Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 20, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SREV | ||
Entity Registrant Name | SERVICESOURCE INTERNATIONAL, INC. | ||
Entity Central Index Key | 1,310,114 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 92,934,876 | ||
Entity Public Float | $ 304.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 26,535 | $ 51,389 |
Short-term investments | 0 | 137,181 |
Accounts receivable, net | 54,284 | 56,516 |
Prepaid expenses and other | 5,653 | 6,112 |
Total current assets | 86,472 | 251,198 |
Property and equipment, net | 36,593 | 34,119 |
Contract acquisition costs | 2,660 | 0 |
Goodwill and intangible assets, net | 6,334 | 6,419 |
Other assets | 4,521 | 3,636 |
Total assets | 136,580 | 295,372 |
Current liabilities: | ||
Accounts payable | 2,424 | 4,574 |
Accrued compensation and benefits | 15,509 | 19,257 |
Convertible notes, net | 0 | 144,167 |
Deferred revenue | 0 | 1,282 |
Accrued expenses | 3,380 | 6,640 |
Other current liabilities | 6,894 | 2,740 |
Total current liabilities | 28,207 | 178,660 |
Other long-term liabilities | 6,540 | 4,603 |
Total liabilities | 34,747 | 183,263 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 20,000 shares authorized and none issued and outstanding | 0 | 0 |
Common stock; $0.0001 par value; 1,000,000 shares authorized; 92,895 shares issued and 92,774 shares outstanding as of December 31, 2018; 90,380 shares issued and 90,259 shares outstanding as of December 31, 2017 | 9 | 8 |
Treasury stock | (441) | (441) |
Additional paid-in capital | 369,246 | 359,347 |
Accumulated deficit | (267,383) | (246,207) |
Accumulated other comprehensive income (loss) | 402 | (598) |
Total stockholders’ equity | 101,833 | 112,109 |
Total liabilities and stockholders’ equity | $ 136,580 | $ 295,372 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
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) | 92,895,000 | 90,380,000 |
Common stock, shares outstanding (in shares) | 92,774,000 | 90,259,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Net revenue | $ 238,340 | $ 239,127 | $ 252,887 |
Cost of revenue | 164,693 | 163,709 | 165,069 |
Gross profit | 73,647 | 75,418 | 87,818 |
Operating expenses: | |||
Sales and marketing | 35,600 | 33,001 | 41,972 |
Research and development | 6,436 | 5,729 | 8,344 |
General and administrative | 47,288 | 53,087 | 52,995 |
Restructuring and other related costs | 209 | 7,308 | 0 |
Total operating expenses | 89,533 | 99,125 | 103,311 |
Loss from operations | (15,886) | (23,707) | (15,493) |
Interest and other expense, net | (6,591) | (9,886) | (8,704) |
Impairment loss on cost basis equity investment | 0 | 0 | (4,500) |
Gain on sale of cost basis equity investment | 0 | 2,100 | 0 |
Impairment loss on investment securities | (1,958) | 0 | 0 |
Loss before income taxes | (24,435) | (31,493) | (28,697) |
Provision for income tax (expense) benefit | (450) | 1,647 | (3,429) |
Net loss | $ (24,885) | $ (29,846) | $ (32,126) |
Net loss per common share: | |||
Basic and diluted (in dollars per share) | $ (0.27) | $ (0.33) | $ (0.37) |
Weighted-average common shares outstanding: | |||
Basic and diluted (in shares) | 91,636 | 89,234 | 86,318 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (24,885) | $ (29,846) | $ (32,126) |
Other comprehensive income (loss) | |||
Unrealized (loss) gain on short-term investments | (705) | (517) | 18 |
Reclassification adjustment for impairment loss included in net loss | 1,958 | 0 | 0 |
Net change in available for sale debt securities | 1,253 | (517) | 18 |
Foreign currency translation adjustments | (253) | 710 | (1,236) |
Other comprehensive income (loss) | 1,000 | 193 | (1,218) |
Comprehensive income (loss) | $ (23,885) | $ (29,653) | $ (33,344) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Shares/Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of standard adoption | $ 0 | $ 294 | $ (294) | |||
Stockholders' equity, adjusted balance | 147,975 | $ 8 | $ (441) | 332,216 | (184,235) | $ 427 |
Beginning Balance (in shares) at Dec. 31, 2015 | 86,893,000 | (121,000) | ||||
Beginning Balance at Dec. 31, 2015 | 147,975 | $ 8 | $ (441) | 331,922 | (183,941) | 427 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (32,126) | (32,126) | ||||
Other comprehensive loss | (1,218) | (1,218) | ||||
Stock-based compensation | 11,307 | 11,307 | ||||
Issuance of common stock, restricted stock units (in shares) | 1,240,000 | |||||
Issuance of common stock, restricted stock units | $ 0 | |||||
Share repurchases (in shares) | (2,300,000) | (2,263,000) | ||||
Share repurchases | $ (8,921) | (8,921) | ||||
Proceeds from the exercise of stock options and employee stock purchase plan (in shares) | 2,434,000 | |||||
Proceeds from the exercise of stock options and employee stock purchase plan | 10,866 | 10,866 | ||||
Net cash paid for payroll taxes on restricted stock unit releases | (947) | (947) | ||||
Ending Balance (in shares) at Dec. 31, 2016 | 88,304,000 | (121,000) | ||||
Ending Balance at Dec. 31, 2016 | 126,936 | $ 8 | $ (441) | 344,521 | (216,361) | (791) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (29,846) | (29,846) | ||||
Other comprehensive loss | 193 | 193 | ||||
Stock-based compensation | 14,539 | 14,539 | ||||
Issuance of common stock, restricted stock units (in shares) | 1,755,000 | |||||
Issuance of common stock, restricted stock units | $ 0 | |||||
Share repurchases (in shares) | 0 | |||||
Proceeds from the exercise of stock options and employee stock purchase plan (in shares) | 321,000 | |||||
Proceeds from the exercise of stock options and employee stock purchase plan | $ 1,062 | 1,062 | ||||
Net cash paid for payroll taxes on restricted stock unit releases | (775) | (775) | ||||
Ending Balance (in shares) at Dec. 31, 2017 | 90,380,000 | (121,000) | ||||
Ending Balance at Dec. 31, 2017 | 112,109 | $ 8 | $ (441) | 359,347 | (246,207) | (598) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of standard adoption | 3,709 | 3,709 | ||||
Stockholders' equity, adjusted balance | 115,818 | $ 8 | $ (441) | 359,347 | (242,498) | (598) |
Net loss | (24,885) | (24,885) | ||||
Other comprehensive loss | 1,000 | 1,000 | ||||
Stock-based compensation | 9,924 | 9,924 | ||||
Issuance of common stock, restricted stock units (in shares) | 2,242,000 | |||||
Issuance of common stock, restricted stock units | 1 | $ 1 | ||||
Proceeds from the exercise of stock options and employee stock purchase plan (in shares) | 273,000 | |||||
Proceeds from the exercise of stock options and employee stock purchase plan | 759 | 759 | ||||
Net cash paid for payroll taxes on restricted stock unit releases | (784) | (784) | ||||
Ending Balance (in shares) at Dec. 31, 2018 | 92,895,000 | (121,000) | ||||
Ending Balance at Dec. 31, 2018 | $ 101,833 | $ 9 | $ (441) | $ 369,246 | $ (267,383) | $ 402 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (24,885) | $ (29,846) | $ (32,126) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 16,495 | 22,588 | 16,052 |
Amortization of debt discount and issuance costs | 5,868 | 9,392 | 8,724 |
Amortization of contract acquisition costs | 1,770 | 0 | 0 |
Amortization of premium on short-term investments | (1,204) | (12) | 1,091 |
Deferred income taxes | 33 | (1,999) | 1,924 |
Stock-based compensation | 9,601 | 13,683 | 10,752 |
Restructuring and other related costs | 458 | 3,063 | 0 |
Impairment loss on cost basis equity investment | 0 | 0 | 4,500 |
Gain on sale of cost basis equity investment | 0 | (2,100) | 0 |
Impairment loss on investment securities | 1,958 | 0 | 0 |
Other | 74 | 184 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 1,724 | 9,060 | (7,156) |
Deferred revenue | 0 | (2,872) | (1,589) |
Prepaid expenses and other assets | (150) | 1,670 | (673) |
Contract acquisition costs | (1,085) | 0 | 0 |
Accounts payable | (2,406) | 2,487 | 872 |
Accrued compensation and benefits | (3,542) | (2,940) | (119) |
Accrued expenses | (3,730) | (1,734) | (49) |
Other liabilities | 2,738 | (827) | 2,249 |
Net cash provided by operating activities | 3,717 | 19,797 | 4,452 |
Cash flows from investing activities: | |||
Acquisition of property and equipment | (15,604) | (17,110) | (26,337) |
Proceeds from sale of cost basis equity investment | 0 | 2,100 | 0 |
Purchases of short-term investments | (480) | (56,626) | (102,130) |
Sales of short-term investments | 133,920 | 53,315 | 98,028 |
Maturities of short-term investments | 4,240 | 3,506 | 1,525 |
Net cash provided by (used in) investing activities | 122,076 | (14,815) | (28,914) |
Cash flows from financing activities: | |||
Repayment on capital lease obligations | (413) | (71) | (131) |
Repayment of convertible notes | (150,000) | 0 | 0 |
Debt issuance costs | (201) | 0 | 0 |
Proceeds from revolving line of credit | 32,000 | 0 | 0 |
Repayment of revolving line of credit | (32,000) | 0 | 0 |
Proceeds from issuance of common stock | 759 | 1,062 | 10,866 |
Payments related to minimum tax withholdings on restricted stock unit releases | (784) | (775) | (877) |
Repurchase of common stock | 0 | 0 | (8,921) |
Net cash (used in) provided by financing activities | (150,639) | 216 | 937 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (8) | (1,501) | (1,117) |
Net change in cash and cash equivalents and restricted cash | (24,854) | 3,697 | (24,642) |
Cash and cash equivalents and restricted cash, beginning of period | 52,633 | 48,936 | 73,578 |
Cash and cash equivalents and restricted cash, end of period | 27,779 | 52,633 | 48,936 |
Supplemental disclosure of non-cash activities: | |||
Cash paid for interest | 2,408 | 2,255 | 2,260 |
Income taxes paid, net | 394 | 1,400 | 1,544 |
Supplemental disclosure of non-cash activities: | |||
Acquisition of property and equipment accrued in accounts payable and accrued expenses | 506 | 108 | 98 |
Increase in contract acquisition costs and benefit to accumulated deficit related to adoption of ASC 606 | 3,346 | 0 | 0 |
Increase in prepaid expenses and other, other liabilities and benefit to accumulated deficit related to adoption of ASC 606 | $ 363 | $ 0 | $ 0 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company ServiceSource International, Inc. is a global leader in outsourced, performance-based customer success and revenue growth solutions. Through our people, processes and technology, we grow and retain revenue on behalf of our clients-some of the world’s leading business-to-business companies - in more than 45 languages. Our solutions help our clients strengthen their customer relationships, drive improved customer adoption, expansion and retention and minimize churn. Our technology platform and best-practice business processes combined with our highly-trained, client-focused revenue delivery professionals and data from 20 years of operating experience enable us to provide our clients greater value for our customer success services than attained by our clients' in-house customer success teams. “ServiceSource,” “the Company,” “we,” “us,” or “our”, as used herein, refer to ServiceSource International, Inc. and its wholly-owned subsidiaries, unless the context indicates otherwise. The Company’s pay-for-performance model allows its clients to pay for the services through either flat-rate or variable commissions based on the revenue generated by the Company on their behalf. Fixed-fee arrangements are typically used in quick deployments to address discrete target areas of our clients’ needs. The Company also earns revenue through its professional services teams, who assist clients with data optimization. The Company’s corporate headquarters is located in Denver, Colorado. The Company has additional U.S. offices in California and Tennessee, and international offices in Bulgaria, Ireland, Japan, Malaysia, Philippines, Singapore and the United Kingdom. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Basis of Consolidation The accompanying Consolidated Financial Statements include the accounts of ServiceSource International, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amount of net revenue and expenses during the reporting period. The Company’s significant accounting judgments and estimates include, but are not limited to: revenue recognition, the valuation and recognition of stock-based compensation, the recognition and measurement of current and deferred income tax assets and liabilities and uncertain tax positions, the provision for bad debts, impairment of goodwill and long-lived assets and impairment on investment securities. The Company bases its estimates and judgments on historical experience and on various assumptions that it believes are reasonable under the circumstances. However, future events are subject to change and estimates and judgments routinely require adjustment. Actual results and outcomes may differ from our estimates. Reclassifications Certain items on the Consolidated Balance Sheet as of December 31, 2017 , the Statement of Stockholders' Equity for the year ended December 31, 2017 and the Statement of Cash Flows for the years ended December 31, 2017 and 2016 have been reclassified to conform to the current year presentation. These reclassifications did not affect the Company's Consolidated Statements of Operations. Significant Risks and Uncertainties The Company is subject to certain risks and uncertainties that could have a material and adverse effect on its future financial position or results of operations. The Company’s clients are primarily high-tech companies and a downturn in these industries, changes in clients’ sales strategies, or widespread shift away from end customers purchasing maintenance and support contracts could have an adverse impact on the Company’s consolidated results of operations and financial condition. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company is also exposed to a variety of market risks, including the effects of changes in foreign currency exchange rates and interest rates. Cash is maintained in demand deposit accounts at U.S., European and Asian financial institutions that management believes are credit worthy. Deposits in these institutions may exceed the amount of insurance provided on these deposits. Accounts receivable are derived from services performed for clients located primarily in the U.S., Europe and Asia. The Company attempts to mitigate the credit risk in its trade receivables through its ongoing credit evaluation process and historical collection experience. The Company performs a periodic review for specific aging evaluation allowance for doubtful accounts based upon the expected collectability of its accounts receivable, which takes into consideration an analysis of historical bad debts, customers' timeliness on payment and other available information. Two customers represented 19% , and 14% of accounts receivable as of December 31, 2018 . Two customers represented 17% and 15% of accounts receivable as of December 31, 2017 . Fair Value of Financial Instruments The Company accounts for certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value guidance establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. An asset or liability’s level is based upon the lowest level of input that is significant to the fair value measurement. The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; Level 3: Inputs that are generally unobservable and typically reflect management's estimates or assumptions that market participants would use in pricing the asset or liability. The carrying amount of financial instruments including cash and cash equivalents, restricted cash recorded in other assets, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their carrying value due to their short-term maturities. See " Note 4 — Fair Value of Financial Instruments " for additional information on the convertible notes. Foreign Currency Translation and Remeasurement Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated to U.S. dollars at exchange rates at the balance sheet date. Net revenue and expenses are translated at monthly average exchange rates. The Company accumulates net translation adjustments in equity as a component of accumulated other comprehensive income (loss). For non-U.S. subsidiaries whose functional currency is the U.S. dollar, transactions that are denominated in foreign currencies are remeasured in U.S. dollars, and any resulting gains and losses are reported in "Interest and other expense, net" in the Consolidated Statements of Operations. For the years ended December 31, 2018 , 2017 and 2016 , we recorded foreign currency transaction losses of approximately $0.7 million , $1.1 million and $0.5 million , respectively. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at their carrying values net of an allowance for doubtful accounts, if applicable. The Company evaluates the ongoing collectability of its accounts receivable based on a number of factors such as the credit quality of its clients, the age of accounts receivable balances, collections experience, current economic conditions and other factors that may affect a client’s ability to pay. In circumstances where the Company is aware of a specific client’s inability to meet its financial obligations to the Company, a specific allowance for doubtful accounts is estimated and recorded, which reduces the recognized receivable to the estimated amount that management believes will ultimately be collected. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. As of December 31, 2018 , 2017 and 2016 the allowance for doubtful accounts was immaterial. For the year ended December 31, 2016 , the Company charged $0.4 million in expense offset by $0.5 million in recoveries to allowance for doubtful accounts. There was no expense or recoveries for the years ended December 31, 2018 and 2017 . Property and Equipment The Company records property and equipment at cost, less accumulated depreciation and amortization. Depreciation is recorded using the straight-line method over the estimated useful lives for each asset class. When assets are disposed, the cost and related accumulated depreciation and amortization are removed from their respective accounts and any gain or loss on sale or disposal is reported in "General and administrative" in the Consolidated Statements of Operations. Lease Asset Retirement Obligations The fair value of a liability for an asset retirement obligation (“ARO”) is recognized in the period in which it is incurred. The Company’s AROs associated with leasehold improvements at our international office locations, which, at the end of a lease, are contractually obligated to be removed. Our AROs were approximately $1.4 million and $1.0 million as of December 31, 2018 and 2017 , respectively. Accretion expense was insignificant for the years ended December 31, 2018 , 2017 and 2016 . Capitalized Internal-Use Software Expenditures related to software developed or obtained for internal use are capitalized and amortized over a period of three to seven years on a straight-line basis. The Company capitalizes direct external costs associated with developing or obtaining internal-use software. In addition, the Company also capitalizes certain payroll and payroll-related costs for employees or professional fees for consultants who are directly associated with the development of such applications. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred and are recorded in "Research and development" in the Consolidated Statements of Operations. Capitalized costs related to internal-use software under development are treated as construction-in-progress until the program, feature or functionality is ready for its intended use, at which time amortization commences. Goodwill Impairment Goodwill represents the excess of the purchase price over the estimated fair market value of net identifiable assets of acquired businesses. The Company evaluates goodwill for possible impairment at least annually or whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. This evaluation includes a preliminary assessment of qualitative factors to determine whether it is necessary to compare the fair value of the reporting unit with its carrying value. If there are indicators of impairment, the fair value of the reporting unit is compared to its carrying value. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference is recorded. No impairment was recorded for the years ended December 31, 2018 , 2017 and 2016 . The carrying value of goodwill for the years ended December 31, 2018 and 2017 was $6.3 million . Impairment of Long-Lived Assets Including Intangible Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate the carrying amount of the long-lived asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the long-lived asset is impaired, an impairment is recognized for the amount by which the carrying value of the asset exceeds its fair value. No impairment was recorded for the years ended December 31, 2018 , 2017 and 2016 . Acquired intangible assets are amortized over their useful lives on a straight-line basis which represents the pattern in which the Company derives benefit from the asset. Cost Basis Equity Investment In 2013, the Company made an equity investment in a private company for $4.5 million , which represented less than 5% of the outstanding equity of that company. Based on unfavorable growth trends and declining financial performance of this private company, the Company determined that its investment was fully impaired and recorded a $4.5 million impairment during the year ended December 31, 2016 . The impairment is included in "Impairment loss on cost basis equity investment" in the Consolidated Statements of Operations. During 2017 , the Company sold this investment for $2.1 million in cash and recorded the proceeds as a gain in "Gain on sale of cost basis equity investment" in our Consolidated Statements of Operations. Operating Leases The Company’s operating lease agreements for office facilities include provisions for certain rent holidays, tenant incentives and escalations in the base price of the rent payment. The Company records rent holidays and rent escalations on a straight-line basis over the lease term and records the difference between expense and cash payments as deferred rent. Tenant incentives are recorded as deferred rent and amortized on a straight-line basis over the lease term. Deferred rent is included in "Other current liabilities" and "Other long-term liabilities" in the Consolidated Balance Sheets. Deferred Debt Issuance Costs Debt consists of convertible notes and a revolving line of credit. Discounts and premiums to the principal amounts are included in the carrying value of debt and amortized to “Interest and other expense, net” over the remaining life of the underlying debt. As of December 31, 2017 , the unamortized premium balance was approximately $5.3 million . For the years ended December 31, 2018 , 2017 and 2016 , the amortization of all premiums/discounts resulted in a reduction of interest expense of approximately $5.3 million , $8.6 million and $8.0 million , respectively. Debt issuance costs related to a recognized liability are presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. Debt issuance costs related to line of credit arrangements are presented as an asset regardless of whether there are any outstanding borrowings on the line of credit arrangement. Deferred loan costs include fees and costs incurred to obtain long-term financing. These fees and costs are amortized to “Interest and other expense, net” over the terms of the related loans. Unamortized debt issuance costs were approximately $0.2 million and $0.5 million as of December 31, 2018 and 2017 , respectively. Our interest expense for the years ended December 31, 2018 , 2017 and 2016 includes approximately $0.5 million , $0.8 million and $0.7 million related to the amortization of loan costs, respectively. Comprehensive Loss We report comprehensive loss in our Consolidated Statements of Comprehensive Loss. Amounts reported in “Accumulated other comprehensive income (loss)” consist of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses on available-for-sale securities. Revenue Recognition The Company provides a comprehensive suite of selling and professional services to its clients. Selling services involves three categories of selling motions: recurring revenue management, customer success activities and inside sales efforts. Recurring revenue management includes hardware and software maintenance contract renewals, subscription renewals and extensions, asset and contract opportunity management, sales enablement and quoting solutions. Customer success activities include onboarding, product adoption, health checks, account management and certain service support. Inside sales efforts include lead generation, qualification and conversion, cross-sell and upsell activities, technology refresh, warranty conversion, win-backs and recaptures, cloud migration and client and asset management. Professional services involves providing data integration at scale with our systems and processes, combined with client data enhancement, enablement and optimization. The Company derives all of its revenue from contracts with clients. Revenue is measured based on the consideration specified in a contract. The Company’s contracts generally contain two distinct performance obligations that are sold on a variable and/or fixed consideration basis. These two distinct performance obligations are identified as selling services and professional services. The length of a selling services contract is generally 2-3 years, while professional services performance obligations are generally fulfilled within 90 days. The Company generally invoices its clients for services on a monthly or quarterly basis with 30-day payment terms. The Company recognizes revenue when it satisfies the performance obligations identified in the contract, which is achieved through the transfer of control of the services to the client. The Company accounts for individual services within a single contract separately if they are distinct. A service is distinct if it is separately identifiable from other services in the contract and if a client can benefit from the service on its own or with other resources that are readily available to the client. Determining whether these services are considered distinct performance obligations and qualify as a series of distinct performance obligations that represent a single performance obligation requires significant judgment. The total contract consideration, or transaction price, is allocated between the separate services identified in the contract based on their stand-alone selling price ("SSP"). SSP is determined based on a cost plus margin analysis for selling services and a standard hourly rate card for professional services. For professional services that are contractually priced differently from SSP, the Company estimates the SSP using a standard hourly rate card and allocates a portion of the total contract consideration to reflect professional services revenue at SSP. The Company’s performance obligations are satisfied over time and revenue is recognized based on monthly or quarterly time increments and the variable volume of closed bookings during the period at the contractual commission rates for selling services, or proportional performance during the period at the SSP for professional services. Due to the continuous nature of providing services to our clients, judgment is required in determining when control of the services is transferred to the client. Because the client simultaneously receives and consumes the benefit of the Company’s selling and professional services as provided, the time increment output method depicts the measure of progress in transferring control of the services to the client. While multiple selling motions in a contract are performed at various times and patterns throughout the month or quarter and the number of closed bookings vary in any given period, each time increment of a service activity is substantially the same and has the same pattern of transfer to the client, and therefore, represents a series of distinct performance obligations that form a single performance obligation. As a result, the Company allocates all variable consideration in a contract to the selling services performance obligation in accordance with the variable consideration allocation exception provisions in ASC 606 (less amounts for which it is probable a significant reversal of revenue will occur when the uncertainties related to the variability are resolved) and applies a single measure of progress to record revenue in the period based on when the output of the variable number of closed bookings occurs or when the variable performance metric is achieved. Judgment is required to estimate the amount of variable consideration to include when estimating the total contract consideration and how to allocate the consideration if one of the distinct performance obligations is not sold at SSP. In addition, significant judgment is required to determine if the variable consideration should be constrained, and to what extent, until the risk of a significant revenue reversal is not probable. The Company also applies the optional disclosure exemptions related to variable consideration and the requirement to disclose the remaining transaction price allocated to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. Contract Acquisition Costs To obtain contracts with clients, the Company pays its sales team commissions based in part on the estimated value of the contract. Because these sales commissions are incurred and paid upon contract execution and would not have been incurred or payable otherwise, they are considered incremental costs to acquire the contract; and if expected to be recoverable, are capitalized as contract acquisition costs in the period the contract is executed. Capitalized sales commissions are amortized to sales and marketing expense based on the pattern of transfer of services to which the asset relates over the estimated contract term, generally 2 - 3 years for a new client or 5 years for long-standing client relationships. The contract acquisition costs asset is evaluated for recoverability and impairment at each reporting period through the amortization period. The Company does not capitalize incremental acquisition costs for contracts if the amortization period of the asset is one year or less. Significant Estimates and Judgments Significant estimates and judgments for revenue recognition and contract acquisition cost capitalization include: identifying and determining distinct performance obligations in contracts with clients, determining the timing of the satisfaction of performance obligations, estimating the timing and amount of variable consideration in a contract and assessing whether it should be constrained in determining the total contract consideration, determining SSP for each performance obligations and the methodology to allocate the total contract consideration to the distinct performance obligations. Our revenue contracts often include promises to transfer services involving multiple selling motions to a client. Determining whether those services are considered distinct performance obligations and qualify as a series of distinct performance obligations that represent a single performance obligation requires significant judgment. Also, due to the continuous nature of providing services to our clients, judgment is required in determining when control of the services is transferred to the client. A significant portion of our contracts is based on a pay-for-performance model that provides the Company with commissions and revenue based on a volume of closed bookings each time period and variable consideration if certain performance targets are achieved during a given period of time (such as exceeding quarterly closure rate thresholds or achieving absolute dollar volume sales targets). Significant judgment is required to determine if this type of variable consideration should be constrained, and to what extent, until the risk of a significant revenue reversal is not probable. We also enter into contracts with multiple performance obligations that incorporate fixed consideration, pay-for-performance commissions and variable bonus commissions. Judgment is required to estimate the amount of variable consideration to include when estimating the total contract consideration and how to allocate the consideration if one of the distinct performance obligations is not sold at SSP. Impact of Changes in Accounting Policies The Company adopted the Accounting Standards Codification Topic 606, Revenue from contracts with customers ("ASC 606") as of January 1, 2018 using the modified retrospective approach by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening accumulated deficit balance as of January 1, 2018. As a result, the comparative information throughout these financial statements has not been adjusted and continues to be reported under legacy GAAP as disclosed in our 2017 annual report on Form 10-K. As described above, the Company changed its accounting policy for revenue recognition and certain sales commissions. The qualitative and the quantitative impact of adopting ASC 606 revenue recognition is presented below in "New Accounting Standards Adopted." Selling Services The Company historically recognized all performance based fees in the period when the specific performance criteria was achieved. Under ASC 606, in certain circumstances the Company estimates the variable fees for which it is probable that a significant reversal will not occur and recognizes these estimated variable fees over the estimated contract life. For certain contracts, this could result in the recognition of the performance-based fees sooner than under the Accounting Standards Codification Topic 605 ("ASC 605" or "legacy GAAP"). Professional Services Prior to the adoption of ASC 606, the Company recognized revenue from professional services at the best estimated selling price upon client acceptance at the end of the implementation or data integration event due to the short-term nature of the services, generally 90 days from the start of the services. Under ASC 606, the Company recognizes revenue at SSP over time as control of the service is transferred to the client, resulting in the recognition of professional services fees sooner than under ASC 605. Sales Commissions The Company previously recognized a portion of certain sales commissions as sales and marketing expense when it was earned by the employee upon obtaining and executing a contract. Under ASC 606, the Company capitalizes this portion of certain sales commissions as contract acquisition costs and amortizes the amount ratably over the contract term for new clients or the estimated life of the client for long-standing client relationships. As a result, sales and marketing expense is recognized later and over a longer period of time than under ASC 605. Advertising Costs Advertising costs are expensed as incurred and are reported in "Sales and marketing" in the Consolidated Statements of Operations. Advertising costs for the years ended December 31, 2018 , 2017 and 2016 were approximately $0.1 million , $0.2 million and $0.1 million , respectively. Income Taxes The Company accounts for income taxes using an asset and liability method, which requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our taxable subsidiaries’ assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. The Company files U.S. federal and state and foreign income tax returns in jurisdictions with varying statutes of limitations. In the normal course of business the Company is subject to examination by taxing authorities throughout the world. These audits include questioning the timing and amount of deductions, the allocation of income among various tax jurisdictions and compliance with federal, state, local and foreign tax laws. The Company accounts for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. The Company records an income tax liability, if any, for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on our tax returns. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision. Stock-Based Compensation The Company issues share-based awards to employees and directors. Awards are measured at fair value on the grant date and amortized to compensation expense over the service period during which the awards fully vest. Such expense is included in our Consolidated Statements of Operations, see " Note 10 — Stockholders' Equity " for additional information. Forfeitures are recognized as incurred. Options issued are valued using the Black-Scholes option-pricing model, which relies on assumptions we make related to the expected term of the options, volatility, dividend yield and risk-free interest rate. Net Income (Loss) Per Common Share Basic net income (loss) per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, shares to be purchased under the Company’s employee stock purchase plan and unvested restricted stock units (“RSUs”). The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. Potential shares of common stock that are not included in the determination of diluted net loss per share because they are anti-dilutive for the periods presented consist of stock options, non-vested restricted stock and shares to be purchased under our 2011 Employee Stock Purchase Plan ("ESPP"). The Company excluded from diluted earnings per share the weighted-average common share equivalents related to 6.7 million , 7.1 million and 7.7 million shares for the years ended December 31, 2018 , 2017 and 2016 , respectively, because their effect would have been anti-dilutive. New Accounting Standards Issued but not yet Adopted Comprehensive Income In February 2018, the Financial Accounting Standard Board ("FASB") issued an Accounting Standard Update ("ASU") that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The guidance should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The adoption of this standard will not have a material impact on the Company. Leases In February 2016, the FASB issued an ASU that modifies existing accounting standards for lease accounting. The new standard requires a lessee to record a lease asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. Leases in which the Company is the lessee will generally be accounted for as operating leases and we will record a lease asset and a lease liability. This standard will be effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018 and will be applied using a modified retrospective approach with optional practical expedients. Early adoption of the standard is permitted. The Company will adopt the standard January 1, 2019 and expects to elect the package of practical expedients, accounting for leases with contractual terms less than 12 months as short-term leases and the transition relief option to apply legacy GAAP to periods prior to the standard’s effective date. The adoption of the standard will result in an increase in total assets and total liabilities of approximately 20% and 95% , respectively, to our Consolidated Balance Sheet as of January 1, 2019 and will not have a material impact to our Consolidated Statements of Operations. New Accounting Standards Adopted Restricted Cash In November 2016, the FASB issued an ASU that requires companies to combine restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning and end of period total amounts on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard effective January 1, 2018 and the effects of this standard were applied retrospectively to all prior periods presented wit |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of the following: Gross Carrying Amount Accumulated Amortization Net (in thousands) Balance as of December 31, 2016 $ 6,050 $ (4,452 ) $ 1,598 Balance as of December 31, 2017 $ 6,050 $ (5,965 ) $ 85 As of December 31, 2018 , the intangible assets were written off and amortization expense for the year ended December 31, 2018 was approximately $0.1 million . Amortization expense was approximately $1.5 million for each of the years ended December 31, 2017 and 2016 , respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4 — Fair Value of Financial Instruments Cash and Cash Equivalents and Short-term Investments Cash equivalents consist of highly liquid investments with original maturities of three months or less at the time of purchase. Short-term investments consist of readily marketable debt securities with a remaining maturity of more-than three months from the time of purchase. The Company classifies 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 (loss) and included as a separate component of stockholders’ equity. Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method. The Company recognized realized gains of $0.03 million and losses of $0.2 million from the sale of available-for-sale-securities for the year ended December 31, 2018 . The Company recognized realized gains of $0.1 million and losses of $0.1 million from the sale of available-for-sale-securities for the year ended December 31, 2017 . Gains and losses on available-for-sale securities are recorded in "Other income (expense), net" in the Consolidated Statements of Operations. There were no transfers between levels during the years ended December 31, 2018 and 2017 . The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and the Company’s intent to sell, or whether it is more-likely-than-not it will be required to sell the investment before recovery of the investment’s cost basis. The Company liquidated its investment securities during 2018 to repay the $150.0 million convertible notes that matured August 1, 2018. Based on our decision to sell the investment securities, we determined an other-than-temporary impairment occurred and a $2.0 million impairment loss was recorded in our Consolidated Statement of Operations for the year ended December 31, 2018 . The following tables present the Company's cash and cash equivalents and short-term investments by significant investment category measured at fair value on a recurring basis: As of December 31, 2018 : Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) Level 1: Cash $ 10,658 $ — $ — $ 10,658 Money market mutual funds 15,877 — — 15,877 Cash and cash equivalents $ 26,535 $ — $ — $ 26,535 As of December 31, 2017 : Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) Level 1: Cash $ 48,712 $ — $ — $ 48,712 Money market mutual funds 2,677 — — 2,677 Cash and cash equivalents 51,389 — — 51,389 Level 2: Short-term investments: Corporate bonds 55,763 1 (346 ) 55,418 U.S. agency securities 34,640 — (410 ) 34,230 Asset-backed securities 21,739 — (127 ) 21,612 U.S. Treasury securities 26,292 — (371 ) 25,921 Total short-term investments 138,434 1 (1,254 ) 137,181 Cash and cash equivalents and short-term investments $ 189,823 $ 1 $ (1,254 ) $ 188,570 The Company had restricted cash of $1.2 million in "Other assets" in the Consolidated Balance Sheets as of December 31, 2018 and 2017 . The restricted cash is classified within Level 1. The convertible notes issued by the Company in August 2013 are included in the Consolidated Balance Sheet as of December 31, 2017 at their original issuance value, net of unamortized discount and issuance costs, and are not marked to market each period. The fair value of the convertible notes was approximately $145.9 million as of December 31, 2017 . The fair value of the convertible notes was determined using quoted market prices for similar securities and are considered Level 2 inputs due to limited trading activity. The Company did not have any other financial instruments or debt measured at fair value as of December 31, 2018 and 2017 . |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net were comprised of the following: December 31, Depreciable Life 2018 2017 (in thousands) Computers and equipment 2 - 5 years $ 20,213 $ 22,186 Software (1) 3 - 7 years 58,962 72,147 Furniture and fixtures 7 years 9,674 11,606 Leasehold improvements Lesser of estimated useful life or life of lease 20,237 19,574 Property and equipment 109,086 125,513 Less: accumulated depreciation and amortization (72,493 ) (91,394 ) Property and equipment, net $ 36,593 $ 34,119 (1) Includes capitalized internally developed software. Depreciation and amortization expense related to property and equipment, which includes amortization expense for internally developed software and capital leases, was $16.4 million , $21.1 million and $14.6 million , respectively, during the years ended December 31, 2018 , 2017 and 2016 . The Company capitalized costs of approximately $11.1 million , $12.6 million and $13.1 million during the years ended December 31, 2018 , 2017 and 2016 , respectively, related to internally developed software. As of December 31, 2018 and 2017 , the carrying value of capitalized costs related to internally developed software, net of accumulated amortization, was $18.9 million and $16.5 million , respectively. Amortization expense related to internally developed software was $8.6 million , $13.3 million and $7.6 million during the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Other Current and Long-Term Lia
