Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'EPAM Systems, Inc. | ' |
Entity Central Index Key | '0001352010 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 46,502,771 |
Document Fiscal Year Focus | '2013 | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $122,979 | $118,112 |
Accounts receivable, net of allowance of $2,592 and $2,203, respectively | 87,611 | 78,906 |
Unbilled revenues | 64,957 | 33,414 |
Prepaid and other current assets | 22,234 | 11,835 |
Employee loans, net of allowance of $0 and $0, respectively, current | 1,848 | 429 |
Time deposits | 0 | 1,006 |
Restricted cash, current | 217 | 660 |
Deferred tax assets, current | 5,350 | 6,593 |
Total current assets | 305,196 | 250,955 |
Property and equipment, net | 54,062 | 53,135 |
Restricted cash, long-term | 246 | 467 |
Employee loans, net of allowance of $0 and $0, respectively, long-term | 4,456 | 0 |
Intangible assets, net | 14,539 | 16,834 |
Goodwill | 22,411 | 22,698 |
Deferred tax assets, long-term | 3,585 | 6,093 |
Other long-term assets | 969 | 632 |
Total assets | 405,464 | 350,814 |
Current liabilities | ' | ' |
Accounts payable | 8,195 | 6,095 |
Accrued expenses and other liabilities | 8,866 | 19,814 |
Deferred revenue, current | 2,583 | 6,369 |
Due to employees | 14,530 | 12,026 |
Taxes payable | 17,364 | 14,557 |
Deferred tax liabilities, current | 577 | 491 |
Total current liabilities | 52,115 | 59,352 |
Deferred revenue, long-term | 155 | 1,263 |
Taxes payable, long-term | 1,228 | 1,228 |
Deferred tax liabilities, long-term | 354 | 2,691 |
Total liabilities | 53,852 | 64,534 |
Commitments and contingencies (See Note 10) | ' | ' |
Stockholders' equity | ' | ' |
Common stock, $0.001 par value; 160,000,000 authorized; 47,329,699 and 45,398,523 shares issued, 46,375,152 and 44,442,494 shares outstanding at September 30, 2013 and December 31, 2012, respectively | 46 | 44 |
Additional paid-in capital | 189,457 | 166,962 |
Retained earnings | 172,227 | 128,992 |
Treasury stock | -8,684 | -8,697 |
Accumulated other comprehensive loss | -1,434 | -1,021 |
Total stockholders' equity | 351,612 | 286,280 |
Total liabilities and stockholders' equity | $405,464 | $350,814 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets | ' | ' |
Accounts receivable, allowance | $2,592 | $2,203 |
Employee loans, current, allowance | 0 | 0 |
Noncurrent assets | ' | ' |
Employee loans, long-term, allowance | $0 | $0 |
Stockholders' equity | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 160,000,000 | 160,000,000 |
Common stock, shares issued (in shares ) | 47,329,699 | 45,398,523 |
Common stock, shares outstanding (in shares) | 46,375,152 | 44,442,494 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) | ' | ' | ' | ' |
Revenues | $140,150 | $110,078 | $397,532 | $308,261 |
Operating expenses: | ' | ' | ' | ' |
Cost of revenues (exclusive of depreciation and amortization) | 88,539 | 69,099 | 250,023 | 193,077 |
Selling, general and administrative expenses | 27,893 | 21,153 | 83,517 | 59,491 |
Depreciation and amortization expense | 3,906 | 3,040 | 11,377 | 7,674 |
Other operating (income)/ expenses, net | -418 | 50 | -686 | 669 |
Income from operations | 20,230 | 16,736 | 53,301 | 47,350 |
Interest and other income, net | 846 | 486 | 2,245 | 1,422 |
Foreign exchange loss | -720 | -635 | -2,088 | -1,949 |
Income before provision for income taxes | 20,356 | 16,587 | 53,458 | 46,823 |
Provision for income taxes | 3,919 | 2,522 | 10,223 | 7,338 |
Net income | 16,437 | 14,065 | 43,235 | 39,485 |
Foreign currency translation adjustments | 2,975 | 2,704 | -413 | 1,852 |
Comprehensive income | 19,412 | 16,769 | 42,822 | 41,337 |
Net income allocated to participating securities | 0 | 0 | 0 | -3,259 |
Net income available for common stockholders | $16,437 | $14,065 | $43,235 | $36,226 |
Net income per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.36 | $0.33 | $0.95 | $0.93 |
Diluted (in dollars per share) | $0.34 | $0.30 | $0.90 | $0.85 |
Shares used in calculation of net income per share: | ' | ' | ' | ' |
Basic (in shares) | 46,162 | 42,952 | 45,492 | 38,990 |
Diluted (in shares) | 48,720 | 46,501 | 48,120 | 42,729 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $43,235 | $39,485 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 11,377 | 7,674 |
Bad debt provision | 988 | 465 |
Deferred taxes | 735 | -374 |
Stock-based compensation expense | 9,791 | 5,369 |
Excess tax benefit on stock-based compensation plans | -4,924 | -1,635 |
Non-cash stock charge | 0 | 640 |
Other | 1,140 | -30 |
(Increase)/ decrease in operating assets: | ' | ' |
Accounts receivable | -11,089 | -6,083 |
Unbilled revenues | -31,373 | -19,424 |
Prepaid expenses and other assets | 1,422 | 1,243 |
Increase/ (decrease) in operating liabilities: | ' | ' |
Accounts payable | 2,475 | -2,098 |
Accrued expenses and other liabilities | -10,822 | -11,318 |
Deferred revenue | -3,811 | -3,387 |
Due to employees | 2,581 | 3,571 |
Taxes payable | 70 | -1,358 |
Net cash provided by operating activities | 11,795 | 12,740 |
Cash flows used in investing activities: | ' | ' |
Purchases of property and equipment | -10,928 | -10,317 |
Payment for construction of corporate facilities | -3,508 | -13,416 |
Employee housing loans | -7,045 | 0 |
Proceeds from repayments of employee housing loans | 1,270 | 0 |
Decrease/ (increase) in restricted cash, net | 1,679 | -52 |
Increase in other long-term assets, net | -323 | -588 |
Acquisitions of businesses, net of cash acquired | -20 | -6,990 |
Net cash used in investing activities | -18,875 | -31,363 |
Cash flows from financing activities: | ' | ' |
Proceeds related to stock options exercises | 7,783 | 2,495 |
Excess tax benefit on stock-based compensation plans | 4,924 | 1,635 |
Net proceeds from issuance of common stock in initial public offering | 0 | 32,364 |
Costs related to stock issue | 0 | -1,766 |
Repurchase of common stock | 0 | -61 |
Net cash provided by financing activities | 12,707 | 34,667 |
Effect of exchange rate changes on cash and cash equivalents | -760 | 1,045 |
Net increase in cash and cash equivalents | 4,867 | 17,089 |
Cash and cash equivalents, beginning of period | 118,112 | 88,796 |
Cash and cash equivalents, end of period | $122,979 | $105,885 |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended | |
Sep. 30, 2013 | ||
BASIS OF PRESENTATION [Abstract] | ' | |
BASIS OF PRESENTATION | ' | |
1 | BASIS OF PRESENTATION | |
The accompanying unaudited interim consolidated financial statements of EPAM Systems, Inc. (the “Company” or “EPAM”) have been prepared in accordance with generally accepted accounting principles in the United States and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. The accompanying unaudited condensed consolidated financial statements are prepared in thousands, except share and per share amounts, and should be read in conjunction with the Company’s audited consolidated financial statements (and notes thereto) for the year ended December 31, 2012. In the Company’s opinion, all adjustments considered necessary for a fair presentation of the accompanying unaudited condensed consolidated financial statements have been included, and all adjustments are of a normal and recurring nature. Operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire year. | ||
The Company reclassified certain prior period amounts to conform to the current period presentation. Such reclassifications had no effect on the Company’s results of operations or total stockholders’ equity. | ||
Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience, knowledge of current conditions and its beliefs of what could occur in the future, given available information. Actual results could differ from those estimates, and such differences may be material to the financial statements. | ||
Fair Value of Financial Instruments — The Company makes significant assumptions about fair values of its financial instruments. Where the fair values of financial assets and liabilities recorded in the consolidated balance sheet cannot be derived from an active market, they are determined using a variety of valuation techniques. These valuation techniques include a net present value technique, comparison to similar instruments with market observable inputs, options pricing models and other relevant valuation models. Inputs into these models are taken from observable market data whenever possible, but in instances where it is not feasible, a degree of judgment is required to establish fair values. | ||
Cash and cash equivalents — are considered Level 1 measurements. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. | ||
Restricted cash and time deposits — are considered Level 2 measurements. Fair values of Level 2 measurements are determined by analyzing quoted prices for similar assets in an active market, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable, and market-corroborated inputs, which are derived principally from or corroborated by observable market data. As of September 30, 2013, carrying values of restricted cash and time deposits approximated their fair values. | ||
Employee Housing Loans — The Company issues loans to its employees under the Employee Housing Program (“housing loans”). Housing loans are issued in U.S. Dollars with a 5-year term and carry an interest rate of 7.5%. The program was designed to be a retention mechanism for the Company’s employees in Belarus. | ||
Although permitted by authoritative guidance, the Company did not elect a fair value option for these financial instruments. These housing loans are measured at fair value upon initial recognition and subsequently carried at amortized cost less allowance for loan losses. Any difference between the carrying value and the fair value of a loan upon initial recognition (“day-one” recognition) is charged to expense. | ||
The housing loans were classified as Level 3 measurements within the fair value hierarchy because they were valued using significant unobservable inputs. The estimated fair value of these housing loans upon initial recognition was computed by projecting the future contractual cash flows to be received from the loans and discounting those projected net cash flows to a present value, which is the estimated fair value (the “Income Approach”). In applying the Income Approach, the Company analyzed similar loans offered by third-party financial institutions in Belarusian Rubles (“BYR”) and adjusted the interest rates charged on such loans to exclude the effects of underlying economic factors, such as inflation and currency devaluation. The Company also assessed the probability of future defaults and associated cash flows impact. In addition, the Company separately analyzed the rate of return that market participants in Belarus would require when investing in unsecured USD-denominated government bonds with similar maturities (a “risk-free rate”) and evaluated a risk premium component to compensate the market participants for the credit and liquidity risks inherent in the loans’ cash flows, as described in the following paragraph. As a result of the analysis performed, the Company determined the carrying values of the housing loans issued during the nine months ended September 30, 2013 approximated their fair values upon initial recognition. The Company also estimated the fair values of the housing loans that were outstanding as of September 30, 2013 using the inputs noted above and determined their fair values approximated the carrying values as of that date. | ||
