DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | ROSETTA STONE INC | |
Entity Central Index Key | 0001351285 | |
Trading Symbol | RST | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 24,059,722 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Tax Identification Number | 043837082 | |
Entity File Number | 1-34283 | |
Entity Address Line One | 1621 North Kent Street | |
Entity Address, Address Line Two | Suite 1200 | |
Entity Address City | Arlington | |
Entity Address State | Virginia | |
Entity Address, Postal Zip Code | 22209 | |
City Area Code | 703 | |
Local Phone Number | 387-5800 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 36,205 | $ 38,092 |
Restricted cash | 45 | 82 |
Accounts receivable (net of allowance for doubtful accounts of $508 and $372 at September 30, 2019 and December 31, 2018, respectively) | 33,093 | 21,950 |
Inventory | 1,523 | 933 |
Deferred sales commissions | 11,872 | 11,597 |
Prepaid expenses and other current assets | 4,922 | 4,041 |
Total current assets | 87,660 | 76,695 |
Deferred sales commissions | 7,788 | 6,933 |
Property and equipment, net | 40,206 | 36,405 |
Operating lease right-of-use assets | 6,078 | |
Intangible assets, net | 14,699 | 15,850 |
Goodwill | 48,678 | 49,239 |
Other assets | 1,786 | 2,136 |
Total assets | 206,895 | 187,258 |
Current liabilities: | ||
Accounts payable | 8,757 | 8,938 |
Accrued compensation | 8,902 | 9,046 |
Income tax payable | 192 | 328 |
Operating lease liabilities | 1,701 | |
Other current liabilities | 11,436 | 13,925 |
Deferred revenue | 123,103 | 113,378 |
Total current liabilities | 154,091 | 145,615 |
Deferred revenue | 55,729 | 49,507 |
Deferred income taxes | 2,331 | 2,776 |
Operating lease liabilities | 4,301 | |
Other long-term liabilities | 1,022 | 1,368 |
Total liabilities | 217,474 | 199,266 |
Commitments and contingencies (Note 11) | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value; 10,000 and 10,000 shares authorized, zero and zero shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively) | ||
Non-designated common stock, $0.00005 par value, 190,000 and 190,000 shares authorized, 25,060 and 24,426 shares issued, and 24,060 and 23,426 shares outstanding, at September 30, 2019 and December 31, 2018, respectively) | 2 | 2 |
Additional paid-in capital | 210,475 | 202,355 |
Treasury stock, at cost; 1,000 and 1,000 shares at September 30, 2019 and December 31, 2018, respectively) | (11,435) | (11,435) |
Accumulated loss | (205,860) | (199,592) |
Accumulated other comprehensive loss | (3,761) | (3,338) |
Total stockholders' deficit | (10,579) | (12,008) |
Total liabilities and stockholders' deficit | $ 206,895 | $ 187,258 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 508 | $ 372 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Non-designated common stock, par value (in dollars per share) | $ 0.00005 | $ 0.00005 |
Non-designated common stock, shares authorized | 190,000,000 | 190,000,000 |
Non-designated common stock, shares issued | 25,060,278 | 24,426,000 |
Non-designated common stock, shares outstanding | 24,060,278 | 23,426,000 |
Treasury stock, issued not outstanding | 1,000,000 | 1,000,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 45,456 | $ 42,750 | $ 136,009 | $ 129,060 |
Cost of revenue | 9,416 | 8,768 | 26,703 | 26,132 |
Gross profit | 36,040 | 33,982 | 109,306 | 102,928 |
Operating expenses | ||||
Sales and marketing | 24,700 | 24,948 | 73,738 | 74,013 |
Research and development | 5,517 | 6,465 | 17,031 | 18,790 |
General and administrative | 8,687 | 8,510 | 25,945 | 25,366 |
Total operating expenses | 38,904 | 39,923 | 116,714 | 118,169 |
Loss from operations | (2,864) | (5,941) | (7,408) | (15,241) |
Other income and (expense): | ||||
Interest income | 6 | 23 | 48 | 71 |
Interest expense | (119) | (82) | (278) | (246) |
Other income and (expense) | (33) | 99 | 1,282 | (130) |
Total other income and (expense) | (146) | 40 | 1,052 | (305) |
Loss before income taxes | (3,010) | (5,901) | (6,356) | (15,546) |
Income tax (benefit) expense | (93) | 588 | (88) | 1,503 |
Net loss | $ (2,917) | $ (6,489) | $ (6,268) | $ (17,049) |
Loss per share: | ||||
Basic | $ (0.12) | $ (0.28) | $ (0.27) | $ (0.75) |
Diluted | $ (0.12) | $ (0.28) | $ (0.27) | $ (0.75) |
Common shares and equivalents outstanding: | ||||
Basic weighted average shares | 23,609 | 22,814 | 23,369 | 22,647 |
Diluted weighted average shares | 23,609 | 22,814 | 23,369 | 22,647 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||||||
Net loss | $ (2,917) | $ (2,807) | $ (544) | $ (6,489) | $ (4,158) | $ (6,402) | $ (6,268) | $ (17,049) |
Other comprehensive loss, net of tax: | ||||||||
Foreign currency translation loss | (371) | (144) | (423) | (225) | ||||
Other comprehensive loss | (371) | $ (265) | $ 213 | (144) | $ (610) | $ 529 | (423) | (225) |
Comprehensive loss | $ (3,288) | $ (6,633) | $ (6,691) | $ (17,274) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (6,268) | $ (17,049) |
Non-cash adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||
Stock-based compensation expense | 3,988 | 3,388 |
Loss (gain) on foreign currency transactions | 201 | 26 |
Bad debt expense | 288 | 110 |
Depreciation and amortization | 10,924 | 10,891 |
Operating lease costs | 1,604 | |
Deferred income tax (benefit) expense | (710) | 437 |
(Gain) loss on disposal or sale of assets | (1,389) | 12 |
Amortization of deferred financing costs | 51 | 102 |
Net change in: | ||
Accounts receivable | (11,552) | (8,314) |
Inventory | (589) | 1,856 |
Deferred sales commissions | (1,138) | (1,193) |
Prepaid expenses and other current assets | (1,039) | 875 |
Income tax receivable or payable | (139) | (397) |
Other assets | 242 | (407) |
Accounts payable | (162) | (36) |
Accrued compensation | 456 | (979) |
Other current liabilities | (1,898) | (3,969) |
Operating lease liabilities | (1,575) | |
Other long-term liabilities | (31) | |
Deferred revenue | 16,394 | 14,384 |
Net cash provided by (used in) operating activities | 7,658 | (263) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (13,720) | (11,700) |
Proceeds from sale of assets | 1,396 | 17 |
Net cash used in investing activities | (12,324) | (11,683) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the exercise of stock options | 3,556 | 1,547 |
Proceeds from borrowings under credit facility | 10,500 | |
Repayments of borrowings under credit facility | (10,500) | |
Payment of deferred financing costs | (47) | (4) |
Payments under financing lease liabilities | (331) | (336) |
Net cash provided by financing activities | 3,178 | 1,207 |
Decrease in cash, cash equivalents, and restricted cash | (1,488) | (10,739) |
Effect of exchange rate changes in cash, cash equivalents, and restricted cash | (436) | (400) |
Net decrease in cash, cash equivalents, and restricted cash | (1,924) | (11,139) |
Cash, cash equivalents, and restricted cash—beginning of period | 38,174 | 43,036 |
Cash, cash equivalents, and restricted cash—end of period | 36,250 | 31,897 |
Cash paid during the periods for: | ||
Interest | 227 | 144 |
Income taxes, net of refund | 465 | 1,342 |
Noncash operating, investing and financing activities: | ||
Accrued liability for purchase of property and equipment | $ 1,135 | $ 1,793 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Total | Non-Designated Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Loss | Accumulated Other Comprehensive Loss |
Balance, beginning of period at Dec. 31, 2017 | $ 2,423 | $ 2 | $ 195,644 | $ (11,435) | $ (178,890) | $ (2,898) |
Balance, beginning of period (in shares) at Dec. 31, 2017 | 22,316 | |||||
Stock issued upon the exercise of stock options | 467 | 467 | ||||
Stock issued upon the exercise of stock options (in shares) | 54 | |||||
Restricted stock award and performance stock unit vesting (in shares) | 167 | |||||
Stock-based compensation expense | 583 | 583 | ||||
Net loss | (6,402) | (6,402) | ||||
Cumulative effect adjustment - adoption of ASC 606 | ASC 606 | 771 | 771 | ||||
Other comprehensive income (loss) | 529 | 529 | ||||
Balance, end of period at Mar. 31, 2018 | (1,629) | $ 2 | 196,694 | (11,435) | (184,521) | (2,369) |
Balance, end of period (in shares) at Mar. 31, 2018 | 22,537 | |||||
Balance, beginning of period at Dec. 31, 2017 | 2,423 | $ 2 | 195,644 | (11,435) | (178,890) | (2,898) |
Balance, beginning of period (in shares) at Dec. 31, 2017 | 22,316 | |||||
Net loss | (17,049) | |||||
Other comprehensive income (loss) | (225) | |||||
Balance, end of period at Sep. 30, 2018 | (9,145) | $ 2 | 200,579 | (11,435) | (195,168) | (3,123) |
Balance, end of period (in shares) at Sep. 30, 2018 | 22,796 | |||||
Balance, beginning of period at Mar. 31, 2018 | (1,629) | $ 2 | 196,694 | (11,435) | (184,521) | (2,369) |
Balance, beginning of period (in shares) at Mar. 31, 2018 | 22,537 | |||||
Stock issued upon the exercise of stock options | 850 | 850 | ||||
Stock issued upon the exercise of stock options (in shares) | 85 | |||||
Restricted stock award and performance stock unit vesting (in shares) | 147 | |||||
Stock-based compensation expense | 1,352 | 1,352 | ||||
Net loss | (4,158) | (4,158) | ||||
Other comprehensive income (loss) | (610) | (610) | ||||
Balance, end of period at Jun. 30, 2018 | (4,195) | $ 2 | 198,896 | (11,435) | (188,679) | (2,979) |
Balance, end of period (in shares) at Jun. 30, 2018 | 22,769 | |||||
Stock issued upon the exercise of stock options | 230 | 230 | ||||
Stock issued upon the exercise of stock options (in shares) | 17 | |||||
Restricted stock award and performance stock unit vesting (in shares) | 10 | |||||
Stock-based compensation expense | 1,453 | 1,453 | ||||
Net loss | (6,489) | (6,489) | ||||
Other comprehensive income (loss) | (144) | (144) | ||||
Balance, end of period at Sep. 30, 2018 | (9,145) | $ 2 | 200,579 | (11,435) | (195,168) | (3,123) |
Balance, end of period (in shares) at Sep. 30, 2018 | 22,796 | |||||
Balance, beginning of period at Dec. 31, 2018 | (12,008) | $ 2 | 202,355 | (11,435) | (199,592) | (3,338) |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 22,912 | |||||
Stock issued upon the exercise of stock options | 744 | 744 | ||||
Stock issued upon the exercise of stock options (in shares) | 67 | |||||
Restricted stock award and performance stock unit vesting (in shares) | 270 | |||||
Unrestricted common stock issued in lieu of cash bonus | 576 | 576 | ||||
Unrestricted common stock issued in lieu of cash bonus (in shares) | 37 | |||||
Stock-based compensation expense | 1,220 | 1,220 | ||||
Net loss | (544) | (544) | ||||
Other comprehensive income (loss) | 213 | 213 | ||||
Balance, end of period at Mar. 31, 2019 | (9,799) | $ 2 | 204,895 | (11,435) | (200,136) | (3,125) |
Balance, end of period (in shares) at Mar. 31, 2019 | 23,286 | |||||
Balance, beginning of period at Dec. 31, 2018 | (12,008) | $ 2 | 202,355 | (11,435) | (199,592) | (3,338) |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 22,912 | |||||
Net loss | (6,268) | |||||
Other comprehensive income (loss) | (423) | |||||
Balance, end of period at Sep. 30, 2019 | (10,579) | $ 2 | 210,475 | (11,435) | (205,860) | (3,761) |
Balance, end of period (in shares) at Sep. 30, 2019 | 23,659 | |||||
Balance, beginning of period at Mar. 31, 2019 | (9,799) | $ 2 | 204,895 | (11,435) | (200,136) | (3,125) |
Balance, beginning of period (in shares) at Mar. 31, 2019 | 23,286 | |||||
Stock issued upon the exercise of stock options | 2,145 | 2,145 | ||||
Stock issued upon the exercise of stock options (in shares) | 206 | |||||
Restricted stock award and performance stock unit vesting (in shares) | 70 | |||||
Stock-based compensation expense | 1,356 | 1,356 | ||||
Net loss | (2,807) | (2,807) | ||||
Other comprehensive income (loss) | (265) | (265) | ||||
Balance, end of period at Jun. 30, 2019 | (9,370) | $ 2 | 208,396 | (11,435) | (202,943) | (3,390) |
Balance, end of period (in shares) at Jun. 30, 2019 | 23,562 | |||||
Stock issued upon the exercise of stock options | 667 | 667 | ||||
Stock issued upon the exercise of stock options (in shares) | 76 | |||||
Restricted stock award and performance stock unit vesting (in shares) | 21 | |||||
Stock-based compensation expense | 1,412 | 1,412 | ||||
Net loss | (2,917) | (2,917) | ||||
Other comprehensive income (loss) | (371) | (371) | ||||
Balance, end of period at Sep. 30, 2019 | $ (10,579) | $ 2 | $ 210,475 | $ (11,435) | $ (205,860) | $ (3,761) |
Balance, end of period (in shares) at Sep. 30, 2019 | 23,659 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS Rosetta Stone Inc. and its subsidiaries ("Rosetta Stone," or the "Company") develop, market and support a suite of language-learning and literacy solutions consisting of web-based software subscriptions, perpetual software products, online and professional services, audio practice products and mobile applications. The Company's offerings are sold on a direct basis and through select third party retailers and distributors. The Company provides its solutions to customers through the sale of web-based software subscriptions, mobile applications, and packaged software, domestically and in certain international markets. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Rosetta Stone Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation The accompanying consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s most recent Annual Report on Form 10-K filed with the SEC on March 6, 2019. The September 30, 2019 consolidated balance sheet included herein includes account balances as of December 31, 2018 that were derived from the audited financial statements as of that date. The Consolidated Financial Statements and the Notes to the Consolidated Financial Statements do not include all disclosures required for annual financial statements and notes. As discussed in this Note 2 and Note 7, the Company adopted the new lease standard (“ASC 842”) effective January 1, 2019 using the modified retrospective approach. The Company elected the comparatives under 840 option, and as such, the comparative information has not been restated under ASC 842 and continues to be reported under the accounting standards in effect for those prior comparative periods. See the Company’s Annual Report on Form 10-K filed with the SEC on March 6, 2019 for lease policies that were in effect in prior periods before adoption of ASC 842. Except as noted above, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s statements of financial position at September 30, 2019 and December 31, 2018, the Company’s results of operations and stockholders’ equity activity for the three and nine months ended September 30, 2019 and 2018, and its cash flows for the nine months ended September 30, 2019 and September 30, 2018 have been made. The results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. All references to September 30, 2019 or to the three and nine months ended September 30, 2019 and 2018 in the notes to the consolidated financial statements are unaudited. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions. The amounts reported in the consolidated financial statements include significant estimates and assumptions that have been made, including, but not limited to, those related to revenue recognition, allowance for doubtful accounts, estimated sales returns and reserves, stock-based compensation, fair value of intangibles and goodwill, disclosure of contingent assets and liabilities, disclosure of contingent litigation, allowance for valuation of deferred tax assets, and the Company's quarterly going concern assessment. The Company bases its estimates and assumptions on historical experience and on various other judgments that are believed to be reasonable under the circumstances. The Company continuously evaluates its estimates and assumptions. Actual results may differ from these estimates and assumptions. Recently Issued Accounting Standards Accounting Standards Adopted During the Period: During 2019, the Company adopted the following recently issued Accounting Standard Updates ("ASU"): In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Accounting Standards Not Yet Adopted: The following ASUs were recently issued but have not yet been adopted by the Company: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Revenue Recognition Nature of Revenue: The Company accounts for revenue contracts with customers by applying the requirements of ASC topic 606, , ("ASC 606"), which includes the following steps: • Identification of the contract, or contracts with a customer. • Identification of the performance obligations in the contract. • Determination of the transaction price. • Allocation of the transaction price to the performance obligations in the contract. • Recognition of the revenue when, or as, the Company satisfies a performance obligation. The Company's primary sources of revenue are web-based software subscriptions, mobile applications, online services, and professional services. Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration expected to be received in exchange for those goods or services. Revenue is recognized net of allowances for returns. Revenue is also recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The majority of our revenue is recognized from non-cancellable web-based software subscriptions, online services, professional services, and mobile applications. Subscription revenue is generated from contracts with customers that provide access to hosted software over a contract term without the customer taking possession of the software. Subscription revenue is recognized ratably over the contract period as the performance obligation is satisfied. Subscription revenue is generated by all three reportable segments and range from short-term to multi-year contracts. Online services are typically sold in short-term service periods and include dedicated online conversational coaching services and access to online communities of language learners. Professional services include implementation services. Online services revenue and professional services revenue are recognized as the services are provided. Expired services are forfeited and revenue is recognized upon expiry. Performance Obligations: A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are satisfied at a point in time or over time as delivery occurs or as work progresses. Significant Judgments: Some of the Company’s contracts with customers include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately, versus together, requires significant judgment. This includes determining whether distinct services are part of a series of distinct services that are substantially the same. When subscription services are sold with professional services, judgment is required to determine whether the professional services are distinct and can be accounted for separately. In the E&E Language segment, the Company has concluded that each promised service within the language-learning subscription is delivered concurrently with all other promised services over the contract term and, as such, concluded that these promises are a single performance obligation that includes a series of distinct services that have the same pattern of transfer to the customer. When there are multiple performance obligations, revenue is allocated to each performance obligation based on its relative standalone selling price (“SSP”). Judgment is required to determine the SSP for each distinct performance obligation where SSP is not directly observable, such as when the product or service is not sold separately, SSP is determined using internally published price lists which include suggested sales prices for each performance obligation based on the type of client and volume purchased. These price lists are derived from past experience and from the expectation of obtaining a reasonable margin based on the cost to fulfill each performance obligation. Subscription revenue is recognized ratably over the contract period as the performance obligation is satisfied. Certain Consumer Language offerings have contracts with no fixed duration and are marketed as lifetime subscriptions. For these lifetime subscriptions, the Company estimates the expected contract period as the greater of the typical customer usage period or the longest fixed-period duration subscription that is currently marketed. The Company's current expected contract period for lifetime subscriptions is 24 months. Certain Consumer Language offerings are sold with a right of return and the Company may provide other credits or incentives. These rights are accounted for as variable consideration when estimating the amount of revenue to recognize by utilizing the expected value method. Returns and credits are estimated at contract inception based on historical return rates, estimated channel inventory levels, the timing of new product introductions and other factors. Reserves for returns and credits are updated at the end of each reporting period as additional information becomes available. The Company distributes its products and services both directly to the end customer and indirectly through resellers. Resellers earn commissions generally calculated as a fixed percentage of the gross sale amount to the end customer. The Company evaluates each of its reseller relationships to determine whether it is the principal (where revenue is recognized at the gross amount) or agent (where revenue is recognized net of the reseller commission). In making this determination the Company evaluates a variety of factors including the amount of control the Company is able to exercise over the transactions. Contract Balances: The timing of revenue recognition, invoicing, and cash collection results in accounts receivable and deferred revenue in the consolidated balance sheets. Payment from customers is often received in advance of services being provided, resulting in deferred revenue. Accounts receivable is recorded when there is an executed customer contract and the right to the consideration becomes unconditional. Contract assets such as unbilled receivables are not material. The allowance for doubtful accounts reflects the best estimate of probable losses inherent in the accounts receivable balance. The Company establishes an allowance for doubtful accounts based on specific risks identified, historical experience, and other currently available evidence. Payment terms and conditions vary by contract type and customer. For the E&E Language and Literacy segments, payment terms generally range from 30 to 90 days. In the Consumer Language segment, resellers and mobile app stores are generally granted payment terms between 30 to 45 days. Within Consumer Language, sales to end customers via the Rosetta Stone ecommerce website are done by credit card, which generally are settled within 7-10 days and may be made in installments. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services and not to provide customers with financing. Deferred revenue is comprised mainly of unearned revenue related to subscription services which is recognized ratably over the subscription period. Deferred revenue also includes payments for professional services and online services to be performed in the future which are earned as revenue when the service is provided. Our practice is to ship our products promptly upon receipt of purchase orders from customers; consequently, contract backlog is not material. See Note 10 "Revenue and Deferred Revenue" for additional disclosures. Assets Recognized from Costs to Obtain a Contract with a Customer: The Company recognizes an asset for the incremental costs of obtaining a contract with a customer, which primarily represents sales commissions paid when a customer contract is either recorded as revenue or deferred revenue. Sales commissions paid to obtain non-cancellable subscription contracts are deferred and amortized in proportion to the period over which the revenue is recognized from the related contract. Deferred sales commissions are amortized to sales and marketing expense on the consolidated statements of operations. Deferred sales commissions are classified as non-current unless the associated amortization period is one year or less. Income Taxes The Company accounts for income taxes in accordance with ASC topic 740, Income Taxes Deferred Tax Valuation Allowance The Company has recorded a valuation allowance offsetting certain of its deferred tax assets as of September 30, 2019. When measuring the need for a valuation allowance on a jurisdiction by jurisdiction basis, the Company assesses both positive and negative evidence regarding whether these deferred tax assets are realizable. In determining deferred tax assets and valuation allowances, the Company is required to make judgments and estimates related to projections of profitability, the timing and extent of the utilization of temporary differences, net operating loss carryforwards, tax credits, applicable tax rates, transfer pricing methodologies and tax planning strategies. The valuation allowance is reviewed quarterly and is maintained until sufficient positive evidence exists to support a reversal. Because evidence such as the Company’s operating results during the most recent three-year period is afforded more weight than forecasted results for future periods, the Company’s cumulative loss in certain jurisdictions represents significant negative evidence in the determination of whether deferred tax assets are more likely than not to be utilized in certain jurisdictions. The Company will release this valuation allowance when it is determined that it is more likely than not that its deferred tax assets will be realized. Any future release of valuation allowance may be recorded as a tax benefit increasing net income. Fair Value of Financial Instruments The Company values its assets and liabilities using the methods of fair value as described in ASC topic 820, Fair Value Measurements, Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with ASC topic 718, Compensation—Stock Compensation Stock options are granted to directors with a 10 -year contractual term. The Company estimates the expected term of stock options using historical grant and exercise information. The Company uses its own historical stock price data to estimate its forfeiture rate and expected volatility over the most recent period commensurate with the estimated expected term of the awards. For the risk-free interest rate, the Company uses a U.S. Treasury Bond rate consistent with the estimated expected term of the option award. The Company’s restricted stock and restricted stock unit grants are accounted for as equity awards. Stock compensation expense associated with service-based equity awards is recognized in the statements of operations on a straight-line basis over the requisite service period, which is the vesting period. For equity awards granted with performance-based conditions, stock compensation expense is recognized in the statements of operations ratably for each vesting tranche based on the probability that operating performance conditions will be met and to what extent. Changes in the probability estimates associated with performance-based awards will be accounted for in the period of change using a cumulative catch-up adjustment to retroactively apply the new probability estimates. In any period in which the Company determines that achievement of the performance metrics is not probable, the Company ceases recording compensation expense and all previously recognized compensation expense for the performance-based award is reversed. For equity awards granted with market-based conditions, stock compensation expense is recognized in the statements of operations ratably for each vesting tranche regardless of meeting or not meeting the market conditions. See Note 12 "Stock-Based Compensation" for additional disclosures. Basic and Diluted Net Loss Per Share Net loss per share is computed under the provisions of ASC topic 260, Earnings Per Share. Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares are included in the diluted computation when dilutive. Potentially dilutive shares are computed using the treasury stock method and primarily consist of shares issuable upon the exercise of stock options, restricted stock awards, restricted stock units and conversion of shares of preferred stock. Common stock equivalent shares are excluded from the diluted computation if their effect is anti-dilutive. When there is a net loss, there is a presumption that there are no dilutive shares as these would be anti-dilutive. See Note 14 "Basic and Diluted Net Loss Per Share" for additional disclosures. Foreign Currency Translation and Transactions The functional currency of the Company's foreign subsidiaries is their local currency. Accordingly, assets and liabilities of the foreign subsidiaries are translated into U.S. dollars at exchange rates in effect on the balance sheet date. Income and expense items are translated at average rates for the period. Translation adjustments are recorded as a component of accumulated other comprehensive loss in stockholders' deficit. Cash flows of consolidated foreign subsidiaries, whose functional currency is their local currency, are translated to U.S. dollars using average exchange rates for the period. The Company reports the effect of exchange rate changes on cash balances held in foreign currencies as a separate item in the reconciliation of the changes in cash, cash equivalents and restricted cash during the period. The following table presents the effect of exchange rate changes on total comprehensive loss (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net loss $ (2,917 ) $ (6,489 ) $ (6,268 ) $ (17,049 ) Foreign currency translation loss (371 ) (144 ) (423 ) (225 ) Comprehensive loss $ (3,288 ) $ (6,633 ) $ (6,691 ) $ (17,274 ) Comprehensive Loss Comprehensive loss consists of net loss and other comprehensive income or loss. Other comprehensive income or loss refers to revenues, expenses, gains, and losses that are not included in net loss, but rather are recorded directly in stockholders' deficit. For the three and nine months ended September 30, 2019 and 2018, the Company's comprehensive loss consisted of net loss and foreign currency translation losses. The other comprehensive loss presented in the consolidated financial statements and the notes are presented net of tax. There has been no tax expense or benefit associated with the components of other comprehensive loss due to the presence of a full valuation allowance for each of the three and nine months ended September 30, 2019 and 2018. Advertising Costs Costs for advertising are expensed as incurred. Advertising expense consisted of the following (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Advertising costs $ 5,534 $ 5,578 $ 16,732 $ 17,272 Going Concern Assessment As part of its internal control framework, the Company routinely performs a quarterly going concern assessment in accordance with ASC sub-topic 205-40, Presentation of Financial Statements - Going Concern The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Management has evaluated whether relevant conditions or events, considered in the aggregate, indicate that there is substantial doubt about the Company's ability to continue as a going concern. Substantial doubt exists when conditions and events, considered in the aggregate, indicate it is probable that the Company will be unable to meet its obligations as they become due within one year after the financial statement issuance date. The assessment is based on the relevant conditions that are known or reasonably knowable as of November 6, 2019. The assessment of the Company's ability to meet its future obligations is inherently judgmental, subjective and susceptible to change. The inputs that are considered important in the Company's going concern analysis, include, but are not limited to, the Company's 2019 cash flow forecast, 2019 operating budget, and long-term plan that extends beyond 2019. These inputs consider information including, but not limited to, the Company’s financial condition, liquidity sources, obligations due within one year after the financial statement issuance date, funds necessary to maintain operations, and financial conditions, including negative financial trends or other indicators of possible financial difficulty. The Company has considered both quantitative and qualitative factors as part of the assessment that are known or reasonably knowable as of November 6, 2019, and concluded that conditions and events considered in the aggregate, do not indicate that it is probable that the Company will be unable to meet obligations as they become due through the one year period following the financial statement issuance date. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 3. INVENTORY Inventory consisted of the following (in thousands): As of September 30, 2019 December 31, 2018 Raw materials $ 785 $ 797 Finished goods 738 136 Total inventory $ 1,523 $ 933 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT The Company capitalizes certain internal use software costs into property and equipment. Capitalized internal use software costs consisted of the following (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Capitalized internal use software $ 3,625 $ 3,724 $ 13,063 $ 11,556 Depreciation and amortization expense related to property and equipment includes depreciation related to its physical assets and amortization expense related to amounts capitalized in the development of internal-use software. Depreciation and amortization expense associated with property and equipment consisted of the following (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Cost of revenue $ 2,817 $ 2,361 $ 7,576 $ 6,129 Sales and marketing 177 177 536 589 Research and development 16 2 33 6 General and administrative 547 495 1,628 1,600 Total depreciation expense $ 3,557 $ 3,035 $ 9,773 $ 8,324 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets Net Excluding Goodwill [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets consisted of the following items as of the dates indicated (in thousands): Trade name / trademark * Core technology Customer relationships Patents and Other Total Gross Carrying Amount $ 12,322 $ 13,432 $ 25,689 $ 312 $ 51,755 Accumulated Amortization/Impairment (1,715 ) (12,505 ) (21,380 ) (305 ) (35,905 ) Balance as of January 1, 2019 $ 10,607 $ 927 $ 4,309 $ 7 $ 15,850 Gross Carrying Amount $ 12,300 $ 13,279 $ 25,528 $ 312 $ 51,419 Accumulated Amortization/Impairment (1,693 ) (12,790 ) (21,925 ) (312 ) (36,720 ) Balance as of September 30, 2019 $ 10,607 $ 489 $ 3,603 $ — $ 14,699 * Included in the tradename/trademark line above is the Rosetta Stone tradename, which is the Company's only indefinite-lived intangible asset. As of January 1, 2019 Amortization Expense for the Long-lived Intangible Assets The following table presents amortization of intangible assets included in the related financial statement line items during the respective periods (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Cost of revenue $ 146 $ 146 $ 439 $ 439 Sales and marketing 235 437 705 1,393 Research and development — 183 7 735 General and administrative — — — — Total intangible amortization expense $ 381 $ 766 $ 1,151 $ 2,567 The following table summarizes the estimated future amortization expense related to intangible assets for the remaining months of 2019 and years thereafter (in thousands): As of September 30, 2019 2019 - remaining $ 382 2020 1,282 2021 940 2022 940 2023 548 Thereafter — Total $ 4,092 Impairment Reviews of Intangible Assets The Company also routinely reviews indefinite-lived intangible assets and long-lived assets for potential impairment as part of the Company’s internal control framework. As an indefinite-lived intangible asset, the Rosetta Stone tradename was evaluated as of September 30, 2019 to determine if indicators of impairment exist. The Company concluded that there were no potential indicators of impairment related to this indefinite-lived intangible asset. Additionally all other long-lived intangible assets were evaluated to determine if indicators of impairment exist and the Company concluded that there are no potential indicators of impairment. |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL | 6. GOODWILL The value of goodwill is primarily derived from the acquisition of Rosetta Stone Ltd. (formerly known as Fairfield & Sons, Ltd.) in January 2006, the acquisition of certain assets of SGLC International Co. Ltd ("SGLC") in November 2009, the acquisition of Livemocha, Inc. ("Livemocha") in April 2013, the acquisition of Lexia Learning Systems, Inc. ("Lexia") in August 2013, and the acquisition of Tell Me More S.A. ("Tell Me More") in January 2014. The Company tests goodwill for impairment annually on June 30 of each year at the reporting unit level using a fair value approach, in accordance with the provisions of ASC topic 350, Intangibles - Goodwill and other The following table shows the balance and changes in goodwill for the Company's operating segments for the nine months ended September 30, 2019 (in thousands): Literacy E&E Language Consumer Language Total Balance as of January 1, 2019 Gross Goodwill $ 9,962 $ 39,277 $ 27,514 $ 76,753 Accumulated Impairment — — (27,514 ) (27,514 ) Goodwill as of January 1, 2019 $ 9,962 $ 39,277 $ — $ 49,239 Effect of change in foreign currency rate — (561 ) — (561 ) Balance as of September 30, 2019 Gross Goodwill $ 9,962 $ 38,716 $ 27,514 $ 76,192 Accumulated Impairment — — (27,514 ) (27,514 ) Goodwill as of September 30, 2019 $ 9,962 $ 38,716 $ — $ 48,678 In connection with the annual goodwill impairment test performed as of June 30, 2019, the Company performed a qualitative goodwill impairment test for its reporting units with remaining goodwill. As of June 30, 2019, the Company concluded that there were no indicators of impairment that would cause us to believe that it is more likely than not that the fair value of our reporting units with goodwill is less than the carrying value. Accordingly, a quantitative impairment test has not been performed and no goodwill impairment charges were recorded in 2019 in connection with the annual goodwill impairment test. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | 7. LEASES As discussed in Note 2 "Summary of Significant Accounting Policies," the Company adopted ASC 842 effective January 1, 2019. The Company elected the comparatives under 840 option and prior comparative information continues to be reported under the accounting standards in effect for those periods; accordingly prior comparative period information has not been restated. Under ASC 842, the Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Some leases include options to extend or terminate the lease, which are included in the lease term when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. Operating Leases The Company leases office space and parking spaces under operating lease arrangements with remaining lease terms that range from 3 to 58 months. Under ASC 842, operating lease right-of-use assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. Operating right-of-use assets are calculated as the sum of (1) initial measurement of lease liability, (2) initial direct costs, and (3) lease payments made to lessor at or before lease commencement date, less any lease incentives received. The operating right-of-use assets are classified as non-current assets. As the Company’s operating leases do not provide an implicit rate, the Company’s incremental borrowing rate is used based on the information available at the later of the date of initial application or the lease commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate was derived from the credit facility arrangement that is described in Note 8 “Borrowing Arrangements”. The majority of the Company’s operating leases are triple net leases where the Company pays a single fixed payment for rent and reimburses the lessor for the Company’s share of property taxes, insurance, and common area maintenance (“CAM”) costs. Typical CAM costs include snow removal, landscaping, janitorial services, maintenance of common areas, etc. CAM charges can be based on actual costs incurred by the landlord or an allocated portion of total CAM performed for the property. There is generally very little variability in these payments. Finance Leases (formerly referred to as capital leases) As a result of a 2014 acquisition, the Company assumed a finance lease for a building in France. Additionally, the Company occasionally enters into finance leases for office equipment. The remaining term of the Company’s finance leases range from 20 to 58 months. With the exception of the updated presentation and disclosure requirements, adoption of ASC 842 did not impact the accounting for finance leases. Finance lease right-of-use assets of $1.9 million and $2.4 million are included in “Property and Equipment” on the Company’s September 30, 2019 and December 31, 2018 balance sheets, respectively. Current finance lease liabilities of $0.5 million and $0.5 million, are included in “Other current liabilities” and non-current finance lease liabilities of $1.0 million and $1.3 million, are included in “Other long-term liabilities” on the September 30, 2019 and December 31, 2018 balance sheets, respectively. Lease amortization expense associated with the Company’s finance leases are recognized in general and administrative expense on the statement of operations. The following table summarizes supplemental statement of operations information related to operating and finance lease costs as indicated (in thousands): Statement of operations information: Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating lease cost $ 545 $ 1,604 Amortization of right-to-use assets $ 114 $ 340 Interest on lease liabilities 16 50 Finance lease cost $ 130 $ 390 The following table summarizes supplemental cash flows information related to operating and finance lease costs as indicated (in thousands): Cash flows information: Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (515 ) $ (1,575 ) Financing cash flows from finance leases $ (109 ) $ (331 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 26 $ 1,997 Finance leases $ 95 $ 95 The following table summarizes undiscounted future operating and finance lease payments as of September 30, 2019 and for the five years thereafter (in thousands): As of September 30, 2019 Operating Leases Finance Leases 2019 - remaining $ 689 $ 130 2020 1,673 519 2021 1,549 517 2022 1,597 393 2023 1,063 23 2024 38 14 Thereafter — — Total undiscounted lease payments 6,609 1,596 Less: imputed interest 607 114 Total $ 6,002 $ 1,482 The following table summarizes supplemental information related to operating and finance leases as indicated below: As of September 30, 2019 Operating Leases Finance Leases Weighted-average remaining lease term (in months) 45.0 40.0 Weighted-average discount rate 5.5 % 4.8 % Prior to January 1, 2019, the Company accounted for its operating and capital leases under the provisions of ASC topic 840, Accounting for Leases ("ASC 840"). During the three and nine months ended September 30, 2018, the Company recognized $0.6 million and $1.8 million in expense under operating leases under ASC 840, respectively. The following table summarizes future minimum operating lease and finance lease payments as of December 31, 2018 (prior to the adoption of ASC 842) and for the five years thereafter (in thousands): As of December 31, 2018 Operating Leases Finance Leases 2019 $ 2,334 $ 525 2020 1,155 520 2021 948 517 2022 977 388 2023 743 1 Thereafter — — Total minimum lease payments $ 6,157 $ 1,951 Less amount representing interest 164 Present value of net minimum lease payments $ 1,787 |
BORROWING ARRANGEMENTS
BORROWING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
BORROWING ARRANGEMENTS | 8. BORROWING ARRANGEMENTS Credit Facility On October 28, 2014, Rosetta Stone Ltd (“RSL”), a wholly owned subsidiary of parent company Rosetta Stone Inc., executed a Loan and Security Agreement with Silicon Valley Bank (“Bank”) to obtain a credit facility (the “credit facility”). Since the original date of execution, the Company and the Bank have executed several amendments to the credit facility to reflect updates to the Company's financial outlook and extend the credit facility. On March 4, 2019, the Company executed the seventh amendment to the credit facility. Under the amended agreement, the Company may borrow up to $15.0 million, including a sub-facility, which reduces available borrowings, for letters of credit in the aggregate availability amount of $4.0 million. Borrowings by RSL under the credit facility are guaranteed by the Company as the ultimate parent. The credit facility has a term that expires on April 1, 2021, during which time RSL may borrow and re-pay loan amounts and re-borrow the loan amounts subject to customary borrowing conditions. However, the Company must have less than $5.0 million in outstanding borrowings for 30 consecutive days during each twelve month period beginning as of the date of execution. Interest on borrowings accrues at the Prime Rate and must be paid quarterly. Proceeds of loans made under the credit facility may be used as working capital or to fund general business requirements. All obligations under the credit facility, including letters of credit, are secured by a security interest on substantially all of the Company’s assets including intellectual property rights and by a stock pledge by the Company of 100% of its ownership interests in U.S. subsidiaries and 66% of its ownership interests in certain foreign subsidiaries. The credit facility contains customary affirmative and negative covenants, including covenants that limit or restrict the ability to, among other things, incur additional indebtedness, dispose of assets, execute a material change in business, acquire or dispose of an entity, grant liens, make share repurchases, and make distributions, including payment of dividends. Effective as of March 4, 2019, the Company is required to maintain compliance with a minimum liquidity coverage ratio of 1.75 and minimum financial performance requirements, as defined in the credit facility. As of September 30, 2019, the Company was in compliance with all covenants. The credit facility contains customary events of default, including among others, non-payment defaults, covenant defaults, bankruptcy and insolvency defaults, and a change of control default, in each case, subject to customary exceptions. The occurrence of a default event could result in the Bank’s acceleration of repayment obligations of any loan amounts then outstanding. As of September 30, 2019, there were no borrowings outstanding. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | 9. OTHER CURRENT LIABILITIES The following table summarizes other current liabilities (in thousands): As of September 30, 2019 December 31, 2018 Accrued marketing expenses $ 3,584 $ 4,382 Accrued professional and consulting fees 1,757 1,273 Sales return reserve 358 579 Sales, withholding, and property taxes payable 3,271 3,391 Other 2,466 4,300 Total other current liabilities $ 11,436 $ 13,925 |
REVENUE AND DEFERRED REVENUE
REVENUE AND DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE AND DEFERRED REVENUE | 10. REVENUE AND DEFERRED REVENUE The opening and closing balances of the Company’s accounts receivable and deferred revenue are as follows: Accounts Receivable Deferred Revenue (current) Deferred Revenue (non-current) Opening balance as of January 1, 2019 $ 21,950 $ 113,378 $ 49,507 Increase/(decrease), net 11,143 9,725 6,222 Ending balance as of September 30, 2019 $ 33,093 $ 123,103 $ 55,729 The amount of revenue recognized in the three months ended September 30, 2019 that was included in the opening January 1, 2019 deferred revenue balance was $35.3 million. The amount of revenue recognized in the nine months ended September 30, 2019 that was included in the opening January 1, 2019 deferred revenue balance was $98.3 million. The vast majority of this revenue consists of deferred subscription revenue. The amount of revenue recognized from performance obligations satisfied in prior periods was not material. The following table sets forth deferred revenue by reportable segment which represents the Company's unfulfilled performance obligations as of September 30, 2019 and the estimated revenue expected to be recognized in the future related to these performance obligations: As of September 30, 2019 Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Literacy $ 59,548 $ 49,585 $ 9,414 $ 539 $ 10 E&E Language 62,130 40,275 9,136 2,858 9,861 Consumer Language 57,154 33,243 10,651 1,822 11,438 Total $ 178,832 $ 123,103 $ 29,201 $ 5,219 $ 21,309 In 2017, the Company entered into a series of agreements with SOURCENEXT Corporation, (“SOURCENEXT”), comprising a single performance obligation associated with the perpetual license of certain intellectual property, software, and product code for exclusive development and sale of language and education-related products in Japan. The Company estimated a 20 year period to recognize the performance obligation. As of September 30, 2019, deferred revenue associated with SOURCENEXT totaled $16.0 million, which will be recognized ratably through April 2037 and comprised the majority of the Consumer Language non-current deferred revenue. As this customer relationship progresses, the Company will prospectively reassess the recognition period as needed. See Note 16 - “Segment Information” for further information on the disaggregation of revenue, including revenue by reportable segment and geographic area. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company has been subject to various claims and legal actions in the ordinary course of its business. The Company is not currently involved in any legal proceeding the ultimate outcome of which, in its judgment based on information currently available, would have a material impact on its business, financial condition or results of operations. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
STOCK-BASED COMPENSATION | 12. STOCK-BASED COMPENSATION 2009 Omnibus Incentive Plan On February 27, 2009, the Company's Board of Directors approved the 2009 Omnibus Incentive Plan (the "2009 Plan") that provided the Company the ability to grant up to 2,437,744 of new stock incentive awards or options including Incentive and Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares, Performance based Restricted Stock, Share Awards, Phantom Stock and Cash Incentive Awards. Service, performance and market-based restricted stock awards are considered outstanding at the time of grant as the stockholder is entitled to voting rights and to receive any dividends declared subject to the loss of the right to receive accumulated dividends if the award is forfeited prior to vesting. Performance units and restricted stock units do not have voting rights. The stock incentive awards and options granted under the 2009 Plan generally expire at the earlier of a specified period after termination of service or the date specified by the Board or its designated committee at the date of grant, but not more than ten years from such grant date. On February 27, 2019, the 2009 plan expired and no additional grants will be made under this plan. Since the establishment of the 2009 Plan, the Board of Directors authorized and the Company's shareholders approved the allocation of additional shares of common stock to the 2009 Plan as follows: Authorization Dates of 2009 Plan Additions Number of Common Stock Shares Authorized to 2009 Plan February 27, 2009 2,437,744 May 26, 2011 1,000,000 May 23, 2012 1,122,930 May 23, 2013 2,317,000 May 20, 2014 500,000 June 12, 2015 1,200,000 May 27, 2017 1,900,000 2019 Omnibus Incentive Plan On May 16, 2019, the Company's stockholders and Board of Directors approved the 2019 Omnibus Incentive Plan (the "2019 Plan") that provided the Company the ability to grant up to 2,350,000 of new stock incentive awards or options including Incentive and Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares, Performance based Restricted Stock, Share Awards, Phantom Stock and Cash Incentive Awards. Service, performance and market-based restricted stock awards are considered outstanding at the time of grant as the stockholder is entitled to voting rights and to receive any dividends declared subject to the loss of the right to receive accumulated dividends if the award is forfeited prior to vesting. Performance units and restricted stock units do not have voting rights. The stock incentive awards and options granted under the 2019 Plan generally expire at the earlier of a specified period after termination of service or the date specified by the Board or its designated committee at the date of grant, but not more than ten years from such grant date. Valuation Assumptions The determination of fair value of our stock-based awards is affected by assumptions regarding subjective and complex variables. Generally, our assumptions are based on historical information and judgment is required to determine if historical trends may be indicators of future outcomes. In accordance with ASC 718, the fair value of stock-based awards to employees is • Service-Based Restricted Stock Awards, Restricted Stock Units, Performance-Based Restricted Stock Awards, and Performance Share Units: Fair value is determined based on the quoted market price of our common stock on the date of grant. • Service-Based Stock Options and Performance-Based Stock Options: Fair value is determined using the Black-Scholes pricing model, which requires the use of estimates, including the risk-free interest rate, expected volatility, expected dividends, and expected term. • Market-Based Restricted Stock Awards and Market-Based Stock Options: The fair value of the market-based awards is determined using a Monte-Carlo simulation model. The Monte Carlo valuation also estimates the number of market-based awards that would be awarded which is reflected in the fair value on the grant date. There have been no market based awards or options granted in the periods presented. For the nine months ended September 30, 2019 and September 30, 2018, the fair value of stock options granted was calculated using the following assumptions in the Black-Scholes model: Nine months ended September 30, 2019 2018 Expected stock price volatility 39.9% - 40.1% 39.0% - 39.8% Expected term of options 5.1 years 6 years Expected dividend yield — — Risk-free interest rate 1.42% - 2.16% 2.73% - 2.85% Stock-Based Compensation Expense Stock compensation expense associated with service-based equity awards is recognized in the statements of operations on a straight-line basis over the requisite service period, which is the vesting period. For equity awards granted with performance-based conditions, stock compensation expense is recognized in the statements of operations ratably for each vesting tranche based on the probability that operating performance conditions will be met and to what extent. Changes in the probability estimates associated with performance-based awards are accounted for in the period of change using a cumulative catch-up adjustment to retroactively apply the new probability estimates. In any period in which the Company determines that achievement of the performance metrics is not probable, the Company ceases recording compensation expense and all previously recognized compensation expense for the performance-based award is reversed. For equity awards granted with market-based conditions, stock compensation is recognized in the statements of operations ratably for each vesting tranche regardless of meeting or not meeting the market conditions. The following table presents stock-based compensation expense included in the related financial statement line items (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Cost of revenue $ 17 $ 15 $ 1 $ (23 ) Sales and marketing 251 312 756 548 Research & development 86 156 229 326 General and administrative 1,058 969 3,002 2,537 Total stock based compensation expense $ 1,412 $ 1,452 $ 3,988 $ 3,388 The following table presents the future stock-based compensation expense, net of forfeitures, for each equity award category as of September 30, 2019 and the weighted average period over which the expense will be recognized: Service-based Restricted Stock Awards Service-based Stock Options Restricted Stock Units Performance Stock Units Unrecognized compensation expense, net of forfeitures (in thousands) $ 2,929 $ 289 $ 399 $ 2,450 Weighted average period over which the above expense will be recognized (in years) 2.33 0.45 0.86 1.17 Service-Based Restricted Stock Awards Shares of service-based restricted stock are generally recognized as expense on a straight-line basis over the requisite service period of the awards, which is also the vesting period. Service-based restricted stock awards are granted at the discretion of the Board of Directors or the Compensation Committee (or its authorized member(s)) and generally vest over a four -year period based upon required service conditions and do not have performance or market conditions. The Company's service-based restricted stock awards are accounted for as equity awards. The grant date fair value is based on the market price of the Company's common stock at the