s stock price were to trade below book value per share for an extended period of time and/or should other events occur indicating the remaining carrying value of our assets might be impaired, the Company would test its goodwill and intangible assets for impairment and may recognize an impairment loss to the extent that the carrying amount exceeds such asset’s fair value. The Company will continue to monitor its financial performance, stock price and other factors in order to determine if there are any indicators of impairment prior to its annual impairment evaluation in November 2015. |
Intangible and other assets, ne
Intangible and other assets, net | 9 Months Ended |
Sep. 30, 2015 | |
Intangible and other assets, net | (12) Intangible and other assets, net Intangible and other assets, net consisted of the following (in thousands): At December 31, 2014 At September 30, 2015 Internet domain names $ 14,607 $ 748 Less accumulated amortization (14,499 ) (720 ) Internet domain names, net 108 28 Other assets: Other 205 205 Total intangibles and other assets, net $ 313 $ 233 The Company capitalizes costs incurred to acquire domain names or URLs, which include the initial registration fees, and are included in Intangible and other assets, net on the condensed consolidated balance sheet. The capitalized costs are amortized over the expected useful life of the domain names on a straight-line basis. The net carrying value of Internet domain names as of December 31, 2014 related to both domain names held for use and available for sale. During the nine months ended September 30, 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. As a result, the net carrying value of Internet domain names as of September 30, 2015 primarily related to domains held for use. Amortization expense for internet domain names was $29,000 and $19,000 for the three months ended September 30, 2014 and 2015, respectively, and was $98,000 and $67,000 for the nine months ended September 30, 2014 and 2015, respectively. Based upon the current amount of domains subject to amortization, and, as a result of the sale of the majority of the Company’s domain names in April 2015, the estimated expense for the next five years is as follows: $14,000 for the remainder of 2015 and $14,000 thereafter. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2015 | |
Common Stock | (13) Common Stock In November 2014, the Company’s board of directors authorized a new share repurchase program (the “2014 Repurchase Program”), which supersedes and replaces any prior repurchase programs. Under the 2014 Repurchase Program, the Company is authorized to repurchase up to 3 million shares of the Company’s Class B common stock in the aggregate through open market and privately negotiated transactions, at such times and in such amounts as the Company deems appropriate. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. 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. The 2014 Repurchase Program does not have an expiration date and may be expanded, limited or terminated at any time without prior notice. During the nine months ended September 30, 2015, the Company repurchased 781,000 shares of Class B common stock for $3.2 million. During the nine months ended September 30, 2014, the Company did not repurchase any shares of Class B common stock under the prior stock repurchase program. During the nine months ended September 30, 2014 and 2015, the Company’s board of directors approved and the Company retired 239,087 and 1,261,742 shares, respectively, of treasury stock. During the nine months ended September 30, 2015 the Company paid aggregate dividends of $1.7 million to shareholders of record on February 11, 2015 and May 7, 2015. We do not anticipate declaring or paying further dividends in the foreseeable future. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations | (14) Discontinued Operations In July 2013, the Company sold certain assets related to Archeo’s pay-per-click advertising services and, in April 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. These disposals meet the requirements of FASB ASC 205-20, “ Discontinued Operations” Nine months ended September 30, Three months ended 2014 2015 2014 2015 Revenue $ 6,979 $ 7,081 $ 1,943 $ — Expenses: Service costs 2,502 1,663 785 — Sales and marketing 388 334 126 — Income from discontinued operations before provision for income taxes 4,089 5,084 1,032 — Income tax expense (benefit) 1,381 — 338 (37 ) Income from discontinued operations, net of tax $ 2,708 $ 5,084 $ 694 $ 37 The discontinued operations incurred amortization of $15,000 and $0 for the three months ended September 30, 2014 and 2015, respectively, and amortization of $101,000 and $16,000 for the nine months ended September 30, 2014 and 2015, respectively. The cash proceeds from the sale of the pay-per-click assets and assets related to Archeo’s domain operations were approximately $1.4 million and $28.1 million, respectively. Both sales include contingent earn-out consideration payments that depend upon the achievement of certain thresholds and will be recognized as income when received. |