Repayment of housing loans is primarily dependent on personal income of borrowers obtained through employment with the Company, which income is set in U.S. Dollars and is not closely correlated with common macroeconomic risks existing in Belarus, such as inflation, local currency devaluation and decrease in the purchasing power of the borrowers’ income. Given a large demand for the program among the Company’s employees and its advantages as compared to alternative methods of financing available on the market, the Company expects the borrowers to fulfill their obligations and estimates the probability of voluntary termination of employment among the borrowers as de minimis. Additionally, housing loans are capped at $50 per loan and secured by real estate financed through the program. The Company establishes a maximum loan-to-value ratio of 70% and expects a decrease in the ratio over the life of a housing loan due to on-going payments by employees. | ||
Employee loans, other — are short-term non-interest bearing relocation loans and other employee loans. These loans are considered Level 3 measurements. The Company’s Level 3, unobservable inputs reflect its assumptions about the factors that market participants use in pricing similar receivables, and are based on the best information available in the circumstances. Due to a short-term nature of employee loans, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. As of September 30, 2013, carrying values of these employee loans approximated their fair values. | ||
Employee Loans — Loans are initially recorded at their fair value, and subsequently measured at their amortized cost, less allowance for loan losses, if any. The Company intends to hold all employee loans until their maturity. Interest income is reported using the effective interest method. Where applicable, loan origination fees, net of direct origination costs, are deferred and recognized in interest income over the life of the loan. | ||
Generally, loans are placed on nonaccrual status at 90 days past due. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. All interest accrued but not collected for loans that are placed on nonaccrual is reversed against interest income. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. Interest income on loans individually classified as impaired is recognized on a cash basis after all past due and current principal payments have been made. | ||
Allowance for Loan Losses — The allowance for loan losses is established when losses are deemed to have occurred through a provision for loan losses charged to income and represents management’s estimate of probable credit losses inherent in the loan portfolio. Determining the amount of the allowance for loan losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated fair value of collateral securing the loans, estimated losses on loans based on historical loss experience, and consideration of current economic trends and conditions, all of which may be susceptible to significant change. | ||
Loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, amounts of allowances are allocated to individual loans based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to the Company. In its review, the Company evaluates the collectability of both principal and interest when assessing the need for a loss accrual. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. | ||
The general allowance covers loans for which no individual impairment has been identified. Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. | ||
Write-offs of unrecoverable loans are charged against the allowance when management believes the uncollectability of a loan balance and any interest due thereon is confirmed. Subsequent recoveries, if any, are credited to the provision for bad debts. | ||
Off-Balance Sheet Financial Instruments — include credit instruments, such as commitments to make employee loans and related guarantees, standby letters of credit and guarantees issued under customer contracts. The face amount for these items represents the exposure to loss, before considering available collateral or the borrower’s ability to repay. Such financial instruments are recorded when they are funded. Loss contingencies arising from off-balance sheet credit exposures are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company does not believe there are such matters that will have a material effect on the consolidated financial statements. | ||
Emerging Growth Company Status — In April 2012, several weeks after EPAM’s initial public offering in February 2012, President Obama signed into law the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act contains provisions that relax certain requirements for “emerging growth companies” that otherwise apply to larger public companies. For as long as a company retains emerging growth company status, which may be until the fiscal year-end after the fifth anniversary of its initial public offering, it will not be required to (1) provide an auditor’s attestation report on its management’s assessment of the effectiveness of its internal control over financial reporting, otherwise required by Section 404(b) of the Sarbanes-Oxley Act of 2002, (2) comply with any new or revised financial accounting standard applicable to public companies until such standard is also applicable to private companies, (3) comply with certain new requirements adopted by the Public Company Accounting Oversight Board, (4) provide certain disclosure regarding executive compensation required of larger public companies or (5) hold shareholder advisory votes on matters relating to executive compensation. | ||
EPAM is classified as an emerging growth company under the JOBS Act and is eligible to take advantage of the accommodations described above for as long as it retains this status. However, EPAM has elected not to take advantage of the transition period described in (2) above, which is the exemption provided in Section 7(a)(2)(B) of the Securities Act of 1933 and Section 13(a) of the Securities Exchange Act of 1934 (in each case as amended by the JOBS Act) for complying with new or revised financial accounting standards. EPAM will therefore comply with new or revised financial accounting standards to the same extent that a non-emerging growth company is required to comply with such standards. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended | |
Sep. 30, 2013 | ||
ACQUISITIONS [Abstract] | ' | |
ACQUISITIONS | ' | |
2 | ACQUISITIONS | |
On December 18, 2012, the Company acquired substantially all of the assets and assumed certain liabilities of Empathy Lab, LLC (“Empathy Lab”), a U.S.-based digital strategy and multi-channel experience design firm. The acquisition was accounted for as a business combination under the acquisition method of accounting in accordance with generally accepted accounting principles. During the second quarter of 2013, the Company finalized the fair values of the assets acquired and liabilities assumed as of the date of acquisition. As a result, total consideration transferred was set at $27,172. There were no material adjustments to the purchase price allocation previously reported. |
GOODWILL
GOODWILL | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
GOODWILL [Abstract] | ' | ||||||||||||||||||||
GOODWILL | ' | ||||||||||||||||||||
3 | GOODWILL | ||||||||||||||||||||
Changes in goodwill for the nine months ended September 30, 2013 were as follows: | |||||||||||||||||||||
North America | EU | Russia | Other | Total | |||||||||||||||||
1-Jan-13 | |||||||||||||||||||||
Goodwill | $ | 16,643 | $ | 2,864 | $ | 3,191 | $ | 1,697 | $ | 24,395 | |||||||||||
Accumulated impairment losses | — | — | — | (1,697 | ) | (1,697 | ) | ||||||||||||||
16,643 | 2,864 | 3,191 | — | 22,698 | |||||||||||||||||
Effect of net foreign currency exchange rate changes | (101 | ) | — | (186 | ) | — | (287 | ) | |||||||||||||
30-Sep-13 | |||||||||||||||||||||
Goodwill | 16,542 | 2,864 | 3,005 | 1,697 | 24,108 | ||||||||||||||||
Accumulated impairment losses | — | — | — | (1,697 | ) | (1,697 | ) | ||||||||||||||
$ | 16,542 | $ | 2,864 | $ | 3,005 | $ | — | $ | 22,411 |
RESTRICTED_CASH_AND_TIME_DEPOS
RESTRICTED CASH AND TIME DEPOSITS | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
RESTRICTED CASH AND TIME DEPOSITS [Abstract] | ' | ||||||||
RESTRICTED CASH AND TIME DEPOSITS | ' | ||||||||
4 | RESTRICTED CASH AND TIME DEPOSITS | ||||||||
Restricted cash and time deposits consisted of the following: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Time deposits | $ | — | $ | 1,006 | |||||
Short-term security deposits under client contracts | 217 | 660 | |||||||
Long-term deposits under employee loan programs | 246 | 360 | |||||||
Long-term deposits under operating leases | — | 107 | |||||||
Total | $ | 463 | $ | 2,133 | |||||
Included in time deposits as of December 31, 2012, was a deposit of $1,006, which earned an interest rate of 2.95%. | |||||||||
At September 30, 2013 and December 31, 2012, short-term security deposits under client contracts included fixed amounts placed in respect of bank guarantees intended to secure appropriate performance under respective contracts. The Company estimates the probability of non-performance under the contracts as remote; therefore, no provision for losses has been created in respect of these amounts as of these dates. | |||||||||
Also included in restricted cash as of September 30, 2013 and December 31, 2012, were deposits of $246 and $360, respectively, placed in connection with certain employee loan program (See Note 10). |
EMPLOYEE_LOANS_AND_ALLOWANCE_F
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES [Abstract] | ' | ||||||||
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES | ' | ||||||||
5 | EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES | ||||||||
In the third quarter of 2012, the Board of Directors of the Company approved the Employee Housing Program (“the Housing Program”), which assists employees in purchasing housing in Belarus. The Housing Program was designed to be a retention mechanism for the Company’s employees in Belarus and is available to full-time employees who have been with the Company for at least three years. As part of the Housing Program, the Company will extend financing to employees up to an aggregate amount of $10,000. Additionally, the Company issues relocation loans in connection with intra-company transfers, as well as certain other individual loans. | |||||||||
During the nine months ended September 30, 2013, loans issued by the Company under the Housing Program were denominated in U.S. Dollars with a five-year term and carried an interest rate of 7.5%. | |||||||||
