DTS 10-Q 10 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 03, 2015
Document and Entity Information
Entity Registrant Name	DTS, INC.
Entity Central Index Key	1,226,308
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,249,909
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 55,204	$ 99,435
Short-term investments	32,266
Accounts receivable, net of allowance for doubtful accounts of $309 and $143 at June 30, 2015 and December 31, 2014 respectively	16,610	12,364
Deferred income taxes	12,066	12,095
Prepaid expenses and other current assets	3,610	5,892
Income taxes receivable	2,375	3,925
Total current assets	122,131	133,711
Property and equipment, net	26,903	27,089
Intangible assets, net	43,827	48,543
Goodwill	50,356	50,356
Deferred income taxes	29,028	26,176
Other long-term assets	2,705	2,395
Total assets	274,950	288,270
Current liabilities:
Accounts payable	2,596	4,492
Accrued expenses	10,270	16,761
Deferred revenue	9,759	10,827
Income taxes payable	51	294
Current portion of long-term debt	7,500	5,000
Total current liabilities	30,176	37,374
Long-term debt	17,500	20,000
Other long-term liabilities	$ 12,105	$ 11,993
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock-$0.0001 par value, 5,000 shares authorized at June 30, 2015 and December 31, 2014; no shares issued and outstanding
Common stock-$0.0001 par value, 70,000 shares authorized at June 30, 2015 and December 31, 2014; 21,908 and 21,440 shares issued at June 30, 2015 and December 31, 2014, respectively; 17,241 and 17,373 shares outstanding at June 30, 2015 and December 31, 2014, respectively	$ 3	$ 3
Additional paid-in capital	253,123	241,053
Treasury stock, at cost- 4,667 and 4,067 shares at June 30, 2015 and December 31, 2014, respectively	(111,331)	(92,184)
Accumulated other comprehensive income	810	808
Retained earnings	72,564	69,223
Total stockholders' equity	215,169	218,903
Total liabilities and stockholders' equity	$ 274,950	$ 288,270

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 309	$ 143
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	70,000	70,000
Common stock, shares issued	21,908	21,440
Common stock, shares outstanding	17,241	17,373
Treasury stock, shares	4,667	4,067

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 34,426	$ 36,189	$ 68,363	$ 73,024
Cost of revenue	2,743	2,460	5,527	4,791
Gross profit	31,683	33,729	62,836	68,233
Operating expenses:
Selling, general and administrative	18,186	18,796	37,969	41,401
Research and development	9,611	9,183	19,239	18,006
Total operating expenses	27,797	27,979	57,208	59,407
Operating income	3,886	5,750	5,628	8,826
Interest and other income (expense), net	(458)	231	(619)	17
Income before income taxes	3,428	5,981	5,009	8,843
Provision (benefit) for income taxes	1,141	(1,034)	1,668	(12,483)
Net income	$ 2,287	$ 7,015	$ 3,341	$ 21,326
Net income per common share:
Basic (in dollars per share)	$ 0.13	$ 0.41	$ 0.19	$ 1.24
Diluted (in dollars per share)	$ 0.12	$ 0.41	$ 0.18	$ 1.23
Weighted average shares outstanding:
Basic (in shares)	17,580	17,038	17,521	17,161
Diluted (in shares)	18,415	17,190	18,326	17,379

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income	$ 2,287	$ 7,015	$ 3,341	$ 21,326
Other comprehensive income, net of tax:
Unrealized gains (losses) on available-for-sale securities and other, net	99	2	2	44
Total comprehensive income	$ 2,386	$ 7,017	$ 3,343	$ 21,370