date of grant. The Company did not grant any restricted stock prior to April 2009. The following table summarizes the Company's service-based restricted stock award activity from January 1, 2019 to September 30, 2019: Service-based Restricted Stock Awards Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested service-based awards, January 1, 2019 400,952 $ 10.72 $ 4,299,689 Service-based awards granted 166,588 15.56 Service-based awards vested (148,075 ) 11.09 Service-based awards cancelled (68,186 ) 11.25 Non-vested Service-based awards, September 30, 2019 351,279 12.76 4,483,128 The following table summarizes the Company's weighted average grant date fair value and vested fair value for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted-average grant-date fair value of service-based restricted stock awards granted $ 15.56 $ 13.87 Fair value of service-based restricted stock awards vested (in thousands) $ 4,395 $ 2,468 Performance-Based Restricted Stock Units Beginning in the first quarter of 2017, the Company began granting annual performance-based restricted stock units ("PSUs") to certain employees which will become earned or eligible to vest based on the Company's achievement of certain pre-defined key operating performance goals during a one to three -year period. The number of PSUs earned or eligible to vest following the performance period is subject to approval by the Compensation Committee of the Board of Directors. Once earned, certain PSUs are then subject to additional service and vesting requirements, while certain PSUs vest shortly after being earned. PSUs were granted at "target" (at 100% of target). Based upon actual attainment of the operating performance results relative to target, actual issuance of PSUs can be eligible for vest anywhere between a maximum of 200% and 0% of the target number of PSUs originally granted. The following table summarizes the Company's PSU activity from January 1, 2019 to September 30, 2019: Performance Stock Units Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested PSUs, January 1, 2019 659,660 $ 11.59 $ 10,818,424 PSUs granted 289,440 15.79 PSUs vested (149,882 ) 10.50 PSUs cancelled (182,533 ) 11.55 Non-vested PSUs, September 30, 2019 616,685 $ 13.84 $ 10,711,684 The following table summarizes the Company's weighted average grant date fair value and fair value of PSUs vested for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted average grant date fair value of PSUs granted $ 15.79 $ 13.90 Fair value of PSUs vested (in thousands) $ 3,255 $ 724 Service-Based Stock Options Service-based stock options are granted at the discretion of the Board of Directors or the Compensation Committee (or its authorized member(s)) and expire 10 years from the date of the grant. Service-based stock options to directors generally vest quarterly over a one year period based upon required service conditions and do not have performance or market conditions. The following table summarizes the Company's service-based stock option activity from January 1, 2019 to September 30, 2019: Service-based Options Weighted Average Exercise Price Weighted Average Contractual Life (years) Aggregate Intrinsic Value Service-based options outstanding, January 1, 2019 1,401,948 $ 9.69 6.17 $ 9,492,949 Service-based options granted 40,169 22.72 Service-based options exercised (348,970 ) 10.19 Service-based options cancelled (15,992 ) 8.19 Service-based options outstanding, September 30, 2019 1,077,155 10.04 5.80 8,240,086 Vested and expected to vest at September 30, 2019 1,074,798 10.03 5.80 8,231,058 Exercisable at September 30, 2019 987,929 9.80 5.65 $ 7,636,938 The following table summarizes the Company's weighted average grant date fair value and intrinsic value of options exercised for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted average grant date fair value of service-based stock options granted $ 9.98 $ 6.76 Intrinsic value of options exercised (in thousands) $ 7,854 $ 2,382 Restricted Stock Units Restricted stock units are granted to members of the Board of Directors as part of their compensation packages. Restricted stock units to directors convert to common stock following the separation of service with the Company. Director restricted stock units vest quarterly over a one year period from the date of grant. The Company also grants restricted stock units to international employees which typically vest over a four-year period. Restricted stock unit expense is recognized straight-line over the vesting period. The Company's restricted stock units are accounted for as equity awards. The grant date fair value is based on the market price of the Company's common stock at the date of grant. The Company did not grant any restricted stock units prior to April 2009. The following table summarizes the Company's restricted stock unit activity from January 1, 2019 to September 30, 2019: Restricted Stock Units Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Units outstanding, January 1, 2019 235,905 $ 11.17 $ 3,868,842 Units granted 28,181 24.14 Units released — — Units cancelled (761 ) 15.11 Units outstanding, September 30, 2019 263,325 12.54 4,581,855 Vested and expected to vest at September 30, 2019 261,900 12.50 4,557,056 Vested and deferred at September 30, 2019 241,799 $ 11.52 $ 4,207,303 The following table summarizes the Company's weighted average grant date fair value and fair value of units converted for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted average grant date fair value of restricted stock units granted $ 24.14 $ 16.03 Fair value of restricted stock units converted (in thousands) $ — $ 495 CEO 2016 Performance and Market Conditioned Restricted Stock Awards and Stock Options Grants On April 4, 2016, the Company named Mr. John Hass as President, CEO and Chairman of the Board. In conjunction with his appointment, the Compensation Committee approved a stock-based compensation package for Mr. Hass aimed to provide significant reward potential for achieving outstanding Company operating performance results and building stockholder value. The package was comprised of 70,423 performance-based restricted stock awards (PRSAs), 314,465 performance-based stock options (PSOs), 70,423 market-based restricted stock awards (MRSAs), and 314,465 market-based stock options (MSOs). The April 4, 2016 grant date fair values associated with these grants were $7.10, $3.24, $6.17 and $0.94, respectively. On February 20, 2017, the Compensation Committee approved 64,719 PRSAs and 144,497 PSOs as eligible for further service vesting requirements. The non-eligible 5,704 and 169,968 PRSAs and PSOs, respectively, were cancelled as of February 20, 2017. PRSAs and PSOs vested 50%, 25% and 25% on April 4, 2017, 2018 and 2019, respectively. As of September 30, 2019, all PRSAs and PSOs were vested. As of September 30, 2019, no PSOs have been exercised. On February 22, 2018, the Compensation Committee approved the maximum quantity of 140,846 MRSAs and 314,465 MSOs as eligible for further service vesting requirements. MRSAs and MSOs vest annually on a pro-rata basis over three years beginning April 4, 2018. As of September 30, 2019, 46,948 MRSAs were unvested and 104,821 MSOs were unvested. As of September 30, 2019, no MSOs have been exercised. As of September 30, 2019, future compensation cost related to the non-vested portion of the MRSAs and MSOs not yet recognized in the consolidated statement of operations was less than $0.1 million and is expected to be recognized over a weighted average period of 0.52 years. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | 13. STOCKHOLDERS' DEFICIT At September 30, 2019, the Company's Board of Directors had the authority to issue 200,000,000 shares of stock, of which 190,000,000 were designated as Common Stock, with a par value of $0.00005 per share, and 10,000,000 were designated as Preferred Stock, with a par value of $0.001 per share. At September 30, 2019, the Company had shares of common stock issued of 25,060,278 and shares of common stock outstanding of 24,060,278. In the first quarter of 2019, the Company issued 36,776 shares of unrestricted common stock in settlement of a previously accrued cash bonus liability; resulting in the reclassification of $0.6 million to additional paid-in capital On August 22, 2013, the Company’s Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $25 million of its outstanding common stock from time to time in the open market or in privately negotiated transactions depending on market conditions, other corporate considerations, debt facility covenants and other contractual limitations, and applicable legal requirements. For the year ended December 31, 2013, the Company paid $11.4 million to repurchase 1,000,000 shares at a weighted average price of $11.44 per share as part of this program. No shares have been repurchased since then. |
BASIC AND DILUTED NET LOSS PER
BASIC AND DILUTED NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED NET LOSS PER SHARE | 14. BASIC AND DILUTED NET LOSS PER SHARE Net loss per share is computed under the provisions of ASC topic 260, Earnings Per Share The following table sets forth the computation of basic and diluted net loss per common share (amounts in thousands, except per share amounts): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net loss $ (2,917 ) $ (6,489 ) $ (6,268 ) $ (17,049 ) Denominator: Basic weighted average shares 23,609 22,814 23,369 22,647 Diluted weighted average shares 23,609 22,814 23,369 22,647 Loss per share: Basic $ (0.12 ) $ (0.28 ) $ (0.27 ) $ (0.75 ) Diluted $ (0.12 ) $ (0.28 ) $ (0.27 ) $ (0.75 ) The Company calculates dilutive common stock equivalent shares using the treasury stock method. In periods where the Company has a net loss, no dilutive common stock equivalent shares are included in the calculation for diluted shares as they are considered anti-dilutive. The following table sets forth dilutive common stock equivalent shares calculated using the treasury stock method (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Stock options 688 686 752 631 Restricted stock units 257 230 244 230 Restricted stocks 488 638 547 634 Total common stock equivalent shares 1,433 1,554 1,543 1,495 Share-based awards to purchase approximately 0.1 and 0.1 million shares of common stock that had an exercise price in excess of the average market price of the common stock during the three months ended September 30, 2019 and September 30, 2018, respectively, were not included in the calculation of diluted loss per share because they were anti-dilutive. Share-based awards to purchase approximately zero and 0.2 million shares of common stock that had an exercise price in excess of the average market price of the common stock during the nine months ended September 30, 2019 and September 30, 2018, respectively, were not included in the calculation of diluted loss per share because they were anti-dilutive. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 15. INCOME TAXES In accordance with ASC topic 740, Income Taxes Income Taxes: Interim Reporting The Company accounts for uncertainty in income taxes under ASC subtopic 740-10-25, Income Taxes: Overall: Background Valuation Allowance Recorded for Deferred Tax Assets As of September 30, 2019, a valuation allowance was provided for the U.S., Hong Kong, Mexico, Spain, France, and Brazil where the Company previously determined in prior periods the deferred tax assets will not more likely than not be realized. Evaluation of the remaining jurisdictions as of September 30, 2019, resulted in the determination that no additional valuation allowances were necessary at this time. However, the Company will continue to assess the need for a valuation allowance against its deferred tax assets in the future and the valuation allowance will be adjusted accordingly, which could materially affect the Company’s financial position and results of operations. As of September 30, 2019, and December 31, 2018, the Company’s U.S. deferred tax liability was $2.3 million and $2.7 million, respectively, related to its goodwill and indefinite lived intangibles. As of September 30, 2019 the Company had foreign net deferred tax assets of $0.2 million compared to foreign net deferred tax liabilities of $0.1 million at December 31, 2018. As of September 30, 2019, and December 31, 2018, the Company had no unrecognized tax benefits. For the nine months ended September 30, 2019 the Company recorded an income tax benefit of $0.1 million. In the first quarter of 2019, the state of Virginia adopted an indefinite carry forward of net operating losses resulting in a release of the state valuation allowance and recognition of $0.6 million in state tax benefit. In the third quarter of 2019, the Company released a valuation allowance related to one of its France subsidiaries resulting in a tax benefit of $0.6 million. Almost fully offsetting this tax benefit was income tax expense related to profits of operations for foreign jurisdictions in the U.K., Germany, Canada, France and China and deferred tax expense related to the tax impact of amortization of indefinite lived intangible assets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 16. SEGMENT INFORMATION The Literacy segment derives the majority of its revenue from the sales of literacy solutions to educational institutions serving grades K through 12. The E&E Language segment derives revenue from sales of language-learning solutions to educational institutions, corporations, and government agencies worldwide. The Consumer Language segment derives the majority of its revenue from sales of language-learning solutions to individuals and retail partners. Revenue from transactions between the Company's operating segments is not material. The Company and its Chief Operating Decision Maker ("CODM") assess profitability and performance of each of its current operating segments in terms of segment contribution. Segment contribution is calculated as segment revenue less expenses directly incurred by or allocated to the segment. Direct segment expenses include materials costs, service costs, customer care and coaching costs, sales and marketing expenses, and bad debt expense. In addition to the previously referenced expenses, the Literacy segment includes direct research and development expenses and Combined Language includes shared research and development expenses, cost of revenue, and sales and marketing expenses applicable to the Consumer Language and E&E Language segments. Segment contribution excludes depreciation, amortization, stock compensation, restructuring and other related expenses. The Company does not allocate expenses beneficial to all segments, which include certain general and administrative expenses such as legal fees, payroll processing fees, accounting related expenses, lease abandonment, The E&E Language segment and Consumer Language segment are characterized as "Language" since both of these segments primarily address the language-learning market and share many of the same costs. These shared language costs are included in the "Shared Services" column of the tables presented below. General and administrative expenses directly incurred by the Language segments consist only of bad debt expense, net of recoveries. Additionally, research and development expenses are included as shared Language costs. The Company will continue to evaluate its management reporting and will update its operating and reportable segments as appropriate. Operating results by segment for the three months ended September 30, 2019 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 15,587 $ 14,074 $ 15,795 $ — $ 29,869 $ 45,456 Cost of revenue 2,519 1,644 2,272 (1 ) 3,915 6,434 Sales and marketing 8,070 6,616 9,396 33 16,045 24,115 Research and development 2,388 — — 2,971 2,971 5,359 General and administrative 523 135 34 — 169 692 Segment contribution $ 2,087 $ 5,679 $ 4,093 $ (3,003 ) $ 6,769 $ 8,856 Segment contribution margin % 13.4 % 40.4 % 25.9 % 22.7 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 2,982 Sales and marketing 585 Research and development 158 General and administrative 1,602 Subtotal 5,327 Corporate unallocated expenses, net: Unallocated general and administrative 6,393 Unallocated non-operating expense 146 Subtotal 6,539 Loss before income taxes $ (3,010 ) Operating results by segment for the three months ended September 30, 2018 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 13,215 $ 14,990 $ 14,545 $ — $ 29,535 $ 42,750 Cost of revenue 2,189 1,733 2,311 19 4,063 6,252 Sales and marketing 7,263 7,551 8,915 273 16,739 24,002 Research and development 2,218 — — 3,615 3,615 5,833 General and administrative 520 40 18 — 58 578 Segment contribution $ 1,025 $ 5,666 $ 3,301 $ (3,907 ) $ 5,060 $ 6,085 Segment contribution margin % 7.8 % 37.8 % 22.7 % 17.1 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 2,516 Sales and marketing 946 Research and development 632 General and administrative 1,468 Subtotal 5,562 Corporate unallocated expenses, net: Unallocated general and administrative 6,464 Unallocated non-operating income (40 ) Subtotal 6,424 Loss before income taxes $ (5,901 ) Operating results by segment for the nine months ended September 30, 2019 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 45,494 $ 43,019 $ 47,496 $ — $ 90,515 $ 136,009 Cost of revenue 7,381 4,811 6,498 (4 ) 11,305 18,686 Sales and marketing 22,538 20,310 28,659 92 49,061 71,599 Research and development 6,607 — — 9,982 9,982 16,589 General and administrative 1,497 264 49 — 313 1,810 Segment contribution $ 7,471 $ 17,634 $ 12,290 $ (10,070 ) $ 19,854 $ 27,325 Segment contribution margin % 16.4 % 41.0 % 25.9 % 21.9 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 8,017 Sales and marketing 2,139 Research and development 442 General and administrative 4,688 Subtotal 15,286 Corporate unallocated expenses, net: Unallocated general and administrative 19,447 Unallocated non-operating income (1,052 ) Subtotal 18,395 Loss before income taxes $ (6,356 ) Operating results by segment for the nine months ended September 30, 2018 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 38,294 $ 45,782 $ 44,984 $ — $ 90,766 $ 129,060 Cost of revenue 6,069 5,037 8,409 57 13,503 19,572 Sales and marketing 20,248 23,467 26,570 889 50,926 71,174 Research and development 5,765 — — 11,191 11,191 16,956 General and administrative 1,492 59 69 — 128 1,620 Segment contribution $ 4,720 $ 17,219 $ 9,936 $ (12,137 ) $ 15,018 $ 19,738 Segment contribution margin % 12.3 % 37.6 % 22.1 % 16.5 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 6,560 Sales and marketing 2,839 Research and development 1,834 General and administrative 4,148 Subtotal 15,381 Corporate unallocated expenses, net: Unallocated general and administrative 19,598 Unallocated non-operating expense 305 Subtotal 19,903 Loss before income taxes $ (15,546 ) Geographic Information Revenue by major geographic region is based primarily upon the geographic location of the customers who purchase the Company's products. The geographic locations of distributors and resellers who purchase and resell the Company's products may be different from the geographic locations of end customers. The information below summarizes revenue from customers by geographic area for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 United States $ 40,891 $ 37,747 $ 121,900 $ 112,471 International 4,565 5,003 14,109 16,589 Total revenue $ 45,456 $ 42,750 $ 136,009 $ 129,060 The information below summarizes long-lived assets by geographic area classified as held and used as of September 30, 2019 and December 31, 2018 (in thousands): September 30, December 31, 2019 2018 United States $ 38,270 $ 34,029 International 1,936 2,376 Total property and equipment, net $ 40,206 $ 36,405 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Rosetta Stone Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s most recent Annual Report on Form 10-K filed with the SEC on March 6, 2019. The September 30, 2019 consolidated balance sheet included herein includes account balances as of December 31, 2018 that were derived from the audited financial statements as of that date. The Consolidated Financial Statements and the Notes to the Consolidated Financial Statements do not include all disclosures required for annual financial statements and notes. As discussed in this Note 2 and Note 7, the Company adopted the new lease standard (“ASC 842”) effective January 1, 2019 using the modified retrospective approach. The Company elected the comparatives under 840 option, and as such, the comparative information has not been restated under ASC 842 and continues to be reported under the accounting standards in effect for those prior comparative periods. See the Company’s Annual Report on Form 10-K filed with the SEC on March 6, 2019 for lease policies that were in effect in prior periods before adoption of ASC 842. Except as noted above, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s statements of financial position at September 30, 2019 and December 31, 2018, the Company’s results of operations and stockholders’ equity activity for the three and nine months ended September 30, 2019 and 2018, and its cash flows for the nine months ended September 30, 2019 and September 30, 2018 have been made. The results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. All references to September 30, 2019 or to the three and nine months ended September 30, 2019 and 2018 in the notes to the consolidated financial statements are unaudited. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions. The amounts reported in the consolidated financial statements include significant estimates and assumptions that have been made, including, but not limited to, those related to revenue recognition, allowance for doubtful accounts, estimated sales returns and reserves, stock-based compensation, fair value of intangibles and goodwill, disclosure of contingent assets and liabilities, disclosure of contingent litigation, allowance for valuation of deferred tax assets, and the Company's quarterly going concern assessment. The Company bases its estimates and assumptions on historical experience and on various other judgments that are believed to be reasonable under the circumstances. The Company continuously evaluates its estimates and assumptions. Actual results may differ from these estimates and assumptions. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Adopted During the Period: During 2019, the Company adopted the following recently issued Accounting Standard Updates ("ASU"): In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Accounting Standards Not Yet Adopted: The following ASUs were recently issued but have not yet been adopted by the Company: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Revenue Recognition | Revenue Recognition Nature of Revenue: The Company accounts for revenue contracts with customers by applying the requirements of ASC topic 606, , ("ASC 606"), which includes the following steps: • Identification of the contract, or contracts with a customer. • Identification of the performance obligations in the contract. • Determination of the transaction price. • Allocation of the transaction price to the performance obligations in the contract. • Recognition of the revenue when, or as, the Company satisfies a performance obligation. The Company's primary sources of revenue are web-based software subscriptions, mobile applications, online services, and professional services. Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration expected to be received in exchange for those goods or services. Revenue is recognized net of allowances for returns. Revenue is also recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The majority of our revenue is recognized from non-cancellable web-based software subscriptions, online services, professional services, and mobile applications. Subscription revenue is generated from contracts with customers that provide access to hosted software over a contract term without the customer taking possession of the software. Subscription revenue is recognized ratably over the contract period as the performance obligation is satisfied. Subscription revenue is generated by all three reportable segments and range from short-term to multi-year contracts. Online services are typically sold in short-term service periods and include dedicated online conversational coaching services and access to online communities of language learners. Professional services include implementation services. Online services revenue and professional services revenue are recognized as the services are provided. Expired services are forfeited and revenue is recognized upon expiry. Performance Obligations: A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are satisfied at a point in time or over time as delivery occurs or as work progresses. Significant Judgments: Some of the Company’s contracts with customers include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately, versus together, requires significant judgment. This includes determining whether distinct services are part of a series of distinct services that are substantially the same. When subscription services are sold with professional services, judgment is required to determine whether the professional services are distinct and can be accounted for separately. In the E&E Language segment, the Company has concluded that each promised service within the language-learning subscription is delivered concurrently with all other promised services over the contract term and, as such, concluded that these promises are a single performance obligation that includes a series of distinct services that have the same pattern of transfer to the customer. When there are multiple performance obligations, revenue is allocated to each performance obligation based on its relative standalone selling price (“SSP”). Judgment is required to determine the SSP for each distinct performance obligation where SSP is not directly observable, such as when the product or service is not sold separately, SSP is determined using internally published price lists which include suggested sales prices for each performance obligation based on the type of client and volume purchased. These price lists are derived from past experience and from the expectation of obtaining a reasonable margin based on the cost to fulfill each performance obligation. Subscription revenue is recognized ratably over the contract period as the performance obligation is satisfied. Certain Consumer Language offerings have contracts with no fixed duration and are marketed as lifetime subscriptions. For these lifetime subscriptions, the Company estimates the expected contract period as the greater of the typical customer usage period or the longest fixed-period duration subscription that is currently marketed. The Company's current expected contract period for lifetime subscriptions is 24 months. Certain Consumer Language offerings are sold with a right of return and the Company may provide other credits or incentives. These rights are accounted for as variable consideration when estimating the amount of revenue to recognize by utilizing the expected value method. Returns and credits are estimated at contract inception based on historical return rates, estimated channel inventory levels, the timing of new product introductions and other factors. Reserves for returns and credits are updated at the end of each reporting period as additional information becomes available. The Company distributes its products and services both directly to the end customer and indirectly through resellers. Resellers earn commissions generally calculated as a fixed percentage of the gross sale amount to the end customer. The Company evaluates each of its reseller relationships to determine whether it is the principal (where revenue is recognized at the gross amount) or agent (where revenue is recognized net of the reseller commission). In making this determination the Company evaluates a variety of factors including the amount of control the Company is able to exercise over the transactions. Contract Balances: The timing of revenue recognition, invoicing, and cash collection results in accounts receivable and deferred revenue in the consolidated balance sheets. Payment from customers is often received in advance of services being provided, resulting in deferred revenue. Accounts receivable is recorded when there is an executed customer contract and the right to the consideration becomes unconditional. Contract assets such as unbilled receivables are not material. The allowance for doubtful accounts reflects the best estimate of probable losses inherent in the accounts receivable balance. The Company establishes an allowance for doubtful accounts based on specific risks identified, historical experience, and other currently available evidence. Payment terms and conditions vary by contract type and customer. For the E&E Language and Literacy segments, payment terms generally range from 30 to 90 days. In the Consumer Language segment, resellers and mobile app stores are generally granted payment terms between 30 to 45 days. Within Consumer Language, sales to end customers via the Rosetta Stone ecommerce website are done by credit card, which generally are settled within 7-10 days and may be made in installments. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services and not to provide customers with financing. Deferred revenue is comprised mainly of unearned revenue related to subscription services which is recognized ratably over the subscription period. Deferred revenue also includes payments for professional services and online services to be performed in the future which are earned as revenue when the service is provided. Our practice is to ship our products promptly upon receipt of purchase orders from customers; consequently, contract backlog is not material. See Note 10 "Revenue and Deferred Revenue" for additional disclosures. Assets Recognized from Costs to Obtain a Contract with a Customer: The Company recognizes an asset for the incremental costs of obtaining a contract with a customer, which primarily represents sales commissions paid when a customer contract is either recorded as revenue or deferred revenue. Sales commissions paid to obtain non-cancellable subscription contracts are deferred and amortized in proportion to the period over which the revenue is recognized from the related contract. Deferred sales commissions are amortized to sales and marketing expense on the consolidated statements of operations. Deferred sales commissions are classified as non-current unless the associated amortization period is one year or less. |
Income Taxes and Deferred Tax Valuation Allowance | Income Taxes The Company accounts for income taxes in accordance with ASC topic 740, Income Taxes Deferred Tax Valuation Allowance The Company has recorded a valuation allowance offsetting certain of its deferred tax assets as of September 30, 2019. When measuring the need for a valuation allowance on a jurisdiction by jurisdiction basis, the Company assesses both positive and negative evidence regarding whether these deferred tax assets are realizable. In determining deferred tax assets and valuation allowances, the Company is required to make judgments and estimates related to projections of profitability, the timing and extent of the utilization of temporary differences, net operating loss carryforwards, tax credits, applicable tax rates, transfer pricing methodologies and tax planning strategies. The valuation allowance is reviewed quarterly and is maintained until sufficient positive evidence exists to support a reversal. Because evidence such as the Company’s operating results during the most recent three-year period is afforded more weight than forecasted results for future periods, the Company’s cumulative loss in certain jurisdictions represents significant negative evidence in the determination of whether deferred tax assets are more likely than not to be utilized in certain jurisdictions. The Company will release this valuation allowance when it is determined that it is more likely than not that its deferred tax assets will be realized. Any future release of valuation allowance may be recorded as a tax benefit increasing net income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company values its assets and liabilities using the methods of fair value as described in ASC topic 820, Fair Value Measurements, Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with ASC topic 718, Compensation—Stock Compensation Stock options are granted to directors with a 10 -year contractual term. The Company estimates the expected term of stock options using historical grant and exercise information. The Company uses its own historical stock price data to estimate its forfeiture rate and expected volatility over the most recent period commensurate with the estimated expected term of the awards. For the risk-free interest rate, the Company uses a U.S. Treasury Bond rate consistent with the estimated expected term of the option award. The Company’s restricted stock and restricted stock unit grants are accounted for as equity awards. Stock compensation expense associated with service-based equity awards is recognized in the statements of operations on a straight-line basis over the requisite service period, which is the vesting period. For equity awards granted with performance-based conditions, stock compensation expense is recognized in the statements of operations ratably for each vesting tranche based on the probability that operating performance conditions will be met and to what extent. Changes in the probability estimates associated with performance-based awards will be accounted for in the period of change using a cumulative catch-up adjustment to retroactively apply the new probability estimates. In any period in which the Company determines that achievement of the performance metrics is not probable, the Company ceases recording compensation expense and all previously recognized compensation expense for the performance-based award is reversed. For equity awards granted with market-based conditions, stock compensation expense is recognized in the statements of operations ratably for each vesting tranche regardless of meeting or not meeting the market conditions. See Note 12 "Stock-Based Compensation" for additional disclosures. |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Net loss per share is computed under the provisions of ASC topic 260, Earnings Per Share. Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares are included in the diluted computation when dilutive. Potentially dilutive shares are computed using the treasury stock method and primarily consist of shares issuable upon the exercise of stock options, restricted stock awards, restricted stock units and conversion of shares of preferred stock. Common stock equivalent shares are excluded from the diluted computation if their effect is anti-dilutive. When there is a net loss, there is a presumption that there are no dilutive shares as these would be anti-dilutive. See Note 14 "Basic and Diluted Net Loss Per Share" for additional disclosures. |
Foreign Currency Transactions and Translations | Foreign Currency Translation and Transactions The functional currency of the Company's foreign subsidiaries is their local currency. Accordingly, assets and liabilities of the foreign subsidiaries are translated into U.S. dollars at exchange rates in effect on the balance sheet date. Income and expense items are translated at average rates for the period. Translation adjustments are recorded as a component of accumulated other comprehensive loss in stockholders' deficit. Cash flows of consolidated foreign subsidiaries, whose functional currency is their local currency, are translated to U.S. dollars using average exchange rates for the period. The Company reports the effect of exchange rate changes on cash balances held in foreign currencies as a separate item in the reconciliation of the changes in cash, cash equivalents and restricted cash during the period. The following table presents the effect of exchange rate changes on total comprehensive loss (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net loss $ (2,917 ) $ (6,489 ) $ (6,268 ) $ (17,049 ) Foreign currency translation loss (371 ) (144 ) (423 ) (225 ) Comprehensive loss $ (3,288 ) $ (6,633 ) $ (6,691 ) $ (17,274 ) |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and other comprehensive income or loss. Other comprehensive income or loss refers to revenues, expenses, gains, and losses that are not included in net loss, but rather are recorded directly in stockholders' deficit. For the three and nine months ended September 30, 2019 and 2018, the Company's comprehensive loss consisted of net loss and foreign currency translation losses. The other comprehensive loss presented in the consolidated financial statements and the notes are presented net of tax. There has been no tax expense or benefit associated with the components of other comprehensive loss due to the presence of a full valuation allowance for each of the three and nine months ended September 30, 2019 and 2018. |
Advertising Costs | Advertising Costs Costs for advertising are expensed as incurred. Advertising expense consisted of the following (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Advertising costs $ 5,534 $ 5,578 $ 16,732 $ 17,272 |