At September 30, 2013 and December 31, 2012, categories of employee loans included in the loan portfolio were as follows: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Housing loans | $ | 5,868 | $ | — | |||||
Relocation and other loans | 436 | 429 | |||||||
Total employee loans | 6,304 | 429 | |||||||
Less: | |||||||||
Allowance for loan losses | — | — | |||||||
Total loans, net of allowance for loan losses | $ | 6,304 | $ | 429 | |||||
There were no loans issued to principal officers, directors, and their affiliates during the three and nine months ended September 30, 2013 and 2012. | |||||||||
On a quarterly basis, the Company reviews the aging of its loan portfolio to evaluate information about the ability of employees to service their debt, including historical payment experience, reasons for payment delays and shortfalls, if any, as well as probability of collecting scheduled principal and interest payments based on the knowledge of individual borrowers, among other factors. | |||||||||
As of September 30, 2013 and December 31, 2012, there were no material past due or non-accrual employee loans. The Company determined no allowance for loan losses was required regarding its employee loans as of September 30, 2013 and December 31, 2012, and there were no movements in provision for loan losses during the three and nine months ended September 30, 2013 and 2012. |
LONGTERM_DEBT
LONG-TERM DEBT | 9 Months Ended | |
Sep. 30, 2013 | ||
LONG-TERM DEBT [Abstract] | ' | |
LONG-TERM DEBT | ' | |
6 | LONG-TERM DEBT | |
Revolving Line of Credit — On January 15, 2013, the Company entered into a revolving loan agreement (the “2013 Credit Facility”) with PNC Bank, National Association (the “Bank”). Under the agreement, the Company’s maximum borrowing capacity was set at $40,000. The 2013 Credit Facility matures on January 15, 2015. Advances under the new line of credit accrue interest at an annual rate equal to the London Interbank Offer Rate, or LIBOR, plus 1.25%. As of September 30, 2013, the borrowing capacity of the Company under the 2013 Credit Facility was $40,000. The Company had no outstanding borrowing as of that date. | ||
The 2013 Credit Facility is collateralized with: (a) all tangible and intangible assets of the Company, and its U.S.-based subsidiaries including all accounts, general intangibles, intellectual property rights, equipment; and (b) all of the outstanding shares of capital stock and other equity interests in U.S.-based subsidiaries of the Company, and 65.0% of the outstanding shares of capital stock and other equity interests in certain of the Company’s foreign subsidiaries. |
EMPLOYEE_BENEFITS
EMPLOYEE BENEFITS | 9 Months Ended | |
Sep. 30, 2013 | ||
EMPLOYEE BENEFITS [Abstract] | ' | |
EMPLOYEE BENEFITS | ' | |
7 | EMPLOYEE BENEFITS | |
The Company has established a 401(k) retirement plan, which is a tax-qualified self-funded retirement plan covering substantially all of the Company’s U.S. employees. Under this plan, employees may elect to defer their current compensation by up to the statutory limit. Effective January 1, 2013, the Company provides discretionary matching contributions to the plan up to a maximum of 2.0% of the employee’s eligible compensation. Employer contributions charged to expense for the three and nine months ended September 30, 2013 were $112 and $286, respectively. The Company does not maintain any defined benefit pension plans or any nonqualified deferred compensation plans. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended | |
Sep. 30, 2013 | ||
INCOME TAXES [Abstract] | ' | |
INCOME TAXES | ' | |
8 | INCOME TAXES | |
The Company’s worldwide effective tax rate for the three months ended September 30, 2013 was 19.3%, compared with 15.2% for the three months ended September 30, 2012. The Company’s worldwide effective tax rate for the nine months ended September 30, 2013 was 19.1%, compared with 15.7% for the nine months ended September 30, 2012. The increase in the Company’s worldwide effective tax rate for the three and nine months ended September 30, 2013, as compared with the corresponding periods of 2012, was primarily due to a higher portion of the Company’s pre-tax profits attributable to its U.S. tax jurisdiction as a result of an acquisition completed in the second half of 2012; and (b) a relative shift in offshore services performed in Belarus, where the Company is currently entitled to a 100.0% exemption from Belarusian income tax, to Ukraine, and, to a lesser extent, Russia, both of which have higher income tax rates. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
EARNINGS PER SHARE [Abstract] | ' | ||||||||||||||||
EARNINGS PER SHARE | ' | ||||||||||||||||
9 | EARNINGS PER SHARE | ||||||||||||||||
Basic EPS is computed by dividing the net income applicable to common stockholders for the period by the weighted average number of shares of common stock outstanding during the same period. The Company’s Series A-1 Preferred, Series A-2 Preferred, and Series A-3 Preferred Stock, that had been outstanding and convertible into common stock until February 13, 2012 (the date of the Company’s initial public offering), were considered participating securities since these securities had non-forfeitable rights to dividends or dividend equivalents during the contractual period and thus required the two-class method of computing EPS. When calculating diluted EPS, the numerator is computed by adding back the undistributed earnings allocated to the participating securities in arriving at the basic EPS and then reallocating such undistributed earnings among the Company’s common stock, participating securities and the potential common shares that result from the assumed exercise of all dilutive options. The denominator is increased to include the number of additional common shares that would have been outstanding had the options been issued. | |||||||||||||||||
No preferred stock was outstanding as of December 31, 2012, as a result of the Company’s initial public offering on February 13, 2012 when all convertible preferred stock was converted into common stock. | |||||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share of common stock as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(in thousands, except share and per share data) | |||||||||||||||||
Numerator for common earnings per share: | |||||||||||||||||
Net income | $ | 16,437 | $ | 14,065 | $ | 43,235 | $ | 39,485 | |||||||||
Net income allocated to participating securities | — | — | — | (3,259 | ) | ||||||||||||
Numerator for basic earnings per share | 16,437 | 14,065 | 43,235 | 36,226 | |||||||||||||
Effect on income available from reallocation of options | — | — | — | 263 | |||||||||||||
Numerator for diluted earnings per share | $ | 16,437 | $ | 14,065 | $ | 43,235 | $ | 36,489 | |||||||||
Denominator for basic earnings per share: | |||||||||||||||||
Weighted average common shares outstanding | 46,162 | 42,952 | 45,492 | 38,990 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options | 2,558 | 3,549 | 2,628 | 3,739 | |||||||||||||
Denominator for diluted earnings per share | 48,720 | 46,501 | 48,120 | 42,729 | |||||||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 0.36 | $ | 0.33 | $ | 0.95 | $ | 0.93 | |||||||||
Diluted | $ | 0.34 | $ | 0.3 | $ | 0.9 | $ | 0.85 | |||||||||
Anti-dilutive options not included in the calculation | 1,873 | 1,953 | 1,399 | 1,582 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | |
Sep. 30, 2013 | ||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | |
COMMITMENTS AND CONTINGENCIES | ' | |
10 | COMMITMENTS AND CONTINGENCIES | |
Employee Loan Program — Beginning in the third quarter of 2006, the Company started to guarantee bank loans for certain of its key employees. Under the conditions of the guarantees, the Company is required to maintain a security deposit of 30.0% of the value of loans outstanding at each reporting date. While the program had been discontinued, the total commitment of the Company under these guarantees remained at $306 as of September 30, 2013. The Company estimates a probability of material losses under the program as remote, therefore, no provision for losses has been recognized for the three and nine months ended September 30, 2013. | ||
Construction in progress — On December 7, 2011, the Company entered into an agreement with IDEAB Project Eesti AS for the construction of a 14,071 square meter office building within the High Technologies Park in Minsk, Belarus. The building is expected to be operational in the first half of 2014. As of September 30, 2013, the total outstanding commitment of the Company was $3,822. | ||
Employee Housing Program —As of September 30, 2013, the Company’s total outstanding commitment under the Housing Program was $693. The Company estimates a probability of material losses under the program as remote, therefore, no provision for losses has been recognized for the three and nine months ended September 30, 2013. |
OPERATING_SEGMENTS
OPERATING SEGMENTS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
OPERATING SEGMENTS [Abstract] | ' | ||||||||||||||||
OPERATING SEGMENTS | ' | ||||||||||||||||
11 | OPERATING SEGMENTS | ||||||||||||||||
The Company’s reportable segments are North America, Europe, Russia and Other. This determination is based on the unique business practices and market specifics of each region and that each region engages in business activities from which it earns revenues and incurs expenses. The Company’s reportable segments are based on the allocation of managerial responsibility for its client base. Because managerial responsibility for a particular client relationship generally correlates with the client’s geographic location, there is a high degree of similarity between client locations and the geographic boundaries of the Company’s reportable segments. In some specific cases, however, managerial responsibility for a particular client is assigned to a management team in another region, usually based on the strength of the relationship between client executives and particular members of EPAM’s senior management team. In a case like this, the client’s activity would be reported through the management team’s reportable segment. | |||||||||||||||||
The Company’s Chief Operating Decision Maker (“CODM”) evaluates its performance and allocates resources based on segment revenues and operating profit. Segment operating profit is defined as income from operations before unallocated costs. Generally, operating expenses for each operating segment have similar characteristics and are subject to similar factors, pressures and challenges. Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as an allocation of certain shared services expenses. Certain expenses are not allocated to specific segments as management does not believe it is practical to allocate such costs to individual segments because they are not directly attributable to any specific segment. Further, stock-based compensation expense is not allocated to individual segments in internal management reports used by the CODM. Accordingly, these expenses are separately disclosed as “unallocated” and adjusted only against the Company’s total income from operations. | |||||||||||||||||
