Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended |
Jun. 30, 2014 | |
Document and Entity Information | ' |
Entity Registrant Name | 'TrueCar, Inc. |
Entity Central Index Key | '0001327318 |
Document Type | 'S-1 |
Document Period End Date | 30-Jun-14 |
Amendment Flag | 'false |
Entity Filer Category | 'Non-accelerated Filer |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Current assets | ' | ' | ' |
Cash and cash equivalents | $111,845 | $43,819 | $22,062 |
Restricted cash - current | 2,000 | 2,000 | 2,500 |
Accounts receivable, net of allowances of $1,621, $2,184 and $1,490 (unaudited) at December 31, 2012 and 2013 and June 30, 2014, respectively (includes related party receivables of $619, $431, and $812 (unaudited) at December 31, 2012 and 2013 and June 30, 2014, respectively) | 24,829 | 18,803 | 10,760 |
Notes receivable from related parties - current | 296 | 178 | 469 |
Prepaid expenses | 6,866 | 3,550 | 1,602 |
Other current assets (includes related party receivables of $253, $363, and $0 (unaudited) at December 31, 2012 and 2013, and June 30, 2014 respectively) | 860 | 1,226 | 662 |
Total current assets | 146,696 | 69,576 | 38,055 |
Restricted cash | ' | ' | 2,000 |
Property and equipment, net | 17,104 | 15,238 | 12,842 |
Goodwill | 53,270 | 53,270 | 53,270 |
Intangible assets, net | 30,005 | 31,834 | 36,227 |
Notes receivable from related parties | ' | 2,682 | 2,632 |
Other assets | 518 | 2,150 | 218 |
Total assets | 247,593 | 174,750 | 145,244 |
Current liabilities | ' | ' | ' |
Accounts payable (includes related party payables of $622, $1,161 and $1,307 (unaudited) at December 31, 2012 and 2013, and June 30, 2014, respectively) | 9,229 | 9,804 | 7,277 |
Accrued employee expenses | 10,028 | 10,129 | 6,156 |
Convertible notes payable | ' | ' | 23,696 |
Revolving line of credit | ' | 4,764 | ' |
Other accrued expenses | 10,989 | 6,242 | 7,716 |
Total current liabilities | 30,246 | 30,939 | 44,845 |
Deferred tax liabilities | 2,104 | 1,791 | 684 |
Other liabilities | 521 | 616 | 519 |
Total liabilities | 32,871 | 33,346 | 46,048 |
Commitments and contingencies (Note 8) | ' | ' | ' |
Stockholders' Equity | ' | ' | ' |
Preferred stock - $0.0001 par value; 20,000,000 shares authorized at June 30, 2014; no shares issued and outstanding | ' | ' | ' |
Common stock - $0.0001 par value; 147,000,000 authorized at December 31, 2012, 150,000,000 shares authorized at December 31, 2013 and 1,000,000,000 shares authorized at June 30, 2014 (unaudited), respectively; 56,207,579, 59,955,343 and 76,814,334 (unaudited) shares issued and outstanding at December 31, 2012 and 2013 and June 30, 2014, respectively | 8 | 6 | 6 |
Additional paid-in capital | 402,229 | 275,803 | 237,021 |
Notes receivable from related parties | ' | -1,069 | -1,327 |
Accumulated deficit | -187,515 | -162,560 | -137,504 |
Total stockholders' equity | 214,722 | 112,180 | 98,196 |
Total liabilities, convertible preferred stock, contingently redeemable common stock, and stockholders' equity | 247,593 | 174,750 | 145,244 |
Series A convertible preferred stock | ' | ' | ' |
Current liabilities | ' | ' | ' |
Series A convertible preferred stock - $0.0001 par value; 4,500,000 shares authorized at December 31, 2013: 2,857,143 and 0 shares issued and outstanding at December 31, 2013 and June 30, 2014 (unaudited); respectively | ' | 29,224 | ' |
Contingently redeemable common stock | ' | ' | ' |
Current liabilities | ' | ' | ' |
Series A convertible preferred stock - $0.0001 par value; 4,500,000 shares authorized at December 31, 2013: 2,857,143 and 0 shares issued and outstanding at December 31, 2013 and June 30, 2014 (unaudited); respectively | ' | ' | $1,000 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | |||
Allowance for doubtful accounts receivable - current | $1,490 | $2,184 | $1,621 |
Related party accounts receivable - current | 812 | 431 | 619 |
Related party accounts payable - current | 1,307 | 1,161 | 622 |
Preferred stock, par value (in dollar per share) | $0.00 | $0.00 | $0.00 |
Preferred stock, shares authorized | 20,000,000 | ' | ' |
Preferred stock, shares issued | 0 | ' | ' |
Preferred stock, shares outstanding | 0 | ' | ' |
Common stock, par value | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 1,000,000,000 | 150,000,000 | 147,000,000 |
Common stock, shares issued | 76,814,334 | 59,955,343 | 56,207,579 |
Common stock, shares outstanding | 76,814,334 | 59,955,343 | 56,207,579 |
Other current assets | ' | ' | ' |
Related party receivable - current | $0 | $363 | $253 |
Convertible preferred stock | ' | ' | ' |
Par value | $0.00 | $0.00 | ' |
Shares authorized | 4,500,000 | 4,500,000 | 0 |
Shares issued | 0 | 2,857,143 | ' |
Shares outstanding | 0 | 2,857,143 | ' |
Contingently redeemable common stock | ' | ' | ' |
Shares issued | ' | ' | 126,262 |
Shares outstanding | ' | ' | 126,262 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 6 Months Ended | 12 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Comprehensive Loss | ' | ' | ' | ' | ' |
Revenues (includes related party revenues of $1,314 and $1,431 for 2011 and 2012, respectively, and no related party revenues for the year ended December 31, 2013 and the six months ended June 30, 2013 (unaudited) and 2014 | $94,427 | $56,266 | $133,958 | $79,889 | $76,330 |
Costs and operating expenses: | ' | ' | ' | ' | ' |
Cost of revenue (exclusive of depreciation and amortization presented separately below; includes related party expenses of $1,152, $2,289 and $2,738 for 2011, 2012 and 2013 and $1,162 (unaudited) and $405 (unaudited) for the six months ended June 30, 2013 and 2014, respectively) | 7,858 | 7,435 | 15,295 | 13,559 | 7,660 |
Sales and marketing (includes related party expenses of $2,734, $3,981 and $10,164 for 2011, 2012 and 2013 and $3,447 (unaudited) and $7,843 (unaudited) for the six months ended June 30, 2013 and 2014, respectively) | 61,059 | 29,409 | 75,180 | 70,327 | 41,992 |
Technology and development | 15,843 | 11,422 | 23,685 | 21,960 | 18,457 |
General and administrative | 27,955 | 12,942 | 30,857 | 34,228 | 21,912 |
Depreciation and amortization | 6,086 | 5,934 | 11,569 | 11,768 | 4,148 |
Total costs and operating expenses | 118,801 | 67,142 | 156,586 | 151,842 | 94,169 |
Loss from operations | -24,374 | -10,876 | -22,628 | -71,953 | -17,839 |
Interest income | 27 | 61 | 121 | 229 | 199 |
Interest expense | -301 | -1,751 | -1,988 | -3,359 | -66 |
Other income (expense) | 10 | 14 | 18 | -18 | -20 |
Change in fair value of preferred stock warrant liability | ' | ' | ' | ' | -1,882 |
Loss before benefit (provision) for income taxes | -24,638 | -12,552 | -24,477 | -75,101 | -19,608 |
Benefit (provision) for income taxes | -317 | -273 | -579 | 606 | 10,690 |
Net loss | -24,955 | -12,825 | -25,056 | -74,495 | -8,918 |
Cumulative dividends on Series B, Series C, and Series D Preferred Stock | ' | ' | ' | ' | -2,370 |
Net loss attributable to common stockholders | -24,955 | -12,825 | -25,056 | -74,495 | -11,288 |
Net loss per share attributable to common stockholders: | ' | ' | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.39) | ($0.22) | ($0.43) | ($1.33) | ($0.49) |
Weighted average common shares outstanding, basic and diluted (in shares) | 63,962 | 57,231 | 58,540 | 55,828 | 22,823 |
Other comprehensive loss: | ' | ' | ' | ' | ' |
Unrealized (loss) gain on marketable securities | ' | ' | ' | 35 | -35 |
Comprehensive loss | ($24,955) | ($12,825) | ($25,056) | ($74,460) | ($8,953) |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Loss (Parenthetical) (USD $) | 6 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue from related party | $0 | $0 | $0 | $1,431 | $1,314 |
Cost of revenue | ' | ' | ' | ' | ' |
Costs and expenses with related parties | 405 | 1,162 | 2,738 | 2,289 | 1,152 |
Sales and marketing | ' | ' | ' | ' | ' |
Costs and expenses with related parties | $7,843 | $3,447 | $10,164 | $3,981 | $2,734 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Deficit) (USD $) | Total | Common stock | APIC | Notes Receivable from Related Parties | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Loss |
In Thousands, except Share data, unless otherwise specified | |||||||
Balance at Dec. 31, 2010 | ($38,444) | $1 | $18,799 | ($1,310) | ($54,091) | ($1,843) | ' |
Balance (in shares) at Dec. 31, 2010 | ' | 7,483,638 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Net loss | -8,918 | ' | ' | ' | -8,918 | ' | ' |
Other comprehensive loss, net of tax | -35 | ' | ' | ' | ' | ' | -35 |
Stock-based compensation | 5,437 | ' | 5,437 | ' | ' | ' | ' |
Issuance of warrants in connection with marketing agreements | 2,112 | ' | 2,112 | ' | ' | ' | ' |
Issuance of restricted stock | 1,037 | ' | 1,037 | ' | ' | ' | ' |
Issuance of restricted stock (in shares) | ' | 592,390 | ' | ' | ' | ' | ' |
Exercise of options to purchase common stock | 528 | ' | 717 | -189 | ' | ' | ' |
Exercise of options to purchase common stock (in shares) | ' | 1,351,318 | ' | ' | ' | ' | ' |
Imputed interest on notes receivable | 314 | ' | 314 | ' | ' | ' | ' |
Repurchase of common stock | -16,038 | ' | -15,156 | 275 | ' | -1,157 | ' |
Repurchase of common stock (in shares) | ' | -2,307,866 | ' | ' | ' | ' | ' |
Interest income on notes receivable | -34 | ' | ' | -34 | ' | ' | ' |
Issuance of common stock for business acquisitions | 90,079 | 1 | 90,078 | ' | ' | ' | ' |
Issuance of common stock for business acquisitions (in shares) | ' | 10,791,338 | ' | ' | ' | ' | ' |
Conversion of convertible preferred stock for common stock | 59,575 | 3 | 59,572 | ' | ' | ' | ' |
Conversion of convertible preferred stock for common stock (in shares) | ' | 30,065,499 | ' | ' | ' | ' | ' |
Conversion of convertible note payable and interest for common stock | 2,060 | ' | 2,060 | ' | ' | ' | ' |
Conversion of convertible note payable and interest for common stock (in shares) | ' | 259,098 | ' | ' | ' | ' | ' |
Conversion of convertible preferred stock warrants for common stock warrants | 2,552 | ' | 2,552 | ' | ' | ' | ' |
Issuance of common stock, net of issuance costs | 58,544 | 1 | 55,543 | ' | ' | 3,000 | ' |
Issuance of common stock in connection with initial public offering, net of underwriting discounts and offering costs (unaudited) (in shares) | ' | 7,426,124 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2011 | 158,769 | 6 | 223,065 | -1,258 | -63,009 | ' | -35 |
Balance (in shares) at Dec. 31, 2011 | ' | 55,661,539 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Net loss | -74,495 | ' | ' | ' | -74,495 | ' | ' |
Other comprehensive loss, net of tax | 35 | ' | ' | ' | ' | ' | 35 |
Stock-based compensation | 9,658 | ' | 9,658 | ' | ' | ' | ' |
Issuance of warrants in connection with marketing agreements | 1,990 | ' | 1,990 | ' | ' | ' | ' |
Issuance of restricted stock | 876 | ' | 876 | ' | ' | ' | ' |
Issuance of restricted stock (in shares) | ' | 17,520 | ' | ' | ' | ' | ' |
Exercise of options to purchase common stock | 313 | ' | 370 | -57 | ' | ' | ' |
Exercise of options to purchase common stock (in shares) | ' | 401,494 | ' | ' | ' | ' | ' |
Imputed interest on notes receivable | 126 | ' | 126 | ' | ' | ' | ' |
Repurchase of common stock | -1,648 | ' | -1,648 | ' | ' | ' | ' |
Repurchase of common stock (in shares) | ' | -265,274 | ' | ' | ' | ' | ' |
Interest income on notes receivable | -27 | ' | ' | -27 | ' | ' | ' |
Beneficial conversion feature related to convertible notes payable, net of tax | 1,618 | ' | 1,618 | ' | ' | ' | ' |
Issuance and adjustment of contingently redeemable common stock | -1,000 | ' | -1,000 | ' | ' | ' | ' |
Issuance and adjustment of contingently redeemable common stock (in shares) | ' | -126,262 | ' | ' | ' | ' | ' |
Exercise of warrants to purchase common stock | 637 | ' | 637 | ' | ' | ' | ' |
Exercise of warrants to purchase common stock (in shares) | ' | 377,672 | ' | ' | ' | ' | ' |
Issuance of common stock, net of issuance costs | 1,344 | ' | 1,329 | 15 | ' | ' | ' |
Issuance of common stock in connection with initial public offering, net of underwriting discounts and offering costs (unaudited) (in shares) | ' | 140,890 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | 98,196 | 6 | 237,021 | -1,327 | -137,504 | ' | ' |
Balance (in shares) at Dec. 31, 2012 | 56,207,579 | 56,207,579 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Net loss | -25,056 | ' | ' | ' | -25,056 | ' | ' |
Stock-based compensation | 9,463 | ' | 9,463 | ' | ' | ' | ' |
Issuance of warrants in connection with marketing agreements | 3,740 | ' | 3,740 | ' | ' | ' | ' |
Issuance of restricted stock | 423 | ' | 423 | ' | ' | ' | ' |
Issuance of restricted stock (in shares) | ' | 20,874 | ' | ' | ' | ' | ' |
Exercise of options to purchase common stock | 229 | ' | 171 | 58 | ' | ' | ' |
Exercise of options to purchase common stock (in shares) | ' | 98,878 | ' | ' | ' | ' | ' |
Imputed interest on notes receivable | 127 | ' | 127 | ' | ' | ' | ' |
Interest income on notes receivable | -28 | ' | ' | -28 | ' | ' | ' |
Conversion of convertible note payable and interest for common stock | 25,447 | ' | 25,447 | ' | ' | ' | ' |
Conversion of convertible note payable and interest for common stock (in shares) | ' | 3,556,412 | ' | ' | ' | ' | ' |
Issuance and adjustment of contingently redeemable common stock (in shares) | ' | 13,840 | ' | ' | ' | ' | ' |
Repurchase of vested common stock awards | -2,000 | ' | -2,000 | ' | ' | ' | ' |
Repayment of notes receivable | 228 | ' | ' | 228 | ' | ' | ' |
Issuance of warrants in connection with Series A convertible preferred stock | 677 | ' | 677 | ' | ' | ' | ' |
Issuance of warrants in connection with revolving line of credit | 408 | ' | 408 | ' | ' | ' | ' |
Issuance of common stock, net of issuance costs | 326 | ' | 326 | ' | ' | ' | ' |
Issuance of common stock in connection with initial public offering, net of underwriting discounts and offering costs (unaudited) (in shares) | ' | 57,760 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | 112,180 | 6 | 275,803 | -1,069 | -162,560 | ' | ' |
Balance (in shares) at Dec. 31, 2013 | 59,955,343 | 59,955,343 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Net loss | -24,955 | ' | ' | ' | -24,955 | ' | ' |
Stock-based compensation | 12,154 | ' | 12,154 | ' | ' | ' | ' |
Issuance of warrants in connection with marketing agreements | 4,668 | ' | 4,668 | ' | ' | ' | ' |
Exercise of options to purchase common stock | 1,760 | ' | 1,760 | ' | ' | ' | ' |
Exercise of options to purchase common stock (in shares) | ' | 1,741,058 | ' | ' | ' | ' | ' |
Imputed interest on notes receivable | 10 | ' | 10 | ' | ' | ' | ' |
Interest income on notes receivable | -3 | ' | ' | -3 | ' | ' | ' |
Conversion of convertible preferred stock for common stock | 29,224 | ' | 29,224 | ' | ' | ' | ' |
Conversion of convertible preferred stock for common stock (in shares) | ' | 2,857,143 | ' | ' | ' | ' | ' |
Exercise of warrants to purchase common stock | 9,461 | 1 | 9,460 | ' | ' | ' | ' |
Exercise of warrants to purchase common stock (in shares) | ' | 3,319,540 | ' | ' | ' | ' | ' |
Repayment of notes receivable | 1,072 | ' | ' | 1,072 | ' | ' | ' |
Issuance of common stock, net of issuance costs | 69,151 | 1 | 69,150 | ' | ' | ' | ' |
Issuance of common stock in connection with initial public offering, net of underwriting discounts and offering costs (unaudited) (in shares) | ' | 8,941,250 | ' | ' | ' | ' | ' |
Balance at Jun. 30, 2014 | $214,722 | $8 | $402,229 | ' | ($187,515) | ' | ' |
Balance (in shares) at Jun. 30, 2014 | 76,814,334 | 76,814,334 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Consolidated Statements of Cash Flows | ' | ' | ' | ' | ' |
Net loss | ($24,955,000) | ($12,825,000) | ($25,056,000) | ($74,495,000) | ($8,918,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' | ' | ' |
Depreciation and amortization | 5,875,000 | 5,609,000 | 10,835,000 | 10,275,000 | 4,027,000 |
Deferred income taxes | 317,000 | 271,000 | 579,000 | -606,000 | -10,690,000 |
Bad debt expense and other reserves | 109,000 | 153,000 | 280,000 | 668,000 | 137,000 |
Stock-based compensation | 11,540,000 | 3,616,000 | 9,346,000 | 10,320,000 | 6,208,000 |
Legal expense settled in stock | ' | ' | ' | 307,000 | ' |
Legal settlement paid in stock | ' | ' | 326,000 | ' | ' |
Increase in fair value of preferred stock warrant liability | ' | ' | ' | ' | 1,882,000 |
Increase in fair value of contingent consideration liability | ' | 48,000 | 95,000 | 1,370,000 | ' |
Common stock warrant expense | 4,668,000 | 1,262,000 | 3,740,000 | 1,990,000 | 2,112,000 |
Purchased investment premium, net of sales and amortization | ' | ' | ' | ' | -586,000 |
Imputed interest on notes receivable | 10,000 | 62,000 | 127,000 | 126,000 | 314,000 |
Interest income on notes receivable | -18,000 | -100,000 | -107,000 | -107,000 | -110,000 |
Interest expense on note payable | ' | 805,000 | 805,000 | 1,508,000 | 60,000 |
Accretion of beneficial conversion feature on convertible notes payable and discount on revolving line of credit | 236,000 | 945,000 | 1,117,000 | 1,770,000 | ' |
Loss on disposal of fixed assets | 211,000 | 325,000 | 734,000 | 1,493,000 | 121,000 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ' | ' | ' | ' | ' |
Accounts receivable | -6,183,000 | -4,317,000 | -8,196,000 | 2,506,000 | -8,169,000 |
Prepaid expenses | -3,319,000 | -2,953,000 | -1,955,000 | -104,000 | -663,000 |
Other current assets | 457,000 | -203,000 | -29,000 | 163,000 | -238,000 |
Other assets | -62,000 | -30,000 | -281,000 | 10,082,000 | -10,223,000 |
Accounts payable | 491,000 | -1,016,000 | 1,382,000 | -2,053,000 | 8,011,000 |
Accrued employee expenses | -410,000 | 2,521,000 | 3,973,000 | -376,000 | 2,674,000 |
Other accrued expenses | 4,700,000 | -121,000 | -1,204,000 | 2,655,000 | 2,525,000 |
Other liabilities | -97,000 | -175,000 | -422,000 | -210,000 | 53,000 |
Net cash used in operating activities | -6,430,000 | -6,123,000 | -3,911,000 | -32,718,000 | -11,473,000 |
Cash flows from investing activities | ' | ' | ' | ' | ' |
Change in restricted cash | ' | 2,500,000 | 2,500,000 | -4,500,000 | 51,000 |
Purchases of investments | ' | ' | ' | ' | -31,451,000 |
Sales of short term investments | ' | ' | ' | 31,061,000 | 976,000 |
Cash acquired in business acquisition, net of cash paid | ' | ' | ' | ' | 6,138,000 |
Purchase of property and equipment | -4,790,000 | -3,320,000 | -8,404,000 | -6,200,000 | -12,721,000 |
Purchase of intangible assets | -350,000 | ' | ' | ' | -50,000 |
Notes receivable from related parties | -60,000 | ' | ' | ' | -150,000 |
Repayment of notes receivable from related parties | 3,761,000 | ' | 421,000 | 13,000 | 10,000 |
Net cash (used in) provided by investing activities | -1,439,000 | -820,000 | -5,483,000 | 20,374,000 | -37,197,000 |
Cash flows from financing activities | ' | ' | ' | ' | ' |
Proceeds from initial public offering net of underwriting discounts | 74,747,000 | ' | ' | ' | ' |
Proceeds from revolving line of credit | ' | ' | 5,000,000 | ' | ' |
Repayments under credit agreement | -5,000,000 | ' | ' | ' | ' |
Proceeds from the issuance of preferred stock and common stock warrants, net of issuance costs | ' | ' | 29,901,000 | ' | ' |
Proceeds from the issuance of common stock, net of issuance costs | ' | ' | ' | 116,000 | 54,138,000 |
Issuance of convertible note payable | ' | ' | ' | 23,133,000 | 2,000,000 |
Proceeds from the sale of treasury stock | ' | ' | ' | ' | 3,000,000 |
Payments of initial public offering costs | -5,073,000 | ' | -551,000 | ' | ' |
Payment of contingent consideration | ' | ' | -428,000 | ' | ' |
Repayment of capital lease obligations | ' | ' | ' | ' | -51,000 |
Repurchase of common stock | ' | ' | -1,000,000 | -1,648,000 | -14,881,000 |
Repurchase of vested common stock option awards | ' | -2,000,000 | -2,000,000 | ' | ' |
Proceeds from exercise of common stock options | 1,760,000 | 185,000 | 229,000 | 313,000 | 528,000 |
Exercise of warrants | 9,461,000 | ' | ' | 637,000 | ' |
Net cash provided by (used in) financing activities | 75,895,000 | -1,815,000 | 31,151,000 | 22,551,000 | 44,734,000 |
Net (decrease) increase in cash and cash equivalents | 68,026,000 | -8,758,000 | 21,757,000 | 10,207,000 | -3,936,000 |
Cash and cash equivalents at beginning of period | 43,819,000 | 22,062,000 | 22,062,000 | 11,855,000 | 15,791,000 |
Cash and cash equivalents at end of period | 111,845,000 | 13,304,000 | 43,819,000 | 22,062,000 | 11,855,000 |
Cash paid during the year for: | ' | ' | ' | ' | ' |
Interest | ' | ' | 64,000 | ' | 6,000 |
Income taxes | ' | ' | ' | ' | 54,000 |
Statement | ' | ' | ' | ' | ' |
Issuance of note receivable for purchase of common stock | ' | ' | ' | ' | 174,000 |
Issuance of common stock for business acquisitions | ' | ' | ' | ' | 90,079,000 |
Issuance of common stock in settlement of liability | ' | ' | ' | 850,000 | 250,000 |
Issuance of common stock in lieu of cash bonus | ' | ' | ' | 626,000 | ' |
Conversion of convertible note payable and accrued interest to common stock | ' | 25,447,000 | 25,447,000 | ' | 2,060,000 |
Conversion of convertible preferred stock for common stock | ' | ' | ' | ' | 59,575,000 |
Conversion of convertible preferred stock warrants for common stock warrants | ' | ' | ' | ' | 2,552,000 |
Contingently redeemable common stock | ' | ' | ' | -1,000,000 | ' |
Beneficial conversion feature related to convertible notes payable, net of tax | ' | ' | ' | 1,618,000 | ' |
Deferred offering costs included in accounts payable and accrued expenses | ' | ' | 1,143,000 | ' | ' |
Tenant incentive for purchase of leasehold improvements | ' | ' | 519,000 | ' | ' |
Stock-based compensation capitalized for software development | 614,000 | 251,000 | 540,000 | 214,000 | 266,000 |
Capitalized assets included in accounts payable, accrued employee expenses and other accrued expenses | 370,000 | 53,000 | 109,000 | ' | ' |
Honk, LLC | ' | ' | ' | ' | ' |
Statement | ' | ' | ' | ' | ' |
Issuance of common stock for business acquisitions | ' | ' | ' | ' | 1,432,000 |
Carperks LLC | ' | ' | ' | ' | ' |
Statement | ' | ' | ' | ' | ' |
Issuance of common stock for business acquisitions | ' | ' | ' | ' | 133,000 |
ALG, Inc | ' | ' | ' | ' | ' |
Statement | ' | ' | ' | ' | ' |
Issuance of common stock for business acquisitions | ' | ' | ' | ' | $88,514,000 |
Organization_and_Nature_of_Bus
Organization and Nature of Business | 6 Months Ended |
Jun. 30, 2014 | |
Organization and Nature of Business | ' |
Organization and Nature of Business | ' |
1. Organization and Nature of Business | |
TrueCar, Inc. ("TrueCar") is an Internet-based information, technology, and communication services company. Hereinafter, TrueCar, Inc. and its wholly owned subsidiaries TrueCar.com, Inc. and ALG, Inc. are collectively referred to as "TrueCar" or the "Company"; TrueCar.com, Inc. is referred to as "TrueCar.com" and ALG, Inc. is referred to as "ALG". | |
TrueCar has established an intelligent, data-driven online platform operating on a common technology infrastructure, powered by proprietary data and analytics. TrueCar operates its platform on the TrueCar.com website. In addition, TrueCar customizes and operates its platform for affinity group marketing partners ("Affinity Group Marketing Partners"). An affinity group is comprised of a network of members or employees that provide discounts to its members. The TrueCar.com website and the car-buying websites TrueCar operates for its Affinity Group Marketing Partners (the "Auto Buying Programs") allow users to obtain market-based pricing data on new and used cars, and to connect with TrueCar's network of Certified Dealers. | |
On October 1, 2011, TrueCar acquired ALG from Dealertrack Holdings Inc. ("Dealertrack"). ALG is a provider of data and consulting services to the automotive industry, specializing in automotive residual value forecasting; consulting services for manufacturers, financial institutions and fleet companies; lease and loan portfolio risk analysis and securitization valuations; data analysis products; and custom modeling tools for residual values and remarketing. During 2011, TrueCar also acquired the assets of Honk LLC ("Honk") and Carperks (Note 3). | |
TrueCar was incorporated in the state of Delaware on February 25, 2005, and began business operations in April 2005. Its principal corporate offices are located in Santa Monica, California. | |
Reverse Stock Split | |
The Company's board of directors and stockholders approved a 2-for-3 reverse split of its common stock and its Series A convertible preferred stock, or preferred stock, which was effected on May 2, 2014. All share data and per share data, and related information presented in the consolidated financial statements and accompanying notes have been retroactively adjusted, where applicable, to reflect the reverse stock split of its common stock and preferred stock. | |
Capital Resources and Liquidity | |
Since inception, the Company's operations have been financed primarily by net proceeds from the sales of shares of its common and preferred stock and from the issuance of indebtedness. For the years ended December 31, 2011, 2012, and 2013, the Company incurred a net loss of $8.9 million, $74.5 million and $25.1 million, respectively. For the six months ended June 30, 2014, the Company incurred a net loss of $25.0 million (unaudited). The Company also had an accumulated deficit at December 31, 2012, December 31, 2013 and June 30, 2014 of $137.5 million, $162.6 million, and $187.5 million (unaudited), respectively. At December 31, 2012, December 31, 2013 and June 30, 2014, the Company had cash and cash equivalents of $22.1 million, $43.8 million, and $111.8 million (unaudited), respectively. | |
Initial Public Offering (unaudited) | |
In May 2014, the Company completed its initial public offering ("IPO") in which the Company sold an aggregate of 8,941,250 (unaudited) shares of its common stock, including 1,166,250 (unaudited) shares sold pursuant to the exercise by the underwriters of their option to purchase such shares, at a public offering price of $9.00 per share (unaudited). The Company received net proceeds of $69.2 million (unaudited), after deducting underwriting discounts and commissions and offering expenses payable by the Company, from sales of its shares in the IPO. Immediately prior to the completion of the IPO, all shares of the then-outstanding Series A convertible preferred stock automatically converted into 2,857,143 (unaudited) shares of common stock. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | |||||||||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||||||||||||||||||||||||||
2. Summary of Significant Accounting Policies | ||||||||||||||||||||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||||||||||||||||||||
The Company's accounting and financial reporting policies conform to accounting principles generally accepted in the United States of America. | ||||||||||||||||||||||||||||||||||||||
During the preparation of the financial statements for the year ended December 31, 2011, the Company identified adjustments relating to timing of revenue recognition, accrued sales taxes and expenses on related party loans affecting 2010 and prior periods. The aggregate amount of these adjustments would have reduced net loss by $360,000 and $420,000 for 2009 and 2010, respectively. The Company concluded these adjustments were not material to any prior reporting period. The Company also concluded that recording the cumulative effect of these adjustments of $780,000 during the year ended December 31, 2011 was not material to the 2011 financial statements and accordingly, the Company recorded these adjustments during the year ended December 31, 2011. | ||||||||||||||||||||||||||||||||||||||
Unaudited Interim Financial Statements | ||||||||||||||||||||||||||||||||||||||
The accompanying interim consolidated balance sheet at June 30, 2014, the consolidated statements of comprehensive loss, and cash flows for the six months ended June 30, 2013 and 2014, the consolidated statement of stockholders' equity (deficit) for the six months ended June 30, 2014 and the financial information disclosed in these notes to the consolidated financial statements related to the six months ended June 30, 2013 and 2014 are unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of the Company's management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company's financial position at June 30, 2014 and its results of operations and its cash flows for the six months ended June 30, 2013 and 2014. The results for the six months ended June 30, 2014 are not necessarily indicative of the results expected for the full year. | ||||||||||||||||||||||||||||||||||||||
Reclassification | ||||||||||||||||||||||||||||||||||||||
Certain prior year balance sheet amounts have been reclassified for consistency with the current period presentation. These reclassifications were not material to the financial statements. | ||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||||||||||||||||||||
The accompanying consolidated financial statements include the accounts of TrueCar and its wholly owned subsidiaries. Business acquisitions are included in the Company's consolidated financial statements from the date of the acquisition. The Company's purchase accounting resulted in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||||||||||||||||||||||||||
Use of Estimates | ||||||||||||||||||||||||||||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to judgment and use of estimates include sales allowances and allowances for doubtful accounts, the fair value of assets and liabilities assumed in business combinations, the recoverability of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and intangible assets, contingencies, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. In addition, the Company engaged valuation specialists to assist with management's determination of the valuation of common stock, in periods prior to the Company's initial public offering, and fair values of assets and liabilities assumed in business combinations. | ||||||||||||||||||||||||||||||||||||||
Segments | ||||||||||||||||||||||||||||||||||||||
The Company has one operating segment. The Company's Chief Operating Decision Maker ("CODM"), the Chief Executive Officer and the Chief Financial Officer, manages the Company's operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. | ||||||||||||||||||||||||||||||||||||||
The CODM reviews separate revenue information for its Transactions and Data and Other offerings. All other financial information is reviewed by the CODM on a consolidated basis. All of the Company's principal operations, decision-making functions and assets are located in the United States. | ||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | ||||||||||||||||||||||||||||||||||||||
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | ||||||||||||||||||||||||||||||||||||||
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Level 1 — Quoted prices in active markets for identical assets or liabilities or funds. | ||||||||||||||||||||||||||||||||||||||
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Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 includes U.S. Treasury, U.S. Government and agency debt securities, and certain corporate obligations. | ||||||||||||||||||||||||||||||||||||||
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Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||||||||||||||||||||||||
Fair Value Methods | ||||||||||||||||||||||||||||||||||||||
Fair value is based on quoted market prices, if available. If listed prices or quotes are not available, fair value is based on internally developed models that primarily use as inputs market-based or independently sourced market parameters. | ||||||||||||||||||||||||||||||||||||||
For financial instruments measured at fair value, the following section describes the valuation methodologies, key inputs and significant assumptions. | ||||||||||||||||||||||||||||||||||||||
Cash Equivalents | ||||||||||||||||||||||||||||||||||||||
Cash equivalents, consisting primarily of money market instruments and debt securities represent highly liquid investments with maturities of three months or less at purchase. Generally, market prices are used to determine the fair value of money market instruments and debt securities. | ||||||||||||||||||||||||||||||||||||||
Marketable Securities | ||||||||||||||||||||||||||||||||||||||
The marketable securities portfolio consists of debt securities. The Company uses quoted prices of identical securities traded in active and inactive markets. | ||||||||||||||||||||||||||||||||||||||
Preferred Stock Warrant Liability | ||||||||||||||||||||||||||||||||||||||
The convertible preferred stock issuable upon exercise of the convertible preferred stock warrants contained a puttable feature triggered by a deemed liquidation resulting from a change of control. Accordingly, warrants to purchase shares of the Company's convertible preferred stock were classified as a liability, recorded at fair value, and were re-measured to fair value at the end of each period. | ||||||||||||||||||||||||||||||||||||||
On August 30, 2011, in connection with the conversion of all the Company's then outstanding shares of convertible preferred stock to common stock, all the warrants to purchase shares of the Company's preferred stock were converted to warrants to purchase shares of the Company's common stock on a one-for-one basis. Upon conversion, the warrants were reclassified as equity and are no longer re-measured to fair value under generally accepted accounting principles. The fair value of the preferred stock warrants at the date of conversion was reclassified to additional paid-in capital. | ||||||||||||||||||||||||||||||||||||||
The Company determined the fair value of its convertible preferred stock warrants with the assistance of a third-party valuation specialist using the Black-Scholes option pricing model with the following assumptions at August 30, 2011, the date the warrants to purchase shares of the Company's preferred stock were converted to warrants to purchase shares of the Company's common stock: | ||||||||||||||||||||||||||||||||||||||
2011 | ||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 0.01% - 0.30% | |||||||||||||||||||||||||||||||||||||
Expected term (years) | 0.3 - 2.7 | |||||||||||||||||||||||||||||||||||||
Expected volatility | 45.00% | |||||||||||||||||||||||||||||||||||||
Dividend yield | — | |||||||||||||||||||||||||||||||||||||
Contingent Consideration Liability | ||||||||||||||||||||||||||||||||||||||
The Company recorded a contingent consideration liability upon the acquisition of Carperks in 2011 (Note 3). Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant. The Company assesses these estimates on an on-going basis as additional data impacting the assumptions is obtained. Changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the consolidated statements of comprehensive loss. The Company determined the fair value of the contingent consideration using the probability adjusted discounted cash flow method. The significant unobservable inputs used in the fair value measurement of contingent consideration are the probabilities of achieving sales milestones, the period in which these milestones are expected to be achieved, and discount rates. At December 31, 2012, it was determined to be probable that the Company would achieve the sales milestones as included in the Carperks purchase agreement. This resulted in the recognition of an obligation of $1.8 million at December 31, 2012. The change in the fair value of contingent consideration liability during the year ended December 31, 2012, primarily related to a significant increase in the probability of achieving the sales milestone as a result of the Company amending the original agreement to expand the time permitted to achieve the milestone. | ||||||||||||||||||||||||||||||||||||||
Significant increases or decreases in the probabilities of achieving the milestones would result in a significantly higher or lower fair value measurement, respectively. Significant increases or decreases in the period in which milestones will be achieved would result in a significantly lower or higher fair value measurement, respectively. The Company paid Carperks approximately $1.9 million through December 31, 2013 as the sales milestones were achieved during 2013. | ||||||||||||||||||||||||||||||||||||||
The following table summarizes the Company's financial assets and liabilities measured at fair value on a recurring basis at December 31, 2012, 2013 and at June 30, 2014 (unaudited) by level within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): | ||||||||||||||||||||||||||||||||||||||
At December 31, 2012 | At December 31, 2013 | At June 30, 2014 (unaudited) | ||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair | Level 1 | Level 2 | Level 3 | Total Fair | Level 1 | Level 2 | Level 3 | Total Fair | |||||||||||||||||||||||||||
Value | Value | Value | ||||||||||||||||||||||||||||||||||||
Cash equivalents | $ | 6,807 | $ | — | $ | — | $ | 6,807 | $ | 7,726 | $ | — | $ | — | $ | 7,726 | $ | 98,929 | $ | — | $ | — | $ | 98,929 | ||||||||||||||
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Total Assets | $ | 6,807 | $ | — | $ | — | $ | 6,807 | $ | 7,726 | $ | — | $ | — | $ | 7,726 | $ | 98,929 | $ | — | $ | — | $ | 98,929 | ||||||||||||||
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Contingent consideration | $ | — | $ | — | $ | 1,798 | $ | 1,798 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
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Total Liabilities | $ | — | $ | — | $ | 1,798 | $ | 1,798 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
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The following table summarizes the changes in Level 3 financial instruments. | ||||||||||||||||||||||||||||||||||||||
Warrants | Contingent | |||||||||||||||||||||||||||||||||||||
Consideration | ||||||||||||||||||||||||||||||||||||||
Fair value, at December 31, 2010 | $ | 670 | $ | — | ||||||||||||||||||||||||||||||||||
Contingent consideration from acquisitions | — | 428 | ||||||||||||||||||||||||||||||||||||
Changes in fair value | 1,882 | — | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock warrants to common stock warrants | (2,552 | ) | — | |||||||||||||||||||||||||||||||||||
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Fair value, at December 31, 2011 | $ | — | $ | 428 | ||||||||||||||||||||||||||||||||||
Changes in fair value | — | 1,370 | ||||||||||||||||||||||||||||||||||||
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Fair value, at December 31, 2012 | $ | — | $ | 1,798 | ||||||||||||||||||||||||||||||||||
Changes in fair value | — | 95 | ||||||||||||||||||||||||||||||||||||
Payments on contingent consideration | — | (1,893 | ) | |||||||||||||||||||||||||||||||||||
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Fair value, at December 31, 2013 and June 30, 2014 (unaudited) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
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The carrying amounts of cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these items. The fair value of the Company's revolving line of credit approximates carrying value based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. | ||||||||||||||||||||||||||||||||||||||