Going Concern Assessment | Going Concern Assessment As part of its internal control framework, the Company routinely performs a quarterly going concern assessment in accordance with ASC sub-topic 205-40, Presentation of Financial Statements - Going Concern The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Management has evaluated whether relevant conditions or events, considered in the aggregate, indicate that there is substantial doubt about the Company's ability to continue as a going concern. Substantial doubt exists when conditions and events, considered in the aggregate, indicate it is probable that the Company will be unable to meet its obligations as they become due within one year after the financial statement issuance date. The assessment is based on the relevant conditions that are known or reasonably knowable as of November 6, 2019. The assessment of the Company's ability to meet its future obligations is inherently judgmental, subjective and susceptible to change. The inputs that are considered important in the Company's going concern analysis, include, but are not limited to, the Company's 2019 cash flow forecast, 2019 operating budget, and long-term plan that extends beyond 2019. These inputs consider information including, but not limited to, the Company’s financial condition, liquidity sources, obligations due within one year after the financial statement issuance date, funds necessary to maintain operations, and financial conditions, including negative financial trends or other indicators of possible financial difficulty. The Company has considered both quantitative and qualitative factors as part of the assessment that are known or reasonably knowable as of November 6, 2019, and concluded that conditions and events considered in the aggregate, do not indicate that it is probable that the Company will be unable to meet obligations as they become due through the one year period following the financial statement issuance date. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Comprehensive Loss | The following table presents the effect of exchange rate changes on total comprehensive loss (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net loss $ (2,917 ) $ (6,489 ) $ (6,268 ) $ (17,049 ) Foreign currency translation loss (371 ) (144 ) (423 ) (225 ) Comprehensive loss $ (3,288 ) $ (6,633 ) $ (6,691 ) $ (17,274 ) |
Schedule of Advertising Costs | Costs for advertising are expensed as incurred. Advertising expense consisted of the following (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Advertising costs $ 5,534 $ 5,578 $ 16,732 $ 17,272 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following (in thousands): As of September 30, 2019 December 31, 2018 Raw materials $ 785 $ 797 Finished goods 738 136 Total inventory $ 1,523 $ 933 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Capitalized Internal Use Software Costs | The Company capitalizes certain internal use software costs into property and equipment. Capitalized internal use software costs consisted of the following (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Capitalized internal use software $ 3,625 $ 3,724 $ 13,063 $ 11,556 |
Schedule of Depreciation and Amortization Expense Associated with Property and Equipment | Depreciation and amortization expense associated with property and equipment consisted of the following (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Cost of revenue $ 2,817 $ 2,361 $ 7,576 $ 6,129 Sales and marketing 177 177 536 589 Research and development 16 2 33 6 General and administrative 547 495 1,628 1,600 Total depreciation expense $ 3,557 $ 3,035 $ 9,773 $ 8,324 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets Net Excluding Goodwill [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following items as of the dates indicated (in thousands): Trade name / trademark * Core technology Customer relationships Patents and Other Total Gross Carrying Amount $ 12,322 $ 13,432 $ 25,689 $ 312 $ 51,755 Accumulated Amortization/Impairment (1,715 ) (12,505 ) (21,380 ) (305 ) (35,905 ) Balance as of January 1, 2019 $ 10,607 $ 927 $ 4,309 $ 7 $ 15,850 Gross Carrying Amount $ 12,300 $ 13,279 $ 25,528 $ 312 $ 51,419 Accumulated Amortization/Impairment (1,693 ) (12,790 ) (21,925 ) (312 ) (36,720 ) Balance as of September 30, 2019 $ 10,607 $ 489 $ 3,603 $ — $ 14,699 * Included in the tradename/trademark line above is the Rosetta Stone tradename, which is the Company's only indefinite-lived intangible asset. As of January 1, 2019 |
Schedule of Intangible Asset Amortization Expense | The following table presents amortization of intangible assets included in the related financial statement line items during the respective periods (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Cost of revenue $ 146 $ 146 $ 439 $ 439 Sales and marketing 235 437 705 1,393 Research and development — 183 7 735 General and administrative — — — — Total intangible amortization expense $ 381 $ 766 $ 1,151 $ 2,567 |
Summary of the Estimated Future Amortization Expense | The following table summarizes the estimated future amortization expense related to intangible assets for the remaining months of 2019 and years thereafter (in thousands): As of September 30, 2019 2019 - remaining $ 382 2020 1,282 2021 940 2022 940 2023 548 Thereafter — Total $ 4,092 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of the Balance and Changes in Goodwill by Operating Segment | The following table shows the balance and changes in goodwill for the Company's operating segments for the nine months ended September 30, 2019 (in thousands): Literacy E&E Language Consumer Language Total Balance as of January 1, 2019 Gross Goodwill $ 9,962 $ 39,277 $ 27,514 $ 76,753 Accumulated Impairment — — (27,514 ) (27,514 ) Goodwill as of January 1, 2019 $ 9,962 $ 39,277 $ — $ 49,239 Effect of change in foreign currency rate — (561 ) — (561 ) Balance as of September 30, 2019 Gross Goodwill $ 9,962 $ 38,716 $ 27,514 $ 76,192 Accumulated Impairment — — (27,514 ) (27,514 ) Goodwill as of September 30, 2019 $ 9,962 $ 38,716 $ — $ 48,678 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Supplemental Statement of Operations Information Related to Operating and Finance Lease Costs | The following table summarizes supplemental statement of operations information related to operating and finance lease costs as indicated (in thousands): Statement of operations information: Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating lease cost $ 545 $ 1,604 Amortization of right-to-use assets $ 114 $ 340 Interest on lease liabilities 16 50 Finance lease cost $ 130 $ 390 |
Summary of Supplemental Cash Flows Information Related to Operating and Finance Lease Costs | The following table summarizes supplemental cash flows information related to operating and finance lease costs as indicated (in thousands): Cash flows information: Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (515 ) $ (1,575 ) Financing cash flows from finance leases $ (109 ) $ (331 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 26 $ 1,997 Finance leases $ 95 $ 95 |
Summary of Undiscounted Future Operating and Finance Lease Payments | The following table summarizes undiscounted future operating and finance lease payments as of September 30, 2019 and for the five years thereafter (in thousands): As of September 30, 2019 Operating Leases Finance Leases 2019 - remaining $ 689 $ 130 2020 1,673 519 2021 1,549 517 2022 1,597 393 2023 1,063 23 2024 38 14 Thereafter — — Total undiscounted lease payments 6,609 1,596 Less: imputed interest 607 114 Total $ 6,002 $ 1,482 |
Summary of Supplemental Information Related to Operating and Finance Leases | The following table summarizes supplemental information related to operating and finance leases as indicated below: As of September 30, 2019 Operating Leases Finance Leases Weighted-average remaining lease term (in months) 45.0 40.0 Weighted-average discount rate 5.5 % 4.8 % |
Summary of Future Minimum Operating Lease and Finance Lease Payments (Prior to Adoption of ASC 842) | The following table summarizes future minimum operating lease and finance lease payments as of December 31, 2018 (prior to the adoption of ASC 842) and for the five years thereafter (in thousands): As of December 31, 2018 Operating Leases Finance Leases 2019 $ 2,334 $ 525 2020 1,155 520 2021 948 517 2022 977 388 2023 743 1 Thereafter — — Total minimum lease payments $ 6,157 $ 1,951 Less amount representing interest 164 Present value of net minimum lease payments $ 1,787 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Current Liabilities | The following table summarizes other current liabilities (in thousands): As of September 30, 2019 December 31, 2018 Accrued marketing expenses $ 3,584 $ 4,382 Accrued professional and consulting fees 1,757 1,273 Sales return reserve 358 579 Sales, withholding, and property taxes payable 3,271 3,391 Other 2,466 4,300 Total other current liabilities $ 11,436 $ 13,925 |
REVENUE AND DEFERRED REVENUE (T
REVENUE AND DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The opening and closing balances of the Company’s accounts receivable and deferred revenue are as follows: Accounts Receivable Deferred Revenue (current) Deferred Revenue (non-current) Opening balance as of January 1, 2019 $ 21,950 $ 113,378 $ 49,507 Increase/(decrease), net 11,143 9,725 6,222 Ending balance as of September 30, 2019 $ 33,093 $ 123,103 $ 55,729 The following table sets forth deferred revenue by reportable segment which represents the Company's unfulfilled performance obligations as of September 30, 2019 and the estimated revenue expected to be recognized in the future related to these performance obligations: As of September 30, 2019 Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Literacy $ 59,548 $ 49,585 $ 9,414 $ 539 $ 10 E&E Language 62,130 40,275 9,136 2,858 9,861 Consumer Language 57,154 33,243 10,651 1,822 11,438 Total $ 178,832 $ 123,103 $ 29,201 $ 5,219 $ 21,309 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Since the establishment of the 2009 Plan, the Board of Directors authorized and the Company's shareholders approved the allocation of additional shares of common stock to the 2009 Plan as follows: Authorization Dates of 2009 Plan Additions Number of Common Stock Shares Authorized to 2009 Plan February 27, 2009 2,437,744 May 26, 2011 1,000,000 May 23, 2012 1,122,930 May 23, 2013 2,317,000 May 20, 2014 500,000 June 12, 2015 1,200,000 May 27, 2017 1,900,000 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | For the nine months ended September 30, 2019 and September 30, 2018, the fair value of stock options granted was calculated using the following assumptions in the Black-Scholes model: Nine months ended September 30, 2019 2018 Expected stock price volatility 39.9% - 40.1% 39.0% - 39.8% Expected term of options 5.1 years 6 years Expected dividend yield — — Risk-free interest rate 1.42% - 2.16% 2.73% - 2.85% |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table presents stock-based compensation expense included in the related financial statement line items (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Cost of revenue $ 17 $ 15 $ 1 $ (23 ) Sales and marketing 251 312 756 548 Research & development 86 156 229 326 General and administrative 1,058 969 3,002 2,537 Total stock based compensation expense $ 1,412 $ 1,452 $ 3,988 $ 3,388 |
Schedule of Future Stock-based Compensation Expense, Net of Forfeitures | The following table presents the future stock-based compensation expense, net of forfeitures, for each equity award category as of September 30, 2019 and the weighted average period over which the expense will be recognized: Service-based Restricted Stock Awards Service-based Stock Options Restricted Stock Units Performance Stock Units Unrecognized compensation expense, net of forfeitures (in thousands) $ 2,929 $ 289 $ 399 $ 2,450 Weighted average period over which the above expense will be recognized (in years) 2.33 0.45 0.86 1.17 |
Schedule of Nonvested Share Activity | The following table summarizes the Company's service-based restricted stock award activity from January 1, 2019 to September 30, 2019: Service-based Restricted Stock Awards Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested service-based awards, January 1, 2019 400,952 $ 10.72 $ 4,299,689 Service-based awards granted 166,588 15.56 Service-based awards vested (148,075 ) 11.09 Service-based awards cancelled (68,186 ) 11.25 Non-vested Service-based awards, September 30, 2019 351,279 12.76 4,483,128 |
Summary of Weighted Average Grant Date and Vested Fair Value | The following table summarizes the Company's weighted average grant date fair value and vested fair value for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted-average grant-date fair value of service-based restricted stock awards granted $ 15.56 $ 13.87 Fair value of service-based restricted stock awards vested (in thousands) $ 4,395 $ 2,468 |
Nonvested Restricted Stock Shares Activity | The following table summarizes the Company's PSU activity from January 1, 2019 to September 30, 2019: Performance Stock Units Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested PSUs, January 1, 2019 659,660 $ 11.59 $ 10,818,424 PSUs granted 289,440 15.79 PSUs vested (149,882 ) 10.50 PSUs cancelled (182,533 ) 11.55 Non-vested PSUs, September 30, 2019 616,685 $ 13.84 $ 10,711,684 |
Summary of Weighted Average Grant Date Fair Value and Fair Value of Performance Stock Unit | The following table summarizes the Company's weighted average grant date fair value and fair value of PSUs vested for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted average grant date fair value of PSUs granted $ 15.79 $ 13.90 Fair value of PSUs vested (in thousands) $ 3,255 $ 724 |
Schedule of Stock Option Activity | The following table summarizes the Company's service-based stock option activity from January 1, 2019 to September 30, 2019: Service-based Options Weighted Average Exercise Price Weighted Average Contractual Life (years) Aggregate Intrinsic Value Service-based options outstanding, January 1, 2019 1,401,948 $ 9.69 6.17 $ 9,492,949 Service-based options granted 40,169 22.72 Service-based options exercised (348,970 ) 10.19 Service-based options cancelled (15,992 ) 8.19 Service-based options outstanding, September 30, 2019 1,077,155 10.04 5.80 8,240,086 Vested and expected to vest at September 30, 2019 1,074,798 10.03 5.80 8,231,058 Exercisable at September 30, 2019 987,929 9.80 5.65 $ 7,636,938 |
Summary of Weighted Average Grant Date Fair Value and Intrinsic Value of Options Exercises | The following table summarizes the Company's weighted average grant date fair value and intrinsic value of options exercised for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted average grant date fair value of service-based stock options granted $ 9.98 $ 6.76 Intrinsic value of options exercised (in thousands) $ 7,854 $ 2,382 |
Schedule of Restricted Stock Units Award Activity | The following table summarizes the Company's restricted stock unit activity from January 1, 2019 to September 30, 2019: Restricted Stock Units Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Units outstanding, January 1, 2019 235,905 $ 11.17 $ 3,868,842 Units granted 28,181 24.14 Units released — — Units cancelled (761 ) 15.11 Units outstanding, September 30, 2019 263,325 12.54 4,581,855 Vested and expected to vest at September 30, 2019 261,900 12.50 4,557,056 Vested and deferred at September 30, 2019 241,799 $ 11.52 $ 4,207,303 |
Summary of Weighted Average Grant Date Fair value | The following table summarizes the Company's weighted average grant date fair value and fair value of units converted for the nine months ended September 30, 2019 and September 30, 2018: Nine months ended September 30, 2019 2018 Weighted average grant date fair value of restricted stock units granted $ 24.14 $ 16.03 Fair value of restricted stock units converted (in thousands) $ — $ 495 |
BASIC AND DILUTED NET LOSS PE_2
BASIC AND DILUTED NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Common Share | The following table sets forth the computation of basic and diluted net loss per common share (amounts in thousands, except per share amounts): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net loss $ (2,917 ) $ (6,489 ) $ (6,268 ) $ (17,049 ) Denominator: Basic weighted average shares 23,609 22,814 23,369 22,647 Diluted weighted average shares 23,609 22,814 23,369 22,647 Loss per share: Basic $ (0.12 ) $ (0.28 ) $ (0.27 ) $ (0.75 ) Diluted $ (0.12 ) $ (0.28 ) $ (0.27 ) $ (0.75 ) |
Schedule of Weighted Average Number of Shares | The following table sets forth dilutive common stock equivalent shares calculated using the treasury stock method (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Stock options 688 686 752 631 Restricted stock units 257 230 244 230 Restricted stocks 488 638 547 634 Total common stock equivalent shares 1,433 1,554 1,543 1,495 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results By Segment | Operating results by segment for the three months ended September 30, 2019 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 15,587 $ 14,074 $ 15,795 $ — $ 29,869 $ 45,456 Cost of revenue 2,519 1,644 2,272 (1 ) 3,915 6,434 Sales and marketing 8,070 6,616 9,396 33 16,045 24,115 Research and development 2,388 — — 2,971 2,971 5,359 General and administrative 523 135 34 — 169 692 Segment contribution $ 2,087 $ 5,679 $ 4,093 $ (3,003 ) $ 6,769 $ 8,856 Segment contribution margin % 13.4 % 40.4 % 25.9 % 22.7 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 2,982 Sales and marketing 585 Research and development 158 General and administrative 1,602 Subtotal 5,327 Corporate unallocated expenses, net: Unallocated general and administrative 6,393 Unallocated non-operating expense 146 Subtotal 6,539 Loss before income taxes $ (3,010 ) Operating results by segment for the three months ended September 30, 2018 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 13,215 $ 14,990 $ 14,545 $ — $ 29,535 $ 42,750 Cost of revenue 2,189 1,733 2,311 19 4,063 6,252 Sales and marketing 7,263 7,551 8,915 273 16,739 24,002 Research and development 2,218 — — 3,615 3,615 5,833 General and administrative 520 40 18 — 58 578 Segment contribution $ 1,025 $ 5,666 $ 3,301 $ (3,907 ) $ 5,060 $ 6,085 Segment contribution margin % 7.8 % 37.8 % 22.7 % 17.1 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 2,516 Sales and marketing 946 Research and development 632 General and administrative 1,468 Subtotal 5,562 Corporate unallocated expenses, net: Unallocated general and administrative 6,464 Unallocated non-operating income (40 ) Subtotal 6,424 Loss before income taxes $ (5,901 ) Operating results by segment for the nine months ended September 30, 2019 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 45,494 $ 43,019 $ 47,496 $ — $ 90,515 $ 136,009 Cost of revenue 7,381 4,811 6,498 (4 ) 11,305 18,686 Sales and marketing 22,538 20,310 28,659 92 49,061 71,599 Research and development 6,607 — — 9,982 9,982 16,589 General and administrative 1,497 264 49 — 313 1,810 Segment contribution $ 7,471 $ 17,634 $ 12,290 $ (10,070 ) $ 19,854 $ 27,325 Segment contribution margin % 16.4 % 41.0 % 25.9 % 21.9 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 8,017 Sales and marketing 2,139 Research and development 442 General and administrative 4,688 Subtotal 15,286 Corporate unallocated expenses, net: Unallocated general and administrative 19,447 Unallocated non-operating income (1,052 ) Subtotal 18,395 Loss before income taxes $ (6,356 ) Operating results by segment for the nine months ended September 30, 2018 were as follows (in thousands): Language Literacy Segment E&E Language Segment Consumer Language Segment Shared Services Combined Language Total Company Revenue $ 38,294 $ 45,782 $ 44,984 $ — $ 90,766 $ 129,060 Cost of revenue 6,069 5,037 8,409 57 13,503 19,572 Sales and marketing 20,248 23,467 26,570 889 50,926 71,174 Research and development 5,765 — — 11,191 11,191 16,956 General and administrative 1,492 59 69 — 128 1,620 Segment contribution $ 4,720 $ 17,219 $ 9,936 $ (12,137 ) $ 15,018 $ 19,738 Segment contribution margin % 12.3 % 37.6 % 22.1 % 16.5 % Unallocated depreciation and amortization, stock compensation, and other expenses (net) included in: Cost of revenue 6,560 Sales and marketing 2,839 Research and development 1,834 General and administrative 4,148 Subtotal 15,381 Corporate unallocated expenses, net: Unallocated general and administrative 19,598 Unallocated non-operating expense 305 Subtotal 19,903 Loss before income taxes $ (15,546 ) |