Revenues from external customers and segment operating profit, before unallocated expenses, for the North America, Europe, Russia and Other reportable segments for the three and nine months ended September 30, 2013 and 2012, were as follows: | |||||||||||||||||
Three Months Ended | Nine MonthsEnded | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Total segment revenues: | |||||||||||||||||
North America | $ | 73,480 | $ | 52,767 | $ | 205,613 | $ | 142,333 | |||||||||
Europe | 51,531 | 42,505 | 146,108 | 123,160 | |||||||||||||
Russia | 12,050 | 11,688 | 37,901 | 30,943 | |||||||||||||
Other | 3,078 | 3,115 | 7,867 | 11,786 | |||||||||||||
Total segment revenues | $ | 140,139 | $ | 110,075 | $ | 397,489 | $ | 308,222 | |||||||||
Segment operating profit: | |||||||||||||||||
North America | $ | 18,133 | $ | 10,450 | $ | 48,527 | $ | 30,616 | |||||||||
Europe | 8,049 | 8,798 | 24,538 | 24,461 | |||||||||||||
Russia | 391 | 1,680 | 2,710 | 3,498 | |||||||||||||
Other | 1,024 | 1,230 | 960 | 4,550 | |||||||||||||
Total segment operating profit | $ | 27,597 | $ | 22,158 | $ | 76,735 | $ | 63,125 | |||||||||
Intersegment transactions were excluded from the above on the basis that they are neither included into the measure of a segment’s profit and loss by the CODM, nor provided to the CODM on a regular basis. | |||||||||||||||||
Reconciliation of segment revenues and operating profit to consolidated income before provision for income taxes is presented below: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Total segment revenues | $ | 140,139 | $ | 110,075 | $ | 397,489 | $ | 308,222 | |||||||||
Unallocated revenue | 11 | 3 | 43 | 39 | |||||||||||||
Revenues | $ | 140,150 | $ | 110,078 | $ | 397,532 | $ | 308,261 | |||||||||
Total segment operating profit: | $ | 27,597 | $ | 22,158 | $ | 76,735 | $ | 63,125 | |||||||||
Unallocated amounts: | |||||||||||||||||
Other revenues | 11 | 3 | 43 | 39 | |||||||||||||
Stock-based compensation expense | (3,365 | ) | (2,046 | ) | (9,791 | ) | (5,369 | ) | |||||||||
Stock charge | — | — | — | (640 | ) | ||||||||||||
Non-corporate taxes | (690 | ) | (391 | ) | (2,190 | ) | (1,630 | ) | |||||||||
Professional fees | (594 | ) | (493 | ) | (2,668 | ) | (1,811 | ) | |||||||||
Depreciation and amortization | (732 | ) | (448 | ) | (2,162 | ) | (756 | ) | |||||||||
Bank charges | (261 | ) | (278 | ) | (914 | ) | (823 | ) | |||||||||
Other corporate expenses | (1,736 | ) | (1,769 | ) | (5,752 | ) | (4,785 | ) | |||||||||
Income from operations | 20,230 | 16,736 | 53,301 | 47,350 | |||||||||||||
Interest and other income, net | 846 | 486 | 2,245 | 1,422 | |||||||||||||
Foreign exchange loss | (720 | ) | (635 | ) | (2,088 | ) | (1,949 | ) | |||||||||
Income before provision for income taxes | $ | 20,356 | $ | 16,587 | $ | 53,458 | $ | 46,823 | |||||||||
Geographic Area Information | |||||||||||||||||
Management has determined that it is not practical to allocate identifiable assets by segment since such assets are used interchangeably among the segments. Geographical information about the Company’s long-lived assets based on physical location of the assets is as follows: | |||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||
Belarus | $ | 39,417 | $ | 40,095 | |||||||||||||
Ukraine | 5,359 | 5,357 | |||||||||||||||
Russia | 3,462 | 3,234 | |||||||||||||||
United States | 2,535 | 2,048 | |||||||||||||||
Hungary | 2,498 | 1,744 | |||||||||||||||
Other | 791 | 657 | |||||||||||||||
Total | $ | 54,062 | $ | 53,135 | |||||||||||||
Long-lived assets include property and equipment, net of accumulated depreciation and amortization. | |||||||||||||||||
Information about the Company’s revenues by client location is as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
United States | $ | 62,871 | $ | 50,365 | $ | 180,067 | $ | 145,629 | |||||||||
United Kingdom | 26,637 | 25,651 | 81,416 | 70,777 | |||||||||||||
Switzerland | 13,920 | 8,496 | 33,934 | 21,438 | |||||||||||||
Russia | 11,534 | 10,554 | 36,464 | 29,045 | |||||||||||||
Canada | 9,162 | 3,270 | 22,980 | 5,816 | |||||||||||||
Germany | 5,141 | 4,325 | 14,211 | 11,766 | |||||||||||||
Kazakhstan | 2,921 | 2,967 | 7,414 | 6,300 | |||||||||||||
Netherlands | 1,895 | 750 | 6,665 | 2,408 | |||||||||||||
Sweden | 1,382 | 1,006 | 3,986 | 3,478 | |||||||||||||
Spain | 448 | 387 | 1,689 | 1,109 | |||||||||||||
Ukraine | 193 | 181 | 524 | 4,556 | |||||||||||||
Other locations | 1,860 | 733 | 3,048 | 1,753 | |||||||||||||
Reimbursable expenses and other revenues | 2,186 | 1,393 | 5,134 | 4,186 | |||||||||||||
Revenues | $ | 140,150 | $ | 110,078 | $ | 397,532 | $ | 308,261 | |||||||||
Service Offering Information | |||||||||||||||||
Information about the Company’s revenues by service offering is as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Software development | $ | 93,870 | $ | 73,894 | $ | 267,948 | $ | 206,045 | |||||||||
Application testing services | 27,773 | 22,001 | 78,473 | 61,297 | |||||||||||||
Application maintenance and support | 11,758 | 8,806 | 33,245 | 25,775 | |||||||||||||
Infrastructure services | 3,754 | 3,213 | 10,625 | 8,965 | |||||||||||||
Licensing | 809 | 771 | 2,107 | 1,993 | |||||||||||||
Reimbursable expenses and other revenues | 2,186 | 1,393 | 5,134 | 4,186 | |||||||||||||
Revenues | $ | 140,150 | $ | 110,078 | $ | 397,532 | $ | 308,261 |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
STOCK-BASED COMPENSATION [Abstract] | ' | ||||||||||||
STOCK-BASED COMPENSATION | ' | ||||||||||||
12 | STOCK-BASED COMPENSATION | ||||||||||||
The following costs related to the Company’s stock compensation plans are included in the unaudited consolidated statements of income: | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
Cost of revenues | $ | 1,498 | $ | 1,036 | $ | 3,356 | $ | 2,486 | |||||
Selling, general and administrative expenses | 1,867 | 1,010 | 6,435 | 2,883 | |||||||||
Total | $ | 3,365 | $ | 2,046 | $ | 9,791 | $ | 5,369 | |||||
During the second quarter of 2013, the Company finalized the fair values of the net assets acquired from Empathy Lab (See Note 2). As a result, the Company issued an additional 1,483 shares of non-vested (“restricted”) common stock to the sellers of Empathy Lab on July 11, 2013 to settle the difference between the initial number of shares issued upon acquisition and the total number of shares due in connection with this transaction. The shares vest 33.33% on each of the first, second and third anniversaries of the closing date. Upon termination of the recipient’s services with the Company with Cause or without Good Reason (in each case, as defined in the escrow agreement), any unvested shares will be forfeited. The fair value of the restricted shares at the time of grant was $42. | |||||||||||||
2012 Non-Employee Directors Compensation Plan—On January 11, 2012, the Company approved the 2012 Non-Employee Directors Compensation Plan (“2012 Directors Plan”), which will be used to issue equity grants to its non-employee directors. The Company authorized 600,000 shares of common stock to be reserved for issuance under the plan. The 2012 Directors Plan will expire after 10 years and will be administered by the Company’s Board of Directors. | |||||||||||||
On January 8, 2013, the Company issued 5,257 shares of non-vested (“restricted”) stock to its new non-employee director under the 2012 Non-Employee Directors Compensation Plan. The shares will vest and become unforfeitable 25% on each of the first, second, third and fourth anniversaries of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro | |||||||||||||
rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $101. | |||||||||||||
On June 13, 2013, the Company issued 8,784 shares of non-vested (“restricted”) stock to its non-employee directors under the 2012 Non-Employee Directors Compensation Plan. The shares will vest and become unforfeitable on the first anniversary of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $225. | |||||||||||||
2012 Long-Term Incentive Plan — On January 11, 2012, the Company approved the 2012 Long-Term Incentive Plan (“2012 Plan”), which will be used to issue equity grants to employees. As of September 30, 2013, 7,038,711 shares of common stock remained available for issuance under the 2012 Plan (this number includes shares that remained available for issuance under the 2006 Plan (as defined below) at the time of its discontinuance and any shares that were subject to an option that was previously granted under the 2006 Plan and that expired or terminated for any reason prior to exercise between the date of discontinuance of the 2006 Plan and September 30, 2013). In addition, up to 2,901,257 shares that are subject to outstanding awards as of September 30, 2013 under the 2006 Plan and that expire or terminate for any reason prior to exercise or that would otherwise have returned to the 2006 Plan’s share reserve under the terms of the 2006 Plan will be available for awards to be granted under the 2012 Plan. | |||||||||||||
During the nine months ended September 30, 2013, the Company issued a total of 1,931,500 stock options under its 2012 Long-Term Incentive Plan with an aggregate grant-date fair value of $18,530. | |||||||||||||
2006 Stock Option Plan — Effective May 31, 2006, the Board of Directors of the Company adopted the 2006 Stock Option Plan (the “2006 Plan”). The Company’s stock option plan permitted the granting of options to directors, employees, and certain independent contractors. The Compensation Committee of the Board of Directors generally had the authority to select individuals who were to receive options and to specify the terms and conditions of each option so granted, including the number of shares covered by the option, the exercise price, vesting provisions, and the overall option term. In January 2012, the 2006 Plan was discontinued; however, outstanding awards remain subject to the terms of the 2006 Plan and any shares that are subject to an option that was previously granted under the 2006 Plan and that will expire or terminate for any reason prior to exercise will become again available for issuance under the 2012 Plan. All of the options issued pursuant to the 2006 Plan expire 10 years from the date of grant. | |||||||||||||
Stock option activity under the Company’s plans is set forth below: | |||||||||||||
Number of | Weighted Average | Aggregate | |||||||||||
Options | Exercise Price | Intrinsic Value | |||||||||||
Options outstanding at January 1, 2013 | 6,296,709 | $ | 7.51 | $ | 66,682 | ||||||||
Options granted | 1,931,500 | 23.19 | 21,845 | ||||||||||
Options exercised | (1,917,134 | ) | 4.07 | (58,338 | ) | ||||||||
Options forfeited/cancelled | (243,918 | ) | 10.74 | (5,795 | ) | ||||||||
Options outstanding at September 30, 2013 | 6,067,157 | $ | 13.47 | $ | 127,592 | ||||||||
Options vested and exercisable at September 30, 2013 | 2,384,193 | $ | 6.03 | $ | 67,878 | ||||||||