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net income	$ 3,341	$ 21,326
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,181	7,403
Stock-based compensation charges	5,640	5,397
Deferred income taxes	(2,029)	(17,957)
Tax shortfalls from stock-based awards		(320)
Excess tax benefits from stock-based awards	(1,696)
Other	310	(14)
Changes in operating assets and liabilities:
Accounts receivable	(4,419)	(9,987)
Prepaid expenses and other assets	2,339	1,732
Accounts payable, accrued expenses and other liabilities	(7,369)	(1,830)
Deferred revenue	(1,068)	(2,113)
Income taxes receivable/ payable	1,948	1,951
Net cash provided by operating activities	4,178	5,588
Cash flows from investing activities:
Purchases of available-for-sale investments	(32,344)
Sale of other assets		725
Purchases of property and equipment	(1,544)	(798)
Purchases of intangible assets	(1,660)	(399)
Other investing activities	(300)
Net cash used in investing activities	(35,848)	(472)
Cash flows from financing activities:
Proceeds from the issuance of common stock under stock-based compensation plans	7,664	1,544
Cash paid for shares withheld for taxes	(2,774)	(692)
Excess tax benefits from stock-based awards	1,696
Purchases of treasury stock	(19,147)	(7,495)
Net cash used in financing activities	(12,561)	(6,643)
Net change in cash and cash equivalents	(44,231)	(1,527)
Cash and cash equivalents, beginning of period	99,435	66,025
Cash and cash equivalents, end of period	$ 55,204	$ 64,498

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2015
Basis of Presentation
Basis of Presentation	Note 1—Basis of Presentation The accompanying unaudited condensed consolidated financial statements of DTS, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair statement of the Company's financial position at June 30, 2015, and the results of operations and cash flows for the periods presented. All intercompany transactions have been eliminated in consolidation. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on March 16, 2015. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2015
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Note 2—Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers (Topic 606)." This ASU outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. For public entities, this ASU will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Entities have the option of applying either a full retrospective approach or a modified approach to adopt the ASU. The Company is evaluating the potential impact of adoption of this ASU on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, "Interest—Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs." The ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. For public entities, this ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted, and entities must apply the ASU on a retrospective basis. The Company is evaluating the potential impact of adoption of this ASU on its consolidated financial statements and does not expect the impact to be material.

Cash, Cash Equivalents and Inve

Cash, Cash Equivalents and Investments	6 Months Ended
	Jun. 30, 2015
Cash, Cash Equivalents and Investments
Cash, Cash Equivalents and Investments	Note 3—Cash, Cash Equivalents and Investments Cash, cash equivalents and investments, classified as available-for-sale, consisted of: As of June 30, 2015 As of December 31, 2014 Cash and cash equivalents: Cash $ $ Money market accounts ​ ​ ​ ​ ​ ​ ​ ​ Total cash and cash equivalents $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term investments: Commercial paper $ $ — Corporate bonds — U.S. government and agency securities — ​ ​ ​ ​ ​ ​ ​ ​ Total short-term investments $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company had no material gross realized or unrealized holding gains or losses from its investments for the periods presented within this quarterly report. The contractual maturities of investments as of June 30, 2015 were all due within one year.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements
Fair Value Measurements	Note 4—Fair Value Measurements The Company's investments are required to be measured and recorded at fair value on a recurring basis. The Company's contingent consideration related to its acquisition of assets from Phorus, Inc. and Phorus, LLC (collectively "Phorus") is also measured and recorded at fair value on a recurring basis until it can be determined whether or not any future payments will be made. Increases or decreases in the fair value of contingent consideration can result from accretion of the liability due to the passage of time, changes in the timing and amount of revenue estimates, changes in discount rates, or remittance of payments. The Company obtained the fair value of its available-for-sale securities, which are not in active markets, from a third-party professional pricing service using quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. The Company's professional pricing service gathers observable inputs for all of its fixed income securities from a variety of industry data providers (e.g., large custodial institutions) and other third-party sources. Once the observable inputs are gathered, all data points are considered and the fair value is determined. The Company validates the quoted market prices provided by its primary pricing service by comparing their assessment of the fair values against the fair values provided by its investment managers. The Company's investment managers use similar techniques to its professional pricing service to derive pricing as described above. As all significant inputs were observable, derived from observable information in the marketplace or supported by observable levels at which transactions are executed in the marketplace, the Company has classified its available-for-sale securities within Level 2 of the fair value hierarchy. The Company classifies the fair value of the contingent consideration liability within Level 3 of the fair value hierarchy, as the fair value is based upon unobservable inputs that are not supported by market activity. As of June 30, 2015 and December 31, 2014, the Company measured the fair value of contingent consideration using an income approach, based on an analysis of projected cash flows using a discount rate of 12% and 15%, respectively. Considerable judgment is required in the assumptions used in fair value measurements. Accordingly, use of different assumptions, such as significant increases or decreases in estimated revenues, cash flows or the discount rate, could result in materially different fair value estimates. For additional information on the contingent consideration, refer to Note 7, "Commitments and Contingencies." The Company's financial assets and liabilities, measured at fair value on a recurring basis, were as follows: Fair Value Measurements Assets (Liabilities) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of June 30, 2015 Commercial paper $ $ — $ $ — Corporate bonds $ $ — $ $ — U.S. government and agency securities $ $ — $ $ — Contingent consideration(1) $ ) $ — $ — $ ) As of December 31, 2014 Contingent consideration(1) $ ) $ — $ — $ ) (1) As of June 30, 2015 and December 31, 2014, the balance was classified in accrued expenses on the consolidated balance sheets.