Other Current and Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Other Current and Long-Term Liabilities | Other Current and Long-Term Liabilities Other current liabilities were comprised of the following: December 31, 2018 (in thousands) Legal reserve $ 3,750 Capital lease obligations 954 Contract liability 873 Deferred rent 735 ESPP withholdings 384 Other liabilities 198 Total $ 6,894 Other long-term liabilities were comprised of the following: December 31, 2018 (in thousands) Deferred rent $ 2,573 Capital lease obligations 1,510 Asset retirement obligations 1,368 Accrued restructuring costs 716 Deferred tax liability 268 Other accrued costs 105 Total $ 6,540 |
Revenues, Contract Asset and Li
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs | Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs The following tables present the disaggregation of revenue from contracts with our clients: Revenue by Performance Obligation For the Year Ended (in thousands) Professional services $ 3,949 Selling services 234,391 Total revenue $ 238,340 Revenue by Geography For the Year Ended (in thousands) APJ $ 34,593 EMEA 60,600 NALA 143,147 Total revenue $ 238,340 Revenue by Contract Pricing For the Year Ended (in thousands) Variable consideration $ 161,129 Fixed consideration 77,211 Total revenue $ 238,340 Contract Balances Once the Company obtains a client contract, the timing of satisfying performance obligations and the receipt of client consideration can be different and will give rise to contract assets and contract liabilities. Contract assets relate to the Company’s conditional rights to consideration for services provided but not yet billable at the reporting date. Accounts receivable balances reflected in the Consolidated Balance Sheet as of December 31, 2018 represent the Company’s unconditional rights to consideration for services provided. Contract asset amounts are transferred to accounts receivables when the rights become unconditional, typically in the same period control of services is transferred to the client and the amount is contractually billable. Contract liabilities primarily relate to the advance consideration received from clients for fixed consideration contracts where transfer of control of the services has not yet occurred. Contract liability balances generally convert to revenue upon either the satisfaction of professional services obligations or when services under fixed consideration contracts are transferred to the client, typically within six months of being recorded. The contract asset and liability balances as of December 31, 2018 totaled $0.2 million and $0.9 million , respectively. These contract balances are reflected in "Prepaid expenses and other", "Other assets" and "Other current liabilities" in the Consolidated Balance Sheet as of December 31, 2018 . Transaction Price Allocated to Remaining Performance Obligations The Company applies the optional disclosure exemption related to variable consideration and the requirement to disclose the remaining transaction price allocated to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. However, for contracts structured with fixed consideration, this optional disclosure is not available. The Company typically invoices selling services fixed consideration in monthly or quarterly installments over the contract term, which is typically 12 months or less. Contracts with fixed consideration are generally with long-standing client relationships and typically renew annually. Assuming none of the Company’s current contracts with fixed consideration are renewed, we estimate receiving approximately $59.5 million in future selling services fixed consideration as of December 31, 2018 . Professional services revenues from fixed consideration are based on proportional performance which is typically concluded within 90 days of contract execution. The Company typically bills professional services upfront upon obtaining a client contract. As of December 31, 2018 , we estimate $0.3 million in professional services fixed consideration remaining to be recognized through 2019 . Contract Acquisition Costs Certain commissions paid to the Company's sales team upon obtaining a client contract are incremental and recoverable, and capitalized as contract acquisition costs. Under the transition guidance, the Company recorded a $3.3 million contract acquisition asset and corresponding offset to the opening accumulated deficit balance related to previously expensed sales commissions. The Company expensed $1.5 million of the $3.3 million asset in 2018 and will expense the remainder of the asset over the next five years as follows: $0.9 million in 2019 , $0.6 million in 2020 , and $0.3 million in 2021 and beyond. During the year ended December 31, 2018 , the Company capitalized an additional $1.1 million of sales commissions as contract acquisition costs related to contracts obtained during the period. The Company recorded $0.2 million of amortization for the year ended December 31, 2018 related to amounts capitalized in 2018 . The weighted-average remaining amortization period related to total capitalized costs was approximately 2.2 years. The Company's impairment recognized on the contract costs was insignificant for the year ended December 31, 2018 . Contract acquisition costs amortization is included in "Sales and marketing" in the Consolidated Statements of Operations. Applying the practical expedient for amortization periods one year or less, the Company recognizes any incremental costs of obtaining contracts as expense when the cost is incurred. These costs are included in "Sales and marketing" in the Consolidated Statements of Operations. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 — 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 bore interest at a rate of 1.50% per year payable semi-annually in arrears on February 1 and August 1, beginning February 1, 2014. On August 1, 2018, the Company paid in full the $150.0 million Notes using proceeds from its short-term investments and operations. Revolving Line of Credit During July 2018 , the Company entered into a $40.0 million senior secured revolving line of credit (the “Revolver”) that allows us to borrow against our domestic receivables as defined in the credit agreement. The Revolver matures July 2021 and bears interest at a variable rate per annum based on the greater of the prime rate, the Federal Funds rate plus 0.50% or the one-month LIBOR rate plus 1.00% , plus, in each case, a margin of 1.00% for base rate borrowings or one-month LIBOR plus 2.00% for Eurodollar borrowings. As of December 31, 2018 , the Company did not have any borrowings outstanding on the Revolver and therefore have no future obligations. The obligations under the credit agreement are secured by substantially all assets of the borrowers and certain of their subsidiaries, including pledges of equity in certain of the Company’s subsidiaries. The Revolver has covenants with which the Company is in compliance as of December 31, 2018 . Interest Expense For the years ended December 31, 2018 , 2017 and 2016 interest expense was approximately $7.4 million , $11.7 million and $11.0 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 — Commitments and Contingencies Operating Leases The Company leases its office space and certain equipment under non-cancelable operating lease agreements with various expiration dates through November 2023 . Rent expense for the years ended December 31, 2018 , 2017 and 2016 was approximately $12.1 million , $10.6 million and $11.3 million , respectively. Rental income for the year ended December 31, 2018 was approximately $1.6 million . The Company recognizes rent expense on a straight-line basis over the lease period and accrues for rent expense incurred but not paid. The Company entered into various leases during the year ended December 31, 2018 as follows: Location Execution Date San Francisco sublease January 2018 San Francisco April 2018 Philippines July 2018 Bulgaria October 2018 Capital Leases The Company has capital lease agreements collateralized by the underlying property and equipment that expire through 2021. As of December 31, 2018 and December 31, 2017 , the Company had capital leases totaling $2.5 million and $0.1 million , respectively, reflected in "Other current liabilities" and "Other long-term liabilities" in the Consolidated Balance Sheets. The accumulated depreciation related to assets under capital lease as of December 31, 2018 and December 31, 2017 was $1.0 million and $0.4 million , respectively. During 2018 , the Company entered into three separate contracts to finance software licenses and IT equipment. Future minimum payments under non-cancelable operating leases, non-cancelable service contract commitments, capital leases, and rental income under a non-cancelable operating sublease as of December 31, 2018 were as follows: Fiscal Year Operating Leases Operating Sublease Other Commitments (1) Capital Leases (in thousands) 2019 $ 10,511 $ 1,875 $ 7,869 $ 954 2020 9,581 1,932 5,188 945 2021 9,047 1,989 542 565 2022 5,997 1,878 15 — 2023 982 — — — Total $ 36,118 $ 7,674 $ 13,614 $ 2,464 (1) During January 2019 a five year purchase commitment for additional expenditures of $26.1 million was executed. Letter of Credit In connection with one of our leased facilities, the Company is required to maintain a $1.2 million letter of credit. The letter of credit is secured by $1.2 million of cash in a money market account, which is classified as restricted cash in "Other assets" in our Consolidated Balance Sheets. Litigation The Company is subject to various legal proceedings and claims arising in the ordinary course of our business, including the cases discussed below. 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 our 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. As of December 31, 2018 and 2017 , the Company accrued a $3.8 million and $1.5 million , respectively, reserve relating to our potential liability for currently pending disputes, reflected in "Other current liabilities" in the Consolidated Balance Sheets. On August 23, 2016, the United States District Court for the Middle District of Tennessee granted conditional class certification in a lawsuit originally filed on September 21, 2015 by three former senior sales representatives. The lawsuit, Sarah Patton, et al v. ServiceSource Delaware, Inc., asserts a claim under the Fair Labor Standards Act alleging that certain non-exempt employees in our Nashville location were not paid for all hours worked and were not properly paid for overtime hours worked. The complaint also asserts claims under Tennessee state law for breach of contract and unjust enrichment; and, on September 28, 2018, the plaintiffs filed a motion to certify the state law breach of contract and unjust enrichment claims as a class action. A settlement of all claims was reached at mediation, and the motion for required court approval of the settlement was filed on January 24, 2019. The Company anticipates Court approval of the settlement and conclusion of the lawsuit in the coming months. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Note 10 — Stockholders' Equity Share Repurchase Program In August 2015, our Board of Directors authorized a stock repurchase program (the "Program") to repurchase up to $30.0 million of our common stock. During the year ended December 31, 2016 , the Company repurchased 2.3 million shares of common stock at a weighted-average price of $3.94 per share for an aggregate purchase price of $8.9 million . The Program expired August 2017 and no shares were repurchased under the Program during the year ended December 31, 2017 . Equity Plans The Company maintains the 2011 Equity Incentive Plan (the “2011 Plan”). The Company’s Board of Directors, by delegation to its compensation committee, administers the 2011 Plan and has authority to determine the directors, officers, employees and consultants to whom options, restricted stock units or restricted stock awards may be granted, the option price or restricted stock purchase price, the timing of when each share is exercisable and the duration of the exercise period and the nature of any restrictions or vesting periods applicable to an option or restricted stock grant At the end of each fiscal year, the share reserve under the 2011 Plan has the option to increase to the lessor of an amount equal to 4% of the outstanding shares as of the end of that fiscal year, 3.8 million shares or a lesser number of shares determined by the Company’s Board of Directors. As of December 31, 2018 , there were approximately 11.9 million shares available for grant under the 2011 Plan. Stock options are recorded at fair value on the date of grant date using the Black-Scholes option-pricing model and generally vest ratably over a four -year period. Vested options may be exercised up to ten years from the grant date, as defined in the 2011 Plan. Vested but unexercised options expire 90 days after termination of employment with the Company. Stock-based compensation expense is amortized on a straight-line basis over the service period during which the right to exercise such options fully vests. Restricted stock units are recorded at fair value on the date of grant and amortized on a straight-line basis over the service period during which the stock vests. Restricted stock units generally vest ratably over four years with vesting contingent upon employment of the Company. 2018 PSU Awards During March 2018, the Company granted performance-based restricted stock unit awards under the 2011 Plan to certain key executives (the “ 2018 PSU Awards”). For each 2018 PSU Award, a number of restricted stock units became eligible to vest based on the levels of achievement of certain performance-based conditions, and those restricted stock units that became eligible to vest will vest 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date, except as otherwise provided under certain termination and change-in-control provisions in each award agreement. The aggregate target number of restricted stock units subject to the 2018 PSU Awards was 1.0 million , with an aggregate grant date fair value of $3.9 million . The performance-based conditions are based upon the Company’s revenue and adjusted EBITDA performance in 2018 against the target goals for such metrics under the Company’s 2018 corporate incentive plan (in each case, “Performance Achievement”), which will each be determined on the date the Company files its annual report on Form 10-K for the year ended December 31, 2018 . The target number of restricted stock units for each 2018 PSU Award will be divided equally between the two performance metrics. For each performance metric, the number of restricted stock units that become eligible to vest will be: (i) if the applicable Performance Achievement is less than 95.10% of the target revenue goal or less than 70.59% of the target EBITDA goal, no restricted stock units for such performance metric, (ii) if the applicable Performance Achievement is equal to 95.10% of the target revenue goal or 70.95% of the target EBITDA goal, 50% of the target number of restricted stock units for such performance metric, (iii) if the applicable Performance Achievement is equal to 100% of the target revenue and EBITDA goals, 100% of the target number of restricted stock units for such performance metric, or (iv) if the applicable Performance Achievement is at least 103.40% of the target revenue goal or 163.03% of the target EBITDA goal, 150% of the target number of restricted stock units for such performance metric. For each performance metric, if the applicable Performance Achievement falls between any of the thresholds (ii), (iii), and (iv) specified in the previous sentence, the number of restricted stock units that become eligible to vest for such performance metric will be determined via linear interpolation. 2017 PSU Awards During the second quarter of 2017 , the Company granted performance-based restricted stock unit awards under the 2011 Plan to certain key executives (the “ 2017 PSU Awards”). For each 2017 PSU Awards contain similar performance and vesting conditions as the 2018 PSU Awards. The aggregate target number of restricted stock units subject to the 2017 PSU Awards was 1.0 million , with an aggregate grant date fair value of $3.7 million . Upon the filing of the Company’s 2017 form 10-K on March 3, 2018, an additional 0.1 million shares with a grant date fair value of $0.2 million became eligible to vest under the 2017 PSU Awards. The 2017 PSU Awards are expensed over the two-year vesting term using the accelerated attribution method. 