Certain assets, including goodwill and intangible assets are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. For the years ended December 31, 2012 and 2013, and the six months ended June 30, 2014 (unaudited) no impairments were recorded on those assets required to be measured at fair value on a non-recurring basis. | ||||||||||||||||||||||||||||||||||||||
Concentrations of Credit and Business Risk | ||||||||||||||||||||||||||||||||||||||
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, accounts receivable and notes receivable from related parties (Note 13). | ||||||||||||||||||||||||||||||||||||||
The Company, at times, maintains cash balances at financial institutions in excess of amounts insured by United States government agencies or payable by the United States government directly. The Company places its cash and cash equivalents with high credit quality financial institutions. | ||||||||||||||||||||||||||||||||||||||
Each reporting period, the Company reevaluates each customer's ability to satisfy credit obligations and maintains an allowance for doubtful accounts based on the evaluations. No single customer comprised more than 10% of the Company's total revenues for the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2013 and 2014 (unaudited). No single customer comprised more than 10% of the Company's accounts receivable balance at December 31, 2012 and 2013 and June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
The Company's single largest source of unique visitors to its Auto Buying Programs comes from its affinity group marketing partner relationship with United Services Automobile Association ("USAA"), a related party (Note 13). Changes in the Company's relationship with USAA and its promotion and marketing of the Company's Auto Buying Programs may have a material adverse effect on the Company's business, financial condition, results of operations and cash flows. | ||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||||||||||||||||||||
The Company considers all highly liquid investments purchased with an original or remaining maturity at the date of purchase of three months or less to be cash equivalents. At December 31, 2012 and 2013, and June 30, 2014 (unaudited) cash and cash equivalents were comprised of cash held in money market funds and checking accounts. | ||||||||||||||||||||||||||||||||||||||
Restricted Cash | ||||||||||||||||||||||||||||||||||||||
Restricted cash at December 31, 2012 and 2013 and June 30, 2014 (unaudited) represents cash on deposit with a financial institution which served as collateral under an Automotive Website Program Partnership Agreement with Yahoo! (Note 8).The restriction on the cash will lapse in conjunction with the expiration of the credit agreement on September 29, 2014. | ||||||||||||||||||||||||||||||||||||||
Investments in Marketable Securities | ||||||||||||||||||||||||||||||||||||||
Investments in marketable securities are classified as available for sale and are recorded at fair value, with the unrealized gains and losses if any, net of taxes, reported as a component of accumulated other comprehensive income (loss) until realized or until a determination is made that other-than-temporary decline in market value or impairment has occurred. | ||||||||||||||||||||||||||||||||||||||
When the Company does not intend to sell a debt security, and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of other-than-temporary impairment of a debt security into earnings and the remaining portion in other comprehensive (loss). The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as determined based on cash flow projections. The Company did not have any debt securities with other-than-temporary impairments at December 31, 2011. The Company did not hold any debt securities at December 31, 2012 and 2013 and June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
In determining whether other-than-temporary impairment exists for equity securities, management considers: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. | ||||||||||||||||||||||||||||||||||||||
The cost of marketable securities sold is based upon the specific identification method and any realized gains or losses on the sale of investments are reflected as a component of other income or expense. There were no significant realized and unrealized gains or losses on marketable securities for the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2013 (unaudited) and June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
In addition, the Company classifies marketable securities as current or non-current based upon whether such assets are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle. | ||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Allowance for Doubtful Accounts, and Sales Allowances | ||||||||||||||||||||||||||||||||||||||
The Company extends credit in the normal course of business to its customers and performs credit evaluations on a case-by-case basis. The Company does not obtain collateral or other security related to its accounts receivable. | ||||||||||||||||||||||||||||||||||||||
Accounts receivable are recorded based on the amount due from the customer and do not bear interest. The Company reduces accounts receivable by a sales allowance and an allowance for doubtful accounts. | ||||||||||||||||||||||||||||||||||||||
The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its network of dealers. Sales allowances relate primarily to credits issued where a dealer claims that an introduction was previously identified by the dealer from a source other than the Company. While contractually obligated to pay the invoice, the Company may issue a credit against the invoice to maintain overall dealer relations. In assessing the adequacy of the sales allowance, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments and credits and ultimate losses may vary from actual results which could be material to the financial statements, however, to date, actual sales allowances have been materially consistent with the Company's estimates. | ||||||||||||||||||||||||||||||||||||||
The Company determines its allowance for doubtful accounts based on its historical write-off experience and when specific circumstances make it likely that recovery will not occur. The Company reviews the allowance for doubtful accounts each reporting period and assesses the aging of account balances, with an emphasis on those that are past due over ninety days. Account balances are charged off against the allowance when the Company determines that it is probable the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. | ||||||||||||||||||||||||||||||||||||||
The following table summarizes the changes in the allowance for doubtful accounts and sales allowances (in thousands): | ||||||||||||||||||||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||||||||||||||||||||||||
Allowances, at beginning of period | $ | 433 | $ | 2,369 | $ | 1,621 | ||||||||||||||||||||||||||||||||
Charged as a reduction of revenue | 6,304 | 6,898 | 6,985 | |||||||||||||||||||||||||||||||||||
Charged to bad debt expense in general and administrative expenses | 137 | 668 | 153 | |||||||||||||||||||||||||||||||||||
Write-offs, net of recoveries | (4,505 | ) | (8,314 | ) | (6,575 | ) | ||||||||||||||||||||||||||||||||
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Allowances, at end of period | $ | 2,369 | $ | 1,621 | $ | 2,184 | ||||||||||||||||||||||||||||||||
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Property and Equipment, net | ||||||||||||||||||||||||||||||||||||||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three to five years, or for leasehold improvements, over the term of the lease if shorter. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company's results of operations. | ||||||||||||||||||||||||||||||||||||||
The Company leases equipment under capital lease agreements. The assets and liabilities under capital lease are recorded at the lesser of the present value of aggregate future minimum lease payments, including estimated bargain purchase options, or the fair value of the asset under lease. Assets under capital lease are depreciated using the straight-line method over the life of the lease. | ||||||||||||||||||||||||||||||||||||||
Software and Website Development Costs | ||||||||||||||||||||||||||||||||||||||
The Company accounts for the costs of computer software obtained or developed for internal use in accordance with ASC 350, Intangibles — Goodwill and Other. Computer software development costs and website development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of computer hardware and software, and costs incurred in developing features and functionality. These capitalized costs are included in property and equipment on the consolidated balance sheets. | ||||||||||||||||||||||||||||||||||||||
The Company expenses costs incurred in the preliminary project and post implementation stages of software development and capitalizes costs incurred in the application development stage and costs associated with significant enhancements to existing internal use software applications. | ||||||||||||||||||||||||||||||||||||||
Software development costs are amortized using the straight-line method over an estimated useful life of three years commencing when the software development project is ready for its intended use. | ||||||||||||||||||||||||||||||||||||||
Costs incurred related to less significant modifications and enhancements as well as maintenance are expensed as incurred. | ||||||||||||||||||||||||||||||||||||||
At December 31, 2012 and 2013, and June 30, 2014, internal use capitalized software development costs were $11.2 million, $16.2 million, and $20.4 million (unaudited) respectively, before accumulated amortization of $3.5 million, $6.4 million, and $8.5 million (unaudited) respectively. During 2013, the Company wrote off capitalized software development costs that were no longer in use of $1.6 million and accumulated amortization of $0.9 million, which resulted in an acceleration of amortization of $0.7 million. | ||||||||||||||||||||||||||||||||||||||
Amortization expense with respect to capitalized software development costs at December 31, 2013 for each of the three years through December 31, 2016 is estimated as follows (in thousands): | ||||||||||||||||||||||||||||||||||||||
Years ended December 31, | ||||||||||||||||||||||||||||||||||||||
2014 | 4,626 | |||||||||||||||||||||||||||||||||||||
2015 | 3,521 | |||||||||||||||||||||||||||||||||||||
2016 | 1,690 | |||||||||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||||||||
Total amortization expense | $ | 9,837 | ||||||||||||||||||||||||||||||||||||
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Intangible Assets Acquired in Business Combinations | ||||||||||||||||||||||||||||||||||||||
The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination, and allocates the purchase price to the tangible and intangible assets acquired and liabilities assumed based on its best estimate of fair value. Acquired intangible assets include: trade names, customer relationships, and developed technology. The Company determines the appropriate useful life of intangible assets by performing an analysis of cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortization. The estimated useful lives for trade names, customer relationships, and technology are generally, one to fifteen years, five to ten years, and three to ten years, respectively. | ||||||||||||||||||||||||||||||||||||||
Long-Lived Assets | ||||||||||||||||||||||||||||||||||||||
The Company evaluates the recoverability of its long-lived assets with finite useful lives for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable and the expected undiscounted future cash flows attributable to the asset group are less than the carrying amount of the asset group, an impairment loss equal to the excess of the asset's carrying value over its fair value is recorded. Fair value is determined based upon estimated discounted future cash flows. During the years ended December 31, 2011, 2012 and 2013, and the six months ended June 30, 2014 (unaudited), there were no impairment charges recorded on the Company's long-lived assets. | ||||||||||||||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||||||||||||||
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. | ||||||||||||||||||||||||||||||||||||||
Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill may be impaired. | ||||||||||||||||||||||||||||||||||||||
Events or changes in circumstances which could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company's use of the acquired assets or the strategy for the Company's overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. | ||||||||||||||||||||||||||||||||||||||
The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, it is required to perform the first of a two-step impairment test. Alternatively, the Company may elect to proceed directly to the first of a two-step impairment test and bypass the qualitative assessment. | ||||||||||||||||||||||||||||||||||||||
The first step involves comparing the estimated fair value of a reporting unit with its respective book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then the carrying amount of the goodwill is compared with its implied fair value. The estimate of implied fair value of goodwill may require valuations of certain internally generated and unrecognized intangible assets. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The Company tests for goodwill impairment annually at December 31. During the years ended December 31, 2011, 2012 and 2013, there were no impairment charges recorded on the Company's goodwill. The fair value of reporting units exceeded their carrying values by a significant margin during each reporting period. During the six months ended June 30, 2014, there were no triggering events which would require an impairment assessment to be performed of the Company's goodwill (unaudited). | ||||||||||||||||||||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||||||||||||||||||||
The Company recognizes revenue, net of sales allowances, when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fees are fixed or determinable, and (iv) collectability is reasonably assured. Deferred revenue is recognized on the accompanying consolidated balance sheets when payments are received in advance of the Company meeting all of the revenue recognition criteria described above. The Company recorded deferred revenue (included in other accrued expenses) of $0.4 million at December 31, 2012 and 2013, and $0.7 million at June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
Transaction Revenues | ||||||||||||||||||||||||||||||||||||||
Auto Buying Program Revenues | ||||||||||||||||||||||||||||||||||||||
Revenues consist of fees paid by dealers participating in the Company's dealer network with which the Company has an agreement. Dealers pay the Company fees either on a per vehicle basis for sales to Auto Buying Program users or in the form of a subscription arrangement. | ||||||||||||||||||||||||||||||||||||||
The Company recognizes revenue for fee arrangements based on a per vehicle basis when the vehicle sale has occurred between the Auto Buying Program user and the dealer. Under the contractual terms and conditions of arrangements with its network of participating certified dealers, the dealer is required to pay the Company upon the sale of a vehicle to an Auto Buying Program user that has been provided to the dealer by the Company. Recognition of revenue from the sale is not contingent upon verification or acceptance of the transaction by the dealer. | ||||||||||||||||||||||||||||||||||||||
Upon a user deciding to proceed with the user's vehicle purchase through the Company, the user provides his or her name, address, e-mail, and a phone number during the process of obtaining a Guaranteed Savings Certificate, which gives the Company the identity and source of a TrueCar introduction provided to a specific dealer prior to an actual sale occurring. After a sale occurs, the Company receives information regarding the sale, including the identity of the purchaser, via the dealer management system used by the dealer that made the sale. In addition to dealer management systems, the Company receives information regarding vehicle sales from a variety of data sources, including third party car sales aggregators, car dealer networks, and other publicly available sources (collectively "sales data") and uses this sales data to further verify that a sale has occurred between an Auto Buying Program user and a dealer, as well as a means to invoice the dealer shortly after the completion of the sales transaction. Actual vehicle sales data is reported on a daily basis shortly following the date of sale. | ||||||||||||||||||||||||||||||||||||||
The Company also recognizes revenue from dealers under subscription agreements. Subscription fee arrangements are short-term in nature with terms ranging from one to three months and are cancellable by the dealer or the Company at any time. Subscription arrangements fall into three types: flat rate subscriptions, subscriptions subject to downward adjustment based on a minimum number of vehicle sales ("guaranteed sales") and subscriptions subject to downward adjustment based on a minimum number of introductions ("guaranteed introductions"). Under flat rate subscription arrangements fees are charged at a monthly flat rate regardless of the number of sales made to users of the Company's platform by the dealer. For flat rate subscription arrangements the Company recognizes the fees as revenue over the subscription period on a straight line basis which corresponds to the period that the Company is providing the dealer access to the Auto Buying Program. Under guaranteed sales subscription arrangements fees are charged based on the number of guaranteed sales multiplied by a fixed amount per vehicle. To the extent that the actual number of vehicles sold by the dealers to users of the Company's platform is less than the number of guaranteed sales, the Company provides a credit to the dealer. To the extent that the actual number of vehicles sold exceeds the number of guaranteed sales, the Company is not entitled to any additional fees. Under guaranteed introductions subscription arrangements, fees are charged based on the number of guaranteed introductions multiplied by a fixed amount per introduction. To the extent that the number of actual introductions is less than the number of guaranteed introductions, the Company provides a credit to the dealer. To the extent that the actual number of introductions provided exceeds the number guaranteed, the Company is not entitled to any additional fees. For guaranteed sales and guaranteed introductions subscription arrangements, the Company recognizes revenue based on the lesser of (i) the actual number of sales generated or introductions delivered through the Auto Buying Program during the subscription period multiplied by the contracted price per sale/introduction or (ii) the straight-line of the subscription fee over the period over which the services are delivered. | ||||||||||||||||||||||||||||||||||||||
OEM Incentives | ||||||||||||||||||||||||||||||||||||||
The Company enters into arrangements with automobile manufacturers ("OEM") to promote the sale of their vehicles through the offering of additional consumer incentives to members of the Company's affinity group marketing partners. These manufacturers pay a per-vehicle fee to the Company for promotion of the incentive and the Company recognizes as revenue the per-vehicle incentive fee at the time the sale of the vehicle has occurred between the Auto Buying Program user and the dealer. | ||||||||||||||||||||||||||||||||||||||
Data and Other Revenues | ||||||||||||||||||||||||||||||||||||||
Data and Other Services | ||||||||||||||||||||||||||||||||||||||
Revenues are generated from the sale of lease residual value data for new and used leased automobiles, guidebooks, and consulting services. Sales are principally made to vehicle manufacturers, vehicle financing companies, investment banks, automobile dealers, and insurance companies. Data and consulting services customers typically prepay for lease residual value data and guidebooks annually in the form of a subscription in advance. | ||||||||||||||||||||||||||||||||||||||
Data and consulting services sales arrangements may include multiple deliverables including sale of lease residual data, from guidebooks and from consulting services. For multiple deliverable revenue arrangements, the Company first assesses whether each deliverable has value to the customer on a standalone basis and performance is considered probable and substantially in its control. Data and consulting services can be sold both on a standalone basis and as part of multiple deliverable arrangements. The deliverables constitute separate units of accounting because the deliverables have standalone value to the customer and as such, the total arrangement consideration is allocated to each unit of accounting using the relative selling price hierarchy. This hierarchy requires the selling price of each deliverable in a multiple deliverable revenue arrangement to be based on, in descending order: (i) vendor-specific objective evidence, or VSOE, (ii) third-party evidence of selling price, or TPE, or (iii) management's best estimated selling price, or BESP. | ||||||||||||||||||||||||||||||||||||||
The Company cannot establish VSOE or TPE because the deliverables are not sold separately within a sufficiently narrow price range or third party pricing for comparable services is not available; therefore, it applies judgment to determine BESP. The objective of BESP is to determine the price at which the Company would transact a sale if the service were sold on a stand-alone basis. The determination of BESP requires the Company to make significant estimates and judgments and the Company considers numerous factors in this determination, including the nature of the deliverables, market conditions and the competitive landscape, internal costs, and its pricing and discounting practices. The Company updates its estimates of BESP on a periodic basis as events and as circumstances may require. | ||||||||||||||||||||||||||||||||||||||
Revenue allocated to each element from the sale of lease residual value data, guidebooks, and consulting services is recognized when the basic recognition criteria are met for each element. Sales attributed to residual value data and guidebooks are recognized when the data or guidebooks are delivered and consulting services are recognized when the project is completed. | ||||||||||||||||||||||||||||||||||||||
Lead Referral Fees | ||||||||||||||||||||||||||||||||||||||
Lead referral fee revenues consist of fees earned through an online process that refers consumers to out-of-network auto dealers and financing companies for new and used vehicles and auto loans when the Company is unable to identify a dealer with a vehicle in the Company's dealer network for which a prospective car buyer is searching. Fees are recognized at the time the lead referral is transmitted to, and accepted by, the lead buying entities and are not contingent on the sale of a vehicle. The Company is not a party to the arrangement with, and is not the primary obligor with, the lead buyer's dealer and accordingly, revenue is recognized for the net fee received for the lead from the lead buyer. | ||||||||||||||||||||||||||||||||||||||
Cost of Revenue (exclusive of depreciation and amortization) | ||||||||||||||||||||||||||||||||||||||
Cost of revenue includes expenses related to the fulfillment of the Company's services, consisting primarily of data costs and licensing fees paid to third party service providers and expenses related to operating the Company's website and mobile applications, including those associated with its data centers, hosting fees, data processing costs required to deliver introductions to its network of TrueCar Certified Dealers, employee costs related to dealer operations, sales matching, and employee and consulting costs related to delivering data and consulting services to the Company's customers. Cost of revenue excludes depreciation and amortization of software development costs and other hosting and data infrastructure equipment used to operate the Company's platforms, which are included in the depreciation and amortization line item on its statement of comprehensive loss. | ||||||||||||||||||||||||||||||||||||||
Sales and Marketing | ||||||||||||||||||||||||||||||||||||||
Sales and marketing expenses consist primarily of radio and television advertising and digital customer acquisition costs, loan subvention costs where the Company pays certain affinity group marketing partners a portion of a consumers' borrowing costs for car loan products offered by these affinity group marketing partners, marketing fees earned by affinity group marketing partners for sales of vehicles from consumer traffic originated from Auto Buying Program websites maintained and operated by the Company for affinity group marketing partners and headcount related expenses for its sales and marketing staff, including salaries, benefits, bonuses, stock-based compensation and commissions costs of marketing and promotional events, public relations costs, corporate communications, and allocated overhead. In addition, the Company also includes compensation expense in sales and marketing recorded in connection with the fair value of warrants issued to an affinity group partner, a direct marketing firm and a service provider (Note 9). | ||||||||||||||||||||||||||||||||||||||
The Company classifies fees paid to affinity group marketing partners as sales and marketing expense as the affinity group marketing programs are marketing channels the Company uses to increase consumer awareness and to acquire traffic for, and drive users to, its auto buying platforms. The Company's affinity group marketing partners do not provide any part of the service that would result in a vehicle sale for a dealer. | ||||||||||||||||||||||||||||||||||||||
Marketing and advertising costs to promote the Company's services are expensed as incurred. Media production costs are expensed the first time the advertisement is aired. Marketing and advertising expenses were $15.0 million, $36.5 million and $27.5 million for the years ended December 31, 2011, 2012 and 2013, respectively. Included in the $36.5 million of marketing and advertising expenses for the year ended December 31, 2012 is $20.0 million for a guaranteed minimum number of unique visitors under an agreement with Yahoo! (Note 8). Marketing and advertising expenses were $9.2 million (unaudited) and $27.1 million (unaudited) for the six months ended June 30, 2013 and 2014, respectively. Prepaid expenses include prepaid media costs of $0.5 million, $1.5 million and $3.4 million (unaudited) at December 31, 2012 and 2013, and June 30, 2014, respectively. | ||||||||||||||||||||||||||||||||||||||
Technology and Development | ||||||||||||||||||||||||||||||||||||||
Technology and development expenses consist primarily of personnel and related expenses for technology and development staff, including salaries, benefits, bonuses and stock-based compensation, the cost of certain third-party service providers, and allocated overhead. Technology and development expenses are expensed as incurred. | ||||||||||||||||||||||||||||||||||||||
General and Administrative | ||||||||||||||||||||||||||||||||||||||
General and administrative expenses consist primarily of personnel and related expenses for administrative, legal, finance and human resource staffs, including salaries, benefits, bonuses and stock-based compensation; professional fees; insurance premiums; other corporate expenses; and allocated overhead. | ||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||||||||||||||||||||
On April 18, 2005, TrueCar's Board of Directors adopted the 2005 Stock Plan (the "2005 Plan"). On September 11, 2008, TrueCar.com's Board of Directors adopted the 2008 Stock Plan (the "2008 Plan"). At December 31, 2013, a total of 22,436,208 and 673,266 shares of common stock have been authorized and reserved for issuance under the 2005 Plan and 2008 Plan, respectively, in the form of incentive or nonqualified stock options and stock purchase rights. The Board of Directors of TrueCar, with the advice of and input from the Compensation Committee, determines the terms and conditions of each grant under both plans. Employees, officers, directors, and consultants are eligible to receive stock options and restricted stock awards under the plans. | ||||||||||||||||||||||||||||||||||||||
The exercise price of nonqualified options may not be less than 85% of the fair market value of the common stock at the date of grant. The exercise price of incentive stock options may not be less than the fair market value of the common stock at the date of grant. The exercise price of incentive stock options granted to individuals that own greater than 10% of the voting stock may not be less than 110% of the fair market value of the common stock at the date of grant. The purchase price of stock purchase rights may not be less than 85% of the fair market value of the common stock at the date of grant. The purchase price of stock purchase rights granted to individuals that own greater than 10% of the voting stock may not be less than 110% of the fair market value of the common stock at the date of grant. | ||||||||||||||||||||||||||||||||||||||
Options granted under these plans become exercisable at a rate of no less than 20% per year over five years from the grant date, except for options granted to officers, directors, and consultants in which exercise periods are determined based upon such conditions as determined by the Board of Directors and set forth in the option agreement. The term of each option is based upon such conditions as determined by the option agreement; however, the term can be no more than ten years from the date of the grant. | ||||||||||||||||||||||||||||||||||||||
In the case of an incentive stock option granted to an optionee who, at the time the option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary, the term of the option is five years from the date of grant or such shorter term as may be provided in the option agreement. | ||||||||||||||||||||||||||||||||||||||
To date, the Company's stock-based compensation has consisted of stock options and restricted stock awards granted to employees and non-employees. | ||||||||||||||||||||||||||||||||||||||
The Company recognizes stock-based compensation expense related to employee stock option and restricted stock grants in accordance with ASC 718, Compensation — Stock Compensation. This standard requires the Company to record stock-based compensation expense equal to the fair value of awards granted to employees. The Company determined the fair value of awards granted to employees using the Black-Scholes option pricing model that included the following weighted average assumptions under the plans: | ||||||||||||||||||||||||||||||||||||||
Year Ended | Six Months | |||||||||||||||||||||||||||||||||||||
December 31, | Ended | |||||||||||||||||||||||||||||||||||||
June 30, | ||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | ||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 2.04 | % | 0.96 | % | 1.41 | % | 1.1 | % | 1.95 | % | ||||||||||||||||||||||||||||
Expected term (years) | 6.01 | 6 | 6.06 | 6.07 | 6.26 | |||||||||||||||||||||||||||||||||
Expected volatility | 48 | % | 60 | % | 61 | % | 63 | % | 58 | % | ||||||||||||||||||||||||||||
Dividend yield | — | — | — | — | — | |||||||||||||||||||||||||||||||||
The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company's employee stock options. | ||||||||||||||||||||||||||||||||||||||
The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. The expected term of options granted is calculated based upon actual historical exercise and post-vesting cancellations, adjusted for expected future exercise behavior. | ||||||||||||||||||||||||||||||||||||||
The Company determined the expected volatility assumption for options granted using the frequency of daily historical prices of comparable public company's common stock for a period equal to the expected term of the options. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future stock option grants. | ||||||||||||||||||||||||||||||||||||||
The dividend yield assumption for options granted is based on the Company's history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future. | ||||||||||||||||||||||||||||||||||||||
As stock-based compensation expense recognized in the Company's consolidated statements of comprehensive loss is based on awards ultimately expected to vest, the amount has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company's historical experience and future expectations. | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation for employee awards is recognized on a straight-line basis over the requisite period, except for performance-based awards which are recognized using the graded vesting model. | ||||||||||||||||||||||||||||||||||||||
Compensation expense for non-employee stock-based awards is recognized in accordance with ASC 505, Equity — Equity-Based Payments to Non-Employees. Under this standard, stock option awards issued to non-employees are accounted for at fair value using the Black-Scholes option-pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The Company records compensation expense based on the then-current fair values of the stock options at each financial reporting date. Compensation recorded during the service period is adjusted in subsequent periods for changes in the stock options' fair value until the earlier of the date at which the non-employee's performance is complete or a performance commitment is reached, which is generally when the stock option vests. | ||||||||||||||||||||||||||||||||||||||
For purposes of financial accounting for stock-based compensation, the Company has determined the fair values of its options based in part on the work of third-party valuation specialists. The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If the Company had made different assumptions, its stock-based compensation expense and its net loss could have been significantly different. | ||||||||||||||||||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||||||||||||||||||
The Company accounts for income taxes under the liability method. Under the liability method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. | ||||||||||||||||||||||||||||||||||||||
The Company determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions meeting the more-likely-than-not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if any, in its income tax provision in the accompanying statements of comprehensive loss. | ||||||||||||||||||||||||||||||||||||||
Earnings Per Share Attributable to Common Stockholders | ||||||||||||||||||||||||||||||||||||||
The Company applies the two-class method for calculating basic earnings per share. Under the two-class method, net income (loss) is reduced by cumulative preferred stock dividends and the residual amount is allocated between common stock and other participating securities based on their participation rights. Participating securities comprised of preferred and restricted common stock, which participate in dividends, if declared, by the Company. As the Company has reported a net loss for all periods, and the participating securities were not contractually obligated to share in the losses of the Company, accordingly, no losses were allocated to the participating securities. | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding, net of the weighted average unvested restricted stock subject to repurchase by the Company, if any, during the period. Diluted earnings per share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, adjusted for the effects of potentially dilutive common stock, which are comprised of stock options and stock warrants, using the treasury-stock method, and convertible preferred stock and notes payable, using the if-converted method. Because the Company reported losses attributable to common stockholders for all periods presented, all potentially dilutive common stock are antidilutive for those periods. | ||||||||||||||||||||||||||||||||||||||
The following table presents the number of anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders at December 31, 2011, 2012 and 2013 and at June 30, 2013 and 2014 (in thousands): | ||||||||||||||||||||||||||||||||||||||
December 31, | June 30, | |||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | ||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
Options to purchase common stock | 15,243 | 15,419 | 18,363 | 16,078 | 26,665 | |||||||||||||||||||||||||||||||||
Common stock warrants | 8,697 | 5,154 | 5,931 | 5,251 | 3,981 | |||||||||||||||||||||||||||||||||
Conversion of convertible preferred stock | — | — | 2,857 | 2,857 | — | |||||||||||||||||||||||||||||||||
Unvested restricted stock awards | 469 | 122 | 55 | 95 | 741 | |||||||||||||||||||||||||||||||||
Contingently redeemable shares | — | 126 | — | 189 | — | |||||||||||||||||||||||||||||||||
Convertible promissory notes | — | 3,444 | — | — | — | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Total shares excluded from net loss per share attributable to common stockholders | 24,409 | 24,265 | 27,206 | 24,470 | 31,387 | |||||||||||||||||||||||||||||||||
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Comprehensive Loss | ||||||||||||||||||||||||||||||||||||||
Comprehensive loss encompasses all changes in equity other than those arising from transactions with stockholders, and consists of net loss and unrealized gains and losses on marketable securities. | ||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||||||||||||||||||||||||
Under the Jumpstart Our Business Startups Act ("JOBS Act"), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. | ||||||||||||||||||||||||||||||||||||||
In July 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update clarifying that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except in certain circumstances. The standards update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance did not have any impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In April 2014, the FASB issued an accounting standards update clarifying the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This standards update is effective for fiscal years beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. The adoption of this guidance is not expected to have any impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In May 2014, the FASB issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace all existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The guidance is effective for annual and interim reporting periods beginning after December 15, 2016. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In June 2014, the FASB issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. The adoption of this guidance is not expected to have an impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In August 2014, the FASB issued new guidance requiring management to assess an entity's ability to continue as a going concern. Specifically, the new guidance provides a definition of the term substantial doubt, requires an evaluation every reporting period including interim periods, provides principles for considering the mitigating effect of management's plans, requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, requires an express statement and other disclosures when substantial doubt is not alleviated, and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The new guidance is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have an impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