Other Intangible Assets

Other Intangible Assets	6 Months Ended
	Jun. 30, 2015
Other Intangible Assets
Other Intangible Assets	Note 5—Other Intangible Assets The Company's other intangible assets were: As of June 30, 2015 As of December 31, 2014 Weighted Average Life (Years) Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Existing technology $ $ ) $ $ $ ) $ Customer relationships ) ) Non-compete ) ) Tradename ) ) Patents ) ) Trademarks ) ) Contractual rights ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other intangible assets $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of intangible assets included in the Company's condensed consolidated statements of operations was: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Cost of revenue $ $ $ $ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total amortization of intangible assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company expects the future amortization of intangible assets held at June 30, 2015 to be as follows: Years Ending December 31, Estimated Amortization Expense 2015 (remaining 6 months) $ 2016 2017 2018 2019 2020 and thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued Expenses

Accrued Expenses	6 Months Ended
	Jun. 30, 2015
Accrued Expenses
Accrued Expenses	Note 6—Accrued Expenses Accrued expenses consisted of: As of June 30, 2015 As of December 31, 2014 Accrued payroll and related benefits $ $ Contingent consideration Other ​ ​ ​ ​ ​ ​ ​ ​ Total accrued expenses $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies
Commitments and Contingencies	Note 7—Commitments and Contingencies During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to the Company's directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in its consolidated balance sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. As of June 30, 2015, under certain contractual rights arrangements, the Company may be obligated to pay up to approximately $8,400 over an estimated period of five years if certain milestones are achieved. In connection with the acquisition of Phorus, contingent consideration of up to $1,000 could be due and payable at the end of 2015.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2015
Income Taxes
Income Taxes	Note 8—Income Taxes Income taxes for quarterly periods are computed using the estimated annual effective tax rate for the year along with discrete items identified in the quarter. For the six months ended June 30, 2015 and 2014, the Company's effective tax rate was approximately 33% and (141)%, respectively. The effective tax rate for 2015 differed from the US statutory rate of 35% primarily due to the impact of foreign operations, as the Company's tax rates in foreign countries are generally lower than the US statutory rate, which was partially offset by non-creditable foreign withholding taxes and non-deductible stock-based compensation. The effective tax rate for 2014 differed from the US statutory rate primarily due to a net tax benefit associated with a special one-time transfer of certain Japan and Taiwan intellectual property licensing rights to the US on January 1, 2014 and the tax benefit associated with the effective settlement of a US federal tax audit for the years 2009 to 2011. As of June 30, 2015 and December 31, 2014, the Company's uncertain tax positions were $11,475 and $11,246, respectively, of which $9,253 and $9,194, respectively, were recorded in other long-term liabilities. The remaining amounts were recorded as a reduction to non-current deferred tax assets. The increase was primarily due to uncertain tax positions relating to transfer pricing positions taken with respect to the Company's foreign subsidiaries and state research and development tax credits. The Company believes that it is reasonably possible that a decrease of approximately $600 in unrecognized tax benefits related to certain income apportionment adjustments may be necessary within the next twelve months due to a proposed settlement of a state tax audit. Additionally, any resolution of the Company's uncertain tax positions may impact the Company's effective tax rate. The Company believes its accruals for uncertain tax positions are adequate for all open years, based on the assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. Inherent uncertainties exist in estimating accruals for uncertain tax positions due to the progress of income tax audits and changes in tax law, both legislated and concluded through the various jurisdictions' tax court systems. The Company may, from time to time, be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to the Company's financial statements. Interest expense and penalties related to income taxes are included in income tax