Options expected to vest | 3,392,301 | $ | 18.14 | $ | 55,498 | ||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line method over the service period (generally the vesting period). Additionally, the Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses a combination of historical data and other factors to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. There were no material changes with respect to the assumptions used in the Black-Scholes option valuation model during the nine months ended September 30, 2013 as compared with the assumptions disclosed in Part II. Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. | |||||||||||||
Summary of restricted stock activity as of September 30, 2013, and changes during the nine months then ended is presented below: | |||||||||||||
Number of | Weighted Average Grant Date Fair Value Per Share | ||||||||||||
Shares | |||||||||||||
Unvested restricted stock outstanding at January 1, 2013 | 659,872 | $ | 17.92 | ||||||||||
Restricted stock granted | 15,524 | 23.69 | |||||||||||
Restricted stock vested | (172,987 | ) | (16.71 | ) | |||||||||
Unvested restricted stock outstanding at September 30, 2013 | 502,409 | $ | 18.51 | ||||||||||
As of September 30, 2013, total unrecognized compensation cost related to non-vested share-based compensation awards was $32,177. That cost is expected to be recognized over the next 2 years using the weighted average method. |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended | |
Sep. 30, 2013 | ||
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | ' | |
RECENT ACCOUNTING PRONOUNCEMENTS | ' | |
13 | RECENT ACCOUNTING PRONOUNCEMENTS | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 is a new accounting standard on the financial statement presentation of unrecognized tax benefits. The new standard provides that a liability related to an unrecognized tax benefit would be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The new standard becomes effective for the periods commencing January 1, 2014, and it should be applied prospectively to unrecognized tax benefits that exist at the effective date with retrospective application permitted. The Company is currently assessing the impacts of this new standard on its financial conditions, results of operating and cash flows. | ||
In March 2013, the FASB issued ASU 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” ASU 2013-05 updates accounting guidance related to the application of consolidation guidance and foreign currency matters. This guidance resolves the diversity in practice about what guidance applies to the release of the cumulative translation adjustment into net income. This guidance is effective for interim and annual periods beginning after December 15, 2013. The Company does not expect the adoption of this pronouncement to have a material effect on its financial condition, results of operations and cash flows. | ||
In February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income (“AOCI”). The ASU is intended to help entities improve the transparency of changes in other comprehensive income (OCI) and items reclassified out of AOCI in their financial statements. It does not amend any existing requirements for reporting net income or OCI in the financial statements. New disclosure requirements are effective for fiscal periods beginning after December 15, 2012 and are applied prospectively. The Company adopted the ASU effective January 1, 2013. The adoption of this standard did not have any effect on the Company’s financial reporting because the only item that had historically affected AOCI and therefore included in cumulative AOCI was currency translation adjustments. | ||
In January 2013, the FASB issued ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.” The ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the Codification or subject to a master netting arrangement or similar agreement. The ASU is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods and requires retrospective application for all comparative periods presented. The Company adopted the ASU effective January 1, 2013. The adoption of this standard did not have any effect on the Company’s financial condition, results of operations and cash flows. | ||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | |
Sep. 30, 2013 | ||
SUBSEQUENT EVENTS [Abstract] | ' | |
SUBSEQUENT EVENTS | ' | |
14 | SUBSEQUENT EVENTS | |
On October 31, 2013, the Company issued 56,450 options to purchase common stock under its 2012 Plan with the aggregate grant date fair value of $940. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
BASIS OF PRESENTATION [Abstract] | ' |
Reclassifications | ' |
The Company reclassified certain prior period amounts to conform to the current period presentation. Such reclassifications had no effect on the Company’s results of operations or total stockholders’ equity. | |
Use of Estimates | ' |
Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience, knowledge of current conditions and its beliefs of what could occur in the future, given available information. Actual results could differ from those estimates, and such differences may be material to the financial statements. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments — The Company makes significant assumptions about fair values of its financial instruments. Where the fair values of financial assets and liabilities recorded in the consolidated balance sheet cannot be derived from an active market, they are determined using a variety of valuation techniques. These valuation techniques include a net present value technique, comparison to similar instruments with market observable inputs, options pricing models and other relevant valuation models. Inputs into these models are taken from observable market data whenever possible, but in instances where it is not feasible, a degree of judgment is required to establish fair values. | |
Cash and cash equivalents — are considered Level 1 measurements. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. | |
Restricted cash and time deposits — are considered Level 2 measurements. Fair values of Level 2 measurements are determined by analyzing quoted prices for similar assets in an active market, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable, and market-corroborated inputs, which are derived principally from or corroborated by observable market data. As of September 30, 2013, carrying values of restricted cash and time deposits approximated their fair values. | |
Employee Housing Loans — The Company issues loans to its employees under the Employee Housing Program (“housing loans”). Housing loans are issued in U.S. Dollars with a 5-year term and carry an interest rate of 7.5%. The program was designed to be a retention mechanism for the Company’s employees in Belarus. | |
Although permitted by authoritative guidance, the Company did not elect a fair value option for these financial instruments. These housing loans are measured at fair value upon initial recognition and subsequently carried at amortized cost less allowance for loan losses. Any difference between the carrying value and the fair value of a loan upon initial recognition (“day-one” recognition) is charged to expense. | |
The housing loans were classified as Level 3 measurements within the fair value hierarchy because they were valued using significant unobservable inputs. The estimated fair value of these housing loans upon initial recognition was computed by projecting the future contractual cash flows to be received from the loans and discounting those projected net cash flows to a present value, which is the estimated fair value (the “Income Approach”). In applying the Income Approach, the Company analyzed similar loans offered by third-party financial institutions in Belarusian Rubles (“BYR”) and adjusted the interest rates charged on such loans to exclude the effects of underlying economic factors, such as inflation and currency devaluation. The Company also assessed the probability of future defaults and associated cash flows impact. In addition, the Company separately analyzed the rate of return that market participants in Belarus would require when investing in unsecured USD-denominated government bonds with similar maturities (a “risk-free rate”) and evaluated a risk premium component to compensate the market participants for the credit and liquidity risks inherent in the loans’ cash flows, as described in the following paragraph. As a result of the analysis performed, the Company determined the carrying values of the housing loans issued during the nine months ended September 30, 2013 approximated their fair values upon initial recognition. The Company also estimated the fair values of the housing loans that were outstanding as of September 30, 2013 using the inputs noted above and determined their fair values approximated the carrying values as of that date. | |
Repayment of housing loans is primarily dependent on personal income of borrowers obtained through employment with the Company, which income is set in U.S. Dollars and is not closely correlated with common macroeconomic risks existing in Belarus, such as inflation, local currency devaluation and decrease in the purchasing power of the borrowers’ income. Given a large demand for the program among the Company’s employees and its advantages as compared to alternative methods of financing available on the market, the Company expects the borrowers to fulfill their obligations and estimates the probability of voluntary termination of employment among the borrowers as de minimis. Additionally, housing loans are capped at $50 per loan and secured by real estate financed through the program. The Company establishes a maximum loan-to-value ratio of 70% and expects a decrease in the ratio over the life of a housing loan due to on-going payments by employees. | |
Employee loans, other — are short-term non-interest bearing relocation loans and other employee loans. These loans are considered Level 3 measurements. The Company’s Level 3, unobservable inputs reflect its assumptions about the factors that market participants use in pricing similar receivables, and are based on the best information available in the circumstances. Due to a short-term nature of employee loans, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. As of September 30, 2013, carrying values of these employee loans approximated their fair values. | |
Employee Loans | ' |
Employee Loans — Loans are initially recorded at their fair value, and subsequently measured at their amortized cost, less allowance for loan losses, if any. The Company intends to hold all employee loans until their maturity. Interest income is reported using the effective interest method. Where applicable, loan origination fees, net of direct origination costs, are deferred and recognized in interest income over the life of the loan. | |
Generally, loans are placed on nonaccrual status at 90 days past due. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. All interest accrued but not collected for loans that are placed on nonaccrual is reversed against interest income. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. Interest income on loans individually classified as impaired is recognized on a cash basis after all past due and current principal payments have been made. | |
Allowance for Loan Losses | ' |