Significant Accounting Polici20
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Pronouncement(s) Not Yet Effective | Recent Accounting Pronouncement(s) Not Yet Effective In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) ASU 2014-09 may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. We are currently in the process of evaluating the impact of adoption of ASU 2014-09 on our consolidated financial statements. |
Revenues | Revenues The following table presents the Company’s revenues by segment for the periods presented (in thousands): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Call-Driven $ 137,728 $ 105,621 $ 46,379 $ 36,135 Archeo 4,646 2,492 859 717 Total Revenue $ 142,374 $ 108,113 $ 47,238 $ 36,852 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 reseller partners for use of the Company’s 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 the Company’s network of owned and operated websites and third-party distribution. See Note 6. Segment Reporting and Geographic Information The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Partner and Other Revenue Sources $ 140,304 $ 107,470 $ 46,914 $ 36,678 Proprietary Website Traffic Sources 2,070 643 324 174 Total Revenue $ 142,374 $ 108,113 $ 47,238 $ 36,852 The Company’s partner network revenues are primarily generated using third party distribution networks to deliver the pay-for-call and pay-for-click advertisers’ listings. The distribution network includes mobile and online search engines and applications, directories, destination sites, shopping engines, third party Internet domains or websites, other targeted web and mobile-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 also generates revenue from cost-per-action services, which occurs when a user makes a phone call from the Company’s advertiser’s listing or is redirected from one of the Company’s websites or a third party website in the Company’s distribution network to an advertiser website and completes the specified action. The Company pays a revenue share to the distribution partners to access their mobile, online, offline and other user traffic. Other revenues include call provisioning and call tracking services, presence management services, campaign management services and outsourced search marketing platforms. The Company’s proprietary website traffic revenues are generated from its portfolio of owned websites which are monetized with pay-for-call or pay-per-click listings that are relevant to the websites, as well as other forms of advertising, including banner advertising and sponsorships. When an online user navigates to one of the Company’s owned and operated websites and calls or clicks on a particular listing or completes the specified action, the Company receives a fee. |
Significant Accounting Polici21
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Revenues by Segment | The following table presents the Company’s revenues by segment for the periods presented (in thousands): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Call-Driven $ 137,728 $ 105,621 $ 46,379 $ 36,135 Archeo 4,646 2,492 859 717 Total Revenue $ 142,374 $ 108,113 $ 47,238 $ 36,852 |
Revenues | The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Partner and Other Revenue Sources $ 140,304 $ 107,470 $ 46,914 $ 36,678 Proprietary Website Traffic Sources 2,070 643 324 174 Total Revenue $ 142,374 $ 108,113 $ 47,238 $ 36,852 |
Stock-based Compensation Plans
Stock-based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock Based Compensation Expense Included in Operating Expense | Stock-based compensation expense was included in the following operating expense categories as follows (in thousands): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Service costs $ 1,010 $ 1,046 $ 371 $ 273 Sales and marketing 659 893 224 339 Product development 2,017 1,843 666 620 General and administrative 5,327 4,027 1,759 1,119 Total stock-based compensation $ 9,013 $ 7,809 $ 3,020 $ 2,351 |
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: Nine months ended September 30, Three months ended 2014 2015 2014 2015 Expected life (in years) 4.0 4.0-6.25 4.0 4.0-6.25 Risk-free interest rate 1.26% 1.13%-1.56% 1.45% 1.15%-1.56% Expected volatility 55%-62% 59%-65% 62% 59%-60% Expected dividend yield 0.76% 0.00%-0.36% 0.76% 0.00% |
Summary of Stock Option Activity | Stock option activity during the nine months ended September 30, 2015 is summarized as follows: Shares Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Balance at December 31, 2014 7,797,228 $ 7.90 6.58 $ 800 Options granted 1,921,215 4.05 Options forfeited (233,750 ) 6.27 Options expired (277,991 ) 7.43 Options exercised (48,654 ) 3.95 Balance at September 30, 2015 9,158,048 $ 7.07 6.53 $ 119 |