2016 PSU Awards During the third quarter of 2016, the Company granted performance-based restricted stock unit awards under the 2011 Plan to certain key executives (the “2016 PSU Awards”). The 2016 PSU Awards contain similar performance and vesting conditions as the 2017 PSU Awards. The aggregate target number of restricted stock units subject to the 2016 PSU Awards was 1.0 million with an aggregate grant date fair value of $5.1 million . Upon the filing of the Company’s 2016 form 10-K on March 6, 2017, an additional 0.2 million shares with a grant date fair value of $1.2 million became eligible to vest under the 2016 PSU Awards. The 2016 PSU Awards are expensed over the two-year vesting term using the accelerated attribution method. Fair Value of Stock Options and Restricted Units The estimated fair value of stock options and restricted stock units granted during the years ended December 31, 2018 , 2017 and 2016 , was approximately $17.4 million , $11.5 million and $13.3 million , respectively. The fair value of each grant of options during 2018 , 2017 and 2016 was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine. Expected Term - The expected term represents the period that the Company’s share-based awards are expected to be outstanding. The Company calculates the expected term based on the average of the weighted-average vesting term and contractual term. Expected Volatility - The expected volatility is based on the historical stock volatility of the Company's own common shares. Risk-Free Interest Rate - The risk-free interest rate is based on the implied yield on U.S. Treasury zero-coupon issues for each option grant date with maturities approximately equal to the option’s contractual term. Expected Dividend Yield - The Company has not paid dividends on its common shares nor does it expect to pay dividends in the foreseeable future. The weighted-average Black-Scholes option-pricing model assumptions were as follows: For the Year Ended December 31, 2018 2017 2016 Expected term (in years) 5.0 5.0 5.0 Expected volatility 58 % 59 % 58 % Risk-free interest rate 2.70 % 1.87 % 1.23 % Expected dividend yield 0.00 % 0.00 % 0.00 % Employee Stock Purchase Plan The Company’s 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 six -month offering period. The Company estimates the fair value of purchase rights under the ESPP using the Black-Scholes option-pricing model and the straight-line attribution approach. The following weighted-average assumptions were as follows: For the Year Ended December 31, 2018 2017 2016 Expected term (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Expected volatility 39% - 55% 29% - 66% 38% - 52% Risk-free interest rate 1.79% - 2.37% 0.65% - 1.21% 0.42% - 0.56% Expected dividend yield 0.00 % 0.00 % 0.00 % The expected term represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate the Company uses in the Black-Scholes option valuation model is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model. At the end of each fiscal year, the share reserve for ESPP has the option to increase to the lesser of an amount equal to one percent of the outstanding shares as of the end of that fiscal year, 1.5 million shares or an amount determined by the Company’s Board of Directors. As of December 31, 2018 , 2.4 million shares had been issued under the ESPP and 4.3 million shares were available for future issuance. Stock Awards Issued to Employees The following table presents total options outstanding, granted, exercised, expired or forfeited, as well as total options exercisable: Shares Weighted-Average Option Price Per Share Weighted-Average Fair Value of Options Granted During the Year Weighted-Average Remaining Contractual Life (Years) Intrinsic Value (in thousands) (in thousands) Issued and outstanding as of December 31, 2015 10,616 $ 4.79 Granted 709 $ 4.11 $ 2.05 Options exercised (2,111) $ 4.62 $ 1,455 Expired and/or Forfeited (1,719) $ 5.43 Issued and outstanding as of December 31, 2016 7,495 $ 4.63 Granted 173 $ 3.63 $ 1.86 Options exercised (14) $ 4.86 $ 8 Expired and/or Forfeited (1,143) $ 5.31 Issued and outstanding as of December 31, 2017 6,511 $ 4.48 Granted 2,652 $ 1.33 $ 0.68 Options exercised (31 ) $ 3.21 $ 32 Expired and/or Forfeited (1,616 ) $ 4.66 Issued and outstanding as of December 31, 2018 7,516 $ 3.34 4.78 $ — Options exercisable as of December 31, 2018 4,645 $ 4.44 1.73 $ — The total estimated fair value of options vested during the years ended December 31, 2018 , 2017 , and 2016 was $1.8 million , $2.5 million and $3.7 million , respectively. The following table summarizes additional information concerning our restricted stock units and performance-based restricted stock units awards: Units Weighted-Average Grant Date Fair Value (in thousands) Unvested as of December 31, 2017 5,027 $ 3.98 Granted 4,920 $ 3.25 Vested (1) (2,528) $ 4.19 Forfeited (1,750) $ 3.87 Unvested as of December 31, 2018 5,669 $ 3.29 (1) 2,295 shares of common stock were issued for restricted stock units vested, 53 shares were canceled and returned and the remaining 233 shares were withheld for taxes. The total estimated fair value of restricted stock units and performance-based restricted stock unit awards vested during the years ended December 31, 2018 , 2017 and 2016 was $8.6 million , $7.3 million and $6.2 million . The following table presents stock-based compensation expense as allocated within the Company’s Consolidated Statements of Operations: For the Year Ended December 31, 2018 2017 2016 (in thousands) Cost of revenue $ 1,056 $ 1,335 $ 1,484 Sales and marketing 3,131 3,774 3,004 Research and development 180 149 586 General and administrative 5,234 8,425 5,678 Restructuring and other related costs — 352 — Total stock-based compensation $ 9,601 $ 14,035 $ 10,752 The above table does not include approximately $0.3 million , $0.5 million and $0.6 million of capitalized stock-based compensation related to internal-use software for the years ended December 31, 2018 , 2017 and 2016 , respectively. As of December 31, 2018 , there was approximately $16.1 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the 2011 Plan, which is expected to be recognized over a weighted-average period of 2.60 years. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company maintains a 401(k) defined contribution plan that covers eligible employees. Employer matching contributions, which may be discontinued at the Company’s discretion, were approximately $1.5 million , $1.5 million and $1.7 million , during the years ended 2018 , 2017 and 2016 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Loss from continuing operations before provision for income taxes for the Company’s domestic and international operations was as follows: For the Year Ended December 31, 2018 2017 2016 (in thousands) U.S. $ (25,298 ) $ (28,463 ) $ (32,499 ) International 863 (3,030 ) 3,802 Loss before provision for income taxes $ (24,435 ) $ (31,493 ) $ (28,697 ) The income tax provision consisted of the following: For the Year Ended December 31, 2018 2017 2016 (in thousands) Current: Federal $ 309 $ 94 $ 279 Foreign 70 46 1,112 State and local 38 212 89 Total current income tax provision (benefit) 417 352 1,480 Deferred: Federal (82 ) (1,645 ) 129 Foreign 85 (5 ) (54 ) State and local 30 (349 ) 1,874 Total deferred income tax provision 33 (1,999 ) 1,949 Income tax provision $ 450 $ (1,647 ) $ 3,429 The following table provides a reconciliation of income taxes provided at the federal statutory rate of 21% for the year ended December 31, 2018 and 35% for the years ended December 31, 2017 and 2016 to the income tax provision: For the Year Ended December 31, 2018 2017 2016 (in thousands) U.S. income tax at federal statutory rate $ (5,131 ) $ (11,012 ) $ (10,046 ) State income taxes, net of federal benefit (857 ) (650 ) (170 ) Section 956 inclusion 191 — 2,976 Share-based compensation 610 (21 ) (882 ) Foreign tax rate differential (212 ) 1,748 5,038 Permanent differences 265 926 383 Tax Cuts and Jobs Act — 37,042 — Tax credits (80 ) (5 ) (111 ) Federal rate change — — (1,954 ) Return to provision — (407 ) 1,068 Adjustment to opening deferreds — — 2,009 Valuation allowance 4,203 (29,334 ) 4,458 Other, net 1,461 66 660 Income tax provision (benefit) $ 450 $ (1,647 ) $ 3,429 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 earnings per share benefit in 2018 , 2017 , and 2016 was not material. In December 2013, Malaysia granted a ten year tax holiday to the Company’s Malaysia affiliate, commencing with its fiscal year beginning January 1, 2014. This resulted in a tax benefit in fiscal 2013 of approximately $0.2 million from the elimination of the Malaysia subsidiary’s deferred tax liabilities. The earnings per share benefit in 2018 , 2017 and 2016 was not material. The following table provides the effect of temporary differences that created deferred income taxes as of December 31, 2018 and 2017 . Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carryforwards at the end of the respective periods: December 31, 2018 2017 (in thousands) Deferred tax assets: Accrued liabilities $ 4,841 $ 3,847 Share-based compensation 2,887 3,904 Net operating loss carryforwards 71,797 65,958 Tax credits 7,400 6,860 Amortization of tax intangibles 981 2,842 Interest 827 — Other, net — 355 Total deferred tax assets 88,733 83,766 Deferred tax liabilities: Property and equipment (3,086 ) (811 ) Convertible notes costs — (263 ) Other, net (119 ) — Total deferred tax liabilities (3,205 ) (1,074 ) Net deferred tax assets 85,528 82,692 Less: Valuation allowance (85,796 ) (82,923 ) Net deferred tax liabilities $ (268 ) $ (231 ) As of December 31, 2018 and 2017 , management assessed the realizability of deferred tax assets and evaluated the need for a valuation allowance for deferred tax assets on a jurisdictional basis. This evaluation utilizes the framework contained in ASC 740, Income Taxes, wherein management analyzes all positive and negative evidence available at the balance sheet date to determine whether all or some portion of the Company's deferred tax assets will not be realized. Under this guidance, a valuation allowance must be established for deferred tax assets when it is more-likely-than-not (a probability level of more than 50 percent) that the asset will not be realized. In assessing the realization of the Company's deferred tax assets, management considers all available evidence, both positive and negative. In concluding on the evaluation, management placed significant emphasis on guidance in ASC 740, which states that “a cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome.” Based upon available evidence, it was concluded on a more-likely-than-not basis that all deferred tax assets were not realizable as of December 31, 2018 . Accordingly, a valuation allowance of $85.8 million has been recorded to offset this deferred tax asset. The change in valuation allowance for the years ended December 31, 2018 and 2017 was a decrease of $2.9 million and a decrease of $29.0 million , respectively. The Company also maintains a deferred tax liability related to indefinite lived intangible assets in jurisdictions which the Company does not have indefinite lived deferred tax assets, as reversal of the taxable temporary difference cannot serve as a source of income for realization of the non-indefinite deferred tax assets, because the deferred tax liability will not reverse until the asset is sold or written down due to impairment. ASC 606 The Company adopted ASC 606 on January 1, 2018. Under ASC 606, the Company recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration which the Company expects to be entitled in exchange for those goods or services. Upon adoption, no change in retained earnings was recorded related to income taxes as the Company maintains a full valuation allowance. An adjustment of $1.0 million was recorded as a deferred tax liability and a corresponding reduction to the valuation allowance. See "Note 2 - Summary of Significant Accounting Policies” for additional information about the non-income tax impact of adoption of ASC 606. Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (the "Act") was enacted in the U.S. on December 22, 2017. The Act reduced the U.S. federal corporate income tax rate from 35% to 21% , required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign-sourced earnings. In 2017 , we recorded provisional amounts for certain enactment-date effects of the Act by applying the guidance in SAB 118 because we had not yet completed our enactment-date accounting for these effects. SAB 118 Measurement Period We applied the guidance in SAB 118 when accounting for the enactment-date effects of the Act in 2017 . As of December 31, 2017 , we had not completed our accounting for all of the enactment-date income tax effects of the Act under ASC 740, Income Taxes, for the following aspects: remeasurement of deferred tax assets and liabilities, one-time transition tax, and tax on global intangible low-taxed income. As of December 31, 2018 , we completed our accounting for all of the enactment-date income tax effects of the Act. As further discussed below, during 2018, we did not recognize adjustments to the provisional amounts recorded as of December 31, 2017 as all changes were off-set by our valuation allowance. One-time Transition Tax The one-time transition tax is based on our total post-1986 earnings and profits ("E&P"), the tax on which we previously deferred from U.S. income taxes under U.S. law. We had estimated a deficit in post 1986 E&P with no income tax expense recorded. Upon further analysis of the Act and Notices and regulations issued and proposed by the U.S. Department of the Treasury and the Internal Revenue Service, we finalized our calculations of the transition tax liability during 2018. Our provisional amount did not change; therefore, there was no adjustment to tax expense or valuation allowance. Deferred Tax Assets and Liabilities As of December 31, 2017 , we remeasured certain deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future (generally 21% ), by recording a provisional expense $37.0 million , with a valuation allowance release of $39.2 million for a net benefit of $2.1 million . Upon further analysis of certain aspects of the Act and refinement of our calculations for the year ended December 31, 2018 , we found no other adjustments were necessary. Global Intangible Low-Taxed Income ("GILTI") The Act subjects a U.S. shareholder to tax on GILTI earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. We have elected to account for GILTI in the year the tax is incurred. As of December 31, 2018 , the Company had $2.6 million of U.S. federal research and development credits which expire beginning in 2031 , and $3.7 million of California research and development credits which do not expire. The Company also has $0.5 million of California Enterprise Zone Credits which expire beginning in 2023 if not utilized, and $1.5 million of other state tax credits which expire beginning in 2024 if not utilized. As of December 31, 2018 , the Company had net operating loss carryforwards of approximately $273.6 million for federal income tax purposes and approximately $453.4 million for state income tax purposes. These losses are available to reduce taxable income and expire at various dates beginning in 2024 for federal income tax purposes and 2021 for state income tax purposes. The Company also has foreign net operating loss carryforwards of approximately $11.0 million which are indefinitely available to reduce taxable income and do not expire. Utilization of the Company’s net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. Management believes that the limitation will not limit utilization of the carryforwards prior to their expiration. The Company acquired U.S. federal net operating loss carryforwards of Scout Analytics, Inc. upon the acquisition of that entity in January 2014, subject to the ownership change limitations. Acquired U.S. federal net operating losses from Scout total approximately $30.2 million net of amounts unavailable due to ownership change limitations, which is included in the total U.S. federal net operating loss above. The Company files U.S. federal and state and foreign income tax returns in jurisdictions with varying statutes of limitations. In the normal course of business the Company is subject to examination by taxing authorities throughout the world. These audits could include examining the timing and amount of deductions, the allocation of income among various tax jurisdictions and compliance with federal, state, local and foreign tax laws. Our 2006 through 2017 tax years generally remain subject to examination by federal, state and foreign tax authorities. The Company has implemented the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2018 2017 2016 (in thousands) Beginning balance $ 932 $ 926 $ 937 Additions based on tax positions related to the current year 12 1 24 Reductions for tax positions of prior years — 5 (35 ) Ending balance $ 944 $ 932 $ 926 As of December 31, 2018 , the Company had a liability for unrecognized tax benefits of $0.9 million , none of which, if recognized, would affect the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2018 , 2017 and 2016 , interest and penalties recognized were insignificant. |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2018 | |
Geographical Areas [Abstract] | |
Geographical Information | Geographical Information The Company’s business is geographically diverse. During 2018 , 60% of net revenue was earned in North America and Latin America (“NALA”), 25% in Europe, Middle East and Africa (“EMEA”) and 15% in Asia Pacific-Japan (“APJ”). Net revenue for a particular geography generally reflects commissions earned from sales of service contracts managed from revenue delivery centers in that geography and subscription sales and professional services to deploy the Company's solutions. Predominantly all of the service contracts sold and managed by the revenue delivery centers relate to end customers located in the same geography. All of NALA net revenue represents revenue generated in the U.S. 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. Net revenue by geographic region, is summarized as follows: For the Year Ended December 31, 2018 2017 2016 (in thousands) Net revenue NALA $ 143,147 $ 151,015 $ 163,371 EMEA 60,600 60,941 62,479 APJ 34,593 27,171 27,037 Total net revenue $ 238,340 $ 239,127 $ 252,887 During the year ended December 31, 2018 , the Company's top ten clients accounted for 67% of our net revenue. Three of our clients, Cisco, VMware, and Dell, represented 14% , 13% and 10% of our revenue, respectively, for the year ended December 31, 2018 . The majority of the Company’s assets as of December 31, 2018 and 2017 were attributable to its U.S. operations. Property and equipment information is based on the physical location of the assets. The following table presents the long-lived assets, consisting of property and equipment, by geographic location: For the Year Ended December 31, 2018 2017 (in thousands) NALA $ 26,046 $ 24,520 EMEA 1,775 2,189 APJ 8,772 7,410 Total property and equipment, net $ 36,593 $ 34,119 |
Restructuring and Other Related
Restructuring and Other Related Costs | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Costs | Restructuring and Other Related Costs In early May 2017, the Company announced a restructuring effort to better align its cost structure with current business and market conditions, including a headcount reduction and the reduction of office space in four locations. The restructuring plan is accounted for in accordance with ASC 420, Exit or Disposal Cost Obligations. The Company recognized restructuring and other related costs of $0.2 million and $7.3 million for the years ended December 31, 2018 and 2017 , respectively. Severance and other employee costs include severance payments, related employee benefits and employee-related legal fees. Lease and other contract termination costs include charges related to lease consolidation and abandonment of spaces no longer utilized and the cancellation of certain contracts with outside vendors. Asset impairments include charges related to leasehold improvements and furniture in spaces vacated or no longer in use. The Company does not expect to incur additional restructuring charges as of December 31, 2018 . Future cash outlays related to restructuring activities are expected to total approximately $1.0 million . These amounts are reported in "Accrued expenses", and "Other long-term liabilities" in our Consolidated Balance Sheet as of December 31, 2018 . The following table presents costs incurred in connection with this restructuring plan recorded to restructuring and other related costs: Severance and Other Employee Costs Lease and Other Contract Termination Costs Asset Impairments Total (in thousands) Balance as of January 1, 2017 $ — $ — $ — $ — Restructuring and other related costs 3,483 2,939 886 7,308 Cash paid (3,060 ) (1,185 ) — (4,245 ) Change in estimates and non-cash charges — — (886 ) (886 ) Acceleration of stock-based compensation expense in additional paid-in capital (352 ) — — (352 ) Balance as of December 31, 2017 $ 71 $ 1,754 $ — $ 1,825 Restructuring and other related costs 120 89 — 209 Cash paid (188 ) (1,133 ) — (1,321 ) Change in estimates and non-cash charges (3 ) 252 — 249 Balance as of December 31, 2018 $ — $ 962 $ — $ 962 In February 2019, the Company announced a restructuring effort to better align its cost structure with current business and market conditions, including a headcount reduction. In connection with this restructuring effort, the Company is expected to incur additional costs in severance and other employee related costs during 2019. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following table presents data derived from our unaudited quarterly Condensed Consolidated Statement of Operations for each quarter during the years ended December 31, 2018 and 2017 . Quarterly amounts may not total to annual amounts due to rounding. For the Quarter Ended, Dec. 31, 2018 Sep. 30, 2018 Jun. 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sep. 30, 2017 Jun. 30, 2017 Mar. 31, 2017 (in thousands, except per share amounts) Net revenue $ 61,471 $ 57,173 $ 61,111 $ 58,585 $ 66,024 $ 58,132 $ 58,262 $ 56,708 Gross profit $ 20,914 $ 17,224 $ 18,648 $ 16,861 $ 24,044 $ 17,329 $ 18,745 $ 15,299 Income (loss) from operations $ 2,346 $ (5,700 ) $ (5,697 ) $ (6,835 ) $ 531 $ (4,636 ) $ (10,338 ) $ (9,264 ) Net income (loss) $ 2,279 $ (6,625 ) $ (8,887 ) $ (11,652 ) $ 74 $ (5,195 ) $ (13,101 ) $ (11,624 ) Net income (loss) per common share: Basic and diluted $ 0.03 $ (0.07 ) $ (0.10 ) $ (0.13 ) $ 0.00 $ (0.06 ) $ (0.15 ) $ (0.13 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events GAAP requires an entity to disclose events that occur after the balance sheet date but before financial statements are issued or are available to be issued (“subsequent events”) as well as the date through which an entity has evaluated subsequent events. There are two types of subsequent events. The first type consists of events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, (“recognized subsequent events”). The second type consists of events that provide evidence about conditions that did not exist at the date of the balance sheet but arose subsequent to that date (“nonrecognized subsequent events”). No additional significant recognized or nonrecognized subsequent events were noted except for those noted in "Note 9 - Commitments and Contingencies" and “Note 14 - Restructuring and Other Related Costs." |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The accompanying Consolidated Financial Statements include the accounts of ServiceSource International, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amount of net revenue and expenses during the reporting period. The Company’s significant accounting judgments and estimates include, but are not limited to: revenue recognition, the valuation and recognition of stock-based compensation, the recognition and measurement of current and deferred income tax assets and liabilities and uncertain tax positions, the provision for bad debts, impairment of goodwill and long-lived assets and impairment on investment securities. The Company bases its estimates and judgments on historical experience and on various assumptions that it believes are reasonable under the circumstances. However, future events are subject to change and estimates and judgments routinely require adjustment. Actual results and outcomes may differ from our estimates. |