Allowance for Loan Losses — The allowance for loan losses is established when losses are deemed to have occurred through a provision for loan losses charged to income and represents management’s estimate of probable credit losses inherent in the loan portfolio. Determining the amount of the allowance for loan losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated fair value of collateral securing the loans, estimated losses on loans based on historical loss experience, and consideration of current economic trends and conditions, all of which may be susceptible to significant change. | |
Loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, amounts of allowances are allocated to individual loans based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to the Company. In its review, the Company evaluates the collectability of both principal and interest when assessing the need for a loss accrual. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. | |
The general allowance covers loans for which no individual impairment has been identified. Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. | |
Write-offs of unrecoverable loans are charged against the allowance when management believes the uncollectability of a loan balance and any interest due thereon is confirmed. Subsequent recoveries, if any, are credited to the provision for bad debts. | |
Off-Balance Sheet Financial Instruments | ' |
Off-Balance Sheet Financial Instruments — include credit instruments, such as commitments to make employee loans and related guarantees, standby letters of credit and guarantees issued under customer contracts. The face amount for these items represents the exposure to loss, before considering available collateral or the borrower’s ability to repay. Such financial instruments are recorded when they are funded. Loss contingencies arising from off-balance sheet credit exposures are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company does not believe there are such matters that will have a material effect on the consolidated financial statements. | |
Emerging Growth Company Status | ' |
Emerging Growth Company Status — In April 2012, several weeks after EPAM’s initial public offering in February 2012, President Obama signed into law the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act contains provisions that relax certain requirements for “emerging growth companies” that otherwise apply to larger public companies. For as long as a company retains emerging growth company status, which may be until the fiscal year-end after the fifth anniversary of its initial public offering, it will not be required to (1) provide an auditor’s attestation report on its management’s assessment of the effectiveness of its internal control over financial reporting, otherwise required by Section 404(b) of the Sarbanes-Oxley Act of 2002, (2) comply with any new or revised financial accounting standard applicable to public companies until such standard is also applicable to private companies, (3) comply with certain new requirements adopted by the Public Company Accounting Oversight Board, (4) provide certain disclosure regarding executive compensation required of larger public companies or (5) hold shareholder advisory votes on matters relating to executive compensation. | |
EPAM is classified as an emerging growth company under the JOBS Act and is eligible to take advantage of the accommodations described above for as long as it retains this status. However, EPAM has elected not to take advantage of the transition period described in (2) above, which is the exemption provided in Section 7(a)(2)(B) of the Securities Act of 1933 and Section 13(a) of the Securities Exchange Act of 1934 (in each case as amended by the JOBS Act) for complying with new or revised financial accounting standards. EPAM will therefore comply with new or revised financial accounting standards to the same extent that a non-emerging growth company is required to comply with such standards. |
GOODWILL_Tables
GOODWILL (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
GOODWILL [Abstract] | ' | ||||||||||||||||||||
Changes in Goodwill | ' | ||||||||||||||||||||
Changes in goodwill for the nine months ended September 30, 2013 were as follows: | |||||||||||||||||||||
North America | EU | Russia | Other | Total | |||||||||||||||||
1-Jan-13 | |||||||||||||||||||||
Goodwill | $ | 16,643 | $ | 2,864 | $ | 3,191 | $ | 1,697 | $ | 24,395 | |||||||||||
Accumulated impairment losses | — | — | — | (1,697 | ) | (1,697 | ) | ||||||||||||||
16,643 | 2,864 | 3,191 | — | 22,698 | |||||||||||||||||
Effect of net foreign currency exchange rate changes | (101 | ) | — | (186 | ) | — | (287 | ) | |||||||||||||
30-Sep-13 | |||||||||||||||||||||
Goodwill | 16,542 | 2,864 | 3,005 | 1,697 | 24,108 | ||||||||||||||||
Accumulated impairment losses | — | — | — | (1,697 | ) | (1,697 | ) | ||||||||||||||
$ | 16,542 | $ | 2,864 | $ | 3,005 | $ | — | $ | 22,411 |
RESTRICTED_CASH_AND_TIME_DEPOS1
RESTRICTED CASH AND TIME DEPOSITS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
RESTRICTED CASH AND TIME DEPOSITS [Abstract] | ' | ||||||||
Components of Restricted Cash and Time Deposits | ' | ||||||||
Restricted cash and time deposits consisted of the following: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Time deposits | $ | — | $ | 1,006 | |||||
Short-term security deposits under client contracts | 217 | 660 | |||||||
Long-term deposits under employee loan programs | 246 | 360 | |||||||
Long-term deposits under operating leases | — | 107 | |||||||
Total | $ | 463 | $ | 2,133 |
EMPLOYEE_LOANS_AND_ALLOWANCE_F1
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES [Abstract] | ' | ||||||||
Categories of Employee Loans Included in Loans Portfolio | ' | ||||||||
At September 30, 2013 and December 31, 2012, categories of employee loans included in the loan portfolio were as follows: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Housing loans | $ | 5,868 | $ | — | |||||
Relocation and other loans | 436 | 429 | |||||||
Total employee loans | 6,304 | 429 | |||||||
Less: | |||||||||
Allowance for loan losses | — | — | |||||||
Total loans, net of allowance for loan losses | $ | 6,304 | $ | 429 |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
EARNINGS PER SHARE [Abstract] | ' | ||||||||||||||||
Computation of Basic and Diluted Earning Per Share | ' | ||||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share of common stock as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(in thousands, except share and per share data) | |||||||||||||||||
Numerator for common earnings per share: | |||||||||||||||||
Net income | $ | 16,437 | $ | 14,065 | $ | 43,235 | $ | 39,485 | |||||||||
Net income allocated to participating securities | — | — | — | (3,259 | ) | ||||||||||||
Numerator for basic earnings per share | 16,437 | 14,065 | 43,235 | 36,226 | |||||||||||||
Effect on income available from reallocation of options | — | — | — | 263 | |||||||||||||
Numerator for diluted earnings per share | $ | 16,437 | $ | 14,065 | $ | 43,235 | $ | 36,489 | |||||||||
Denominator for basic earnings per share: | |||||||||||||||||
Weighted average common shares outstanding | 46,162 | 42,952 | 45,492 | 38,990 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options | 2,558 | 3,549 | 2,628 | 3,739 | |||||||||||||
Denominator for diluted earnings per share | 48,720 | 46,501 | 48,120 | 42,729 | |||||||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 0.36 | $ | 0.33 | $ | 0.95 | $ | 0.93 | |||||||||
Diluted | $ | 0.34 | $ | 0.3 | $ | 0.9 | $ | 0.85 | |||||||||
Anti-dilutive options not included in the calculation | 1,873 | 1,953 | 1,399 | 1,582 |
OPERATING_SEGMENTS_Tables
OPERATING SEGMENTS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
OPERATING SEGMENTS [Abstract] | ' | ||||||||||||||||
Revenues from External Customers and Segment Operating Profit before Unallocated Expenses | ' | ||||||||||||||||
Revenues from external customers and segment operating profit, before unallocated expenses, for the North America, Europe, Russia and Other reportable segments for the three and nine months ended September 30, 2013 and 2012, were as follows: | |||||||||||||||||
Three Months Ended | Nine MonthsEnded | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Total segment revenues: | |||||||||||||||||
North America | $ | 73,480 | $ | 52,767 | $ | 205,613 | $ | 142,333 | |||||||||
Europe | 51,531 | 42,505 | 146,108 | 123,160 | |||||||||||||
Russia | 12,050 | 11,688 | 37,901 | 30,943 | |||||||||||||
Other | 3,078 | 3,115 | 7,867 | 11,786 | |||||||||||||
Total segment revenues | $ | 140,139 | $ | 110,075 | $ | 397,489 | $ | 308,222 | |||||||||
Segment operating profit: | |||||||||||||||||
North America | $ | 18,133 | $ | 10,450 | $ | 48,527 | $ | 30,616 | |||||||||
Europe | 8,049 | 8,798 | 24,538 | 24,461 | |||||||||||||
Russia | 391 | 1,680 | 2,710 | 3,498 | |||||||||||||
Other | 1,024 | 1,230 | 960 | 4,550 | |||||||||||||
Total segment operating profit | $ | 27,597 | $ | 22,158 | $ | 76,735 | $ | 63,125 | |||||||||
Reconciliation of Segment Revenues and Operating Profit to Consolidated Income Before Provision for Income Taxes | ' | ||||||||||||||||
Reconciliation of segment revenues and operating profit to consolidated income before provision for income taxes is presented below: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Total segment revenues | $ | 140,139 | $ | 110,075 | $ | 397,489 | $ | 308,222 | |||||||||
Unallocated revenue | 11 | 3 | 43 | 39 | |||||||||||||
Revenues | $ | 140,150 | $ | 110,078 | $ | 397,532 | $ | 308,261 | |||||||||
Total segment operating profit: | $ | 27,597 | $ | 22,158 | $ | 76,735 | $ | 63,125 | |||||||||
Unallocated amounts: | |||||||||||||||||
Other revenues | 11 | 3 | 43 | 39 | |||||||||||||
Stock-based compensation expense | (3,365 | ) | (2,046 | ) | (9,791 | ) | (5,369 | ) | |||||||||
Stock charge | — | — | — | (640 | ) | ||||||||||||
Non-corporate taxes | (690 | ) | (391 | ) | (2,190 | ) | (1,630 | ) | |||||||||
Professional fees | (594 | ) | (493 | ) | (2,668 | ) | (1,811 | ) | |||||||||
Depreciation and amortization | (732 | ) | (448 | ) | (2,162 | ) | (756 | ) | |||||||||
Bank charges | (261 | ) | (278 | ) | (914 | ) | (823 | ) | |||||||||
Other corporate expenses | (1,736 | ) | (1,769 | ) | (5,752 | ) | (4,785 | ) | |||||||||
Income from operations | 20,230 | 16,736 | 53,301 | 47,350 | |||||||||||||
Interest and other income, net | 846 | 486 | 2,245 | 1,422 | |||||||||||||
Foreign exchange loss | (720 | ) | (635 | ) | (2,088 | ) | (1,949 | ) | |||||||||
Income before provision for income taxes | $ | 20,356 | $ | 16,587 | $ | 53,458 | $ | 46,823 | |||||||||
Geographical Information of Long-Lived Assets Based on Physical Location | ' | ||||||||||||||||
Management has determined that it is not practical to allocate identifiable assets by segment since such assets are used interchangeably among the segments. Geographical information about the Company’s long-lived assets based on physical location of the assets is as follows: | |||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||
Belarus | $ | 39,417 | $ | 40,095 | |||||||||||||
Ukraine | 5,359 | 5,357 | |||||||||||||||
