Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 29, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | SREV | |
Entity Registrant Name | SERVICESOURCE INTERNATIONAL, INC. | |
Entity Central Index Key | 1,310,114 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common stock, shares outstanding | 85,803,562 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 55,296 | $ 72,334 |
Short-term investments | 138,746 | 136,378 |
Accounts receivable, net | 54,561 | 56,563 |
Deferred income taxes | 97 | 97 |
Prepaid expenses and other | 7,242 | 8,167 |
Total current assets | 255,942 | 273,539 |
Property and equipment, net | 34,340 | 25,903 |
Deferred income taxes, net of current portion | 169 | 1,759 |
Goodwill and intangibles, net | 8,688 | 9,444 |
Other assets, net | 7,677 | 6,919 |
Total assets | 306,816 | 317,564 |
Current liabilities: | ||
Accounts payable | 2,310 | 1,067 |
Accrued taxes | 896 | 1,112 |
Accrued compensation and benefits | 22,467 | 22,116 |
Deferred revenue | 5,480 | 5,770 |
Accrued expenses | 5,818 | 4,716 |
Other current liabilities | 2,559 | 2,327 |
Total current liabilities | 39,530 | 37,108 |
Obligations under capital leases, net of current portion | 153 | 198 |
Convertible notes, net | 130,299 | 126,051 |
Other long-term liabilities | 6,409 | 6,232 |
Total liabilities | 176,391 | 169,589 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock; $0.0001 par value; 1,000,000 shares authorized; 85,656 shares issued and 85,535 shares outstanding as of June 30, 2016; 86,893 shares issued and 86,772 shares outstanding as of December 31, 2015 | 8 | 8 |
Treasury stock | (441) | (441) |
Additional paid-in capital | 328,916 | 331,922 |
Accumulated deficit | (198,296) | (183,941) |
Accumulated other comprehensive income | 238 | 427 |
Total stockholders’ equity | 130,425 | 147,975 |
Total liabilities and stockholders’ equity | $ 306,816 | $ 317,564 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 85,656,000 | 86,893,000 |
Common stock, shares outstanding (in shares) | 85,535,000 | 86,772,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Net revenue | $ 61,969 | $ 61,613 | $ 121,719 | $ 127,810 |
Cost of revenue | 40,344 | 42,692 | 81,778 | 88,507 |
Gross profit | 21,625 | 18,921 | 39,941 | 39,303 |
Operating expenses: | ||||
Sales and marketing | 11,326 | 10,165 | 21,779 | 21,000 |
Research and development | 2,016 | 4,646 | 4,180 | 9,468 |
General and administrative | 11,552 | 10,701 | 23,595 | 22,866 |
Restructuring and other | 0 | 2,988 | 0 | 3,739 |
Total operating expenses | 24,894 | 28,500 | 49,554 | 57,073 |
Loss from operations | (3,269) | (9,579) | (9,613) | (17,770) |
Interest expense and other, net | (1,700) | (2,739) | (3,209) | (4,584) |
Loss before income taxes | (4,969) | (12,318) | (12,822) | (22,354) |
Income tax provision | 249 | 1,134 | 1,537 | 1,313 |
Net loss | $ (5,218) | $ (13,452) | $ (14,359) | $ (23,667) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.06) | $ (0.16) | $ (0.17) | $ (0.28) |
Weighted average common shares outstanding, basic and diluted (in shares) | 85,413 | 85,072 | 85,747 | 84,665 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (5,218) | $ (13,452) | $ (14,359) | $ (23,667) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (703) | 352 | (1,119) | 105 |
Unrealized gain (loss) on short-term investments, net of tax | (169) | (261) | 930 | 113 |
Other comprehensive income (loss), net of tax | (872) | 91 | (189) | 218 |
Total comprehensive loss | $ (6,090) | $ (13,361) | $ (14,548) | $ (23,449) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (14,359) | $ (23,667) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 7,564 | 6,783 |
Amortization of debt discount and issuance costs | 4,247 | 3,903 |
Accretion of premium on short-term investments and other | 554 | (497) |
Deferred income taxes | 855 | 1,070 |
Stock-based compensation | 5,195 | 7,544 |
Restructuring and other | 0 | 3,450 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 2,287 | 11,754 |
Deferred revenue | (303) | 338 |
Prepaid expenses and other | 61 | (852) |
Accounts payable | 766 | (2,064) |
Accrued taxes | (231) | (555) |
Accrued compensation and benefits | 317 | (1,570) |
Accrued expenses | 1,031 | (2,448) |
Other liabilities | 336 | 125 |
Net cash provided by operating activities | 8,320 | 3,314 |
Cash flows from investing activities | ||
Acquisition of property and equipment | (14,316) | (5,114) |
Restricted cash | 0 | (1,244) |
Purchases of short-term investments | (55,133) | (51,074) |
Sales of short-term investments | 53,361 | 40,194 |
Maturities of short-term investments | 350 | 290 |
Net cash used in investing activities | (15,738) | (16,948) |
Cash flows from financing activities | ||
Repayment on capital leases obligations | (103) | (91) |
Repurchase of common stock | (8,921) | 0 |
Proceeds from common stock issuances | 739 | 944 |
Net cash (used in) provided by financing activities | (8,285) | 853 |
Net decrease in cash and cash equivalents | (15,703) | (12,781) |
Effect of exchange rate changes on cash and cash equivalents | (1,335) | 444 |
Cash and cash equivalents at beginning of period | 72,334 | 90,382 |
Cash and cash equivalents at end of period | $ 55,296 | $ 78,045 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation ServiceSource International, Inc. (together with its subsidiaries, the “Company”) is a global leader in customer and revenue lifecycle solutions that power enterprise revenue relationships, partnering with business to business technology and technology-enabled companies to optimize maintenance, support and subscription revenue streams, while also improving end customer relationships and loyalty. The Company delivers these results via dedicated service teams and integral cloud-based technologies, leveraging benchmarks and best-practices derived from its rich database of service and renewal behavior. By integrating managed services, cloud software and data, the Company provides its clients with insights into their end customers' businesses, end-to-end management and optimization of the service-contract renewals process and customer success activities, including data management, quoting, selling and recurring revenue business intelligence. The Company receives commissions from its clients based on renewal sales that the Company generates on their behalf under a pay-for-performance or flat-rate model. In addition, the Company also provides a purpose-built cloud application to maximize the renewal of subscriptions, maintenance and support contracts and receives subscription fees from its clients for the SaaS product. The Company’s corporate headquarters is located in San Francisco, California. The Company has additional U.S. offices in Colorado, Tennessee and Washington, and international offices in Bulgaria, Ireland, Japan, Malaysia, the Philippines, Singapore and the United Kingdom. The accompanying unaudited interim condensed consolidated financial statements (“condensed consolidated financial statements”) include the accounts of ServiceSource International, Inc. and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X, without audit. Accordingly, they do not include all of the information required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2015 has been derived from the Company's audited annual consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission ("SEC") on March 8, 2016. These condensed consolidated financial statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto for the year ended December 31, 2015 , included in our Annual Report on Form 10-K. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, management considers necessary for a fair statement of the Company's financial position, operating results, and cash flows for the interim periods presented. Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Also, the results for the interim periods are not necessarily indicative of results for the entire year. The Company’s Chief Executive Officer ("CEO") is its chief operating decision maker. The CEO historically managed the Company as two reportable segments: Managed Services and Cloud and Business Intelligence ("CBI") based on the discrete financial information available for each segment. However, during the second half of 2015, the Company began implementing a series of actions to emphasize a one-company, single go-to-market strategy for its services offering that resulted in the reorganization of its CBI personnel and sales team delivery structure. The objective of these actions was to more closely integrate and support the Managed Services organization with the Company’s cloud technologies and to eliminate new stand-alone CBI cloud offerings. Further, due to this reorganization and shift to a single go-to-market strategy, discrete cost information was no longer separately available for the former CBI segment. Consequently, beginning in the first quarter of 2016, the CEO manages and allocates resources on a company-wide basis as a single segment that is focused on service offerings which integrate data, processes and cloud technologies. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standard Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in the FASB's Accounting Standards Codification ("ASC") 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral of the effective date to December 15, 2017, and early application would be permitted, but not before the original effective date of December 15, 2016, so the effective date will be the first quarter of fiscal year 2018 using one of two retrospective application methods. The Company is currently evaluating the impact ASU No. 2014-09 will have on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal Use Software, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. ASU No. 2015-05 is effective for the Company in fiscal year 2016. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. The Company has historically accounted for its cloud computing arrangements as a service contract. Consequently, adoption of ASU No. 2015-05 had no impact on the Company's consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that deferred tax assets and liabilities to be classified as noncurrent in the consolidated balance sheet. The standard will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for financial statements that have not been previously issued. The standard may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. The Company is currently evaluating the impact that adoption of ASU No. 2015-17 will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). This standard requires entities that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The standard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2018. The guidance is required to be applied by the modified retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this authoritative guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This standard simplifies and clarifies certain aspects of share-based payment accounting and presentation. The standard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2016-09 will have on its consolidated financial statements. Reclassifications Amounts shown in Other assets, net, on the Consolidated Balance Sheet as of December 31, 2015 have been reclassified to Convertible notes, net, to reflect the current period presentation as a result of the adoption of ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Cost, which 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. See Note 6 - Debt. Correction to Condensed Consolidated Balance Sheet as of December 31, 2015 Subsequent to the issuance of the Company’s 2015 consolidated financial statements, management determined that its net deferred tax asset valuation allowance was incorrectly computed and recorded for the periods ending December 31, 2012, 2013, 2014 and 2015 and March 31, 2016. This error was due to the incorrect netting of an indefinite-lived deferred tax liability related to tax-deductible goodwill against certain deferred tax assets that the Company believed more likely than not would not be realized. In order to be a source of future taxable income to support realizability of a deferred tax asset, a taxable temporary difference must reverse in a period such that it would result in the realization of the deferred tax asset. Taxable temporary differences related to indefinite-lived intangibles and tax-deductible goodwill are problematic in this regard as, by their nature, they are not predicted to reverse (commonly referred to as naked credits). While such temporary differences would reverse on impairment or sale of the related assets, those events are not anticipated under ASC 740 Income taxes (“ASC 740”) for purposes of predicting the reversal of the related taxable temporary difference. As a result, the reversal of taxable temporary differences with respect to indefinite-lived assets and tax-deductible goodwill should not be considered a source of future taxable income when evaluating and calculating a valuation allowance in accordance with ASC 740. The cumulative error beginning in 2012 totaled $2.2 million at March 31, 2016 and $2.1 million at December 31, 2015. In evaluating whether the previously issued financial statements were materially misstated, the Company followed the guidance of ASC 250, Accounting Changes and Error Corrections, SEC Staff Accounting Bulletin ("SAB") Topic 1.M, Assessing Materiality, and SAB Topic 1.N, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. The Company concluded that the error was not material to the affected prior periods. However, correction of the entire cumulative error in the second quarter of 2016 would be material to that quarter's three and six months results and would impact comparisons to prior quarters. As a result, certain amounts presented in the Company’s condensed consolidated financial statements have been revised from the amounts previously reported to correct this error as shown in the table below and as included elsewhere in this Quarterly Report on Form 10-Q for the period ended June 30, 2016. Condensed Consolidated Balance Sheet as of December 31, 2015 (in thousands): As Previously Reported Corrections As Revised Other long term liabilities $ 4,113 $ 2,119 $ 6,232 Total liabilities 167,470 2,119 169,589 Accumulated deficit (181,822 ) (2,119 ) (183,941 ) Total stockholders' equity 150,094 (2,119 ) 147,975 Total liabilities and stockholders' equity 317,564 — 317,564 Correction to Condensed Consolidated Statements of Operations, Comprehensive Income (Loss) and Cash Flows for the periods ended June 30, 2015 The Company has restated certain amounts in the condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2015 and the condensed consolidated statement of cash flows for the six months ended June 30, 2015 to correct income tax expense related to the valuation allowance calculation error discussed above, so that such adjustment is recorded in the proper period. The Company believes this correction is not material to its previously issued annual and interim consolidated financial statements. The effects of correcting the valuation allowance calculation error are as follows: • Additional income tax expense of $0.1 million and $0.1 million in the three and six months ended June 30, 2015, respectively, has been recorded; • Net loss increases $0.1 million and $0.1 million in the three and six months ended June 30, 2015, respectively; and • Net loss per share, basic and diluted remain unchanged. The following tables summarize the effects of the correction on the Company’s condensed consolidated statements of operations for three and six months ended June 30, 2015 (in thousands): For the Three Months Ended June 30, 2015 As Previously Reported Corrections As Revised Loss before income taxes $ (12,318 ) $ — $ (12,318 ) Income tax provision 1,089 45 1,134 Net loss $ (13,407 ) $ (45 ) $ (13,452 ) Net loss per share, basic and diluted $ (0.16 ) $ — $ (0.16 ) Weighted average common shares outstanding, basic and diluted 85,072 — 85,072 For the Six Months Ended June 30, 2015 As Previously Reported Corrections As Revised Loss before income taxes $ (22,354 ) $ — $ (22,354 ) Income tax provision 1,223 90 1,313 Net loss $ (23,577 ) $ (90 ) $ (23,667 ) Net loss per share, basic and diluted $ (0.28 ) $ — $ (0.28 ) Weighted average common shares outstanding, basic and diluted 84,665 — 84,665 The following tables summarize the effects of the corrections on the Company’s condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2015 (in thousands): For the Three Months Ended June 30, 2015 As Previously Reported Corrections As Revised Net loss $ (13,407 ) $ (45 ) $ (13,452 ) Other comprehensive income (loss): Foreign currency translation adjustments 352 — 352 Unrealized gain (loss) on short-term investments (261 ) — (261 ) Other comprehensive income (loss) 91 — 91 Total comprehensive loss $ (13,316 ) $ (45 ) $ (13,361 ) For the Six Months Ended June 30, 2015 As Previously Reported Corrections As Revised Net loss $ (23,577 ) $ (90 ) $ (23,667 ) Other comprehensive income (loss): Foreign currency translation adjustments 105 — 105 Unrealized gain (loss) on short-term investments 113 — 113 Other comprehensive income (loss) 218 — 218 Total comprehensive loss $ (23,359 ) $ (90 ) $ (23,449 ) The following tables summarize the effects of the corrections on the Company’s condensed consolidated statement of cash flows for the six months ended June 30, 2015 (in thousands): For the Six Months Ended June 30, 2015 Cash flows from operating activities As Previously Reported Corrections As Revised Net loss $ (23,577 ) $ (90 ) $ (23,667 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 6,783 — 6,783 Amortization of debt discount and issuance costs 3,903 — 3,903 Accretion of premium on short-term investments and other (497 ) — (497 ) Deferred income taxes 980 90 1,070 Stock-based compensation 7,544 — 7,544 Restructuring and other 3,450 — 3,450 Changes in operating assets and liabilities: Accounts receivable, net 11,754 — 11,754 Deferred revenue 338 — 338 Prepaid expenses and other (852 ) — (852 ) Accounts payable (2,064 ) — (2,064 ) Accrued taxes (555 ) — (555 ) Accrued compensation and benefits (1,570 ) — (1,570 ) Accrued expenses (2,448 ) — (2,448 ) Other liabilities 125 — 125 Net cash provided by operating activities $ 3,314 $ — $ 3,314 |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-term Investments | 6 Months Ended |
Jun. 30, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | Cash, Cash Equivalents and Short-Term Investments Cash equivalents consist of highly liquid fixed-income investments with original maturities of three months or less at the time of purchase, including money market funds. Short-term investments consist of readily marketable securities with a remaining maturity of more than three months from time of purchase. The Company classifies all of its cash equivalents and short-term investments as “available for sale,” as these investments are free of trading restrictions and are available for use in the Company's daily operations. These marketable securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as accumulated other comprehensive income and included as a separate component of stockholders’ equity. Gains and losses are recognized when realized. When the Company determines that other-than-temporary declines in fair value have occurred, the amount of the decline that is related to a credit loss is recognized in earnings. Gains and losses are determined using the specific identification method. The Company’s realized gains and losses in the three and six months ended June 30, 2016 and 2015 were insignificant. Cash and cash equivalents and short-term investments consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 55,080 $ — $ — $ 55,080 Cash equivalents: Money market mutual funds 216 — — 216 Total cash and cash equivalents 55,296 — — 55,296 Short-term investments: Corporate bonds 55,012 279 (25 ) 55,266 U.S. agency securities 33,458 239 — 33,697 Asset-backed securities 27,773 118 (3 ) 27,888 U.S. Treasury securities 21,756 143 (4 ) 21,895 Total short-term investments 137,999 779 (32 ) 138,746 Cash, cash equivalents and short-term investments $ 193,295 $ 779 $ (32 ) $ 194,042 December 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 72,105 $ — $ — $ 72,105 Cash equivalents: Money market mutual funds 229 — — 229 Total cash and cash equivalents 72,334 — — 72,334 Short-term investments: Corporate bonds 54,434 — (389 ) 54,045 U.S. agency securities 36,010 — (187 ) 35,823 Asset-backed securities 30,665 — (132 ) 30,533 U.S. Treasury securities 16,024 — (47 ) 15,977 Total short-term investments 137,133 — (755 ) 136,378 Cash, cash equivalents and short-term investments $ 209,467 $ — $ (755 ) $ 208,712 The following table summarizes the amortized cost and estimated fair value of money market mutual funds and short-term fixed income securities classified as short-term investments based on stated maturities as of June 30, 2016 (in thousands): Amortized Cost Estimated Fair Value Less than 1 year $ 14,440 $ 14,429 Due in 1 to 3 years 123,775 124,533 Total $ 138,215 $ 138,962 As of June 30, 2016 , the Company did not consider any of its investments to be other-than-temporarily impaired. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures certain financial instruments at fair value on a recurring basis. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities. Level 2 valuations are based on inputs that are observable, either directly or indirectly, other than quoted prices included within Level 1. Such inputs used in determining fair value for Level 2 valuations include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement. All of the Company’s cash equivalents and short-term investments are classified within Level 1 or Level 2. The following table presents information about the Company’s financial instruments that are measured at fair value as of June 30, 2016 and indicates the fair value hierarchy of the valuation (in thousands): Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents: Money market mutual funds $ 216 $ 216 $ — Total cash equivalents 216 216 — Short-term investments: Corporate bonds 55,266 — 55,266 U.S. agency securities 33,697 — 33,697 Asset-backed securities 27,888 — 27,888 U.S. Treasury securities 21,895 — 21,895 Total short-term investments 138,746 — 138,746 Cash equivalents and short-term investments $ 138,962 $ 216 $ 138,746 The Company has restricted cash of $1.2 million within Other assets as of June 30, 2016 and December 31, 2015 . The restricted cash is classified within Level 1. The following table presents information about the Company’s financial instruments that are measured at fair value as of December 31, 2015 and indicates the fair value hierarchy of the valuation (in thousands): Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents: Money market mutual funds $ 229 $ 229 $ — Total cash equivalents 229 229 — Short-term investments: Corporate bonds 54,045 — 54,045 U.S. agency securities 35,823 — 35,823 Asset-backed securities 30,533 — 30,533 U.S. Treasury securities 15,977 — 15,977 Total short-term investments 136,378 — 136,378 Cash equivalents and short-term investments $ 136,607 $ 229 $ 136,378 The convertible notes issued by the Company in August 2013 are shown on the accompanying consolidated balance sheets at their original issuance value, net of unamortized discount, and are not marked to market each period. The approximate fair value of the convertible notes as of June 30, 2016 and December 31, 2015 was $131.3 million and $126.0 million , respectively. The fair value of the convertible notes was determined using quoted market prices for similar securities, which, due to limited trading activity, are considered Level 2 in the fair value hierarchy. The Company did not have any other financial instruments or long-term debt measured at fair value as of June 30, 2016 and December 31, 2015 . |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities balances were comprised of the following (in thousands): June 30, December 31, Accrued Interest - Convertible Notes $ 937 $ 948 Deferred Rent 904 738 ESPP Withholding 718 641 Total $ 2,559 $ 2,327 |
Credit Facility and Capital Lea
Credit Facility and Capital Leases | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Credit Facility and Capital Leases | Credit Facility and Capital Leases Letter of Credit On February 3, 2015, the Company issued a $1.2 million letter of credit in connection with a lease for a new San Francisco facility. The letter of credit is secured by $1.2 million of a money market account which is classified as restricted cash in other current assets, in the accompanying condensed consolidated balance sheets. Capital Leases The Company has capital lease agreements totaling $0.2 million that are collateralized by the underlying property and equipment and expire through September 2019 . The weighted-average imputed interest rates for the capital lease agreements were 2.9% and 5.4% at June 30, 2016 and 2015 , respectively. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior Convertible Notes In August 2013, the Company issued senior convertible notes (the “Notes”) in exchange for gross proceeds of $150.0 million . The Notes are governed by an Indenture, dated August 13, 2013 (the “Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee. The Notes will mature on August 1, 2018, unless earlier repurchased or converted, and bear interest at a rate of 1.50% per year payable semi-annually in arrears on February 1 and August 1, beginning February 1, 2014. The Notes are convertible at an initial conversion rate of 61.6770 of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $16.21 per share of common stock, subject to anti-dilution adjustments upon certain specified events as defined in the Indenture. Upon conversion, the Notes will be settled in cash, shares of the Company’s common stock, or any combination thereof, at the Company’s option. Prior to February 1, 2018, the Notes are convertible only upon the following circumstances: • during any calendar quarter commencing after December 31, 2013, (and only during such calendar quarter), if for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; • during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of common stock and the applicable conversion rate on each such trading day; or • upon the occurrence of specified corporate events described in the Indenture. Holders of the Notes may convert their Notes at any time on or after February 1, 2018, until the close of business on the second schedule trading day immediately preceding the maturity date, regardless of the foregoing circumstances. The holders of the Notes may require the Company to repurchase all or a portion of their Notes at a cash repurchase price equal to 100% of the principal amount of the Notes being repurchased, plus accrued and unpaid interest, if any, upon a fundamental change as defined in the Indenture. In addition, upon certain events of default as defined in the Indenture, the trustee, or the holders of at least 25% in principal amount of the outstanding Notes may declare 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, on all the Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal of and accrued and unpaid interest on the Notes will automatically become due and payable. The Notes were not subject to conversion or repurchase at June 30, 2016 . To account for the Notes at issuance, the Company separated the Notes into debt and equity components pursuant to the accounting standards for convertible debt instruments that may be fully or partially settled in cash upon conversion. The fair value of debt component was estimated using an interest rate for nonconvertible debt, with terms similar to the Notes, excluding the conversion feature. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The excess of the principal amount of the Notes over the fair value of the debt component was recorded as a debt discount and a corresponding increase in additional paid-in capital. The debt discount is accreted to interest expense over the term of the Notes using the interest method. The amount recorded to additional paid-in capital is not to be remeasured as long as it continues to meet the conditions of equity classification. Upon issuance of the $150.0 million of Notes, the Company recorded $111.5 million to debt and $38.5 million to additional paid-in capital. The Company incurred transaction costs of approximately $4.9 million related to the issuance of the Notes. In accounting for these costs, the Company allocated the costs to the debt and equity components in proportion to the allocation of proceeds from the issuance of the Notes to such components. Transaction costs allocated to the debt component of $3.6 million were recorded as a deferred asset in other assets, net, and amortized to interest expense over the term of the Notes. As a result of the adoption of ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Cost, these costs were reclassified to Convertible Notes, net, as of December 31, 2015. The transaction costs allocated to the equity component of $1.3 million were recorded to additional paid-in capital. The net carrying amount of the liability component of the Notes consists of the following (in thousands): June 30, 2016 December 31, 2015 Principal amount $ 150,000 $ 150,000 Unamortized debt discount (18,022 ) (21,908 ) Unamortized debt issuance costs (1,679 ) (2,041 ) Net carrying amount $ 130,299 $ 126,051 The following table presents the interest expense recognized related to the Notes (in thousands): Three Months Ended Six Months Ended June 30, 2016 2015 2016 2015 Contractual interest expense at 1.5% per annum $ 563 $ 563 $ 1,125 $ 1,125 Amortization of debt issuance costs 183 169 362 333 Accretion of debt discount 1,961 1,815 3,886 3,571 Total $ 2,707 $ 2,547 $ 5,373 $ 5,029 The net proceeds from the Notes were approximately $145.1 million after payment of the initial purchasers' discount and offering expense. The Company used approximately $31.4 million of the net proceeds from the Notes to pay the cost of the Note Hedges described below, which was partially offset by $21.8 million of the proceeds from the Company's sale of the Warrants also described below. Note Hedges Concurrent with the issuance of the Notes, the Company entered into note hedges (“Note Hedges”) with certain bank counterparties, with respect to its common stock. The Company paid $31.4 million for the Note Hedges. The Note Hedges cover approximately 9.25 million shares of the Company's common stock at a strike price of $16.21 per share. The Note Hedges will expire upon the maturity of the Notes. The Note Hedges are intended to reduce the potential dilution to the Company's common stock upon conversion of the Notes and/or offset the cash payment in excess of the principal amount of the Notes the Company is required to make in the event that the market value per share of the Company's common stock at the time of exercise is greater than the conversion price of the Notes. Warrants Separately, the Company entered into warrant transactions, whereby it sold warrants to the same bank counterparties as the Note Hedges to acquire approximately 9.25 million shares of the Company's common stock at an initial strike price of $21.02 per share (“Warrants”), subject to anti-dilution adjustments. The Company received proceeds of approximately $21.8 million from the sale of the Warrants. If the fair value per share of the Company's common stock exceeds the strike price of the Warrants, the Warrants will have a dilutive effect on earnings per share, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. The amounts paid and received for the Note Hedges and the Warrants have been recorded in additional paid-in capital. The fair value of the Note Hedges and the Warrants are not remeasured through earnings each reporting period. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases its office space and certain equipment under noncancelable operating lease agreements with various expiration dates through November 30, 2022 . Rent expense for the three months ended June 30, 2016 and 2015 was $2.8 million and $2.6 million , respectively, and for the six months ended June 30, 2016 and 2015 was $5.4 million and $4.8 million , respectively. The Company recognizes rent expense on a straight-line basis over the lease period and accrues for rent expense incurred but not paid. In April 2016, the Company signed a 6 -year office lease expiring in July 2022, for a new international sales center in Singapore to occupy 17,626 square feet. The total minimum lease payments are estimated to be approximately $4.8 million over the lease term. In July 2016, the Company signed a 5 -year office lease expiring in December 2021, for an additional floor in the existing service delivery center in the Philippines to occupy 21,915 square feet. The total minimum lease payments are estimated to be approximately $3.5 million over the lease term. Litigation On July 8, 2015, a single plaintiff filed a putative securities class action lawsuit, Weller v. ServiceSource International, Inc. et al., in the U.S. District Court for the Northern District of California (the “Weller Lawsuit”) against the Company and the Company’s former Chief Executive Officer. The Weller Lawsuit was brought on behalf of purchasers of Company stock during the period January 22, 2014 through May 1, 2014, and alleges violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In connection with the mandatory lead plaintiff appointment process under the Private Securities Litigation Reform Act ("PSLRA"), various law firms issued press releases between July 2015 and September 2015 to search for additional shareholders that would be willing to serve as lead plaintiffs in this lawsuit. This solicitation period ended on September 29, 2015 and no other shareholders came forward, leaving only the named plaintiff as the sole shareholder seeking to be appointed lead plaintiff. The court appointed Weller a lead plaintiff on October 21, 2015. At this time, no motion to certify a class has been filed. The Company believes that the claims are meritless, and will vigorously defend itself against such claims. On December 9, 2015, the Company filed a motion to dismiss the Weller Lawsuit. The motion has been fully briefed, and the parties are awaiting a ruling from the court. From time to time, the Company may be subject to other litigation or threatened litigation arising in the ordinary course of our business. Although the results of litigation and claims cannot be predicted with certainty, the Company is currently not aware of any litigation or threats of litigation in which the final outcome could have a material adverse effect on its business, operating results, financial position, or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. The Company records a contingent liability when it is probable that a loss has been incurred and the amount is reasonably estimable in accordance with accounting for contingencies. |
Share Repurchase Program, Stock
Share Repurchase Program, Stock-Based Compensation and ESPP | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Repurchase Program, Stock-Based Compensation and ESPP | Share Repurchase Program, Stock-Based Compensation and ESPP In August 2015, the Board authorized a stock repurchase program (the "program") with a maximum authorization to repurchase up to $30.0 million worth of common stock of the Company. The program expires in August 2017. The aggregate amount available under the program was approximately $19.9 million as of June 30, 2016 . The share repurchase program does not obligate the Company to acquire any specific number of shares. Under the program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. The Company cash settles with the program broker periodically and reflects any unsettled amounts as a current liability at each period end. The following shares of common stock were repurchased under the above-described repurchase plan: Number of Shares (in thousands) Weighted Average Repurchase Price Per Share Amount (includes commissions) (in thousands) 2016: Second quarter 428 $ 3.88 $ 1,661 First quarter 1,835 3.96 7,260 2015: Fourth quarter 136 $ 4.09 $ 557 Third Quarter 159 4.12 655 Total common stock repurchases under the program 2,558 $ 10,133 The following table summarizes the consolidated stock-based compensation expense included in the condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, 2016 2015 2016 2015 Cost of revenue $ 379 $ 659 $ 847 $ 1,495 Sales and marketing 726 716 1,588 1,647 Research and development 144 444 341 991 General and administrative 1,087 1,158 2,419 3,411 Total stock-based compensation $ 2,336 $ 2,977 $ 5,195 $ 7,544 The above table does not include $0.1 million and $0.3 million of capitalized stock-based compensation related to internal-use software during the three and six months ended June 30, 2016 . There was no capitalized stock-based compensation related to internal-use software during the three and six months ended June 30, 2015 . Determining Fair Value of Stock Awards The Company estimates the fair value of stock option awards at the date of grant using the Black-Scholes option-pricing model. Options are granted with an exercise price equal to the fair value of the common stock as of the date of grant. Compensation expense is amortized net of estimated forfeitures on a straight-line basis over the requisite service period of the options, which is generally four years . Restricted stock, upon vesting, entitles the holder to one share of common stock for each restricted stock unit or award, and has a purchase price of $ 0.0001 per share, which is equal to the par value of the Company’s common stock, and vests over four years . The fair value of the restricted stock is based on the Company’s closing stock price on the date of grant, and compensation expense net of estimated forfeitures is recognized on a straight-line basis over the vesting period. We estimate the fair value of stock options granted using the Black-Scholes option-pricing model. This model requires us to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of our common stock price using peer company volatility and the number of options that will be forfeited prior to vesting. Prior to January 1, 2016, the expected stock price volatility assumption was determined by examining the historical volatilities for industry peers. Effective January 1, 2016, the stock price volatility assumption was determined by examining a blend of the historical volatilities for industry peers and the trading history for the Company’s common stock. Option and restricted stock activity under the 2011 Plan for the six months ended June 30, 2016 was as follows (shares in thousands): Options Outstanding Restricted Stock Shares and Units Number Weighted- Number Outstanding — December 31, 2015 7,055 10,616 $ 4.79 4,552 Additional shares reserved under the 2011 equity incentive plan 3,478 — — — Granted (1,603 ) 548 3.90 1,055 Options exercised/ Restricted stock released (49 ) 3.35 (880 ) RSU shares withheld for taxes 61 — — 61 Canceled/Forfeited 1,299 (582 ) 5.80 (717 ) Outstanding — June 30, 2016 10,290 10,533 $ 4.70 4,071 The weighted average grant-date fair value of employee stock options granted during the three months ended June 30, 2016 and 2015 was $1.88 and $1.30 per share, respectively, and $1.99 and $1.30 for the six months ended June 30, 2016 and 2015 , respectively. The unamortized grant date fair value of both stock options and restricted stock awards totaled $18.0 million at June 30, 2016 . Employee Stock Purchase Plan The Company’s 2011 Employee Stock Purchase Plan (the “ESPP”) is intended to qualify under Section 423 of the Internal Revenue Code of 1986. Under the ESPP, employees are eligible to purchase common stock through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. The purchase price of the shares on each purchase date is equal to 85% of the lower of the fair market value of the Company’s common stock on the first and last trading days of each 12 -month offering period. The ESPP provides that additional shares are reserved under the plan annually on the first day of each fiscal year in an amount equal to the lesser of (i) 1.5 million shares, (ii) one percent of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (iii) an amount determined by the board of directors and/or the compensation committee of the board of directors. On January 1, 2016, approximately 0.9 million additional shares were reserved under the ESPP pursuant to the plan's automatic increase provision. As of June 30, 2016 , 1.6 million total shares had been issued under the ESPP and 3.3 million shares were available for future issuance. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to taxation in the United States and various state and foreign jurisdictions. Earnings from non-U.S. activities are subject to local country income tax. The Company computes its quarterly income tax provision by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter. The primary difference between the effective tax rate and the federal statutory tax rate relates to the valuation allowances on the Company’s net operating losses and foreign tax rate differences. In the quarter ended June 30, 2016, the California Franchise Tax Board concluded their examination of the tax years 2008 through 2010 with no change to the tax returns filed. The tax years 2010 through 2016 remain subject to examination by other federal, state or foreign tax authorities. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are to be reinvested indefinitely outside the United States In November 2015, the Philippine Economic Zone Authority granted a four year tax holiday to the Company's Philippine affiliate, commencing with its fiscal year, beginning January 1, 2016. The related aggregate dollar and earnings per share impact is not material. Consistent with the Company’s practice in prior periods for assessing realization of deferred tax assets, management believes that based on the available objective evidence it is more likely than not that the tax benefits of the U.S. and Singapore losses will not be realized. As a result, the Company provided a valuation allowance for all U.S. federal deferred tax assets and for all Singapore deferred tax assets. The Company continues to record a state valuation allowance to reflect only the portion of state deferred tax assets that are more likely than not to be realized. Changes in tax laws and rates may affect other deferred tax assets and liabilities. These changes are accounted for in the period of enactment and are reflected in the Company’s June 30, 2016 financial results. For the three and six months ended June 30, 2016 , the Company recorded income tax expense of $0.2 million and $1.5 million , respectively. This amount primarily consists of income and withholding taxes for foreign and state jurisdictions where the Company has profitable operations, as well as valuation allowance adjustments for certain U.S. tax jurisdictions. No tax benefit was provided for losses incurred in United States and Singapore because those losses are offset by a full valuation allowance. The gross amount of the Company's unrecognized tax benefits was $0.9 million as of June 30, 2016 and December 31, 2015 , none of which, if recognized, would affect the Company’s effective tax rate. |