Reclassifications | Reclassifications Certain items on the Consolidated Balance Sheet as of December 31, 2017 , the Statement of Stockholders' Equity for the year ended December 31, 2017 and the Statement of Cash Flows for the years ended December 31, 2017 and 2016 have been reclassified to conform to the current year presentation. These reclassifications did not affect the Company's Consolidated Statements of Operations. |
Significant Risks and Uncertainties | Significant Risks and Uncertainties The Company is subject to certain risks and uncertainties that could have a material and adverse effect on its future financial position or results of operations. The Company’s clients are primarily high-tech companies and a downturn in these industries, changes in clients’ sales strategies, or widespread shift away from end customers purchasing maintenance and support contracts could have an adverse impact on the Company’s consolidated results of operations and financial condition. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company is also exposed to a variety of market risks, including the effects of changes in foreign currency exchange rates and interest rates. Cash is maintained in demand deposit accounts at U.S., European and Asian financial institutions that management believes are credit worthy. Deposits in these institutions may exceed the amount of insurance provided on these deposits. Accounts receivable are derived from services performed for clients located primarily in the U.S., Europe and Asia. The Company attempts to mitigate the credit risk in its trade receivables through its ongoing credit evaluation process and historical collection experience. The Company performs a periodic review for specific aging evaluation allowance for doubtful accounts based upon the expected collectability of its accounts receivable, which takes into consideration an analysis of historical bad debts, customers' timeliness on payment and other available information. Two customers represented 19% , and 14% of accounts receivable as of December 31, 2018 . Two customers represented 17% and 15% of accounts receivable as of December 31, 2017 . |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value guidance establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. An asset or liability’s level is based upon the lowest level of input that is significant to the fair value measurement. The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; Level 3: Inputs that are generally unobservable and typically reflect management's estimates or assumptions that market participants would use in pricing the asset or liability. The carrying amount of financial instruments including cash and cash equivalents, restricted cash recorded in other assets, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their carrying value due to their short-term maturities. See " Note 4 — Fair Value of Financial Instruments " for additional information on the convertible notes. |
Foreign Currency Translation and Remeasurement | Foreign Currency Translation and Remeasurement Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated to U.S. dollars at exchange rates at the balance sheet date. Net revenue and expenses are translated at monthly average exchange rates. The Company accumulates net translation adjustments in equity as a component of accumulated other comprehensive income (loss). For non-U.S. subsidiaries whose functional currency is the U.S. dollar, transactions that are denominated in foreign currencies are remeasured in U.S. dollars, and any resulting gains and losses are reported in "Interest and other expense, net" in the Consolidated Statements of Operations. For the years ended December 31, 2018 , 2017 and 2016 , we recorded foreign currency transaction losses of approximately $0.7 million , $1.1 million and $0.5 million , respectively. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at their carrying values net of an allowance for doubtful accounts, if applicable. The Company evaluates the ongoing collectability of its accounts receivable based on a number of factors such as the credit quality of its clients, the age of accounts receivable balances, collections experience, current economic conditions and other factors that may affect a client’s ability to pay. In circumstances where the Company is aware of a specific client’s inability to meet its financial obligations to the Company, a specific allowance for doubtful accounts is estimated and recorded, which reduces the recognized receivable to the estimated amount that management believes will ultimately be collected. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. As of December 31, 2018 , 2017 and 2016 the allowance for doubtful accounts was immaterial. For the year ended December 31, 2016 , the Company charged $0.4 million in expense offset by $0.5 million in recoveries to allowance for doubtful accounts. There was no expense or recoveries for the years ended December 31, 2018 and 2017 . |
Property and Equipment | Property and Equipment The Company records property and equipment at cost, less accumulated depreciation and amortization. Depreciation is recorded using the straight-line method over the estimated useful lives for each asset class. When assets are disposed, the cost and related accumulated depreciation and amortization are removed from their respective accounts and any gain or loss on sale or disposal is reported in "General and administrative" in the Consolidated Statements of Operations. |
Lease Asset Retirement Obligations | Lease Asset Retirement Obligations The fair value of a liability for an asset retirement obligation (“ARO”) is recognized in the period in which it is incurred. The Company’s AROs associated with leasehold improvements at our international office locations, which, at the end of a lease, are contractually obligated to be removed. Our AROs were approximately $1.4 million and $1.0 million as of December 31, 2018 and 2017 , respectively. Accretion expense was insignificant for the years ended December 31, 2018 , 2017 and 2016 . |
Capitalized Internal-Use Software | Capitalized Internal-Use Software Expenditures related to software developed or obtained for internal use are capitalized and amortized over a period of three to seven years on a straight-line basis. The Company capitalizes direct external costs associated with developing or obtaining internal-use software. In addition, the Company also capitalizes certain payroll and payroll-related costs for employees or professional fees for consultants who are directly associated with the development of such applications. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred and are recorded in "Research and development" in the Consolidated Statements of Operations. Capitalized costs related to internal-use software under development are treated as construction-in-progress until the program, feature or functionality is ready for its intended use, at which time amortization commences. |
Goodwill Impairment | Goodwill Impairment Goodwill represents the excess of the purchase price over the estimated fair market value of net identifiable assets of acquired businesses. The Company evaluates goodwill for possible impairment at least annually or whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. This evaluation includes a preliminary assessment of qualitative factors to determine whether it is necessary to compare the fair value of the reporting unit with its carrying value. If there are indicators of impairment, the fair value of the reporting unit is compared to its carrying value. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference is recorded. No impairment was recorded for the years ended December 31, 2018 , 2017 and 2016 . The carrying value of goodwill for the years ended December 31, 2018 and 2017 was $6.3 million . |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Including Intangible Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate the carrying amount of the long-lived asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the long-lived asset is impaired, an impairment is recognized for the amount by which the carrying value of the asset exceeds its fair value. No impairment was recorded for the years ended December 31, 2018 , 2017 and 2016 . Acquired intangible assets are amortized over their useful lives on a straight-line basis which represents the pattern in which the Company derives benefit from the asset. |
Cost Basis Equity Investment | Cost Basis Equity Investment In 2013, the Company made an equity investment in a private company for $4.5 million , which represented less than 5% of the outstanding equity of that company. Based on unfavorable growth trends and declining financial performance of this private company, the Company determined that its investment was fully impaired and recorded a $4.5 million impairment during the year ended December 31, 2016 . The impairment is included in "Impairment loss on cost basis equity investment" in the Consolidated Statements of Operations. During 2017 , the Company sold this investment for $2.1 million in cash and recorded the proceeds as a gain in "Gain on sale of cost basis equity investment" in our Consolidated Statements of Operations. |
Operating Leases | Operating Leases The Company’s operating lease agreements for office facilities include provisions for certain rent holidays, tenant incentives and escalations in the base price of the rent payment. The Company records rent holidays and rent escalations on a straight-line basis over the lease term and records the difference between expense and cash payments as deferred rent. Tenant incentives are recorded as deferred rent and amortized on a straight-line basis over the lease term. Deferred rent is included in "Other current liabilities" and "Other long-term liabilities" in the Consolidated Balance Sheets. |
Deferred Debt Issuance Costs | Deferred Debt Issuance Costs Debt consists of convertible notes and a revolving line of credit. Discounts and premiums to the principal amounts are included in the carrying value of debt and amortized to “Interest and other expense, net” over the remaining life of the underlying debt. As of December 31, 2017 , the unamortized premium balance was approximately $5.3 million . For the years ended December 31, 2018 , 2017 and 2016 , the amortization of all premiums/discounts resulted in a reduction of interest expense of approximately $5.3 million , $8.6 million and $8.0 million , respectively. Debt issuance costs related to a recognized liability are presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. Debt issuance costs related to line of credit arrangements are presented as an asset regardless of whether there are any outstanding borrowings on the line of credit arrangement. Deferred loan costs include fees and costs incurred to obtain long-term financing. These fees and costs are amortized to “Interest and other expense, net” over the terms of the related loans. Unamortized debt issuance costs were approximately $0.2 million and $0.5 million as of December 31, 2018 and 2017 , respectively. Our interest expense for the years ended December 31, 2018 , 2017 and 2016 includes approximately $0.5 million , $0.8 million and $0.7 million related to the amortization of loan costs, respectively. |
Comprehensive Income (Loss) | Comprehensive Loss We report comprehensive loss in our Consolidated Statements of Comprehensive Loss. Amounts reported in “Accumulated other comprehensive income (loss)” consist of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses on available-for-sale securities. |
Revenue Recognition | Revenue Recognition The Company provides a comprehensive suite of selling and professional services to its clients. Selling services involves three categories of selling motions: recurring revenue management, customer success activities and inside sales efforts. Recurring revenue management includes hardware and software maintenance contract renewals, subscription renewals and extensions, asset and contract opportunity management, sales enablement and quoting solutions. Customer success activities include onboarding, product adoption, health checks, account management and certain service support. Inside sales efforts include lead generation, qualification and conversion, cross-sell and upsell activities, technology refresh, warranty conversion, win-backs and recaptures, cloud migration and client and asset management. Professional services involves providing data integration at scale with our systems and processes, combined with client data enhancement, enablement and optimization. The Company derives all of its revenue from contracts with clients. Revenue is measured based on the consideration specified in a contract. The Company’s contracts generally contain two distinct performance obligations that are sold on a variable and/or fixed consideration basis. These two distinct performance obligations are identified as selling services and professional services. The length of a selling services contract is generally 2-3 years, while professional services performance obligations are generally fulfilled within 90 days. The Company generally invoices its clients for services on a monthly or quarterly basis with 30-day payment terms. The Company recognizes revenue when it satisfies the performance obligations identified in the contract, which is achieved through the transfer of control of the services to the client. The Company accounts for individual services within a single contract separately if they are distinct. A service is distinct if it is separately identifiable from other services in the contract and if a client can benefit from the service on its own or with other resources that are readily available to the client. Determining whether these services are considered distinct performance obligations and qualify as a series of distinct performance obligations that represent a single performance obligation requires significant judgment. The total contract consideration, or transaction price, is allocated between the separate services identified in the contract based on their stand-alone selling price ("SSP"). SSP is determined based on a cost plus margin analysis for selling services and a standard hourly rate card for professional services. For professional services that are contractually priced differently from SSP, the Company estimates the SSP using a standard hourly rate card and allocates a portion of the total contract consideration to reflect professional services revenue at SSP. The Company’s performance obligations are satisfied over time and revenue is recognized based on monthly or quarterly time increments and the variable volume of closed bookings during the period at the contractual commission rates for selling services, or proportional performance during the period at the SSP for professional services. Due to the continuous nature of providing services to our clients, judgment is required in determining when control of the services is transferred to the client. Because the client simultaneously receives and consumes the benefit of the Company’s selling and professional services as provided, the time increment output method depicts the measure of progress in transferring control of the services to the client. While multiple selling motions in a contract are performed at various times and patterns throughout the month or quarter and the number of closed bookings vary in any given period, each time increment of a service activity is substantially the same and has the same pattern of transfer to the client, and therefore, represents a series of distinct performance obligations that form a single performance obligation. As a result, the Company allocates all variable consideration in a contract to the selling services performance obligation in accordance with the variable consideration allocation exception provisions in ASC 606 (less amounts for which it is probable a significant reversal of revenue will occur when the uncertainties related to the variability are resolved) and applies a single measure of progress to record revenue in the period based on when the output of the variable number of closed bookings occurs or when the variable performance metric is achieved. Judgment is required to estimate the amount of variable consideration to include when estimating the total contract consideration and how to allocate the consideration if one of the distinct performance obligations is not sold at SSP. In addition, significant judgment is required to determine if the variable consideration should be constrained, and to what extent, until the risk of a significant revenue reversal is not probable. The Company also applies the optional disclosure exemptions related to variable consideration and the requirement to disclose the remaining transaction price allocated to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. Contract Acquisition Costs To obtain contracts with clients, the Company pays its sales team commissions based in part on the estimated value of the contract. Because these sales commissions are incurred and paid upon contract execution and would not have been incurred or payable otherwise, they are considered incremental costs to acquire the contract; and if expected to be recoverable, are capitalized as contract acquisition costs in the period the contract is executed. Capitalized sales commissions are amortized to sales and marketing expense based on the pattern of transfer of services to which the asset relates over the estimated contract term, generally 2 - 3 years for a new client or 5 years for long-standing client relationships. The contract acquisition costs asset is evaluated for recoverability and impairment at each reporting period through the amortization period. The Company does not capitalize incremental acquisition costs for contracts if the amortization period of the asset is one year or less. Significant Estimates and Judgments Significant estimates and judgments for revenue recognition and contract acquisition cost capitalization include: identifying and determining distinct performance obligations in contracts with clients, determining the timing of the satisfaction of performance obligations, estimating the timing and amount of variable consideration in a contract and assessing whether it should be constrained in determining the total contract consideration, determining SSP for each performance obligations and the methodology to allocate the total contract consideration to the distinct performance obligations. Our revenue contracts often include promises to transfer services involving multiple selling motions to a client. Determining whether those services are considered distinct performance obligations and qualify as a series of distinct performance obligations that represent a single performance obligation requires significant judgment. Also, due to the continuous nature of providing services to our clients, judgment is required in determining when control of the services is transferred to the client. A significant portion of our contracts is based on a pay-for-performance model that provides the Company with commissions and revenue based on a volume of closed bookings each time period and variable consideration if certain performance targets are achieved during a given period of time (such as exceeding quarterly closure rate thresholds or achieving absolute dollar volume sales targets). Significant judgment is required to determine if this type of variable consideration should be constrained, and to what extent, until the risk of a significant revenue reversal is not probable. We also enter into contracts with multiple performance obligations that incorporate fixed consideration, pay-for-performance commissions and variable bonus commissions. Judgment is required to estimate the amount of variable consideration to include when estimating the total contract consideration and how to allocate the consideration if one of the distinct performance obligations is not sold at SSP. Impact of Changes in Accounting Policies The Company adopted the Accounting Standards Codification Topic 606, Revenue from contracts with customers ("ASC 606") as of January 1, 2018 using the modified retrospective approach by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening accumulated deficit balance as of January 1, 2018. As a result, the comparative information throughout these financial statements has not been adjusted and continues to be reported under legacy GAAP as disclosed in our 2017 annual report on Form 10-K. As described above, the Company changed its accounting policy for revenue recognition and certain sales commissions. The qualitative and the quantitative impact of adopting ASC 606 revenue recognition is presented below in "New Accounting Standards Adopted." Selling Services The Company historically recognized all performance based fees in the period when the specific performance criteria was achieved. Under ASC 606, in certain circumstances the Company estimates the variable fees for which it is probable that a significant reversal will not occur and recognizes these estimated variable fees over the estimated contract life. For certain contracts, this could result in the recognition of the performance-based fees sooner than under the Accounting Standards Codification Topic 605 ("ASC 605" or "legacy GAAP"). Professional Services Prior to the adoption of ASC 606, the Company recognized revenue from professional services at the best estimated selling price upon client acceptance at the end of the implementation or data integration event due to the short-term nature of the services, generally 90 days from the start of the services. Under ASC 606, the Company recognizes revenue at SSP over time as control of the service is transferred to the client, resulting in the recognition of professional services fees sooner than under ASC 605. Sales Commissions The Company previously recognized a portion of certain sales commissions as sales and marketing expense when it was earned by the employee upon obtaining and executing a contract. Under ASC 606, the Company capitalizes this portion of certain sales commissions as contract acquisition costs and amortizes the amount ratably over the contract term for new clients or the estimated life of the client for long-standing client relationships. As a result, sales and marketing expense is recognized later and over a longer period of time than under ASC 605. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are reported in "Sales and marketing" in the Consolidated Statements of Operations. Advertising costs for the years ended December 31, 2018 , 2017 and 2016 were approximately $0.1 million , $0.2 million and $0.1 million , respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes using an asset and liability method, which requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our taxable subsidiaries’ assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. The Company files U.S. federal and state and foreign income tax returns in jurisdictions with varying statutes of limitations. In the normal course of business the Company is subject to examination by taxing authorities throughout the world. These audits include questioning the timing and amount of deductions, the allocation of income among various tax jurisdictions and compliance with federal, state, local and foreign tax laws. The Company accounts for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. The Company records an income tax liability, if any, for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on our tax returns. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision. |
Stock-Based Compensation | Stock-Based Compensation The Company issues share-based awards to employees and directors. Awards are measured at fair value on the grant date and amortized to compensation expense over the service period during which the awards fully vest. Such expense is included in our Consolidated Statements of Operations, see " Note 10 — Stockholders' Equity " for additional information. Forfeitures are recognized as incurred. Options issued are valued using the Black-Scholes option-pricing model, which relies on assumptions we make related to the expected term of the options, volatility, dividend yield and risk-free interest rate. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share Basic net income (loss) per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, shares to be purchased under the Company’s employee stock purchase plan and unvested restricted stock units (“RSUs”). The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. Potential shares of common stock that are not included in the determination of diluted net loss per share because they are anti-dilutive for the periods presented consist of stock options, non-vested restricted stock and shares to be purchased under our 2011 Employee Stock Purchase Plan ("ESPP"). The Company excluded from diluted earnings per share the weighted-average common share equivalents related to 6.7 million , 7.1 million and 7.7 million shares for the years ended December 31, 2018 , 2017 and 2016 , respectively, because their effect would have been anti-dilutive. |
New Accounting Standards | New Accounting Standards Issued but not yet Adopted Comprehensive Income In February 2018, the Financial Accounting Standard Board ("FASB") issued an Accounting Standard Update ("ASU") that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The guidance should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The adoption of this standard will not have a material impact on the Company. Leases In February 2016, the FASB issued an ASU that modifies existing accounting standards for lease accounting. The new standard requires a lessee to record a lease asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. Leases in which the Company is the lessee will generally be accounted for as operating leases and we will record a lease asset and a lease liability. This standard will be effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018 and will be applied using a modified retrospective approach with optional practical expedients. Early adoption of the standard is permitted. The Company will adopt the standard January 1, 2019 and expects to elect the package of practical expedients, accounting for leases with contractual terms less than 12 months as short-term leases and the transition relief option to apply legacy GAAP to periods prior to the standard’s effective date. The adoption of the standard will result in an increase in total assets and total liabilities of approximately 20% and 95% , respectively, to our Consolidated Balance Sheet as of January 1, 2019 and will not have a material impact to our Consolidated Statements of Operations. New Accounting Standards Adopted Restricted Cash In November 2016, the FASB issued an ASU that requires companies to combine restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning and end of period total amounts on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard effective January 1, 2018 and the effects of this standard were applied retrospectively to all prior periods presented within these Consolidated Financial Statements. As a result, we include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning and end of period balances on our Consolidated Statements of Cash Flows. For the years ended December 31, 2018 and 2017 the effect of the change in accounting principle was an increase in cash and cash equivalents and restricted cash of $1.2 million , on our Consolidated Statements of Cash Flows. Goodwill Impairment In January 2017, the FASB issued an ASU that simplifies the accounting for goodwill impairment by eliminating step two from the goodwill impairment test which compares the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. This ASU does not change impairment indicators or the qualitative assessment. This standard is effective for fiscal years beginning after December 15, 2019 and is required to be adopted using a prospective approach. Early adoption is permitted beginning with interim or annual goodwill impairment tests performed on testing dates on or after January 1, 2017. The Company adopted this standard prospectively effective October 1, 2018. The adoption of this standard did not have an impact on the Company’s Consolidated Financial Statements. Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers" which amended the existing FASB ASC 605 and created ASC 606. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in amounts that reflect the consideration the entity expects to receive in exchange for those goods or services. ASC 606 also specifies the incremental costs of obtaining a contract with a customer and the costs of fulfilling a contract with a customer (if those costs are not within the scope of another Topic or Sub-Topic) should be deferred and recognized over the appropriate period of contract performance if they are expected to be recovered. In addition, ASC 606 requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The most significant impact to the Company's financial position and results of operations is the timing of expense recognition for certain sales commissions and to a lesser extent, the timing of revenue recognition for certain contracts that include certain performance-based fees. See below for additional information regarding the application of this new standard and its impact on our Consolidated Financial Statements. The Company adopted this standard effective January 1, 2018 utilizing the modified retrospective approach, or the cumulative catch-up transition method and applied ASC 606 to all contracts not completed as of January 1, 2018. The initial adoption impact to the Company’s financial position was not material. Under the transition guidance, the Company recorded a $3.3 million contract acquisition asset and corresponding offset to the opening accumulated deficit balance related to previously expensed sales commissions. The Company expensed $1.5 million of the $3.3 million asset in 2018 and will expense the remainder of the asset over the next five years as follows: $0.9 million in 2019 , $0.6 million in 2020 , and $0.3 million in 2021 and beyond. Additionally, the Company recorded a $0.4 million net contract asset and corresponding offset to the opening accumulated deficit balance related to previously unrecognized revenue under legacy GAAP which would have been recognized in periods prior to 2018 under ASC 606. The following tables summarize the impact of adopting ASC 606 on the Company's Consolidated Financial Statements: Consolidated Balance Sheet December 31, 2018 As reported ASC 606 adjustments Balances prior to adoption (in thousands) Accounts receivable, net $ 54,284 $ 80 $ 54,364 Prepaid expenses and other $ 5,653 $ (167 ) $ 5,486 Contract acquisition costs $ 2,660 $ (2,660 ) $ — Other assets $ 4,521 $ (30 ) $ 4,491 Deferred revenue $ — $ 1,172 $ 1,172 Other current liabilities $ 6,894 $ (1,073 ) $ 5,821 Accumulated deficit $ (267,383 ) $ (2,876 ) $ (270,259 ) Consolidated Statement of Operations For The Year Ended December 31, 2018 As Reported ASC 606 adjustments Balances prior to adoption (in thousands) Net revenue $ 238,340 $ 145 $ 238,485 Sales and marketing $ 35,600 $ (688 ) $ 34,912 Net income (loss) $ (24,885 ) $ 833 $ (24,052 ) Consolidated Statement of Cash Flows For The Year Ended December 31, 2018 As Reported ASC 606 adjustments Balances prior to adoption (in thousands) Net income (loss) $ (24,885 ) $ 833 $ (24,052 ) Amortization of contract acquisition cost $ 1,770 $ (1,770 ) $ — Accounts receivable, net $ 1,724 $ (80 ) $ 1,644 Deferred revenue $ — $ 1,172 $ 1,172 Prepaid expenses and other $ (150 ) $ (167 ) $ (317 ) Contract acquisition costs $ (1,085 ) $ 1,085 $ — Other liabilities $ 2,738 $ (1,073 ) $ 1,665 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Impacts of Adopting ASC 606 | The following tables summarize the impact of adopting ASC 606 on the Company's Consolidated Financial Statements: Consolidated Balance Sheet December 31, 2018 As reported ASC 606 adjustments Balances prior to adoption (in thousands) Accounts receivable, net $ 54,284 $ 80 $ 54,364 Prepaid expenses and other $ 5,653 $ (167 ) $ 5,486 Contract acquisition costs $ 2,660 $ (2,660 ) $ — Other assets $ 4,521 $ (30 ) $ 4,491 Deferred revenue $ — $ 1,172 $ 1,172 Other current liabilities $ 6,894 $ (1,073 ) $ 5,821 Accumulated deficit $ (267,383 ) $ (2,876 ) $ (270,259 ) Consolidated Statement of Operations For The Year Ended December 31, 2018 As Reported ASC 606 adjustments Balances prior to adoption (in thousands) Net revenue $ 238,340 $ 145 $ 238,485 Sales and marketing $ 35,600 $ (688 ) $ 34,912 Net income (loss) $ (24,885 ) $ 833 $ (24,052 ) Consolidated Statement of Cash Flows For The Year Ended December 31, 2018 As Reported ASC 606 adjustments Balances prior to adoption (in thousands) Net income (loss) $ (24,885 ) $ 833 $ (24,052 ) Amortization of contract acquisition cost $ 1,770 $ (1,770 ) $ — Accounts receivable, net $ 1,724 $ (80 ) $ 1,644 Deferred revenue $ — $ 1,172 $ 1,172 Prepaid expenses and other $ (150 ) $ (167 ) $ (317 ) Contract acquisition costs $ (1,085 ) $ 1,085 $ — Other liabilities $ 2,738 $ (1,073 ) $ 1,665 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | Intangible assets consisted of the following: Gross Carrying Amount Accumulated Amortization Net (in thousands) Balance as of December 31, 2016 $ 6,050 $ (4,452 ) $ 1,598 Balance as of December 31, 2017 $ 6,050 $ (5,965 ) $ 85 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measurement of Financial Instruments | The following tables present the Company's cash and cash equivalents and short-term investments by significant investment category measured at fair value on a recurring basis: As of December 31, 2018 : Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) Level 1: Cash $ 10,658 $ — $ — $ 10,658 Money market mutual funds 15,877 — — 15,877 Cash and cash equivalents $ 26,535 $ — $ — $ 26,535 As of December 31, 2017 : Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) Level 1: Cash $ 48,712 $ — $ — $ 48,712 Money market mutual funds 2,677 — — 2,677 Cash and cash equivalents 51,389 — — 51,389 Level 2: Short-term investments: Corporate bonds 55,763 1 (346 ) 55,418 U.S. agency securities 34,640 — (410 ) 34,230 Asset-backed securities 21,739 — (127 ) 21,612 U.S. Treasury securities 26,292 — (371 ) 25,921 Total short-term investments 138,434 1 (1,254 ) 137,181 Cash and cash equivalents and short-term investments $ 189,823 $ 1 $ (1,254 ) $ 188,570 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net were comprised of the following: December 31, Depreciable Life 2018 2017 (in thousands) Computers and equipment 2 - 5 years $ 20,213 $ 22,186 Software (1) 3 - 7 years 58,962 72,147 Furniture and fixtures 7 years 9,674 11,606 Leasehold improvements Lesser of estimated useful life or life of lease 20,237 19,574 Property and equipment 109,086 125,513 Less: accumulated depreciation and amortization (72,493 ) (91,394 ) Property and equipment, net $ 36,593 $ 34,119 (1) Includes capitalized internally developed software. |
Other Current and Long-Term L_2
Other Current and Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities were comprised of the following: December 31, 2018 (in thousands) Legal reserve $ 3,750 Capital lease obligations 954 Contract liability 873 Deferred rent 735 ESPP withholdings 384 Other liabilities 198 Total $ 6,894 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities were comprised of the following: December 31, 2018 (in thousands) Deferred rent $ 2,573 Capital lease obligations 1,510 Asset retirement obligations 1,368 Accrued restructuring costs 716 Deferred tax liability 268 Other accrued costs 105 Total $ 6,540 |
Revenues, Contract Asset and _2
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue From Contracts with Clients | The following tables present the disaggregation of revenue from contracts with our clients: Revenue by Performance Obligation For the Year Ended (in thousands) Professional services $ 3,949 Selling services 234,391 Total revenue $ 238,340 Revenue by Geography For the Year Ended (in thousands) APJ $ 34,593 EMEA 60,600 NALA 143,147 Total revenue $ 238,340 Revenue by Contract Pricing For the Year Ended (in thousands) Variable consideration $ 161,129 Fixed consideration 77,211 Total revenue $ 238,340 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease Disclosure | The Company entered into various leases during the year ended December 31, 2018 as follows: Location Execution Date San Francisco sublease January 2018 San Francisco April 2018 Philippines July 2018 Bulgaria October 2018 |
Future Minimum Lease Payments Under Non-cancelable Operating Leases and Rental Income | Future minimum payments under non-cancelable operating leases, non-cancelable service contract commitments, capital leases, and rental income under a non-cancelable operating sublease as of December 31, 2018 were as follows: Fiscal Year Operating Leases Operating Sublease Other Commitments (1) Capital Leases (in thousands) 2019 $ 10,511 $ 1,875 $ 7,869 $ 954 2020 9,581 1,932 5,188 945 2021 9,047 1,989 542 565 2022 5,997 1,878 15 — 2023 982 — — — Total $ 36,118 $ 7,674 $ 13,614 $ 2,464 (1) During January 2019 a five year purchase commitment for additional expenditures of $26.1 million was executed. |
Other Commitments | Future minimum payments under non-cancelable operating leases, non-cancelable service contract commitments, capital leases, and rental income under a non-cancelable operating sublease as of December 31, 2018 were as follows: Fiscal Year Operating Leases Operating Sublease Other Commitments (1) Capital Leases (in thousands) 2019 $ 10,511 $ 1,875 $ 7,869 $ 954 2020 9,581 1,932 5,188 945 2021 9,047 1,989 542 565 2022 5,997 1,878 15 — 2023 982 — — — Total $ 36,118 $ 7,674 $ 13,614 $ 2,464 (1) During January 2019 a five year purchase commitment for additional expenditures of $26.1 million was executed. |
Schedule of Future Contractual Payments Under Capital Leases | Future minimum payments under non-cancelable operating leases, non-cancelable service contract commitments, capital leases, and rental income under a non-cancelable operating sublease as of December 31, 2018 were as follows: Fiscal Year Operating Leases Operating Sublease Other Commitments (1) Capital Leases (in thousands) 2019 $ 10,511 $ 1,875 $ 7,869 $ 954 2020 9,581 1,932 5,188 945 2021 9,047 1,989 542 565 2022 5,997 1,878 15 — 2023 982 — — — Total $ 36,118 $ 7,674 $ 13,614 $ 2,464 (1) During January 2019 a five year purchase commitment for additional expenditures of $26.1 million was executed. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Weighted Average Assumptions | The weighted-average Black-Scholes option-pricing model assumptions were as follows: For the Year Ended December 31, 2018 2017 2016 Expected term (in years) 5.0 5.0 5.0 Expected volatility 58 % 59 % 58 % Risk-free interest rate 2.70 % 1.87 % 1.23 % Expected dividend yield 0.00 % 0.00 % 0.00 % The Company estimates the fair value of purchase rights under the ESPP using the Black-Scholes option-pricing model and the straight-line attribution approach. The following weighted-average assumptions were as follows: For the Year Ended December 31, 2018 2017 2016 Expected term (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Expected volatility 39% - 55% 29% - 66% 38% - 52% Risk-free interest rate 1.79% - 2.37% 0.65% - 1.21% 0.42% - 0.56% Expected dividend yield 0.00 % 0.00 % 0.00 % |
Summary of Option and RSU Activity | The following table presents total options outstanding, granted, exercised, expired or forfeited, as well as total options exercisable: Shares Weighted-Average Option Price Per Share Weighted-Average Fair Value of Options Granted During the Year Weighted-Average Remaining Contractual Life (Years) Intrinsic Value (in thousands) (in thousands) Issued and outstanding as of December 31, 2015 10,616 $ 4.79 Granted 709 $ 4.11 $ 2.05 Options exercised (2,111) $ 4.62 $ 1,455 Expired and/or Forfeited (1,719) $ 5.43 Issued and outstanding as of December 31, 2016 7,495 $ 4.63 Granted 173 $ 3.63 $ 1.86 Options exercised (14) $ 4.86 $ 8 Expired and/or Forfeited (1,143) $ 5.31 Issued and outstanding as of December 31, 2017 6,511 $ 4.48 Granted 2,652 $ 1.33 $ 0.68 Options exercised (31 ) $ 3.21 $ 32 Expired and/or Forfeited (1,616 ) $ 4.66 Issued and outstanding as of December 31, 2018 7,516 $ 3.34 4.78 $ — Options exercisable as of December 31, 2018 4,645 $ 4.44 1.73 $ — |
Schedule of Other Than Options Activity | The following table summarizes additional information concerning our restricted stock units and performance-based restricted stock units awards: Units Weighted-Average Grant Date Fair Value (in thousands) Unvested as of December 31, 2017 5,027 $ 3.98 Granted 4,920 $ 3.25 Vested (1) (2,528) $ 4.19 Forfeited (1,750) $ 3.87 Unvested as of December 31, 2018 5,669 $ 3.29 (1) 2,295 shares of common stock were issued for restricted stock units vested, 53 shares were canceled and returned and the remaining 233 shares were withheld for taxes. |
Summary of Stock-Based Compensation Expense | The following table presents stock-based compensation expense as allocated within the Company’s Consolidated Statements of Operations: For the Year Ended December 31, 2018 2017 2016 (in thousands) Cost of revenue $ 1,056 $ 1,335 $ 1,484 Sales and marketing 3,131 3,774 3,004 Research and development 180 149 586 General and administrative 5,234 8,425 5,678 Restructuring and other related costs — 352 — Total stock-based compensation $ 9,601 $ 14,035 $ 10,752 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss from Continuing Operations Before Provision for Income Taxes | Loss from continuing operations before provision for income taxes for the Company’s domestic and international operations was as follows: For the Year Ended December 31, 2018 2017 2016 (in thousands) U.S. $ (25,298 ) $ (28,463 ) $ (32,499 ) International 863 (3,030 ) 3,802 Loss before provision for income taxes $ (24,435 ) $ (31,493 ) $ (28,697 ) |
Summary of Income Tax Provision | The income tax provision consisted of the following: For the Year Ended December 31, 2018 2017 2016 (in thousands) Current: Federal $ 309 $ 94 $ 279 Foreign 70 46 1,112 State and local 38 212 89 Total current income tax provision (benefit) 417 352 1,480 Deferred: Federal (82 ) (1,645 ) 129 Foreign 85 (5 ) (54 ) State and local 30 (349 ) 1,874 Total deferred income tax provision 33 (1,999 ) 1,949 Income tax provision $ 450 $ (1,647 ) $ 3,429 |
Schedule of Reconciliation of Income Taxes Provided at Federal Statutory Rate to Income Tax Provision | The following table provides a reconciliation of income taxes provided at the federal statutory rate of 21% for the year ended December 31, 2018 and 35% for the years ended December 31, 2017 and 2016 to the income tax provision: For the Year Ended December 31, 2018 2017 2016 (in thousands) U.S. income tax at federal statutory rate $ (5,131 ) $ (11,012 ) $ (10,046 ) State income taxes, net of federal benefit (857 ) (650 ) (170 ) Section 956 inclusion 191 — 2,976 Share-based compensation 610 (21 ) (882 ) Foreign tax rate differential (212 ) 1,748 5,038 Permanent differences 265 926 383 Tax Cuts and Jobs Act — 37,042 — Tax credits (80 ) (5 ) (111 ) Federal rate change — — (1,954 ) Return to provision — (407 ) 1,068 Adjustment to opening deferreds — — 2,009 Valuation allowance 4,203 (29,334 ) 4,458 Other, net 1,461 66 660 Income tax provision (benefit) $ 450 $ (1,647 ) $ 3,429 |
Schedule of Effect of Temporary Differences that Created Deferred Income Taxes | The following table provides the effect of temporary differences that created deferred income taxes as of December 31, 2018 and 2017 . Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carryforwards at the end of the respective periods: December 31, 2018 2017 (in thousands) Deferred tax assets: Accrued liabilities $ 4,841 $ 3,847 Share-based compensation 2,887 3,904 Net operating loss carryforwards 71,797 65,958 Tax credits 7,400 6,860 Amortization of tax intangibles 981 2,842 Interest 827 — Other, net — 355 Total deferred tax assets 88,733 83,766 Deferred tax liabilities: Property and equipment (3,086 ) (811 ) Convertible notes costs — (263 ) Other, net (119 ) — Total deferred tax liabilities (3,205 ) (1,074 ) Net deferred tax assets 85,528 82,692 Less: Valuation allowance (85,796 ) (82,923 ) Net deferred tax liabilities $ (268 ) $ (231 ) |
Schedule of Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2018 2017 2016 (in thousands) Beginning balance $ 932 $ 926 $ 937 Additions based on tax positions related to the current year 12 1 24 Reductions for tax positions of prior years — 5 (35 ) Ending balance $ 944 $ 932 $ 926 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Geographical Areas [Abstract] | |
Schedule of Net Revenue and Long-Lived Assets by Geographic Region | Net revenue by geographic region, is summarized as follows: For the Year Ended December 31, 2018 2017 2016 (in thousands) Net revenue NALA $ 143,147 $ 151,015 $ 163,371 EMEA 60,600 60,941 62,479 APJ 34,593 27,171 27,037 Total net revenue $ 238,340 $ 239,127 $ 252,887 During the year ended December 31, 2018 , the Company's top ten clients accounted for 67% of our net revenue. Three of our clients, Cisco, VMware, and Dell, represented 14% , 13% and 10% of our revenue, respectively, for the year ended December 31, 2018 . The majority of the Company’s assets as of December 31, 2018 and 2017 were attributable to its U.S. operations. Property and equipment information is based on the physical location of the assets. The following table presents the long-lived assets, consisting of property and equipment, by geographic location: For the Year Ended December 31, 2018 2017 (in thousands) NALA $ 26,046 $ 24,520 EMEA 1,775 2,189 APJ 8,772 7,410 Total property and equipment, net $ 36,593 $ 34,119 |
Restructuring and Other Relat_2
Restructuring and Other Related Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Reserve Activities | The following table presents costs incurred in connection with this restructuring plan recorded to restructuring and other related costs: Severance and Other Employee Costs Lease and Other Contract Termination Costs Asset Impairments Total (in thousands) Balance as of January 1, 2017 $ — $ — $ — $ — Restructuring and other related costs 3,483 2,939 886 7,308 Cash paid (3,060 ) (1,185 ) — (4,245 ) Change in estimates and non-cash charges — — (886 ) (886 ) Acceleration of stock-based compensation expense in additional paid-in capital (352 ) — — (352 ) Balance as of December 31, 2017 $ 71 $ 1,754 $ — $ 1,825 Restructuring and other related costs 120 89 — 209 Cash paid (188 ) (1,133 ) — (1,321 ) Change in estimates and non-cash charges (3 ) 252 — 249 Balance as of December 31, 2018 $ — $ 962 $ — $ 962 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Information [Abstract] | |
Summary of Unaudited Quarterly Consolidated Statement of Operations Data | The following table presents data derived from our unaudited quarterly Condensed Consolidated Statement of Operations for each quarter during the years ended December 31, 2018 and 2017 . Quarterly amounts may not total to annual amounts due to rounding. For the Quarter Ended, Dec. 31, 2018 Sep. 30, 2018 Jun. 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sep. 30, 2017 Jun. 30, 2017 Mar. 31, 2017 (in thousands, except per share amounts) Net revenue $ 61,471 $ 57,173 $ 61,111 $ 58,585 $ 66,024 $ 58,132 $ 58,262 $ 56,708 Gross profit $ 20,914 $ 17,224 $ 18,648 $ 16,861 $ 24,044 $ 17,329 $ 18,745 $ 15,299 Income (loss) from operations $ 2,346 $ (5,700 ) $ (5,697 ) $ (6,835 ) $ 531 $ (4,636 ) $ (10,338 ) $ (9,264 ) Net income (loss) $ 2,279 $ (6,625 ) $ (8,887 ) $ (11,652 ) $ 74 $ (5,195 ) $ (13,101 ) $ (11,624 ) Net income (loss) per common share: Basic and diluted $ 0.03 $ (0.07 ) $ (0.10 ) $ (0.13 ) $ 0.00 $ (0.06 ) $ (0.15 ) $ (0.13 ) |
The Company (Details)
The Company (Details) | 12 Months Ended |
Dec. 31, 2018language | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of languages | 45 |
Years of experience minimum | 20 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) shares in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2013 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Charged to expense | $ 0 | $ 0 | $ 400,000 | |||
Recoveries | 0 | 0 | 500,000 | |||
Asset retirement obligations | 1,368,000 | 1,000,000 | ||||
Goodwill impairment | 0 | 0 | 0 | |||
Goodwill | 6,300,000 | 6,300,000 | ||||
Impairment of long-lived assets | 0 | 0 | 0 | |||
Cost method investment | $ 4,500,000 | |||||
Gain on sale of cost basis equity investment | 0 | 0 | 4,500,000 | |||
Sale of investment | 2,100,000 | |||||
Unamortized premium balance | 5,300,000 | |||||
Amortization of premiums/discounts | 5,300,000 | 8,600,000 | 8,000,000 | |||
Unamortized debt issuance costs | 200,000 | 500,000 | ||||
Amortization of debt issuance costs | $ 500,000 | 800,000 | 700,000 | |||
Performance obligation, description of timing | The length of a selling services contract is generally 2-3 years, while professional services performance obligations are generally fulfilled within 90 days. | |||||
Advertising expense | $ 100,000 | $ 200,000 | $ 100,000 | |||
Shares excluded from computation (in shares) | 6.7 | 7.1 | 7.7 | |||
Net change in cash and cash equivalents and restricted cash | $ (24,854,000) | $ 3,697,000 | $ (24,642,000) | |||
Additional contract costs capitalized | 1,100,000 | |||||
Amortization of contract acquisition costs | 1,770,000 | 0 | 0 | |||
Amortization expense for 2019 | 900,000 | |||||
Amortization expense for 2020 | 600,000 | |||||
Amortization expense for 2021 and beyond | 300,000 | |||||
Contract asset | $ 200,000 | |||||
Current Fiscal Year End Date | --12-31 | |||||
Software Development | Minimum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Useful life | 3 years | |||||
Software Development | Maximum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Useful life | 7 years | |||||
Other (Expense) Income, Net | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Foreign currency transaction (gain) losses | $ 700,000 | $ 1,100,000 | $ 500,000 | |||
New client | Minimum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Capitalized contract, amortization period | 2 years | |||||
New client | Maximum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Capitalized contract, amortization period | 3 years | |||||
Long-standing client | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Capitalized contract, amortization period | 5 years | |||||
Accounts Receivable | Customer Concentration Risk | Customer 1 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Concentration risk | 19.00% | 17.00% | ||||
Accounts Receivable | Customer Concentration Risk | Customer 2 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Concentration risk | 14.00% | 15.00% | ||||
ASU 2016-18 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net change in cash and cash equivalents and restricted cash | $ 1,200,000 | $ 1,200,000 | ||||
ASU 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Contract acquisition asset | 3,300,000 | |||||
Amortization of contract acquisition costs | 1,500,000 | |||||
Balances prior to adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Amortization of contract acquisition costs | $ 0 | |||||
Balances prior to adoption | ASU 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Contract asset | $ 400,000 | |||||
Subsequent Event | Scenario, Forecast | ASU 2016-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Increase in total assets | 20.00% | |||||
Increase in total liabilities | 95.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Impact of ASC 606 Adoption on Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | $ 54,284 | $ 56,516 | |
Prepaid expenses and other | 5,653 | 6,112 | |
Contract acquisition costs | 2,660 | 0 | |
Other assets | 4,521 | 3,636 | |
Deferred revenue | 0 | 1,282 | |
Other current liabilities | 6,894 | 2,740 | |
Accumulated deficit | (267,383) | $ (246,207) | |
Balances prior to adoption | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | 54,364 | ||
Prepaid expenses and other | 5,486 | ||
Contract acquisition costs | 0 | ||
Other assets | 4,491 | ||
Deferred revenue | 1,172 | ||
Other current liabilities | 5,821 | ||
Accumulated deficit | (270,259) | ||
ASU 2014-09 | ASC 606 adjustments | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | 80 | ||
Prepaid expenses and other | (167) | ||
Contract acquisition costs | (2,660) | ||
Other assets | (30) | ||
Deferred revenue | 1,172 | ||
Other current liabilities | (1,073) | ||
Accumulated deficit | $ (2,876) | ||
ASU 2014-09 | Balances prior to adoption | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accumulated deficit | $ 3,300 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Impact of ASC 606 Adoption on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net revenue | $ 238,340 | $ 239,127 | $ 252,887 | ||||||||
Sales and marketing | 35,600 | 33,001 | 41,972 | ||||||||
Net loss | $ 2,279 | $ (6,625) | $ (8,887) | $ (11,652) | $ 74 | $ (5,195) | $ (13,101) | $ (11,624) | (24,885) | $ (29,846) | $ (32,126) |
Balances prior to adoption | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net revenue | 238,485 | ||||||||||
Sales and marketing | 34,912 | ||||||||||
Net loss | (24,052) | ||||||||||
ASU 2014-09 | ASC 606 adjustments | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net revenue | 145 | ||||||||||
Sales and marketing | (688) | ||||||||||
Net loss | $ 833 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Impact of ASC 606 Adoption on Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net loss | $ 2,279 | $ (6,625) | $ (8,887) | $ (11,652) | $ 74 | $ (5,195) | $ (13,101) | $ (11,624) | $ (24,885) | $ (29,846) | $ (32,126) |
Amortization of contract acquisition costs | 1,770 | 0 | 0 | ||||||||
Accounts receivable, net | 1,724 | 9,060 | (7,156) | ||||||||
Deferred revenue | 0 | (2,872) | (1,589) | ||||||||
Prepaid expenses and other assets | (150) | 1,670 | (673) | ||||||||
Contract acquisition costs | (1,085) | 0 | 0 | ||||||||
Other liabilities | 2,738 | $ (827) | $ 2,249 | ||||||||
Balances prior to adoption | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net loss | (24,052) | ||||||||||
Amortization of contract acquisition costs | 0 | ||||||||||
Accounts receivable, net | 1,644 | ||||||||||
Deferred revenue | 1,172 | ||||||||||
Prepaid expenses and other assets | (317) | ||||||||||
Contract acquisition costs | 0 | ||||||||||
Other liabilities | 1,665 | ||||||||||
ASU 2014-09 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Amortization of contract acquisition costs | 1,500 | ||||||||||
ASU 2014-09 | ASC 606 adjustments | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net loss | 833 | ||||||||||
Amortization of contract acquisition costs | (1,770) | ||||||||||
Accounts receivable, net | (80) | ||||||||||
Deferred revenue | 1,172 | ||||||||||
Prepaid expenses and other assets | (167) | ||||||||||
Contract acquisition costs | 1,085 | ||||||||||
Other liabilities | $ (1,073) |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross Carrying Amount | $ 6,050 | $ 6,050 |
Accumulated Amortization | (5,965) | (4,452) |
Net | $ 85 | $ 1,598 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 0.1 | $ 1.5 | $ 1.5 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Aug. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Available-for-sale securities, gross realized gains | $ 30 | $ 100 | ||
Available-for-sale securities, gross realized losses | 200 | (100) | ||
Repayments of convertible debt | 150,000 | 0 | $ 0 | |
Other-than-temporary impairment loss recorded in earnings | 1,958 | 0 | $ 0 | |
Senior Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Repayments of convertible debt | $ 150,000 | |||
Convertible Notes Payable | Significant Other Observable Inputs (Level 2) | ||||
Debt Instrument [Line Items] | ||||
Convertible notes approximate fair value | 145,900 | |||
Other Assets | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||
Debt Instrument [Line Items] | ||||
Restricted cash | $ 1,200 | $ 1,200 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Level 1: | ||
Cash equivalents | $ 26,535 | $ 51,389 |
Fair Value, Measurements, Recurring | ||
Short-term investments: | ||
Cash, cash equivalents and short-term investments, amortized cost | 189,823 | |
Cash, cash equivalents and short-term investments, unrealized gains | 1 | |
Cash, cash equivalents and short-term investments, unrealized losses | (1,254) | |
Cash, cash equivalents and short-term investments, estimated fair value | 188,570 | |
Level 1 | Fair Value, Measurements, Recurring | ||
Level 1: | ||
Cash equivalents | 26,535 | 51,389 |
Level 1 | Fair Value, Measurements, Recurring | Cash | ||
Level 1: | ||
Cash | 10,658 | 48,712 |
Level 1 | Fair Value, Measurements, Recurring | Money market mutual funds | ||
Level 1: | ||
Cash equivalents | $ 15,877 | 2,677 |
Level 2 | Fair Value, Measurements, Recurring | ||
Short-term investments: | ||
Short-term investments, amortized cost | 138,434 | |
Short-term investments, unrealized gains | 1 | |
Short-term investments, unrealized losses | (1,254) | |
Short-term investments, estimated fair value | 137,181 | |
Level 2 | Fair Value, Measurements, Recurring | Corporate bonds | ||
Short-term investments: | ||
Short-term investments, amortized cost | 55,763 | |
Short-term investments, unrealized gains | 1 | |
Short-term investments, unrealized losses | (346) | |
Short-term investments, estimated fair value | 55,418 | |
Level 2 | Fair Value, Measurements, Recurring | U.S. agency securities | ||
Short-term investments: | ||
Short-term investments, amortized cost | 34,640 | |
Short-term investments, unrealized gains | 0 | |
Short-term investments, unrealized losses | (410) | |
Short-term investments, estimated fair value | 34,230 | |
Level 2 | Fair Value, Measurements, Recurring | Asset-backed securities | ||
Short-term investments: | ||
Short-term investments, amortized cost | 21,739 | |
Short-term investments, unrealized gains | 0 | |
Short-term investments, unrealized losses | (127) | |
Short-term investments, estimated fair value | 21,612 | |
Level 2 | Fair Value, Measurements, Recurring | U.S. Treasury securities | ||
Short-term investments: | ||
Short-term investments, amortized cost | 26,292 | |
Short-term investments, unrealized gains | 0 | |
Short-term investments, unrealized losses | (371) | |
Short-term investments, estimated fair value | $ 25,921 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 109,086 | $ 125,513 |
Less: accumulated depreciation and amortization | (72,493) | (91,394) |
Property and equipment, net | 36,593 | 34,119 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 20,213 | 22,186 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 58,962 | 72,147 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life | 7 years | |
Property and equipment | $ 9,674 | 11,606 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 20,237 | $ 19,574 |
Minimum | Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life | 2 years | |
Minimum | Software | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life | 3 years | |
Maximum | Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life | 5 years | |
Maximum | Software | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life | 7 years |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense related to property and equipment | $ 16.4 | $ 21.1 | $ 14.6 |
Internal-use software development costs capitalized | 11.1 | 12.6 | 13.1 |
Carrying value of internal-use software, net of accumulated amortization | 18.9 | 16.5 | |
Amortization of capitalized costs related to internal-use software | $ 8.6 | $ 13.3 | $ 7.6 |
Other Current and Long-Term L_3
Other Current and Long-Term Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Legal reserve | $ 3,750 | $ 1,500 |
Capital lease obligations | 954 | |
Contract liability | 873 | |
Deferred rent | 735 | |
ESPP withholdings | 384 | |
Other liabilities | 198 | |
Total | $ 6,894 | $ 2,740 |
Other Current and Long-Term L_4
Other Current and Long-Term Liabilities - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Deferred rent | $ 2,573 | |
Capital lease obligations | 1,510 | |
Asset retirement obligations | 1,368 | $ 1,000 |
Accrued restructuring costs | 716 | |
Deferred tax liability | 268 | 231 |
Other accrued costs | 105 | |
Total | $ 6,540 | $ 4,603 |
Revenues, Contract Asset and _3
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Net revenue | $ 238,340 | $ 239,127 | $ 252,887 |
Variable consideration | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 161,129 | ||
Fixed consideration | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 77,211 | ||
APJ | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 34,593 | ||
EMEA | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 60,600 | ||
NALA | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 143,147 | ||
Professional services | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 3,949 | ||
Selling services | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | $ 234,391 |
Revenues, Contract Asset and _4
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Current Fiscal Year End Date | --12-31 | ||
Contract asset | $ 200,000 | ||
Contract liability | 873,000 | ||
Additional contract costs capitalized | $ 1,100,000 | ||
Document Fiscal Year Focus | 2,018 | ||
Amortization expense for 2019 | $ 900,000 | ||
Amortization expense for 2020 | 600,000 | ||
Amortization expense for 2021 and beyond | 300,000 | ||
Amortization of contract acquisition costs | 1,770,000 | $ 0 | $ 0 |
Impairment of contract costs | $ 0 | ||
Amortization term | 2 years 2 months 1 day | ||
ASU 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract acquisition asset | $ 3,300,000 | ||
Amortization of contract acquisition costs | 1,500,000 | ||
Selling services | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Remaining performance obligation | 59,500,000 | ||
After Adoption of New Revenue Guidance | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Amortization of contract acquisition costs | $ 200,000 |
Revenues, Contract Asset and _5
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs - Performance Obligations (Details) - Selling services $ in Millions | Dec. 31, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 59.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 0.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected timing of satisfaction | 1 year |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Aug. 01, 2018 | Jul. 31, 2018 | Aug. 31, 2013 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||
Repayments of convertible debt | $ 150,000,000 | $ 0 | $ 0 | |||
Interest expense | $ 7,400,000 | $ 11,700,000 | $ 11,000,000 | |||
Senior Convertible Notes | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of debt | $ 150,000,000 | |||||
Interest rate | 1.50% | |||||
Repayments of convertible debt | $ 150,000,000 | |||||
Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | |||||
Federal Funds rate | Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread of interest rate | 0.50% | |||||
LIBOR | Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread of interest rate | 1.00% | |||||
Base rate | Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread of interest rate | 1.00% | |||||
Eurodollar | Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread of interest rate | 2.00% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Aug. 23, 2016plaintiff | Dec. 31, 2018USD ($)contract | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Operating Leased Assets [Line Items] | ||||
Rent expense | $ 12,100 | $ 10,600 | $ 11,300 | |
Rent income | 1,600 | |||
Capital lease | 2,500 | 100 | ||
Capital leases, accumulated depreciation | $ 1,000 | 400 | ||
Number of contracts | contract | 3 | |||
Loss contingency accrual | $ 3,750 | $ 1,500 | ||
Money market mutual funds | Letter of Credit | ||||
Operating Leased Assets [Line Items] | ||||
Collateral for letter of credit | $ 1,200 | |||
Sarah Patton, et al v. ServiceSource Delaware, Inc | Pending Litigation | ||||
Operating Leased Assets [Line Items] | ||||
Number of plaintiffs | plaintiff | 3 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments Under Non-cancelable Operating Leases and Service Contract Commitments, Capital Leases and Rental Income (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Jan. 31, 2019 | Dec. 31, 2018 | |
Operating Leases | ||
2,019 | $ 10,511 | |
2,020 | 9,581 | |
2,021 | 9,047 | |
2,022 | 5,997 | |
2,023 | 982 | |
Total | 36,118 | |
Operating Sublease | ||
2,019 | 1,875 | |
2,020 | 1,932 | |
2,021 | 1,989 | |
2,022 | 1,878 | |
2,023 | 0 | |
Total | 7,674 | |
Other Commitments | ||
2,019 | 7,869 | |
2,020 | 5,188 | |
2,021 | 542 | |
2,022 | 15 | |
2,023 | 0 | |
Total | 13,614 | |
Capital Leases | ||
2,019 | 954 | |
2,020 | 945 | |
2,021 | 565 | |
2,022 | 0 | |
2,023 | 0 | |
Total | 2,464 | |
Subsequent Event [Line Items] | ||
Purchase commitment | $ 13,614 | |
Subsequent Event | ||
Other Commitments | ||
Total | $ 26,100 | |
Subsequent Event [Line Items] | ||
Purchase commitment period | 5 years | |
Purchase commitment | $ 26,100 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | Mar. 03, 2018 | Mar. 06, 2017 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock repurchase program, maximum repurchase authorization (up to) | $ 30,000,000 | ||||||
Share repurchases (in shares) | 0 | 2,300,000 | |||||
Weighted-average price per share (in dollars per share) | $ 3.94 | ||||||
Aggregate repurchase price | $ 8,900,000 | ||||||
Value of stock options and awards granted | $ 17,400,000 | $ 11,500,000 | 13,300,000 | ||||
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 | 6 months | ||||||
Share issued under employee stock purchase plan (in shares) | 2,400,000 | ||||||
Estimated fair value of share options vested | $ 1,800,000 | 2,500,000 | 3,700,000 | ||||
Fair value of instruments other than option | 8,600,000 | 7,300,000 | 6,200,000 | ||||
Stock-based compensation capitalization costs | $ 300,000 | $ 500,000 | $ 600,000 | ||||
Shares withheld for taxes (in shares) | 233,000 | ||||||
Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance-based restricted stock units subject for PSU award (in shares) | 100,000 | 200,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||
Aggregate grant date fair value | $ 200,000 | $ 1,200,000 | $ 3,900,000 | $ 3,700,000 | $ 5,100,000 | ||
Percentage of performance achievement target goal, condition one | 95.10% | ||||||
Percent of target EBITDA | 70.59% | ||||||
Percentage of performance achievement target goal, condition two | 95.10% | ||||||
Percent of target EBITDA, condition two | 70.95% | ||||||
Percentage of restricted stock units eligible to vest, condition two | 50.00% | ||||||
Percentage of performance achievement target goal, condition three | 100.00% | ||||||
Percentage of restricted stock units eligible to vest, condition three | 100.00% | ||||||
Percentage of performance achievement target goal, condition four | 103.40% | ||||||
Percent of target EBITDA, condition four | 163.03% | ||||||
Percentage of restricted stock units eligible to vest, condition four | 150.00% | ||||||
Performance Shares | Tranche 1 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percent | 50.00% | ||||||
Performance Shares | Tranche 2 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percent | 50.00% | ||||||
2011 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of outstanding shares, limit increase | 4.00% | ||||||
Number of shares outstanding, limit increase (in shares) | 3,800,000 | ||||||
Shares available for future issuance (in shares) | 11,900,000 | ||||||
Unrecognized compensation expense | $ 16,100,000 | ||||||
Unrecognized compensation expense, weighted-average period recognized | 2 years 7 months 7 days | ||||||
2011 Plan | Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Vested option expiring period | 10 years | ||||||
Vested but unexercised option expiring period | 90 days | ||||||
2011 Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of outstanding shares, limit increase | 1.00% | ||||||
Number of shares outstanding, limit increase (in shares) | 1,500,000 | ||||||
Shares available for future issuance (in shares) | 4,300,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Weighted Average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years | 5 years | 5 years |
Expected volatility | 58.00% | 59.00% | 58.00% |
Risk-free interest rate | 2.70% | 1.87% | 1.23% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
ESPP | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Expected volatility | 39.00% | 29.00% | 38.00% |
Risk-free interest rate | 1.79% | 0.65% | 0.42% |
ESPP | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 1 year | 1 year | 1 year |
Expected volatility | 55.00% | 66.00% | 52.00% |
Risk-free interest rate | 2.37% | 1.21% | 0.56% |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Option and RSU Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted-Average Grant Date Fair Value | |||
Canceled and returned restricted stock (in shares) | 53 | ||
Shares withheld for taxes (in shares) | 233 | ||
Employee Stock Option | |||
Shares | |||
Number of Shares, Outstanding, Beginning balance (in shares) | 6,511 | 7,495 | 10,616 |
Number of Shares, Granted (in shares) | 2,652 | 173 | 709 |
Number of Shares, Options exercised (in shares) | (31) | (14) | (2,111) |
Number of Shares, Expired and/or Forfeited (in shares) | (1,616) | (1,143) | (1,719) |
Number of Shares, Outstanding, Ending balance (in shares) | 7,516 | 6,511 | 7,495 |
Options exercisable (in shares) | 4,645 | ||
Weighted-Average Option Price Per Share | |||
Weighted-Average Exercise Price, Outstanding, Beginning balance (in dollars per share) | $ 4.48 | $ 4.63 | $ 4.79 |
Weighted-Average Exercise Price, Granted (in dollars per share) | 1.33 | 3.63 | 4.11 |
Weighted-Average Exercise Price, Options exercised (in dollars per share) | 3.21 | 4.86 | 4.62 |
Weighted-Average Exercise Price, Expired and/or Forfeited (in dollars per share) | 4.66 | 5.31 | 5.43 |
Weighted-Average Exercise Price, Outstanding, Ending balance (in dollars per share) | 3.34 | 4.48 | 4.63 |
Options exercisable (in dollars per share) | 4.44 | ||
Weighted-Average Fair Value of Options Granted During the Year (in dollars per share) | $ 0.68 | $ 1.86 | $ 2.05 |
Issued and outstanding contractual life | 4 years 9 months 11 days | ||
Options exercisable contractual life | 1 year 8 months 24 days | ||
Options exercised intrinsic value | $ 32 | $ 8 | $ 1,455 |
Issued and outstanding intrinsic value | 0 | ||
Options exercisable intrinsic value | $ 0 | ||
Restricted Stock Units | |||
Restricted Stock Outstanding, Number of Shares [Roll Forward] | |||
Number of Shares, Outstanding, Beginning balance (in shares) | 5,027 | ||
Number of Shares, Granted (in shares) | 4,920 | ||
Number of Shares, Vested (in shares) | (2,528) | ||
Number of Shares, Forfeited (in shares) | (1,750) | ||
Number of Shares, Outstanding, Ending balance (in shares) | 5,669 | 5,027 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Exercise Price, Outstanding, Beginning balance (in dollars per share) | $ 3.98 | ||
Weighted-Average Exercise Price, Granted (in dollars per share) | 3.25 | ||
Weighted-Average Exercise Price, Options vested (in dollars per share) | 4.19 | ||
Weighted-Average Exercise Price, Forfeited (in dollars per share) | 3.87 | ||
Weighted-Average Exercise Price, Outstanding, Ending balance (in dollars per share) | $ 3.29 | $ 3.98 | |
Common Stock | |||
Shares | |||
Number of Shares, Options exercised (in shares) | (273) | (321) | (2,434) |
Weighted-Average Grant Date Fair Value | |||
Vested restricted stock units converted to shares (in shares) | 2,295 |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | $ 9,601 | $ 14,035 | $ 10,752 |
Cost of revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 1,056 | 1,335 | 1,484 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 3,131 | 3,774 | 3,004 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 180 | 149 | 586 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 5,234 | 8,425 | 5,678 |
Restructuring and other related costs | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | $ 0 | $ 352 | $ 0 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||
Employers' discretionary contribution, amount | $ 1.5 | $ 1.5 | $ 1.7 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss from Continuing Operations Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (25,298) | $ (28,463) | $ (32,499) |
International | 863 | (3,030) | 3,802 |
Loss before income taxes | $ (24,435) | $ (31,493) | $ (28,697) |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | |
Current: | ||||
Federal | $ 309 | $ 94 | $ 279 | |
Foreign | 70 | 46 | 1,112 | |
State and local | 38 | 212 | 89 | |
Total current income tax provision (benefit) | 417 | 352 | 1,480 | |
Deferred: | ||||
Federal | (82) | (1,645) | 129 | |
Foreign | 85 | (5) | (54) | |
State and local | 30 | (349) | 1,874 | |
Total deferred income tax provision | 33 | (1,999) | 1,949 | |
Income tax provision | $ 450 | $ (1,647) | $ 3,429 | $ (200) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Taxes Provided at Federal Statutory Rate to Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||||
U.S. income tax at federal statutory rate | $ (5,131) | $ (11,012) | $ (10,046) | |
State income taxes, net of federal benefit | (857) | (650) | (170) | |
Section 956 inclusion | 191 | 0 | 2,976 | |
Foreign tax rate differential | 610 | (21) | (882) | |
Share-based compensation | (212) | 1,748 | 5,038 | |
Permanent differences | 265 | 926 | 383 | |
Tax Cuts and Jobs Act | 0 | 37,042 | 0 | |
Tax credits | (80) | (5) | (111) | |
Federal rate change | 0 | 0 | (1,954) | |
Return to provision | 0 | (407) | 1,068 | |
Adjustment to opening deferreds | 0 | 0 | 2,009 | |
Valuation allowance | 4,203 | (29,334) | 4,458 | |
Other, net | 1,461 | 66 | 660 | |
Income tax provision | $ 450 | $ (1,647) | $ 3,429 | $ (200) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Nov. 30, 2015 | Dec. 31, 2013 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2015 | Jan. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||||||
Tax benefit | $ (450) | $ 1,647 | $ (3,429) | $ 200 | ||||
Deferred tax assets, valuation allowance | (85,796) | (82,923) | ||||||
Increase (decrease) in the valuation allowance | (2,900) | (29,000) | ||||||
Deferred tax liability | 268 | 231 | ||||||
Deferred tax balance | 37,000 | |||||||
Decrease in valuation allowance | 39,200 | |||||||
Provisional tax benefit | 2,100 | |||||||
Unrecognized tax benefits | 944 | $ 932 | $ 926 | $ 937 | ||||
Research And Development Tax Credit Carryforward | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax credits carryforward | 2,600 | |||||||
California Enterprise Zone Credits Expiring 2024 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax credits carryforward | 500 | |||||||
Other Tax Credit Carryforward | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax credits carryforward | 1,500 | |||||||
Foreign Tax Authority | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Net operating loss carryforwards | 11,000 | |||||||
Domestic Tax Authority | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Net operating loss carryforwards | 273,600 | |||||||
Domestic Tax Authority | Scout | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Net operating loss carryforwards | $ 30,200 | |||||||
State and Local Jurisdiction | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Net operating loss carryforwards | 453,400 | |||||||
Malaysia | Foreign Tax Authority | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Income tax holiday period | 10 years | |||||||
California | Research And Development Tax Credit Carryforward | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax credits carryforward | 3,700 | |||||||
Philippine Economic Zone Authority | Foreign Tax Authority | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Income tax holiday period | 4 years | |||||||
ASC 606 adjustments | ASU 2014-09 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Deferred tax assets, valuation allowance | 1,000 | |||||||
Deferred tax liability | $ 1,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effect of Temporary Differences that Created Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Accrued liabilities | $ 4,841 | $ 3,847 |
Share-based compensation | 2,887 | 3,904 |
Net operating loss carryforwards | 71,797 | 65,958 |
Tax credits | 7,400 | 6,860 |
Amortization of tax intangibles | 981 | 2,842 |
Interest | 827 | 0 |
Other, net | 0 | 355 |
Total deferred tax assets | 88,733 | 83,766 |
Deferred tax liabilities: | ||
Property and equipment | (3,086) | (811) |
Other, net | 0 | (263) |
Other, net | (119) | 0 |
Total deferred tax liabilities | (3,205) | (1,074) |
Net deferred tax assets | 85,528 | 82,692 |
Less: Valuation allowance | (85,796) | (82,923) |
Net deferred tax liabilities | $ (268) | $ (231) |
Income Taxes - Schedule of Re_2
Income Taxes - Schedule of Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 932 | $ 926 | $ 937 |
Additions based on tax positions related to the current year | 12 | 1 | 24 |
Reductions for tax positions of prior years | 0 | (5) | (35) |
Ending balance | $ 944 | $ 932 | $ 926 |
Geographical Information - Narr
Geographical Information - Narrative (Details) - Sales Revenue, Net | 12 Months Ended |
Dec. 31, 2018 | |
Geographic Concentration Risk | NALA | |
Concentration Risk [Line Items] | |
Concentration risk | 60.00% |
Geographic Concentration Risk | EMEA | |
Concentration Risk [Line Items] | |
Concentration risk | 25.00% |
Geographic Concentration Risk | APJ | |
Concentration Risk [Line Items] | |
Concentration risk | 15.00% |
Top Ten Clients | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk | 67.00% |
Cisco | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk | 14.00% |
VMWare | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk | 13.00% |
Dell | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk | 10.00% |
Geographical Information - Sche
Geographical Information - Schedule of Net Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total net revenue | $ 61,471 | $ 57,173 | $ 61,111 | $ 58,585 | $ 66,024 | $ 58,132 | $ 58,262 | $ 56,708 | $ 238,340 | $ 239,127 | $ 252,887 |
NALA | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total net revenue | 143,147 | 151,015 | 163,371 | ||||||||
EMEA | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total net revenue | 60,600 | 60,941 | 62,479 | ||||||||
APJ | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total net revenue | $ 34,593 | $ 27,171 | $ 27,037 |
Geographical Information - Sc_2
Geographical Information - Schedule of Long-Lived Assets by Geographic Location (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 36,593 | $ 34,119 |
NALA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 26,046 | 24,520 |
EMEA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 1,775 | 2,189 |
APJ | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 8,772 | $ 7,410 |
Restructuring and Other Relat_3
Restructuring and Other Related Costs - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2017location | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Restructuring and Related Activities [Abstract] | ||||
Reduction in headcount and office space due to restructuring | location | 4 | |||
Restructuring and other charges | $ 209 | $ 7,308 | ||
Future cash outlays related to these restructuring activities | $ 962 | $ 1,825 | $ 0 |
Restructuring and Other Relat_4
Restructuring and Other Related Costs - Restructuring and Other Reserve Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 1,825 | $ 0 |
Restructuring and other charges | 209 | 7,308 |
Cash paid | (1,321) | (4,245) |
Change in estimates and non-cash charges | 249 | (886) |
Acceleration of stock-based compensation expense in additional paid-in capital | (352) | |
Ending Balance | 962 | 1,825 |
Severance and Other Employee Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 71 | 0 |
Restructuring and other charges | 120 | 3,483 |
Cash paid | (188) | (3,060) |
Change in estimates and non-cash charges | (3) | 0 |
Acceleration of stock-based compensation expense in additional paid-in capital | (352) | |
Ending Balance | 0 | 71 |
Lease and Other Contract Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 1,754 | 0 |
Restructuring and other charges | 89 | 2,939 |
Cash paid | (1,133) | (1,185) |
Change in estimates and non-cash charges | 252 | 0 |
Acceleration of stock-based compensation expense in additional paid-in capital | 0 | |
Ending Balance | 962 | 1,754 |
Asset Impairments | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | 0 |
Restructuring and other charges | 0 | 886 |
Cash paid | 0 | 0 |
Change in estimates and non-cash charges | 0 | (886) |
Acceleration of stock-based compensation expense in additional paid-in capital | 0 | |
Ending Balance | $ 0 | $ 0 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Net revenue | $ 61,471 | $ 57,173 | $ 61,111 | $ 58,585 | $ 66,024 | $ 58,132 | $ 58,262 | $ 56,708 | $ 238,340 | $ 239,127 | $ 252,887 |
Gross profit | 20,914 | 17,224 | 18,648 | 16,861 | 24,044 | 17,329 | 18,745 | 15,299 | 73,647 | 75,418 | 87,818 |
Income (loss) from operations | 2,346 | (5,700) | (5,697) | (6,835) | 531 | (4,636) | (10,338) | (9,264) | (15,886) | (23,707) | (15,493) |
Net loss | $ 2,279 | $ (6,625) | $ (8,887) | $ (11,652) | $ 74 | $ (5,195) | $ (13,101) | $ (11,624) | $ (24,885) | $ (29,846) | $ (32,126) |
Net loss per common share: | |||||||||||
Basic and diluted (in dollars per share) | $ 0.03 | $ (0.07) | $ (0.10) | $ (0.13) | $ 0 | $ (0.06) | $ (0.15) | $ (0.13) | $ (0.27) | $ (0.33) | $ (0.37) |