Business_Combinations
Business Combinations | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Business Combinations | ' | |||||||||||||
Business Combinations | ' | |||||||||||||
3. Business Combinations | ||||||||||||||
The Company accounts for acquisitions of businesses in accordance with ASC 805 — Business Combinations using the acquisition method of accounting where the cost is allocated to the underlying net tangible and intangible assets acquired based on their respective fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Acquisitions are included in the Company's consolidated financial statements at the acquisition date. Goodwill of $53.3 million represents the excess of the purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill of $13.3 million attributed to the ALG and Honk acquisitions is deductible for income tax purposes. | ||||||||||||||
Determining the fair value of certain acquired assets and liabilities is subjective in nature and often involves the use of significant estimates and assumptions, including but not limited to, the selection of appropriate valuation methodology, projected revenue, expense and cash flows and discount rates. | ||||||||||||||
The following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for business acquisitions made by the Company during the year ended December 31, 2011 (in thousands): | ||||||||||||||
ALG, Inc. | Honk LLC | Carperks | Total | |||||||||||
Assets acquired | ||||||||||||||
Cash | $ | 7,638 | — | — | $ | 7,638 | ||||||||
Accounts receivable | 1,526 | — | — | 1,526 | ||||||||||
Other assets | 276 | — | — | 276 | ||||||||||
Property and equipment | 230 | 19 | — | 249 | ||||||||||
Acquired technology | 29,600 | 1,000 | — | 30,600 | ||||||||||
Customer relationships | 5,000 | — | 1,300 | 6,300 | ||||||||||
Tradenames | 4,900 | — | 70 | 4,970 | ||||||||||
Goodwill | 51,206 | 712 | 691 | 52,609 | ||||||||||
| | | | | | | | | | | | | | |
Total assets acquired | 100,376 | 1,731 | 2,061 | 104,168 | ||||||||||
| | | | | | | | | | | | | | |
Liabilities assumed | 1,043 | 299 | — | 1,342 | ||||||||||
Deferred tax liabilities | 10,819 | — | — | 10,819 | ||||||||||
| | | | | | | | | | | | | | |
Net assets acquired | $ | 88,514 | $ | 1,432 | $ | 2,061 | $ | 92,007 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Consideration paid | ||||||||||||||
Common stock issued | $ | 82,500 | 1,412 | 133 | $ | 84,045 | ||||||||
Warrants issued | 6,014 | 20 | — | 6,034 | ||||||||||
Contingent consideration | — | — | 428 | 428 | ||||||||||
Cash paid | — | — | 1,500 | 1,500 | ||||||||||
| | | | | | | | | | | | | | |
Total consideration | $ | 88,514 | $ | 1,432 | $ | 2,061 | $ | 92,007 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The weighted average useful life of all identified acquired intangible assets is 10.2 years. The weighted average useful life for acquired technologies, customer relationships, and tradenames are 9.8 years, 9.0 years, and 14.8 years, respectively. | ||||||||||||||
On April 29, 2011, the Company acquired the assets and assumed the liabilities of Honk in exchange for 977,605 shares of the Company's common stock, 580,291 shares of which are subject to certain restrictions and vesting requirements based on future employee service conditions (the "Restricted Shares"). Under the arrangement, 313,625 and 266,666 of the Restricted Shares will vest over two years and four years, respectively. The restricted shares issued are subject to post-acquisition employment, and accordingly, the Company has accounted for them as post-acquisition compensation expense over the respective vesting periods. The remaining 397,314 shares of common stock have been recorded as purchase consideration for the acquisition and were valued based on the Company's stock price on the acquisition date. In addition, the Company issued a warrant for the purchase of an additional 5,724 shares of the Company's common stock at $0.01 per share. Honk provides consumers access to trusted consumer vehicle reviews and opinions. The Company acquired Honk to complement the existing facets of its business. | ||||||||||||||
On September 1, 2011, the Company acquired the assets and assumed the liabilities of American Transportation Marketing Group, LTD (operating as Carperks) in exchange for 16,666 shares of the Company's common stock, a cash payment of up to $1.5 million based on migration of Carperks' partners to the TrueCar platform, and contingent cash consideration of up to $1.9 million based on future sales. The Company acquired Carperks to gain access to its customer base which included a vast network of corporate leasing partners and organizations throughout the US. The 16,666 shares of common stock were valued based on the Company's stock price on the acquisition date. The cash payment is based on the migration of Carperks' customers to the TrueCar platform and was paid during 2011. At the date of the acquisition, the Company assessed the probabilities of Carperks meeting future sales and recorded contingent consideration of $0.4 million. From the acquisition date through December, 31, 2011, there were no significant changes to the value of the contingent consideration. On December 28, 2012, the Company and Carperks amended the sales thresholds to earn the contingent consideration and extended the earnout period through December 31, 2013. The Company then reassessed the probability of Carperks meeting future sales thresholds under the amended agreement and considered it probable the sales milestones would be achieved. As a result, during the fourth quarter of 2012, the Company recorded an increase in the fair value of the contingent consideration of $1.4 million. The change in fair value of the contingent consideration was recorded under general and administrative expense in the statement of comprehensive loss. | ||||||||||||||
On October 1, 2011, the Company acquired all the equity interests of ALG, a wholly owned subsidiary of Dealertrack, through a merger agreement. The transaction was structured as a tax-free reorganization and Dealertrack received 10,377,358 shares of TrueCar's common stock and warrants to purchase 4,231,416 shares of TrueCar's common stock at an exercise of $7.95 per share, as consideration. The shares of common stock were valued based on the Company's stock price on the acquisition date. The warrants were valued at the acquisition date using the Black-Scholes option pricing model with the following assumptions: contractual term of one year, expected volatility of 45%, risk-free rate of 0.19% and zero dividend-yield. ALG provides consulting and data services relating to automobile residual values to automotive manufacturers, financial institutions, and fleet services. The acquisition provided TrueCar with an opportunity to expand the Company's automotive industry footprint through ALG's longstanding industry relationships. | ||||||||||||||
As a result of the acquisitions, the Company recorded $0.7 million, $0.7 million, and $51.2 million of goodwill at each of the acquisition dates, respectively, for the acquisitions of Honk, Carperks, and ALG, respectively. Goodwill recorded in connection with the acquisitions is primarily attributable to the synergies expected to benefit the Company's existing Auto Buying Programs. | ||||||||||||||
For the year ended December 31, 2011, the Company incurred transaction costs of $1.9 million in connection with the above acquisitions which were expensed as incurred and included in general and administrative expense in the accompanying statement of comprehensive loss. | ||||||||||||||
Revenues and net loss attributable to the acquisitions for the period from the acquisition dates to December 31, 2011 were $2.4 million and $1.4 million, respectively. Revenues and net losses attributable solely to ALG from acquisition date to December 31, 2011 were $2.2 million and $1.2 million, respectively. | ||||||||||||||
No acquisitions were consummated during the years ended December 31, 2012 and 2013 and the six months ended June 30, 2014 (unaudited). | ||||||||||||||
Unaudited Pro Forma Financial Information | ||||||||||||||
The following table reflects the unaudited pro forma consolidated revenues and net loss for the year ended December 31, 2011 as if the acquisitions of ALG, Honk and Carperks had taken place on January 1, 2010, after giving effect to certain adjustments including the amortization of acquired intangible assets and the associated tax effect and the elimination of the Company's and the acquiree's non-recurring acquisition-related expenses (in thousands): | ||||||||||||||
2011 | ||||||||||||||
Revenues | $ | 84,754 | ||||||||||||
Net loss | $ | 14,666 | ||||||||||||
Revenues and net losses attributed to ALG for the year ended December 31, 2011 were $9.9 million and $7.9 million. | ||||||||||||||
The unaudited pro forma information presented does not purport to be indicative of the results that would have been achieved had the acquisitions been consummated at January 1, 2010 nor of the results which may occur in the future. The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable. | ||||||||||||||
Property_and_Equipment_net
Property and Equipment, net | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Property and Equipment, net | ' | ||||||||||
Property and Equipment, net | ' | ||||||||||
4. Property and Equipment, net | |||||||||||
Property and equipment consisted of the following at December 31, 2012 and 2013 and June 30, 2014 (in thousands): | |||||||||||
December 31, | |||||||||||
June 30, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(unaudited) | |||||||||||
Computer equipment and internally developed software | $ | 16,840 | $ | 22,517 | $ | 26,757 | |||||
Furniture and fixtures | 1,357 | 1,654 | 2,048 | ||||||||
Leasehold improvements | 2,306 | 2,921 | 3,050 | ||||||||
Vehicles | 45 | — | — | ||||||||
| | | | | | | | | | | |
20,548 | 27,092 | 31,855 | |||||||||
Less: Accumulated depreciation | (7,706 | ) | (11,854 | ) | (14,751 | ) | |||||
| | | | | | | | | | | |
Total property and equipment, net | $ | 12,842 | $ | 15,238 | $ | 17,104 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Total depreciation and amortization expense of property and equipment was $2.7 million, $5.6 million and $6.4 million for the years ended December 31, 2011, 2012 and 2013, respectively. Total depreciation and amortization expense of property and equipment was $3.4 million (unaudited) and $3.9 million (unaudited) for the six months ended June 30, 2013 and 2014 respectively. | |||||||||||
Amortization of internal use capitalized software development costs was $1.4 million, $2.8 million and $3.8 million for the years ended December 31, 2011, 2012 and 2013, respectively. Amortization of internal use capitalized software development costs was $2.0 million (unaudited) and $2.3 million (unaudited) for the six months ended June 30, 2013 and 2014, respectively. | |||||||||||
Intangible_Assets
Intangible Assets | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Intangible Assets | ' | ||||||||||||||||
Intangible Assets | ' | ||||||||||||||||
5. Intangible Assets | |||||||||||||||||
Intangible assets consisted of the following at December 31, 2012, December 31, 2013 and June 30, 2014 (in thousands): | |||||||||||||||||
At December 31, 2012 | |||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Weighted | ||||||||||||||
Value | amortization | Value | average useful | ||||||||||||||
life in years | |||||||||||||||||
Acquired technology and domain name | $ | 30,713 | $ | (4,306 | ) | $ | 26,407 | 9.75 | |||||||||
Customer relationships | 6,300 | (972 | ) | 5,328 | 8.97 | ||||||||||||
Tradenames | 4,970 | (478 | ) | 4,492 | 14.8 | ||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 41,983 | $ | (5,756 | ) | $ | 36,227 | 10.23 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
At December 31, 2013 | |||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Weighted | ||||||||||||||
Value | amortization | Value | average useful | ||||||||||||||
life in years | |||||||||||||||||
Acquired technology and domain name | $ | 30,725 | $ | (7,624 | ) | $ | 23,101 | 9.75 | |||||||||
Customer relationships | 6,300 | (1,732 | ) | 4,568 | 8.97 | ||||||||||||
Tradenames | 4,970 | (805 | ) | 4,165 | 14.8 | ||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 41,995 | $ | (10,161 | ) | $ | 31,834 | 10.23 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
At June 30, 2014 (unaudited) | |||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Weighted | ||||||||||||||
Value | amortization | Value | average useful | ||||||||||||||
life in years | |||||||||||||||||
Acquired technology and domain name | $ | 31,075 | $ | (9,260 | ) | $ | 21,815 | 9.7 | |||||||||
Customer relationships | 6,300 | (2,112 | ) | 4,188 | 8.97 | ||||||||||||
Tradenames | 4,900 | (898 | ) | 4,002 | 15 | ||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 42,275 | $ | (12,270 | ) | $ | 30,005 | 10.2 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
For the six months ended June 30, 2014, the increase in the gross intangible assets balance was due to the purchase of the True.com domain name for $0.4 million (unaudited). | |||||||||||||||||
Amortization expense by asset type for the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2013 and 2014 is shown below (in thousands): | |||||||||||||||||
Year Ended | Six Months | ||||||||||||||||
December 31, | Ended | ||||||||||||||||
June 30, | |||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | |||||||||||||
(unaudited) | |||||||||||||||||
Acquired technology and domain name | $ | 963 | $ | 3,343 | $ | 3,318 | $ | 1,658 | $ | 1,636 | |||||||
Customer relationships | 212 | 760 | 760 | 380 | 380 | ||||||||||||
Tradenames | 105 | 373 | 327 | 163 | 163 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total amortization | $ | 1,280 | $ | 4,476 | $ | 4,405 | $ | 2,201 | $ | 2,179 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Amortization expense with respect to intangible assets at December 31, 2013 for each of the five years through December 31, 2018 and thereafter is as follows (in thousands): | |||||||||||||||||
Years ended December 31, | |||||||||||||||||
2014 | 4,183 | ||||||||||||||||
2015 | 4,061 | ||||||||||||||||
2016 | 3,968 | ||||||||||||||||
2017 | 3,789 | ||||||||||||||||
2018 | 3,788 | ||||||||||||||||
Thereafter | 12,045 | ||||||||||||||||
| | | | | |||||||||||||
Total amortization expense | $ | 31,834 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Debt_Financing
Debt Financing | 6 Months Ended |
Jun. 30, 2014 | |
Debt Financing | ' |
Debt Financing | ' |
6. Debt Financing | |
On May 8, 2012, the Company received cash proceeds of $23.1 million by issuing subordinated secured convertible promissory notes to investors. The convertible promissory notes bore interest at 10% per annum and were due on May 7, 2013. Principal and interest under the notes was due at maturity, unless earlier converted into shares of the Company's common stock. The notes were included as current liabilities under "Convertible Notes Payable" in the December 31, 2012 balance sheet. | |
Principal and accrued interest under the promissory notes was automatically convertible into shares of the Company's common stock issued and sold at the Company's next financing yielding gross proceeds of at least $25.0 million (the "Qualified Financing"). The conversion price upon automatic conversion was equivalent to the lower of 85% of the price per share paid by the purchasers in the Qualified Financing or $12.08 per share. Principal and accrued interest under the promissory notes was convertible at the option of the holders if a change in control or an initial public offering occurred prior to the maturity date of the note. The conversion price per share was equivalent to the greater of 85% of the price per share as reflected in the change in control or initial public offering, or $7.95 per share. | |
Principal and accrued interest under the promissory notes was convertible at the option of the holders if a Qualified Financing, change in control or initial public offering did not occur prior to maturity, at a price per share of $7.16. | |
As the convertible promissory notes allowed the holders to convert the notes at a price less than the estimated fair value of the Company's common stock on the date of issuance, the notes contained a beneficial conversion feature ("BCF"). The BCF was valued on the issuance date of the notes as the difference between the fair value of the Company's common stock and the conversion price of $7.16 per share multiplied by the number of shares that the notes were convertible into. The Company recorded the BCF of $2.7 million as a discount on the notes and an adjustment to additional paid-in capital. The discount was amortized as additional interest expense over the period of the notes using the effective interest method. | |
For the year ended December 31, 2012, the Company recorded interest expense of $1.5 million and amortization of debt discount of $1.8 million, which increased the face of the amount of the notes. | |
For the year ended December 31, 2013 and the six months ended June 30, 2013, the Company recorded interest expense of $0.8 million and $0.8 million (unaudited) and amortization of debt discount of $0.9 million and $0.9 million (unaudited), respectively. | |
On May 8, 2013, the holders of the secured convertible promissory notes converted all the principal and interest on the notes to 3,556,412 shares of common stock at a conversion price of $7.16 per share. | |
Credit_Facility
Credit Facility | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Credit Facility | ' | ||||
Credit Facility | ' | ||||
7. Credit Facility | |||||
In 2009, the Company entered into a Credit Facility with a financial institution that provided advances under (i) a formula-based line of credit, (ii) a non-formula-based line of credit, and (iii) equipment term loans. On June 13, 2012, the Company entered into an amended and restated loan and security agreement with the same financial institution (the "Amended Credit Facility"). The Amended Credit Facility provided for advances under a formula-based revolving line of credit. The revolving line of credit provided advances equal to 80% of eligible accounts receivable and was subject to sub-limits, as defined, for letters of credit, foreign exchange, and cash management services provided by the financial institution. The maximum amount available under the line of credit was $8.0 million at December 31, 2012. The Company did not draw on the line of credit in 2012. | |||||
At December 31, 2012, no amounts were outstanding under the Amended Credit Facility. | |||||
On June 13, 2013, the Company entered into a second amended and restated loan and security agreement with the same institution ("Second Amended Credit Facility"). The Second Amended Credit Facility provides for advances under a formula-based revolving line of credit. The revolving line of credit provides advances equal to 80% of eligible accounts receivable and is subject to sub-limits, as defined, for letters of credit, foreign exchange, and cash management services provided by the financial institution. In addition, the Company entered into a warrant agreement that allows the financial institution to purchase 26,666 shares of the Company's common stock at an exercise price of $7.92 per share if the Company draws on the credit facility at any time after the issuance date. If at any time, the advances to the Company in aggregate principal amount are greater than $4.0 million the number of shares increases to 66,666. On August 29, 2013, the Company drew down $5.0 million on the credit facility, triggering warrants to purchase up to 66,666 shares of TrueCar's common stock at an exercise of $7.92 per share to be issued to the financial institution. For the year ended December 31, 2013, the Company recorded a debt discount of $0.4 million related to the warrants issued. | |||||
The revolving line bears interest at a floating per annum rate equal to the bank's prime rate plus an applicable margin based on the Company's liquidity defined as unrestricted cash plus amounts available under the credit facility. If the Company's liquidity is i) less than $10 million, the applicable margin is 1.75%, ii) if the Company's liquidity is equal to or greater than $10 million but less than $20 million, the applicable margin is 0.5%, iii) if the Company's liquidity is greater than or equal to $20 million, the applicable margin is 0.0%. The line of credit agreement requires the Company to make monthly interest payments on the outstanding principal. All unpaid principal is due at maturity, which is June 13, 2014. The maximum amount available under the line of credit was $12.0 million, of which $6.9 million was available at December 31, 2013. In May 2014, the Company repaid all amounts then outstanding (unaudited). | |||||
The Second Amended Credit Facility requires the Company to maintain an adjusted quick ratio of at least 1.5 to 1 on the last day of each month. At December 31, 2013, the Company was in compliance with the financial covenants. The Company is also obligated to pay administrative and commitment fees. The Second Amended Credit Facility restricts the Company's ability to pay dividends. In the event the Company is in default of the Second Amended Credit Facility or other indebtedness with other third parties, or have judgments or liens that may have a material adverse effect on the Company's business, the financial institution reserves the right to accelerate the maturity of all outstanding debt associated with the Second Amended Credit Facility. | |||||
The carrying value of the Company's debt, before discount, approximates fair value. At December 31, 2013, the carrying amount of the Company's outstanding debt is summarized as follows (in thousands): | |||||
December 31, | |||||
2013 | |||||
Revolving line of credit | $ | 5,000 | |||
Debt discount, net of accumulated accretion | (236 | ) | |||
| | | | | |
Total carrying value | $ | 4,764 | |||
| | | | | |
| | | | | |
August 2014 Amendment to the Credit Facility (unaudited) | |||||
In August 2014, the Company further amended its credit facility, effective as of June 13, 2014, with the same financial institution that provides for advances of up to $25.0 million (unaudited) under a formula-based revolving line of credit that expires on June 13, 2016. | |||||
This amended credit facility bears interest at either (i) the London Interbank Offered Rate ("LIBOR") plus 2.25% if net cash, as defined, is greater than or equal to $1.00 (ii) LIBOR plus 3.75% if net cash, as defined, is less than $1.00, (iii) the bank's prime rate if net cash is greater than or equal to $1.00, or (iv) the bank's prime rate plus 1.5% if net cash is less than $1.00. The Company can select whether its borrowings will fall under a LIBOR or prime rate interest rate, and will also pay an annual commitment fee of $50,000 to the financial institution (unaudited). | |||||
This amended credit facility also requires the Company to maintain an adjusted quick ratio of at least 1.5 to 1 on the last day of each month during periods when the Company has drawn down at least 75% of the lesser of the Borrowing Base or $25.0 million (unaudited). The Second Amended Credit Facility restricts the Company's ability to pay dividends. In the event the Company is in default of the amended credit facility or other indebtedness with other third parties, or have judgments or liens that may have a material adverse effect on the Company's business, the financial institution reserves the right to accelerate the maturity of all outstanding debt associated with the amended credit facility. | |||||
In September 2014, the Company borrowed $5.0 million (unaudited) under the amended credit facility. | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
8. Commitments and Contingencies | |||||
Operating Leases | |||||
At December 31, 2013, the Company had various non-cancellable operating leases related to the Company's equipment and office facilities which expire through 2017. | |||||
At December 31, 2013, future minimum payments for obligations under non-cancellable operating leases are as follows (in thousands): | |||||
Years ended December 31, | |||||
2014 | 2,435 | ||||
2015 | 2,395 | ||||
2016 | 2,504 | ||||
2017 | 2,000 | ||||
2018 | 2,002 | ||||
Thereafter | 3,120 | ||||
| | | | | |
Total minimum lease payments | $ | 14,456 | |||
| | | | | |
| | | | | |
The Company recorded rent expense of $1.6 million, $2.4 million, and $2.7 million for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
In connection with one of the Company's office facilities leases, the Company was required to obtain an irrevocable standby letter of credit, in the amount of $0.5 million for the benefit of its landlord. This letter of credit was posted by the financial institution which provides the Credit Facility (Note 7). The letter of credit expires on May 15, 2016. | |||||
In July 2014, the Company entered into a new facility lease in Santa Monica and an irrevocable standby letter of credit (See Note 15). | |||||
At June 30, 2014 and including the new facility lease executed in July 2014, future minimum payments for obligations under non-cancellable operating leases are as follows (in thousands)(unaudited): | |||||
Six months ending December 31, 2014 | $ | 1,337 | |||
2015 | 5,149 | ||||
2016 | 5,922 | ||||
2017 | 5,201 | ||||
2018 | 5,530 | ||||
Thereafter | 37,008 | ||||
| | | | | |
Total minimum lease payments | $ | 60,147 | |||
| | | | | |
| | | | | |
Automotive Website Program Partnership Agreement | |||||
On October 19, 2011, the Company entered into an agreement with Yahoo! Inc. or Yahoo!. Under the agreement, the Company agreed to host Yahoo!'s Auto Buying Program and pay a minimum of $50.0 million annually beginning January 1, 2012 for a period of three years, in exchange for a guarantee by Yahoo! of the delivery of specified quantities of unique visitors and users to the Auto Buying Program. On October 19, 2011, the Company paid a deposit of $10.0 million to Yahoo! and on January 17, 2012 provided a stand-by letter of credit of $15.0 million that guaranteed the Company's performance under the agreement. | |||||
On June 29, 2012, the Company and Yahoo! modified the Automotive Website Program Partnership Agreement, significantly reducing the Company's obligations under the agreement. The modification eliminated the annual minimum guarantee of $50.0 million and provided that the Company pay Yahoo! a marketing fee based on future vehicle sales generated through the automotive site. The Company agreed to pay Yahoo! $20.0 million for the visitors and users it provided through the date of the terminated agreement via the use of the $10.0 million deposit originally held by Yahoo!, with the remaining balance payable in installments over a period of nine months, and was paid in full in February of 2013. | |||||
In addition, the June 29, 2012 modification provided for an immediate reduction of the stand-by letter of credit required under the agreement from $15.0 million to $10.0 million and a further reduction each month of $1.1 million, to reduce the stand-by letter of credit to $2.0 million as the Company made installment payments on the $20.0 million settlement amount. The Company was required to maintain restricted cash equal to the amount of the stand-by letter of credit. At December 31, 2012 the stand-by letter of credit outstanding totaled $4.5 million. The stand-by letter of credit was reduced to $2.0 million in April 2013 and will be reduced to zero on September 29, 2014, the expiration date of the stand-by letter of credit agreement. | |||||
Legal Proceedings | |||||
From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company's business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. | |||||
Employment Contracts | |||||
The Company has entered into employment contracts with certain executives of the Company. Employment under these contracts is at-will employment. However, under the provisions of the contracts, the Company would incur severance obligations up to twelve months of the executive's annual base salary for certain events such as involuntary terminations. In addition, upon the consummation of the IPO, certain executives earned liquidity bonuses totaling $2.6 million (unaudited), which were recorded in sales and marketing and general and administrative expenses in the Company's consolidated statements of comprehensive loss during the six months ended June 30, 2014. | |||||
Indemnifications | |||||
In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, investors, directors, officers, employees and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third-parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss provisions. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. To date, there has not been a material claim paid by the Company, nor has the Company been sued in connection with these indemnification arrangements. At December 31, 2012 and 2013, and June 30, 2014 (unaudited), the Company has not accrued a liability for these guarantees, because the likelihood of incurring a payment obligation, if any, in connection with these guarantees is not probable or reasonably estimable. | |||||
Marketing Sponsorships | |||||
The Company has entered into marketing sponsorship agreements with professional sporting affiliations. At December 31, 2013, the sponsorship agreements require future commitments of $0.8 million payable in 2014 and $0.8 million payable in 2015. | |||||
Convertible_Preferred_Stock_an
Convertible Preferred Stock and Stockholders' Equity | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Convertible Preferred Stock and Stockholders' Equity | ' | ||||
Convertible Preferred Stock and Stockholders' Equity | ' | ||||
9. Convertible Preferred Stock and Stockholders' Equity | |||||
At December 31, 2012, the Company was authorized to issue 147.0 million shares of common stock and no shares of convertible preferred stock. In November 2013, the Company increased the number of authorized shares of common stock to 150.0 million shares. Additionally, the Company authorized the issuance of 4.5 million shares of preferred stock, designated as Series A Preferred Stock ("Series A"). | |||||
In August 2011 and September 2011, the Company raised gross proceeds of $54.4 million through the issuance of 6,847,812 shares of common stock. Simultaneously with the consummation of the initial closing of the common stock financing in August 2011, all of the Company's issued and outstanding convertible preferred stock was converted into shares of common stock on a one for one basis. Upon conversion, the carrying value of the convertible preferred stock of $59.6 million was reclassified to common stock and additional paid-in-capital. The liquidation preference provisions of the preferred stock were considered contingent redemption provisions as there were certain events, including a change in control, that were not solely within the control of the Company. As a result, prior to conversion in August 2011, the preferred stock was reflected in the mezzanine section of the consolidated balance sheet. Holders of certain series of preferred stock were entitled to receive cumulative dividends when and if declared by the Board of Directors. No dividends were declared through August 30, 2011. Cumulative dividends on the preferred stock immediately prior to the conversion were $9.5 million, of which $2.4 million related to 2011. The dividends relating to 2011 were recorded as an increase to net loss attributable to common stock for the computation of 2011 earnings per share. No dividends were paid on the preferred stock. | |||||
In November 2013, the Company sold an aggregate of 2,857,143 shares of Series A and warrants to purchase 666,666 shares of common stock at an exercise price of $15.00 per share to Vulcan Capital Growth Equity LLC ("Vulcan"), in a private placement at a price of $10.50 per share, for an aggregate purchase price of $30.0 million. | |||||
The Series A may be converted at any time after issuance, at the option of the holder, into shares of common stock as is determined by dividing the applicable issue price by the applicable conversion price of each share as defined in the Company's Certificate of Incorporation. The conversion rate for the Series A is initially one for one, subject to anti-dilution and other customary adjustments. | |||||
Each share of the Series A will automatically convert into common stock, at the then applicable conversion rate, upon (i) the closing of a firm commitment underwritten initial public offering of the Company's common stock pursuant to a registration statement under the Securities Act of 1933, or (ii) upon the receipt by the Company of a written request for such conversion from the holders of the majority of the Preferred Stock then outstanding, or, if later, the effective date for conversion specified in such request. | |||||
Series A holders are entitled to receive non-cumulative dividends when and if declared by the Board of Directors at an annual rate of $0.84 per share. No dividends were declared in 2013 and in the six months ended June 30, 2014 (unaudited). | |||||
In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, including a change in control or sale of substantially all assets of the Company, (collectively "a Liquidation") the holders of the Series A are entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of the Common Stock by reason of their ownership of such stock, an amount per share for each share of Series A held by them equal to the sum of (i) the liquidation preference specified for such share of Series A, and (ii) all declared but unpaid dividends (if any) on such share of Series A. After payment to the Series A, remaining assets, if any, will be distributed pro rata among the common stockholders. If upon a Liquidation, the assets of the Company legally available for distribution of the holders of the Series A are insufficient to permit the payment to such holders of the full amounts specified, then the entire assets of the Company legally available for distribution will be distributed with equal priority and pro rata among the holders of the Series A in proportion to the full amounts they would otherwise be entitled to receive. Holders of Series A have no preemptive, subscription or other rights, and there are no redemption or sinking fund provisions applicable to the preferred stock. The liquidation preference provisions of preferred stock are considered contingent redemption provisions and as a result, the Series A is reflected in the mezzanine section of the consolidated balance sheet at December 31, 2013. | |||||
Each holder of outstanding shares of Series A is entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A are convertible. Holders of Series A vote together with the holders of common stock as a single class. Authorized shares may be increased or decreased (but not below the number of shares of common stock then outstanding) by vote of the holders of a majority of the stock of the Company. As long as any shares of Series A are outstanding, the Company will not, without first obtaining approval of the holders of more than 50% of the outstanding Series A amend, alter or repeal any provision of the Certificate of Incorporation if such act adversely affects the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series A holders. | |||||
In May 2014, immediately prior to the completion of the Company's IPO, all of the outstanding shares of the Series A preferred stock automatically converted into 2,857,143 shares (unaudited) of common stock on a one-to-one basis. | |||||
Stock Repurchases | |||||
During the year ended December 31, 2011, the Company repurchased a total of 2,307,866 shares of common stock at an average price of $6.57 per share for an aggregate amount of $15.2 million. Of the 2,307,866 shares repurchased, 1,761,006, representing $14.0 million of the cost, were retired and recorded as a reduction of common stock and additional paid-in-capital. The remaining shares were sold to existing investors at the same price which the Company paid to repurchase the shares. | |||||
During the year ended December 31, 2012, the Company repurchased a total of 265,274 shares of common stock at an average price of $6.21 per share for an aggregate amount of $1.7 million in cash. Of the 265,274 shares of common stock repurchased, 110,278 shares were repurchased from the Company's CEO in September 2012; 24,916 shares of common stock were repurchased from a former employee in accordance with a severance agreement in October 2012 and 130,080 shares of common stock were repurchased in connection with an executed employment agreement with its CEO. Pursuant to an employment agreement, the Company's CEO was also provided the right to sell $1.0 million shares of common stock that were vested for at least six months to the Company during December 2012 at the fair value per share at the time of the sale. On December 28, 2012, the Company repurchased 130,080 shares at a price of $8.00 in connection with this agreement. All repurchased shares were retired and have been recorded as a reduction of common stock and additional paid-in capital. | |||||
During the year ended December 31, 2013, the Company repurchased a total of 112,422 shares of common stock at a price of $8.90 per share for an aggregate amount of $1.0 million in cash. All shares were repurchased from the Company's CEO in December 2013 in connection with his executed employment agreement. Pursuant to the employment agreement, the Company's CEO was provided the right to sell $1.0 million shares of common stock that were vested for at least six months to the Company during December 2013 at the fair value per share at the time of sale upon certain performance conditions being met (See "Other Equity Awards" below within "Note 9"). The repurchased shares were retired and have been recorded as a reduction of common stock and additional paid-in capital. | |||||
Warrants to Purchase Preferred Stock and Common Stock | |||||