expense. The Company, or one of its subsidiaries, files income tax returns in the US and other foreign jurisdictions. With few exceptions, the Company is no longer subject to US federal income tax examinations by the Internal Revenue Service (IRS) for years prior to 2012. The California Franchise Tax Board (FTB) is conducting a state tax examination for the years 2009 and 2010, including certain prior period carryforwards from 2006 to 2008. Significant judgment is required in determining the consolidated provision for income taxes as the Company considers each tax jurisdiction's taxable earnings and the impact of the tax audit process. The final outcome of tax audits by the IRS, the FTB or other state tax authorities, and various foreign tax authorities could differ materially from amounts reflected in the condensed consolidated financial statements. Licensing revenue is recognized gross of withholding taxes that are remitted by the Company's licensees directly to the local tax authorities. For the three months ended June 30, 2015 and 2014, withholding taxes were $576 and $562, respectively. For the six months ended June 30, 2015 and 2014, withholding taxes were $982 and $2,095, respectively. Withholding taxes were lower in 2015 year-to-date compared to 2014 due to the elimination of withholding on licensing revenue from Japan as a result of the one-time transfer of those intellectual property licensing rights from Ireland to the US.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2015
Stock-Based Compensation
Stock-Based Compensation	Note 9—Stock-Based Compensation On February 11, 2015, the Compensation Committee of the Company's Board of Directors (the "Committee") approved grants of 133 time-based vesting restricted stock units (the "2015 RSUs") and 99 performance-based restricted stock units (the "2015 PSUs") under the 2012 Equity Incentive Plan (the "2012 Plan"). The 2015 RSUs vest in four equal annual installments beginning on February 15, 2016. The 2015 PSUs vest in two equal installments upon achievement of certain internal performance goals, with one-half of the PSUs vesting on February 15, 2017 and the remaining PSUs vesting on February 15, 2018, in each case assuming the performance goals are achieved. The internal performance goals will be measured over a two year period ending December 31, 2016. Each PSU represents the contingent right to receive between zero and two shares of the Company's common stock upon vesting, subject to the level of achievement of the performance goals. Any portion of the PSUs that do not vest due to performance below the minimum required level for vesting will be forfeited. The 2015 PSUs and 2015 RSUs are payable in cash or shares of common stock at the discretion of the Committee. However, if the Company's stockholders approved an addition of shares to the 2012 Plan's share reserve prior to December 31, 2015 that would, in the opinion of the Committee, be sufficient to settle the awards in shares of stock, then such awards would subsequently be settled in shares of common stock. As of March 31, 2015, the Company did not have sufficient shares under the 2012 Plan to settle the 2015 PSUs and 2015 RSUs in common stock and the awards were accounted for as liability awards. On May 14, 2015, the Company's stockholders approved an amendment to the 2012 Plan to increase the share reserve by 1,000 shares, which the Committee believes to be sufficient to settle such awards in stock. As such, as of June 30, 2015, the Company accounted for the awards as equity awards, and the aggregate amount of compensation cost of the awards was remeasured on May 14, 2015. The amounts previously recorded as liabilities for these awards have been reclassified to additional paid-in-capital as of June 30, 2015. Compensation expense for the PSUs is calculated using the number of shares of common stock expected to vest based on the probability and estimated level of achievement of the performance goals. Compensation expense will be adjusted in subsequent reporting periods if the assessed probability or estimated level of achievement of the performance goals change. Compensation expense for both the PSUs and RSUs is recognized over the corresponding requisite service period. For the three months ended June 30, 2015, compensation expense for the 2015 PSUs and 2015 RSUs was $329 and $265, respectively. For the six months ended June 30, 2015, compensation expense for the 2015 PSUs and 2015 RSUs was $505 and $407, respectively. Considerable judgment is required in assessing the probability and estimated level of achievement of the performance goals. Accordingly, use of different assumptions or estimates could result in materially different compensation expense.