Summary of Restricted Stock Awards and Restricted Stock Units | Restricted stock awards and restricted stock unit activity during the nine months ended September 30, 2015 is summarized as follows: Shares/ Units Weighted average grant date fair value Unvested balance at December 31, 2014 2,140,762 $ 6.55 Granted 1,193,837 4.26 Vested (727,716 ) 7.51 Forfeited (127,707 ) 5.64 Unvested balance at September 30, 2015 2,479,176 $ 5.21 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Computation of Net Income (Loss) per Share Basic and Diluted | The following table calculates net income (loss) applicable to common stockholders used to compute basic net income per share for the periods ended (in thousands, except per share amounts): Nine months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (3,479 ) $ (19,168 ) $ (235 ) $ (1,582 ) Dividends paid to participating securities — (98 ) — (37 ) Net loss from continuing operations applicable to common stockholders $ (3,479 ) $ (19,266 ) $ (235 ) $ (1,619 ) Discontinued operations, net of tax 457 2,529 3,464 23,815 Net income (loss) applicable to common stockholders $ (3,022 ) $ (16,737 ) $ 3,229 $ 22,196 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 6,062 33,546 5,233 35,980 Basic net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.57 ) $ (0.57 ) $ (0.04 ) $ (0.04 ) Discontinued operations, net of tax 0.07 0.07 0.66 0.66 Basic net income (loss) per share applicable to common stockholders $ (0.50 ) $ (0.50 ) $ 0.62 $ 0.62 Three months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (2,852 ) $ (19,616 ) $ (24 ) $ (167 ) Dividends paid to participating securities — (29 ) — — Net loss from continuing operations applicable to common stockholders $ (2,852 ) $ (19,645 ) $ (24 ) $ (167 ) Discontinued operations, net of tax 123 849 25 175 Net income (loss) applicable to common stockholders $ (2,729 ) $ (18,796 ) $ 1 $ 8 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 36,041 5,233 36,120 Basic net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.55 ) $ (0.55 ) $ (0.00 ) $ (0.00 ) Discontinued operations, net of tax 0.03 0.03 0.00 0.00 Basic net income (loss) per share applicable to common stockholders $ (0.52 ) $ (0.52 ) $ 0.00 $ 0.00 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): Nine months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (3,479 ) $ (19,168 ) $ (235 ) $ (1,582 ) Dividends paid to participating securities — (98 ) — (37 ) Reallocation of net income for Class A shares as a result of conversion of Class A to Class B shares — (3,479 ) — (235 ) Net loss from continuing operations applicable to common stockholders $ (3,479 ) $ (22,745 ) $ (235 ) $ (1,854 ) Discontinued operations, net of tax 457 2,529 3,464 23,815 Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares — 457 — 3,464 Discontinued operations, net of tax $ 457 $ 2,986 $ 3,464 $ 27,279 Net income (loss) applicable to common stockholders $ (3,022 ) $ (19,759 ) $ 3,229 $ 25,425 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 6,062 33,546 5,233 35,980 Conversion of Class A to Class B common shares outstanding — 6,062 — 5,233 Weighted average number of shares outstanding used to calculate diluted net income (loss) per share 6,062 39,608 5,233 41,213 Diluted net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.57 ) $ (0.57 ) $ (0.04 ) $ (0.04 ) Discontinued operations, net of tax 0.07 0.07 0.66 0.66 Diluted net income (loss) per share applicable to common stockholders $ (0.50 ) $ (0.50 ) $ 0.62 $ 0.62 Three months ended September 30, 2014 2015 Class A Class B Class A Class B Numerator: Net loss from continuing operations $ (2,852 ) $ (19,616 ) $ (24 ) $ (167 ) Dividends paid to participating securities — (29 ) — — Reallocation of net loss for Class A shares as a result of conversion of Class A to Class B shares — (2,852 ) — (24 ) Net loss from continuing operations applicable to common stockholders $ (2,852 ) $ (22,497 ) $ (24 ) $ (191 ) Discontinued operations, net of tax 123 849 25 175 Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares — 123 — 25 Discontinued operations, net of tax $ 123 $ 972 $ 25 $ 200 Net income (loss) applicable to common stockholders $ (2,729 ) $ (21,525 ) $ 1 $ 9 Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 36,041 5,233 36,120 Conversion of Class A to Class B common shares outstanding — 5,233 — 5,233 Weighted average number of shares outstanding used to calculate diluted net income (loss) per share 5,233 41,274 5,233 41,353 Diluted net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.55 ) $ (0.55 ) $ (0.00 ) $ (0.00 ) Discontinued operations, net of tax 0.03 0.03 0.00 0.00 Diluted net income (loss) per share applicable to common stockholders $ (0.52 ) $ (0.52 ) $ 0.00 $ 0.00 |
Concentrations (Tables)
Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Consolidated Revenue | |