From 2005 to 2008, the Company issued warrants to purchase various classes of preferred stock totaling 412,222 shares. These warrants were immediately exercisable, in whole or in part at exercise prices of $1.53 and $1.80 per share. The expiration date of the warrants ranged from April 2012 to September 2014. In 2011, the Company's issued and outstanding convertible preferred stock was converted into shares of common stock. Simultaneously, the holders of convertible preferred stock warrants automatically converted their warrants into warrants to purchase shares of common stock. Accordingly, the Company recorded an adjustment to reclassify the then fair value of $2.6 million of the convertible preferred stock warrant liability to additional paid-in capital. During the year ended December 31, 2012, warrants to purchase 353,856 shares were exercised at an exercise price of $1.80 per share. During the year ended December 31, 2013, warrants to purchase 21,093 shares were exercised at an exercise price of $1.53 per share. At December 31, 2012 and 2013 and June 30, 2014 (unaudited), warrants to purchase 58,366 shares, 32,222 shares and 32,222 shares, respectively, of common stock at an exercise price of $1.53 per share were outstanding. | |||||
Warrants Issued to USAA | |||||
On March 12, 2009, June 25, 2010, and on January 1, 2012, the Company entered into agreements with USAA, an affinity partner and significant stockholder of the Company, which agreements provided for the issuance of warrants to purchase shares of the Company's common stock if minimum performance milestones, based on the level of vehicle sales, were achieved. The warrants issued to USAA were in exchange for marketing services performed by USAA under the Company's affinity group marketing program. The purpose of the marketing services performed by USAA is to create awareness and to acquire traffic for, and drive users to, the Company's auto buying platforms. For that reason warrants issued to USAA are recorded as sales and marketing expenses in the Company's consolidated statements of comprehensive loss. On November 24, 2009, the minimum performance milestones were reached and a fully vested warrant was issued by the Company which allows for the purchase of up to 961,482 shares of common stock at $0.83 per share. These warrants were outstanding at December 31, 2012 and 2013. | |||||
On June 25, 2010, an additional warrant to purchase up to 1,653,333 shares of the Company's common stock at $2.12 per share was issued to USAA. The warrant became exercisable based on the achievement of performance milestones based on the level of vehicle sales. During 2011, the performance milestones were fully achieved and the affinity partner received a warrant to purchase the full 1,653,333 shares of common stock. The warrant was fully vested at December 31, 2011. For the year ended December 31, 2011, the Company recognized expense of $0.4 million related to this warrant. The warrant will expire at the earlier of (i) eight (8) years from issuance, (ii) ninety (90) days after the expiration of the affinity agreement, or (iii) immediately prior to the close of an initial public offering of the Company's common stock. In 2011, the Company recorded the fair value of the warrant based on the following assumptions using the Black-Scholes option pricing model: expected life of 7.1 to 7.4 years, risk-free interest rate 2.39% to 2.95% and volatility of 50%. These warrants were outstanding at December 31, 2012 and 2013. | |||||
On January 1, 2012, the Company issued another warrant to USAA which allows USAA to purchase up to 1,042,666 shares of the Company's common stock at $7.95 per share if minimum performance milestones are reached. The warrant becomes exercisable based on the achievement of the performance milestones. For the year ended December 31, 2012 and 2013, a portion of their performance milestone was achieved and the Company recognized expense of $0.3 million and $1.1 million related to warrants to purchase 31,201 and 415,349 shares of common stock that have been earned and are vested, respectively. For the six months ended June 30, 2013 and 2014, the Company recognized expense of $0.4 million (unaudited) and $0.7 million (unaudited) related to warrants to purchase 154,294 shares (unaudited) and 203,803 shares (unaudited) of common stock that have been earned and are vested, respectively. The warrant will expire at the earlier of (i) eight (8) years from issuance, (ii) ninety (90) days after the expiration of the affinity-agreement with USAA, or (iii) immediately prior to the close of an initial public offering of the Company's common stock. In 2012, the Company recorded the fair value of the warrants based on the following assumptions using the Black-Scholes option pricing model: expected life 7.0 to 8.0 years, risk free rate of 1.02% to 1.77% and volatility of 50.0% to 58.6%. In 2013, the Company recorded the fair value of the warrants based on the following assumptions using the Black-Scholes option pricing model: expected life 2.0 to 2.9 years, risk free rate of 0.29% to 0.52% and volatility of 47.4% to 52.8%. | |||||
In May 2014, the Company and USAA agreed to an extension of the affinity group marketing agreement with USAA. As part of the agreement, the Company issued to USAA a warrant to purchase 1,458,979 shares (unaudited) of the Company's common stock, which will be exercisable in two tranches. The first tranche of 392,313 shares (unaudited) has an exercise price of $7.95 per share (unaudited) and the second tranche of 1,066,666 shares (unaudited) has an exercise price of $15.00 per share (unaudited). The warrant becomes exercisable based on the achievement of performance milestones based on the level of vehicle sales of USAA members through the Company's auto buying platforms. The warrant terminates on the earlier of the eighth anniversary of the date of issuance, the first anniversary of the termination of the USAA car-buying program or the date on which the Company no longer operates the USAA car-buying program. In addition, the agreement provides for the Company to spend marketing program funds with the actual level of marketing spend to be mutually agreed upon by USAA and the Company, subject to limits based on the number of actual vehicle sales generated through the affinity group marketing program (Note 13). For the six months ended June 30, 2014, the Company recognized expense of $1.2 million (unaudited) related to warrants to purchase 136,755 shares (unaudited) of common stock that had been earned and vested. | |||||
Warrants to purchase 3,265,168 shares (unaudited) of the Company's common stock earned from agreements entered into prior to May 2014 were exercised in connection with the Company's IPO in May 2014 for an aggregate purchase price of $9.5 million (unaudited). | |||||
Warrants Issued to Third Party Marketing Firm | |||||
On February 25, 2011, the Company entered into a media and marketing services agreement with a direct marketing firm. Under the arrangement, the marketing firm will provide media purchasing, production, advertising, and marketing services in connection with the advertising and marketing of the Company's services. In addition to cash consideration, the Company agreed to issue a warrant to the marketing firm to purchase up to 1,433,333 shares of the Company's common stock at a price of $6.02 per share. Under the warrant agreement, one share of common stock becomes exercisable for each $27.90 of media placement costs the Company incurs. All shares under the warrant agreement will become exercisable in accordance with the vesting schedule or termination by either party pursuant to the agreement in the event of a default, as defined. The warrant expires eight years from the issuance date. The Company does not have a guaranteed purchase commitment under the terms of the agreement. Effective September 1, 2012, the warrant agreement was amended ("First Amendment") to allow the direct marketing firm, for the period September 1, 2012 through April 30, 2013, to vest in warrants at the greater of i) one share of common stock for each $27.90 that the Company expends or becomes obligated to expend at the end of each month through any media provider on media placement costs, or ii) 44,800 shares per month if the Company has not expended or become obligated to expend $1 million on media placement costs per month. Effective April 30, 2013, the warrant agreement was amended ("Second Amendment") to allow the direct marketing firm, for the period May 1, 2013 through July 31, 2013, to vest in a manner consistent with the First Amendment. Effective July 1, 2013, the warrant agreement was amended ("Third Amendment") to allow the direct marketing firm, for the period July 1, 2013 through December 31, 2013, to vest in warrants at the greater of i) one share of common stock for each $27.90 that the Company expends or becomes obligated to expend at the end of each month through any media provider on media placement costs, or ii) 17,926 shares per month on July 31, 2013 and 35,842 shares per month thereafter if the Company has not expended or become obligated to expend $1 million on media placement costs per month. In December 2013, the warrant agreement was amended ("Fourth Amendment") to extend the effective term under the Third Amendment for an additional six months through June 30, 2014. All other terms under the Third Amendment remain in full force and effect during this extended six month period. | |||||
In 2011, the Company recorded the fair value of the warrants based on the following assumptions using the Black-Scholes option pricing model: expected life of 7.17 to 7.67 years, risk free rate 1.38% to 2.65% and volatility of 56.5%. In 2012, the Company recorded the fair value of the warrants based on the following assumptions using the Black-Scholes option pricing model: expected life of 5.8 to 7.1 years, risk free rate of 0.62% to 1.39% and volatility of 58.6% to 59.5%. In 2013, the Company recorded the fair value of the warrants based on the following assumptions using the Black-Scholes option pricing model: expected life of 5.2 to 6.5 years, risk free rate of 0.63% to 1.81% and volatility of 51.5% to 59.5%. For the years ended December 31, 2011, 2012 and 2013, the Company recognized expense of $1.7 million related to 277,685 warrants earned, $1.6 million related to 207,710 warrants earned and $2.5 million related to 604,266 warrants earned, respectively. For the six months ended June 30, 2013 and 2014, the Company recognized expense of $0.7 million (unaudited) and $2.3 million (unaudited) related to 268,800 (unaudited) and 343,665 (unaudited) warrants earned, respectively. The expense has been reflected as sales and marketing expense on the accompanying consolidated statements of comprehensive loss. | |||||
Warrants Issued in Connection with Business Acquisitions | |||||
On April 29, 2011, in connection with the acquisition of Honk (Note 3), The Company issued a warrant for the purchase of 5,724 shares of the Company's common stock at $0.01 per share. These fully vested warrants expire on April 29, 2021 or upon a qualified liquidity event and were outstanding at December 31, 2012 and 2013. | |||||
On October 1, 2011, in connection with the acquisition of ALG (Note 3), the Company issued warrants to purchase 4,231,416 shares of common stock at an exercise of $7.95 per share. The warrants were valued at the acquisition date using the Black-Scholes option pricing model with the following assumptions: contractual term of one year, expected volatility of 45%, risk-free rate of 0.19% and zero dividend-yield. Common stock warrants in the amount of 4,231,416 at an exercise price of $7.95 per share were net exercised at December 31, 2012 for the total shares issued of 23,816. | |||||
Warrants Issued to Yahoo! | |||||
On April 12, 2012, the Company issued a warrant to Yahoo! in accordance with the Automotive Website Program Partnership agreement, to purchase up to 8,000,000 shares of the Company's common stock, with shares vesting in 666,666 share increments on a quarterly basis over the period beginning January 1, 2012 through December 31, 2014. The exercise price of the warrants was $11.51 per share for warrant shares that vested during 2012, and would be at a price equal to the Company's common stock per share fair value at December 31, 2012 and December 31, 2013 for 2013 and 2014, respectively. On June 29, 2012, the Automotive Website Program Partnership Agreement was modified and the unvested warrants to purchase an aggregate of 7,333,333 shares of common stock were cancelled. At the date of amendment 666,666 of the warrants had vested. In 2012, the Company recorded the fair value of the warrants based on the following assumptions using the Black-Scholes option pricing model: expected life of 0.2 to 2.9 years, risk free rate of 0.06% to 0.50% and volatility of 50.9%. For the year ended December 31, 2012, the Company recognized expense of $0.1 million related to the 666,666 warrants earned. These warrants expired unexercised during 2012. | |||||
Warrants Issued to Financial Institution | |||||
On June 13, 2012, in connection with the execution of the amended credit facility (Note 7), the Company entered into a warrant agreement with financial institution to purchase 26,666 shares of the Company's common stock, at an exercise price of $11.51 per share if the Company draws on the credit facility at any time after the issuance date. If at any time, the advances to the Company in aggregate principal amount are greater than $4.0 million, the number of shares increases to 66,666. The warrants are immediately vested upon drawing on the line and expire on the earlier of June 13, 2022, or an acquisition of the Company consisting solely of cash and or marketable securities. The warrant is automatically net exercised on the expiration date, if the fair market value per share of the Company's common stock at expiration date is greater than the warrant exercise price. On June 13, 2013 the Company entered into a second amendment and restated loan and security agreement which reduced the exercise price of the warrants to $7.92. On August 29, 2013, the Company drew down $5.0 million on the credit facility, triggering the issuance of warrants to purchase 66,666 shares of TrueCar's common stock at an exercise of $7.92 per share. In 2013, the Company recorded the relative fair value of the warrants based on the following assumptions using the Black-Scholes option pricing model: life of 10 years, risk free rate of 2.78% and volatility of 64.8%. For the year ended December 31, 2013, the Company recorded the fair value of the warrants to additional paid-in capital, offset by a debt discount, reducing the carrying value of the line of credit. The debt discount is amortized over the life of the loan as interest expense using the effective interest method. | |||||
In June 2014, warrants to purchase 66,666 shares (unaudited) of the Company's common stock were exercised through a net settlement election. The Company issued 27,526 shares (unaudited) of its common stock to the financial institution. | |||||
Warrants Issued to Vulcan | |||||
In November 2013, in the Vulcan private placement, the Company issued to Vulcan a warrant to purchase 666,666 shares of its common stock at an exercise price of $15.00 per share. The warrant is immediately exercisable and expires in November 2015. The Company allocated the $30.0 million aggregate proceeds from the issuance of Series A and the warrant based on their relative fair values. Approximately $0.7 million and $29.2 million were allocated to the warrant and Series A, respectively, net of issuance costs. The warrant is classified in equity and the fair value of the warrant was recorded as additional paid-in capital at December 31, 2013. The Company recorded the relative fair value of the warrant based on the following assumptions using the Black-Scholes option pricing model: expected life of 2 years, risk free rate of 0.31% and volatility of 49.4%. | |||||
Convertible Promissory Note | |||||
On February 25, 2011, the Company received cash proceeds of $2.0 million by issuing a convertible promissory note to a direct marketing firm. The convertible promissory note bore interest at 6% per annum and was due and payable upon demand by the holder at any time after August 25, 2011. All principal and accrued interest under the convertible note was automatically convertible into shares of the Company's preferred stock issued and sold at the close of the Company's next equity financing. The number of shares of preferred stock to be issued was equal to the quotient obtained by dividing the entire principal and accrued interest amount due under the convertible note by the lowest price per share paid for the next round of preferred stock. At August 25, 2011, the Company had not consummated an equity financing as defined in the convertible promissory note; however, on August 30, 2011, the Company raised capital through the issuance of common stock. The holder of the note agreed to exchange $2.1 million of principal and accrued interest due under the convertible note for 259,098 shares of the Company's common stock. | |||||
Other Equity Awards | |||||
In December 2012, pursuant to an amendment to the Company's CEO's employment agreement, the CEO was provided with the right to sell $1.0 million of common stock to the Company during December 2012 and December 2013, respectively, at the then fair value of the Company's common stock. In the event of the repurchases of common stock by the Company, the CEO was also entitled to receive options to purchase the equivalent number of shares of common stock at the then fair value of common stock. The CEO exercised his right to have the Company repurchase 130,080 and 112,422 shares of common stock in December 2012 and 2013, respectively, and the Company subsequently issued the CEO options to purchase the equivalent number of shares of common stock at the fair value of common stock on the respective grant dates. The options associated with the December 2013 repurchase were contingently issuable based upon the achievement of certain performance conditions related to specified cash balances or adjusted earnings before interest, income taxes, depreciation, and amortization during the allotted time period and continued service of the CEO. As the performance conditions were probable and the performance conditions were achieved during the year ended December 31, 2013, the Company recognized $0.2 million of compensation expense related to these awards. For the six months ended June 30, 2014, the Company recognized $0.4 million (unaudited) of compensation expense related to these awards. At June 30, 2014, the Company expects to record additional estimated stock-based compensation expense of $0.6 million (unaudited) over a weighted-average period of 2.9 years (unaudited) related to both of the option awards. The shares of common stock related to the December 2013 right to sell $1.0 million of common stock to the Company were classified within the mezzanine section of the consolidated balance sheets at December 31, 2012 as the shares were contingently redeemable at the option of the CEO. | |||||
Reserve for Unissued Shares of Common Stock | |||||
The Company is required to reserve and keep available out of its authorized but unissued shares of common stock such number of shares sufficient for the exercise of all outstanding warrants, plus shares granted and available for grant under the Company's stock option plan. | |||||
The amount of such shares of the Company's common stock reserved for these purposes at December 31, 2013 is as follows: | |||||
Number of Shares | |||||
Common stock issued | 59,955,343 | ||||
Outstanding stock options | 18,363,144 | ||||
Outstanding common stock warrants | 5,930,758 | ||||
Outstanding Series A preferred stock | 2,857,143 | ||||
Additional shares available for grant under the 2005 Plan | 604,093 | ||||
| | | | | |
Total | 87,710,481 | ||||
| | | | | |
| | | | | |
Exchange of shares for services | |||||
The Company entered into a common stock purchase agreement with a third party vendor that provided legal services to the Company. The common stock purchase agreement allowed the Company to enter into a Conversion Option Agreement ("Conversion Option"), which allowed the Company to pay 20% of its bill rendered for legal service in shares of common stock of the Company at a price of $11.51 for $0.9 million of the lesser of (i) $11.51 per share, or (ii) the value, as of the 15th of each month during the term of the engagement, implied by the most recent equity financing consummated during the term of the engagement. On various dates throughout 2012, the Company exercised its Conversion Option and exchanged 73,883 shares of common stock of the Company at a price of $11.51 for $0.9 million of legal services rendered for the period ended December 31, 2012. The fair value of the shares exchanged during the year ended December 31, 2012 ranged from $7.92 to $9.75 resulting in a gain of $0.2 million on the transaction related to the issuance of these shares. | |||||
Shares issued for legal settlement | |||||
In November 2013, the Company entered into a fully executed settlement agreement with one of its marketing sponsorship partners. Pursuant to the settlement agreement, the Company paid $0.3 million in cash and issued 36,666 shares of common stock to the marketing sponsorship partner in November 2013 and recorded a total expense of $0.6 million. | |||||
Stockbased_Awards
Stock-based Awards | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stock based Awards | ' | ||||||||||||||||
Stock based Awards | ' | ||||||||||||||||
10. Stock-based Awards | |||||||||||||||||
Stock Options | |||||||||||||||||
A summary of the Company's stock option activity under the 2005 and 2008 plans for the year ended December 31, 2013 and six months ended June 30, 2014 (unaudited) is as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | |||||||||||||||
Options | Average | Average | |||||||||||||||
Exercise | Remaining | ||||||||||||||||
Price | Contract Life | ||||||||||||||||
(in years) | |||||||||||||||||
Outstanding at December 31, 2012 | 15,418,788 | $ | 3.51 | 7.35 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Granted | 5,193,127 | $ | 8.44 | ||||||||||||||
Exercised | (98,878 | ) | $ | 1.73 | |||||||||||||
Canceled/forfeited | (2,149,893 | ) | $ | 3.68 | |||||||||||||
| | | | | | | | | | | |||||||
Outstanding at December 31, 2013 | 18,363,144 | $ | 4.89 | 7.17 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Granted (unaudited) | 10,545,647 | $ | 15.86 | ||||||||||||||
Exercised (unaudited) | (1,741,058 | ) | $ | 1.01 | |||||||||||||
Canceled/forfeited (unaudited) | (502,943 | ) | $ | 9.36 | |||||||||||||
| | | | | | | | | | | |||||||
Outstanding at June 30, 2014 (unaudited) | 26,664,790 | $ | 9.4 | 7.98 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Vested and expected to vest at December 31, 2013 | 16,947,300 | $ | 4.66 | 7.05 | |||||||||||||
Exercisable at December 31, 2013 | 10,855,844 | $ | 2.82 | 5.97 | |||||||||||||
Vested and expected to vest at June 30, 2014 (unaudited) | 25,236,587 | $ | 9.32 | 7.91 | |||||||||||||
Exercisable at June 30, 2014 (unaudited) | 18,884,427 | $ | 8.72 | 7.39 | |||||||||||||
At December 31, 2013 and June 30, 2014, total remaining stock-based compensation expense for unvested awards was $25.9 million and $73.3 million (unaudited), respectively, which is expected to be recognized over a weighted-average period of 2.96 years and 3.1 years (unaudited), respectively. | |||||||||||||||||
The weighted-average grant-date fair value per share of options granted for the years ended December 31, 2011, 2012 and 2013 was $2.39, $4.83 and $4.79, respectively. The Company recorded stock-based compensation expense for stock option awards of $5.2 million, $9.4 million, $8.9 million, $3.5 million (unaudited) and $11.1 million (unaudited) for the years ended December 31, 2011 and 2012, and 2013, and the six months ended June 30, 2013 and 2014, respectively. | |||||||||||||||||
The total intrinsic value of options exercised in 2011, 2012 and 2013 was $8.6 million, $2.9 million and $0.6 million, respectively. This intrinsic value represents the difference between the fair market value of the Company's common stock on the date of exercise and the exercise price of each option. Based on the fair market value of the Company's common stock at December 31, 2013, the total intrinsic value of all outstanding options was $76.9 million. The total intrinsic value of exercisable options at December 31, 2013 was $67.4 million. The total intrinsic value of options vested and expected to vest at December 31, 2013 was $74.7 million. | |||||||||||||||||
There was no excess tax benefits realized for the tax deductions from stock options exercised during the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2013 and 2014 (unaudited). | |||||||||||||||||
During 2011 and 2012, the Company granted certain executives stock options to purchase 349,997 shares of common stock at a weighted average exercise price of $6.15 per share, and 166,665 shares of common stock at a weighted average exercise price of $11.51 per share, respectively. Awards granted in 2011 and 2012 contain performance conditions based on achieving certain revenue and earnings targets. During 2013, the Company granted stock options to purchase 1,765,875 shares of common stock, of which 1,173,620 stock options were granted to certain executives. The weighted average exercise price was $8.85. Of the awards granted in 2013, 82,327 stock options granted are based on achieving certain revenue and earnings targets and 1,683,548 shares contain a two-step vesting condition of which the first step is based on achieving certain revenue and earnings targets, which upon being met, options begin vesting over 48 months beginning on January 1, 2014. The grant date fair values of these awards for 2011, 2012 and 2013 were $1.0 million, $0.8 million and $8.8 million, respectively, as determined using a Black-Scholes option pricing model. The Company recognizes compensation cost for stock options with performance conditions using a graded vesting model, based on the probability of the performance condition being met, net of estimated pre-vesting forfeitures. At December 31, 2011, 2012 and 2013, the Company determined that it was probable that the performance conditions of certain awards would be met, and accordingly, compensation cost totaling $0.3 million, $0.3 million and $1.8 million was recognized for these awards during 2011, 2012 and 2013, respectively. | |||||||||||||||||
In July 2011, the Board of Directors authorized the modification of stock options issued to an executive, which extended the exercise period related to fully vested stock options. As a result of the modification, additional stock compensation of $2.1 million was recognized in 2011. | |||||||||||||||||
In March 2012, the Board of Directors authorized the modification of stock options which accelerated vesting of stock options to purchase 726,469 shares of common stock and extended the exercise period for all vested shares, including stock options to purchase 631,333 shares of common stock previously granted to a former executive. As a result of the modification, additional stock compensation expense of $4.5 million was recognized in 2012. | |||||||||||||||||
Restricted Stock | |||||||||||||||||
Activity in connection with the restricted stock is as follows for the year ended December 31, 2013: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested — December 31, 2012 | 122,222 | $ | 3.56 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Granted | 20,873 | $ | 8.9 | ||||||||||||||
Vested | (87,540 | ) | $ | 4.83 | |||||||||||||
| | | | | | | | ||||||||||
Non-vested — December 31, 2013 | 55,555 | $ | 3.56 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Granted (unaudited) | — | $ | — | ||||||||||||||
Vested (unaudited) | 27,777 | $ | 3.56 | ||||||||||||||
Canceled/forfeited (unaudited) | — | $ | — | ||||||||||||||
| | | | | | | | ||||||||||
Non-vested — June 30, 2014 (unaudited) | 27,778 | $ | 3.56 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
For the years ended December 31, 2011, 2012 and 2013, the Company recorded $1.0 million, $0.9 million, and $0.4 million, respectively, in compensation expense in connection with the vesting of shares of restricted stock. At December 31, 2013, total remaining stock-based compensation expense amounted to $0.2 million, which is expected to be recognized through November 2014. | |||||||||||||||||
Restricted Stock Units | |||||||||||||||||
Activity in connection with the restricted stock units is as follows for the six months ended June 30, 2014 (unaudited): | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested — December 31, 2013 | — | $ | — | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Granted (unaudited) | 720,146 | $ | 10.04 | ||||||||||||||
Vested (unaudited) | — | $ | — | ||||||||||||||
Canceled/forfeited (unaudited) | (6,607 | ) | $ | 9.63 | |||||||||||||
| | | | | | | | ||||||||||
Non-vested — June 30, 2014 (unaudited) | 713,539 | $ | 10.04 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
At June 30, 2014, total remaining stock-based compensation expense for non-vested restricted stock units amounted to $5.0 million (unaudited), which is expected to be recognized over a weighted-average period of 2.6 years (unaudited). | |||||||||||||||||
Stock-based Compensation Cost | |||||||||||||||||
The Company recorded stock-based compensation cost relating to stock options and restricted stock awards in the following categories on the accompanying consolidated statements of comprehensive loss (in thousands): | |||||||||||||||||
Year Ended | Six Months | ||||||||||||||||
December 31, | Ended | ||||||||||||||||
June 30, | |||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | |||||||||||||
(unaudited) | |||||||||||||||||
Cost of revenue | $ | 47 | $ | 122 | $ | 141 | $ | 53 | $ | 163 | |||||||
Sales and marketing | 1,076 | 1,571 | 2,561 | 1,104 | 2,344 | ||||||||||||
Technology and development | 1,096 | 1,428 | 1,762 | 783 | 1,865 | ||||||||||||
General and administrative | 3,989 | 7,199 | 4,882 | 1,676 | 7,168 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total stock-based compensation expense | 6,208 | 10,320 | 9,346 | 3,616 | 11,540 | ||||||||||||
Amount capitalized to internal software use | 266 | 214 | 540 | 251 | 614 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total stock-based compensation cost | $ | 6,474 | $ | 10,534 | $ | 9,886 | $ | 3,867 | $ | 12,154 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income_Taxes
Income Taxes | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | ' | ||||||||||
11. Income Taxes | |||||||||||
The components of the Company's income tax (benefit) provision are as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 2 | 3 | 7 | ||||||||
| | | | | | | | | | | |
Total current provision | 2 | 3 | 7 | ||||||||
| | | | | | | | | | | |
Deferred: | |||||||||||
Federal | (8,264 | ) | (318 | ) | 504 | ||||||
State | (2,428 | ) | (291 | ) | 68 | ||||||
| | | | | | | | | | | |
Total deferred (benefit) provision | (10,692 | ) | (609 | ) | 572 | ||||||
| | | | | | | | | | | |
Total income tax (benefit) provision | $ | (10,690 | ) | $ | (606 | ) | $ | 579 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
As described below, the Company has established a valuation allowance against its net deferred tax assets as the Company has determined that it is more likely than not that the deferred tax assets will not be realized. The Company's income tax provision in 2013 of $0.6 million reflected the amortization of tax deductible goodwill that is not an available source of income to realize deferred tax assets. The Company's income tax benefit in 2012 of $0.6 million reflected a tax benefit of $1.1 million associated with a beneficial conversion feature on its convertible notes payable issued in May 2012 (Note 6), which was partially offset by tax expense related to the amortization of tax deductible goodwill that is not an available source of income to realize deferred tax assets. The benefit from income taxes in 2011 of $10.7 million primarily reflected a partial release of the valuation allowance as a result of deferred tax liabilities recognized from the acquisition of ALG. The acquired deferred tax liabilities were an available source of realization for the Company's deferred tax assets at the date of the acquisition, resulting in a corresponding release of the valuation allowance for the year ended December 31, 2011. | |||||||||||
The reconciliation between the amount computed by applying the U.S. federal statutory tax rate of 34% to income before income taxes and the income tax (benefit) provision is as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Income tax benefit at the statutory rate | $ | (6,679 | ) | $ | (25,534 | ) | $ | (8,322 | ) | ||
State income taxes, net of federal benefit | (116 | ) | (5,742 | ) | 218 | ||||||
Nondeductible expenses | 142 | 144 | 346 | ||||||||
Change in valuation allowance | (6,878 | ) | 30,064 | 6,446 | |||||||
Expiration of capital loss carryforward | 2,034 | — | — | ||||||||
Research and development tax credits | (398 | ) | — | — | |||||||
Stock-based compensation | 1,571 | 646 | 2,037 | ||||||||
Other | (366 | ) | (184 | ) | (146 | ) | |||||
| | | | | | | | | | | |
Total income tax (benefit) provision | $ | (10,690 | ) | $ | (606 | ) | $ | 579 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss. The Company's annual estimated effective tax rate differs from the statutory rate primarily as a result of state taxes, tax amortization of goodwill and changes in the Company's valuation allowance. For the six months ended June 30, 2013 and 2014, the Company recorded $0.3 million (unaudited) and $0.3 million (unaudited) in income tax expense, respectively. | |||||||||||
The components of deferred tax assets (liabilities) are as follows (in thousands): | |||||||||||
December 31, | December 31, | ||||||||||
2012 | 2013 | ||||||||||
Deferred income tax assets: | |||||||||||
Net operating loss carryforwards | $ | 47,511 | $ | 49,921 | |||||||
Stock-based compensation | 6,243 | 8,262 | |||||||||
Accrued expenses | 1,929 | 2,852 | |||||||||
Research and development tax credits | 610 | 610 | |||||||||
Other | 157 | 172 | |||||||||
| | | | | | | | ||||
Gross deferred tax assets | 56,450 | 61,817 | |||||||||
| | | | | | | | ||||
Valuation allowance | (41,412 | ) | (47,858 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 15,038 | 13,959 | |||||||||
| | | | | | | | ||||
Deferred tax liabilities: | |||||||||||
State taxes | (3,405 | ) | (3,296 | ) | |||||||
Property, equipment and software | (2,676 | ) | (3,353 | ) | |||||||
Intangible assets and goodwill | (9,297 | ) | (8,566 | ) | |||||||
Other | (344 | ) | — | ||||||||
| | | | | | | | ||||
Gross deferred tax liabilities | (15,722 | ) | (15,215 | ) | |||||||
| | | | | | | | ||||
Total net deferred tax liabilities | $ | (684 | ) | $ | (1,256 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
The net deferred tax liability at December 31, 2012 and 2013 relates to amortization of tax deductible goodwill that is not an available source of income to realize deferred tax assets. Accordingly, the net deferred tax liability does not reduce the need for a valuation allowance related to the Company's net deferred tax assets. | |||||||||||
At December 31, 2013, the Company had federal and state net operating loss carryforwards of $122.7 million and $106.3 million, respectively. The Company's federal and state net operating loss carryforwards expire beginning in the years ending December 31, 2026 and 2014, respectively. At December 31, 2013, the Company had federal and state research and development tax credit carryforwards of approximately $0.8 million and $0.4 million, respectively. The federal tax credit carryforwards begin to expire in 2028. The state tax credit carryforward can be carried forward indefinitely. | |||||||||||
The Internal Revenue Code of 1986, as amended, imposes substantial restrictions on the utilization of net operating losses and other tax attributes in the event of an "ownership change" of a corporation. Accordingly, a company's ability to use pre-change net operating loss and research tax credits may be limited as prescribed under IRC Sections 382 and 383. Events which may cause limitation in the amount of the net operating losses and credits that the Company utilizes in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. As a result of historical equity issuances, the Company has determined that annual limitations on the utilization of its net operating losses and credits do exist pursuant to IRC Sections 382 and 383, however, such limitations are not expected to impact the Company's ability to utilize these deferred tax assets. | |||||||||||
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2013. Such objective evidence limits the ability to consider other subjective evidence such as its projections for future growth. On the basis of this evaluation, at December 31, 2013, a valuation allowance of $47.9 million has been recorded since it is more likely than not that the deferred tax assets will not be realized. | |||||||||||
The change in the valuation allowance for the years ended December 31, 2011, 2012, and 2013 is as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Valuation allowance, at beginning of year | $ | 18,226 | $ | 11,348 | $ | 41,412 | |||||
Increase in valuation allowance | 3,941 | 30,064 | 6,446 | ||||||||
Release of valuation allowance | (10,819 | ) | — | — | |||||||
| | | | | | | | | | | |
Valuation Allowances, at end of year | $ | 11,348 | $ | 41,412 | $ | 47,858 | |||||
| | | | | | | | | | | |
As a result of certain realization requirements of ASC 718, Compensation — Stock Compensation, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets at December 31, 2011, 2012 and 2013, that arose directly from (or the use of which was postponed by) tax deductions related to stock-based compensation that are greater than the compensation recognized for financial reporting purposes. Additional paid-in capital will be increased by $1.7 million if and when such deferred tax assets are ultimately realized. The Company uses the with-and-without approach when determining when excess tax benefits have been realized. | |||||||||||
The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Unrecognized tax benefit beginning of year | $ | — | $ | — | $ | (4 | ) | ||||
Gross increases — tax positions in prior year | — | 610 | — | ||||||||
Gross decreases — tax positions in current year | — | (614 | ) | — | |||||||
| | | | | | | | | | | |
Unrecognized tax benefit end of year | $ | — | $ | (4 | ) | $ | (4 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
The unrecognized tax benefits are recorded as an adjustment to the deferred tax assets. Since there is a full valuation allowance recorded against the deferred tax assets, any subsequent reductions of the valuation allowance and recognition of the associated tax benefit would affect the effective tax rate. | |||||||||||
The Company's policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision. At December 31, 2013, the Company had no accrued interest and penalties related to uncertain tax positions. The Company does not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. | |||||||||||