Summary of Revenue From Customers by Geographic Area | The information below summarizes revenue from customers by geographic area for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 United States $ 40,891 $ 37,747 $ 121,900 $ 112,471 International 4,565 5,003 14,109 16,589 Total revenue $ 45,456 $ 42,750 $ 136,009 $ 129,060 |
Summary of Long-Lived Assets by Geographic Area | The information below summarizes long-lived assets by geographic area classified as held and used as of September 30, 2019 and December 31, 2018 (in thousands): September 30, December 31, 2019 2018 United States $ 38,270 $ 34,029 International 1,936 2,376 Total property and equipment, net $ 40,206 $ 36,405 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | |
Revenue Recognition Arrangements [Line Items] | |||||
Operating lease right-of-use assets | $ 6,078 | $ 6,078 | |||
Total operating lease liabilities | 6,002 | $ 6,002 | |||
Number Of Operating Segments | Segment | 3 | ||||
Stock options granted to directors, contractual term | 10 years | ||||
Other comprehensive income (loss), tax | $ 0 | $ 0 | $ 0 | $ 0 | |
Minimum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer credit card settlement period | 7 days | ||||
Maximum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer credit card settlement period | 10 days | ||||
Consumer Language | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 24 months | ||||
Consumer Language | Minimum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer payment terms | 30 days | ||||
Consumer Language | Maximum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer payment terms | 45 days | ||||
E&E Language | Minimum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer payment terms | 30 days | ||||
E&E Language | Maximum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer payment terms | 90 days | ||||
Literacy | Minimum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer payment terms | 30 days | ||||
Literacy | Maximum | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Contract with customer payment terms | 90 days | ||||
ASU 2016-02 | |||||
Revenue Recognition Arrangements [Line Items] | |||||
Operating lease right-of-use assets | $ 5,300 | ||||
Total operating lease liabilities | $ 5,200 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||||||
Net loss | $ (2,917) | $ (2,807) | $ (544) | $ (6,489) | $ (4,158) | $ (6,402) | $ (6,268) | $ (17,049) |
Foreign currency translation loss | (371) | (144) | (423) | (225) | ||||
Comprehensive loss | $ (3,288) | $ (6,633) | $ (6,691) | $ (17,274) |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Advertising Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Advertising costs | $ 5,534 | $ 5,578 | $ 16,732 | $ 17,272 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 785 | $ 797 |
Finished goods | 738 | 136 |
Total inventory | $ 1,523 | $ 933 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Capitalized Internal Use Software Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | ||||
Capitalized internal use software | $ 3,625 | $ 3,724 | $ 13,063 | $ 11,556 |
PROPERTY AND EQUIPMENT - Sche_2
PROPERTY AND EQUIPMENT - Schedule of Depreciation and Amortization Expense Associated with Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | $ 10,924 | $ 10,891 | ||
Property and equipment | ||||
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | $ 3,557 | $ 3,035 | 9,773 | 8,324 |
Property and equipment | Cost of revenue | ||||
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | 2,817 | 2,361 | 7,576 | 6,129 |
Property and equipment | Sales and marketing | ||||
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | 177 | 177 | 536 | 589 |
Property and equipment | Research and development | ||||
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | 16 | 2 | 33 | 6 |
Property and equipment | General and administrative | ||||
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | $ 547 | $ 495 | $ 1,628 | $ 1,600 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite and indefinite lived intangible assets | $ 51,419 | $ 51,755 | |
Accumulated Amortization/Impairment | (36,720) | (35,905) | |
Total | 14,699 | 15,850 | $ 15,850 |
Trade name / trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite and indefinite lived intangible assets | 12,300 | 12,322 | |
Accumulated Amortization/Impairment | (1,693) | (1,715) | |
Total | 10,607 | 10,607 | |
Core technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite lived intangible assets | 13,279 | 13,432 | |
Accumulated Amortization/Impairment | (12,790) | (12,505) | |
Total | 489 | 927 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite lived intangible assets | 25,528 | 25,689 | |
Accumulated Amortization/Impairment | (21,925) | (21,380) | |
Total | 3,603 | 4,309 | |
Patents and Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite lived intangible assets | 312 | 312 | |
Accumulated Amortization/Impairment | (312) | (305) | |
Total | 7 | ||
Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets (excluding goodwill) | $ 10,600 | $ 10,600 |
INTANGIBLE ASSETS - Intangible
INTANGIBLE ASSETS - Intangible Assets Amortization Expense for Long-lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible amortization expense | $ 381 | $ 766 | $ 1,151 | $ 2,567 |
Cost of revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible amortization expense | 146 | 146 | 439 | 439 |
Sales and marketing | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible amortization expense | $ 235 | 437 | 705 | 1,393 |
Research and development | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible amortization expense | $ 183 | $ 7 | $ 735 |
INTANGIBLE ASSETS - Future Amor
INTANGIBLE ASSETS - Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Summary of the estimated future amortization expense related to intangible assets | |
2019 - remaining | $ 382 |
2020 | 1,282 |
2021 | 940 |
2022 | 940 |
2023 | 548 |
Total | $ 4,092 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Intangible Assets Net Excluding Goodwill [Abstract] | |
Impairment all other long-lived intangible assets | $ 0 |
Impairment indefinite-lived intangible assets | $ 0 |
GOODWILL - Schedule of Goodwill
GOODWILL - Schedule of Goodwill Balance and Changes (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Line Items] | |
Gross Goodwill, beginning balance | $ 76,753 |
Accumulated Impairment, beginning balance | (27,514) |
Goodwill, beginning balance | 49,239 |
Effect of change in foreign currency rate | (561) |
Gross Goodwill, ending balance | 76,192 |
Accumulated Impairment, ending balance | (27,514) |
Goodwill, ending balance | 48,678 |
Literacy | |
Goodwill [Line Items] | |
Gross Goodwill, beginning balance | 9,962 |
Goodwill, beginning balance | 9,962 |
Gross Goodwill, ending balance | 9,962 |
Goodwill, ending balance | 9,962 |
E&E Language | |
Goodwill [Line Items] | |
Gross Goodwill, beginning balance | 39,277 |
Goodwill, beginning balance | 39,277 |
Effect of change in foreign currency rate | (561) |
Gross Goodwill, ending balance | 38,716 |
Goodwill, ending balance | 38,716 |
Consumer Language | |
Goodwill [Line Items] | |
Gross Goodwill, beginning balance | 27,514 |
Accumulated Impairment, beginning balance | (27,514) |
Gross Goodwill, ending balance | 27,514 |
Accumulated Impairment, ending balance | $ (27,514) |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, Impairment | $ 0 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Lessee Lease Description [Line Items] | ||||
Finance lease right-of-use assets | $ 1.9 | $ 2.4 | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | us-gaap:PropertyPlantAndEquipmentNet | ||
Current finance lease liabilities | $ 0.5 | $ 0.5 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent | ||
Non-current finance lease liabilities | $ 1 | $ 1.3 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent | ||
Rent expense | $ 0.6 | $ 1.8 | ||
Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease, remaining lease term | 3 months | |||
Finance lease, remaining term term | 20 months | |||
Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease, remaining lease term | 58 months | |||
Finance lease, remaining term term | 58 months |
LEASES - Summary of Supplementa
LEASES - Summary of Supplemental Statement of Operations Information Related to Operating and Finance Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease costs | $ 545 | $ 1,604 |
Amortization of right-to-use assets | 114 | 340 |
Interest on lease liabilities | 16 | 50 |
Finance lease cost | $ 130 | $ 390 |
LEASES - Summary of Supplemen_2
LEASES - Summary of Supplemental Cash Flows Information Related to Operating and Finance Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ (515) | $ (1,575) | |
Financing cash flows from finance leases | (109) | (331) | $ (336) |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | 26 | 1,997 | |
Finance leases | $ 95 | $ 95 |
LEASES - Summary of Undiscounte
LEASES - Summary of Undiscounted Future Operating and Finance Lease Payments (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
2019 - remaining | $ 689 |
2020 | 1,673 |
2021 | 1,549 |
2022 | 1,597 |
2023 | 1,063 |
2024 | 38 |
Thereafter | 0 |
Total undiscounted lease payments | 6,609 |
Less: imputed interest | 607 |
Total | 6,002 |
Finance Leases | |
2019 - remaining | 130 |
2020 | 519 |
2021 | 517 |
2022 | 393 |
2023 | 23 |
2024 | 14 |
Thereafter | 0 |
Total undiscounted lease payments | 1,596 |
Less: imputed interest | 114 |
Total | $ 1,482 |
LEASES - Summary of Supplemen_3
LEASES - Summary of Supplemental Information Related to Operating and Finance leases (Details) | Sep. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term (in months), operating leases | 45 months |
Weighted-average discount rate, operating leases | 5.50% |
Weighted-average remaining lease term (in months), finance leases | 40 months |
Weighted-average discount rate, finance leases | 4.80% |
LEASES - Summary of Future Mini
LEASES - Summary of Future Minimum Operating Lease and Finance Lease Payments (Prior to Adoption of ASC 842) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases | |
2019 | $ 2,334 |
2020 | 1,155 |
2021 | 948 |
2022 | 977 |
2023 | 743 |
Thereafter | 0 |
Total minimum lease payments | 6,157 |
Finance Leases | |
2019 | 525 |
2020 | 520 |
2021 | 517 |
2022 | 388 |
2023 | 1 |
Total minimum lease payments | 1,951 |
Less amount representing interest | 164 |
Present value of net minimum lease payments | $ 1,787 |
BORROWING ARRANGEMENTS - Narrat
BORROWING ARRANGEMENTS - Narrative (Details) - USD ($) $ in Millions | Mar. 04, 2019 | Sep. 30, 2019 |
Minimum | ||
Line of Credit Facility [Line Items] | ||
Liquidity coverage ratio | 1.75% | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, limit on outstanding borrowings | $ 5 | |
Revolving Credit Facility | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity provided under credit facility | $ 15 | |
Borrowings outstanding under credit facility | $ 0 | |
Revolving Credit Facility | Line of Credit | United States | Parent Company And Guarantor Subsidiaries | ||
Line of Credit Facility [Line Items] | ||
Line of credit, ownership stock pledged as collateral, percentage | 100.00% | |
Revolving Credit Facility | Line of Credit | Foreign Subsidiaries | Parent Company And Guarantor Subsidiaries | ||
Line of Credit Facility [Line Items] | ||
Line of credit, ownership stock pledged as collateral, percentage | 66.00% | |
Letter of Credit | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity provided under credit facility | $ 4 |
OTHER CURRENT LIABILITIES - Sum
OTHER CURRENT LIABILITIES - Summary of Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Accrued marketing expenses | $ 3,584 | $ 4,382 |
Accrued professional and consulting fees | 1,757 | 1,273 |
Sales return reserve | 358 | 579 |
Sales, withholding, and property taxes payable | 3,271 | 3,391 |
Other | 2,466 | 4,300 |
Total other current liabilities | $ 11,436 | $ 13,925 |
REVENUE AND DEFERRED REVENUE -
REVENUE AND DEFERRED REVENUE - Schedule of Accounts Receivable and Deferred Revenue (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Accounts Receivable | |
Opening balance | $ 21,950 |
Increase/(decrease), net | 11,143 |
Ending balance | 33,093 |
Deferred Revenue (current) | |
Opening balance | 113,378 |
Increase/(decrease), net | 9,725 |
Ending balance | 123,103 |
Deferred Revenue (non-current) | |
Opening balance | 49,507 |
Increase/(decrease), net | 6,222 |
Ending balance | $ 55,729 |
REVENUE AND DEFERRED REVENUE _2
REVENUE AND DEFERRED REVENUE - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Revenue Recognition Arrangements [Line Items] | ||
Revenue recognized that was included in opening deferred revenue balance | $ 35.3 | $ 98.3 |
SOURCENEXT | ||
Revenue Recognition Arrangements [Line Items] | ||
Contract with Customer, Liability | $ 16 | $ 16 |
REVENUE AND DEFERRED REVENUE _3
REVENUE AND DEFERRED REVENUE - Schedule of Deferred Revenue by Reportable Segment (Details) | Sep. 30, 2019USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 178,832 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 123,103 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 29,201 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 5,219 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 21,309 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | |
Literacy | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 59,548 |
Literacy | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 49,585 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
Literacy | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 9,414 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Literacy | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 539 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Literacy | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 10 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | |
E&E Language | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 62,130 |
E&E Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 40,275 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
E&E Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 9,136 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
E&E Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 2,858 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
E&E Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 9,861 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | |
Consumer Language | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 57,154 |
Consumer Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 33,243 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
Consumer Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 10,651 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Consumer Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 1,822 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Consumer Language | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 11,438 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
REVENUE AND DEFERRED REVENUE _4
REVENUE AND DEFERRED REVENUE - Schedule of Deferred Revenue by Reportable Segment (Details 1) | Sep. 30, 2019USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 178,832 |
Literacy | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | 59,548 |
E&E Language | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | 62,130 |
Consumer Language | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations | $ 57,154 |
REVENUE AND DEFERRED REVENUE _5
REVENUE AND DEFERRED REVENUE - Narrative (Details 1) | Sep. 30, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue Recognition Arrangements [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Recognition Arrangements [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Recognition Arrangements [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Recognition Arrangements [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | |
SOURCENEXT | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-01-01 | |
Revenue Recognition Arrangements [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 20 years |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | May 16, 2019 | Apr. 04, 2019 | Apr. 04, 2018 | May 27, 2017 | Apr. 04, 2017 | Feb. 20, 2017 | Apr. 04, 2016 | Jun. 12, 2015 | May 20, 2014 | May 23, 2013 | May 23, 2012 | May 26, 2011 | Feb. 27, 2009 | Sep. 30, 2019 | Dec. 31, 2018 | Feb. 22, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Expiration period | 10 years | |||||||||||||||
Restricted Stock Award, Service-Based | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 4 years | |||||||||||||||
Awards granted (in shares) | 166,588 | |||||||||||||||
Awards granted (in dollars per share) | $ 15.56 | |||||||||||||||
Awards cancelled | 68,186 | |||||||||||||||
Awards vested (in shares) | 148,075 | |||||||||||||||
Restricted Stock Units, Performance-Based | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Granted target percentage | 100.00% | |||||||||||||||
Restricted Stock Units, Performance-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Awards granted (in shares) | 70,423 | |||||||||||||||
Awards granted (in dollars per share) | $ 7.10 | |||||||||||||||
Equity instrument awards outstanding | 64,719 | |||||||||||||||
Awards cancelled | 5,704 | |||||||||||||||
Restricted Stock Units, Performance-Based | President, Chief Executive Officer and Board of Directors Chairman | April 4, 2017 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights, percentage | 50.00% | |||||||||||||||
Restricted Stock Units, Performance-Based | President, Chief Executive Officer and Board of Directors Chairman | April 4, 2018 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights, percentage | 25.00% | |||||||||||||||
Restricted Stock Units, Performance-Based | President, Chief Executive Officer and Board of Directors Chairman | April 4, 2019 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights, percentage | 25.00% | |||||||||||||||
Employee Stock Option, Serviced-Based | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Options outstanding | 1,077,155 | 1,401,948 | ||||||||||||||
Exercisable at the end of the period | 987,929 | |||||||||||||||
Employee Stock Option, Serviced-Based | Director | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 1 year | |||||||||||||||
Restricted Stock Units (RSUs) | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 4 years | |||||||||||||||
Awards granted (in shares) | 28,181 | |||||||||||||||
Awards granted (in dollars per share) | $ 24.14 | |||||||||||||||
Equity instrument awards outstanding | 263,325 | 235,905 | ||||||||||||||
Restricted Stock Units (RSUs) | Director | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 1 year | |||||||||||||||
Employee Stock Option, Performance-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Awards granted (in shares) | 314,465 | |||||||||||||||
Awards granted (in dollars per share) | $ 3.24 | |||||||||||||||
Options outstanding | 144,497 | |||||||||||||||
Options cancelled | 169,968 | |||||||||||||||
Restricted Stock Award, Market-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Awards granted (in shares) | 70,423 | |||||||||||||||
Awards granted (in dollars per share) | $ 6.17 | |||||||||||||||
Employee Stock Option, Market-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 3 years | |||||||||||||||
Awards granted (in shares) | 314,465 | |||||||||||||||
Awards granted (in dollars per share) | $ 0.94 | |||||||||||||||
Exercisable at the end of the period | 0 | |||||||||||||||
Restricted Stock, Performance-Based and Employee Stock Option, Performance-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Exercisable at the end of the period | 0 | |||||||||||||||
Restricted Stock Award, Market-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 3 years | |||||||||||||||
Restricted Stock, Market-Based and Employee Stock Option, Market-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Period over which future compensation cost expected to be recognized | 6 months 7 days | |||||||||||||||
Minimum | Restricted Stock Units, Performance-Based | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights, percentage | 0.00% | |||||||||||||||
Maximum | Restricted Stock Units, Performance-Based | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights, percentage | 200.00% | |||||||||||||||
Maximum | Employee Stock Option, Market-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Options outstanding | 314,465 | |||||||||||||||
Awards vested (in shares) | 104,821 | |||||||||||||||
Maximum | Restricted Stock Award, Market-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Equity instrument awards outstanding | 140,846 | |||||||||||||||
Awards vested (in shares) | 46,948 | |||||||||||||||
Maximum | Restricted Stock, Market-Based and Employee Stock Option, Market-Based | President, Chief Executive Officer and Board of Directors Chairman | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Non-vested compensation cost not yet recognized | $ 0.1 | |||||||||||||||
2009 Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of additional shares authorized for grant | 1,900,000 | 1,200,000 | 500,000 | 2,317,000 | 1,122,930 | 1,000,000 | 2,437,744 | |||||||||
2009 Plan | Maximum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Expiration period | 10 years | |||||||||||||||
2019 Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of additional shares authorized for grant | 2,350,000 | |||||||||||||||
2019 Plan | Maximum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Expiration period | 10 years |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Common Stock Shares Authorized under 2009 Plan (Details) - shares | May 27, 2017 | Jun. 12, 2015 | May 20, 2014 | May 23, 2013 | May 23, 2012 | May 26, 2011 | Feb. 27, 2009 |
2009 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of Common Stock Shares Authorized to 2009 Plan | 1,900,000 | 1,200,000 | 500,000 | 2,317,000 | 1,122,930 | 1,000,000 | 2,437,744 |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted Average Assumptions (Details) - Employee Stock Option, Serviced-Based | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected stock price volatility, minimum | 39.90% | 39.00% |
Expected stock price volatility, maximum | 40.10% | 39.80% |
Expected term of options | 5 years 1 month 6 days | 6 years |
Risk-free interest rate, minimum | 1.42% | 2.73% |
Risk-free interest rate, maximum | 2.16% | 2.85% |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 1,412 | $ 1,452 | $ 3,988 | $ 3,388 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | 17 | 15 | 1 | (23) |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | 251 | 312 | 756 | 548 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | 86 | 156 | 229 | 326 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 1,058 | $ 969 | $ 3,002 | $ 2,537 |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock-based Compensation Expense Net of Forfeitures (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Restricted Stock Award, Service-Based | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net of forfeitures (in thousands) | $ 2,929 |
Weighted average period over which the above expense will be recognized (in years) | 2 years 3 months 29 days |
Employee Stock Option, Serviced-Based | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net of forfeitures (in thousands) | $ 289 |
Weighted average period over which the above expense will be recognized (in years) | 5 months 12 days |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net of forfeitures (in thousands) | $ 399 |
Weighted average period over which the above expense will be recognized (in years) | 10 months 9 days |
Restricted Stock Units, Performance-Based | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net of forfeitures (in thousands) | $ 2,450 |
Weighted average period over which the above expense will be recognized (in years) | 1 year 2 months 1 day |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - Restricted Stock Award, Service-Based - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Nonvested Outstanding | ||
Balance, beginning of period (in shares) | 400,952 | |
Awards granted (in shares) | 166,588 | |
Awards vested (in shares) | (148,075) | |
Awards cancelled (in shares) | (68,186) | |
Balance, end of period (in shares) | 351,279 | |
Weighted Average Grant Date Fair Value | ||
Balance, beginning of period (in dollars per share) | $ 10.72 | |
Awards granted (in dollars per share) | 15.56 | |
Awards vested (in dollars per share) | 11.09 | |
Awards cancelled (in dollars per share) | 11.25 | |
Balance, end of period (in dollars per share) | $ 12.76 | |
Aggregate Intrinsic Value | ||
Awards outstanding at Balance Sheet date | $ 4,483,128 | $ 4,299,689 |
STOCK-BASED COMPENSATION - We_2
STOCK-BASED COMPENSATION - Weighted Average Grant Date Fair Value and Vested Fair Value (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value of service-based restricted stock awards granted | $ 24.14 | $ 16.03 |
Restricted Stock Award, Service-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value of service-based restricted stock awards granted | $ 15.56 | $ 13.87 |
Fair value of service-based restricted stock awards vested (in thousands) | $ 4,395 | $ 2,468 |
STOCK-BASED COMPENSATION - Perf
STOCK-BASED COMPENSATION - Performance-Based Restricted Stock Units (Details) - Restricted Stock Units, Performance-Based - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
PSUs | ||
Balance, beginning of period (in shares) | 659,660 | |
Awards granted (in shares) | 289,440 | |
Awards vested (in shares) | (149,882) | |
Awards cancelled | (182,533) | |
Balance, end of period (in shares) | 616,685 | |
Weighted Average Grant Date Fair Value | ||
Balance, beginning of period (in dollars per share) | $ 11.59 | |
Awards granted (in dollars per share) | 15.79 | |
Awards vested (in dollars per share) | 10.50 | |
Awards cancelled (in dollars per share) | 11.55 | |
Balance, end of period (in dollars per share) | $ 13.84 | |
Aggregate Intrinsic Value | ||
Awards outstanding at Balance Sheet date | $ 10,711,684 | $ 10,818,424 |
STOCK-BASED COMPENSATION - We_3
STOCK-BASED COMPENSATION - Weighted Average Grant Date Fair Value and Fair Value of PSUs Vested (Details) - Restricted Stock Units, Performance-Based - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value of PSUs granted | $ 15.79 | $ 13.90 |
Fair value of PSUs vested (in thousands) | $ 3,255 | $ 724 |
STOCK-BASED COMPENSATION - St_3
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - Employee Stock Option, Serviced-Based | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Service-based Options | ||
Service-based options outstanding, January 1, 2019 | shares | 1,401,948 | |
Service-based options granted | shares | 40,169 | |
Service-based options exercised | shares | (348,970) | |
Service-based options cancelled | shares | (15,992) | |
Service-based options outstanding at the end of the period | shares | 1,077,155 | 1,401,948 |
Vested and expected to vest at the end of the period | shares | 1,074,798 | |
Exercisable at the end of the period | shares | 987,929 | |
Weighted Average Exercise Price | ||
Service-based options outstanding, January 1, 2019 | $ / shares | $ 9.69 | |
Service-based options granted | $ / shares | 22.72 | |
Service-based options exercised | $ / shares | 10.19 | |
Service-based options cancelled | $ / shares | 8.19 | |
Service-based options outstanding at the end of the period | $ / shares | 10.04 | $ 9.69 |
Vested and expected to vest at the end of the period | $ / shares | 10.03 | |
Exercisable at the end of the period | $ / shares | $ 9.80 | |
Service-based options outstanding, January 1, 2019 | 5 years 9 months 18 days | 6 years 2 months 1 day |
Vested and expected to vest at the end of the period | 5 years 9 months 18 days | |
Exercisable at the end of the period | 5 years 7 months 24 days | |
Aggregate Intrinsic Value | ||
Service-based options outstanding | $ | $ 8,240,086 | $ 9,492,949 |
Vested and expected to vest at the end of the period | $ | 8,231,058 | |
Exercisable at the end of the period | $ | $ 7,636,938 |
STOCK-BASED COMPENSATION - We_4
STOCK-BASED COMPENSATION - Weighted Average Grant Date Fair Value and Intrinsic Value of Options Exercised (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value of service-based restricted stock awards granted | $ 24.14 | $ 16.03 |
Employee Stock Option, Serviced-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value of service-based restricted stock awards granted | $ 9.98 | $ 6.76 |
Intrinsic value of options exercised (in thousands) | $ 7,854 | $ 2,382 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Stock Unit Outstanding Activity (Details) - Restricted Stock Units (RSUs) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Nonvested Outstanding | ||
Units Outstanding, beginning balance | 235,905 | |
Awards granted (in shares) | 28,181 | |
Units cancelled | (761) | |
Units Outstanding, ending balance | 263,325 | |
Units Outstanding, vested and expected to vest end of period, units outstanding | 261,900 | |
Vested and deferred at the end of the period, units outstanding | 241,799 | |
Weighted Average Grant Date Fair Value | ||
Units Outstanding, beginning balance | $ 11.17 | |
Awards granted (in dollars per share) | 24.14 | |
Units cancelled | 15.11 | |
Units Outstanding, ending balance | 12.54 | |
Weighted Average Grant Date Fair Value, vested and expected to vest end of period | 12.50 | |
Weighted Average Grant Date Fair Value, vested and deferred end of period | $ 11.52 | |
Aggregate Intrinsic Value | ||
Awards outstanding at Balance Sheet date | $ 4,581,855 | $ 3,868,842 |
Vested and expected to vest at the end of the period | 4,557,056 | |
Vested and deferred at the end of the period | $ 4,207,303 |
STOCK-BASED COMPENSATION - We_5
STOCK-BASED COMPENSATION - Weighted Average Grant Date Fair Value - (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Weighted-average grant-date fair value of service-based restricted stock awards granted | $ 24.14 | $ 16.03 |
Fair value of restricted stock units converted (in thousands) | $ 495 |
STOCKHOLDERS' DEFICIT- Narrativ
STOCKHOLDERS' DEFICIT- Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 69 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2013 | Sep. 30, 2019 | Dec. 31, 2018 | Aug. 22, 2013 | |
Stockholders Equity [Line Items] | |||||
Capital units, authorized (in shares) | 200,000,000 | ||||
Common stock, shares authorized (in shares) | 190,000,000 | 190,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.00005 | $ 0.00005 | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares issued (in shares) | 25,060,278 | 24,426,000 | |||
Common stock, shares outstanding (in shares) | 24,060,278 | 23,426,000 | |||
Share repurchase program, number of shares authorized to repurchase, value | $ 25,000,000 | ||||
Stock repurchased during the year, value | $ 11,400,000 | ||||
Shares repurchased under the share repurchase program (in shares) | 1,000,000 | 0 | |||
Stock repurchased during the year, weighted average price (in dollars per share) | $ 11.44 | ||||
Unrestricted Common Stock | |||||
Stockholders Equity [Line Items] | |||||
Unrestricted common stock issued in lieu of cash bonus (in shares) | 36,776 | ||||
Reclassification adjustment to additional paid in capital | $ 600,000 |
BASIC AND DILUTED NET LOSS PE_3
BASIC AND DILUTED NET LOSS PER SHARE - Schedule of Basic and Diluted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net loss | $ (2,917) | $ (2,807) | $ (544) | $ (6,489) | $ (4,158) | $ (6,402) | $ (6,268) | $ (17,049) |
Denominator: | ||||||||
Basic weighted average shares (in shares) | 23,609 | 22,814 | 23,369 | 22,647 | ||||
Diluted weighted average shares (in shares) | 23,609 | 22,814 | 23,369 | 22,647 | ||||
Loss per share: | ||||||||
Basic (in dollars per share) | $ (0.12) | $ (0.28) | $ (0.27) | $ (0.75) | ||||
Diluted (in dollars per share) | $ (0.12) | $ (0.28) | $ (0.27) | $ (0.75) |
BASIC AND DILUTED NET LOSS PE_4
BASIC AND DILUTED NET LOSS PER SHARE - Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total common stock equivalent shares (in shares) | 1,433 | 1,554 | 1,543 | 1,495 |
Stock options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total common stock equivalent shares (in shares) | 688 | 686 | 752 | 631 |
Restricted stock units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total common stock equivalent shares (in shares) | 257 | 230 | 244 | 230 |
Restricted stocks | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total common stock equivalent shares (in shares) | 488 | 638 | 547 | 634 |
BASIC AND DILUTED NET LOSS PE_5
BASIC AND DILUTED NET LOSS PER SHARE - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Common stock (in shares) | 100,000 | 100,000 | 0 | 200,000 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Income Tax Examination [Line Items] | ||||||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | |||
Income tax benefit | 93 | $ (588) | 88 | $ (1,503) | ||
State tax benefit | $ 600 | |||||
Foreign tax benefit | 600 | |||||
Domestic Tax Authority | ||||||
Income Tax Examination [Line Items] | ||||||
Gross deferred tax liabilities | 2,300 | 2,300 | 2,700 | |||
Foreign Tax Authority | ||||||
Income Tax Examination [Line Items] | ||||||
Deferred tax liabilities, net | $ 100 | |||||
Deferred tax assets, net | $ 200 | $ 200 |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 45,456 | $ 42,750 | $ 136,009 | $ 129,060 |
Cost of revenue | 9,416 | 8,768 | 26,703 | 26,132 |
Sales and marketing | 24,700 | 24,948 | 73,738 | 74,013 |
Research and development | 5,517 | 6,465 | 17,031 | 18,790 |
General and administrative | 8,687 | 8,510 | 25,945 | 25,366 |
Loss from operations | (2,864) | (5,941) | (7,408) | (15,241) |
Unallocated non-operating expense (income) | 146 | (40) | (1,052) | 305 |
Loss before income taxes | (3,010) | (5,901) | (6,356) | (15,546) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | 6,434 | 6,252 | 18,686 | 19,572 |
Sales and marketing | 24,115 | 24,002 | 71,599 | 71,174 |
Research and development | 5,359 | 5,833 | 16,589 | 16,956 |
General and administrative | 692 | 578 | 1,810 | 1,620 |
Loss from operations | 8,856 | 6,085 | 27,325 | 19,738 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | 2,982 | 2,516 | 8,017 | 6,560 |
Sales and marketing | 585 | 946 | 2,139 | 2,839 |
Research and development | 158 | 632 | 442 | 1,834 |
General and administrative | 1,602 | 1,468 | 4,688 | 4,148 |
Subtotal | 5,327 | 5,562 | 15,286 | 15,381 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
General and administrative | 6,393 | 6,464 | 19,447 | 19,598 |
Subtotal | 6,539 | 6,424 | 18,395 | 19,903 |
Unallocated non-operating expense (income) | 146 | (40) | (1,052) | 305 |
Literacy | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 15,587 | $ 13,215 | $ 45,494 | $ 38,294 |
Segment contribution margin % | 13.40% | 7.80% | 16.40% | 12.30% |
Literacy | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | $ 2,519 | $ 2,189 | $ 7,381 | $ 6,069 |
Sales and marketing | 8,070 | 7,263 | 22,538 | 20,248 |
Research and development | 2,388 | 2,218 | 6,607 | 5,765 |
General and administrative | 523 | 520 | 1,497 | 1,492 |
Loss from operations | 2,087 | 1,025 | 7,471 | 4,720 |
E&E Language | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 14,074 | $ 14,990 | $ 43,019 | $ 45,782 |
Segment contribution margin % | 40.40% | 37.80% | 41.00% | 37.60% |
E&E Language | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | $ 1,644 | $ 1,733 | $ 4,811 | $ 5,037 |
Sales and marketing | 6,616 | 7,551 | 20,310 | 23,467 |
General and administrative | 135 | 40 | 264 | 59 |
Loss from operations | 5,679 | 5,666 | 17,634 | 17,219 |
Consumer Language | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 15,795 | $ 14,545 | $ 47,496 | $ 44,984 |
Segment contribution margin % | 25.90% | 22.70% | 25.90% | 22.10% |
Consumer Language | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | $ 2,272 | $ 2,311 | $ 6,498 | $ 8,409 |
Sales and marketing | 9,396 | 8,915 | 28,659 | 26,570 |
General and administrative | 34 | 18 | 49 | 69 |
Loss from operations | 4,093 | 3,301 | 12,290 | 9,936 |
Shared Services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | (1) | 19 | (4) | 57 |
Sales and marketing | 33 | 273 | 92 | 889 |
Research and development | 2,971 | 3,615 | 9,982 | 11,191 |
Loss from operations | (3,003) | (3,907) | (10,070) | (12,137) |
Combined Language | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 29,869 | $ 29,535 | $ 90,515 | $ 90,766 |
Segment contribution margin % | 22.70% | 17.10% | 21.90% | 16.50% |
Combined Language | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | $ 3,915 | $ 4,063 | $ 11,305 | $ 13,503 |
Sales and marketing | 16,045 | 16,739 | 49,061 | 50,926 |
Research and development | 2,971 | 3,615 | 9,982 | 11,191 |
General and administrative | 169 | 58 | 313 | 128 |
Loss from operations | $ 6,769 | $ 5,060 | $ 19,854 | $ 15,018 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic Area and Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenue | $ 45,456 | $ 42,750 | $ 136,009 | $ 129,060 | |
Property and equipment, net | 40,206 | 40,206 | $ 36,405 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenue | 40,891 | 37,747 | 121,900 | 112,471 | |
Property and equipment, net | 38,270 | 38,270 | 34,029 | ||
International | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenue | 4,565 | $ 5,003 | 14,109 | $ 16,589 | |
Property and equipment, net | $ 1,936 | $ 1,936 | $ 2,376 |