Description of Business and B16
Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X, without audit. Accordingly, they do not include all of the information required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2015 has been derived from the Company's audited annual consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission ("SEC") on March 8, 2016. These condensed consolidated financial statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto for the year ended December 31, 2015 , included in our Annual Report on Form 10-K. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, management considers necessary for a fair statement of the Company's financial position, operating results, and cash flows for the interim periods presented. Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Also, the results for the interim periods are not necessarily indicative of results for the entire year. The Company’s Chief Executive Officer ("CEO") is its chief operating decision maker. The CEO historically managed the Company as two reportable segments: Managed Services and Cloud and Business Intelligence ("CBI") based on the discrete financial information available for each segment. However, during the second half of 2015, the Company began implementing a series of actions to emphasize a one-company, single go-to-market strategy for its services offering that resulted in the reorganization of its CBI personnel and sales team delivery structure. The objective of these actions was to more closely integrate and support the Managed Services organization with the Company’s cloud technologies and to eliminate new stand-alone CBI cloud offerings. Further, due to this reorganization and shift to a single go-to-market strategy, discrete cost information was no longer separately available for the former CBI segment. Consequently, beginning in the first quarter of 2016, the CEO manages and allocates resources on a company-wide basis as a single segment that is focused on service offerings which integrate data, processes and cloud technologies. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standard Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in the FASB's Accounting Standards Codification ("ASC") 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral of the effective date to December 15, 2017, and early application would be permitted, but not before the original effective date of December 15, 2016, so the effective date will be the first quarter of fiscal year 2018 using one of two retrospective application methods. The Company is currently evaluating the impact ASU No. 2014-09 will have on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal Use Software, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. ASU No. 2015-05 is effective for the Company in fiscal year 2016. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. The Company has historically accounted for its cloud computing arrangements as a service contract. Consequently, adoption of ASU No. 2015-05 had no impact on the Company's consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that deferred tax assets and liabilities to be classified as noncurrent in the consolidated balance sheet. The standard will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for financial statements that have not been previously issued. The standard may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. The Company is currently evaluating the impact that adoption of ASU No. 2015-17 will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). This standard requires entities that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The standard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2018. The guidance is required to be applied by the modified retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this authoritative guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This standard simplifies and clarifies certain aspects of share-based payment accounting and presentation. The standard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2016-09 will have on its consolidated financial statements. |
Reclassification | Reclassifications Amounts shown in Other assets, net, on the Consolidated Balance Sheet as of December 31, 2015 have been reclassified to Convertible notes, net, to reflect the current period presentation as a result of the adoption of ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Cost, which 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. |
Cash and Cash Equivalents | Cash equivalents consist of highly liquid fixed-income investments with original maturities of three months or less at the time of purchase, including money market funds. Short-term investments consist of readily marketable securities with a remaining maturity of more than three months from time of purchase. The Company classifies all of its cash equivalents and short-term investments as “available for sale,” as these investments are free of trading restrictions and are available for use in the Company's daily operations. These marketable securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as accumulated other comprehensive income and included as a separate component of stockholders’ equity. Gains and losses are recognized when realized. When the Company determines that other-than-temporary declines in fair value have occurred, the amount of the decline that is related to a credit loss is recognized in earnings. Gains and losses are determined using the specific identification method. |
Fair Value of Financial Instruments | The Company measures certain financial instruments at fair value on a recurring basis. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities. Level 2 valuations are based on inputs that are observable, either directly or indirectly, other than quoted prices included within Level 1. Such inputs used in determining fair value for Level 2 valuations include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement. All of the Company’s cash equivalents and short-term investments are classified within Level 1 or Level 2. |
Income Taxes | The Company is subject to taxation in the United States and various state and foreign jurisdictions. Earnings from non-U.S. activities are subject to local country income tax. The Company computes its quarterly income tax provision by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter. The primary difference between the effective tax rate and the federal statutory tax rate relates to the valuation allowances on the Company’s net operating losses and foreign tax rate differences. In the quarter ended June 30, 2016, the California Franchise Tax Board concluded their examination of the tax years 2008 through 2010 with no change to the tax returns filed. The tax years 2010 through 2016 remain subject to examination by other federal, state or foreign tax authorities. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are to be reinvested indefinitely outside the United States In November 2015, the Philippine Economic Zone Authority granted a four year tax holiday to the Company's Philippine affiliate, commencing with its fiscal year, beginning January 1, 2016. The related aggregate dollar and earnings per share impact is not material. Consistent with the Company’s practice in prior periods for assessing realization of deferred tax assets, management believes that based on the available objective evidence it is more likely than not that the tax benefits of the U.S. and Singapore losses will not be realized. As a result, the Company provided a valuation allowance for all U.S. federal deferred tax assets and for all Singapore deferred tax assets. The Company continues to record a state valuation allowance to reflect only the portion of state deferred tax assets that are more likely than not to be realized. Changes in tax laws and rates may affect other deferred tax assets and liabilities. These changes are accounted for in the period of enactment and are reflected in the Company’s June 30, 2016 financial results. |
Description of Business and B17