Russia | 3,462 | 3,234 | |||||||||||||||
United States | 2,535 | 2,048 | |||||||||||||||
Hungary | 2,498 | 1,744 | |||||||||||||||
Other | 791 | 657 | |||||||||||||||
Total | $ | 54,062 | $ | 53,135 | |||||||||||||
Revenues by Client Location | ' | ||||||||||||||||
Information about the Company’s revenues by client location is as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
United States | $ | 62,871 | $ | 50,365 | $ | 180,067 | $ | 145,629 | |||||||||
United Kingdom | 26,637 | 25,651 | 81,416 | 70,777 | |||||||||||||
Switzerland | 13,920 | 8,496 | 33,934 | 21,438 | |||||||||||||
Russia | 11,534 | 10,554 | 36,464 | 29,045 | |||||||||||||
Canada | 9,162 | 3,270 | 22,980 | 5,816 | |||||||||||||
Germany | 5,141 | 4,325 | 14,211 | 11,766 | |||||||||||||
Kazakhstan | 2,921 | 2,967 | 7,414 | 6,300 | |||||||||||||
Netherlands | 1,895 | 750 | 6,665 | 2,408 | |||||||||||||
Sweden | 1,382 | 1,006 | 3,986 | 3,478 | |||||||||||||
Spain | 448 | 387 | 1,689 | 1,109 | |||||||||||||
Ukraine | 193 | 181 | 524 | 4,556 | |||||||||||||
Other locations | 1,860 | 733 | 3,048 | 1,753 | |||||||||||||
Reimbursable expenses and other revenues | 2,186 | 1,393 | 5,134 | 4,186 | |||||||||||||
Revenues | $ | 140,150 | $ | 110,078 | $ | 397,532 | $ | 308,261 | |||||||||
Revenues by Service Offering | ' | ||||||||||||||||
Information about the Company’s revenues by service offering is as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Software development | $ | 93,870 | $ | 73,894 | $ | 267,948 | $ | 206,045 | |||||||||
Application testing services | 27,773 | 22,001 | 78,473 | 61,297 | |||||||||||||
Application maintenance and support | 11,758 | 8,806 | 33,245 | 25,775 | |||||||||||||
Infrastructure services | 3,754 | 3,213 | 10,625 | 8,965 | |||||||||||||
Licensing | 809 | 771 | 2,107 | 1,993 | |||||||||||||
Reimbursable expenses and other revenues | 2,186 | 1,393 | 5,134 | 4,186 | |||||||||||||
Revenues | $ | 140,150 | $ | 110,078 | $ | 397,532 | $ | 308,261 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
STOCK-BASED COMPENSATION [Abstract] | ' | ||||||||||||
Costs Related to Stock Compensation Plans | ' | ||||||||||||
The following costs related to the Company’s stock compensation plans are included in the unaudited consolidated statements of income: | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
Cost of revenues | $ | 1,498 | $ | 1,036 | $ | 3,356 | $ | 2,486 | |||||
Selling, general and administrative expenses | 1,867 | 1,010 | 6,435 | 2,883 | |||||||||
Total | $ | 3,365 | $ | 2,046 | $ | 9,791 | $ | 5,369 | |||||
Stock Option Activity | ' | ||||||||||||
Stock option activity under the Company’s plans is set forth below: | |||||||||||||
Number of | Weighted Average | Aggregate | |||||||||||
Options | Exercise Price | Intrinsic Value | |||||||||||
Options outstanding at January 1, 2013 | 6,296,709 | $ | 7.51 | $ | 66,682 | ||||||||
Options granted | 1,931,500 | 23.19 | 21,845 | ||||||||||
Options exercised | (1,917,134 | ) | 4.07 | (58,338 | ) | ||||||||
Options forfeited/cancelled | (243,918 | ) | 10.74 | (5,795 | ) | ||||||||
Options outstanding at September 30, 2013 | 6,067,157 | $ | 13.47 | $ | 127,592 | ||||||||
Options vested and exercisable at September 30, 2013 | 2,384,193 | $ | 6.03 | $ | 67,878 | ||||||||
Options expected to vest | 3,392,301 | $ | 18.14 | $ | 55,498 | ||||||||
Restricted Stock Activity | ' | ||||||||||||
Summary of restricted stock activity as of September 30, 2013, and changes during the nine months then ended is presented below: | |||||||||||||
Number of | Weighted Average Grant Date Fair Value Per Share | ||||||||||||
Shares | |||||||||||||
Unvested restricted stock outstanding at January 1, 2013 | 659,872 | $ | 17.92 | ||||||||||
Restricted stock granted | 15,524 | 23.69 | |||||||||||
Restricted stock vested | (172,987 | ) | (16.71 | ) | |||||||||
Unvested restricted stock outstanding at September 30, 2013 | 502,409 | $ | 18.51 |
BASIS_OF_PRESENTATION_Details
BASIS OF PRESENTATION (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items] | ' |
Loan term | '5 years |
Interest rate on loan | 7.50% |
Capped price per housing loan | $50 |
Maximum loan-to-value-ratio | 70.00% |
Loans on nonaccrual status | '90 days |
ACQUISITIONS_Details
ACQUISITIONS (Details) (Empathy Lab, USD $) | Jun. 30, 2013 |
In Thousands, unless otherwise specified | |
Empathy Lab | ' |
Business Acquisition [Line Items] | ' |
Total consideration transferred | $27,172 |
GOODWILL_Details
GOODWILL (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Goodwill [Roll Forward] | ' |
Goodwill beginning balance | $24,395 |
Accumulated impairment losses, beginning balance | -1,697 |
Goodwill beginning balance | 22,698 |
Effect of net foreign currency exchange rate changes | -287 |
Goodwill ending balance | 24,108 |
Accumulated impairment losses, ending balance | -1,697 |
Goodwill ending balance | 22,411 |
North America [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill beginning balance | 16,643 |
Accumulated impairment losses, beginning balance | 0 |
Goodwill beginning balance | 16,643 |
Effect of net foreign currency exchange rate changes | -101 |
Goodwill ending balance | 16,542 |
Accumulated impairment losses, ending balance | 0 |
Goodwill ending balance | 16,542 |
EU [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill beginning balance | 2,864 |
Accumulated impairment losses, beginning balance | 0 |
Goodwill beginning balance | 2,864 |
Effect of net foreign currency exchange rate changes | 0 |
Goodwill ending balance | 2,864 |
Accumulated impairment losses, ending balance | 0 |
Goodwill ending balance | 2,864 |
Russia [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill beginning balance | 3,191 |
Accumulated impairment losses, beginning balance | 0 |
Goodwill beginning balance | 3,191 |
Effect of net foreign currency exchange rate changes | -186 |
Goodwill ending balance | 3,005 |
Accumulated impairment losses, ending balance | 0 |
Goodwill ending balance | 3,005 |
Other Segment [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill beginning balance | 1,697 |
Accumulated impairment losses, beginning balance | -1,697 |
Goodwill beginning balance | 0 |
Effect of net foreign currency exchange rate changes | 0 |
Goodwill ending balance | 1,697 |
Accumulated impairment losses, ending balance | -1,697 |
Goodwill ending balance | $0 |
RESTRICTED_CASH_AND_TIME_DEPOS2
RESTRICTED CASH AND TIME DEPOSITS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule Of Deposits Assets Current And Noncurrent [Line Items] | ' | ' |
Time deposits | $0 | $1,006 |
Restricted cash, current | 217 | 660 |
Restricted cash, long-term | 246 | 467 |
Total | 463 | 2,133 |
Provision for Loss on Contracts | 0 | 0 |
Time Deposits [Member] | ' | ' |
Schedule Of Deposits Assets Current And Noncurrent [Line Items] | ' | ' |
Time deposits | 0 | 1,006 |
Interest rate of time deposits | ' | 2.95% |
Security Deposits under Client Contracts [Member] | ' | ' |
Schedule Of Deposits Assets Current And Noncurrent [Line Items] | ' | ' |
Restricted cash, current | 217 | 660 |
Deposits under Employee Loan Programs [Member] | ' | ' |
Schedule Of Deposits Assets Current And Noncurrent [Line Items] | ' | ' |
Restricted cash, long-term | 246 | 360 |
Deposits under Operating Leases [Member] | ' | ' |
Schedule Of Deposits Assets Current And Noncurrent [Line Items] | ' | ' |
Restricted cash, long-term | $0 | $107 |
EMPLOYEE_LOANS_AND_ALLOWANCE_F2
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) (USD $) | 9 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
Principal Officers, Directors, and Their Affiliates [Member] | Principal Officers, Directors, and Their Affiliates [Member] | Loans Under Employee Housing Program [Member] | Loans Under Employee Housing Program [Member] | Relocation and Other Loans [Member] | Relocation and Other Loans [Member] | |||
Loan | Loan | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum service period for employee housing program | '3 years | ' | ' | ' | ' | ' | ' | ' |
Loans authorized for issuance, amount | $10,000 | ' | ' | ' | ' | ' | ' | ' |
Loan term | '5 years | ' | ' | ' | ' | ' | ' | ' |
Interest rate on loan | 7.50% | ' | ' | ' | ' | ' | ' | ' |
Total employee loans | 6,304 | 429 | ' | ' | 5,868 | 0 | 436 | 429 |
Less: Allowance for loan losses | 0 | 0 | ' | ' | ' | ' | ' | ' |
Total loans, net of allowance for loan losses | 6,304 | 429 | ' | ' | ' | ' | ' | ' |
Number of employee loans | ' | ' | 0 | 0 | ' | ' | ' | ' |
Past due employee loans | 0 | 0 | ' | ' | ' | ' | ' | ' |
Employee loans on nonaccrual status | $0 | $0 | ' | ' | ' | ' | ' | ' |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Debt Instrument [Line Items] | ' |
Line of credit, maximum borrowing capacity | $40,000 |
Line of credit, expiration date | 15-Jan-15 |
Line of credit, current borrowing capacity | $40,000 |
Variable rate in addition to LIBOR | 1.25% |
Percentage of foreign subsidiaries outstanding shares of capital stock serves as collateral | 65.00% |
EMPLOYEE_BENEFITS_Details
EMPLOYEE BENEFITS (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
EMPLOYEE BENEFITS [Abstract] | ' | ' |
Discretionary matching contribution to retirement plan by employer | 2.00% | 2.00% |
Contribution by employer for retirement plan | $112 | $286 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes [Line Items] | ' | ' | ' | ' |
Effective tax rate | 19.30% | 15.20% | 19.10% | 15.70% |
Belarus [Member] | ' | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' | ' |
Tax exempt income | 100.00% | ' | ' | ' |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator for earnings per share: | ' | ' | ' | ' |
Net income | $16,437 | $14,065 | $43,235 | $39,485 |
Net income allocated to participating securities | 0 | 0 | 0 | -3,259 |
Numerator for basic earnings per share | 16,437 | 14,065 | 43,235 | 36,226 |
Effect on income available from reallocation of options | 0 | 0 | 0 | 263 |
Numerator for diluted earnings per share | $16,437 | $14,065 | $43,235 | $36,489 |
Denominator for basic earnings per share: | ' | ' | ' | ' |
Weighted average shares outstanding (in shares) | 46,162 | 42,952 | 45,492 | 38,990 |
Effect of dilutive securities (in shares): | ' | ' | ' | ' |
Stock options | 2,558 | 3,549 | 2,628 | 3,739 |
Denominator for diluted earnings per share (in shares) | 48,720 | 46,501 | 48,120 | 42,729 |
Net income per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.36 | $0.33 | $0.95 | $0.93 |
Diluted (in dollars per share) | $0.34 | $0.30 | $0.90 | $0.85 |
Stock Options | ' | ' | ' | ' |
Net income per share: | ' | ' | ' | ' |
Anti-dilutive options not included in the calculation (in shares) | 1,873 | 1,953 | 1,399 | 1,582 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Employee Loan Program [Member] | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' |
Percentage of security deposit under employee loan program | 30.00% | 30.00% |
Total commitment | $306 | $306 |
Provision for losses under employee loan program | 0 | 0 |
Construction in Progress [Member] | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' |
Total commitment | 3,822 | 3,822 |
Area of office building | 14,071 | 14,071 |