Schedules of Concentration of Risk, by Risk Factor | The advertisers representing more than 10% of consolidated revenue are as follows (in percentages): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 Advertiser A 23 % 30 % 24 % 28 % Advertiser B * 20 % * 19 % Advertiser C 34 % * 33 % * * Less than 10% |
Consolidated Accounts Receivable | |
Schedules of Concentration of Risk, by Risk Factor | The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows (in percentages): At December 31, 2014 At September 30, 2015 Advertiser A 41 % 34 % Advertiser B 16 % 18 % * Less than 10% |
Segment Reporting and Geograp25
Segment Reporting and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information | Selected segment information (in thousands): Nine months ended September 30, 2015 Call-Driven Archeo Total Revenue $ 105,621 $ 2,492 $ 108,113 Operating expenses 99,412 2,447 101,859 Segment profit $ 6,209 $ 45 $ 6,254 Less reconciling items: Stock based compensation 7,809 Acquisition and disposition related costs 199 Other expense 52 Loss from continuing operations before provision for income taxes $ (1,806 ) Nine months ended September 30, 2014 Call-Driven Archeo Total Revenue $ 137,728 $ 4,646 $ 142,374 Operating expenses 129,140 3,558 132,698 Segment profit $ 8,588 $ 1,088 $ 9,676 Less reconciling items: Stock based compensation 9,013 Amortization of intangible assets from acquisitions 434 Acquisition and disposition related costs (68 ) Other expense 43 Income from continuing operations before provision for income taxes $ 254 Three months ended September 30, 2015 Call-Driven Archeo Total Revenue $ 36,135 $ 717 $ 36,852 Operating expenses 33,958 450 34,408 Segment profit $ 2,177 $ 267 $ 2,444 Less reconciling items: Stock based compensation 2,351 Acquisition and disposition related costs 81 Other expense 12 Loss from continuing operations before provision for income taxes $ — Three months ended September 30, 2014 Call-Driven Archeo Total Revenue $ 46,379 $ 859 $ 47,238 Operating expenses 43,100 925 44,025 Segment profit (loss) $ 3,279 $ (66 ) $ 3,213 Less reconciling items: Stock based compensation 3,020 Other expense 19 Income from continuing operations before provision for income taxes $ 174 |
Revenues by Geographic Region | Revenues by geographic region are as follows (in percentages): Nine months ended September 30, Three months ended September 30, 2014 2015 2014 2015 United States 97 % 97 % 97 % 97 % Canada 3 % 3 % 3 % 3 % Other countries * * * * 100 % 100 % 100 % 100 % * Less than 1% of revenue. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property and Equipment | Property and equipment consisted of the following (in thousands): At December 31, 2014 At September 30, 2015 Computer and other related equipment $ 18,662 $ 21,190 Purchased and internally developed software 7,836 7,890 Furniture and fixtures 1,416 1,733 Leasehold improvements 1,834 2,081 $ 29,748 $ 32,894 Less: accumulated depreciation and amortization (24,318 ) (26,656 ) Property and equipment, net $ 5,430 $ 6,238 |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Future Minimum Payments | Future minimum payments are approximately as follows (in thousands): Facilities operating leases Other contractual obligations Total 2015 $ 571 $ 1,291 $ 1,862 2016 2,313 3,054 5,367 2017 2,373 86 2,459 2018 577 1 578 2019 and after — — — Total minimum payments $ 5,834 $ 4,432 $ 10,266 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill during the nine months ended September 30, 2015 are as follows (in thousands): Call Driven Archeo Total Balance as of December 31, 2014 $ 63,305 $ 2,374 $ 65,679 Sale of certain assets related to domain operations — (2,374 ) (2,374 ) Balance as of September 30, 2015 $ 63,305 $ — $ 63,305 |
Intangible and other assets, 29
Intangible and other assets, net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Intangible and Other Assets, Net | Intangible and other assets, net consisted of the following (in thousands): At December 31, 2014 At September 30, 2015 Internet domain names $ 14,607 $ 748 Less accumulated amortization (14,499 ) (720 ) Internet domain names, net 108 28 Other assets: Other 205 205 Total intangibles and other assets, net $ 313 $ 233 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Operating Results for Discontinued Operations | The operating results for the discontinued operations were as follows (in thousands): Nine months ended September 30, Three months ended 2014 2015 2014 2015 Revenue $ 6,979 $ 7,081 $ 1,943 $ — Expenses: Service costs 2,502 1,663 785 — Sales and marketing 388 334 126 — Income from discontinued operations before provision for income taxes 4,089 5,084 1,032 — Income tax expense (benefit) 1,381 — 338 (37 ) Income from discontinued operations, net of tax $ 2,708 $ 5,084 $ 694 $ 37 |
Revenues by Segment (Detail)
Revenues by Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information | ||||
Total Revenue | $ 36,852 | $ 47,238 | $ 108,113 | $ 142,374 |
Call Driven | ||||
Segment Reporting Information | ||||