Description of Business and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following tables summarize the effects of the correction on the Company’s condensed consolidated statements of operations for three and six months ended June 30, 2015 (in thousands): For the Three Months Ended June 30, 2015 As Previously Reported Corrections As Revised Loss before income taxes $ (12,318 ) $ — $ (12,318 ) Income tax provision 1,089 45 1,134 Net loss $ (13,407 ) $ (45 ) $ (13,452 ) Net loss per share, basic and diluted $ (0.16 ) $ — $ (0.16 ) Weighted average common shares outstanding, basic and diluted 85,072 — 85,072 For the Six Months Ended June 30, 2015 As Previously Reported Corrections As Revised Loss before income taxes $ (22,354 ) $ — $ (22,354 ) Income tax provision 1,223 90 1,313 Net loss $ (23,577 ) $ (90 ) $ (23,667 ) Net loss per share, basic and diluted $ (0.28 ) $ — $ (0.28 ) Weighted average common shares outstanding, basic and diluted 84,665 — 84,665 The following tables summarize the effects of the corrections on the Company’s condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2015 (in thousands): For the Three Months Ended June 30, 2015 As Previously Reported Corrections As Revised Net loss $ (13,407 ) $ (45 ) $ (13,452 ) Other comprehensive income (loss): Foreign currency translation adjustments 352 — 352 Unrealized gain (loss) on short-term investments (261 ) — (261 ) Other comprehensive income (loss) 91 — 91 Total comprehensive loss $ (13,316 ) $ (45 ) $ (13,361 ) For the Six Months Ended June 30, 2015 As Previously Reported Corrections As Revised Net loss $ (23,577 ) $ (90 ) $ (23,667 ) Other comprehensive income (loss): Foreign currency translation adjustments 105 — 105 Unrealized gain (loss) on short-term investments 113 — 113 Other comprehensive income (loss) 218 — 218 Total comprehensive loss $ (23,359 ) $ (90 ) $ (23,449 ) The following tables summarize the effects of the corrections on the Company’s condensed consolidated statement of cash flows for the six months ended June 30, 2015 (in thousands): For the Six Months Ended June 30, 2015 Cash flows from operating activities As Previously Reported Corrections As Revised Net loss $ (23,577 ) $ (90 ) $ (23,667 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 6,783 — 6,783 Amortization of debt discount and issuance costs 3,903 — 3,903 Accretion of premium on short-term investments and other (497 ) — (497 ) Deferred income taxes 980 90 1,070 Stock-based compensation 7,544 — 7,544 Restructuring and other 3,450 — 3,450 Changes in operating assets and liabilities: Accounts receivable, net 11,754 — 11,754 Deferred revenue 338 — 338 Prepaid expenses and other (852 ) — (852 ) Accounts payable (2,064 ) — (2,064 ) Accrued taxes (555 ) — (555 ) Accrued compensation and benefits (1,570 ) — (1,570 ) Accrued expenses (2,448 ) — (2,448 ) Other liabilities 125 — 125 Net cash provided by operating activities $ 3,314 $ — $ 3,314 Condensed Consolidated Balance Sheet as of December 31, 2015 (in thousands): As Previously Reported Corrections As Revised Other long term liabilities $ 4,113 $ 2,119 $ 6,232 Total liabilities 167,470 2,119 169,589 Accumulated deficit (181,822 ) (2,119 ) (183,941 ) Total stockholders' equity 150,094 (2,119 ) 147,975 Total liabilities and stockholders' equity 317,564 — 317,564 |
Cash, Cash Equivalents and Sh18
Cash, Cash Equivalents and Short-term Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Summary of Cash and Cash Equivalents and Short-Term Investments | Cash and cash equivalents and short-term investments consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 55,080 $ — $ — $ 55,080 Cash equivalents: Money market mutual funds 216 — — 216 Total cash and cash equivalents 55,296 — — 55,296 Short-term investments: Corporate bonds 55,012 279 (25 ) 55,266 U.S. agency securities 33,458 239 — 33,697 Asset-backed securities 27,773 118 (3 ) 27,888 U.S. Treasury securities 21,756 143 (4 ) 21,895 Total short-term investments 137,999 779 (32 ) 138,746 Cash, cash equivalents and short-term investments $ 193,295 $ 779 $ (32 ) $ 194,042 December 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 72,105 $ — $ — $ 72,105 Cash equivalents: Money market mutual funds 229 — — 229 Total cash and cash equivalents 72,334 — — 72,334 Short-term investments: Corporate bonds 54,434 — (389 ) 54,045 U.S. agency securities 36,010 — (187 ) 35,823 Asset-backed securities 30,665 — (132 ) 30,533 U.S. Treasury securities 16,024 — (47 ) 15,977 Total short-term investments 137,133 — (755 ) 136,378 Cash, cash equivalents and short-term investments $ 209,467 $ — $ (755 ) $ 208,712 |
Summary of Cost and Estimated Fair Value of Short-Term Fixed Income Securities | The following table summarizes the amortized cost and estimated fair value of money market mutual funds and short-term fixed income securities classified as short-term investments based on stated maturities as of June 30, 2016 (in thousands): Amortized Cost Estimated Fair Value Less than 1 year $ 14,440 $ 14,429 Due in 1 to 3 years 123,775 124,533 Total $ 138,215 $ 138,962 |
Fair Value of Financial Instr19
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value | The following table presents information about the Company’s financial instruments that are measured at fair value as of June 30, 2016 and indicates the fair value hierarchy of the valuation (in thousands): Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents: Money market mutual funds $ 216 $ 216 $ — Total cash equivalents 216 216 — Short-term investments: Corporate bonds 55,266 — 55,266 U.S. agency securities 33,697 — 33,697 Asset-backed securities 27,888 — 27,888 U.S. Treasury securities 21,895 — 21,895 Total short-term investments 138,746 — 138,746 Cash equivalents and short-term investments $ 138,962 $ 216 $ 138,746 The following table presents information about the Company’s financial instruments that are measured at fair value as of December 31, 2015 and indicates the fair value hierarchy of the valuation (in thousands): Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents: Money market mutual funds $ 229 $ 229 $ — Total cash equivalents 229 229 — Short-term investments: Corporate bonds 54,045 — 54,045 U.S. agency securities 35,823 — 35,823 Asset-backed securities 30,533 — 30,533 U.S. Treasury securities 15,977 — 15,977 Total short-term investments 136,378 — 136,378 Cash equivalents and short-term investments $ 136,607 $ 229 $ 136,378 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities balances were comprised of the following (in thousands): June 30, December 31, Accrued Interest - Convertible Notes $ 937 $ 948 Deferred Rent 904 738 ESPP Withholding 718 641 Total $ 2,559 $ 2,327 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Liability Component | The net carrying amount of the liability component of the Notes consists of the following (in thousands): June 30, 2016 December 31, 2015 Principal amount $ 150,000 $ 150,000 Unamortized debt discount (18,022 ) (21,908 ) Unamortized debt issuance costs (1,679 ) (2,041 ) Net carrying amount $ 130,299 $ 126,051 |
Schedule of Interest Expense on Notes Recognized | The following table presents the interest expense recognized related to the Notes (in thousands): Three Months Ended Six Months Ended June 30, 2016 2015 2016 2015 Contractual interest expense at 1.5% per annum $ 563 $ 563 $ 1,125 $ 1,125 Amortization of debt issuance costs 183 169 362 333 Accretion of debt discount 1,961 1,815 3,886 3,571 Total $ 2,707 $ 2,547 $ 5,373 $ 5,029 |
Share Repurchase Program, Sto22
Share Repurchase Program, Stock-Based Compensation and ESPP (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule Of Common Stock Repurchase | The following shares of common stock were repurchased under the above-described repurchase plan: Number of Shares (in thousands) Weighted Average Repurchase Price Per Share Amount (includes commissions) (in thousands) 2016: Second quarter 428 $ 3.88 $ 1,661 First quarter 1,835 3.96 7,260 2015: Fourth quarter 136 $ 4.09 $ 557 Third Quarter 159 4.12 655 Total common stock repurchases under the program 2,558 $ 10,133 |
Summary of Stock-Based Compensation Expense | The following table summarizes the consolidated stock-based compensation expense included in the condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, 2016 2015 2016 2015 Cost of revenue $ 379 $ 659 $ 847 $ 1,495 Sales and marketing 726 716 1,588 1,647 Research and development 144 444 341 991 General and administrative 1,087 1,158 2,419 3,411 Total stock-based compensation $ 2,336 $ 2,977 $ 5,195 $ 7,544 |
Summary of Option and Restricted Stock Activity | Option and restricted stock activity under the 2011 Plan for the six months ended June 30, 2016 was as follows (shares in thousands): Options Outstanding Restricted Stock Shares and Units Number Weighted- Number Outstanding — December 31, 2015 7,055 10,616 $ 4.79 4,552 Additional shares reserved under the 2011 equity incentive plan 3,478 — — — Granted (1,603 ) 548 3.90 1,055 Options exercised/ Restricted stock released (49 ) 3.35 (880 ) RSU shares withheld for taxes 61 — — 61 Canceled/Forfeited 1,299 (582 ) 5.80 (717 ) Outstanding — June 30, 2016 10,290 10,533 $ 4.70 4,071 |
Description of Business and B23
Description of Business and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($)segment | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($)segment | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Number of segments managed by CEO | segment | 1 | 2 | ||||
Cumulative error amount | $ 2,200 | $ 2,100 | ||||
Income tax provision | $ 249 | $ 1,134 | $ 1,537 | $ 1,313 | ||
Net loss | $ 5,218 | 13,452 | $ 14,359 | 23,667 | ||
Corrections | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Income tax provision | 45 | 90 | ||||
Net loss | $ 45 | $ 90 |
Description of Business and B24
Description of Business and Basis of Presentation - Correction to Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Other long-term liabilities | $ 6,409 | $ 6,232 |
Total liabilities | 176,391 | 169,589 |
Accumulated deficit | (198,296) | (183,941) |
Total stockholders' equity | 130,425 | 147,975 |
Total liabilities and stockholders' equity | $ 306,816 | 317,564 |
As Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Other long-term liabilities | 4,113 | |
Total liabilities | 167,470 | |
Accumulated deficit | (181,822) | |
Total stockholders' equity | 150,094 | |
Total liabilities and stockholders' equity | 317,564 | |
Corrections | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Other long-term liabilities | 2,119 | |
Total liabilities | 2,119 | |
Accumulated deficit | (2,119) | |
Total stockholders' equity | (2,119) | |
Total liabilities and stockholders' equity | $ 0 |
Description of Business and B25
Description of Business and Basis of Presentation - Correction to Condensed Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Loss before income taxes | $ (4,969) | $ (12,318) | $ (12,822) | $ (22,354) |
Income tax provision | 249 | 1,134 | 1,537 | 1,313 |
Net loss | $ (5,218) | $ (13,452) | $ (14,359) | $ (23,667) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.06) | $ (0.16) | $ (0.17) | $ (0.28) |
Weighted average common shares outstanding, basic and diluted (in shares) | 85,413 | 85,072 | 85,747 | 84,665 |
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Loss before income taxes | $ (12,318) | $ (22,354) | ||
Income tax provision | 1,089 | 1,223 | ||
Net loss | $ (13,407) | $ (23,577) | ||
Net loss per share, basic and diluted (in dollars per share) | $ (0.16) | $ (0.28) | ||
Weighted average common shares outstanding, basic and diluted (in shares) | 85,072 | 84,665 | ||
Corrections | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Loss before income taxes | $ 0 | $ 0 | ||
Income tax provision | 45 | 90 | ||
Net loss | $ (45) | $ (90) | ||
Net loss per share, basic and diluted (in dollars per share) | $ 0 | $ 0 | ||
Weighted average common shares outstanding, basic and diluted (in shares) | 0 | 0 |
Description of Business and B26