The Company is subject to taxation in the United States and various states. Due to the presence of net operating loss carryforwards, all of the income tax years remain open for examination by the Internal Revenue Service ("IRS") and various state taxing authorities. The Company was notified that it is under audit by the IRS for the tax years ending December 31, 2011 and 2012. The Company is not currently under audit from any other state taxing authorities. | |||||||||||
Employee_Benefit_Plan
Employee Benefit Plan | 6 Months Ended |
Jun. 30, 2014 | |
Employee Benefit Plan | ' |
Employee Benefit Plan | ' |
12. Employee Benefit Plan | |
The Company has a 401(k) Savings Retirement Plan that covers substantially all full-time employees who meet the plan's eligibility requirements and provides for an employee elective contribution. The Company made matching contributions to the plan of $0.5 million, $0.9 million and $0.9 million, for the years ended December 31, 2011, 2012 and 2013, respectively. | |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions | ' |
Related Party Transactions | ' |
13. Related Party Transactions | |
Transactions with Stockholders | |
As part of the acquisition of ALG, the Company entered into various data licensing and transition services agreements with Dealertrack, a significant stockholder of the Company. Costs under these agreements for the year ended December 31, 2011 of $0.8 million and $0.1 million, for the year ended December 31, 2012 of $1.7 million and $0.6 million and for the year ended December 31, 2013 of $2.0 million and $0.3 million are included in cost of revenue, and sales and marketing expense in the consolidated statement of comprehensive loss, respectively. Costs under these agreements included in cost of revenue for the six months ended June 30, 2013 and 2014 were $1.2 million (unaudited) and $0.4 million (unaudited), respectively. Costs under these agreements included in sales and marketing expense for the six months ended June 30, 2013 were $0.2 million (unaudited). There were no costs recorded in sales and marketing expense for the six months ended June 30, 2014 (unaudited). Accounts payable to Dealertrack totaled $0.2 million at December 31, 2012. No amounts were due to Dealertrack at December 31, 2013 and June 30, 2014 (unaudited). | |
Notes Receivable from Related Parties | |
From 2007 to 2011, the Company issued notes to executives of the Company totaling $4.1 million of which $2.9 million were exchanged for cash and $1.2 million were in consideration for the purchase of common stock. The notes bear interest at rates between 1.2% and 6.0%. Principal and interest payments are due at maturity. The loans have maturity dates ranging from 2011 to 2016, and were repaid in full by February 2014, except for $0.3 million which has been reserved for by the Company. | |
In September 2010, the Company issued a note to a former employee of the Company for $0.2 million in connection with the exercise of options to purchase common stock. The note bore interest at 0.5% and there were no principal and interest payments due until maturity in August 2013, and was paid in full. | |
In October 2012, an executive resigned from the Company and became a consultant. At his separation date, the former executive had two notes outstanding with original principal balances of $0.1 million and $0.1 million, due November 2013 and August 2014, respectively. As part of this separation, the notes were amended such that the principal and accrued interest were due and payable upon the earlier of November 2013 or 45 days following the termination as a service provider to the Company. At December 31, 2012, the aggregate principal and interest outstanding was $0.2 million. The principal and interest on the notes were paid in full on December 27, 2013. | |
In June 2014 the Company advanced $60,000 (unaudited) to an employee in exchange for a promissory note. The note is due on December 31, 2014 at an interest rate of 3.5% (unaudited). At June 30, 2014, the note receivable of $60,000 (unaudited) remained outstanding. | |
Loans issued for the purchase of the Company's capital stock have been classified in stockholders' equity on the accompanying consolidated balance sheets. Loans issued for cash have been classified as notes receivable from related parties on the accompanying consolidated balance sheets. | |
All of the notes receivable from the Company's executives described above are full recourse notes against their personal assets. In addition, the notes receivable contain provisions for accelerated repayment upon certain events such as termination of employment, the filing of a registration statement with the SEC for an initial public offering, or the acquisition of the Company. | |
Service Provider | |
Beginning in October 2013, an executive officer of the Company is an officer of a firm that provides marketing services to the Company. For the year ended December 31, 2013 and the six months ended June 30, 2014, the Company recorded sales and marketing expense of $1.1 million and $1.6 million (unaudited), respectively. At June 30, 2014, the Company recorded $1.9 million (unaudited) in prepaid expenses related to this marketing firm. There was no prepaid expense relating to this marketing firm at December 31, 2013. Additionally, the Company has amounts due to this marketing firm at December 31, 2013 of $0.3 million and June 30, 2014 (unaudited) of $0.2 million, respectively. | |
Advances to an Officer | |
The Company pays business and personal expenses, which may be charged to a corporate card or paid directly to third parties, of the Company's CEO and the CEO reimburses the Company for personal expenses paid by the Company. During 2011, 2012 and 2013, the Company paid personal expenses of $0.1 million, $0.4 million and $0.1 million, respectively. At December 31, 2012 and 2013, amounts receivable from this executive were $0.3 million and $0.4 million, respectively, and were included in other current assets on the accompanying consolidated balance sheets. The advances made to the CEO were paid in full in February 2014. | |
Stock Repurchase Arrangement with Officer | |
The Company executed an employment agreement with a stock repurchase provision with its CEO. In December 2012 and 2013, the Company repurchased 130,080 shares of common stock at a price of $8.00 and 112,422 shares of common stock at a price of $8.90 per share, respectively, which were the fair value of the shares on the respective dates of repurchase (Note 9). | |
Transactions with USAA | |
A former member of the Company's board of directors is the current Head of Corporate Development at USAA, the largest stockholder and most significant affinity marketing partner of the Company. The Company has entered into arrangements with USAA to operate their Auto Buying Program. The Company has amounts due from USAA at December 31, 2012 and 2013 and June 30, 2014 of $0.6 million, $0.4 million, and $0.8 million (unaudited), respectively. In addition, the Company has amounts due to USAA at December 31, 2012 and 2013 and June 30, 2014 of $0.5 million, $1.2 million, and $1.1 million (unaudited), respectively. The Company recorded sales and marketing expense of $2.6 million, $3.4 million, $8.8 million, $3.2 million (unaudited), and $6.2 million (unaudited) for the years ended December 31, 2011, 2012 and 2013, and the six months ended June 30, 2013 and 2014, respectively, related to service arrangements entered into with USAA, including non-cash expense associated with warrants to purchase shares of common stock (Note 9). | |
Transactions with AutoNation | |
The President and Chief Operating Officer of AutoNation, Inc., or AutoNation served as a member of the Company's board of directors from July 2011 to May 2012. During the periods from July 2011 to December 31, 2011 and January 2012 to May 2012, auto buying program revenues from AutoNation and its dealership affiliates' were $1.3 million and $1.4 million, respectively. | |
Revenue_Information
Revenue Information | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Revenue Information | ' | ||||||||||||||||
Revenue Information | ' | ||||||||||||||||
14. Revenue Information | |||||||||||||||||
The CODM reviews separate revenue information for its Transaction and Data and Other service offerings. All other financial information is reviewed by the CODM on a consolidated basis. The following table presents our revenue categories during the periods presented (in thousands): | |||||||||||||||||
Year Ended | Six Months | ||||||||||||||||
December 31, | Ended | ||||||||||||||||
June 30, | |||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | |||||||||||||
(unaudited) | |||||||||||||||||
Transaction revenue | $ | 71,222 | $ | 64,703 | $ | 118,713 | $ | 48,959 | $ | 86,119 | |||||||
Data and other revenue | 5,108 | 15,186 | 15,245 | 7,307 | 8,308 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total revenues | $ | 76,330 | $ | 79,889 | $ | 133,958 | $ | 56,266 | $ | 94,427 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
15. Subsequent Events | |
The Company evaluated subsequent events through April 3, 2014, the date of issuance of the consolidated financial statements for the year ended December 31, 2013. The Company has also evaluated subsequent events through May 5, 2014 for the effects of the reverse stock split described in Note 1. | |
In the first quarter of 2014, the Board of Directors granted stock options to purchase 3,094,173 shares of the Company's common stock to employees and consultants at a weighted average exercise price of $9.24 per share. The stock options vest over periods ranging from one to four years. The estimated total stock-based compensation associated with these stock options of $15.8 million is expected to be recognized over a weighted average period of 3.8 years. | |
In January 2014, the Company acquired the domain name, True.com for $350,000 in cash. | |
In February 2014, the Company acquired the ticker symbol, TRUE, in exchange for cash of $750,000 and warrants to purchase 16,664 shares of common stock at an exercise price of $8.90 per share, with an estimated fair value of $53,000. | |
In February 2014, the Board of Directors approved an increase of 7,333,333 shares of our common stock reserved for issuance under our Amended and Restated 2005 Stock Plan. | |
On February 13, 2014, the Company's CEO repaid the Company for the entire outstanding balance of notes receivable and other advances outstanding at December 31, 2013 of $4.0 million. | |
Subsequent Events (unaudited) | |
On May 4, 2014, the Company and USAA agreed to an extension of the affinity group marketing agreement with USAA. As part of the agreement, the Company issued to USAA a warrant to purchase 1,458,979 shares (unaudited) of the Company's common stock (See Note 9). | |
In May 2014, the Company completed its IPO (See Note 1). | |
In May 2014, the Company entered into an office building lease in San Francisco (the "SF Lease") for approximately 8,279 square feet commencing on August 1, 2014 (the "SF Lease Commencement Date"). Under the terms of the agreement, the entire space will be leased for over 10 years from the SF Lease Commencement Date. The Company has the option to extend the Lease for an additional term of five years. Annual base rent for fiscal year 2015 will be approximately $0.6 million (unaudited), and the cumulative base rent for the initial lease term will be approximately $7.0 million (unaudited). In conjunction with the SF Lease, the Company was required to obtain an irrevocable standby letter of credit in the amount of $0.8 million (unaudited) for the benefit of the landlord. Beginning August 1, 2017 through August 1, 2020, the letter of credit is subject to an annual reduction to as little as $0.2 million. | |
In July 2014, the Company entered into an office building lease (the "Lease") for approximately 33,700 square feet commencing on January 1, 2015 (the "Lease Commencement Date"). Under the terms of the agreement, approximately 16,700 square feet will be leased for 15 years from the Lease Commencement Date. Additional expansion spaces totaling approximately 17,000 square feet will be leased for 10 years from the Lease Commencement Date. The Company has the option to extend the Lease for a total term of twenty years. Annual base rent for fiscal year 2015 will be approximately $2.2 million (unaudited), and the cumulative base rent for the initial lease term will be approximately $36.3 million (unaudited). In conjunction with the Lease, the Company was required to obtain an irrevocable standby letter of credit in the amount of $3.5 million (unaudited) for the benefit of the landlord. Beginning October 1, 2019 through October 1, 2025, the letter of credit is subject to an annual reduction to as little as $1.2 million. | |
In August 2014, the Company amended its credit facility. Refer to Note 7 for further details of the amended credit facility. | |
In August 2014, the Company entered into an agreement to purchase a perpetual software subscription license totaling $4.9 million (unaudited), which was fully paid in the third quarter of 2014. In addition to the software license agreement, the Company purchased a support services package for a three year term totaling $2.4 million (unaudited) payable quarterly. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | |||||||||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||||||||||||||||||||||||||
Basis of Presentation | ' | |||||||||||||||||||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||||||||||||||||||||
The Company's accounting and financial reporting policies conform to accounting principles generally accepted in the United States of America. | ||||||||||||||||||||||||||||||||||||||
During the preparation of the financial statements for the year ended December 31, 2011, the Company identified adjustments relating to timing of revenue recognition, accrued sales taxes and expenses on related party loans affecting 2010 and prior periods. The aggregate amount of these adjustments would have reduced net loss by $360,000 and $420,000 for 2009 and 2010, respectively. The Company concluded these adjustments were not material to any prior reporting period. The Company also concluded that recording the cumulative effect of these adjustments of $780,000 during the year ended December 31, 2011 was not material to the 2011 financial statements and accordingly, the Company recorded these adjustments during the year ended December 31, 2011. | ||||||||||||||||||||||||||||||||||||||
Unaudited Interim Financial Statements | ' | |||||||||||||||||||||||||||||||||||||
Unaudited Interim Financial Statements | ||||||||||||||||||||||||||||||||||||||
The accompanying interim consolidated balance sheet at June 30, 2014, the consolidated statements of comprehensive loss, and cash flows for the six months ended June 30, 2013 and 2014, the consolidated statement of stockholders' equity (deficit) for the six months ended June 30, 2014 and the financial information disclosed in these notes to the consolidated financial statements related to the six months ended June 30, 2013 and 2014 are unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of the Company's management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company's financial position at June 30, 2014 and its results of operations and its cash flows for the six months ended June 30, 2013 and 2014. The results for the six months ended June 30, 2014 are not necessarily indicative of the results expected for the full year. | ||||||||||||||||||||||||||||||||||||||
Reclassification | ' | |||||||||||||||||||||||||||||||||||||
Reclassification | ||||||||||||||||||||||||||||||||||||||
Certain prior year balance sheet amounts have been reclassified for consistency with the current period presentation. These reclassifications were not material to the financial statements. | ||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | ' | |||||||||||||||||||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||||||||||||||||||||
The accompanying consolidated financial statements include the accounts of TrueCar and its wholly owned subsidiaries. Business acquisitions are included in the Company's consolidated financial statements from the date of the acquisition. The Company's purchase accounting resulted in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||||||||||||||||||||||||||
Use of Estimates | ' | |||||||||||||||||||||||||||||||||||||
Use of Estimates | ||||||||||||||||||||||||||||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to judgment and use of estimates include sales allowances and allowances for doubtful accounts, the fair value of assets and liabilities assumed in business combinations, the recoverability of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and intangible assets, contingencies, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. In addition, the Company engaged valuation specialists to assist with management's determination of the valuation of common stock, in periods prior to the Company's initial public offering, and fair values of assets and liabilities assumed in business combinations. | ||||||||||||||||||||||||||||||||||||||
Segments | ' | |||||||||||||||||||||||||||||||||||||
Segments | ||||||||||||||||||||||||||||||||||||||
The Company has one operating segment. The Company's Chief Operating Decision Maker ("CODM"), the Chief Executive Officer and the Chief Financial Officer, manages the Company's operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. | ||||||||||||||||||||||||||||||||||||||
The CODM reviews separate revenue information for its Transactions and Data and Other offerings. All other financial information is reviewed by the CODM on a consolidated basis. All of the Company's principal operations, decision-making functions and assets are located in the United States. | ||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | |||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | ||||||||||||||||||||||||||||||||||||||
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | ||||||||||||||||||||||||||||||||||||||
• | ||||||||||||||||||||||||||||||||||||||
Level 1 — Quoted prices in active markets for identical assets or liabilities or funds. | ||||||||||||||||||||||||||||||||||||||
• | ||||||||||||||||||||||||||||||||||||||
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 includes U.S. Treasury, U.S. Government and agency debt securities, and certain corporate obligations. | ||||||||||||||||||||||||||||||||||||||
• | ||||||||||||||||||||||||||||||||||||||
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||||||||||||||||||||||||
Fair Value Methods | ||||||||||||||||||||||||||||||||||||||
Fair value is based on quoted market prices, if available. If listed prices or quotes are not available, fair value is based on internally developed models that primarily use as inputs market-based or independently sourced market parameters. | ||||||||||||||||||||||||||||||||||||||
For financial instruments measured at fair value, the following section describes the valuation methodologies, key inputs and significant assumptions. | ||||||||||||||||||||||||||||||||||||||
Cash Equivalents | ||||||||||||||||||||||||||||||||||||||
Cash equivalents, consisting primarily of money market instruments and debt securities represent highly liquid investments with maturities of three months or less at purchase. Generally, market prices are used to determine the fair value of money market instruments and debt securities. | ||||||||||||||||||||||||||||||||||||||
Marketable Securities | ||||||||||||||||||||||||||||||||||||||
The marketable securities portfolio consists of debt securities. The Company uses quoted prices of identical securities traded in active and inactive markets. | ||||||||||||||||||||||||||||||||||||||
Preferred Stock Warrant Liability | ||||||||||||||||||||||||||||||||||||||
The convertible preferred stock issuable upon exercise of the convertible preferred stock warrants contained a puttable feature triggered by a deemed liquidation resulting from a change of control. Accordingly, warrants to purchase shares of the Company's convertible preferred stock were classified as a liability, recorded at fair value, and were re-measured to fair value at the end of each period. | ||||||||||||||||||||||||||||||||||||||
On August 30, 2011, in connection with the conversion of all the Company's then outstanding shares of convertible preferred stock to common stock, all the warrants to purchase shares of the Company's preferred stock were converted to warrants to purchase shares of the Company's common stock on a one-for-one basis. Upon conversion, the warrants were reclassified as equity and are no longer re-measured to fair value under generally accepted accounting principles. The fair value of the preferred stock warrants at the date of conversion was reclassified to additional paid-in capital. | ||||||||||||||||||||||||||||||||||||||
The Company determined the fair value of its convertible preferred stock warrants with the assistance of a third-party valuation specialist using the Black-Scholes option pricing model with the following assumptions at August 30, 2011, the date the warrants to purchase shares of the Company's preferred stock were converted to warrants to purchase shares of the Company's common stock: | ||||||||||||||||||||||||||||||||||||||
2011 | ||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 0.01% - 0.30% | |||||||||||||||||||||||||||||||||||||
Expected term (years) | 0.3 - 2.7 | |||||||||||||||||||||||||||||||||||||
Expected volatility | 45.00% | |||||||||||||||||||||||||||||||||||||
Dividend yield | — | |||||||||||||||||||||||||||||||||||||
Contingent Consideration Liability | ||||||||||||||||||||||||||||||||||||||
The Company recorded a contingent consideration liability upon the acquisition of Carperks in 2011 (Note 3). Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant. The Company assesses these estimates on an on-going basis as additional data impacting the assumptions is obtained. Changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the consolidated statements of comprehensive loss. The Company determined the fair value of the contingent consideration using the probability adjusted discounted cash flow method. The significant unobservable inputs used in the fair value measurement of contingent consideration are the probabilities of achieving sales milestones, the period in which these milestones are expected to be achieved, and discount rates. At December 31, 2012, it was determined to be probable that the Company would achieve the sales milestones as included in the Carperks purchase agreement. This resulted in the recognition of an obligation of $1.8 million at December 31, 2012. The change in the fair value of contingent consideration liability during the year ended December 31, 2012, primarily related to a significant increase in the probability of achieving the sales milestone as a result of the Company amending the original agreement to expand the time permitted to achieve the milestone. | ||||||||||||||||||||||||||||||||||||||
Significant increases or decreases in the probabilities of achieving the milestones would result in a significantly higher or lower fair value measurement, respectively. Significant increases or decreases in the period in which milestones will be achieved would result in a significantly lower or higher fair value measurement, respectively. The Company paid Carperks approximately $1.9 million through December 31, 2013 as the sales milestones were achieved during 2013. | ||||||||||||||||||||||||||||||||||||||
The following table summarizes the Company's financial assets and liabilities measured at fair value on a recurring basis at December 31, 2012, 2013 and at June 30, 2014 (unaudited) by level within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): | ||||||||||||||||||||||||||||||||||||||
At December 31, 2012 | At December 31, 2013 | At June 30, 2014 (unaudited) | ||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair | Level 1 | Level 2 | Level 3 | Total Fair | Level 1 | Level 2 | Level 3 | Total Fair | |||||||||||||||||||||||||||
Value | Value | Value | ||||||||||||||||||||||||||||||||||||
Cash equivalents | $ | 6,807 | $ | — | $ | — | $ | 6,807 | $ | 7,726 | $ | — | $ | — | $ | 7,726 | $ | 98,929 | $ | — | $ | — | $ | 98,929 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Assets | $ | 6,807 | $ | — | $ | — | $ | 6,807 | $ | 7,726 | $ | — | $ | — | $ | 7,726 | $ | 98,929 | $ | — | $ | — | $ | 98,929 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contingent consideration | $ | — | $ | — | $ | 1,798 | $ | 1,798 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | $ | — | $ | — | $ | 1,798 | $ | 1,798 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following table summarizes the changes in Level 3 financial instruments. | ||||||||||||||||||||||||||||||||||||||
Warrants | Contingent | |||||||||||||||||||||||||||||||||||||
Consideration | ||||||||||||||||||||||||||||||||||||||
Fair value, at December 31, 2010 | $ | 670 | $ | — | ||||||||||||||||||||||||||||||||||
Contingent consideration from acquisitions | — | 428 | ||||||||||||||||||||||||||||||||||||
Changes in fair value | 1,882 | — | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock warrants to common stock warrants | (2,552 | ) | — | |||||||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
Fair value, at December 31, 2011 | $ | — | $ | 428 | ||||||||||||||||||||||||||||||||||
Changes in fair value | — | 1,370 | ||||||||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
Fair value, at December 31, 2012 | $ | — | $ | 1,798 | ||||||||||||||||||||||||||||||||||
Changes in fair value | — | 95 | ||||||||||||||||||||||||||||||||||||
Payments on contingent consideration | — | (1,893 | ) | |||||||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
Fair value, at December 31, 2013 and June 30, 2014 (unaudited) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
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| | | | | | | | |||||||||||||||||||||||||||||||
The carrying amounts of cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these items. The fair value of the Company's revolving line of credit approximates carrying value based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. | ||||||||||||||||||||||||||||||||||||||
Certain assets, including goodwill and intangible assets are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. For the years ended December 31, 2012 and 2013, and the six months ended June 30, 2014 (unaudited) no impairments were recorded on those assets required to be measured at fair value on a non-recurring basis. | ||||||||||||||||||||||||||||||||||||||
Concentrations of Credit and Business Risk | ' | |||||||||||||||||||||||||||||||||||||
Concentrations of Credit and Business Risk | ||||||||||||||||||||||||||||||||||||||
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, accounts receivable and notes receivable from related parties (Note 13). | ||||||||||||||||||||||||||||||||||||||
The Company, at times, maintains cash balances at financial institutions in excess of amounts insured by United States government agencies or payable by the United States government directly. The Company places its cash and cash equivalents with high credit quality financial institutions. | ||||||||||||||||||||||||||||||||||||||
Each reporting period, the Company reevaluates each customer's ability to satisfy credit obligations and maintains an allowance for doubtful accounts based on the evaluations. No single customer comprised more than 10% of the Company's total revenues for the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2013 and 2014 (unaudited). No single customer comprised more than 10% of the Company's accounts receivable balance at December 31, 2012 and 2013 and June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
The Company's single largest source of unique visitors to its Auto Buying Programs comes from its affinity group marketing partner relationship with United Services Automobile Association ("USAA"), a related party (Note 13). Changes in the Company's relationship with USAA and its promotion and marketing of the Company's Auto Buying Programs may have a material adverse effect on the Company's business, financial condition, results of operations and cash flows. | ||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | ' | |||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||||||||||||||||||||
The Company considers all highly liquid investments purchased with an original or remaining maturity at the date of purchase of three months or less to be cash equivalents. At December 31, 2012 and 2013, and June 30, 2014 (unaudited) cash and cash equivalents were comprised of cash held in money market funds and checking accounts. | ||||||||||||||||||||||||||||||||||||||
Restricted Cash | ' | |||||||||||||||||||||||||||||||||||||
Restricted Cash | ||||||||||||||||||||||||||||||||||||||
Restricted cash at December 31, 2012 and 2013 and June 30, 2014 (unaudited) represents cash on deposit with a financial institution which served as collateral under an Automotive Website Program Partnership Agreement with Yahoo! (Note 8).The restriction on the cash will lapse in conjunction with the expiration of the credit agreement on September 29, 2014. | ||||||||||||||||||||||||||||||||||||||
Investments in Marketable Securities | ' | |||||||||||||||||||||||||||||||||||||
Investments in Marketable Securities | ||||||||||||||||||||||||||||||||||||||
Investments in marketable securities are classified as available for sale and are recorded at fair value, with the unrealized gains and losses if any, net of taxes, reported as a component of accumulated other comprehensive income (loss) until realized or until a determination is made that other-than-temporary decline in market value or impairment has occurred. | ||||||||||||||||||||||||||||||||||||||
When the Company does not intend to sell a debt security, and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of other-than-temporary impairment of a debt security into earnings and the remaining portion in other comprehensive (loss). The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as determined based on cash flow projections. The Company did not have any debt securities with other-than-temporary impairments at December 31, 2011. The Company did not hold any debt securities at December 31, 2012 and 2013 and June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
In determining whether other-than-temporary impairment exists for equity securities, management considers: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. | ||||||||||||||||||||||||||||||||||||||
The cost of marketable securities sold is based upon the specific identification method and any realized gains or losses on the sale of investments are reflected as a component of other income or expense. There were no significant realized and unrealized gains or losses on marketable securities for the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2013 (unaudited) and June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
In addition, the Company classifies marketable securities as current or non-current based upon whether such assets are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle. | ||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Allowance for Doubtful Accounts, and Sales Allowances | ' | |||||||||||||||||||||||||||||||||||||
Accounts Receivable, Allowance for Doubtful Accounts, and Sales Allowances | ||||||||||||||||||||||||||||||||||||||
The Company extends credit in the normal course of business to its customers and performs credit evaluations on a case-by-case basis. The Company does not obtain collateral or other security related to its accounts receivable. | ||||||||||||||||||||||||||||||||||||||
Accounts receivable are recorded based on the amount due from the customer and do not bear interest. The Company reduces accounts receivable by a sales allowance and an allowance for doubtful accounts. | ||||||||||||||||||||||||||||||||||||||
The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its network of dealers. Sales allowances relate primarily to credits issued where a dealer claims that an introduction was previously identified by the dealer from a source other than the Company. While contractually obligated to pay the invoice, the Company may issue a credit against the invoice to maintain overall dealer relations. In assessing the adequacy of the sales allowance, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments and credits and ultimate losses may vary from actual results which could be material to the financial statements, however, to date, actual sales allowances have been materially consistent with the Company's estimates. | ||||||||||||||||||||||||||||||||||||||
The Company determines its allowance for doubtful accounts based on its historical write-off experience and when specific circumstances make it likely that recovery will not occur. The Company reviews the allowance for doubtful accounts each reporting period and assesses the aging of account balances, with an emphasis on those that are past due over ninety days. Account balances are charged off against the allowance when the Company determines that it is probable the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. | ||||||||||||||||||||||||||||||||||||||
The following table summarizes the changes in the allowance for doubtful accounts and sales allowances (in thousands): | ||||||||||||||||||||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||||||||||||||||||||||||
Allowances, at beginning of period | $ | 433 | $ | 2,369 | $ | 1,621 | ||||||||||||||||||||||||||||||||
Charged as a reduction of revenue | 6,304 | 6,898 | 6,985 | |||||||||||||||||||||||||||||||||||
Charged to bad debt expense in general and administrative expenses | 137 | 668 | 153 | |||||||||||||||||||||||||||||||||||
Write-offs, net of recoveries | (4,505 | ) | (8,314 | ) | (6,575 | ) | ||||||||||||||||||||||||||||||||
| | | | | | | | | | | ||||||||||||||||||||||||||||
Allowances, at end of period | $ | 2,369 | $ | 1,621 | $ | 2,184 | ||||||||||||||||||||||||||||||||
| | | | | | | | | | | ||||||||||||||||||||||||||||
| | | | | | | | | | | ||||||||||||||||||||||||||||
Property and Equipment, net | ' | |||||||||||||||||||||||||||||||||||||
Property and Equipment, net | ||||||||||||||||||||||||||||||||||||||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three to five years, or for leasehold improvements, over the term of the lease if shorter. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company's results of operations. | ||||||||||||||||||||||||||||||||||||||
The Company leases equipment under capital lease agreements. The assets and liabilities under capital lease are recorded at the lesser of the present value of aggregate future minimum lease payments, including estimated bargain purchase options, or the fair value of the asset under lease. Assets under capital lease are depreciated using the straight-line method over the life of the lease. | ||||||||||||||||||||||||||||||||||||||
Software and Website Development Costs | ' | |||||||||||||||||||||||||||||||||||||
Software and Website Development Costs | ||||||||||||||||||||||||||||||||||||||
The Company accounts for the costs of computer software obtained or developed for internal use in accordance with ASC 350, Intangibles — Goodwill and Other. Computer software development costs and website development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of computer hardware and software, and costs incurred in developing features and functionality. These capitalized costs are included in property and equipment on the consolidated balance sheets. | ||||||||||||||||||||||||||||||||||||||
The Company expenses costs incurred in the preliminary project and post implementation stages of software development and capitalizes costs incurred in the application development stage and costs associated with significant enhancements to existing internal use software applications. | ||||||||||||||||||||||||||||||||||||||
Software development costs are amortized using the straight-line method over an estimated useful life of three years commencing when the software development project is ready for its intended use. | ||||||||||||||||||||||||||||||||||||||
Costs incurred related to less significant modifications and enhancements as well as maintenance are expensed as incurred. | ||||||||||||||||||||||||||||||||||||||
At December 31, 2012 and 2013, and June 30, 2014, internal use capitalized software development costs were $11.2 million, $16.2 million, and $20.4 million (unaudited) respectively, before accumulated amortization of $3.5 million, $6.4 million, and $8.5 million (unaudited) respectively. During 2013, the Company wrote off capitalized software development costs that were no longer in use of $1.6 million and accumulated amortization of $0.9 million, which resulted in an acceleration of amortization of $0.7 million. | ||||||||||||||||||||||||||||||||||||||
Amortization expense with respect to capitalized software development costs at December 31, 2013 for each of the three years through December 31, 2016 is estimated as follows (in thousands): | ||||||||||||||||||||||||||||||||||||||
Years ended December 31, | ||||||||||||||||||||||||||||||||||||||
2014 | 4,626 | |||||||||||||||||||||||||||||||||||||
2015 | 3,521 | |||||||||||||||||||||||||||||||||||||
2016 | 1,690 | |||||||||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||||||||
Total amortization expense | $ | 9,837 | ||||||||||||||||||||||||||||||||||||
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Intangible Assets Acquired in Business Combinations | ' | |||||||||||||||||||||||||||||||||||||
Intangible Assets Acquired in Business Combinations | ||||||||||||||||||||||||||||||||||||||
The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination, and allocates the purchase price to the tangible and intangible assets acquired and liabilities assumed based on its best estimate of fair value. Acquired intangible assets include: trade names, customer relationships, and developed technology. The Company determines the appropriate useful life of intangible assets by performing an analysis of cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortization. The estimated useful lives for trade names, customer relationships, and technology are generally, one to fifteen years, five to ten years, and three to ten years, respectively. | ||||||||||||||||||||||||||||||||||||||
Long Lived Assets | ' | |||||||||||||||||||||||||||||||||||||
Long-Lived Assets | ||||||||||||||||||||||||||||||||||||||
The Company evaluates the recoverability of its long-lived assets with finite useful lives for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable and the expected undiscounted future cash flows attributable to the asset group are less than the carrying amount of the asset group, an impairment loss equal to the excess of the asset's carrying value over its fair value is recorded. Fair value is determined based upon estimated discounted future cash flows. During the years ended December 31, 2011, 2012 and 2013, and the six months ended June 30, 2014 (unaudited), there were no impairment charges recorded on the Company's long-lived assets. | ||||||||||||||||||||||||||||||||||||||