Total Revenue | 36,135 | 46,379 | 105,621 | 137,728 |
Archeo | ||||
Segment Reporting Information | ||||
Total Revenue | $ 717 | $ 859 | $ 2,492 | $ 4,646 |
Revenues by Revenue Sources (De
Revenues by Revenue Sources (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue [Line Items] | ||||
Total Revenue | $ 36,852 | $ 47,238 | $ 108,113 | $ 142,374 |
Partner and Other Revenue Sources | ||||
Revenue [Line Items] | ||||
Total Revenue | 36,678 | 46,914 | 107,470 | 140,304 |
Proprietary Web Site Traffic Sources | ||||
Revenue [Line Items] | ||||
Total Revenue | $ 174 | $ 324 | $ 643 | $ 2,070 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense by Operating Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 2,351 | $ 3,020 | $ 7,809 | $ 9,013 |
Service Costs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 273 | 371 | 1,046 | 1,010 |
Sales and Marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 339 | 224 | 893 | 659 |
Product Development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 620 | 666 | 1,843 | 2,017 |
General and Administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 1,119 | $ 1,759 | $ 4,027 | $ 5,327 |
Stock Based Compensation Plans
Stock Based Compensation Plans - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | |
Feb. 28, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Excess tax benefit | $ 323,000 | $ 6,500,000 | |
Repurchase of stock for tax withholding | 14,754 | 41,287 | |
Vesting of restricted shares | 108,000 | 54,600 | 143,650 |
Minimum withholding tax | $ 74,000 | $ 467,000 | |
Options vested | 139,000 |
Assumptions to Estimate Fair Va
Assumptions to Estimate Fair Value for Stock Options at Grant Date (Detail) - Time Vested Stock Options | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life (in years) | 4 years | 4 years | ||
Risk-free interest rate | 1.45% | 1.26% | ||
Risk-free interest rate, minimum | 1.15% | 1.13% | ||
Risk-free interest rate, maximum | 1.56% | 1.56% | ||
Expected volatility | 62.00% | |||
Expected volatility, minimum | 59.00% | 59.00% | 55.00% | |
Expected volatility, maximum | 60.00% | 65.00% | 62.00% | |
Expected dividend yield | 0.00% | 0.76% | 0.76% | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life (in years) | 4 years | 4 years | ||
Expected dividend yield | 0.00% | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life (in years) | 6 years 3 months | 6 years 3 months | ||
Expected dividend yield | 0.36% |
Summary of Stock Option Activit
Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares, Beginning Balance | 7,797,228 | |
Options granted, Shares | 1,921,215 | |
Options forfeited, Shares | (233,750) | |
Options expired, Shares | (277,991) | |
Options exercised, Shares | (48,654) | |
Number of shares, Ending Balance | 9,158,048 | 7,797,228 |
Weighted average exercise price, Beginning Balance | $ 7.90 | |
Options granted, Weighted average exercise price | 4.05 | |
Options forfeited, Weighted average exercise price | 6.27 | |
Options expired, Weighted average exercise price | 7.43 | |
Options exercised, Weighted average exercise price | 3.95 | |
Weighted average exercise price, Ending Balance | $ 7.07 | $ 7.90 |
Weighted average remaining contractual term, End of the period | 6 years 6 months 11 days | 6 years 6 months 29 days |
Aggregate intrinsic value, Outstanding Ending Balance | $ 119 | $ 800 |
Summary Restricted Stock Awards
Summary Restricted Stock Awards and Restricted Stock Units Activity (Detail) - $ / shares | 1 Months Ended | 9 Months Ended | |
Feb. 28, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested, Shares | (108,000) | (54,600) | (143,650) |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Shares, Beginning Balance | 2,140,762 | ||
Granted, Shares | 1,193,837 | ||
Vested, Shares | (727,716) | ||
Forfeited, Shares | (127,707) | ||
Unvested Shares, Ending Balance | 2,479,176 | ||
Weighted average grant date fair value, Beginning Balance | $ 6.55 | ||
Granted, Weighted average grant date fair value | 4.26 | ||
Vested, Weighted average grant date fair value | 7.51 | ||
Forfeited, Weighted average grant date fair value | 5.64 | ||
Weighted average grant date fair value, Ending Balance | $ 5.21 |
Computation of Net Income (Loss
Computation of Net Income (Loss) Per Share Basic and Diluted (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Net loss from continuing operations | $ (191) | $ (22,468) | $ (1,817) | $ (22,647) |
Dividends paid to participating securities | (29) | (37) | (98) | |
Net income (loss) applicable to common stockholders | 9 | (21,525) | 25,425 | (19,759) |
Numerator: | ||||
Net loss from continuing operations | (191) | (22,468) | (1,817) | (22,647) |
Dividends paid to participating securities | (29) | (37) | (98) | |
Class A | ||||
Numerator: | ||||
Net loss from continuing operations | (24) | (2,852) | (235) | (3,479) |
Net loss from continuing operations applicable to common stockholders | (24) | (2,852) | (235) | (3,479) |