Description of Business and Basis of Presentation - Correction to Condensed Consolidated Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | $ (5,218) | $ (13,452) | $ (14,359) | $ (23,667) |
Foreign currency translation adjustments | (703) | 352 | (1,119) | 105 |
Unrealized gain (loss) on short-term investments, net of tax | (169) | (261) | 930 | 113 |
Other comprehensive income (loss), net of tax | (872) | 91 | (189) | 218 |
Total comprehensive loss | $ (6,090) | (13,361) | $ (14,548) | (23,449) |
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | (13,407) | (23,577) | ||
Foreign currency translation adjustments | 352 | 105 | ||
Unrealized gain (loss) on short-term investments, net of tax | (261) | 113 | ||
Other comprehensive income (loss), net of tax | 91 | 218 | ||
Total comprehensive loss | (13,316) | (23,359) | ||
Corrections | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | (45) | (90) | ||
Foreign currency translation adjustments | 0 | 0 | ||
Unrealized gain (loss) on short-term investments, net of tax | 0 | 0 | ||
Other comprehensive income (loss), net of tax | 0 | 0 | ||
Total comprehensive loss | $ (45) | $ (90) |
Description of Business and B27
Description of Business and Basis of Presentation - Correction to Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | $ (5,218) | $ (13,452) | $ (14,359) | $ (23,667) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 7,564 | 6,783 | ||
Amortization of debt discount and issuance costs | 4,247 | 3,903 | ||
Accretion of premium on short-term investments and other | 554 | (497) | ||
Deferred income taxes | 855 | 1,070 | ||
Stock-based compensation | 5,195 | 7,544 | ||
Restructuring and other | 0 | 3,450 | ||
Accounts receivable, net | 2,287 | 11,754 | ||
Deferred revenue | (303) | 338 | ||
Prepaid expenses and other | 61 | (852) | ||
Accounts payable | 766 | (2,064) | ||
Accrued taxes | (231) | (555) | ||
Accrued compensation and benefits | 317 | (1,570) | ||
Accrued expenses | 1,031 | (2,448) | ||
Other liabilities | 336 | 125 | ||
Net cash provided by operating activities | $ 8,320 | 3,314 | ||
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | (13,407) | (23,577) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 6,783 | |||
Amortization of debt discount and issuance costs | 3,903 | |||
Accretion of premium on short-term investments and other | (497) | |||
Deferred income taxes | 980 | |||
Stock-based compensation | 7,544 | |||
Restructuring and other | 3,450 | |||
Accounts receivable, net | 11,754 | |||
Deferred revenue | 338 | |||
Prepaid expenses and other | (852) | |||
Accounts payable | (2,064) | |||
Accrued taxes | (555) | |||
Accrued compensation and benefits | (1,570) | |||
Accrued expenses | (2,448) | |||
Other liabilities | 125 | |||
Net cash provided by operating activities | 3,314 | |||
Corrections | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | $ (45) | (90) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 0 | |||
Amortization of debt discount and issuance costs | 0 | |||
Accretion of premium on short-term investments and other | 0 | |||
Deferred income taxes | 90 | |||
Stock-based compensation | 0 | |||
Restructuring and other | 0 | |||
Accounts receivable, net | 0 | |||
Deferred revenue | 0 | |||
Prepaid expenses and other | 0 | |||
Accounts payable | 0 | |||
Accrued taxes | 0 | |||
Accrued compensation and benefits | 0 | |||
Accrued expenses | 0 | |||
Other liabilities | 0 | |||
Net cash provided by operating activities | $ 0 |
Cash, Cash Equivalents and Sh28
Cash, Cash Equivalents and Short-term Investments - Summary of Cash and Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||||
Total cash and cash equivalents, Amortized Cost | $ 55,296 | $ 72,334 | $ 78,045 | $ 90,382 |
Total short-term investments, Amortized Cost | 137,999 | 137,133 | ||
Total short-term investments, Unrealized Gains | 779 | 0 | ||
Total short-term investments, Unrealized Losses | (32) | (755) | ||
Total short-term investments, Estimated Fair Value | 138,746 | 136,378 | ||
Cash, cash equivalents and short-term investments, Amortized Cost | 193,295 | 209,467 | ||
Cash, cash equivalents and short-term investments, Unrealized Gains | 779 | 0 | ||
Cash, cash equivalents and short-term investments, Unrealized Losses | (32) | (755) | ||
Cash, cash equivalents and short-term investments, Estimated Fair Value | 194,042 | 208,712 | ||
Corporate bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total short-term investments, Amortized Cost | 55,012 | 54,434 | ||
Total short-term investments, Unrealized Gains | 279 | 0 | ||
Total short-term investments, Unrealized Losses | (25) | (389) | ||
Total short-term investments, Estimated Fair Value | 55,266 | 54,045 | ||
U.S. agency securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total short-term investments, Amortized Cost | 33,458 | 36,010 | ||
Total short-term investments, Unrealized Gains | 239 | 0 | ||
Total short-term investments, Unrealized Losses | 0 | (187) | ||
Total short-term investments, Estimated Fair Value | 33,697 | 35,823 | ||
Asset-backed securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total short-term investments, Amortized Cost | 27,773 | 30,665 | ||
Total short-term investments, Unrealized Gains | 118 | 0 | ||
Total short-term investments, Unrealized Losses | (3) | (132) | ||
Total short-term investments, Estimated Fair Value | 27,888 | 30,533 | ||
U.S. Treasury securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total short-term investments, Amortized Cost | 21,756 | 16,024 | ||
Total short-term investments, Unrealized Gains | 143 | 0 | ||
Total short-term investments, Unrealized Losses | (4) | (47) | ||
Total short-term investments, Estimated Fair Value | 21,895 | 15,977 | ||
Cash | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total cash and cash equivalents, Amortized Cost | 55,080 | 72,105 | ||
Total cash and cash equivalents, Unrealized Gains | 0 | 0 | ||
Total cash and cash equivalents, Unrealized Losses | 0 | 0 | ||
Total cash and cash equivalents, Estimated Fair Value | 55,080 | 72,105 | ||
Money market mutual funds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total cash and cash equivalents, Amortized Cost | 216 | 229 | ||
Total cash and cash equivalents, Unrealized Gains | 0 | 0 | ||
Total cash and cash equivalents, Unrealized Losses | 0 | 0 | ||
Total cash and cash equivalents, Estimated Fair Value | 216 | 229 | ||
Total cash and cash equivalents | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total cash and cash equivalents, Amortized Cost | 55,296 | 72,334 | ||
Total cash and cash equivalents, Unrealized Gains | 0 | 0 | ||
Total cash and cash equivalents, Unrealized Losses | 0 | 0 | ||
Total cash and cash equivalents, Estimated Fair Value | $ 55,296 | $ 72,334 |
Cash, Cash Equivalents and Sh29
Cash, Cash Equivalents and Short-term Investments - Summary of Cost and Estimated Fair Values of Short Term Fixed Income Securities (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Amortized Cost | |
Less than 1 year | $ 14,440 |
Due in 1 to 3 years | 123,775 |
Total | 138,215 |
Estimated Fair Value | |
Less than 1 year | 14,429 |
Due in 1 to 3 years | 124,533 |
Total | $ 138,962 |
Fair Value of Financial Instr30
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Short-term investments: | ||
Total short-term investments | $ 138,746 | $ 136,378 |
Fair Value, Measurements, Recurring | ||
Cash equivalents: | ||
Total cash equivalents | 216 | 229 |
Short-term investments: | ||
Total short-term investments | 138,746 | 136,378 |
Cash equivalents and short-term investments | 138,962 | 136,607 |
Fair Value, Measurements, Recurring | Money market mutual funds | ||
Cash equivalents: | ||
Total cash equivalents | 216 | 229 |
Fair Value, Measurements, Recurring | Corporate bonds | ||
Short-term investments: | ||
Total short-term investments | 55,266 | 54,045 |
Fair Value, Measurements, Recurring | U.S. agency securities | ||
Short-term investments: | ||
Total short-term investments | 33,697 | 35,823 |
Fair Value, Measurements, Recurring | Asset-backed securities | ||
Short-term investments: | ||
Total short-term investments | 27,888 | 30,533 |
Fair Value, Measurements, Recurring | U.S. Treasury securities | ||
Short-term investments: | ||
Total short-term investments | 21,895 | 15,977 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Cash equivalents: | ||
Total cash equivalents | 216 | 229 |
Short-term investments: | ||
Total short-term investments | 0 | 0 |
Cash equivalents and short-term investments | 216 | 229 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market mutual funds | ||
Cash equivalents: | ||
Total cash equivalents | 216 | 229 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate bonds | ||
Short-term investments: | ||
Total short-term investments | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. agency securities | ||
Short-term investments: | ||
Total short-term investments | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset-backed securities | ||
Short-term investments: | ||
Total short-term investments | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities | ||
Short-term investments: | ||
Total short-term investments | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Cash equivalents: | ||
Total cash equivalents | 0 | 0 |
Short-term investments: | ||
Total short-term investments | 138,746 | 136,378 |
Cash equivalents and short-term investments | 138,746 | 136,378 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Money market mutual funds | ||
Cash equivalents: | ||
Total cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Corporate bonds | ||
Short-term investments: | ||
Total short-term investments | 55,266 | 54,045 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | U.S. agency securities | ||
Short-term investments: | ||
Total short-term investments | 33,697 | 35,823 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Short-term investments: | ||
Total short-term investments | 27,888 | 30,533 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | U.S. Treasury securities | ||
Short-term investments: | ||
Total short-term investments | $ 21,895 | $ 15,977 |
Fair Value of Financial Instr31
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Significant Other Observable Inputs (Level 2) | Convertible Notes Payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of convertible notes | $ 131.3 | $ 126 |
Other Assets | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash | $ 1.2 | $ 1.2 |
Other Current Liabilities - Sch
Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued Interest - Convertible Notes | $ 937 | $ 948 |
Deferred Rent | 904 | 738 |