Net Income Per Common Share

Net Income Per Common Share	6 Months Ended
	Jun. 30, 2015
Net Income Per Common Share
Net Income Per Common Share	Note 10—Net Income Per Common Share Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares outstanding plus the dilutive effect of any outstanding stock options, unvested restricted stock, any unvested PSUs for which the performance conditions have been satisfied at the reporting date, and the Company's employee stock purchase plan (ESPP) using the treasury stock method. The computation of basic and diluted net income per common share was: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net income $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average shares outstanding Effect of dilutive securities: Common stock options Restricted stock ESPP ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average diluted shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income per common share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income per common share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anti-dilutive shares excluded from the determination of diluted net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Common Stock Repurchases

Common Stock Repurchases	6 Months Ended
	Jun. 30, 2015
Common Stock Repurchases
Common Stock Repurchases	Note 11—Common Stock Repurchases In February 2014, the Company's Board of Directors authorized, subject to certain business and market conditions, the purchase of up to 2,000 shares of the Company's common stock in the open market or in privately negotiated transactions. As of June 30, 2015, the Company had repurchased 974 shares of common stock under this authorization for an aggregate of $26,642. All shares repurchased under these authorizations were accounted for as treasury stock.

Cash, Cash Equivalents and In18

Cash, Cash Equivalents and Investments (Tables)	6 Months Ended
	Jun. 30, 2015
Cash, Cash Equivalents and Investments
Schedule of cash, cash equivalents and investments	As of June 30, 2015 As of December 31, 2014 Cash and cash equivalents: Cash $ $ Money market accounts ​ ​ ​ ​ ​ ​ ​ ​ Total cash and cash equivalents $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term investments: Commercial paper $ $ — Corporate bonds — U.S. government and agency securities — ​ ​ ​ ​ ​ ​ ​ ​ Total short-term investments $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements
Schedule of financial assets and liabilities, measured at fair value on a recurring basis	Fair Value Measurements Assets (Liabilities) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of June 30, 2015 Commercial paper $ $ — $ $ — Corporate bonds $ $ — $ $ — U.S. government and agency securities $ $ — $ $ — Contingent consideration(1) $ ) $ — $ — $ ) As of December 31, 2014 Contingent consideration(1) $ ) $ — $ — $ ) (1) As of June 30, 2015 and December 31, 2014, the balance was classified in accrued expenses on the consolidated balance sheets.

Other Intangible Assets (Tables

Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2015
Other Intangible Assets
Summary of the Company's other intangible assets	As of June 30, 2015 As of December 31, 2014 Weighted Average Life (Years) Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Existing technology $ $ ) $ $ $ ) $ Customer relationships ) ) Non-compete ) ) Tradename ) ) Patents ) ) Trademarks ) ) Contractual rights ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other intangible assets $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Summary of amortization of intangible assets	For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Cost of revenue $ $ $ $ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total amortization of intangible assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Schedule of expected future amortization of intangible assets	Years Ending December 31, Estimated Amortization Expense 2015 (remaining 6 months) $ 2016 2017 2018 2019 2020 and thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2015
Accrued Expenses
Schedule of accrued expenses	As of June 30, 2015 As of December 31, 2014 Accrued payroll and related benefits $ $ Contingent consideration Other ​ ​ ​ ​ ​ ​ ​ ​ Total accrued expenses $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net Income Per Common Share (Ta

Net Income Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2015
Net Income Per Common Share
Computation of basic and diluted net income per common share	For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net income $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average shares outstanding Effect of dilutive securities: Common stock options Restricted stock ESPP ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average diluted shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income per common share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income per common share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anti-dilutive shares excluded from the determination of diluted net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash, Cash Equivalents and In23

Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
Cash, cash equivalents and investments
Total cash and cash equivalents	$ 55,204	$ 99,435	$ 64,498	$ 66,025
Total short-term investments	32,266
Cash
Cash, cash equivalents and investments
Cash	19,794	17,899
Money market accounts
Cash, cash equivalents and investments
Cash equivalents	35,410	$ 81,536
Commercial Paper
Cash, cash equivalents and investments
Short-term investments	3,997
Corporate Bond
Cash, cash equivalents and investments
Short-term investments	16,196
Available-for-sale securities | U.S. government and agency securities
Cash, cash equivalents and investments
Short-term investments	$ 12,073

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Fair Value Measurements
Contingent consideration	$ (900)	$ (900)
Phorus
Fair Value Measurements
Discount rate (as a percent)	12.00%	15.00%
Recurring basis | Total
Fair Value Measurements
Contingent consideration	$ (900)	$ (900)
Recurring basis | Total | Commercial Paper
Fair Value Measurements
Available-for-sale securities	3,997
Recurring basis | Total | Corporate Bond
Fair Value Measurements
Available-for-sale securities	16,196
Recurring basis | Total | U.S. government and agency securities
Fair Value Measurements
Available-for-sale securities	12,073
Recurring basis | Significant Other Observable Inputs (Level 2) | Commercial Paper
Fair Value Measurements
Available-for-sale securities	3,997
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate Bond
Fair Value Measurements
Available-for-sale securities	16,196
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. government and agency securities
Fair Value Measurements
Available-for-sale securities	12,073
Recurring basis | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Contingent consideration	$ (900)	$ (900)

Other Intangible Assets (Detail

Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Summary of acquired intangible assets by category
Gross Amount	$ 79,048		$ 79,048		$ 78,515
Accumulated Amortization	(35,221)		(35,221)		(29,972)
Net Carrying Amount	43,827		43,827		48,543
Total amortization of intangible assets	2,647	$ 2,582	5,280	$ 4,939
Future amortization of intangible assets
2015 (remaining 6 months)	5,530		5,530
2,016	10,343		10,343
2,017	9,800		9,800
2,018	7,963		7,963
2,019	6,712		6,712
2020 and thereafter	3,479		3,479
Net Carrying Amount	43,827		$ 43,827		48,543
Existing technology
Summary of acquired intangible assets by category
Weighted Average Life			6 years
Gross Amount	18,483		$ 18,483		18,483
Accumulated Amortization	(11,903)		(11,903)		(10,575)
Net Carrying Amount	6,580		6,580		7,908
Future amortization of intangible assets
Net Carrying Amount	6,580		$ 6,580		7,908
Customer relationships
Summary of acquired intangible assets by category
Weighted Average Life			8 years
Gross Amount	45,801		$ 45,801		45,801
Accumulated Amortization	(17,403)		(17,403)		(14,525)
Net Carrying Amount	28,398		28,398		31,276
Future amortization of intangible assets
Net Carrying Amount	28,398		$ 28,398		31,276
Non-compete
Summary of acquired intangible assets by category
Weighted Average Life			2 years
Gross Amount	492		$ 492		492
Accumulated Amortization	(429)		(429)		(402)
Net Carrying Amount	63		63		90
Future amortization of intangible assets
Net Carrying Amount	63		$ 63		90
Tradename
Summary of acquired intangible assets by category
Weighted Average Life			5 years
Gross Amount	3,261		$ 3,261		3,261
Accumulated Amortization	(1,888)		(1,888)		(1,581)
Net Carrying Amount	1,373		1,373		1,680
Future amortization of intangible assets
Net Carrying Amount	1,373		$ 1,373		1,680
Patents
Summary of acquired intangible assets by category
Weighted Average Life			5 years
Gross Amount	3,475		$ 3,475		3,405
Accumulated Amortization	(1,368)		(1,368)		(1,233)
Net Carrying Amount	2,107		2,107		2,172
Future amortization of intangible assets
Net Carrying Amount	2,107		$ 2,107		2,172
Trademarks
Summary of acquired intangible assets by category
Weighted Average Life			10 years
Gross Amount	848		$ 848		785
Accumulated Amortization	(389)		(389)		(357)
Net Carrying Amount	459		459		428
Future amortization of intangible assets
Net Carrying Amount	459		$ 459		428
Contractual rights
Summary of acquired intangible assets by category
Weighted Average Life			5 years
Gross Amount	6,688		$ 6,688		6,288
Accumulated Amortization	(1,841)		(1,841)		(1,299)
Net Carrying Amount	4,847		4,847		4,989
Future amortization of intangible assets
Net Carrying Amount	4,847		4,847		$ 4,989
Cost of revenue
Summary of acquired intangible assets by category
Total amortization of intangible assets	2,386	2,154	4,754	4,297
Operating expenses
Summary of acquired intangible assets by category
Total amortization of intangible assets	$ 261	$ 428	$ 526	$ 642