Discontinued operations, net of tax | 25 | 123 | 3,464 | 457 |
Net income (loss) applicable to common stockholders | $ 1 | $ (2,729) | $ 3,229 | $ (3,022) |
Denominator: | ||||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 5,233 | 5,233 | 5,233 | 6,062 |
Basic net income (loss) per share: | ||||
Net loss from continuing operations applicable to common stockholders | $ 0 | $ (0.55) | $ (0.04) | $ (0.57) |
Discontinued operations, net of tax | 0 | 0.03 | 0.66 | 0.07 |
Basic net income (loss) per share applicable to common stockholders | $ 0 | $ (0.52) | $ 0.62 | $ (0.50) |
Numerator: | ||||
Net loss from continuing operations | $ (24) | $ (2,852) | $ (235) | $ (3,479) |
Net loss from continuing operations applicable to common stockholders | (24) | (2,852) | (235) | (3,479) |
Discontinued operations, net of tax | 25 | 123 | 3,464 | 457 |
Discontinued operations, net of tax | 25 | 123 | 3,464 | 457 |
Net income (loss) applicable to common stockholders | $ 1 | $ (2,729) | $ 3,229 | $ (3,022) |
Denominator: | ||||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 5,233 | 5,233 | 5,233 | 6,062 |
Weighted average number of shares outstanding used to calculate diluted net income (loss) per share | 5,233 | 5,233 | 5,233 | 6,062 |
Diluted net income (loss) per share: | ||||
Net loss from continuing operations applicable to common stockholders | $ 0 | $ (0.55) | $ (0.04) | $ (0.57) |
Discontinued operations, net of tax | 0 | 0.03 | 0.66 | 0.07 |
Diluted net income (loss) per share applicable to common stockholders | $ 0 | $ (0.52) | $ 0.62 | $ (0.50) |
Class B | ||||
Numerator: | ||||
Net loss from continuing operations | $ (167) | $ (19,616) | $ (1,582) | $ (19,168) |
Dividends paid to participating securities | (29) | (37) | (98) | |
Net loss from continuing operations applicable to common stockholders | (167) | (16,645) | (1,619) | (19,266) |
Discontinued operations, net of tax | 175 | 849 | 23,815 | 2,529 |
Net income (loss) applicable to common stockholders | $ 8 | $ (18,796) | $ 22,196 | $ 16,737 |
Denominator: | ||||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 36,120 | 36,041 | 35,980 | 33,546 |
Basic net income (loss) per share: | ||||
Net loss from continuing operations applicable to common stockholders | $ 0 | $ (0.55) | $ (0.04) | $ (0.57) |
Discontinued operations, net of tax | 0 | 0.03 | 0.66 | 0.07 |
Basic net income (loss) per share applicable to common stockholders | $ 0 | $ (0.52) | $ 0.62 | $ (0.50) |
Numerator: | ||||
Net loss from continuing operations | $ (167) | $ (19,616) | $ (1,582) | $ (19,168) |
Dividends paid to participating securities | (29) | (37) | (98) | |
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares | (24) | (2,852) | (235) | (3,479) |
Net loss from continuing operations applicable to common stockholders | (191) | (22,497) | (1,854) | (22,745) |
Discontinued operations, net of tax | 175 | 849 | 23,815 | 2,529 |
Discontinued operations, net of tax | 200 | 972 | 27,279 | 2,986 |
Net income (loss) applicable to common stockholders | $ 9 | $ (21,525) | $ 25,425 | $ (19,759) |
Denominator: | ||||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 36,120 | 36,041 | 35,980 | 33,546 |
Conversion of Class A to Class B common shares outstanding | 5,233 | 5,233 | 5,233 | 6,062 |
Weighted average number of shares outstanding used to calculate diluted net income (loss) per share | 41,353 | 41,274 | 41,213 | 39,608 |
Diluted net income (loss) per share: | ||||
Net loss from continuing operations applicable to common stockholders | $ 0 | $ (0.55) | $ (0.04) | $ (0.57) |
Discontinued operations, net of tax | 0 | 0.03 | 0.66 | 0.07 |
Diluted net income (loss) per share applicable to common stockholders | $ 0 | $ (0.52) | $ 0.62 | $ (0.50) |
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 | $ 25 | $ 123 | $ 3,464 | $ 457 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares | 1,427 | 1,103 | 1,427 | 1,103 |
Class B | Equity Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares | 9,158 | 7,833 | 9,158 | 7,833 |
Class B | Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares | 1,052 | 1,503 | 1,052 | 1,503 |
Concentrations - Additional Inf
Concentrations - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015Agency | Sep. 30, 2014Agency | Sep. 30, 2015DistributorAgency | Sep. 30, 2014DistributorAgency | Dec. 31, 2014Agency | |
Concentration Risk [Line Items] | |||||
Number of distribution partners that were paid consolidated revenue | Distributor | 0 | 1 | |||
Maximum | |||||
Concentration Risk [Line Items] | |||||
Percentage of revenue as criteria for major distribution partners | 20.00% | ||||
Minimum | |||||
Concentration Risk [Line Items] | |||||
Percentage of revenue as criteria for major distribution partners | 10.00% | ||||
Consolidated Revenue | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Number of advertising agencies | 1 | 0 | 1 | 0 | |
Concentration Risk, Percentage | 17.00% | 10.00% | 19.00% | 10.00% | |
Consolidated Accounts Receivable | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Number of advertising agencies | 1 | 1 | |||
Concentration Risk, Percentage | 15.00% | 13.00% |
Schedules of Concentration of R
Schedules of Concentration of Risk Based on Consolidated Revenue (Detail) - Customer Concentration Risk - Consolidated Revenue | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |||||
Concentration Risk [Line Items] | ||||||||
Concentration Risk, Percentage | 17.00% | 10.00% | 19.00% | 10.00% | ||||
Advertiser A | ||||||||
Concentration Risk [Line Items] | ||||||||
Concentration Risk, Percentage | 28.00% | 24.00% | 30.00% | 23.00% | ||||
Advertiser B | ||||||||
Concentration Risk [Line Items] | ||||||||
Concentration Risk, Percentage | 19.00% | [1] | 20.00% | [1] | ||||
Advertiser C | ||||||||
Concentration Risk [Line Items] | ||||||||
Concentration Risk, Percentage | [1] | 33.00% | [1] | 34.00% | ||||
[1] | Less than 10% |
Schedules of Concentration of42
Schedules of Concentration of Risk Based on Accounts Receivable (Detail) - Customer Concentration Risk - Consolidated Accounts Receivable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.00% | 13.00% |
Advertiser A | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 34.00% | 41.00% |
Advertiser B | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 18.00% | 16.00% |
Segment Reporting and Geograp43
Segment Reporting and Geographic Information - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Segment Reporting Information | ||
Goodwill | $ 63,305 | $ 65,679 |
Call Driven | ||
Segment Reporting Information | ||
Goodwill | 63,305 | 63,305 |
Archeo | ||
Segment Reporting Information | ||
Goodwill | $ 0 | $ 2,374 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Segment Reporting Information | |||||
Revenue | $ 36,852 | $ 47,238 | $ 108,113 | $ 142,374 | |
Operating expenses | 36,840 | 47,045 | 109,867 | 142,077 | |
Income (Loss) from operations | 12 | 193 | (1,754) | 297 | |
Less reconciling items: | |||||
Stock based compensation | 7,809 | 9,024 | |||
Amortization of intangible assets from acquisitions | [1] | 434 | |||
Acquisition and disposition related costs | 81 | 199 | (68) | ||
Other expense | 11 | 19 | 48 | 56 | |
Income (loss) from continuing operations before provision for income taxes | 174 | (1,806) | 254 | ||
Call Driven | |||||
Segment Reporting Information | |||||
Revenue | 36,135 | 46,379 | 105,621 | 137,728 | |
Archeo | |||||
Segment Reporting Information | |||||
Revenue | 717 | 859 | 2,492 | 4,646 | |
Operating Segments | |||||
Segment Reporting Information | |||||
Revenue | 36,852 | 47,238 | 108,113 | 142,374 | |
Operating expenses | 34,408 | 44,025 | 101,859 | 132,698 | |
Income (Loss) from operations | 2,444 | 3,213 | 6,254 | 9,676 | |
Less reconciling items: | |||||
Stock based compensation | 2,351 | 3,020 | 7,809 | 9,013 | |
Amortization of intangible assets from acquisitions | 434 | ||||
Acquisition and disposition related costs | 81 | 199 | (68) | ||
Other expense | 12 | 19 | 52 | 43 | |
Income (loss) from continuing operations before provision for income taxes | 174 | (1,806) | 254 | ||
Operating Segments | Call Driven | |||||
Segment Reporting Information | |||||
Revenue | 36,135 | 46,379 | 105,621 | 137,728 | |
Operating expenses | 33,958 | 43,100 | 99,412 | 129,140 | |
Income (Loss) from operations | 2,177 | 3,279 | 6,209 | 8,588 | |
Operating Segments | Archeo | |||||
Segment Reporting Information | |||||
Revenue | 717 | 859 | 2,492 | 4,646 | |
Operating expenses | 450 | 925 | 2,447 | 3,558 | |
Income (Loss) from operations | $ 267 | $ (66) | $ 45 | $ 1,088 | |
[1] | Components of amortization of intangible assets from acquisitions: Service costs $ 434 $ - $ - $ - |
Revenues by Geographic Region (
Revenues by Geographic Region (Detail) - Geographic Concentration Risk - Consolidated Revenue | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information | ||||
Revenue by geographic region | 100.00% | 100.00% | 100.00% | 100.00% |
United States | ||||
Segment Reporting Information | ||||
Revenue by geographic region | 97.00% | 97.00% | 97.00% | 97.00% |
Canada | ||||
Segment Reporting Information | ||||
Revenue by geographic region | 3.00% | 3.00% | 3.00% | 3.00% |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 32,894 | $ 29,748 |
Less: accumulated depreciation and amortization | (26,656) | (24,318) |
Property and equipment, net | 6,238 | 5,430 |
Computer and Other Related Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 21,190 | 18,662 |
Purchased and Internally Developed Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,890 | 7,836 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,733 | 1,416 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,081 | $ 1,834 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 885,000 | $ 863,000 | $ 2,600,000 | $ 2,600,000 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule Of Contractual Commitments [Line Items] | ||||