ESPP Withholding | 718 | 641 |
Total | $ 2,559 | $ 2,327 |
Credit Facility and Capital L33
Credit Facility and Capital Leases - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Feb. 03, 2015 | |
Line of Credit Facility [Line Items] | |||
Total capital lease agreements | $ 0.2 | ||
Underlying property and equipment expiration period | September 2,019 | ||
Weighted-average imputed interest rates for the capital lease agreements | 2.90% | 5.40% | |
Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Letter of credit | $ 1.2 | ||
Letter of Credit | Money market mutual funds | |||
Line of Credit Facility [Line Items] | |||
Letter of credit, collateral | $ 1.2 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ / shares in Units, shares in Thousands | 1 Months Ended | |||
Aug. 31, 2013USD ($)d$ / sharesshares | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2015 | |
Debt Instrument [Line Items] | ||||
Payments of convertible note hedges | $ 31,400,000 | |||
Shares covered under note hedges (in shares) | shares | 9,250 | |||
Common stock strike price (in dollars per share) | $ / shares | $ 16.21 | |||
Warrant | ||||
Debt Instrument [Line Items] | ||||
Proceeds from the issuance of warrants | $ 21,800,000 | |||
Warrants sold to acquire shares (in shares) | shares | 9,250 | |||
Exercise price of warrant (in dollars per share) | $ / shares | $ 21.02 | |||
Senior Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of debt | $ 150,000,000 | |||
Interest rate (percent) | 1.50% | 1.50% | 1.50% | |
Conversion ratio | 0.061677 | |||
Conversion price (in dollars per share) | $ / shares | $ 16.21 | |||
Threshold consecutive trading days | 5 days | |||
Threshold percentage of stock price trigger (percent) | 98.00% | |||
Threshold business days | 5 days | |||
Cash repurchase price (percent) | 100.00% | |||
Minimum percent held in principal amount of outstanding notes to declare all notes to be due and payable (percent) | 25.00% | |||
Debt | $ 111,500,000 | $ 130,299,000 | $ 126,051,000 | |
Additional paid in capital | 38,500,000 | |||
Transaction costs, additional paid in capital | 4,900,000 | |||
Net proceeds from the Notes | 145,100,000 | |||
Senior Convertible Notes | Note Hedges | ||||
Debt Instrument [Line Items] | ||||
Payments of convertible note hedges | 31,400,000 | |||
Senior Convertible Notes | Warrant | ||||
Debt Instrument [Line Items] | ||||
Proceeds from the issuance of warrants | 21,800,000 | |||
Senior Convertible Notes | Other Assets | ||||
Debt Instrument [Line Items] | ||||
Debt component of transaction costs, gross | 3,600,000 | |||
Senior Convertible Notes | Additional Paid-in Capital | ||||
Debt Instrument [Line Items] | ||||
Transaction costs, additional paid in capital | $ 1,300,000 | |||
Senior Convertible Notes | After December 31, 2013 | ||||
Debt Instrument [Line Items] | ||||
Threshold trading days | d | 20 | |||
Threshold consecutive trading days | 30 days | |||
Threshold percentage of stock price trigger (percent) | 130.00% |
Debt - Schedule of Net Carrying
Debt - Schedule of Net Carrying Amount of Liability Component (Details) - Senior Convertible Notes - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Aug. 31, 2013 |
Liability Component | |||
Principal amount | $ 150,000 | $ 150,000 | |
Unamortized debt discount | (18,022) | (21,908) | |
Unamortized debt issuance costs | (1,679) | (2,041) | |
Net carrying amount | $ 130,299 | $ 126,051 | $ 111,500 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense on Notes Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Aug. 31, 2013 | |
Interest Expense | |||||
Total | $ 1,700 | $ 2,739 | $ 3,209 | $ 4,584 | |
Senior Convertible Notes | |||||
Interest Expense | |||||
Interest rate (percent) | 1.50% | 1.50% | 1.50% | 1.50% | 1.50% |
Contractual interest expense at 1.5% per annum | $ 563 | $ 563 | $ 1,125 | $ 1,125 | |
Amortization of debt issuance costs | 183 | 169 | 362 | 333 | |
Accretion of debt discount | 1,961 | 1,815 | 3,886 | 3,571 | |
Total | $ 2,707 | $ 2,547 | $ 5,373 | $ 5,029 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2016USD ($)ft² | Apr. 30, 2016USD ($)ft² | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | |
Operating Leased Assets [Line Items] | ||||||
Operating lease payment of non-cancelable agreement expiration period | through November 30, 2022 | |||||
Rent expense | $ 2.8 | $ 2.6 | $ 5.4 | $ 4.8 | ||
SINGAPORE | ||||||
Operating Leased Assets [Line Items] | ||||||
Lease term (in years) | 6 years | |||||
Area of space (in square feet) | ft² | 17,626 | |||||
Total future annual minimum lease payment | $ 4.8 | |||||
Subsequent Event | PHILIPPINES | ||||||
Operating Leased Assets [Line Items] | ||||||
Lease term (in years) | 5 years | |||||
Area of space (in square feet) | ft² | 21,915 | |||||
Total future annual minimum lease payment | $ 3.5 |
Share Repurchase Program, Sto38
Share Repurchase Program, Stock-Based Compensation and ESPP - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jan. 01, 2016 | Dec. 31, 2015 | Aug. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock repurchase program, authorized amount (up to) | $ 30,000,000 | ||||||
Stock repurchase program, remaining authorized amount | $ 19,900,000 | $ 19,900,000 | |||||
Capitalized stock-based compensation related to internal-use software | $ 100,000 | $ 0 | $ 300,000 | $ 0 | |||
Weighted average grant-date fair value of stock options granted (in dollars per share) | $ 1.88 | $ 1.30 | $ 1.99 | $ 1.30 | |||
Grant date fair value | $ 18,000,000 | $ 18,000,000 | |||||
Percentage of payroll deductions | 10.00% | ||||||
Percentage of purchase price of the shares on each purchase date is equal to the fair market value | 85.00% | ||||||
Common stock on the first and last trading days on offering period (in months) | 12 months | ||||||
Shares issued (in shares) | 1,600 | ||||||
Shares available for future issuance (in shares) | 10,290 | 10,290 | 7,055 | ||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued (in shares) | 1,500 | ||||||
Percentage of outstanding shares | 1.00% | ||||||
Shares available for future issuance (in shares) | 3,300 | 3,300 | 900 | ||||
Stock Compensation Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Requisite service period (in years) | 4 years | ||||||
Restricted Stock Outstanding | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Exercise price (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Share-based payment award, award vesting period (in years) | 4 years |
Share Repurchase Program, Sto39
Share Repurchase Program, Stock-Based Compensation and ESPP - Schedule Of Common Stock Repurchase (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||
Number of Shares (in shares) | 428 | 1,835 | 136 | 159 | 2,558 |
Weighted Average Repurchase Price Per Share (in dollars per share) | $ 3.88 | $ 3.96 | $ 4.09 | $ 4.12 | |
Amount (includes commissions) | $ 1,661 | $ 7,260 | $ 557 | $ 655 | $ 10,133 |
Share Repurchase Program, Sto40
Share Repurchase Program, Stock-Based Compensation and ESPP - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 2,336 | $ 2,977 | $ 5,195 | $ 7,544 |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 379 | 659 | 847 | 1,495 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 726 | 716 | 1,588 | 1,647 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 144 | 444 | 341 | 991 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 1,087 | $ 1,158 | $ 2,419 | $ 3,411 |
Share Repurchase Program, Sto41
Share Repurchase Program, Stock-Based Compensation and ESPP - Summary of Option and Restricted Stock Activity (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Options Outstanding, Number of Shares | |
Shares and Units Available for Grant, Beginning balance (in shares) | 7,055 |
Additional shares reserved under the 2011 equity incentive plan (in shares) | 3,478 |
Shares and Units Available for Grant, Granted (in shares) | (1,603) |
Shares and Units Available for Grant, Options exercised/ Restricted stock released (in shares) | |
Shares and Units Available for Grant, RSU shares withheld for taxes (in shares) | 61 |
Shares and Units Available for Grant, Options Outstanding, Number of Shares (in shares) | 0 |
Shares and Units Available for Grant, Canceled/Forfeited (in shares) | 1,299 |
Shares and Units Available for Grant, Ending balance (in shares) | 10,290 |
Options Outstanding, Options, Weighted Average Exercise Price | |
Options Outstanding, Weighted Average Exercise Price, RSU shares withheld for taxes (in dollars per share) | $ / shares | $ 0 |
Employee Stock Option | |
Options Outstanding, Number of Shares | |
Options Outstanding, Number of Shares, Beginning Balance (in shares) | 10,616 |
Additional shares reserved under the 2011 equity incentive plan (in shares) | 0 |
Options Outstanding, Number of Shares, Granted (in shares) | 548 |
Options Outstanding, Number of Shares, Options exercised/ Restricted stock released (in shares) | (49) |
Options Outstanding, Number of Shares, Canceled /Forfeited (in shares) | (582) |
Options Outstanding, Number of Shares, Ending Balance (in shares) | 10,533 |
Options Outstanding, Options, Weighted Average Exercise Price | |
Options Outstanding, Weighted Average Exercise Price, Beginning Balance (in dollars per share) | $ / shares | $ 4.79 |
Options Outstanding, Weighted Average Exercise Price, Granted (in dollars per share) | $ / shares | 3.90 |
Options Outstanding, Weighted Average Exercise Price, Options exercised/ Restricted stock released (in dollars per share) | $ / shares | 3.35 |
Options Outstanding, Weighted Average Exercise Price, Canceled/Forfeited (in dollars per share) | $ / shares | 5.80 |
Options Outstanding, Weighted Average Exercise Price, Ending Balance (in dollars per share) | $ / shares | $ 4.70 |
Restricted Stock Outstanding | |
Options Outstanding, Number of Shares | |
Restricted Stock Outstanding Number of Shares, Beginning balance (in shares) | 4,552 |
Additional shares reserved under the 2011 equity incentive plan (in shares) | 0 |
Restricted Stock Outstanding Number of Shares, Granted (in shares) | 1,055 |
Restricted Stock Outstanding Number of Shares, Options exercised/ Restricted stock released (in shares) | (880) |
Shares and Units Available for Grant, Restricted Stock Outstanding, Number of Shares (in shares) | 61 |
Restricted Stock Outstanding Number of Shares, Canceled /Forfeited (in shares) | (717) |
Restricted Stock Outstanding Number of Shares, Ending balance (in shares) | 4,071 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Income tax provision | $ 249 | $ 1,134 | $ 1,537 | $ 1,313 | |
Unrecognized tax benefits | $ 900 | $ 900 | $ 900 |