Goodwill | ' | |||||||||||||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||||||||||||||
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. | ||||||||||||||||||||||||||||||||||||||
Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill may be impaired. | ||||||||||||||||||||||||||||||||||||||
Events or changes in circumstances which could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company's use of the acquired assets or the strategy for the Company's overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. | ||||||||||||||||||||||||||||||||||||||
The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, it is required to perform the first of a two-step impairment test. Alternatively, the Company may elect to proceed directly to the first of a two-step impairment test and bypass the qualitative assessment. | ||||||||||||||||||||||||||||||||||||||
The first step involves comparing the estimated fair value of a reporting unit with its respective book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then the carrying amount of the goodwill is compared with its implied fair value. The estimate of implied fair value of goodwill may require valuations of certain internally generated and unrecognized intangible assets. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The Company tests for goodwill impairment annually at December 31. During the years ended December 31, 2011, 2012 and 2013, there were no impairment charges recorded on the Company's goodwill. The fair value of reporting units exceeded their carrying values by a significant margin during each reporting period. During the six months ended June 30, 2014, there were no triggering events which would require an impairment assessment to be performed of the Company's goodwill (unaudited). | ||||||||||||||||||||||||||||||||||||||
Revenue Recognition | ' | |||||||||||||||||||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||||||||||||||||||||
The Company recognizes revenue, net of sales allowances, when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fees are fixed or determinable, and (iv) collectability is reasonably assured. Deferred revenue is recognized on the accompanying consolidated balance sheets when payments are received in advance of the Company meeting all of the revenue recognition criteria described above. The Company recorded deferred revenue (included in other accrued expenses) of $0.4 million at December 31, 2012 and 2013, and $0.7 million at June 30, 2014 (unaudited). | ||||||||||||||||||||||||||||||||||||||
Transaction Revenues | ||||||||||||||||||||||||||||||||||||||
Auto Buying Program Revenues | ||||||||||||||||||||||||||||||||||||||
Revenues consist of fees paid by dealers participating in the Company's dealer network with which the Company has an agreement. Dealers pay the Company fees either on a per vehicle basis for sales to Auto Buying Program users or in the form of a subscription arrangement. | ||||||||||||||||||||||||||||||||||||||
The Company recognizes revenue for fee arrangements based on a per vehicle basis when the vehicle sale has occurred between the Auto Buying Program user and the dealer. Under the contractual terms and conditions of arrangements with its network of participating certified dealers, the dealer is required to pay the Company upon the sale of a vehicle to an Auto Buying Program user that has been provided to the dealer by the Company. Recognition of revenue from the sale is not contingent upon verification or acceptance of the transaction by the dealer. | ||||||||||||||||||||||||||||||||||||||
Upon a user deciding to proceed with the user's vehicle purchase through the Company, the user provides his or her name, address, e-mail, and a phone number during the process of obtaining a Guaranteed Savings Certificate, which gives the Company the identity and source of a TrueCar introduction provided to a specific dealer prior to an actual sale occurring. After a sale occurs, the Company receives information regarding the sale, including the identity of the purchaser, via the dealer management system used by the dealer that made the sale. In addition to dealer management systems, the Company receives information regarding vehicle sales from a variety of data sources, including third party car sales aggregators, car dealer networks, and other publicly available sources (collectively "sales data") and uses this sales data to further verify that a sale has occurred between an Auto Buying Program user and a dealer, as well as a means to invoice the dealer shortly after the completion of the sales transaction. Actual vehicle sales data is reported on a daily basis shortly following the date of sale. | ||||||||||||||||||||||||||||||||||||||
The Company also recognizes revenue from dealers under subscription agreements. Subscription fee arrangements are short-term in nature with terms ranging from one to three months and are cancellable by the dealer or the Company at any time. Subscription arrangements fall into three types: flat rate subscriptions, subscriptions subject to downward adjustment based on a minimum number of vehicle sales ("guaranteed sales") and subscriptions subject to downward adjustment based on a minimum number of introductions ("guaranteed introductions"). Under flat rate subscription arrangements fees are charged at a monthly flat rate regardless of the number of sales made to users of the Company's platform by the dealer. For flat rate subscription arrangements the Company recognizes the fees as revenue over the subscription period on a straight line basis which corresponds to the period that the Company is providing the dealer access to the Auto Buying Program. Under guaranteed sales subscription arrangements fees are charged based on the number of guaranteed sales multiplied by a fixed amount per vehicle. To the extent that the actual number of vehicles sold by the dealers to users of the Company's platform is less than the number of guaranteed sales, the Company provides a credit to the dealer. To the extent that the actual number of vehicles sold exceeds the number of guaranteed sales, the Company is not entitled to any additional fees. Under guaranteed introductions subscription arrangements, fees are charged based on the number of guaranteed introductions multiplied by a fixed amount per introduction. To the extent that the number of actual introductions is less than the number of guaranteed introductions, the Company provides a credit to the dealer. To the extent that the actual number of introductions provided exceeds the number guaranteed, the Company is not entitled to any additional fees. For guaranteed sales and guaranteed introductions subscription arrangements, the Company recognizes revenue based on the lesser of (i) the actual number of sales generated or introductions delivered through the Auto Buying Program during the subscription period multiplied by the contracted price per sale/introduction or (ii) the straight-line of the subscription fee over the period over which the services are delivered. | ||||||||||||||||||||||||||||||||||||||
OEM Incentives | ||||||||||||||||||||||||||||||||||||||
The Company enters into arrangements with automobile manufacturers ("OEM") to promote the sale of their vehicles through the offering of additional consumer incentives to members of the Company's affinity group marketing partners. These manufacturers pay a per-vehicle fee to the Company for promotion of the incentive and the Company recognizes as revenue the per-vehicle incentive fee at the time the sale of the vehicle has occurred between the Auto Buying Program user and the dealer. | ||||||||||||||||||||||||||||||||||||||
Data and Other Revenues | ||||||||||||||||||||||||||||||||||||||
Data and Other Services | ||||||||||||||||||||||||||||||||||||||
Revenues are generated from the sale of lease residual value data for new and used leased automobiles, guidebooks, and consulting services. Sales are principally made to vehicle manufacturers, vehicle financing companies, investment banks, automobile dealers, and insurance companies. Data and consulting services customers typically prepay for lease residual value data and guidebooks annually in the form of a subscription in advance. | ||||||||||||||||||||||||||||||||||||||
Data and consulting services sales arrangements may include multiple deliverables including sale of lease residual data, from guidebooks and from consulting services. For multiple deliverable revenue arrangements, the Company first assesses whether each deliverable has value to the customer on a standalone basis and performance is considered probable and substantially in its control. Data and consulting services can be sold both on a standalone basis and as part of multiple deliverable arrangements. The deliverables constitute separate units of accounting because the deliverables have standalone value to the customer and as such, the total arrangement consideration is allocated to each unit of accounting using the relative selling price hierarchy. This hierarchy requires the selling price of each deliverable in a multiple deliverable revenue arrangement to be based on, in descending order: (i) vendor-specific objective evidence, or VSOE, (ii) third-party evidence of selling price, or TPE, or (iii) management's best estimated selling price, or BESP. | ||||||||||||||||||||||||||||||||||||||
The Company cannot establish VSOE or TPE because the deliverables are not sold separately within a sufficiently narrow price range or third party pricing for comparable services is not available; therefore, it applies judgment to determine BESP. The objective of BESP is to determine the price at which the Company would transact a sale if the service were sold on a stand-alone basis. The determination of BESP requires the Company to make significant estimates and judgments and the Company considers numerous factors in this determination, including the nature of the deliverables, market conditions and the competitive landscape, internal costs, and its pricing and discounting practices. The Company updates its estimates of BESP on a periodic basis as events and as circumstances may require. | ||||||||||||||||||||||||||||||||||||||
Revenue allocated to each element from the sale of lease residual value data, guidebooks, and consulting services is recognized when the basic recognition criteria are met for each element. Sales attributed to residual value data and guidebooks are recognized when the data or guidebooks are delivered and consulting services are recognized when the project is completed. | ||||||||||||||||||||||||||||||||||||||
Lead Referral Fees | ||||||||||||||||||||||||||||||||||||||
Lead referral fee revenues consist of fees earned through an online process that refers consumers to out-of-network auto dealers and financing companies for new and used vehicles and auto loans when the Company is unable to identify a dealer with a vehicle in the Company's dealer network for which a prospective car buyer is searching. Fees are recognized at the time the lead referral is transmitted to, and accepted by, the lead buying entities and are not contingent on the sale of a vehicle. The Company is not a party to the arrangement with, and is not the primary obligor with, the lead buyer's dealer and accordingly, revenue is recognized for the net fee received for the lead from the lead buyer. | ||||||||||||||||||||||||||||||||||||||
Cost of Revenue (exclusive of depreciation and amortization) | ' | |||||||||||||||||||||||||||||||||||||
Cost of Revenue (exclusive of depreciation and amortization) | ||||||||||||||||||||||||||||||||||||||
Cost of revenue includes expenses related to the fulfillment of the Company's services, consisting primarily of data costs and licensing fees paid to third party service providers and expenses related to operating the Company's website and mobile applications, including those associated with its data centers, hosting fees, data processing costs required to deliver introductions to its network of TrueCar Certified Dealers, employee costs related to dealer operations, sales matching, and employee and consulting costs related to delivering data and consulting services to the Company's customers. Cost of revenue excludes depreciation and amortization of software development costs and other hosting and data infrastructure equipment used to operate the Company's platforms, which are included in the depreciation and amortization line item on its statement of comprehensive loss. | ||||||||||||||||||||||||||||||||||||||
Sales and Marketing | ' | |||||||||||||||||||||||||||||||||||||
Sales and Marketing | ||||||||||||||||||||||||||||||||||||||
Sales and marketing expenses consist primarily of radio and television advertising and digital customer acquisition costs, loan subvention costs where the Company pays certain affinity group marketing partners a portion of a consumers' borrowing costs for car loan products offered by these affinity group marketing partners, marketing fees earned by affinity group marketing partners for sales of vehicles from consumer traffic originated from Auto Buying Program websites maintained and operated by the Company for affinity group marketing partners and headcount related expenses for its sales and marketing staff, including salaries, benefits, bonuses, stock-based compensation and commissions costs of marketing and promotional events, public relations costs, corporate communications, and allocated overhead. In addition, the Company also includes compensation expense in sales and marketing recorded in connection with the fair value of warrants issued to an affinity group partner, a direct marketing firm and a service provider (Note 9). | ||||||||||||||||||||||||||||||||||||||
The Company classifies fees paid to affinity group marketing partners as sales and marketing expense as the affinity group marketing programs are marketing channels the Company uses to increase consumer awareness and to acquire traffic for, and drive users to, its auto buying platforms. The Company's affinity group marketing partners do not provide any part of the service that would result in a vehicle sale for a dealer. | ||||||||||||||||||||||||||||||||||||||
Marketing and advertising costs to promote the Company's services are expensed as incurred. Media production costs are expensed the first time the advertisement is aired. Marketing and advertising expenses were $15.0 million, $36.5 million and $27.5 million for the years ended December 31, 2011, 2012 and 2013, respectively. Included in the $36.5 million of marketing and advertising expenses for the year ended December 31, 2012 is $20.0 million for a guaranteed minimum number of unique visitors under an agreement with Yahoo! (Note 8). Marketing and advertising expenses were $9.2 million (unaudited) and $27.1 million (unaudited) for the six months ended June 30, 2013 and 2014, respectively. Prepaid expenses include prepaid media costs of $0.5 million, $1.5 million and $3.4 million (unaudited) at December 31, 2012 and 2013, and June 30, 2014, respectively. | ||||||||||||||||||||||||||||||||||||||
Technology and Development | ' | |||||||||||||||||||||||||||||||||||||
Technology and Development | ||||||||||||||||||||||||||||||||||||||
Technology and development expenses consist primarily of personnel and related expenses for technology and development staff, including salaries, benefits, bonuses and stock-based compensation, the cost of certain third-party service providers, and allocated overhead. Technology and development expenses are expensed as incurred. | ||||||||||||||||||||||||||||||||||||||
General and Administrative | ' | |||||||||||||||||||||||||||||||||||||
General and Administrative | ||||||||||||||||||||||||||||||||||||||
General and administrative expenses consist primarily of personnel and related expenses for administrative, legal, finance and human resource staffs, including salaries, benefits, bonuses and stock-based compensation; professional fees; insurance premiums; other corporate expenses; and allocated overhead. | ||||||||||||||||||||||||||||||||||||||
Stock Based Compensation | ' | |||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||||||||||||||||||||
On April 18, 2005, TrueCar's Board of Directors adopted the 2005 Stock Plan (the "2005 Plan"). On September 11, 2008, TrueCar.com's Board of Directors adopted the 2008 Stock Plan (the "2008 Plan"). At December 31, 2013, a total of 22,436,208 and 673,266 shares of common stock have been authorized and reserved for issuance under the 2005 Plan and 2008 Plan, respectively, in the form of incentive or nonqualified stock options and stock purchase rights. The Board of Directors of TrueCar, with the advice of and input from the Compensation Committee, determines the terms and conditions of each grant under both plans. Employees, officers, directors, and consultants are eligible to receive stock options and restricted stock awards under the plans. | ||||||||||||||||||||||||||||||||||||||
The exercise price of nonqualified options may not be less than 85% of the fair market value of the common stock at the date of grant. The exercise price of incentive stock options may not be less than the fair market value of the common stock at the date of grant. The exercise price of incentive stock options granted to individuals that own greater than 10% of the voting stock may not be less than 110% of the fair market value of the common stock at the date of grant. The purchase price of stock purchase rights may not be less than 85% of the fair market value of the common stock at the date of grant. The purchase price of stock purchase rights granted to individuals that own greater than 10% of the voting stock may not be less than 110% of the fair market value of the common stock at the date of grant. | ||||||||||||||||||||||||||||||||||||||
Options granted under these plans become exercisable at a rate of no less than 20% per year over five years from the grant date, except for options granted to officers, directors, and consultants in which exercise periods are determined based upon such conditions as determined by the Board of Directors and set forth in the option agreement. The term of each option is based upon such conditions as determined by the option agreement; however, the term can be no more than ten years from the date of the grant. | ||||||||||||||||||||||||||||||||||||||
In the case of an incentive stock option granted to an optionee who, at the time the option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary, the term of the option is five years from the date of grant or such shorter term as may be provided in the option agreement. | ||||||||||||||||||||||||||||||||||||||
To date, the Company's stock-based compensation has consisted of stock options and restricted stock awards granted to employees and non-employees. | ||||||||||||||||||||||||||||||||||||||
The Company recognizes stock-based compensation expense related to employee stock option and restricted stock grants in accordance with ASC 718, Compensation — Stock Compensation. This standard requires the Company to record stock-based compensation expense equal to the fair value of awards granted to employees. The Company determined the fair value of awards granted to employees using the Black-Scholes option pricing model that included the following weighted average assumptions under the plans: | ||||||||||||||||||||||||||||||||||||||
Year Ended | Six Months | |||||||||||||||||||||||||||||||||||||
December 31, | Ended | |||||||||||||||||||||||||||||||||||||
June 30, | ||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | ||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 2.04 | % | 0.96 | % | 1.41 | % | 1.1 | % | 1.95 | % | ||||||||||||||||||||||||||||
Expected term (years) | 6.01 | 6 | 6.06 | 6.07 | 6.26 | |||||||||||||||||||||||||||||||||
Expected volatility | 48 | % | 60 | % | 61 | % | 63 | % | 58 | % | ||||||||||||||||||||||||||||
Dividend yield | — | — | — | — | — | |||||||||||||||||||||||||||||||||
The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company's employee stock options. | ||||||||||||||||||||||||||||||||||||||
The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. The expected term of options granted is calculated based upon actual historical exercise and post-vesting cancellations, adjusted for expected future exercise behavior. | ||||||||||||||||||||||||||||||||||||||
The Company determined the expected volatility assumption for options granted using the frequency of daily historical prices of comparable public company's common stock for a period equal to the expected term of the options. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future stock option grants. | ||||||||||||||||||||||||||||||||||||||
The dividend yield assumption for options granted is based on the Company's history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future. | ||||||||||||||||||||||||||||||||||||||
As stock-based compensation expense recognized in the Company's consolidated statements of comprehensive loss is based on awards ultimately expected to vest, the amount has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company's historical experience and future expectations. | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation for employee awards is recognized on a straight-line basis over the requisite period, except for performance-based awards which are recognized using the graded vesting model. | ||||||||||||||||||||||||||||||||||||||
Compensation expense for non-employee stock-based awards is recognized in accordance with ASC 505, Equity — Equity-Based Payments to Non-Employees. Under this standard, stock option awards issued to non-employees are accounted for at fair value using the Black-Scholes option-pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The Company records compensation expense based on the then-current fair values of the stock options at each financial reporting date. Compensation recorded during the service period is adjusted in subsequent periods for changes in the stock options' fair value until the earlier of the date at which the non-employee's performance is complete or a performance commitment is reached, which is generally when the stock option vests. | ||||||||||||||||||||||||||||||||||||||
For purposes of financial accounting for stock-based compensation, the Company has determined the fair values of its options based in part on the work of third-party valuation specialists. The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If the Company had made different assumptions, its stock-based compensation expense and its net loss could have been significantly different. | ||||||||||||||||||||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||||||||||||||||||
The Company accounts for income taxes under the liability method. Under the liability method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. | ||||||||||||||||||||||||||||||||||||||
The Company determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions meeting the more-likely-than-not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if any, in its income tax provision in the accompanying statements of comprehensive loss. | ||||||||||||||||||||||||||||||||||||||
Earnings Per Share Attributable to Common Stockholders | ' | |||||||||||||||||||||||||||||||||||||
Earnings Per Share Attributable to Common Stockholders | ||||||||||||||||||||||||||||||||||||||
The Company applies the two-class method for calculating basic earnings per share. Under the two-class method, net income (loss) is reduced by cumulative preferred stock dividends and the residual amount is allocated between common stock and other participating securities based on their participation rights. Participating securities comprised of preferred and restricted common stock, which participate in dividends, if declared, by the Company. As the Company has reported a net loss for all periods, and the participating securities were not contractually obligated to share in the losses of the Company, accordingly, no losses were allocated to the participating securities. | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding, net of the weighted average unvested restricted stock subject to repurchase by the Company, if any, during the period. Diluted earnings per share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, adjusted for the effects of potentially dilutive common stock, which are comprised of stock options and stock warrants, using the treasury-stock method, and convertible preferred stock and notes payable, using the if-converted method. Because the Company reported losses attributable to common stockholders for all periods presented, all potentially dilutive common stock are antidilutive for those periods. | ||||||||||||||||||||||||||||||||||||||
The following table presents the number of anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders at December 31, 2011, 2012 and 2013 and at June 30, 2013 and 2014 (in thousands): | ||||||||||||||||||||||||||||||||||||||
December 31, | June 30, | |||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | ||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
Options to purchase common stock | 15,243 | 15,419 | 18,363 | 16,078 | 26,665 | |||||||||||||||||||||||||||||||||
Common stock warrants | 8,697 | 5,154 | 5,931 | 5,251 | 3,981 | |||||||||||||||||||||||||||||||||
Conversion of convertible preferred stock | — | — | 2,857 | 2,857 | — | |||||||||||||||||||||||||||||||||
Unvested restricted stock awards | 469 | 122 | 55 | 95 | 741 | |||||||||||||||||||||||||||||||||
Contingently redeemable shares | — | 126 | — | 189 | — | |||||||||||||||||||||||||||||||||
Convertible promissory notes | — | 3,444 | — | — | — | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Total shares excluded from net loss per share attributable to common stockholders | 24,409 | 24,265 | 27,206 | 24,470 | 31,387 | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Comprehensive Loss | ' | |||||||||||||||||||||||||||||||||||||
Comprehensive Loss | ||||||||||||||||||||||||||||||||||||||
Comprehensive loss encompasses all changes in equity other than those arising from transactions with stockholders, and consists of net loss and unrealized gains and losses on marketable securities. | ||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | ' | |||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||||||||||||||||||||||||
Under the Jumpstart Our Business Startups Act ("JOBS Act"), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. | ||||||||||||||||||||||||||||||||||||||
In July 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update clarifying that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except in certain circumstances. The standards update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance did not have any impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In April 2014, the FASB issued an accounting standards update clarifying the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This standards update is effective for fiscal years beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. The adoption of this guidance is not expected to have any impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In May 2014, the FASB issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace all existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The guidance is effective for annual and interim reporting periods beginning after December 15, 2016. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In June 2014, the FASB issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. The adoption of this guidance is not expected to have an impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
In August 2014, the FASB issued new guidance requiring management to assess an entity's ability to continue as a going concern. Specifically, the new guidance provides a definition of the term substantial doubt, requires an evaluation every reporting period including interim periods, provides principles for considering the mitigating effect of management's plans, requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, requires an express statement and other disclosures when substantial doubt is not alleviated, and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The new guidance is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have an impact on the Company's consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | |||||||||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | ' | |||||||||||||||||||||||||||||||||||||
Summary of financial assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||||||||||||||||||||||||||||
At December 31, 2012 | At December 31, 2013 | At June 30, 2014 (unaudited) | ||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair | Level 1 | Level 2 | Level 3 | Total Fair | Level 1 | Level 2 | Level 3 | Total Fair | |||||||||||||||||||||||||||
Value | Value | Value | ||||||||||||||||||||||||||||||||||||
Cash equivalents | $ | 6,807 | $ | — | $ | — | $ | 6,807 | $ | 7,726 | $ | — | $ | — | $ | 7,726 | $ | 98,929 | $ | — | $ | — | $ | 98,929 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Assets | $ | 6,807 | $ | — | $ | — | $ | 6,807 | $ | 7,726 | $ | — | $ | — | $ | 7,726 | $ | 98,929 | $ | — | $ | — | $ | 98,929 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contingent consideration | $ | — | $ | — | $ | 1,798 | $ | 1,798 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | $ | — | $ | — | $ | 1,798 | $ | 1,798 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Summary of changes in Level 3 financial instruments | ' | |||||||||||||||||||||||||||||||||||||
Warrants | Contingent | |||||||||||||||||||||||||||||||||||||
Consideration | ||||||||||||||||||||||||||||||||||||||
Fair value, at December 31, 2010 | $ | 670 | $ | — | ||||||||||||||||||||||||||||||||||
Contingent consideration from acquisitions | — | 428 | ||||||||||||||||||||||||||||||||||||
Changes in fair value | 1,882 | — | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock warrants to common stock warrants | (2,552 | ) | — | |||||||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
Fair value, at December 31, 2011 | $ | — | $ | 428 | ||||||||||||||||||||||||||||||||||
Changes in fair value | — | 1,370 | ||||||||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
Fair value, at December 31, 2012 | $ | — | $ | 1,798 | ||||||||||||||||||||||||||||||||||
Changes in fair value | — | 95 | ||||||||||||||||||||||||||||||||||||
Payments on contingent consideration | — | (1,893 | ) | |||||||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
Fair value, at December 31, 2013 and June 30, 2014 (unaudited) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||||||||
Summary of changes in the allowance for doubtful accounts and sales allowances | ' | |||||||||||||||||||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||||||||||||||||||||||||
Allowances, at beginning of period | $ | 433 | $ | 2,369 | $ | 1,621 | ||||||||||||||||||||||||||||||||
Charged as a reduction of revenue | 6,304 | 6,898 | 6,985 | |||||||||||||||||||||||||||||||||||
Charged to bad debt expense in general and administrative expenses | 137 | 668 | 153 | |||||||||||||||||||||||||||||||||||
Write-offs, net of recoveries | (4,505 | ) | (8,314 | ) | (6,575 | ) | ||||||||||||||||||||||||||||||||
| | | | | | | | | | | ||||||||||||||||||||||||||||
Allowances, at end of period | $ | 2,369 | $ | 1,621 | $ | 2,184 | ||||||||||||||||||||||||||||||||
| | | | | | | | | | | ||||||||||||||||||||||||||||
| | | | | | | | | | | ||||||||||||||||||||||||||||
Schedule of fair value of awards granted to employees using the Black Scholes option pricing model | ' | |||||||||||||||||||||||||||||||||||||
Year Ended | Six Months | |||||||||||||||||||||||||||||||||||||
December 31, | Ended | |||||||||||||||||||||||||||||||||||||
June 30, | ||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | ||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 2.04 | % | 0.96 | % | 1.41 | % | 1.1 | % | 1.95 | % | ||||||||||||||||||||||||||||
Expected term (years) | 6.01 | 6 | 6.06 | 6.07 | 6.26 | |||||||||||||||||||||||||||||||||
Expected volatility | 48 | % | 60 | % | 61 | % | 63 | % | 58 | % | ||||||||||||||||||||||||||||
Dividend yield | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Schedule of anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ' | |||||||||||||||||||||||||||||||||||||
December 31, | June 30, | |||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | ||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
Options to purchase common stock | 15,243 | 15,419 | 18,363 | 16,078 | 26,665 | |||||||||||||||||||||||||||||||||
Common stock warrants | 8,697 | 5,154 | 5,931 | 5,251 | 3,981 | |||||||||||||||||||||||||||||||||
Conversion of convertible preferred stock | — | — | 2,857 | 2,857 | — | |||||||||||||||||||||||||||||||||
Unvested restricted stock awards | 469 | 122 | 55 | 95 | 741 | |||||||||||||||||||||||||||||||||
Contingently redeemable shares | — | 126 | — | 189 | — | |||||||||||||||||||||||||||||||||
Convertible promissory notes | — | 3,444 | — | — | — | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Total shares excluded from net loss per share attributable to common stockholders | 24,409 | 24,265 | 27,206 | 24,470 | 31,387 | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Internally developed software | ' | |||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | ' | |||||||||||||||||||||||||||||||||||||
Schedule of amortization expense with respect to capitalized software development costs | ' | |||||||||||||||||||||||||||||||||||||
Years ended December 31, | ||||||||||||||||||||||||||||||||||||||
2014 | 4,626 | |||||||||||||||||||||||||||||||||||||
2015 | 3,521 | |||||||||||||||||||||||||||||||||||||
2016 | 1,690 | |||||||||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||||||||
Total amortization expense | $ | 9,837 | ||||||||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||||||||
Preferred Stock Warrants converted to common stock warrants | ' | |||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | ' | |||||||||||||||||||||||||||||||||||||
Schedule of fair value of convertible preferred stock warrants using the Black-Scholes option pricing model | ' | |||||||||||||||||||||||||||||||||||||
2011 | ||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 0.01% - 0.30% | |||||||||||||||||||||||||||||||||||||
Expected term (years) | 0.3 - 2.7 | |||||||||||||||||||||||||||||||||||||
Expected volatility | 45.00% | |||||||||||||||||||||||||||||||||||||
Dividend yield | — |
Business_Combinations_Tables
Business Combinations (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Business Combinations | ' | |||||||||||||
Summary of the allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for business acquisitions | ' | |||||||||||||
ALG, Inc. | Honk LLC | Carperks | Total | |||||||||||
Assets acquired | ||||||||||||||
Cash | $ | 7,638 | — | — | $ | 7,638 | ||||||||
Accounts receivable | 1,526 | — | — | 1,526 | ||||||||||
Other assets | 276 | — | — | 276 | ||||||||||
Property and equipment | 230 | 19 | — | 249 | ||||||||||
Acquired technology | 29,600 | 1,000 | — | 30,600 | ||||||||||
Customer relationships | 5,000 | — | 1,300 | 6,300 | ||||||||||
Tradenames | 4,900 | — | 70 | 4,970 | ||||||||||
Goodwill | 51,206 | 712 | 691 | 52,609 | ||||||||||
| | | | | | | | | | | | | | |
Total assets acquired | 100,376 | 1,731 | 2,061 | 104,168 | ||||||||||
| | | | | | | | | | | | | | |
Liabilities assumed | 1,043 | 299 | — | 1,342 | ||||||||||
Deferred tax liabilities | 10,819 | — | — | 10,819 | ||||||||||
| | | | | | | | | | | | | | |
Net assets acquired | $ | 88,514 | $ | 1,432 | $ | 2,061 | $ | 92,007 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Consideration paid | ||||||||||||||
Common stock issued | $ | 82,500 | 1,412 | 133 | $ | 84,045 | ||||||||
Warrants issued | 6,014 | 20 | — | 6,034 | ||||||||||
Contingent consideration | — | — | 428 | 428 | ||||||||||
Cash paid | — | — | 1,500 | 1,500 | ||||||||||
| | | | | | | | | | | | | | |
Total consideration | $ | 88,514 | $ | 1,432 | $ | 2,061 | $ | 92,007 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of pro forma consolidated revenues and net loss | ' | |||||||||||||
2011 | ||||||||||||||
Revenues | $ | 84,754 | ||||||||||||
Net loss | $ | 14,666 |
Property_and_Equipment_net_Tab
Property and Equipment, net (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Property and Equipment, net | ' | ||||||||||
Schedule of property and equipment | ' | ||||||||||
December 31, | |||||||||||
June 30, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(unaudited) | |||||||||||
Computer equipment and internally developed software | $ | 16,840 | $ | 22,517 | $ | 26,757 | |||||
Furniture and fixtures | 1,357 | 1,654 | 2,048 | ||||||||
Leasehold improvements | 2,306 | 2,921 | 3,050 | ||||||||
Vehicles | 45 | — | — | ||||||||
| | | | | | | | | | | |
20,548 | 27,092 | 31,855 | |||||||||
Less: Accumulated depreciation | (7,706 | ) | (11,854 | ) | (14,751 | ) | |||||
| | | | | | | | | | | |
Total property and equipment, net | $ | 12,842 | $ | 15,238 | $ | 17,104 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Intangible_Assets_Tables
Intangible Assets (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Intangible Assets | ' | ||||||||||||||||
Schedule of intangible assets | ' | ||||||||||||||||
At December 31, 2012 | |||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Weighted | ||||||||||||||
Value | amortization | Value | average useful | ||||||||||||||
life in years | |||||||||||||||||
Acquired technology and domain name | $ | 30,713 | $ | (4,306 | ) | $ | 26,407 | 9.75 | |||||||||
Customer relationships | 6,300 | (972 | ) | 5,328 | 8.97 | ||||||||||||
Tradenames | 4,970 | (478 | ) | 4,492 | 14.8 | ||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 41,983 | $ | (5,756 | ) | $ | 36,227 | 10.23 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
At December 31, 2013 | |||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Weighted | ||||||||||||||
Value | amortization | Value | average useful | ||||||||||||||
life in years | |||||||||||||||||
Acquired technology and domain name | $ | 30,725 | $ | (7,624 | ) | $ | 23,101 | 9.75 | |||||||||
Customer relationships | 6,300 | (1,732 | ) | 4,568 | 8.97 | ||||||||||||
Tradenames | 4,970 | (805 | ) | 4,165 | 14.8 | ||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 41,995 | $ | (10,161 | ) | $ | 31,834 | 10.23 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Schedule of amortization expense | ' | ||||||||||||||||
Year Ended | Six Months | ||||||||||||||||
December 31, | Ended | ||||||||||||||||
June 30, | |||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | |||||||||||||
(unaudited) | |||||||||||||||||
Acquired technology and domain name | $ | 963 | $ | 3,343 | $ | 3,318 | $ | 1,658 | $ | 1,636 | |||||||
Customer relationships | 212 | 760 | 760 | 380 | 380 | ||||||||||||
Tradenames | 105 | 373 | 327 | 163 | 163 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total amortization | $ | 1,280 | $ | 4,476 | $ | 4,405 | $ | 2,201 | $ | 2,179 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Amortization expense with respect to intangible assets at June 30, 2014 for each of the five years through December 31, 2018 | ' | ||||||||||||||||