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accrued Expenses
Accrued payroll and related benefits	$ 6,900	$ 13,893
Contingent consideration	900	900
Other	2,470	1,968
Total accrued expenses	$ 10,270	$ 16,761

Commitments and Contingencies (

Commitments and Contingencies (Details) - Jun. 30, 2015 - USD ($) $ in Thousands	Total
Commitments and Contingencies
Period for the payment of additional consideration subject to the achievement of certain milestones	5 years
Maximum
Commitments and Contingencies
Additional consideration payable subject to the achievement of certain milestones	$ 8,400
Phorus | Maximum
Commitments and Contingencies
Contingent consideration due and payable at the end of 2015	$ 1,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Effective tax rate (as a percent)			33.00%	(141.00%)
Statutory federal rate (as a percent)			35.00%
Uncertain tax positions	$ 11,475		$ 11,475		$ 11,246
Potential decrease in unrecognized tax benefits			600
Withholding taxes	576	$ 562	982	$ 2,095
Other long-term liabilities
Uncertain tax positions	$ 9,253		$ 9,253		$ 9,194

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - 2012 Equity Incentive Plan $ in Thousands	May. 14, 2015shares	Feb. 11, 2015installmentshares	Jun. 30, 2015USD ($)	Jun. 30, 2015USD ($)
Stock-Based Compensation
Additional share authorized for issuance	1,000,000
PSUs
Stock-Based Compensation
Number of units granted (in shares)		99,000
Number of installments in which PSUs will vest | installment		2
Performance goals measurement period		2 years
Compensation expense | $			$ 329	$ 505
PSUs | Minimum
Stock-Based Compensation
Number of shares of the Company's common stock upon vesting that each PSU represents the contingent right to receive		0
PSUs | Maximum
Stock-Based Compensation
Number of shares of the Company's common stock upon vesting that each PSU represents the contingent right to receive		2
RSUs
Stock-Based Compensation
Number of units granted (in shares)		133,000
Number of installments in which PSUs will vest | installment		4
Compensation expense | $			$ 265	$ 407
Vesting on February 15, 2017 | PSUs
Stock-Based Compensation
Vesting percentage		50.00%

Net Income Per Common Share (De

Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net income	$ 2,287	$ 7,015	$ 3,341	$ 21,326
Denominator:
Weighted average shares outstanding	17,580	17,038	17,521	17,161
Weighted average diluted shares outstanding	18,415	17,190	18,326	17,379
Basic net income per common share (in dollars per share)	$ 0.13	$ 0.41	$ 0.19	$ 1.24
Diluted net income per common share (in dollars per share)	$ 0.12	$ 0.41	$ 0.18	$ 1.23
Anti-dilutive shares excluded from the determination of diluted net income per share	443	3,429	504	3,020
Common Stock Options
Denominator:
Effect on weighted average common shares outstanding from dilutive securities	651	100	633	142
RSUs
Denominator:
Effect on weighted average common shares outstanding from dilutive securities	169	38	161	57
ESPP
Denominator:
Effect on weighted average common shares outstanding from dilutive securities	15	14	11	19

Common Stock Repurchases (Detai

Common Stock Repurchases (Details) - USD ($) shares in Thousands, $ in Thousands	17 Months Ended
	Jun. 30, 2015	Feb. 28, 2014
Common stock repurchase
Shares of common stock repurchased	974
Aggregate value of shares repurchased	$ 26,642
Common Stock | Maximum
Common stock repurchase
Number of shares of common stock authorized to be repurchased		2,000