Expiration of operating lease agreements | Through 2,018 | |||
Expiration of other contractual obligations | Through 2,018 | |||
Rent expense | $ 460,000 | $ 467,000 | $ 1,400,000 | $ 1,400,000 |
Future Minimum Payments (Detail
Future Minimum Payments (Detail) $ in Thousands | Sep. 30, 2015USD ($) |
Schedule Of Contractual Commitments [Line Items] | |
Facilities operating leases 2015 | $ 571 |
Facilities operating leases 2016 | 2,313 |
Facilities operating leases 2017 | 2,373 |
Facilities operating leases 2018 | 577 |
Facilities operating leases 2019 and after | 0 |
Facilities operating leases Total minimum payments | 5,834 |
Other contractual obligations 2015 | 1,291 |
Other contractual obligations 2016 | 3,054 |
Other contractual obligations 2017 | 86 |
Other contractual obligations 2018 | 1 |
Other contractual obligations 2019 and after | 0 |
Other contractual obligations, Total minimum payments | 4,432 |
Total 2,015 | 1,862 |
Total 2,016 | 5,367 |
Total 2,017 | 2,459 |
Total 2,018 | 578 |
Total 2019 and after | 0 |
Total minimum payments | $ 10,266 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Apr. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Apr. 30, 2008 | |
Line of Credit Facility [Line Items] | ||||
Secured revolving credit facility | $ 30,000,000 | |||
Borrowings under the credit agreement | $ 0 | $ 0 | ||
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
LIBOR rate | 0.00% | |||
Amended Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maturity period | Apr. 1, 2017 |
Contingencies and Taxes - Addit
Contingencies and Taxes - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Percentage of valuation allowance | 100.00% | 100.00% |
Deferred tax assets | $ 34.8 |
Changes in the Carrying Amount
Changes in the Carrying Amount of Goodwill (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | $ 65,679 |
Sale of certain assets related to domain operations | (2,374) |
Balance as of September 30, 2015 | 63,305 |
Call Driven | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | 63,305 |
Balance as of September 30, 2015 | 63,305 |
Archeo | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | 2,374 |
Sale of certain assets related to domain operations | (2,374) |
Balance as of September 30, 2015 | $ 0 |
Intangible and Other Assets Net
Intangible and Other Assets Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule of Intangible Assets Disclosure [Line Items] | ||
Other | $ 205 | $ 205 |
Total intangibles and other assets, net | 233 | 313 |
Internet Domain Names | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Internet domain names | 748 | 14,607 |
Less accumulated amortization | (720) | (14,499) |
Internet domain names, net | $ 28 | $ 108 |
Intangible and Other Assets N54
Intangible and Other Assets Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | [1] | $ 434,000 | |||
Internet Domain Names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 19,000 | $ 29,000 | $ 67,000 | $ 98,000 | |
Estimated amortization expense based on current amount of domains, remainder of 2015 | 14,000 | 14,000 | |||
Estimated amortization expense based on current amount of domains, thereafter | $ 14,000 | $ 14,000 | |||
[1] | Components of amortization of intangible assets from acquisitions: Service costs $ 434 $ - $ - $ - |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Nov. 30, 2014 | |
Equity, Class of Treasury Stock [Line Items] | |||
Treasury stock, shares retired | 1,261,742 | 239,087 | |
Dividend paid | $ 1,700,000 | ||
Dividends declared during 2014 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Date of record | Feb. 11, 2015 | ||
Dividends declared during 2015 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Date of record | May 7, 2015 | ||
Class B | |||
Equity, Class of Treasury Stock [Line Items] | |||
Number of shares authorized to be repurchased | 3,000,000 | ||
Treasury stock acquired, shares | 781,000 | 0 | |
Treasury stock acquired, value | $ 3,200,000 | $ 0 |
Operating Results for Discontin
Operating Results for Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Expenses: | ||||
Discontinued operations, net of tax | $ 200 | $ 972 | $ 27,279 | $ 2,986 |
Archeo's Pay-Per-Click Advertising Services and Archeo's Domain Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 1,943 | 7,081 | 6,979 | |
Expenses: | ||||
Service costs | 785 | 1,663 | 2,502 | |
Sales and marketing | 126 | 334 | 388 | |
Income from discontinued operations before provision for income taxes | 1,032 | 5,084 | 4,089 | |
Income tax expense (benefit) | (37) | 338 | 1,381 | |
Discontinued operations, net of tax | $ 37 | $ 694 | $ 5,084 | $ 2,708 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2015 | Jul. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Discontinued operation, amortization expenses | $ 0 | $ 15,000 | $ 16,000 | $ 101,000 | ||
Cash proceeds from sale of discontinued operations | $ 28,100,000 | $ 1,400,000 |