Years ended December 31, | |||||||||||||||||
2014 | 4,183 | ||||||||||||||||
2015 | 4,061 | ||||||||||||||||
2016 | 3,968 | ||||||||||||||||
2017 | 3,789 | ||||||||||||||||
2018 | 3,788 | ||||||||||||||||
Thereafter | 12,045 | ||||||||||||||||
| | | | | |||||||||||||
Total amortization expense | $ | 31,834 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Credit_Facility_Tables
Credit Facility (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Credit Facility | ' | ||||
Summary of carrying amount of outstanding debt | ' | ||||
December 31, | |||||
2013 | |||||
Revolving line of credit | $ | 5,000 | |||
Debt discount, net of accumulated accretion | (236 | ) | |||
| | | | | |
Total carrying value | $ | 4,764 | |||
| | | | | |
| | | | | |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies | ' | ||||
Schedule of future minimum payments for obligations under non-cancellable operating leases | ' | ||||
At December 31, 2013, future minimum payments for obligations under non-cancellable operating leases are as follows (in thousands): | |||||
Years ended December 31, | |||||
2014 | 2,435 | ||||
2015 | 2,395 | ||||
2016 | 2,504 | ||||
2017 | 2,000 | ||||
2018 | 2,002 | ||||
Thereafter | 3,120 | ||||
| | | | | |
Total minimum lease payments | $ | 14,456 | |||
| | | | | |
| | | | | |
At June 30, 2014 and including the new facility lease executed in July 2014, future minimum payments for obligations under non-cancellable operating leases are as follows (in thousands)(unaudited): | |||||
Six months ending December 31, 2014 | $ | 1,337 | |||
2015 | 5,149 | ||||
2016 | 5,922 | ||||
2017 | 5,201 | ||||
2018 | 5,530 | ||||
Thereafter | 37,008 | ||||
| | | | | |
Total minimum lease payments | $ | 60,147 | |||
| | | | | |
| | | | | |
Convertible_Preferred_Stock_an1
Convertible Preferred Stock and Stockholders' Equity (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Convertible Preferred Stock and Stockholders' Equity | ' | ||||
Schedule of reserve for unissued shares of common stock | ' | ||||
Number of Shares | |||||
Common stock issued | 59,955,343 | ||||
Outstanding stock options | 18,363,144 | ||||
Outstanding common stock warrants | 5,930,758 | ||||
Outstanding Series A preferred stock | 2,857,143 | ||||
Additional shares available for grant under the 2005 Plan | 604,093 | ||||
| | | | | |
Total | 87,710,481 | ||||
| | | | | |
| | | | | |
Stockbased_Awards_Tables
Stock-based Awards (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stock based Awards | ' | ||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||
Number of | Weighted- | Weighted- | |||||||||||||||
Options | Average | Average | |||||||||||||||
Exercise | Remaining | ||||||||||||||||
Price | Contract Life | ||||||||||||||||
(in years) | |||||||||||||||||
Outstanding at December 31, 2012 | 15,418,788 | $ | 3.51 | 7.35 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Granted | 5,193,127 | $ | 8.44 | ||||||||||||||
Exercised | (98,878 | ) | $ | 1.73 | |||||||||||||
Canceled/forfeited | (2,149,893 | ) | $ | 3.68 | |||||||||||||
| | | | | | | | | | | |||||||
Outstanding at December 31, 2013 | 18,363,144 | $ | 4.89 | 7.17 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Granted (unaudited) | 10,545,647 | $ | 15.86 | ||||||||||||||
Exercised (unaudited) | (1,741,058 | ) | $ | 1.01 | |||||||||||||
Canceled/forfeited (unaudited) | (502,943 | ) | $ | 9.36 | |||||||||||||
| | | | | | | | | | | |||||||
Outstanding at June 30, 2014 (unaudited) | 26,664,790 | $ | 9.4 | 7.98 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Vested and expected to vest at December 31, 2013 | 16,947,300 | $ | 4.66 | 7.05 | |||||||||||||
Exercisable at December 31, 2013 | 10,855,844 | $ | 2.82 | 5.97 | |||||||||||||
Vested and expected to vest at June 30, 2014 (unaudited) | 25,236,587 | $ | 9.32 | 7.91 | |||||||||||||
Exercisable at June 30, 2014 (unaudited) | 18,884,427 | $ | 8.72 | 7.39 | |||||||||||||
Schedule of activity in connection with restricted stock | ' | ||||||||||||||||
Activity in connection with the restricted stock is as follows for the year ended December 31, 2013: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested — December 31, 2012 | 122,222 | $ | 3.56 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Granted | 20,873 | $ | 8.9 | ||||||||||||||
Vested | (87,540 | ) | $ | 4.83 | |||||||||||||
| | | | | | | | ||||||||||
Non-vested — December 31, 2013 | 55,555 | $ | 3.56 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Granted (unaudited) | — | $ | — | ||||||||||||||
Vested (unaudited) | 27,777 | $ | 3.56 | ||||||||||||||
Canceled/forfeited (unaudited) | — | $ | — | ||||||||||||||
| | | | | | | | ||||||||||
Non-vested — June 30, 2014 (unaudited) | 27,778 | $ | 3.56 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Schedule of activity in connection with the restricted stock units | ' | ||||||||||||||||
Activity in connection with the restricted stock units is as follows for the six months ended June 30, 2014 (unaudited): | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested — December 31, 2013 | — | $ | — | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Granted (unaudited) | 720,146 | $ | 10.04 | ||||||||||||||
Vested (unaudited) | — | $ | — | ||||||||||||||
Canceled/forfeited (unaudited) | (6,607 | ) | $ | 9.63 | |||||||||||||
| | | | | | | | ||||||||||
Non-vested — June 30, 2014 (unaudited) | 713,539 | $ | 10.04 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Schedule of stock-based compensation cost relating to stock options and restricted stock awards | ' | ||||||||||||||||
Year Ended | Six Months | ||||||||||||||||
December 31, | Ended | ||||||||||||||||
June 30, | |||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | |||||||||||||
(unaudited) | |||||||||||||||||
Cost of revenue | $ | 47 | $ | 122 | $ | 141 | $ | 53 | $ | 163 | |||||||
Sales and marketing | 1,076 | 1,571 | 2,561 | 1,104 | 2,344 | ||||||||||||
Technology and development | 1,096 | 1,428 | 1,762 | 783 | 1,865 | ||||||||||||
General and administrative | 3,989 | 7,199 | 4,882 | 1,676 | 7,168 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total stock-based compensation expense | 6,208 | 10,320 | 9,346 | 3,616 | 11,540 | ||||||||||||
Amount capitalized to internal software use | 266 | 214 | 540 | 251 | 614 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total stock-based compensation cost | $ | 6,474 | $ | 10,534 | $ | 9,886 | $ | 3,867 | $ | 12,154 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income_Taxes_Tables
Income Taxes (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Income Taxes | ' | ||||||||||
Schedule of components of the income tax (benefit) provision | ' | ||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 2 | 3 | 7 | ||||||||
| | | | | | | | | | | |
Total current provision | 2 | 3 | 7 | ||||||||
| | | | | | | | | | | |
Deferred: | |||||||||||
Federal | (8,264 | ) | (318 | ) | 504 | ||||||
State | (2,428 | ) | (291 | ) | 68 | ||||||
| | | | | | | | | | | |
Total deferred (benefit) provision | (10,692 | ) | (609 | ) | 572 | ||||||
| | | | | | | | | | | |
Total income tax (benefit) provision | $ | (10,690 | ) | $ | (606 | ) | $ | 579 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation between the amount computed by applying the U.S. federal statutory tax rate of 34% to income before income taxes and the income tax (benefit) provision | ' | ||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Income tax benefit at the statutory rate | $ | (6,679 | ) | $ | (25,534 | ) | $ | (8,322 | ) | ||
State income taxes, net of federal benefit | (116 | ) | (5,742 | ) | 218 | ||||||
Nondeductible expenses | 142 | 144 | 346 | ||||||||
Change in valuation allowance | (6,878 | ) | 30,064 | 6,446 | |||||||
Expiration of capital loss carryforward | 2,034 | — | — | ||||||||
Research and development tax credits | (398 | ) | — | — | |||||||
Stock-based compensation | 1,571 | 646 | 2,037 | ||||||||
Other | (366 | ) | (184 | ) | (146 | ) | |||||
| | | | | | | | | | | |
Total income tax (benefit) provision | $ | (10,690 | ) | $ | (606 | ) | $ | 579 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of deferred tax assets (liabilities) | ' | ||||||||||
December 31, | December 31, | ||||||||||
2012 | 2013 | ||||||||||
Deferred income tax assets: | |||||||||||
Net operating loss carryforwards | $ | 47,511 | $ | 49,921 | |||||||
Stock-based compensation | 6,243 | 8,262 | |||||||||
Accrued expenses | 1,929 | 2,852 | |||||||||
Research and development tax credits | 610 | 610 | |||||||||
Other | 157 | 172 | |||||||||
| | | | | | | | ||||
Gross deferred tax assets | 56,450 | 61,817 | |||||||||
| | | | | | | | ||||
Valuation allowance | (41,412 | ) | (47,858 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 15,038 | 13,959 | |||||||||
| | | | | | | | ||||
Deferred tax liabilities: | |||||||||||
State taxes | (3,405 | ) | (3,296 | ) | |||||||
Property, equipment and software | (2,676 | ) | (3,353 | ) | |||||||
Intangible assets and goodwill | (9,297 | ) | (8,566 | ) | |||||||
Other | (344 | ) | — | ||||||||
| | | | | | | | ||||
Gross deferred tax liabilities | (15,722 | ) | (15,215 | ) | |||||||
| | | | | | | | ||||
Total net deferred tax liabilities | $ | (684 | ) | $ | (1,256 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of change in the valuation allowance | ' | ||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Valuation allowance, at beginning of year | $ | 18,226 | $ | 11,348 | $ | 41,412 | |||||
Increase in valuation allowance | 3,941 | 30,064 | 6,446 | ||||||||
Release of valuation allowance | (10,819 | ) | — | — | |||||||
| | | | | | | | | | | |
Valuation Allowances, at end of year | $ | 11,348 | $ | 41,412 | $ | 47,858 | |||||
| | | | | | | | | | | |
Schedule of reconciliation of the total amounts of unrecognized tax benefits | ' | ||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Unrecognized tax benefit beginning of year | $ | — | $ | — | $ | (4 | ) | ||||
Gross increases — tax positions in prior year | — | 610 | — | ||||||||
Gross decreases — tax positions in current year | — | (614 | ) | — | |||||||
| | | | | | | | | | | |
Unrecognized tax benefit end of year | $ | — | $ | (4 | ) | $ | (4 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Revenue_Information_Tables
Revenue Information (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Revenue Information | ' | ||||||||||||||||
Schedule of revenue categories | ' | ||||||||||||||||
Year Ended | Six Months | ||||||||||||||||
December 31, | Ended | ||||||||||||||||
June 30, | |||||||||||||||||
2011 | 2012 | 2013 | 2013 | 2014 | |||||||||||||
(unaudited) | |||||||||||||||||
Transaction revenue | $ | 71,222 | $ | 64,703 | $ | 118,713 | $ | 48,959 | $ | 86,119 | |||||||
Data and other revenue | 5,108 | 15,186 | 15,245 | 7,307 | 8,308 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total revenues | $ | 76,330 | $ | 79,889 | $ | 133,958 | $ | 56,266 | $ | 94,427 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Organization_and_Nature_of_Bus1
Organization and Nature of Business (Details) (USD $) | 6 Months Ended | 12 Months Ended | 1 Months Ended | 2 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | 31-May-14 | Sep. 29, 2011 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 31-May-14 | 31-May-14 | Jun. 30, 2014 | |
Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | |||||||
IPO | Over-allotment option | Series A convertible preferred stock | |||||||||||||
Reverse Stock Split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio for reverse stock split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66.67 |
Capital Resources and Liquidity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | $24,955,000 | $12,825,000 | $25,056,000 | $74,495,000 | $8,918,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated deficit | 187,515,000 | ' | 162,560,000 | 137,504,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 111,845,000 | 13,304,000 | 43,819,000 | 22,062,000 | 11,855,000 | 15,791,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial Public Offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares sold | ' | ' | ' | ' | ' | ' | ' | 6,847,812 | 8,941,250 | 57,760 | 140,890 | 7,426,124 | 8,941,250 | 1,166,250 | ' |
Public offering price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9 | ' | ' |
Net proceeds from sale of shares in IPO | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $69,200,000 | ' | ' |
Shares of common stock issued for conversion of Series A preferred | ' | ' | ' | ' | ' | ' | 2,857,143 | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2011 | |
item | Adjustments relating to timing of revenue recognition, accrued sales taxes and expenses on related party loans | Adjustments relating to timing of revenue recognition, accrued sales taxes and expenses on related party loans | Adjustments relating to timing of revenue recognition, accrued sales taxes and expenses on related party loans | |
Cumulative effect of adjustments | ||||
Adjustments | ' | $420,000 | $360,000 | $780,000 |
Segments | ' | ' | ' | ' |
Number of operating segment | 1 | ' | ' | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Aug. 30, 2011 |
Carperks | Carperks | Convertible Preferred Stock Warrants [Member] | Convertible Preferred Stock Warrants [Member] | Convertible Preferred Stock Warrants [Member] | Preferred Stock Warrants converted to common stock warrants | ||
Minimum | Maximum | ||||||
Fair Value Measurements | ' | ' | ' | ' | ' | ' | ' |
Conversion rate of warrants | ' | ' | ' | ' | ' | ' | 1 |
Risk-free interest rate (as a percent) | ' | ' | ' | ' | 0.01% | 0.30% | ' |
Expected term (years) | ' | ' | ' | ' | '3 months 18 days | '2 years 8 months 12 days | ' |
Expected volatility (as a percent) | ' | ' | ' | 45.00% | ' | ' | ' |
Fair Value Assumptions, Expected Dividend Rate | ' | ' | ' | 0.00% | ' | ' | ' |
Contingent consideration obligation | $428,000 | ' | $1,800,000 | ' | ' | ' | ' |
Payments made upon achievement of sales milestones | ' | $1,900,000 | ' | ' | ' | ' | ' |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (Recurring, USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Level 1 | ' | ' | ' |
Fair Value Measurements | ' | ' | ' |
Cash equivalents | $98,929 | $7,726 | $6,807 |
Total Assets | 98,929 | 7,726 | 6,807 |
Level 3 | ' | ' | ' |
Fair Value Measurements | ' | ' | ' |
Contingent consideration | ' | ' | 1,798 |
Total Liabilities | ' | ' | 1,798 |
Total Fair Value | ' | ' | ' |
Fair Value Measurements | ' | ' | ' |
Cash equivalents | 98,929 | 7,726 | 6,807 |
Total Assets | 98,929 | 7,726 | 6,807 |
Contingent consideration | ' | ' | 1,798 |
Total Liabilities | ' | ' | $1,798 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Changes in Level 3 financial instruments | ' | ' | ' | ' |
Impairments on goodwill and intangible assets | $0 | $0 | $0 | ' |
Changes in the allowance for doubtful accounts and sales allowances | ' | ' | ' | ' |
Allowances, at beginning of period | 2,184 | 1,621 | 2,369 | 433 |
Charged as a reduction of revenue | ' | 6,985 | 6,898 | 6,304 |
Charged to bad debt expense in general and administrative expenses | ' | 153 | 668 | 137 |
Write-offs, net of recoveries | ' | -6,575 | -8,314 | -4,505 |
Allowances, at end of period | 1,490 | 2,184 | 1,621 | 2,369 |
Convertible preferred stock warrants | ' | ' | ' | ' |
Changes in Level 3 financial instruments | ' | ' | ' | ' |
Balance at the beginning of period | ' | ' | ' | 670 |
Changes in fair value | ' | ' | ' | 1,882 |
Conversion and payments | ' | ' | ' | -2,552 |
Contingent Consideration | ' | ' | ' | ' |
Changes in Level 3 financial instruments | ' | ' | ' | ' |
Balance at the beginning of period | ' | 1,798 | 428 | ' |
Contingent consideration from acquisitions | ' | ' | ' | 428 |
Changes in fair value | ' | 95 | 1,370 | ' |
Conversion and payments | ' | -1,893 | ' | ' |
Balance at the end of the period | ' | ' | $1,798 | $428 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) | 6 Months Ended |
Jun. 30, 2014 | |
Minimum | ' |
Property and Equipment, net | ' |
Estimated useful life | '3 years |
Maximum | ' |
Property and Equipment, net | ' |
Estimated useful life | '5 years |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 6) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Software and Website Development Costs | ' | ' | ' |
Intangible assets before accumulated amortization | $31,855,000 | $27,092,000 | $20,548,000 |
Accumulated amortization | 14,751,000 | 11,854,000 | 7,706,000 |
Amortization expense | ' | ' | ' |
Total property and equipment, net | 17,104,000 | 15,238,000 | 12,842,000 |
Internally developed software | ' | ' | ' |
Software and Website Development Costs | ' | ' | ' |
Estimated useful life | '3 years | ' | ' |
Intangible assets before accumulated amortization | 20,400,000 | 16,200,000 | 11,200,000 |
Accumulated amortization | 8,500,000 | 6,400,000 | 3,500,000 |
Capitalized software development costs written off | ' | 1,600,000 | ' |
Accumulated amortization written off | ' | 900,000 | ' |
Acceleration of amortization | ' | 700,000 | ' |
Amortization expense | ' | ' | ' |
2014 | ' | 4,626,000 | ' |
2015 | ' | 3,521,000 | ' |
2016 | ' | 1,690,000 | ' |
Total property and equipment, net | ' | $9,837,000 | ' |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Details 7) (USD $) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '10 years 2 months 12 days | ' | ' | ' |
Long Lived Assets | ' | ' | ' | ' |
Impairment charges recorded on long lived assets | $0 | $0 | $0 | $0 |
Goodwill | ' | ' | ' | ' |
Impairment charges recorded on goodwill | ' | $0 | $0 | $0 |
Trade names | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '14 years 9 months 18 days | ' | ' | ' |
Trade names | Minimum | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '1 year | ' | ' | ' |
Trade names | Maximum | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '15 years | ' | ' | ' |
Customer relationships | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '9 years | ' | ' | ' |
Customer relationships | Minimum | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' | ' |
Customer relationships | Maximum | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '10 years | ' | ' | ' |
Technology | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '9 years 9 months 18 days | ' | ' | ' |
Technology | Minimum | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '3 years | ' | ' | ' |
Technology | Maximum | ' | ' | ' | ' |
Intangible Assets Acquired in Business Combinations | ' | ' | ' | ' |
Estimated useful lives | '10 years | ' | ' | ' |
Recovered_Sheet1
Summary of Significant Accounting Policies (Details 8) (USD $) | 6 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 29, 2012 | Dec. 31, 2012 |
Yahoo Auto Buying Program | Yahoo Auto Buying Program | ||||||
Revenue Recognition | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | $0.07 | ' | $0.40 | $0.40 | ' | ' | ' |
Sales and Marketing | ' | ' | ' | ' | ' | ' | ' |
Marketing and advertising expenses | 27.1 | 9.2 | 27.5 | 36.5 | 15 | 20 | 20 |
Prepaid media costs | $3.40 | ' | $1.50 | $0.50 | ' | ' | ' |
Recovered_Sheet2
Summary of Significant Accounting Policies (Details 9) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Assumptions used to estimate the fair value of awards | ' | ' | ' | ' | ' |
Risk free interest rate (as a percent) | 1.95% | 1.10% | 1.41% | 0.96% | 2.04% |
Expected term (years) | '6 years 3 months 4 days | '6 years 25 days | '6 years 22 days | '6 years | '6 years 4 days |
Expected volatility (as a percent) | 58.00% | 63.00% | 61.00% | 60.00% | 48.00% |
Options | Maximum | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Award term | ' | ' | '10 years | ' | ' |
Nonqualified options | Minimum | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Purchase price of awards expressed as a percentage of fair value of common stock on the date of grant | ' | ' | 85.00% | ' | ' |
Incentive stock options | Shareholder who own greater than 10% voting power | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Purchase price of awards expressed as a percentage of fair value of common stock on the date of grant | ' | ' | 110.00% | ' | ' |
Percentage of voting power owned by shareholder | ' | ' | 10.00% | ' | ' |
Award term | ' | ' | '5 years | ' | ' |
Employee stock options | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Award term | ' | ' | '5 years | ' | ' |
Employee stock options | Minimum | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Vesting percentage | ' | ' | 20.00% | ' | ' |
Stock purchase rights | Minimum | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Purchase price of awards expressed as a percentage of fair value of common stock on the date of grant | ' | ' | 85.00% | ' | ' |
Stock purchase rights | Shareholder who own greater than 10% voting power | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Purchase price of awards expressed as a percentage of fair value of common stock on the date of grant | ' | ' | 110.00% | ' | ' |
Percentage of voting power owned by shareholder | ' | ' | 10.00% | ' | ' |
2005 Plan | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Common stock authorized and reserved for issuance (in shares) | ' | ' | 22,436,208 | ' | ' |
2008 Plan | ' | ' | ' | ' | ' |
Stock Based Compensation | ' | ' | ' | ' | ' |
Common stock authorized and reserved for issuance (in shares) | ' | ' | 673,266 | ' | ' |
Recovered_Sheet3
Summary of Significant Accounting Policies (Details 10) | 6 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Earnings Per Share Attributable to Common Stockholders | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted net loss per share attributable to common stockholders | 31,387 | 24,470 | 27,206 | 24,265 | 24,409 |
Options to purchase common stock | ' | ' | ' | ' | ' |
Earnings Per Share Attributable to Common Stockholders | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted net loss per share attributable to common stockholders | 26,665 | 16,078 | 18,363 | 15,419 | 15,243 |
Common Stock Purchase Warrants | ' | ' | ' | ' | ' |
Earnings Per Share Attributable to Common Stockholders | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted net loss per share attributable to common stockholders | 3,981 | 5,251 | 5,931 | 5,154 | 8,697 |
Series A convertible preferred stock | ' | ' | ' | ' | ' |
Earnings Per Share Attributable to Common Stockholders | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ' | 2,857 | 2,857 | ' | ' |
Unvested restricted stock awards | ' | ' | ' | ' | ' |
Earnings Per Share Attributable to Common Stockholders | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted net loss per share attributable to common stockholders | 741 | 95 | 55 | 122 | 469 |
Contingently redeemable common stock | ' | ' | ' | ' | ' |
Earnings Per Share Attributable to Common Stockholders | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ' | 189 | ' | 126 | ' |
Convertible promissory notes | ' | ' | ' | ' | ' |
Earnings Per Share Attributable to Common Stockholders | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ' | ' | ' | 3,444 | ' |
Business_Combinations_Details
Business Combinations (Details) (USD $) | 6 Months Ended | 12 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2014 | Dec. 31, 2011 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2011 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2011 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2011 | Oct. 01, 2011 | Oct. 01, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Apr. 29, 2011 | Apr. 29, 2011 | Apr. 29, 2011 | Apr. 29, 2011 | Apr. 29, 2011 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 01, 2011 | Sep. 01, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | |
item | item | item | Acquired technology | Acquired technology | Acquired technology | Customer relationships | Customer relationships | Customer relationships | Tradenames | Tradenames | Tradenames | ALG and Honk | ALG, Inc. | ALG, Inc. | ALG, Inc. | ALG, Inc. | ALG, Inc. | ALG, Inc. | Honk LLC | Honk LLC | Honk LLC | Honk LLC | Honk LLC | Honk LLC | Honk LLC | Carperks | Carperks | Carperks | Carperks | Carperks | Carperks | |||
Maximum | Maximum | Maximum | Common Stock Purchase Warrants | Common stock | Acquired technology | Customer relationships | Tradenames | Common Stock Purchase Warrants | Common stock | Common stock | Common stock | Common stock | Acquired technology | Common stock | Customer relationships | Tradenames | ||||||||||||||||||
Restricted stock awards | Restricted stock awards | Restricted stock awards | ||||||||||||||||||||||||||||||||
Vest over two years | Vest over four years | |||||||||||||||||||||||||||||||||
Assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash | ' | ' | ' | ' | $7,638,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,638,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | ' | 1,526,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,526,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other assets | ' | ' | ' | ' | 276,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 276,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | 249,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 230,000 | ' | ' | ' | ' | ' | 19,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' | ' | 30,600,000 | ' | ' | 6,300,000 | ' | ' | 4,970,000 | ' | ' | ' | ' | ' | 29,600,000 | 5,000,000 | 4,900,000 | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | 1,300,000 | 70,000 |
Goodwill | 53,270,000 | ' | 53,270,000 | 53,270,000 | 52,609,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,300,000 | 51,206,000 | ' | ' | ' | ' | ' | 712,000 | ' | ' | ' | ' | ' | ' | ' | 691,000 | ' | ' | ' | ' |
Total assets acquired | ' | ' | ' | ' | 104,168,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,376,000 | ' | ' | ' | ' | ' | 1,731,000 | ' | ' | ' | ' | ' | ' | ' | 2,061,000 | ' | ' | ' | ' |
Liabilities assumed | ' | ' | ' | ' | 1,342,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,043,000 | ' | ' | ' | ' | ' | 299,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liabilities | ' | ' | ' | ' | 10,819,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,819,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net assets acquired | ' | ' | ' | ' | 92,007,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,514,000 | ' | ' | ' | ' | ' | 1,432,000 | ' | ' | ' | ' | ' | ' | ' | 2,061,000 | ' | ' | ' | ' |
Consideration paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued | ' | ' | ' | ' | 84,045,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 82,500,000 | ' | ' | ' | ' | ' | 1,412,000 | ' | ' | ' | ' | ' | ' | ' | 133,000 | ' | ' | ' | ' |
Warrants issued | ' | ' | ' | ' | 6,034,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,014,000 | ' | ' | ' | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration | ' | ' | ' | ' | 428,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 428,000 | ' | ' | ' | ' |
Cash paid | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' |
Total consideration | ' | ' | ' | ' | 92,007,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,514,000 | ' | ' | ' | ' | ' | 1,432,000 | ' | ' | ' | ' | ' | ' | ' | 2,061,000 | ' | ' | ' | ' |
Maximum contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,900,000 | ' | ' | ' |
Additional information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average useful life of acquired intangible | '10 years 2 months 12 days | ' | ' | ' | ' | '9 years 9 months 18 days | ' | '10 years | '9 years | ' | '10 years | '14 years 9 months 18 days | ' | '15 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued to acquire entity (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,377,358 | ' | ' | ' | ' | ' | 977,605 | 580,291 | 313,625 | 266,666 | ' | ' | ' | ' | 16,666 | ' | ' |
Shares issued as consideration for acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 397,314 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares that may be purchased under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,231,416 | ' | ' | ' | ' | ' | 5,724 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.95 | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in fair value of contingent consideration | ' | 48,000 | 95,000 | 1,370,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ' |
Expected life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.19% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs | ' | ' | ' | ' | 1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | 2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of acquisition | 0 | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pro Forma Financial Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | 84,754,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | $14,666,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property_and_Equipment_net_Det
Property and Equipment, net (Details) (USD $) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Property and Equipment, net | ' | ' | ' | ' | ' |
Property and equipment, gross | $31,855,000 | ' | $27,092,000 | $20,548,000 | ' |
Less: Accumulated depreciation | -14,751,000 | ' | -11,854,000 | -7,706,000 | ' |
Total property and equipment, net | 17,104,000 | ' | 15,238,000 | 12,842,000 | ' |
Total depreciation and amortization expense | 5,875,000 | 5,609,000 | 10,835,000 | 10,275,000 | 4,027,000 |
Property and Equipment | ' | ' | ' | ' | ' |
Property and Equipment, net | ' | ' | ' | ' | ' |
Total depreciation and amortization expense | 3,900,000 | 3,400,000 | 6,400,000 | 5,600,000 | 2,700,000 |
Computer equipment and internally developed software | ' | ' | ' | ' | ' |
Property and Equipment, net | ' | ' | ' | ' | ' |
Property and equipment, gross | 26,757,000 | ' | 22,517,000 | 16,840,000 | ' |
Furniture and fixtures | ' | ' | ' | ' | ' |
Property and Equipment, net | ' | ' | ' | ' | ' |
Property and equipment, gross | 2,048,000 | ' | 1,654,000 | 1,357,000 | ' |
Leasehold Improvements | ' | ' | ' | ' | ' |
Property and Equipment, net | ' | ' | ' | ' | ' |
Property and equipment, gross | 3,050,000 | ' | 2,921,000 | 2,306,000 | ' |
Vehicles | ' | ' | ' | ' | ' |
Property and Equipment, net | ' | ' | ' | ' | ' |
Property and equipment, gross | ' | ' | ' | 45,000 | ' |
Internally developed software | ' | ' | ' | ' | ' |
Property and Equipment, net | ' | ' | ' | ' | ' |
Property and equipment, gross | 20,400,000 | ' | 16,200,000 | 11,200,000 | ' |
Less: Accumulated depreciation | -8,500,000 | ' | -6,400,000 | -3,500,000 | ' |
Total property and equipment, net | ' | ' | 9,837,000 | ' | ' |
Amortization | $2,300,000 | $2,000,000 | $3,800,000 | $2,800,000 | $1,400,000 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Intangible assets | ' | ' | ' | ' | ' |
Gross Carrying Value | $42,275,000 | ' | $41,995,000 | $41,983,000 | ' |
Accumulated amortization | -12,270,000 | ' | -10,161,000 | -5,756,000 | ' |
Net Carrying Value | 30,005,000 | ' | 31,834,000 | 36,227,000 | ' |
Weighted average useful life in years | '10 years 2 months 12 days | ' | '10 years 2 months 23 days | '10 years 2 months 23 days | ' |
Amortization expense | 2,179,000 | 2,201,000 | 4,405,000 | 4,476,000 | 1,280,000 |
Acquired technology and domain name | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Gross Carrying Value | 31,075,000 | ' | 30,725,000 | 30,713,000 | ' |
Accumulated amortization | -9,260,000 | ' | -7,624,000 | -4,306,000 | ' |
Net Carrying Value | 21,815,000 | ' | 23,101,000 | 26,407,000 | ' |
Weighted average useful life in years | '9 years 8 months 12 days | ' | '9 years 9 months | '9 years 9 months | ' |
Amortization expense | 1,636,000 | 1,658,000 | 3,318,000 | 3,343,000 | 963,000 |
Customer relationships | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Gross Carrying Value | 6,300,000 | ' | 6,300,000 | 6,300,000 | ' |
Accumulated amortization | -2,112,000 | ' | -1,732,000 | -972,000 | ' |
Net Carrying Value | 4,188,000 | ' | 4,568,000 | 5,328,000 | ' |
Weighted average useful life in years | '8 years 11 months 19 days | ' | '8 years 11 months 19 days | '8 years 11 months 19 days | ' |
Amortization expense | 380,000 | 380,000 | 760,000 | 760,000 | 212,000 |
Tradenames | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Gross Carrying Value | 4,900,000 | ' | 4,970,000 | 4,970,000 | ' |
Accumulated amortization | -898,000 | ' | -805,000 | -478,000 | ' |
Net Carrying Value | 4,002,000 | ' | 4,165,000 | 4,492,000 | ' |
Weighted average useful life in years | '15 years | ' | '14 years 9 months 18 days | '14 years 9 months 18 days | ' |
Amortization expense | 163,000 | 163,000 | 327,000 | 373,000 | 105,000 |
Domain name | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Intangible assets acquired | $400,000 | ' | ' | ' | ' |
Intangible_Assets_Details_2
Intangible Assets (Details 2) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Amortization expense for each of the five years through December 31, 2018 and thereafter | ' | ' | ' |
Years ended December 31, 2014 | ' | $4,183 | ' |
2015 | ' | 4,061 | ' |
2016 | ' | 3,968 | ' |
2017 | ' | 3,789 | ' |
2018 | ' | 3,788 | ' |
Thereafter | ' | 12,045 | ' |
Net Carrying Value | $30,005 | $31,834 | $36,227 |
Debt_Financing_Details
Debt Financing (Details) (USD $) | 0 Months Ended | 6 Months Ended | 12 Months Ended | ||
8-May-13 | 8-May-12 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Debt financing | ' | ' | ' | ' | ' |
Beneficial converstion feature | ' | ' | ' | ' | $1,618,000 |
Subordinated secured convertible promissory notes | ' | ' | ' | ' | ' |
Debt financing | ' | ' | ' | ' | ' |
Cash proceeds received | ' | 23,100,000 | ' | ' | ' |
Interest rate (as a percent) | ' | 10.00% | ' | ' | ' |
Conversion price as a percentage of price per share upon automatic conversion (as a percent) | ' | 85.00% | ' | ' | ' |
Conversion price upon automatic conversion (in dollars per share) | ' | $12.08 | ' | ' | ' |
Conversion price as a percentage of price per share convertible at the option of the holder if change in control or intial public offering occurs prior to maturity date (as a percent) | ' | 85.00% | ' | ' | ' |
Conversion price convertible at the option of the holder if change in control or intial public offering occurs prior to maturity date (in dollars per share) | ' | $7.95 | ' | ' | ' |
Conversion price convertible at the option of the holder if change in control or intial public offering does not occur prior to the maturity date (in dollars per share) | ' | $7.16 | ' | ' | ' |
Beneficial converstion feature | ' | 2,700,000 | ' | ' | ' |
Interest expense | ' | ' | 800,000 | 800,000 | 1,500,000 |
Amortization of debt discount | ' | ' | 900,000 | 900,000 | 1,800,000 |
Common stock issued on conversion (in shares) | 3,556,412 | ' | ' | ' | ' |
Conversion price (in dollars per share) | $7.16 | ' | ' | ' | ' |
Subordinated secured convertible promissory notes | Minimum | ' | ' | ' | ' | ' |
Debt financing | ' | ' | ' | ' | ' |
Qualified financing for automatic conversion | ' | $25,000,000 | ' | ' | ' |
Credit_Facility_Details
Credit Facility (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | Jun. 30, 2014 | Aug. 13, 2014 | Jun. 13, 2013 | Jun. 13, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 13, 2013 | Jun. 13, 2013 | Jun. 13, 2013 | Jun. 13, 2013 | Aug. 13, 2014 | Aug. 13, 2014 | Aug. 13, 2014 | Aug. 13, 2014 | Aug. 13, 2014 | Aug. 13, 2014 | Aug. 13, 2014 | Jun. 13, 2013 | Jun. 13, 2013 | Jun. 13, 2013 | Aug. 29, 2013 | Dec. 31, 2013 | Jun. 13, 2012 | Jun. 13, 2013 | Jun. 13, 2013 | |
Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | |||
Liquidity less than $10 million | Liquidity equal to or greater than $10 million but less than $20 million | Liquidity equal to or greater than $10 million but less than $20 million | Liquidity greater than or equal to $20 million | LIBOR | LIBOR | LIBOR | LIBOR | Prime rate | Prime rate | Prime rate | Prime rate | Prime rate | Prime rate | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | |||||||||
Maximum | Minimum | Maximum | Maximum | Variable interest rate, net cash greater than or equal to $1.00 | Variable interest rate, net cash greater than or equal to $1.00 | Variable interest rate, net cash less than $1.00 | Variable interest rate, net cash less than $1.00 | Variable interest rate, net cash greater than or equal to $1.00 | Variable interest rate, net cash less than $1.00 | Variable interest rate, net cash less than $1.00 | Liquidity less than $10 million | Liquidity equal to or greater than $10 million but less than $20 million | Liquidity greater than or equal to $20 million | Draws on credit facility at any time after issuance date | Draws on credit facility at any time after issuance date | Advances greater than $4.0 million at any time after issuance date | |||||||||||
Minimum | Maximum | Minimum | Maximum | ||||||||||||||||||||||||
Credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of eligible accounts receivable in which advances are granted under the credit facility | ' | ' | ' | 80.00% | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | $25,000,000 | ' | ' | ' | $12,000,000 | $8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares that may be purchased under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66,666 | ' | 26,666 | 26,666 | 66,666 |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.92 | ' | $11.51 | $7.92 | ' |
Threshold borrowings under the credit facility for higher number of shares under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | 4,000,000 |
Amount drawn on credit facility | 5,000,000 | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' |
Debt discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' |
Liquidity threshold | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | 10,000,000 | 20,000,000 | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis spread (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.25% | ' | 3.75% | ' | ' | 1.50% | ' | 1.75% | 0.50% | 0.00% | ' | ' | ' | ' | ' |
Remaining borrowing capacity | ' | ' | ' | ' | ' | ' | 6,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying amount of outstanding debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving line of credit, before discount | ' | 0 | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt discount, net of accumulated accretion | ' | 0 | ' | ' | ' | ' | -236,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total carrying value | 4,764,000 | ' | ' | ' | ' | ' | 4,764,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net cash threshold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | 1 | 1 | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quick ratio minimum | ' | ' | 1.5 | 1.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum percentage used in calculation to determine the quick ratio debt covenant requirement | ' | ' | 75.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Specified amount of draws against credit facility used to determine quick ratio debt covenant requirement | ' | ' | $25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2014 | |
Future minimum payments | ' | ' | ' | ' |
2014 | $2,435,000 | ' | ' | ' |
Six months ending December 31, 2014 | ' | ' | ' | 1,337,000 |
2015 | 2,395,000 | ' | ' | 5,149,000 |
2016 | 2,504,000 | ' | ' | 5,922,000 |
2017 | 2,000,000 | ' | ' | 5,201,000 |