Employees Housing Program [Member] | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' |
Total commitment | 693 | 693 |
Provision for losses under employee loan program | $0 | $0 |
OPERATING_SEGMENTS_Revenues_fr
OPERATING SEGMENTS, Revenues from External Customers and Segment Operating Profit Before Unallocated Expenses (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | $140,150 | $110,078 | $397,532 | $308,261 |
Operating profit | 20,230 | 16,736 | 53,301 | 47,350 |
Russia [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 11,534 | 10,554 | 36,464 | 29,045 |
Operating Segments [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 140,139 | 110,075 | 397,489 | 308,222 |
Operating profit | 27,597 | 22,158 | 76,735 | 63,125 |
Operating Segments [Member] | North America [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 73,480 | 52,767 | 205,613 | 142,333 |
Operating profit | 18,133 | 10,450 | 48,527 | 30,616 |
Operating Segments [Member] | Europe [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 51,531 | 42,505 | 146,108 | 123,160 |
Operating profit | 8,049 | 8,798 | 24,538 | 24,461 |
Operating Segments [Member] | Russia [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 12,050 | 11,688 | 37,901 | 30,943 |
Operating profit | 391 | 1,680 | 2,710 | 3,498 |
Operating Segments [Member] | Other Reportable Segments [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 3,078 | 3,115 | 7,867 | 11,786 |
Operating profit | $1,024 | $1,230 | $960 | $4,550 |
OPERATING_SEGMENTS_Reconciliat
OPERATING SEGMENTS, Reconciliation of Segment Revenues and Operating Profit to Consolidated Income From Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | $140,150 | $110,078 | $397,532 | $308,261 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Income from operations | 20,230 | 16,736 | 53,301 | 47,350 |
Other revenues | 11 | 3 | 43 | 39 |
Stock-based compensation expense | -3,365 | -2,046 | -9,791 | -5,369 |
Stock charge | 0 | 0 | 0 | -640 |
Non-corporate taxes | -690 | -391 | -2,190 | -1,630 |
Professional fees | -594 | -493 | -2,668 | -1,811 |
Depreciation and amortization | -3,906 | -3,040 | -11,377 | -7,674 |
Bank charges | -261 | -278 | -914 | -823 |
Other corporate expenses | -1,736 | -1,769 | -5,752 | -4,785 |
Interest and other income, net | 846 | 486 | 2,245 | 1,422 |
Foreign exchange loss | -720 | -635 | -2,088 | -1,949 |
Income before provision for income taxes | 20,356 | 16,587 | 53,458 | 46,823 |
Operating Segments [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 140,139 | 110,075 | 397,489 | 308,222 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Income from operations | 27,597 | 22,158 | 76,735 | 63,125 |
Unallocated Amounts [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Depreciation and amortization | ($732) | ($448) | ($2,162) | ($756) |
OPERATING_SEGMENTS_Geographica
OPERATING SEGMENTS, Geographical Information of Long-Lived Assets Based on Physical Location (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' |
Long-lived assets | $54,062 | $53,135 |
Belarus [Member] | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' |
Long-lived assets | 39,417 | 40,095 |
Ukraine [Member] | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' |
Long-lived assets | 5,359 | 5,357 |
Russia [Member] | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' |
Long-lived assets | 3,462 | 3,234 |
United States [Member] | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' |
Long-lived assets | 2,535 | 2,048 |
Hungary [Member] | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' |
Long-lived assets | 2,498 | 1,744 |
Other locations [Member] | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' |
Long-lived assets | $791 | $657 |
OPERATING_SEGMENTS_Revenues_by
OPERATING SEGMENTS, Revenues by Client Location (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | $140,150 | $110,078 | $397,532 | $308,261 |
Reimbursable expenses and other revenues [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 2,186 | 1,393 | 5,134 | 4,186 |
United States [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 62,871 | 50,365 | 180,067 | 145,629 |
United Kingdom [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 26,637 | 25,651 | 81,416 | 70,777 |
Switzerland [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 13,920 | 8,496 | 33,934 | 21,438 |
Russia [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 11,534 | 10,554 | 36,464 | 29,045 |
Canada [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 9,162 | 3,270 | 22,980 | 5,816 |
Germany [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 5,141 | 4,325 | 14,211 | 11,766 |
Kazakhstan [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 2,921 | 2,967 | 7,414 | 6,300 |
Netherlands [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 1,895 | 750 | 6,665 | 2,408 |
Sweden [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 1,382 | 1,006 | 3,986 | 3,478 |
Spain [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 448 | 387 | 1,689 | 1,109 |
Ukraine [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | 193 | 181 | 524 | 4,556 |
Other Countries [Member] | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Revenues | $1,860 | $733 | $3,048 | $1,753 |
OPERATING_SEGMENTS_Revenues_by1
OPERATING SEGMENTS, Revenues by Service Offering (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenues | $140,150 | $110,078 | $397,532 | $308,261 |
Software development [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenues | 93,870 | 73,894 | 267,948 | 206,045 |
Application testing services [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenues | 27,773 | 22,001 | 78,473 | 61,297 |
Application maintenance and support [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenues | 11,758 | 8,806 | 33,245 | 25,775 |
Infrastructure services [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenues | 3,754 | 3,213 | 10,625 | 8,965 |
Licensing [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenues | 809 | 771 | 2,107 | 1,993 |
Reimbursable expenses and other revenues [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenues | $2,186 | $1,393 | $5,134 | $4,186 |
STOCKBASED_COMPENSATION_Costs_
STOCK-BASED COMPENSATION, Costs Related To Stock Compensation Plans (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | $3,365 | $2,046 | $9,791 | $5,369 |
Cost of revenues [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | 1,498 | 1,036 | 3,356 | 2,486 |
Selling, general and administrative expenses [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | $1,867 | $1,010 | $6,435 | $2,883 |
STOCKBASED_COMPENSATION_StockB
STOCK-BASED COMPENSATION, Stock-Based Compensation - Additional Information (Details) (USD $) | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Jul. 11, 2013 | Jan. 11, 2012 | Jun. 13, 2013 | Jan. 08, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 18, 2015 | Dec. 18, 2014 | Dec. 18, 2013 | Jan. 08, 2017 | Jan. 08, 2016 | Jan. 08, 2015 | Jan. 08, 2014 |
Restricted Stock Units (RSUs) | 2012 Non Employee Directors Compensation Plan | 2012 Non Employee Directors Compensation Plan | 2012 Non Employee Directors Compensation Plan | 2012 Long Term Incentive Plan | 2006 Stock Option Plan | 2006 Stock Option Plan | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | ||
Empathy Lab | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Maximum | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Non Employee Directors | Non Employee Directors | Non Employee Directors | Non Employee Directors | |||||
Empathy Lab | Empathy Lab | Empathy Lab | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | |||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares authorized to be reserved for issuance (in shares) | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2012 Directors Plan expiration period | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non vested common stock shares issued (in shares) | ' | 1,483 | ' | 8,784 | 5,257 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of Restricted stock shares vested (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 33.30% | 33.30% | 33.30% | 25.00% | 25.00% | 25.00% | 25.00% |
Fair value of restricted stock | ' | $42 | ' | $225 | $101 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares subject to outstanding awards that expire or terminate that are available for awards to be granted (in shares) | ' | ' | ' | ' | ' | ' | ' | 2,901,257 | ' | ' | ' | ' | ' | ' | ' |
Common stock shares available for issuance (in shares) | ' | ' | ' | ' | ' | 7,038,711 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued (in shares) | ' | ' | ' | ' | ' | 1,931,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued, grant date fair value | ' | ' | ' | ' | ' | 18,530 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options issued expiration period | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $32,177 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKBASED_COMPENSATION_Stock_
STOCK-BASED COMPENSATION, Stock Option Activity (Details) (USD $) | 9 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 |
Number of Options | ' |
Options outstanding at January 1, 2013 | 6,296,709 |
Options granted | 1,931,500 |
Options exercised | -1,917,134 |
Options forfeited/cancelled | -243,918 |
Options outstanding at September 30, 2013 | 6,067,157 |
Options vested and exercisable at September 30, 2013 | 2,384,193 |
Options expected to vest | 3,392,301 |
Weighted-Average Exercise Price | ' |
Options outstanding at January 1, 2013 | $7.51 |
Options granted | $23.19 |
Options exercised | $4.07 |
Options forfeited/cancelled | $10.74 |
Options outstanding at September 30, 2013 | $13.47 |
Options vested and exercisable at September 30, 2013 | $6.03 |
Options expected to vest | $18.14 |
Aggregate Intrinsic Value | ' |
Options outstanding at January 1, 2013 | $66,682 |
Options granted | 21,845 |
Options exercised | -58,338 |
Options forfeited/cancelled | -5,795 |
Options outstanding at September 30, 2013 | 127,592 |
Options vested and exercisable at September 30, 2013 | 67,878 |
Options expected to vest | $55,498 |
STOCKBASED_COMPENSATION_Stock_1
STOCK-BASED COMPENSATION, Stock Compensation Plans (Details) (Restricted Stock Units (RSUs), USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Restricted Stock Units (RSUs) | ' |
Number of Shares | ' |
Unvested restricted stock outstanding at January 1, 2013 | 659,872 |
Restricted stock granted | 15,524 |
Restricted stock vested | -172,987 |
Unvested restricted stock outstanding at September 30, 2013 | 502,409 |
Weighted-Average Grant Date Fair Value Per Share | ' |
Unvested restricted stock outstanding at January 1, 2013 | $17.92 |
Restricted stock granted | $23.69 |
Restricted stock vested | ($16.71) |
Unvested restricted stock outstanding at September 30, 2013 | $18.51 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (2012 Long Term Incentive Plan, USD $) | 9 Months Ended | 0 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Oct. 31, 2013 |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ' | ' |
Stock options issued (in shares) | 1,931,500 | 56,450 |
Stock options issued, grant date fair value | $18,530 | $940 |