2018 | 2,002,000 | ' | ' | 5,530,000 |
Thereafter | 3,120,000 | ' | ' | 37,008,000 |
Total minimum lease payments | 14,456,000 | ' | ' | 60,147,000 |
Rent expense and other operating lease disclosures | ' | ' | ' | ' |
Rent expense | 2,700,000 | 2,400,000 | 1,600,000 | ' |
Office Building Lease | ' | ' | ' | ' |
Rent expense and other operating lease disclosures | ' | ' | ' | ' |
Irrevocable stand-by letter of credit | $500,000 | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (Yahoo Auto Buying Program, USD $) | 0 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 29, 2012 | Oct. 19, 2011 | Apr. 30, 2013 | Dec. 31, 2012 | Jan. 17, 2012 | Sep. 29, 2014 |
Subsequent Event | ||||||
Scenario Forecast | ||||||
Commitment and contingencies | ' | ' | ' | ' | ' | ' |
Minimum annual payment for 3 years | ' | $50 | ' | ' | ' | ' |
Number of years for minimum annual payment | ' | '3 years | ' | ' | ' | ' |
Deposit | ' | 10 | ' | ' | ' | ' |
Stand-by letter of credit to guarantee performance | 10 | ' | 2 | 4.5 | 15 | 0 |
Minimum annual payment requirement which was eliminated | 50 | ' | ' | ' | ' | ' |
Settlement amount | 20 | ' | ' | ' | ' | ' |
Portion of settlement paid by deposit | 10 | ' | ' | ' | ' | ' |
Period over which remaining balance will be paid | '9 months | ' | ' | ' | ' | ' |
Monthly reduction in stand-by letter of credit | 1.1 | ' | ' | ' | ' | ' |
Letter of credit required after settlement paid | $2 | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Employment Contracts | Marketing Sponsorships | |
Commitment and contingencies | ' | ' |
Maximum term of executive's annual base salary to determine severance obligations | '12 months | ' |
Liquidity bonus | $2.60 | ' |
Amount payable during remainder of 2014 | ' | 0.8 |
Amount payable in 2015 | ' | $0.80 |
Convertible_Preferred_Stock_an2
Convertible Preferred Stock and Stockholders' Equity (Details) (USD $) | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 48 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 2 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||||||
Aug. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2014 | Nov. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Aug. 30, 2011 | Dec. 31, 2008 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2012 | Dec. 31, 2008 | Nov. 30, 2013 | Nov. 30, 2013 | 31-May-14 | Sep. 29, 2011 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Dec. 28, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-14 | Nov. 30, 2013 | Aug. 31, 2011 | Dec. 31, 2011 | |
CEO | CEO | Preferred Stock Warrants converted to common stock warrants | Preferred Stock Warrants converted to common stock warrants | Preferred Stock Warrants converted to common stock warrants | Preferred Stock Warrants converted to common stock warrants | Preferred Stock Warrants converted to common stock warrants | Preferred Stock Warrants converted to common stock warrants | Preferred Stock Warrants converted to common stock warrants | Preferred Stock Warrants converted to common stock warrants | Vulcan | Vulcan | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | APIC | APIC | Series A convertible preferred stock | Series A convertible preferred stock | Series A convertible preferred stock | Series A convertible preferred stock | Series A convertible preferred stock | Series A convertible preferred stock | Preferred Stock | Preferred Stock | |||||||
Employment agreement | Employment agreement | Exercise price of $1.53 per share | Exercise price of $1.53 per share | Exercise price of $1.53 per share | Exercise price of $1.53 per share | Exercise price of $1.80 per share | Exercise price of $1.80 per share | Common Stock Purchase Warrants | CEO | CEO | CEO | CEO | CEO | Former employee | Vulcan | Vulcan | ||||||||||||||||||||||||
Employment agreement | Employment agreement | Employment agreement | Employment agreement | Severance agreement | ||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock and Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | 150,000,000 | 147,000,000 | ' | 1,000,000,000 | 150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,500,000 | 4,500,000 | 4,500,000 | 0 | ' | ' | ' | ' |
Gross proceeds through issuance of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $54,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,847,812 | 8,941,250 | 57,760 | 140,890 | 7,426,124 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,857,143 | ' | ' |
Conversion ratio | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | 1 | 1 | 1 | ' |
Annual rate of dividends declared (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.84 | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertble preferred stock for common stock | 59,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends declared (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' | ' | $0 | ' |
Minimum percentage of outstanding Series A preferred stockholders whose approval is required to amend, alter or repeal any provision of the Certificate of Incorporation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' |
Cumulative dividends | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,500,000 | ' |
Dividends | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400,000 |
Dividends paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' |
Number of shares that may be purchased under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | 412,222 | 32,222 | 32,222 | 58,366 | ' | ' | ' | ' | 666,666 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.53 | ' | $1.80 | ' | $15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Private placement price per share (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate purchase price for preferred stock and warrants | ' | ' | ' | 2,552,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,552,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock issued for conversion of Series A | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,857,143 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 265,274 | 2,307,866 | 110,278 | 130,080 | 130,080 | 112,422 | 130,080 | 24,916 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.21 | $6.57 | ' | $8 | ' | $8.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of shares repurchased | ' | ' | 1,648,000 | 16,038,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,648,000 | 15,156,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased and retired (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,761,006 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased and retired, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash paid for repurchase of common stock | ' | 1,000,000 | 1,648,000 | 14,881,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share value for which right to sell is provided | ' | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting term of shares for which right to sell is provided | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassification of warrant liability to APIC | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for exercise of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,093 | ' | ' | ' | 353,856 | ' | ' | ' | ' | ' | 3,319,540 | ' | 377,672 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Preferred_Stock_an3
Convertible Preferred Stock and Stockholders' Equity (Details 2) (USD $) | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 8 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||||||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 30, 2011 | Feb. 25, 2011 | Sep. 30, 2014 | Nov. 30, 2013 | Dec. 31, 2013 | Aug. 29, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 13, 2012 | Jun. 13, 2013 | Jun. 13, 2013 | Jun. 13, 2012 | Nov. 30, 2013 | Dec. 31, 2013 | Jun. 29, 2012 | Apr. 12, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Apr. 29, 2011 | Oct. 01, 2011 | Dec. 31, 2012 | Feb. 25, 2011 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | 31-May-14 | Jun. 30, 2014 | Nov. 24, 2009 | Jun. 25, 2010 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Jan. 02, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-14 | 31-May-14 | 31-May-14 | |
Convertible promissory notes | Convertible promissory notes | Revolving line of credit | Vulcan | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | Common Stock Purchase Warrants | ||||||
Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Vulcan | Vulcan | Yahoo Auto Buying Program | Yahoo Auto Buying Program | Yahoo Auto Buying Program | Yahoo Auto Buying Program | Yahoo Auto Buying Program | Honk LLC | ALG, Inc. | ALG, Inc. | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | Third Party Marketing Firm | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | |||||||||||
Draws on credit facility at any time after issuance date | Draws on credit facility at any time after issuance date | Advances greater than $4.0 million at any time after issuance date | Advances greater than $4.0 million at any time after issuance date | Yahoo | Yahoo | Yahoo | Yahoo | Yahoo | Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | First Amendment and Second Amendment | Third Amendment and Fourth Amendment | Fourth Amendment | Warrants agreement entered on March 12, 2009 | Warrants agreement entered on June 25, 2010 | Warrants agreement entered on June 25, 2010 | Warrants agreement entered on June 25, 2010 | Warrants agreement entered on June 25, 2010 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Warrants agreement entered on January 1, 2012 | Affinity Group Marketing Agreement | Affinity Group Marketing Agreement | Affinity Group Marketing Agreement | |||||||||||||||||||||||||||
Minimum | Maximum | Minimum | Maximum | Minimum | Minimum | Maximum | Maximum | item | Tranche One | Tranche Two | |||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock and Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum number of shares under warrant agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' | ' | ' | ' | ' | ' | 1,433,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,653,333 | ' | ' | ' | 1,042,666 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares that may be purchased under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66,666 | ' | ' | 26,666 | 26,666 | 66,666 | 66,666 | 666,666 | ' | ' | ' | ' | ' | ' | 5,724 | 4,231,416 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 961,482 | ' | 1,653,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,458,979 | 392,313 | 1,066,666 |
Shares vesting in increments on quarterly basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 666,666 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.92 | ' | ' | $11.51 | $7.92 | ' | ' | $15 | ' | ' | ' | $11.51 | ' | ' | $0.01 | $7.95 | ' | $6.02 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.83 | $2.12 | ' | ' | ' | $7.95 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.95 | $15 |
Number of warrant tranches | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Media placement costs per share for warrant vesting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $27.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '8 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '8 years | ' | ' | ' | '8 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of warrant after expiration of the affinity agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum shares under warrant to vest per month | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum shares under warrant to vest in first month of amendment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,926 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum shares under warrant to vest in remaining months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,842 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold expense for minimum vesting of shares under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extension period under warrant agreement amendment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of warrants | $9,461,000 | ' | ' | $637,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from exercise of warrants | 9,461,000 | ' | ' | 637,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares cancelled under unvested warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,333,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant expense | 4,668,000 | 1,262,000 | 3,740,000 | 1,990,000 | 2,112,000 | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | 2,300,000 | 700,000 | 2,500,000 | 1,600,000 | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | 400,000 | ' | ' | ' | 700,000 | 400,000 | 1,100,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' |
Number of shares under warrants that have been earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 666,666 | ' | 666,666 | ' | ' | ' | ' | ' | ' | 343,665 | 268,800 | 604,266 | 207,710 | 277,685 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 136,755 | ' | ' | ' | ' | ' | ' | 203,803 | 154,294 | 415,349 | 31,201 | ' | ' | ' | ' | ' | ' | ' |
Expected life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | '2 months 12 days | '2 years 10 months 24 days | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | '5 years 2 months 12 days | '5 years 9 months 18 days | '7 years 2 months 1 day | '6 years 6 months | '7 years 1 month 6 days | '7 years 8 months 1 day | ' | ' | ' | ' | ' | ' | ' | ' | '7 years 1 month 6 days | '7 years 4 months 24 days | ' | ' | ' | ' | ' | '2 years | '7 years | '2 years 10 months 24 days | '8 years | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.78% | ' | ' | ' | ' | ' | 0.31% | ' | ' | ' | 0.06% | 0.50% | ' | 0.19% | ' | ' | ' | ' | ' | ' | ' | 0.63% | 0.62% | 1.38% | 1.81% | 1.39% | 2.65% | ' | ' | ' | ' | ' | ' | ' | ' | 2.39% | 2.95% | ' | ' | ' | ' | ' | 0.29% | 1.02% | 0.52% | 1.77% | ' | ' | ' |
Volatility (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49.40% | ' | ' | 50.90% | ' | ' | ' | 45.00% | ' | ' | ' | ' | ' | ' | 56.50% | 51.50% | 58.60% | ' | 59.50% | 59.50% | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | 47.40% | 50.00% | 52.80% | 58.60% | ' | ' | ' |
Fair Value Assumptions, Expected Dividend Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 64.80% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for exercise of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,526 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,816 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,265,168 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold borrowings under the credit facility for higher number of shares under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | 4,000,000 | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount drawn on credit facility | ' | ' | 5,000,000 | ' | ' | ' | ' | 5,000,000 | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate purchase price for preferred stock and warrants | ' | ' | ' | ' | 2,552,000 | ' | ' | ' | 30,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash proceeds on issuance | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal and accrued interest due amount of debt converted | ' | ' | $25,447,000 | ' | $2,060,000 | $2,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock issued upon debt conversion | ' | ' | ' | ' | ' | 259,098 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Preferred_Stock_an4
Convertible Preferred Stock and Stockholders' Equity (Details 3) (USD $) | 6 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Nov. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2013 | |
Third party vendor | Third party vendor | Third party vendor | Marketing sponsorship partner | 2005 Plan | Series A convertible preferred stock | Series A convertible preferred stock | CEO | CEO | CEO | |||||||
Minimum | Maximum | item | Employment agreement | Employment agreement | Employment agreement | |||||||||||
Convertible Preferred Stock and Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share value for which right to sell is provided | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | ' | $1,000,000 |
Compensation expense | 11,540,000 | 3,616,000 | 9,346,000 | 10,320,000 | 6,208,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | 200,000 |
Additional estimated stock-based compensation expense expected to record | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' |
Weighted-average period for recognition of stock-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years 10 months 24 days | ' |
Common stock issued | 76,814,334 | ' | 59,955,343 | 56,207,579 | 55,661,539 | 7,483,638 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding stock options | ' | ' | 18,363,144 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding common stock warrants | ' | ' | 5,930,758 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 2,857,143 | ' | ' | ' |
Additional shares available for grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 604,093 | ' | ' | ' | ' | ' |
Total | ' | ' | 87,710,481 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of bill rendered for legal services that can be paid in shares of common stock | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price (in dollars per share) | ' | ' | ' | ' | ' | ' | $11.51 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of shares issued | ' | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued | ' | ' | ' | ' | ' | ' | 73,883 | ' | ' | 36,666 | ' | ' | ' | ' | ' | ' |
Fair value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $7.92 | $9.75 | ' | ' | ' | ' | ' | ' | ' |
Gain on transaction issuance of shares | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of marketing sponsorship partner | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' |
Cash paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' |
Total expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | $600,000 | ' | ' | ' | ' | ' | ' |
Stockbased_Awards_Details
Stock-based Awards (Details) (USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Number of Options | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of period (in shares) | ' | 18,363,144 | ' | ' | ' | ' |
Outstanding at the end of the period (in shares) | ' | ' | ' | 18,363,144 | ' | ' |
Additional disclosure | ' | ' | ' | ' | ' | ' |
Stock-based compensation expense | ' | $11,540,000 | $3,616,000 | $9,346,000 | $10,320,000 | $6,208,000 |
Options | ' | ' | ' | ' | ' | ' |
Number of Options | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of period (in shares) | ' | 18,363,144 | 15,418,788 | 15,418,788 | ' | ' |
Granted (in shares) | ' | 10,545,647 | ' | 5,193,127 | ' | ' |
Exercised (in shares) | ' | -1,741,058 | ' | -98,878 | ' | ' |
Canceled/forfeited (in shares) | ' | -502,943 | ' | -2,149,893 | ' | ' |
Outstanding at the end of the period (in shares) | ' | 26,664,790 | ' | 18,363,144 | 15,418,788 | ' |
Vested and expected to vest at the end of the period (in shares) | ' | 25,236,587 | ' | 16,947,300 | ' | ' |
Exercisable at the end of the period (in shares) | ' | 18,884,427 | ' | 10,855,844 | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of period (in dollars per share) | ' | $4.89 | $3.51 | $3.51 | ' | ' |
Granted (in dollars per share) | ' | $15.86 | ' | $8.44 | ' | ' |
Exercised (in dollars per share) | ' | $1.01 | ' | $1.73 | ' | ' |
Canceled/forfeited (in dollars per share) | ' | $9.36 | ' | $3.68 | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | $9.40 | ' | $4.89 | $3.51 | ' |
Vested and expected to vest at the end of the period (in dollars per share) | ' | $9.32 | ' | $4.66 | ' | ' |
Exercisable at the end of the period (in dollars per share) | ' | $8.72 | ' | $2.82 | ' | ' |
Weighted Average Remaining Contract Life (in years) | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | '7 years 11 months 23 days | ' | '7 years 2 months 1 day | '7 years 4 months 6 days | ' |
Vested and expected to vest at the end of the period | ' | '7 years 10 months 28 days | ' | '7 years 18 days | ' | ' |
Exercisable at the end of the period | ' | '7 years 4 months 20 days | ' | '5 years 11 months 19 days | ' | ' |
Additional disclosure | ' | ' | ' | ' | ' | ' |
Remaining stock-based compensation expense for unvested awards | ' | 73,300,000 | ' | 25,900,000 | ' | ' |
Weighted average period over which remaining stock based compensation expense for unvested awards is expected to be recognized | ' | '3 years 1 month 6 days | ' | '2 years 11 months 16 days | ' | ' |
Weighted-average grant-date fair value per share of options granted (in dollars per share) | ' | ' | ' | $4.79 | $4.83 | $2.39 |
Stock-based compensation expense | ' | 11,100,000 | 3,500,000 | 8,900,000 | 9,400,000 | 5,200,000 |
Intrinsic value of options exercised | ' | ' | ' | 600,000 | 2,900,000 | 8,600,000 |
Intrinsic value of all outstanding options | ' | ' | ' | 76,900,000 | ' | ' |
Intrinsic value of exercisable options | ' | ' | ' | 67,400,000 | ' | ' |
Intrinsic value of options vested and expected to vest | ' | ' | ' | 74,700,000 | ' | ' |
Excess tax benefits realized for the tax deductions from stock options exercised | ' | 0 | 0 | 0 | 0 | 0 |
Number of shares of common stock to be purchased | ' | ' | ' | 1,765,875 | ' | ' |
Additional stock compensation as a result of the modification | ' | ' | ' | ' | 4,500,000 | 2,100,000 |
Accelerated vesting of stock options to purchase shares of common stock (in shares) | 726,469 | ' | ' | ' | ' | ' |
Options | Certain executives | ' | ' | ' | ' | ' | ' |
Number of Options | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | 1,173,620 | 166,665 | 349,997 |
Weighted-Average Exercise Price | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | $8.85 | $11.51 | $6.15 |
Additional disclosure | ' | ' | ' | ' | ' | ' |
Stock-based compensation expense | ' | ' | ' | 1,800,000 | 300,000 | 300,000 |
Grant date fair values | ' | ' | ' | $8,800,000 | $800,000 | $1,000,000 |
Options | Former executive | ' | ' | ' | ' | ' | ' |
Additional disclosure | ' | ' | ' | ' | ' | ' |
Accelerated vesting of stock options to purchase shares of common stock (in shares) | 631,333 | ' | ' | ' | ' | ' |
Stock options granted based on achieving certain revenue and earnings targets | Certain executives | ' | ' | ' | ' | ' | ' |
Number of Options | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | 82,327 | ' | ' |
Stock options containing a two step vesting condition | Certain executives | ' | ' | ' | ' | ' | ' |
Number of Options | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | 1,683,548 | ' | ' |
Additional disclosure | ' | ' | ' | ' | ' | ' |
Vesting period | ' | ' | ' | '48 months | ' | ' |
Stockbased_Awards_Details_2
Stock-based Awards (Details 2) (USD $) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Weighted-Average Grant Date Fair Value | ' | ' | ' | ' | ' |
Compensation expense in connection with the vesting of shares of restricted stock (in dollars) | $11,540,000 | $3,616,000 | $9,346,000 | $10,320,000 | $6,208,000 |
Restricted stock awards | ' | ' | ' | ' | ' |
Number of Shares | ' | ' | ' | ' | ' |
Non-vested at the beginning of period (in shares) | 55,555 | 122,222 | 122,222 | ' | ' |
Granted (in shares) | ' | ' | 20,873 | ' | ' |
Vested (in shares) | -27,777 | ' | -87,540 | ' | ' |
Non-vested at the end of the period (in dollars per share) | 27,778 | ' | 55,555 | 122,222 | ' |
Weighted-Average Grant Date Fair Value | ' | ' | ' | ' | ' |
Non-vested at the beginning of period (in dollars per share) | $3.56 | $3.56 | $3.56 | ' | ' |
Granted (in dollars per share) | ' | ' | $8.90 | ' | ' |
Vested (in dollars per share) | $3.56 | ' | $4.83 | ' | ' |
Non-vested at the end of the period (in dollars per share) | $3.56 | ' | $3.56 | $3.56 | ' |
Compensation expense in connection with the vesting of shares of restricted stock (in dollars) | ' | ' | 400,000 | 900,000 | 1,000,000 |
Additional disclosures | ' | ' | ' | ' | ' |
Remaining stock-based compensation expense (in dollars) | ' | ' | 200,000 | ' | ' |
Restricted stock units | ' | ' | ' | ' | ' |
Number of Shares | ' | ' | ' | ' | ' |
Granted (in shares) | 720,146 | ' | ' | ' | ' |
Canceled/forfeited (in shares) | -6,607 | ' | ' | ' | ' |
Non-vested at the end of the period (in dollars per share) | 713,539 | ' | ' | ' | ' |
Weighted-Average Grant Date Fair Value | ' | ' | ' | ' | ' |
Granted (in dollars per share) | $10.04 | ' | ' | ' | ' |
Canceled/forfeited (in dollars per share) | $9.63 | ' | ' | ' | ' |
Non-vested at the end of the period (in dollars per share) | $10.04 | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' | ' |
Remaining stock-based compensation expense (in dollars) | $5,000,000 | ' | ' | ' | ' |
Weighted-average period for recognition of stock-based compensation expense | '2 years 7 months 6 days | ' | ' | ' | ' |
Stockbased_Awards_Details_3
Stock-based Awards (Details 3) (USD $) | 6 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock-based Compensation Cost | ' | ' | ' | ' | ' |
Total stock-based compensation expense | $11,540 | $3,616 | $9,346 | $10,320 | $6,208 |
Amount capitalized to internal software use | 614 | 251 | 540 | 214 | 266 |
Total stock-based compensation cost | 12,154 | 3,867 | 9,886 | 10,534 | 6,474 |
Cost of revenue | ' | ' | ' | ' | ' |
Stock-based Compensation Cost | ' | ' | ' | ' | ' |
Total stock-based compensation expense | 163 | 53 | 141 | 122 | 47 |
Sales and marketing | ' | ' | ' | ' | ' |
Stock-based Compensation Cost | ' | ' | ' | ' | ' |
Total stock-based compensation expense | 2,344 | 1,104 | 2,561 | 1,571 | 1,076 |
Technology and development | ' | ' | ' | ' | ' |
Stock-based Compensation Cost | ' | ' | ' | ' | ' |
Total stock-based compensation expense | 1,865 | 783 | 1,762 | 1,428 | 1,096 |
General and administrative | ' | ' | ' | ' | ' |
Stock-based Compensation Cost | ' | ' | ' | ' | ' |
Total stock-based compensation expense | $7,168 | $1,676 | $4,882 | $7,199 | $3,989 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Current: | ' | ' | ' | ' | ' | ' |
State | ' | ' | $7,000 | $3,000 | $2,000 | ' |
Total current provision | ' | ' | 7,000 | 3,000 | 2,000 | ' |
Deferred: | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | 504,000 | -318,000 | -8,264,000 | ' |
State | ' | ' | 68,000 | -291,000 | -2,428,000 | ' |
Total deferred (benefit) provision | ' | ' | 572,000 | -609,000 | -10,692,000 | ' |
Total income tax (benefit) provision | 317,000 | 273,000 | 579,000 | -606,000 | -10,690,000 | ' |
Tax benefit associated with a beneficial conversion feature on its convertible notes payable | ' | ' | ' | 1,100,000 | ' | ' |
U.S. federal statutory tax rate (as a percent) | 34.00% | ' | ' | ' | ' | ' |
Reconciliation between the amount computed by applying the U.S. federal statutory tax rate of 34% to income before income taxes and the income tax (benefit) provision | ' | ' | ' | ' | ' | ' |
Income tax benefit at the statutory rate | ' | ' | -8,322,000 | -25,534,000 | -6,679,000 | ' |
State income taxes, net of federal benefit | ' | ' | 218,000 | -5,742,000 | -116,000 | ' |
Nondeductible expenses | ' | ' | 346,000 | 144,000 | 142,000 | ' |
Change in valuation allowance | ' | ' | 6,446,000 | 30,064,000 | -6,878,000 | ' |
Expiration of capital loss carryforward | ' | ' | ' | ' | 2,034,000 | ' |
Research and development tax credits | ' | ' | ' | ' | -398,000 | ' |
Stock-based compensation | ' | ' | 2,037,000 | 646,000 | 1,571,000 | ' |
Other | ' | ' | -146,000 | -184,000 | -366,000 | ' |
Total income tax (benefit) provision | 317,000 | 273,000 | 579,000 | -606,000 | -10,690,000 | ' |
Deferred income tax assets: | ' | ' | ' | ' | ' | ' |
Net operating loss carryforwards | ' | ' | 49,921,000 | 47,511,000 | ' | ' |
Stock-based compensation | ' | ' | 8,262,000 | 6,243,000 | ' | ' |
Accrued expenses | ' | ' | 2,852,000 | 1,929,000 | ' | ' |
Research and development tax credits | ' | ' | 610,000 | 610,000 | ' | ' |
Other | ' | ' | 172,000 | 157,000 | ' | ' |
Gross deferred tax assets | ' | ' | 61,817,000 | 56,450,000 | ' | ' |
Valuation allowance | ' | ' | -47,858,000 | -41,412,000 | -11,348,000 | -18,226,000 |
Net deferred tax assets | ' | ' | 13,959,000 | 15,038,000 | ' | ' |
Deferred tax liabilities: | ' | ' | ' | ' | ' | ' |
State taxes | ' | ' | -3,296,000 | -3,405,000 | ' | ' |
Property, equipment and software | ' | ' | -3,353,000 | -2,676,000 | ' | ' |
Intangible assets and goodwill | ' | ' | -8,566,000 | -9,297,000 | ' | ' |
Other | ' | ' | ' | -344,000 | ' | ' |
Gross deferred tax liabilities | ' | ' | -15,215,000 | -15,722,000 | ' | ' |
Total net deferred tax liabilities | ' | ' | ($1,256,000) | ($684,000) | ' | ' |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
State | ' |
Net operating loss carryforwards | ' |
Net operating loss carryforwards | $106.30 |
Federal | ' |
Net operating loss carryforwards | ' |
Net operating loss carryforwards | $122.70 |
Income_Taxes_Details_3
Income Taxes (Details 3) (Research and development, USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
State | ' |
Tax credit carryforwards | ' |
Tax credit carryforwards | $0.40 |
Federal | ' |
Tax credit carryforwards | ' |
Tax credit carryforwards | $0.80 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Change in the valuation allowance | ' | ' | ' |
Valuation allowance, at beginning of year | $41,412,000 | $11,348,000 | $18,226,000 |
Increase in valuation allowance | 6,446,000 | 30,064,000 | 3,941,000 |
Release of valuation allowance | ' | ' | -10,819,000 |
Valuation Allowances, at end of year | 47,858,000 | 41,412,000 | 11,348,000 |
Increase in additional paid in capital if and when deferred tax assets are ultimately realized | 1,700,000 | 1,700,000 | 1,700,000 |
Reconciliation of the total amounts of unrecognized tax benefits | ' | ' | ' |
Unrecognized tax benefit beginning of year | -4,000 | ' | ' |
Gross increases - tax positions in prior year | ' | 610,000 | ' |
Gross decreases - tax positions in current year | ' | -614,000 | ' |
Unrecognized tax benefit end of year | -4,000 | -4,000 | ' |
Accrued interest and penalties | ' | ' | ' |
Accrued interest and penalties | $0 | ' | ' |
Employee_Benefit_Plan_Details
Employee Benefit Plan (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Benefit Plan | ' | ' | ' |
Matching contributions to 401(k) Savings Retirement Plan | $0.90 | $0.90 | $0.50 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 60 Months Ended | 60 Months Ended | 6 Months Ended | 1 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 5 Months Ended | 6 Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | Jun. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2010 | Oct. 31, 2012 | Dec. 31, 2012 | Oct. 31, 2012 | Oct. 31, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 31-May-12 | Dec. 31, 2011 | |
Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Dealertrack | Executives | Executives | Executives | Executives | Executives | Executives | Executives | Former employee | Former executive | Former executive | Former executive | Former executive | Employee | Marketing Firm with Related Officer | Marketing Firm with Related Officer | Marketing Firm with Related Officer | Marketing Firm with Related Officer | CEO | CEO | CEO | USAA | USAA | USAA | USAA | USAA | USAA | USAA | USAA | AutoNation and its dealership affiliates | AutoNation and its dealership affiliates | ||||||
Cost of revenue | Cost of revenue | Cost of revenue | Cost of revenue | Cost of revenue | Sales and marketing | Sales and marketing | Sales and marketing | Sales and marketing | Sales and marketing | Minimum | Maximum | Sales and marketing | Sales and marketing | item | Note receivable, due August 2013 | Note receivable, due August 2014 | Sales and marketing | Sales and marketing | Sales and marketing | Sales and marketing | Sales and marketing | Sales and marketing | Sales and marketing | |||||||||||||||||||||||||
Related Party Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Costs under related party agreements | ' | ' | ' | ' | ' | ' | ' | ' | $400,000 | $1,200,000 | $2,000,000 | $1,700,000 | $800,000 | $0 | $200,000 | $300,000 | $600,000 | $100,000 | ' | ' | ' | ' | ' | $1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,600,000 | $1,100,000 | ' | ' | ' | ' | ' | ' | $6,200,000 | $3,200,000 | $8,800,000 | $3,400,000 | $2,600,000 | ' | ' |
Payable to related party | 1,307,000 | ' | 1,161,000 | 622,000 | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | 1,200,000 | 500,000 | ' | ' | ' | ' | ' | ' | ' |
Amounts due to related party | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 300,000 | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | 200,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of notes outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes issued to related parties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000 | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash exchanged for notes receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock exchanged for notes receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate on notes receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.20% | 6.00% | ' | ' | 0.50% | ' | ' | ' | ' | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes receivable from related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | 200,000 | 100,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period over which principal and accrued interests will be due and payable following the termination as a service provider to the Company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '45 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount advanced to employee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee advance outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid expenses | 6,866,000 | ' | 3,550,000 | 1,602,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,900,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Personal expenses paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | 400,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amounts receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 112,422 | 130,080 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.90 | $8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivable from related party | 812,000 | ' | 431,000 | 619,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | 400,000 | 600,000 | ' | ' | ' | ' | ' | ' | ' |
Revenue from related party | $0 | $0 | $0 | $1,431,000 | $1,314,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,400,000 | $1,300,000 |
Revenue_Information_Details
Revenue Information (Details) (USD $) | 6 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue Information | ' | ' | ' | ' | ' |
Revenue | $94,427 | $56,266 | $133,958 | $79,889 | $76,330 |
Transaction revenue | ' | ' | ' | ' | ' |
Revenue Information | ' | ' | ' | ' | ' |
Revenue | 86,119 | 48,959 | 118,713 | 64,703 | 71,222 |
Data and other revenue | ' | ' | ' | ' | ' |
Revenue Information | ' | ' | ' | ' | ' |
Revenue | $8,308 | $7,307 | $15,245 | $15,186 | $5,108 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||||||||||
Jun. 30, 2014 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Feb. 28, 2014 | Aug. 31, 2014 | Jul. 10, 2014 | Jul. 31, 2014 | Jul. 10, 2014 | Jul. 10, 2014 | Jul. 10, 2014 | 31-May-14 | 31-May-14 | 4-May-14 | Feb. 28, 2014 | Jan. 31, 2014 | Aug. 31, 2014 | Feb. 13, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Office building lease | Domain name | Options to purchase common stock | Options to purchase common stock | Options to purchase common stock | Options to purchase common stock | Options to purchase common stock | Stock options containing a two step vesting condition | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | ||||
Certain executives | Certain executives | Certain executives | Certain executives | Support Services Agreement | Office building lease | Office building lease | Office building lease | Office Buiding Lease, Space One | Office Buiding Lease, Space Two | SF Lease | SF Lease | Common Stock Purchase Warrants | 2005 Stock Plan | Domain name | Perpetual software license | CEO | Options to purchase common stock | Options to purchase common stock | Options to purchase common stock | |||||||||
sqft | October, 2019 to October, 2025 | October, 2019 to October, 2025 | sqft | sqft | sqft | October, 2019 to October, 2025 | Warrant Agreement in May 2014 | Employees and consultants | Employees and consultants | Employees and consultants | ||||||||||||||||||
USAA | Minimum | Maximum | ||||||||||||||||||||||||||
Subsequent Events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock to be purchased | ' | ' | ' | ' | ' | ' | 1,765,875 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,094,173 | ' | ' |
Weighted average exercise price (in dollars per share) | ' | ' | ' | ' | ' | $15.86 | $8.44 | $8.85 | $11.51 | $6.15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.24 | ' | ' |
Vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '48 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '4 years |
Estimated total stock based compensation expected to be recognized over a weighted average period | ' | ' | ' | ' | ' | $73,300,000 | $25,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $15,800,000 | ' | ' |
Weighted average period over which remaining stock based compensation expense for unvested awards is expected to be recognized | ' | ' | ' | ' | ' | '3 years 1 month 6 days | '2 years 11 months 16 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years 9 months 18 days | ' | ' |
Payment in cash for acquisition of domain name, True.com | 350,000 | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 350,000 | ' | ' | ' | ' | ' |
Payment made for acquiring ticker symbol | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares that may be purchased under warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,664 | ' | ' | ' | ' | ' | ' | ' | ' | 1,458,979 | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated fair value of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in shares of common stock reserved for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,333,333 | ' | ' | ' | ' | ' | ' |
Proceeds received for the entire outstanding balance of notes receivable and other advances outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ' |
Area of office building | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,700 | ' | ' | 16,700 | 17,000 | 8,279 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | '10 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Optional lease extension term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '20 years | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual base rent for 2015 | 5,149,000 | ' | 2,395,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cumulative base rent for initial lease term | 60,147,000 | ' | 14,456,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,300,000 | ' | ' | ' | ' | 7,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Irrevocable stand-by letter of credit | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,500,000 | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum amount of annual reduction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | 1,200,000 | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets acquired | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,900,000 | ' | ' | ' | ' |
Contract term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total contract obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |