Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document Documentand Entity Information [Abstract] | ||
Entity Registrant Name | EPAM Systems, Inc. | |
Entity Central Index Key | 1,352,010 | |
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 | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,971,442 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Document Period End Date | Sep. 30, 2015 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Trading Symbol | EPAM |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 214,443 | $ 220,534 |
Time deposits | 30,000 | 0 |
Accounts receivable, net of allowance of $2,216 and $2,181, respectively | 125,683 | 124,483 |
Unbilled revenues | 104,860 | 55,851 |
Prepaid and other current assets | 20,205 | 9,289 |
Employee loans, net of allowance of $0 and $0, respectively, current | 2,760 | 2,434 |
Deferred tax assets, current | 2,109 | 2,496 |
Total current assets | 500,060 | 415,087 |
Property and equipment, net | 60,552 | 55,134 |
Restricted cash, long-term | 187 | 156 |
Employee loans, net of allowance of $0 and $0, respectively, long-term | 4,177 | 4,081 |
Intangible assets, net | 37,176 | 47,689 |
Goodwill | 84,229 | 57,417 |
Deferred tax assets, long-term | 14,006 | 11,094 |
Other long-term assets | 3,341 | 3,368 |
Total assets | 703,728 | 594,026 |
Current liabilities | ||
Accounts payable | 12,061 | 4,641 |
Accrued expenses and other liabilities | 42,487 | 32,203 |
Deferred revenue, current | 2,345 | 3,220 |
Due to employees | 28,666 | 24,518 |
Taxes payable | 26,401 | 24,704 |
Contingent consideration, current (Note 2 and 4) | 0 | 35,524 |
Deferred tax liabilities, current | 408 | 603 |
Total current liabilities | 112,368 | 125,413 |
Long-term debt | 15,000 | 0 |
Deferred tax liabilities, long-term | 3,492 | 4,563 |
Total liabilities | $ 130,860 | $ 129,976 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity | ||
Common stock, $0.001 par value; 160,000,000 authorized; 49,857,284 and 48,748,298 shares issued, 49,848,259 and 48,303,811 shares outstanding at September 30, 2015 and December 31, 2014, respectively | $ 49 | $ 48 |
Additional paid-in capital | 284,938 | 229,501 |
Retained earnings | 317,412 | 260,598 |
Treasury stock | (80) | (4,043) |
Accumulated other comprehensive loss | (29,451) | (22,054) |
Total stockholders’ equity | 572,868 | 464,050 |
Total liabilities and stockholders’ equity | $ 703,728 | $ 594,026 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Accounts receivable allowance | $ 2,216 | $ 2,181 |
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) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 160,000,000 | 160,000,000 |
Common stock, shares issued (in shares ) | 49,857,284 | 48,748,298 |
Common stock, shares outstanding (in shares) | 49,848,259 | 48,303,811 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues | $ 236,049 | $ 192,764 | $ 653,875 | $ 527,843 |
Operating expenses: | ||||
Cost of revenues (exclusive of depreciation and amortization) | 148,479 | 122,509 | 408,622 | 335,065 |
Selling, general and administrative expenses | 55,431 | 42,875 | 158,345 | 113,905 |
Depreciation and amortization expense | 4,393 | 5,510 | 12,496 | 14,650 |
Other operating (income)/ expenses, net | (30) | 35 | 210 | 2,055 |
Income from operations | 27,776 | 21,835 | 74,202 | 62,168 |
Interest and other income, net | 865 | 1,261 | 3,322 | 3,401 |
Foreign exchange gain/ (loss) | 32 | (718) | (6,187) | (3,198) |
Income before provision for income taxes | 28,673 | 22,378 | 71,337 | 62,371 |
Provision for income taxes | 5,800 | 3,338 | 14,519 | 11,153 |
Net income | 22,873 | 19,040 | 56,818 | 51,218 |
Foreign currency translation adjustments | (8,341) | (8,260) | (7,397) | (8,943) |
Comprehensive income | $ 14,532 | $ 10,780 | $ 49,421 | $ 42,275 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.40 | $ 1.17 | $ 1.09 |
Diluted (in dollars per share) | $ 0.44 | $ 0.38 | $ 1.10 | $ 1.03 |
Shares used in calculation of net income per share: | ||||
Basic (in shares) | 49,043 | 47,315 | 48,506 | 47,058 |
Diluted (in shares) | 52,344 | 49,829 | 51,755 | 49,530 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 56,818 | $ 51,218 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 12,496 | 14,650 |
Bad debt expense | 910 | 946 |
Deferred taxes | 535 | 275 |
Stock-based compensation expense | 33,350 | 16,524 |
Excess tax benefit on stock-based compensation plans | (3,118) | (2,551) |
Other | 2,358 | 2,607 |
(Increase)/ decrease in operating assets: | ||
Accounts receivable | (3,575) | (18,126) |
Unbilled revenues | (49,110) | (26,070) |
Prepaid expenses and other assets | 29 | 525 |
Increase/ (decrease) in operating liabilities: | ||
Accounts payable | 8,128 | (264) |
Accrued expenses and other liabilities | 10,844 | 6,346 |
Deferred revenues | (607) | (2,067) |
Due to employees | 4,295 | 7,121 |
Taxes payable | (8,799) | 5,035 |
Net cash provided by operating activities | 64,554 | 56,169 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (9,533) | (8,164) |
Payment for construction of corporate facilities | (4,671) | (3,541) |
Employee housing loans issued | (1,993) | (1,316) |
Proceeds from repayments of employee housing loans | 1,611 | 1,303 |
Increase in restricted cash and time deposits, net | (29,947) | 307 |
Increase in other long-term assets, net | (988) | (499) |
Acquisition of businesses, net of cash acquired (Note 2) | (27,654) | (26,498) |
Net cash used in investing activities | (73,175) | (38,408) |
Cash flows from financing activities: | ||
Proceeds related to stock options exercises | 17,607 | 6,808 |
Excess tax benefit on stock-based compensation plans | 3,118 | 2,551 |
Proceeds from borrowing under line of credit (Note 5) | 15,000 | 0 |
Acquisition of business, deferred consideration (Note 2) | (30,274) | 0 |
Net cash provided by financing activities | 5,451 | 9,359 |
Effect of exchange rate changes on cash and cash equivalents | (2,921) | (5,081) |
Net increase/ (decrease) in cash and cash equivalents | (6,091) | 22,039 |
Cash and cash equivalents, beginning of period | 220,534 | 169,207 |
Cash and cash equivalents, end of period | $ 214,443 | $ 191,246 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES EPAM is a global leader in software product development and engineering solutions, servicing clients in over 20 countries across North America, Europe, Asia and Australia. The Company serves global clients in various industries, including Independent Software Vendors (“ISVs”) and technology, banking and financial services, business information and media, travel and hospitality and Life Sciences and Healthcare. The Company is incorporated in Delaware with headquarters in Newtown, PA, with multiple delivery centers located in Belarus, Ukraine, Russia, Hungary, Kazakhstan, Bulgaria, China, Armenia, Poland, Mexico and Austria, and client management locations in the United States, Canada, the United Kingdom, Germany, Sweden, Switzerland, Netherlands, Russia, Kazakhstan, Singapore, China, Hong Kong and Australia. Basis of Presentation —The accompanying unaudited condensed consolidated financial statements ("financial statements") of EPAM Systems, Inc. (the “Company” or “EPAM”) have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. The condensed consolidated financial statements include the financial statements of EPAM Systems, Inc. and its subsidiaries with all intercompany balances and transactions eliminated. These unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2014 included in its Annual Report on Form 10-K. The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements. Additionally, operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire year. Revenue Recognition — The Company recognizes revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the sales price is fixed or determinable; and (4) collectability is reasonably assured. Determining whether and when some of these criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue reported. The Company derives its revenues from a variety of service offerings, which represent specific competencies of its IT professionals. Contracts for these services have different terms and conditions based on the scope, deliverables, and complexity of the engagement, which require management to make judgments and estimates in determining appropriate revenue recognition pattern. Fees for these contracts may be in the form of time-and-materials or fixed-price arrangements. If there is an uncertainty about the project completion or receipt of payment for the consulting services, revenue is deferred until the uncertainty is sufficiently resolved. At the time revenue is recognized, the Company provides for any contractual deductions and reduces the revenue accordingly. The Company reports gross reimbursable “out-of-pocket” expenses incurred as both revenues and cost of revenues in the condensed consolidated statements of income and comprehensive income. The Company defers amounts billed to its clients for revenues not yet earned. Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods. Unbilled revenue is recorded when services have been provided but billed subsequent to the period end in accordance with the contract terms. Fair Value of Financial Instruments — The Company makes assumptions about fair values of its financial assets and liabilities in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, "Fair Value Measurement," and utilizes the following fair value hierarchy in determining inputs used for valuation: Level 1 — Quoted prices for identical assets or liabilities in active markets. Level 2 — Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities, and observable inputs other than quoted prices such as interest rates or yield curves. Level 3 — Unobservable inputs reflecting our view about the assumptions that market participants would use in pricing the asset or liability. Where the fair values of financial assets and liabilities recorded in the condensed consolidated balance sheets 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. To the extent possible, observable market data is used as inputs into these models but when it is not feasible, a degree of judgment is required to establish fair values. Financial Assets and Liabilities Measured At Fair Value on a Recurring Basis The Company's contingent liabilities measured at fair value on a recurring basis are comprised of performance-based awards issued to certain former owners of the acquired businesses in exchange for future services. Contingent liabilities are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs according to fair value measurement accounting. The Company estimates the fair value of contingent liabilities based on certain performance milestones of the acquired businesses and estimated probabilities of achievement, then discounts the liabilities to present value using the Company’s cost of debt for the cash component of contingent consideration, and risk free rate for the stock component of a contractual contingency. The Company believes its estimates and assumptions are reasonable, however, there is significant judgment involved. Changes in the fair value of contingent consideration liabilities primarily result from changes in the timing and amount of specific milestone estimates and changes in probability assumptions with respect to the likelihood of achieving the various earnout criteria. These changes could cause a material impact to, and volatility in the Company’s operating results. Additionally, during the third quarter of 2015, the Company entered into derivative financial instruments to manage exposure to fluctuations in certain foreign currencies. For accounting purposes, these foreign currency option and forward contracts are not designated as hedges, as defined under FASB ASC Topic 815, "Derivatives and Hedging," and all changes in their fair value are reported within foreign exchange gain/(loss) line of the unaudited condensed consolidated statements of income and comprehensive income. The Company measures these foreign currency derivative contracts at fair value on a recurring basis utilizing Level 2 inputs. Financial Assets and Liabilities Measured At Fair Value on a Non-Recurring Basis The amounts of the Company’s financial assets and liabilities, with the exceptions of employee housing loans and other employee loans described further herein, approximate fair value because of their short-term maturities. See Note 4 for disclosures related to fair value. Employee Loans — The Company issues employee housing loans in Belarus and relocation loans to assist employees with relocation needs in connection with intra-company transfers. There are no loans issued to principal officers, directors, and their affiliates. 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. Since the initiation of the loan program there have not been material past due or non-accrual employee loans or write offs related to loan losses and, therefore, the Company determined that no allowance for loan losses is required. Employee Housing Loans — In the third quarter of 2012, the Board of Directors of the Company approved the Employee Housing Program (the “Housing Program”), which assists employees with purchasing housing in Belarus in a form of a loan. The Housing Program was designed to be a retention mechanism for the Company’s employees in Belarus and is available to full-time qualified employees who have been with the Company for at least 3 years . The aggregate maximum lending limit of the program is $10,000 , with individual loans not exceeding $50 . The housing is sold directly to employees by independent third parties. Loans issued under the Housing Program are denominated in U.S. dollars with a 5 -year term and an interest rate of 7.5% . 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 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 U.S. dollar-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 a result of the analysis performed, the Company determined the carrying values of the housing loans issued during the nine months ended September 30, 2015 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, 2015 using the inputs noted above and determined their fair values approximated the carrying values as of that date. Employee Loans, Other — The Company issues short-term, non-interest bearing relocation loans to employees that relocated within the company. Due to the short term of employee loans and high certainty of repayment, their carrying amount is a reasonable estimate of their fair value. Business Combinations — The Company accounts for its business combinations using the acquisition accounting method, which requires it to determine the fair value of net assets acquired and the related goodwill and other intangible assets in accordance with the FASB ASC Topic 805, "Business Combinations." The Company identifies and attributes fair values and estimated lives to the intangible assets acquired and allocates the total cost of an acquisition to the underlying net assets based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. There are different valuation models for each component, the selection of which requires considerable judgment. These determinations will affect the amount of amortization expense recognized in future periods. The Company bases its fair value estimates on assumptions it believes are reasonable, but recognizes that the assumptions are inherently uncertain. If initial accounting for the business combination has not been completed by the end of the reporting period in which the business combination occurs, provisional amounts are reported for which the accounting is incomplete, with retrospective adjustment made to such provisional amounts during the measurement period to present new information about facts and circumstances that existed as of the acquisition date. Once the measurement period ends, and in no case beyond one year from the acquisition date, revisions of the accounting for the business combination are recorded in earnings. All acquisition-related costs, other than the costs to issue debt or equity securities, are accounted for as expenses in the period in which they are incurred. Changes in fair value of contingent consideration arrangements that are not measurement period adjustments are recognized in earnings. Payments to settle contingent consideration, if any, are reflected in cash flows from financing activities and the changes in fair value are reflected in cash flows from operating activities in the Company’s condensed consolidated statements of cash flows. The Company’s acquisitions usually do not have significant amounts of tangible assets, as the principal assets typically acquired are customer relationships, trade names, non-competition agreements, and workforce. As a result, a substantial portion of the purchase price is allocated to goodwill and other intangible assets. Goodwill and Other Intangible Assets — Goodwill and intangible assets that have indefinite useful lives are treated consistently with FASB ASC 350, "Intangibles - Goodwill and Other." They are tested annually for impairment and are not amortized. Intangible assets that have finite useful lives are amortized over their estimated useful lives on a straight-line basis. When facts and circumstances indicate potential impairment of amortizable intangible assets, the Company evaluates the recoverability of the asset’s carrying value, using estimates of future cash flows that utilize a discount rate determined by its management to be commensurate with the risk inherent in the Company’s business model over the remaining asset life. The estimates of future cash flows attributable to intangible assets require significant judgment based on the Company’s historical and anticipated results. Any impairment loss is measured by the excess of carrying value over fair value. Stock-Based Compensation — The Company recognizes the cost of its share-based incentive awards based on the fair value of the award at the date of grant net of estimated forfeitures. The cost is expensed evenly over the service period. The service period is the period over which the employee performs the related services, which is normally the same as the vesting period. Over time, the forfeiture assumption is adjusted to the actual forfeiture rate and such change may affect the timing of the total amount of expense recognized over the vesting period. Equity-based awards that do not require future service are expensed immediately. Equity-based awards that do not meet the criteria for equity classification are recorded as liabilities and adjusted to fair value at the end of each reporting period. Off-Balance Sheet Financial Instruments — The Company uses the FASB ASC Topic 825, "Financial Instruments." to identify and disclose off-balance sheet financial instruments, which include credit instruments, such as commitments to make employee loans and related guarantees, standby letters of credit and certain 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. Loss contingencies arising from off-balance sheet financial instruments 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 such matters exists that will have a material effect on the condensed consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Acquisitions completed during the year ended December 31, 2014 and nine months ended September 30, 2015 allowed the Company to expand into desirable geographic locations, complement the existing vertical markets, increase revenue and create new offerings of services currently provided. The Company used the acquisition method of accounting to record these business combinations. Acquisitions were settled in cash and/or stock where a portion of the settlement price may have been deferred. For some transactions, purchase agreements contain contingent consideration in the form of an earnout obligation. 2015 Acquisitions NavigationArts — On July 10, 2015, the Company acquired all of the outstanding equity of NavigationArts, Inc. and its subsidiary, NavigationArts, LLC. The U.S.-based NavigationArts provides digital consulting, architecture and content solutions and is regarded as a leading user-experience agency. The acquisition of NavigationArts, Inc. added approximately 90 design consultants to the Company's headcount. In connection with the NavigationArts acquisition the Company paid $28,747 in cash consideration, of which $2,670 was placed in escrow for a period of 18 months as security for the indemnification obligations of the sellers under the terms of the stock purchase agreement. The purchase price was preliminarily allocated to the net assets acquired based on their estimated fair values, as follows: NavigationArts Cash and cash equivalents $ 1,317 Trade receivables and other current assets 3,920 Property and equipment and other long-term assets 230 Deferred tax asset — Acquired intangible assets 1,500 Goodwill 23,822 Total assets acquired 30,789 Accounts payable and accrued expenses 871 Deferred revenue 50 Due to employees 596 Deferred tax liability 525 Total liabilities assumed 2,042 Net assets acquired $ 28,747 The above estimated fair values of the assets acquired and liabilities assumed are provisional and based on the information that was available as of the acquisition date and updated for any changes as of September 30, 2015. The acquired intangible assets noted above consist of customer relationship assets with an estimated fair value of $1,500 . The useful life of these assets is expected to be three years . The Company is gathering additional information necessary to finalize the estimated fair values of intangible assets, deferred income taxes and other amounts. The fair values reflected are subject to change and such changes could be significant and cause possible additional payments either from the Company or from the former owners of NavigationArts based on the final adjustments made to original estimates. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the respective acquisition dates. As of September 30, 2015 , NavigationArts has been significantly integrated into the Company and as such, it is not possible to precisely report its individual post-acquisition results of operations. The Company does not deem the business combination with NavigationArts to be material to the Company’s consolidated results of operations. Pro forma results of operations for the NavigationArts acquisition were not presented because the effects of the acquisition were not material to the Company’s consolidated results of operations for the periods presented. 2014 Acquisitions The following table discloses details of purchase price consideration of each of the 2014 acquisitions: Name of Acquisition Effective Date of Acquisition Common Shares Fair Value of Common Shares Cash, Net of Working Capital and Other Adjustments Recorded Earnout Payable Total Recorded Purchase Price Maximum Potential Earnout Payable Issued Deferred Issued Deferred Paid Deferred Cash Stock (in shares) (in thousands) Netsoft March 5, 2014 — — $ — $ — $ 2,403 $ 1,022 $ 1,825 $ — $ 5,250 $ 1,825 Jointech April 30, 2014 — 89,552 — 2,788 10,000 4,000 15,000 5,000 36,788 20,000 GGA June 6, 2014 — — — — 14,892 — 11,400 — 26,292 Great Fridays October 31, 2014 — — — — 10,777 — 1,173 — 11,950 1,173 — 89,552 $ — $ 2,788 $ 38,072 $ 5,022 $ 29,398 $ 5,000 $ 80,280 Common shares issued in connection with acquisitions, if applicable, are valued at closing market prices as of the effective date of the applicable acquisition. The maximum potential earnout payables disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The amounts recorded as earnout payables, which are based upon the estimated future operating results of the acquired businesses within a seven -to twelve -month period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration in the foregoing table. The Company records any subsequent changes in the fair value of the earnout obligations in its consolidated income from operations. Please see Note 4 for discussion around significant inputs and assumptions relating to the earnout obligations. All earnout obligations for these acquisitions have been settled. Netsoft — On March 5, 2014, the Company completed an acquisition of substantially all of the assets and assumed certain specific liabilities of U.S.-based healthcare technology consulting firm Netsoft Holdings, LLC and Armenia-based Ozsoft, LLC (collectively, “Netsoft”). As a result of this transaction, substantially all of the employees of Netsoft, including approximately 40 IT professionals, accepted employment with the Company. In connection with the Netsoft acquisition, the Company agreed to issue 2,289 restricted shares of Company common stock as consideration for future services to key management and employees of Netsoft (the “Netsoft Closing Shares”). The Company agreed to pay deferred consideration consisting partly of 9,154 restricted shares of Company common stock. During the three months ended March 31, 2015, the Company issued 16,349 restricted shares of Company common stock to Netsoft for achieving certain performance targets (collectively with the Netsoft Closing Shares, the “Netsoft Employment Shares”). The Netsoft Employment Shares vest in equal annual installments over a three -year period starting from the date of acquisition. The first such installment vested during the first quarter of 2015. All unvested shares will be forfeited upon termination of services by the Company for cause or by the employee other than for good reason. The Netsoft Employment Shares had an estimated value of $1,017 at the time of grant and were recorded as stock-based compensation expense over an associated service period of three years (Note 7 ). Under the terms of this agreement, all of the Netsoft Closing Shares, as well as $256 , were placed in escrow for a period of 18 months as security for the indemnification obligations of the sellers under the asset purchase agreement. Jointech — On April 30, 2014, the Company acquired all of the outstanding equity of Joint Technology Development Limited, a company organized under the laws of Hong Kong, including its wholly-owned subsidiaries Jointech Software (Shenzhen) Co., Ltd., a company organized under the laws of China, and Jointech Software Pte. Ltd., a company organized under the laws of Singapore (collectively, “Jointech”). Jointech provides strategic technology services to multi-national organizations in investment banking, wealth and asset management. As a result of this transaction, substantially all employees of Jointech, including approximately 216 IT professionals, accepted employment with the Company. In connection with the Jointech acquisition, the Company issued 89,552 shares of the Company common stock to a former owner of Jointech as consideration for future services on or about the six-month anniversary from the date of acquisition (the “Jointech Closing Shares”). Furthermore, during the second quarter of 2015, the Company issued 83,057 restricted shares of Company common stock to Jointech for achieving certain performance targets (collectively with the Jointech Closing Shares, the “Jointech Employment Shares”). The Jointech Employment Shares vest in equal annual installments over a three -year period starting from the date of acquisition. The first such installment vested during the second quarter of 2015. All unvested Jointech Employment Shares will be forfeited upon termination of services for cause by the Company or other than for good reason (as applicable) by either of the two former owners of the acquired business. The aggregate fair value of the Jointech Employment Shares at the date of grant was $7,788 and will be recorded as stock-based compensation expense over an associated service period of three years (Note 7 ). Under the terms of the agreement, 15% of the total purchase price, in cash and stock, including the Jointech Employment Shares, was placed in an escrow account for a period of 18 months as security for the indemnification obligations of the sellers under the stock purchase agreement. GGA — On June 6, 2014, the Company acquired substantially all of the assets and assumed certain specific liabilities of GGA Software Services, LLC, Institute of Theoretical Chemistry, Inc., and GGA’s Russian affiliate (collectively, “GGA”). Established in 1994, GGA develops scientific informatics applications and content databases; creates state-of-the-art algorithms and models; and delivers IT support, maintenance, and QA services to the world’s leading healthcare and life sciences companies. As a result of this transaction, substantially all employees of GGA, including approximately 329 IT professionals and 126 scientists, accepted employment with the Company. In connection with the GGA acquisition, the Company agreed to issue 262,277 shares of the Company common stock to the former owners of GGA as consideration for future services (the “GGA Closing Shares”). Furthermore, during the second quarter of 2015, the Company issued 233,753 restricted shares of Company common stock to the former owners of GGA for achieving certain performance targets (collectively with the GGA Closing Shares, the “GGA Employment Shares”). The GGA Employment Shares vest in equal annual installments over a three -year period starting from the date of acquisition. The first such installment vested during the second quarter of 2015. With respect to each former owner, all unvested shares will be forfeited upon either termination of services by the Company for cause or by the employee other than for good reason. The aggregate fair value of the GGA Employment Shares at the date of grant was $20,655 and will be recorded as stock-based expense over an associated service period of three years (Note 7 ). Under the terms of the agreement, 102,631 of the GGA Employment Shares were placed into an escrow account for a period of 15 months as security for the indemnification obligations of the sellers under the asset purchase agreement. Great Fridays — On October 31, 2014, the Company acquired all of the outstanding equity of Great Fridays Limited and its subsidiaries with intent to expand the Company's product and design service portfolio. Great Fridays Limited, headquartered in Manchester, UK, with offices in London, San Francisco and New York, focuses on bridging the gap between business and design. The acquisition of Great Fridays added approximately 50 creative design professionals to the Company's headcount. In connection with the Great Fridays acquisition, the Company agreed to issue 90,864 shares of the Company common stock to the former owners of Great Fridays as consideration for future services (the “Great Fridays Closing Shares”). Furthermore, during the second quarter of 2015, subject to attainment of specified performance targets, the Company issued to the former owners of Great Fridays 10,092 shares of the Company common stock (collectively with Great Fridays Closing Shares, the “GF Employment Shares”). The GF Employment Shares vest in equal annual installments over a three -year period starting from the date of acquisition. With respect to each former owner, all unvested shares will be forfeited upon either termination of services by the Company for cause or by the employee other than for good reason. The aggregate fair value of the GF Employment Shares at the date of grant was $4,823 and will be recorded as stock-based compensation expense over an associated service period of three years (Note 7 ). Under the terms of the agreement, 28,390 of the GF Employment Shares were placed into an escrow account for a period of 24 months as security for the indemnification obligations of the sellers under the asset purchase agreement. The following is a summary of the estimated fair values of the net assets acquired at the date of each respective acquisition during the year ended December 31, 2014 as originally reported in the quarterly condensed consolidated financial statements and at September 30, 2015 : Netsoft Jointech GGA Great Fridays Total As Originally Reported Final as of As Originally Reported Final as of As Originally Reported Final as of As Originally Reported As of As Originally Reported As of Cash and cash equivalents $ — $ — $ 871 $ 871 $ — $ — $ 259 $ 259 $ 1,130 $ 1,130 Trade receivables and other current assets 788 788 784 784 5,157 5,377 1,825 1,825 8,554 8,774 Property and equipment and other long-term assets 52 52 338 338 444 306 262 262 1,096 958 Deferred tax asset 351 — — — 4,463 — — — 4,814 — Acquired intangible assets 1,700 1,700 25,744 15,312 10,959 16,000 5,747 200 44,150 33,212 Goodwill 2,776 2,779 11,033 23,758 6,496 7,306 6,947 11,327 27,252 45,170 Total assets acquired 5,667 5,319 38,770 41,063 27,519 28,989 15,040 13,873 86,996 89,244 Accounts payable and accrued expenses 69 69 728 728 2,593 2,593 872 872 4,262 4,262 Deferred revenue — — — — — 104 317 317 317 421 Due to employees — — 1,254 1,254 — — 624 624 1,878 1,878 Deferred tax liability — — — 2,293 — — 1,200 110 1,200 2,403 Total liabilities assumed 69 69 1,982 4,275 2,593 2,697 3,013 1,923 7,657 8,964 Net assets acquired $ 5,598 $ 5,250 $ 36,788 $ 36,788 $ 24,926 $ 26,292 $ 12,027 $ 11,950 $ 79,339 $ 80,280 As of September 30, 2015 , the fair values of the assets acquired and liabilities assumed and the related purchase price allocation for the Netsoft, Jointech and GGA acquisitions have been finalized. For the Great Fridays acquisition, the above estimated fair values of the assets acquired and liabilities assumed are provisional and based on the information that was available as of the acquisition date. The Company is gathering additional information necessary to finalize the estimated fair values of intangible assets, deferred income taxes and other amounts associated with the acquisition of Great Fridays, for which the purchase price allocation has not been finalized as of September 30, 2015 . The fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. As of September 30, 2015 , and during the period since the date of each respective acquisition up through September 30, 2015 , or the date purchase accounting was finalized, as applicable, the Company made updates to the initially reported acquired balances and has finalized valuation of the balances of Netsoft, Jointech and GGA. For Netsoft, the deferred tax asset and goodwill were adjusted, which decreased the net assets acquired by $348 . For Jointech, intangible assets were adjusted to reflect the final fair value of intangible assets acquired and a deferred tax liability was established, both increasing goodwill with no change to the net assets acquired. For GGA, the final working capital adjustment was completed, deferred tax assets were netted with additional recognized deferred tax liabilities and additional accounts receivable and deferred revenue were recognized. In addition, intangible assets and property and equipment were adjusted to reflect the final fair value of the assets acquired. These adjustments resulted in an overall increase to goodwill and increased the net assets acquired by $1,366 . For Great Fridays, the value of the intangible assets and associated deferred tax liabilities were reduced based on the final fair value estimates of acquired intangible assets, which increased goodwill. These adjustments resulted in a decrease in net assets acquired by $77 . The adjustments identified above did not significantly impact our previously reported net income of prior periods and, as such, prior period amounts have not been retrospectively adjusted. As of September 30, 2015 , the following table presents the estimated fair values and useful lives of intangible assets acquired during the year ended December 31, 2014 : Netsoft Jointech GGA Great Fridays Weighted Average Amount Weighted Average Amount Weighted Average Amount Weighted Average Amount Customer relationships 10 $ 1,700 10 $ 15,000 10 $ 16,000 3 $ 200 Trade names — — 2 312 — — — — Total $ 1,700 $ 15,312 $ 16,000 $ 200 As of September 30, 2015 , the companies acquired during 2014 have been significantly integrated into the Company and as such, it is not possible to precisely report their individual post-acquisition results of operations. Pro forma results of operations for the acquisition transactions are not presented because the effects of the acquisitions would not have been material to the Company’s consolidated results of operations, individually or in the aggregate for the periods presented. |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Goodwill by reportable segment was as follows: North America Europe Total Balance as of January 1, 2015 $ 31,078 $ 26,339 $ 57,417 Netsoft purchase accounting adjustment (Note 2) 30 — 30 Jointech purchase accounting adjustment (Note 2) — 6,181 6,181 GGA purchase accounting adjustment (Note 2) (4,807 ) — (4,807 ) Great Fridays purchase accounting adjustment (Note 2) — 4,281 4,281 Acquisition of NavigationArts (Note 2) 23,822 — 23,822 Effect of net foreign currency exchange rate changes (341 ) (2,354 ) (2,695 ) Balance as of September 30, 2015 $ 49,782 $ 34,447 $ 84,229 Excluded from the table above are the Other and Russia segments. In 2011, the Company recorded an accumulated impairment loss of $1,697 in the Other operating segment. In the fourth quarter of 2014, the Company recorded an accumulated impairment loss of $2,241 for the Russia operating segment, reducing the carrying value of goodwill to zero. All existing assets that related to the Russia segment, excluding goodwill and including any unrecognized intangible assets, were assessed by management and deemed not to be impaired. There were no accumulated impairments losses in any of the North America or Europe operating segments as of September 30, 2015 or December 31, 2014 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS | FAIR VALUE MEASUREMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS As required by the guidance for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Significant unobservable inputs used in the fair value measurement of contingent consideration related to business acquisitions are forecasts of expected future operating results of those businesses as developed by the Company’s management and the probability of achievement of those operating forecasts. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels. We classify our foreign currency derivative contracts primarily within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. Contingent considerations are within Level 3. The following tables show the fair values of the Company’s financial assets and liabilities, including derivative contracts, measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 Balance Level 2 Level 3 Balance Level 2 Level 3 Foreign currency derivative assets $ 110 $ 110 $ — $ — $ — $ — Total assets measured at fair value on a recurring basis 110 110 — — — — Contingent consideration — — — 37,400 — 37,400 Performance-based equity awards 2,979 — 2,979 3,223 — 3,223 Foreign currency derivative liabilities 224 224 — — — — Total liabilities measured at fair value on a recurring basis $ 3,203 $ 224 $ 2,979 $ 40,623 $ — $ 40,623 As of December 31, 2014 , contingent consideration and performance-based equity awards included amounts payable in cash and stock in connection with the acquisitions of businesses completed during the year ended December 31, 2014 (Note 2 ). As of September 30, 2015 , the only financial liabilities related to acquisitions of businesses included performance-based equity awards. During the third quarter ending September 30, 2015 , the Company began managing exposure to fluctuations in certain foreign currencies by using short-term foreign currency forward and option contracts. For accounting purposes, these derivative contracts are not designated as hedges. The changes in their fair value were not material in aggregate or individually and are reported within the foreign exchange gain/(loss) line of the unaudited condensed consolidated statements of income and comprehensive income for the quarter ended September 30, 2015 . All of the derivative financial instruments entered into as of September 30, 2015 have expiration dates prior to December 31, 2015 . The combined aggregate notional amount of the Hungarian forint and Russian ruble foreign currency derivative contracts outstanding as of September 30, 2015 was $25,200 . There were no foreign currency derivative contracts outstanding as of December 31, 2014 . Sensitivity to Changes in Significant Unobservable Inputs The fair value of the contingent consideration, which is based on the present value of the expected future payments to be made to the sellers of the acquired businesses, was derived by analyzing the future performance of the acquired businesses using the earnout formula and performance targets specified in each purchase agreement and adjusting those amounts to reflect the ability of the acquired entities to achieve the stated targets. As of June 30, 2015 the measurement periods related to the contingent consideration for each acquisition was complete, therefore, the amount of total consideration to be paid is no longer subject to change during the quarter ended September 30, 2015 . A reconciliation of the beginning and ending balances of acquisition-related contractual contingent liabilities using significant unobservable inputs (Level 3) for the nine months ended September 30, 2015 , was as follows: Amount Contractual contingent liabilities at January 1, 2015 $ 40,623 Liability-classified stock-based awards 3,861 Changes in fair value of contractual contingent liabilities included in earnings 3,257 Effect of net foreign currency exchange rate changes 246 Settlements of contractual contingent liabilities - cash and stock (45,008 ) Contractual contingent liabilities at September 30, 2015 $ 2,979 There were no transfers in or out of Level 3 from other levels in the fair value hierarchy during the nine months ended September 30, 2015 and 2014. Changes in the values of these financial liabilities, if any, are typically recorded within selling, general and administrative expenses line on the Company's unaudited condensed consolidated statements of income and comprehensive income. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On September 12, 2014, the Company entered into a credit facility (the “2014 Credit Facility”) with PNC Bank, National Association; Santander Bank, N.A; and Silicon Valley Bank (collectively the “Lenders”) to replace its former revolving loan agreement. The 2014 Credit Facility provides for a borrowing capacity of $100,000 , with potential to increase the credit facility up to $200,000 if certain conditions are met. The 2014 Credit Facility matures on September 12, 2019. Borrowings under the 2014 Credit Facility may be denominated in U.S. dollars or, up to a maximum of $50,000 in British pounds sterling, Canadian dollars, euros or Swiss francs (or other currencies as may be approved by the lenders). Borrowings under the 2014 Credit Facility bear interest at either a base rate or Euro-rate plus a margin based on the Company’s leverage ratio. Base rate is equal to the highest of (a) the Federal Funds Open Rate, plus 0.5% , (b) the Prime Rate, and (c) the Daily LIBOR Rate, plus 1.0% . The 2014 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 and 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. The 2014 Credit Facility includes customary business and financial covenants and restricts the Company's ability to make or pay dividends (other than certain intercompany dividends) unless no potential or actual event of default has occurred or would be triggered. As of September 30, 2015 , the Company was in compliance with all covenants contained in the 2014 Credit Facility. During the quarter ended September 30, 2015 , the Company borrowed $15,000 denominated in U.S. dollars under the 2014 Credit Facility, with a LIBOR-based interest rate, which resets on a quarterly basis. As of September 30, 2015 , the Company had outstanding debt of $15,000 . |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s worldwide effective tax rate for the three months ended September 30, 2015 and 2014 was 20.2% and 14.9% , respectively, and 20.4% and 17.9% during the nine months ended September 30, 2015 and 2014 , respectively. The factors that caused an increase in the Company’s worldwide effective tax rate for 2015 are the changes in the geographic mix of the current year earnings towards countries with higher statutory rates (U.S., U.K. Germany and Canada) and also the mix of new tax jurisdictions from business acquired in the US, western Europe and Asia. Additionally, the $1,200 release of the ASC 740-10 reserve during the third quarter of 2014 reduced the rates for the three and nine months ended September 30, 2014. This reserve was initially posted as a tax expense in 2010 as the Company's position in 2010 was deemed uncertain and remained on the balance sheet until the federal statute expired during the third quarter of 2014 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The following costs related to the Company’s stock compensation plans were included in the condensed consolidated statements of income and comprehensive income: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Cost of revenues $ 3,622 $ 2,463 $ 9,871 $ 6,391 Selling, general and administrative expenses - Acquisition related 4,542 2,905 13,985 5,128 Selling, general and administrative expenses - All other 3,799 2,057 9,494 5,005 Total $ 11,963 $ 7,425 $ 33,350 $ 16,524 Equity Plans 2015 Long-Term Incentive Plan — On June 11, 2015, the Company's stockholders approved the 2015 Long Term Incentive Plan (“2015 Plan”) to be used to issue equity grants to company personnel. As of September 30, 2015 , 6,669,713 shares of common stock remained available for issuance under the 2015 Plan. In addition, up to 6,390,069 shares that are subject to outstanding awards as of September 30, 2015 under the 2012 Plan and up to 1,275,089 shares that are subject to outstanding awards as of September 30, 2015 under the 2006 Plan and that expire or terminate for any reason prior to exercise or that would otherwise have returned to the respective Plan’s share pool under the terms of the Plan, will be available for awards to be granted under the 2015 Plan. 2012 Non-Employee Directors Compensation Plan — On January 11, 2012, the Company approved the 2012 Non-Employee Directors Compensation Plan (“2012 Directors Plan”) to 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 is administered by the Company’s Board of Directors. As of September 30, 2015 , 554,070 shares of common stock remained available for issuance under the 2012 Directors Plan. 2012 Long-Term Incentive Plan — On January 11, 2012, the Company approved the 2012 Long-Term Incentive Plan (“2012 Plan”) to be used to issue equity grants to company personnel. In June 2015, the 2012 Plan was discontinued; however, outstanding awards remain subject to the terms of the 2012 Plan and any shares that are subject to an award that was previously granted under the 2012 and modified 2006 Plan and that expire or terminate for any reason prior to exercise will become available for issuance under the 2015 Plan. All of the options issued pursuant to the 2012 Plan expire 10 years from the date of grant. 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 2006 Plan permitted the granting of options to directors, employees, and certain independent contractors. 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 award that was previously granted under the 2006 Plan and that expire or terminate for any reason prior to exercise will become available for issuance under the 2015 Plan. All of the options issued pursuant to the 2006 Plan expire 10 years from the date of grant. Stock Options Stock option activity under the Company’s plans is set forth below: Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Options outstanding at January 1, 2015 6,838,746 $ 20.98 $ 183,073 Options granted 2,189,424 62.03 27,346 Options exercised (1,086,066 ) 16.28 (63,252 ) Options forfeited/cancelled (171,222 ) 33.32 (7,054 ) Options outstanding at September 30, 2015 7,770,882 $ 32.93 $ 323,191 Options vested and exercisable at September 30, 2015 2,753,236 $ 15.08 $ 163,652 Options expected to vest 4,634,538 $ 42.26 $ 149,510 During the nine months ended September 30, 2015 , the Company issued grants consisting of 2,083,700 shares underlying stock options under the 2012 Plan with an aggregate grant-date fair value of $44,394 and 105,724 shares underlying stock options under the 2015 Plan with an aggregate grant-date fair value of $2,789 . The options are generally scheduled to vest in equal 25% installments on each of the first four anniversaries of the grant date, subject to the terms of the 2015 Plan and the applicable stock option agreement. In general, in the event of the participant’s termination of service for any reason, unvested options are forfeited as of the date of such termination without any payment to the participant. As of September 30, 2015 , total remaining unrecognized compensation cost related to unvested stock options, net of forfeitures, under the 2012 Plan was approximately $67,998 under the 2012 Plan and $2,677 under the 2015 Plan. The costs are expected to be recognized over a weighted-average period of 2.0 years and 2.4 years , respectively. As of September 30, 2015 there are no fully vested and exercisable options under 2015 Plan. The weighted average remaining contractual term of the outstanding options expected to vest under 2015 Plan was 9.9 years . The weighted average remaining contractual term of the outstanding options under 2012 Plan as of September 30, 2015 was 7.4 years for fully vested and exercisable options and 8.6 years for options expected to vest, respectively. The weighted average remaining contractual term of the outstanding options under 2006 Plan as of September 30, 2015 was 5.2 years for fully vested and exercisable options. There were no options expected to vest under 2006 Plan as of September 30, 2015 . As of September 30, 2015 , a total of 5,015 shares underlying options exercised through September 30, 2015 , were in transfer with the Company’s transfer agent. 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, 2015 , as compared with the assumptions disclosed in Note 14 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 . Other Awards Other awards include awards of restricted stock and restricted stock units (“RSUs”) under the Company’s 2012 Directors Plan, the 2012 Plan and the 2015 Plan, after its adoption. In addition, the Company has issued in the past, and may issue in the future its equity securities to compensate employees of acquired businesses for future services. These issuances are on such terms and at such prices as the Company deems appropriate. Equity-based awards granted in connection with acquisitions of businesses are generally issued in the form of service-based awards dependent on continuing employment only and performance-based awards, which are granted and vest only if certain specified performance conditions are met. The awards issued in connection with acquisitions of businesses are subject to the terms and conditions contained in the applicable award agreement and acquisition documents. Service-Based Awards Summarized activity related to the Company’s service-based awards for the nine months ended September 30, 2015 , was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested service-based awards outstanding at January 1, 2015 633,442 $ 36.88 Awards granted 100,391 39.20 Awards vested (145,631 ) 39.45 Awards forfeited/cancelled (11,372 ) 32.13 Unvested service-based awards outstanding at September 30, 2015 576,830 $ 36.73 As of September 30, 2015 , aggregate unrecognized compensation expense under the 2012 Directors Plan was $377 . This cost is expected to be recognized over the next 1.2 years using the weighted average method. The Company issued 5,295 shares of unvested (“restricted”) common stock under the 2012 Directors Plan during the three and nine months ended September 30, 2015 . Included in service-based awards are RSUs issued to certain key management personnel under the 2012 and 2015 Plans. During the nine months ended September 30, 2015 the Company issued 58,000 service-based RSUs under 2012 Plan with the fair value of $3,560 . There were no service-based RSUs under 2012 Plan issued during the three months ended September 30, 2015 . As of September 30, 2015 , the aggregate unrecognized compensation expense related to unvested service-based RSUs under the 2012 Plan was $4,305 . This cost is expected to be recognized over the next 2.2 years using the weighted average method. These RSUs are generally scheduled to vest in equal 25% installments on each annual anniversary of the grant date, subject to the terms of the 2015 Plan and applicable RSU award agreement, including the termination provisions. In general, in the event of the participant’s termination of service for any reason, unvested RSUs are forfeited as of the date of such termination without any payment to the participant. During the three and nine months ended September 30, 2015 the Company issued 25,000 service-based RSUs under 2015 Plan with the fair value of $1,853 , respectively. As of September 30, 2015 , the aggregate unrecognized compensation expense related to unvested service-based RSUs under the 2015 Plan was $1,771 . This cost is expected to be recognized over the next 2.4 years using the weighted average method. These RSUs are generally scheduled to vest in equal 25% installments on each annual anniversary of the grant date, subject to the terms of the 2015 Plan and applicable RSU award agreement, including the termination provisions. In general, in the event of the participant’s termination of service for any reason, unvested RSUs are forfeited as of the date of such termination without any payment to the participant. In connection with the Company’s acquisitions, 427,293 shares underlying service-based awards with an aggregate fair value of $16,137 were unvested and outstanding as of September 30, 2015 under the 2012 Plan. As of September 30, 2015 , unrecognized compensation cost related to unvested service-based awards granted under the 2012 Plan in connection with acquisitions was $11,542 . This cost is expected to be recognized over the next 1.4 years using the weighted average method. In connection with the Company’s acquisitions, 12,096 shares underlying service-based awards with an aggregate fair value of $905 were unvested and outstanding as of September 30, 2015 under the 2015 Plan. As of September 30, 2015 , unrecognized compensation cost related to unvested service-based awards granted under the 2015 Plan in connection with acquisitions was $836 . This cost is expected to be recognized over the next 1.9 years using the weighted average method. Performance -Based Awards In 2014, the Company granted performance-based awards in connection with the acquisitions completed during that year. The total number of the awards varies based on attainment of certain performance targets pursuant to the terms of the relevant transaction documents. Typically, the vesting period is three years, with one third of the awards granted vesting in equal installments on the first, second and third anniversaries of the grant. If an eligible employee leaves the Company prior to a vesting date, the unvested portion of the award generally will be forfeited. The Company periodically evaluates the achievement of the related performance conditions during the applicable performance measurement period and the number of shares expected to be delivered, and resulting compensation expense is adjusted accordingly. During the nine months ended September 30, 2015 , one-third of the performance-based awards, net of any forfeitures, for Netsoft, Jointech and GGA vested. Summarized activity related to the Company’s performance-based awards for the nine months ended September 30, 2015 , was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested performance-based awards outstanding at January 1, 2015 371,510 $ 39.34 Awards granted 14,000 70.22 Awards vested (114,105 ) 40.15 Awards forfeited/cancelled (1,360 ) 36.57 Changes in the number of awards expected to be delivered (19,105 ) 31.70 Unvested performance-based awards outstanding at September 30, 2015 250,940 $ 41.29 As of September 30, 2015 , total unrecognized compensation cost related to all unvested performance-based awards was $14,384 . This cost is expected to be recognized over the next 1.4 years using the weighted average method. During the nine months ended September 30, 2015 , the Company issued 14,000 RSUs with the fair value of $983 to certain new personnel. The vesting of these RSUs is contingent on achieving certain performance targets pursuant to the terms of the individual agreements. These RSUs have a vesting period of three years, with one third of the awards granted vesting in equal installments on the first, second and third anniversaries of the grant. In general, in the event of the participant’s termination of service for any reason or failure to meet certain performance targets, unvested RSUs are forfeited as of the date of such event without any payment to the participant. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, unvested restricted stock and unvested RSUs. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. 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 2015 2014 2015 2014 Numerator for common earnings per share: Net income $ 22,873 $ 19,040 $ 56,818 $ 51,218 Numerator for basic and diluted earnings per share $ 22,873 $ 19,040 $ 56,818 $ 51,218 Denominator for basic earnings per share: Weighted average common shares outstanding 49,043 47,315 48,506 47,058 Effect of dilutive securities: Stock options, RSUs and performance-based awards 3,301 2,514 3,249 2,472 Denominator for diluted earnings per share 52,344 49,829 51,755 49,530 Net income per share: Basic $ 0.47 $ 0.40 $ 1.17 $ 1.09 Diluted $ 0.44 $ 0.38 $ 1.10 $ 1.03 During the three and nine months ended September 30, 2015 , a total of 2,143 and 1,456 shares underlying equity-based awards, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect was anti-dilutive. During the three and nine months ended September 30, 2014 , a total of 2,691 and 2,152 shares underlying equity-based awards, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect was anti-dilutive. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Construction in progress — On December 7, 2011, the Company entered into an agreement with IDEAB Project Eesti AS (“IDEAB”) for the construction of an office building within the High Technologies Park in Minsk, Belarus (the “Construction Agreement”). At the same time, the Company entered into a related investment agreement with the Minsk Executive Committee acting on behalf of the Republic of Belarus (the “Investment Agreement”) permitting the Company to use land located in the government’s High Technologies Park to construct the new office building and granting certain tax benefits. The Construction Agreement committed IDEAB to construct an office building for the Company in Minsk with a completion date of February 28, 2014. In April 2014, IDEAB stopped its construction before the building’s completion, for reasons unrelated to the Company’s performance under the Construction Agreement. In May 2014, IDEAB notified the Company that it was unable to continue as general contractor to complete the construction of the building in time and on the terms agreed. As a result, the Company took control over the construction site. On July 7, 2014, the Company provided IDEAB with notice of termination of the Construction Agreement, effective on or about July 11, 2014. The Company filed a legal action against IDEAB in Belarus in August 2014, claiming breach of contract. In September 2014, the court decided in the Company’s favor and directed IDEAB to pay the Company $1,000 plus reimbursement of certain expenses. The Company is pursuing recovery from IDEAB of this amount. The Company has filed other lawsuits seeking recovery from IDEAB of additional amounts (including future work and construction materials) from IDEAB. These lawsuits are in various stages of litigation and it is not possible to estimate the likelihood of recovery. The Investment Agreement specified a completion deadline for construction of September 15, 2012 extended by the parties to December 31, 2014, and further extended to October 1, 2015. At September 30, 2015 , the Company has completed the building and began amortizing approximately $22,714 of capitalized construction costs. Indemnification Obligations — In the normal course of business, the Company is a party to a variety of agreements under which it may be obligated to indemnify the other party for certain matters. These obligations typically arise in contracts where the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations or covenants for certain matters such as title to assets and intellectual property rights associated with certain arrangements. The duration of these indemnifications varies, and in certain cases, is indefinite. The Company is unable to reasonably estimate the maximum potential amount of future payments under these or similar agreements due to the unique facts and circumstances of each agreement and the fact that certain indemnifications provide for no limitation to the maximum potential future payments under the indemnification. Management is not aware of any such matters that historically had or would have a material effect on the financial statements of the Company. Litigation — From time to time, the Company is involved in litigation, claims or other contingencies. Management is not aware of any such matters that would have a material effect on the condensed consolidated financial statements of the Company. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS The Company determines its operating segments and reports segment information in accordance with the management approach, which designates internal reporting used by management to make operating decisions and assess performance as the source of the Company’s reportable segments. The Company manages its business primarily based on the geographic managerial responsibility for its client base. As 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 cases, managerial responsibility for a particular client is assigned to a management team in another region and is usually based on the strength of the relationship between client executives and particular members of EPAM’s senior management team. In such a case, the client’s activity would be reported through the management team’s reportable segment. The Company’s reportable segments are North America, Europe, Russia and Other. The Company’s Chief Operating Decision Maker (“CODM”) evaluates performance and allocates resources based on the segment's 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 because these expenses are either not directly attributable to any specific segment or controllable at the segment level and consequently are not allocated to individual segments in internal management reports used by the CODM. Such 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, 2015 and 2014 , were as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Total segment revenues: North America $ 121,746 $ 99,393 $ 330,228 $ 267,866 Europe 103,514 78,074 292,826 217,247 Russia 9,707 14,762 27,432 38,881 Other 1,207 530 3,951 3,445 Total segment revenues $ 236,174 $ 192,759 $ 654,437 $ 527,439 Segment operating profit: North America $ 28,906 $ 22,557 $ 78,720 $ 62,283 Europe 17,021 12,200 49,031 36,049 Russia 1,626 3,779 3,095 4,843 Other 168 (1,508 ) (12 ) (3,726 ) Total segment operating profit $ 47,721 $ 37,028 $ 130,834 $ 99,449 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. During the three and nine months ended September 30, 2015 , revenues from one customer, UBS AG , were $32,960 and $95,826 , respectively, and accounted for more than 10% of total revenues. During the three and nine months ended September 30, 2014 , revenues from one customer, UBS AG , were $27,012 and $70,259 , respectively, and accounted for more than 10% of total revenues. Revenues from this customer included reimbursable expenses and were included in the Company’s Europe segment in the periods indicated. Trade accounts receivable and unbilled revenues are generally dispersed across our clients in proportion to their revenues. As of September 30, 2015 , unbilled trade receivables from one customer, UBS AG, individually exceeded 10% and accounted for 16.5% of our total unbilled trade receivables. There were no customers individually exceeding 10% of our billed trade receivables as of September 30, 2015 . Reconciliation of segment revenues and operating profit to consolidated income before provision for income taxes is presented below: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Total segment revenues $ 236,174 $ 192,759 $ 654,437 $ 527,439 Unallocated revenues/ (discounts) (125 ) 5 (562 ) 404 Revenues $ 236,049 $ 192,764 $ 653,875 $ 527,843 Total segment operating profit: $ 47,721 $ 37,028 $ 130,834 $ 99,449 Unallocated amounts: Other unallocated revenues/ (discounts) (125 ) 5 (562 ) 404 Stock-based compensation expense (11,963 ) (7,425 ) (33,350 ) (16,524 ) Non-corporate taxes (1,120 ) (789 ) (2,858 ) (1,944 ) Professional fees (1,572 ) (839 ) (5,423 ) (3,380 ) Depreciation and amortization (1,312 ) (2,589 ) (3,919 ) (5,470 ) Bank charges (340 ) (708 ) (1,021 ) (1,211 ) One-time charges — — — (2,000 ) Other corporate expenses (3,513 ) (2,848 ) (9,499 ) (7,156 ) Income from operations 27,776 21,835 74,202 62,168 Interest and other income, net 865 1,261 3,322 3,401 Foreign exchange gain/(loss) 32 (718 ) (6,187 ) (3,198 ) Income before provision for income taxes $ 28,673 $ 22,378 $ 71,337 $ 62,371 Geographic Area Information Long-lived assets include property and equipment, net of accumulated depreciation and amortization, and management has determined that it is not practical to allocate these 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 was as follows: September 30, December 31, Belarus $ 46,844 $ 41,652 Ukraine 4,482 4,392 Hungary 2,406 2,773 United States 2,072 2,001 Russia 2,043 2,196 Other 2,705 2,120 Total $ 60,552 $ 55,134 Information about the Company’s revenues by client location is as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 United States $ 110,191 $ 84,276 $ 299,606 $ 228,504 United Kingdom 41,324 35,222 121,312 102,642 Switzerland 28,370 22,508 81,654 63,873 Canada 14,695 13,518 40,394 34,973 Russia 9,469 14,351 26,526 37,513 Germany 10,378 6,459 26,216 18,951 Hong Kong 5,758 5,058 17,030 8,268 Netherlands 2,630 2,174 6,984 6,636 Sweden 3,020 1,734 7,479 6,213 Belgium 2,154 1,079 5,307 2,619 Kazakhstan 1,208 525 3,951 3,141 Ireland 1,554 1,448 4,374 2,430 Other locations 2,421 1,949 6,066 5,978 Reimbursable expenses and other revenues 2,877 2,463 6,976 6,102 Revenues $ 236,049 $ 192,764 $ 653,875 $ 527,843 Service Offering Information Information about the Company’s revenues by service offering is as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Software development $ 165,438 $ 134,000 $ 457,216 $ 364,539 Application testing services 46,275 37,155 125,615 103,121 Application maintenance and support 17,976 14,824 53,078 40,715 Infrastructure services 2,689 3,502 8,609 10,740 Licensing 794 820 2,381 2,626 Reimbursable expenses and other revenues 2,877 2,463 6,976 6,102 Revenues $ 236,049 $ 192,764 $ 653,875 $ 527,843 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | September 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update eliminates the current requirement to retrospectively adjust provisional amounts recognized at the acquisition date. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The implementation of this standard is not expected to have a material effect on the Company’s condensed consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update guides presentation of debt issuance costs and requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The implementation of this standard is not expected to have a material effect on the Company’s condensed consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidations Analysis, which changes the guidance for evaluating whether to consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The implementation of this standard is not expected to have a material effect on the Company’s condensed consolidated financial statements. In November 2014, the FASB issued ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting. The update provides an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may also elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The amendment is effective on November 18, 2014. The implementation of this standard did not have a material effect on the Company’s condensed consolidated financial statements. In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The update aims to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. The amendments are effective for annual period and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The implementation of this standard is not expected to have a material effect on the Company’s condensed consolidated financial statements as the Company currently does not issue hybrid instruments. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this update provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. These amendments aim to reduce diversity in the timing and content of footnote disclosures. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter, with early adoption permitted. The implementation of this standard is not expected to have a material effect on the Company’s condensed consolidated financial statements. In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718), which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 with early adoption permitted. Entities may apply the amendments in this ASU either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The implementation of this standard is not expected to have a material effect on the Company’s condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which impacts virtually all aspects of an entity’s revenue recognition. The ASU introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard will be effective for the Company beginning in its first quarter of 2017. In July 2015, the FASB deferred the effective date until the annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. The Company is currently evaluating the impact this new standard will have on its condensed consolidated financial statements. In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. To qualify as a discontinued operation the standard requires a disposal to represent a strategic shift that has, or will have, a major effect on an entity's operations and financial results. The standard also expands the disclosures for discontinued operations and requires new disclosures related to individually material dispositions that do not qualify as discontinued operations. The standard is effective prospectively for fiscal periods beginning after December 15, 2014, including interim periods within that reporting period, with early adoption permitted. The implementation of this standard did not have a material impact on the Company’s condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Nature of Operations | EPAM is a global leader in software product development and engineering solutions, servicing clients in over 20 countries across North America, Europe, Asia and Australia. The Company serves global clients in various industries, including Independent Software Vendors (“ISVs”) and technology, banking and financial services, business information and media, travel and hospitality and Life Sciences and Healthcare. The Company is incorporated in Delaware with headquarters in Newtown, PA, with multiple delivery centers located in Belarus, Ukraine, Russia, Hungary, Kazakhstan, Bulgaria, China, Armenia, Poland, Mexico and Austria, and client management locations in the United States, Canada, the United Kingdom, Germany, Sweden, Switzerland, Netherlands, Russia, Kazakhstan, Singapore, China, Hong Kong and Australia. |
Basis of Presentation | Basis of Presentation —The accompanying unaudited condensed consolidated financial statements ("financial statements") of EPAM Systems, Inc. (the “Company” or “EPAM”) have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. The condensed consolidated financial statements include the financial statements of EPAM Systems, Inc. and its subsidiaries with all intercompany balances and transactions eliminated. These unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2014 included in its Annual Report on Form 10-K. |
Use of Estimates | The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements. Additionally, operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire year. |
Revenue Recognition | Revenue Recognition — The Company recognizes revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the sales price is fixed or determinable; and (4) collectability is reasonably assured. Determining whether and when some of these criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue reported. The Company derives its revenues from a variety of service offerings, which represent specific competencies of its IT professionals. Contracts for these services have different terms and conditions based on the scope, deliverables, and complexity of the engagement, which require management to make judgments and estimates in determining appropriate revenue recognition pattern. Fees for these contracts may be in the form of time-and-materials or fixed-price arrangements. If there is an uncertainty about the project completion or receipt of payment for the consulting services, revenue is deferred until the uncertainty is sufficiently resolved. At the time revenue is recognized, the Company provides for any contractual deductions and reduces the revenue accordingly. The Company reports gross reimbursable “out-of-pocket” expenses incurred as both revenues and cost of revenues in the condensed consolidated statements of income and comprehensive income. The Company defers amounts billed to its clients for revenues not yet earned. Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods. Unbilled revenue is recorded when services have been provided but billed subsequent to the period end in accordance with the contract terms. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments — The Company makes assumptions about fair values of its financial assets and liabilities in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, "Fair Value Measurement," and utilizes the following fair value hierarchy in determining inputs used for valuation: Level 1 — Quoted prices for identical assets or liabilities in active markets. Level 2 — Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities, and observable inputs other than quoted prices such as interest rates or yield curves. Level 3 — Unobservable inputs reflecting our view about the assumptions that market participants would use in pricing the asset or liability. Where the fair values of financial assets and liabilities recorded in the condensed consolidated balance sheets 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. To the extent possible, observable market data is used as inputs into these models but when it is not feasible, a degree of judgment is required to establish fair values. Financial Assets and Liabilities Measured At Fair Value on a Recurring Basis The Company's contingent liabilities measured at fair value on a recurring basis are comprised of performance-based awards issued to certain former owners of the acquired businesses in exchange for future services. Contingent liabilities are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs according to fair value measurement accounting. The Company estimates the fair value of contingent liabilities based on certain performance milestones of the acquired businesses and estimated probabilities of achievement, then discounts the liabilities to present value using the Company’s cost of debt for the cash component of contingent consideration, and risk free rate for the stock component of a contractual contingency. The Company believes its estimates and assumptions are reasonable, however, there is significant judgment involved. Changes in the fair value of contingent consideration liabilities primarily result from changes in the timing and amount of specific milestone estimates and changes in probability assumptions with respect to the likelihood of achieving the various earnout criteria. These changes could cause a material impact to, and volatility in the Company’s operating results. Additionally, during the third quarter of 2015, the Company entered into derivative financial instruments to manage exposure to fluctuations in certain foreign currencies. For accounting purposes, these foreign currency option and forward contracts are not designated as hedges, as defined under FASB ASC Topic 815, "Derivatives and Hedging," and all changes in their fair value are reported within foreign exchange gain/(loss) line of the unaudited condensed consolidated statements of income and comprehensive income. The Company measures these foreign currency derivative contracts at fair value on a recurring basis utilizing Level 2 inputs. Financial Assets and Liabilities Measured At Fair Value on a Non-Recurring Basis The amounts of the Company’s financial assets and liabilities, with the exceptions of employee housing loans and other employee loans described further herein, approximate fair value because of their short-term maturities. See Note 4 for disclosures related to fair value. Employee Loans — The Company issues employee housing loans in Belarus and relocation loans to assist employees with relocation needs in connection with intra-company transfers. There are no loans issued to principal officers, directors, and their affiliates. 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. Since the initiation of the loan program there have not been material past due or non-accrual employee loans or write offs related to loan losses and, therefore, the Company determined that no allowance for loan losses is required. Employee Housing Loans — In the third quarter of 2012, the Board of Directors of the Company approved the Employee Housing Program (the “Housing Program”), which assists employees with purchasing housing in Belarus in a form of a loan. The Housing Program was designed to be a retention mechanism for the Company’s employees in Belarus and is available to full-time qualified employees who have been with the Company for at least 3 years . The aggregate maximum lending limit of the program is $10,000 , with individual loans not exceeding $50 . The housing is sold directly to employees by independent third parties. Loans issued under the Housing Program are denominated in U.S. dollars with a 5 -year term and an interest rate of 7.5% . 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 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 U.S. dollar-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 a result of the analysis performed, the Company determined the carrying values of the housing loans issued during the nine months ended September 30, 2015 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, 2015 using the inputs noted above and determined their fair values approximated the carrying values as of that date. Employee Loans, Other — The Company issues short-term, non-interest bearing relocation loans to employees that relocated within the company. Due to the short term of employee loans and high certainty of repayment, their carrying amount is a reasonable estimate of their fair value. |
Business Combinations | Business Combinations — The Company accounts for its business combinations using the acquisition accounting method, which requires it to determine the fair value of net assets acquired and the related goodwill and other intangible assets in accordance with the FASB ASC Topic 805, "Business Combinations." The Company identifies and attributes fair values and estimated lives to the intangible assets acquired and allocates the total cost of an acquisition to the underlying net assets based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. There are different valuation models for each component, the selection of which requires considerable judgment. These determinations will affect the amount of amortization expense recognized in future periods. The Company bases its fair value estimates on assumptions it believes are reasonable, but recognizes that the assumptions are inherently uncertain. If initial accounting for the business combination has not been completed by the end of the reporting period in which the business combination occurs, provisional amounts are reported for which the accounting is incomplete, with retrospective adjustment made to such provisional amounts during the measurement period to present new information about facts and circumstances that existed as of the acquisition date. Once the measurement period ends, and in no case beyond one year from the acquisition date, revisions of the accounting for the business combination are recorded in earnings. All acquisition-related costs, other than the costs to issue debt or equity securities, are accounted for as expenses in the period in which they are incurred. Changes in fair value of contingent consideration arrangements that are not measurement period adjustments are recognized in earnings. Payments to settle contingent consideration, if any, are reflected in cash flows from financing activities and the changes in fair value are reflected in cash flows from operating activities in the Company’s condensed consolidated statements of cash flows. The Company’s acquisitions usually do not have significant amounts of tangible assets, as the principal assets typically acquired are customer relationships, trade names, non-competition agreements, and workforce. As a result, a substantial portion of the purchase price is allocated to goodwill and other intangible assets. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets — Goodwill and intangible assets that have indefinite useful lives are treated consistently with FASB ASC 350, "Intangibles - Goodwill and Other." They are tested annually for impairment and are not amortized. Intangible assets that have finite useful lives are amortized over their estimated useful lives on a straight-line basis. When facts and circumstances indicate potential impairment of amortizable intangible assets, the Company evaluates the recoverability of the asset’s carrying value, using estimates of future cash flows that utilize a discount rate determined by its management to be commensurate with the risk inherent in the Company’s business model over the remaining asset life. The estimates of future cash flows attributable to intangible assets require significant judgment based on the Company’s historical and anticipated results. Any impairment loss is measured by the excess of carrying value over fair value. |
Stock-based Compensation | Stock-Based Compensation — The Company recognizes the cost of its share-based incentive awards based on the fair value of the award at the date of grant net of estimated forfeitures. The cost is expensed evenly over the service period. The service period is the period over which the employee performs the related services, which is normally the same as the vesting period. Over time, the forfeiture assumption is adjusted to the actual forfeiture rate and such change may affect the timing of the total amount of expense recognized over the vesting period. Equity-based awards that do not require future service are expensed immediately. Equity-based awards that do not meet the criteria for equity classification are recorded as liabilities and adjusted to fair value at the end of each reporting period. |
Off-Balance Sheet Financial Instruments | Off-Balance Sheet Financial Instruments — The Company uses the FASB ASC Topic 825, "Financial Instruments." to identify and disclose off-balance sheet financial instruments, which include credit instruments, such as commitments to make employee loans and related guarantees, standby letters of credit and certain 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. Loss contingencies arising from off-balance sheet financial instruments 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 such matters exists that will have a material effect on the condensed consolidated financial statements. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
2015 Acquisitions | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price was preliminarily allocated to the net assets acquired based on their estimated fair values, as follows: NavigationArts Cash and cash equivalents $ 1,317 Trade receivables and other current assets 3,920 Property and equipment and other long-term assets 230 Deferred tax asset — Acquired intangible assets 1,500 Goodwill 23,822 Total assets acquired 30,789 Accounts payable and accrued expenses 871 Deferred revenue 50 Due to employees 596 Deferred tax liability 525 Total liabilities assumed 2,042 Net assets acquired $ 28,747 |
2014 Acquisitions | |
Business Acquisition [Line Items] | |
Summary of Acquisitions in Exchange for Common Stock and/or Cash | The following table discloses details of purchase price consideration of each of the 2014 acquisitions: Name of Acquisition Effective Date of Acquisition Common Shares Fair Value of Common Shares Cash, Net of Working Capital and Other Adjustments Recorded Earnout Payable Total Recorded Purchase Price Maximum Potential Earnout Payable Issued Deferred Issued Deferred Paid Deferred Cash Stock (in shares) (in thousands) Netsoft March 5, 2014 — — $ — $ — $ 2,403 $ 1,022 $ 1,825 $ — $ 5,250 $ 1,825 Jointech April 30, 2014 — 89,552 — 2,788 10,000 4,000 15,000 5,000 36,788 20,000 GGA June 6, 2014 — — — — 14,892 — 11,400 — 26,292 Great Fridays October 31, 2014 — — — — 10,777 — 1,173 — 11,950 1,173 — 89,552 $ — $ 2,788 $ 38,072 $ 5,022 $ 29,398 $ 5,000 $ 80,280 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following is a summary of the estimated fair values of the net assets acquired at the date of each respective acquisition during the year ended December 31, 2014 as originally reported in the quarterly condensed consolidated financial statements and at September 30, 2015 : Netsoft Jointech GGA Great Fridays Total As Originally Reported Final as of As Originally Reported Final as of As Originally Reported Final as of As Originally Reported As of As Originally Reported As of Cash and cash equivalents $ — $ — $ 871 $ 871 $ — $ — $ 259 $ 259 $ 1,130 $ 1,130 Trade receivables and other current assets 788 788 784 784 5,157 5,377 1,825 1,825 8,554 8,774 Property and equipment and other long-term assets 52 52 338 338 444 306 262 262 1,096 958 Deferred tax asset 351 — — — 4,463 — — — 4,814 — Acquired intangible assets 1,700 1,700 25,744 15,312 10,959 16,000 5,747 200 44,150 33,212 Goodwill 2,776 2,779 11,033 23,758 6,496 7,306 6,947 11,327 27,252 45,170 Total assets acquired 5,667 5,319 38,770 41,063 27,519 28,989 15,040 13,873 86,996 89,244 Accounts payable and accrued expenses 69 69 728 728 2,593 2,593 872 872 4,262 4,262 Deferred revenue — — — — — 104 317 317 317 421 Due to employees — — 1,254 1,254 — — 624 624 1,878 1,878 Deferred tax liability — — — 2,293 — — 1,200 110 1,200 2,403 Total liabilities assumed 69 69 1,982 4,275 2,593 2,697 3,013 1,923 7,657 8,964 Net assets acquired $ 5,598 $ 5,250 $ 36,788 $ 36,788 $ 24,926 $ 26,292 $ 12,027 $ 11,950 $ 79,339 $ 80,280 |
Schedule of Finite-Lived Intangible Assets | As of September 30, 2015 , the following table presents the estimated fair values and useful lives of intangible assets acquired during the year ended December 31, 2014 : Netsoft Jointech GGA Great Fridays Weighted Average Amount Weighted Average Amount Weighted Average Amount Weighted Average Amount Customer relationships 10 $ 1,700 10 $ 15,000 10 $ 16,000 3 $ 200 Trade names — — 2 312 — — — — Total $ 1,700 $ 15,312 $ 16,000 $ 200 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill By Reportable Segment | Goodwill by reportable segment was as follows: North America Europe Total Balance as of January 1, 2015 $ 31,078 $ 26,339 $ 57,417 Netsoft purchase accounting adjustment (Note 2) 30 — 30 Jointech purchase accounting adjustment (Note 2) — 6,181 6,181 GGA purchase accounting adjustment (Note 2) (4,807 ) — (4,807 ) Great Fridays purchase accounting adjustment (Note 2) — 4,281 4,281 Acquisition of NavigationArts (Note 2) 23,822 — 23,822 Effect of net foreign currency exchange rate changes (341 ) (2,354 ) (2,695 ) Balance as of September 30, 2015 $ 49,782 $ 34,447 $ 84,229 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables show the fair values of the Company’s financial assets and liabilities, including derivative contracts, measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 Balance Level 2 Level 3 Balance Level 2 Level 3 Foreign currency derivative assets $ 110 $ 110 $ — $ — $ — $ — Total assets measured at fair value on a recurring basis 110 110 — — — — Contingent consideration — — — 37,400 — 37,400 Performance-based equity awards 2,979 — 2,979 3,223 — 3,223 Foreign currency derivative liabilities 224 224 — — — — Total liabilities measured at fair value on a recurring basis $ 3,203 $ 224 $ 2,979 $ 40,623 $ — $ 40,623 |
Reconciliation of Liabilities Measured on Recurring Basis, Unobservable Input | A reconciliation of the beginning and ending balances of acquisition-related contractual contingent liabilities using significant unobservable inputs (Level 3) for the nine months ended September 30, 2015 , was as follows: Amount Contractual contingent liabilities at January 1, 2015 $ 40,623 Liability-classified stock-based awards 3,861 Changes in fair value of contractual contingent liabilities included in earnings 3,257 Effect of net foreign currency exchange rate changes 246 Settlements of contractual contingent liabilities - cash and stock (45,008 ) Contractual contingent liabilities at September 30, 2015 $ 2,979 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Costs Related to Stock Compensation Plans | The following costs related to the Company’s stock compensation plans were included in the condensed consolidated statements of income and comprehensive income: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Cost of revenues $ 3,622 $ 2,463 $ 9,871 $ 6,391 Selling, general and administrative expenses - Acquisition related 4,542 2,905 13,985 5,128 Selling, general and administrative expenses - All other 3,799 2,057 9,494 5,005 Total $ 11,963 $ 7,425 $ 33,350 $ 16,524 |
Stock Option Activity | Stock option activity under the Company’s plans is set forth below: Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Options outstanding at January 1, 2015 6,838,746 $ 20.98 $ 183,073 Options granted 2,189,424 62.03 27,346 Options exercised (1,086,066 ) 16.28 (63,252 ) Options forfeited/cancelled (171,222 ) 33.32 (7,054 ) Options outstanding at September 30, 2015 7,770,882 $ 32.93 $ 323,191 Options vested and exercisable at September 30, 2015 2,753,236 $ 15.08 $ 163,652 Options expected to vest 4,634,538 $ 42.26 $ 149,510 |
Service-based Awards Activity | Summarized activity related to the Company’s service-based awards for the nine months ended September 30, 2015 , was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested service-based awards outstanding at January 1, 2015 633,442 $ 36.88 Awards granted 100,391 39.20 Awards vested (145,631 ) 39.45 Awards forfeited/cancelled (11,372 ) 32.13 Unvested service-based awards outstanding at September 30, 2015 576,830 $ 36.73 |
Performance-based Awards Activity | Summarized activity related to the Company’s performance-based awards for the nine months ended September 30, 2015 , was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested performance-based awards outstanding at January 1, 2015 371,510 $ 39.34 Awards granted 14,000 70.22 Awards vested (114,105 ) 40.15 Awards forfeited/cancelled (1,360 ) 36.57 Changes in the number of awards expected to be delivered (19,105 ) 31.70 Unvested performance-based awards outstanding at September 30, 2015 250,940 $ 41.29 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings 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 2015 2014 2015 2014 Numerator for common earnings per share: Net income $ 22,873 $ 19,040 $ 56,818 $ 51,218 Numerator for basic and diluted earnings per share $ 22,873 $ 19,040 $ 56,818 $ 51,218 Denominator for basic earnings per share: Weighted average common shares outstanding 49,043 47,315 48,506 47,058 Effect of dilutive securities: Stock options, RSUs and performance-based awards 3,301 2,514 3,249 2,472 Denominator for diluted earnings per share 52,344 49,829 51,755 49,530 Net income per share: Basic $ 0.47 $ 0.40 $ 1.17 $ 1.09 Diluted $ 0.44 $ 0.38 $ 1.10 $ 1.03 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [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, 2015 and 2014 , were as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Total segment revenues: North America $ 121,746 $ 99,393 $ 330,228 $ 267,866 Europe 103,514 78,074 292,826 217,247 Russia 9,707 14,762 27,432 38,881 Other 1,207 530 3,951 3,445 Total segment revenues $ 236,174 $ 192,759 $ 654,437 $ 527,439 Segment operating profit: North America $ 28,906 $ 22,557 $ 78,720 $ 62,283 Europe 17,021 12,200 49,031 36,049 Russia 1,626 3,779 3,095 4,843 Other 168 (1,508 ) (12 ) (3,726 ) Total segment operating profit $ 47,721 $ 37,028 $ 130,834 $ 99,449 |
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 2015 2014 2015 2014 Total segment revenues $ 236,174 $ 192,759 $ 654,437 $ 527,439 Unallocated revenues/ (discounts) (125 ) 5 (562 ) 404 Revenues $ 236,049 $ 192,764 $ 653,875 $ 527,843 Total segment operating profit: $ 47,721 $ 37,028 $ 130,834 $ 99,449 Unallocated amounts: Other unallocated revenues/ (discounts) (125 ) 5 (562 ) 404 Stock-based compensation expense (11,963 ) (7,425 ) (33,350 ) (16,524 ) Non-corporate taxes (1,120 ) (789 ) (2,858 ) (1,944 ) Professional fees (1,572 ) (839 ) (5,423 ) (3,380 ) Depreciation and amortization (1,312 ) (2,589 ) (3,919 ) (5,470 ) Bank charges (340 ) (708 ) (1,021 ) (1,211 ) One-time charges — — — (2,000 ) Other corporate expenses (3,513 ) (2,848 ) (9,499 ) (7,156 ) Income from operations 27,776 21,835 74,202 62,168 Interest and other income, net 865 1,261 3,322 3,401 Foreign exchange gain/(loss) 32 (718 ) (6,187 ) (3,198 ) Income before provision for income taxes $ 28,673 $ 22,378 $ 71,337 $ 62,371 |
Geographical Information of Long-Lived Assets Based on Physical Location | Geographical information about the Company’s long-lived assets based on physical location of the assets was as follows: September 30, December 31, Belarus $ 46,844 $ 41,652 Ukraine 4,482 4,392 Hungary 2,406 2,773 United States 2,072 2,001 Russia 2,043 2,196 Other 2,705 2,120 Total $ 60,552 $ 55,134 |
Revenues by Client Location | Information about the Company’s revenues by client location is as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 United States $ 110,191 $ 84,276 $ 299,606 $ 228,504 United Kingdom 41,324 35,222 121,312 102,642 Switzerland 28,370 22,508 81,654 63,873 Canada 14,695 13,518 40,394 34,973 Russia 9,469 14,351 26,526 37,513 Germany 10,378 6,459 26,216 18,951 Hong Kong 5,758 5,058 17,030 8,268 Netherlands 2,630 2,174 6,984 6,636 Sweden 3,020 1,734 7,479 6,213 Belgium 2,154 1,079 5,307 2,619 Kazakhstan 1,208 525 3,951 3,141 Ireland 1,554 1,448 4,374 2,430 Other locations 2,421 1,949 6,066 5,978 Reimbursable expenses and other revenues 2,877 2,463 6,976 6,102 Revenues $ 236,049 $ 192,764 $ 653,875 $ 527,843 |
Revenues by Service Offering | Information about the Company’s revenues by service offering is as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Software development $ 165,438 $ 134,000 $ 457,216 $ 364,539 Application testing services 46,275 37,155 125,615 103,121 Application maintenance and support 17,976 14,824 53,078 40,715 Infrastructure services 2,689 3,502 8,609 10,740 Licensing 794 820 2,381 2,626 Reimbursable expenses and other revenues 2,877 2,463 6,976 6,102 Revenues $ 236,049 $ 192,764 $ 653,875 $ 527,843 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Loans issued to principal officers, directors, or their affiliates | $ 0 |
Allowance for employee loans | 0 |
Non-accrual employee loans | 0 |
Material loans past due | $ 0 |
Loans Under Employee Housing Program | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Interest rate on loan (as a percent) | 7.50% |
Loan term (in years) | 5 years |
Minimum service period (in years) | 3 years |
Loans Under Employee Housing Program | Maximum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Individual loan original amount limit | $ 50 |
Authorized loan program amount | $ 10,000 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | Jul. 10, 2015USD ($) | Jun. 30, 2015shares | Mar. 31, 2015shares | Oct. 31, 2014USD ($)shares | Jun. 06, 2014USD ($)shares | Apr. 30, 2014USD ($)Ownershares | Mar. 05, 2014USD ($)shares | Sep. 30, 2015 |
Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Estimated Future Operating Results Period, Subsequent to Acquisition Date | 7 months | |||||||
Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Estimated Future Operating Results Period, Subsequent to Acquisition Date | 12 months | |||||||
2015 Acquisitions | NavigationArts | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash Consideration Placed In Escrow | $ | $ 2,670 | |||||||
Consideration Placed In Escrow, Period | 18 months | |||||||
2015 Acquisitions | NavigationArts | Design Consultant [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of professionals | 90 | |||||||
2014 Acquisitions | Netsoft | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash Consideration Placed In Escrow | $ | $ 256 | |||||||
Consideration Placed In Escrow, Period | 18 months | |||||||
2014 Acquisitions | Netsoft | Employment Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Share vesting term | 3 years | 3 years | ||||||
Stock issued or issuable, value assigned | $ | $ 1,017 | |||||||
2014 Acquisitions | Netsoft | Employment Shares, Closing Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 2,289 | |||||||
2014 Acquisitions | Netsoft | Employment Shares, Earn-Out Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 16,349 | |||||||
Deferred restricted shares | 9,154 | |||||||
2014 Acquisitions | Netsoft | IT professionals | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of professionals | 40 | |||||||
2014 Acquisitions | Jointech | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Acquisition, Number of Former Owners | Owner | 2 | |||||||
Consideration Placed In Escrow, Percentage | 15.00% | |||||||
2014 Acquisitions | Jointech | Employment Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Share vesting term | 3 years | 3 years | ||||||
Stock issued or issuable, value assigned | $ | $ 7,788 | |||||||
Consideration Placed In Escrow, Period | 18 months | |||||||
2014 Acquisitions | Jointech | Employment Shares, Closing Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 89,552 | |||||||
2014 Acquisitions | Jointech | Employment Shares, Earn-Out Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 83,057 | |||||||
2014 Acquisitions | Jointech | IT professionals | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of professionals | 216 | |||||||
2014 Acquisitions | GGA | Employment Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Share vesting term | 3 years | 3 years | ||||||
Stock issued or issuable, value assigned | $ | $ 20,655 | |||||||
2014 Acquisitions | GGA | Employment Shares, Closing Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 262,277 | |||||||
Consideration Placed In Escrow, Period | 15 months | |||||||
Consideration Placed In Escrow, Shares | 102,631 | |||||||
2014 Acquisitions | GGA | Employment Shares, Earn-Out Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 233,753 | |||||||
2014 Acquisitions | GGA | IT professionals | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of professionals | 329 | |||||||
2014 Acquisitions | GGA | Scientists | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of professionals | 126 | |||||||
2014 Acquisitions | Great Fridays Limited | Employment Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Share vesting term | 3 years | 3 years | ||||||
Stock issued or issuable, value assigned | $ | $ 4,823 | |||||||
Consideration Placed In Escrow, Period | 24 months | |||||||
Consideration Placed In Escrow, Shares | 28,390 | |||||||
2014 Acquisitions | Great Fridays Limited | Employment Shares, Closing Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 90,864 | |||||||
2014 Acquisitions | Great Fridays Limited | Employment Shares, Earn-Out Shares | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued or issuable, number of shares | 10,092 | |||||||
2014 Acquisitions | Great Fridays Limited | Designers | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of professionals | 50 |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - USD ($) $ in Thousands | Jul. 10, 2015 | Oct. 31, 2014 | Jun. 06, 2014 | Apr. 30, 2014 | Mar. 05, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Business Acquisition [Line Items] | |||||||
Cash, Net of Working Capital and Other Adjustments, Deferred | $ 30,274 | $ 0 | |||||
2015 Acquisitions | NavigationArts | |||||||
Business Acquisition [Line Items] | |||||||
Cash, Net of Working Capital and Other Adjustments, Paid | $ 28,747 | ||||||
2014 Acquisitions | Netsoft | |||||||
Business Acquisition [Line Items] | |||||||
Cash, Net of Working Capital and Other Adjustments, Paid | $ 2,403 | ||||||
Cash, Net of Working Capital and Other Adjustments, Deferred | 1,022 | ||||||
Recorded Earnout Payable, Cash | 1,825 | ||||||
Recorded Earnout Payable, Stock | 0 | ||||||
Total Recorded Purchase Price | $ 5,250 | ||||||
2014 Acquisitions | Jointech | |||||||
Business Acquisition [Line Items] | |||||||
Cash, Net of Working Capital and Other Adjustments, Paid | $ 10,000 | ||||||
Cash, Net of Working Capital and Other Adjustments, Deferred | 4,000 | ||||||
Recorded Earnout Payable, Cash | 15,000 | ||||||
Recorded Earnout Payable, Stock | 5,000 | ||||||
Total Recorded Purchase Price | $ 36,788 | ||||||
2014 Acquisitions | GGA | |||||||
Business Acquisition [Line Items] | |||||||
Cash, Net of Working Capital and Other Adjustments, Paid | $ 14,892 | ||||||
Cash, Net of Working Capital and Other Adjustments, Deferred | 0 | ||||||
Recorded Earnout Payable, Cash | 11,400 | ||||||
Recorded Earnout Payable, Stock | 0 | ||||||
Total Recorded Purchase Price | $ 26,292 | ||||||
2014 Acquisitions | Great Fridays Limited | |||||||
Business Acquisition [Line Items] | |||||||
Cash, Net of Working Capital and Other Adjustments, Paid | $ 10,777 | ||||||
Cash, Net of Working Capital and Other Adjustments, Deferred | 0 | ||||||
Recorded Earnout Payable, Cash | 1,173 | ||||||
Recorded Earnout Payable, Stock | 0 | ||||||
Total Recorded Purchase Price | $ 11,950 | ||||||
2014 Acquisitions | Total | |||||||
Business Acquisition [Line Items] | |||||||
Cash, Net of Working Capital and Other Adjustments, Paid | 38,072 | ||||||
Cash, Net of Working Capital and Other Adjustments, Deferred | 5,022 | ||||||
Recorded Earnout Payable, Cash | 29,398 | ||||||
Recorded Earnout Payable, Stock | 5,000 | ||||||
Total Recorded Purchase Price | $ 80,280 | ||||||
2014 Acquisitions | Common Stock | Netsoft | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued, number of shares | 0 | ||||||
Stock deferred, number of shares | 0 | ||||||
Fair value of stock issued | $ 0 | ||||||
Fair value of deferred stock | 0 | ||||||
2014 Acquisitions | Common Stock | Jointech | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued, number of shares | 0 | ||||||
Stock deferred, number of shares | 89,552 | ||||||
Fair value of stock issued | $ 0 | ||||||
Fair value of deferred stock | 2,788 | ||||||
2014 Acquisitions | Common Stock | GGA | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued, number of shares | 0 | ||||||
Stock deferred, number of shares | 0 | ||||||
Fair value of stock issued | $ 0 | ||||||
Fair value of deferred stock | $ 0 | ||||||
2014 Acquisitions | Common Stock | Great Fridays Limited | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued, number of shares | 0 | ||||||
Stock deferred, number of shares | 0 | ||||||
Fair value of stock issued | $ 0 | ||||||
Fair value of deferred stock | 0 | ||||||
2014 Acquisitions | Common Stock | Total | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued, number of shares | 0 | ||||||
Stock deferred, number of shares | 89,552 | ||||||
Fair value of stock issued | $ 0 | ||||||
Fair value of deferred stock | $ 2,788 | ||||||
2014 Acquisitions | Maximum | Netsoft | |||||||
Business Acquisition [Line Items] | |||||||
Maximum Potential Earnout Payable | $ 1,825 | ||||||
2014 Acquisitions | Maximum | Jointech | |||||||
Business Acquisition [Line Items] | |||||||
Maximum Potential Earnout Payable | $ 20,000 | ||||||
2014 Acquisitions | Maximum | Great Fridays Limited | |||||||
Business Acquisition [Line Items] | |||||||
Maximum Potential Earnout Payable | $ 1,173 |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Jul. 10, 2015 | Dec. 31, 2014 | Oct. 31, 2014 | Jun. 06, 2014 | Apr. 30, 2014 | Mar. 05, 2014 | |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 84,229 | $ 57,417 | |||||||
2015 Acquisitions | NavigationArts | As Originally Reported [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | $ 1,317 | ||||||||
Trade receivables and other current assets | 3,920 | ||||||||
Property and equipment and other long-term assets | 230 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 1,500 | ||||||||
Goodwill | 23,822 | ||||||||
Total assets acquired | 30,789 | ||||||||
Accounts payable and accrued expenses | 871 | ||||||||
Deferred revenue | 50 | ||||||||
Due to employees | 596 | ||||||||
Deferred tax liability | 525 | ||||||||
Total liabilities assumed | 2,042 | ||||||||
Net assets acquired | $ 28,747 | ||||||||
2014 Acquisitions | Netsoft | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | $ 0 | ||||||||
Trade receivables and other current assets | 788 | ||||||||
Property and equipment and other long-term assets | 52 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 1,700 | ||||||||
Goodwill | 2,779 | ||||||||
Total assets acquired | 5,319 | ||||||||
Accounts payable and accrued expenses | 69 | ||||||||
Deferred revenue | 0 | ||||||||
Due to employees | 0 | ||||||||
Deferred tax liability | 0 | ||||||||
Total liabilities assumed | 69 | ||||||||
Net assets acquired | 5,250 | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||||||||
Adjustment to net assets acquired | $ (348) | ||||||||
2014 Acquisitions | Netsoft | As Originally Reported [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | $ 0 | ||||||||
Trade receivables and other current assets | 788 | ||||||||
Property and equipment and other long-term assets | 52 | ||||||||
Deferred tax asset | 351 | ||||||||
Acquired intangible assets | 1,700 | ||||||||
Goodwill | 2,776 | ||||||||
Total assets acquired | 5,667 | ||||||||
Accounts payable and accrued expenses | 69 | ||||||||
Deferred revenue | 0 | ||||||||
Due to employees | 0 | ||||||||
Deferred tax liability | 0 | ||||||||
Total liabilities assumed | 69 | ||||||||
Net assets acquired | $ 5,598 | ||||||||
2014 Acquisitions | Jointech | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | $ 871 | ||||||||
Trade receivables and other current assets | 784 | ||||||||
Property and equipment and other long-term assets | 338 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 15,312 | ||||||||
Goodwill | 23,758 | ||||||||
Total assets acquired | 41,063 | ||||||||
Accounts payable and accrued expenses | 728 | ||||||||
Deferred revenue | 0 | ||||||||
Due to employees | 1,254 | ||||||||
Deferred tax liability | 2,293 | ||||||||
Total liabilities assumed | 4,275 | ||||||||
Net assets acquired | 36,788 | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||||||||
Adjustment to net assets acquired | 0 | ||||||||
2014 Acquisitions | Jointech | As Originally Reported [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | $ 871 | ||||||||
Trade receivables and other current assets | 784 | ||||||||
Property and equipment and other long-term assets | 338 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 25,744 | ||||||||
Goodwill | 11,033 | ||||||||
Total assets acquired | 38,770 | ||||||||
Accounts payable and accrued expenses | 728 | ||||||||
Deferred revenue | 0 | ||||||||
Due to employees | 1,254 | ||||||||
Deferred tax liability | 0 | ||||||||
Total liabilities assumed | 1,982 | ||||||||
Net assets acquired | $ 36,788 | ||||||||
2014 Acquisitions | GGA | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | 0 | ||||||||
Trade receivables and other current assets | 5,377 | ||||||||
Property and equipment and other long-term assets | 306 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 16,000 | ||||||||
Goodwill | 7,306 | ||||||||
Total assets acquired | 28,989 | ||||||||
Accounts payable and accrued expenses | 2,593 | ||||||||
Deferred revenue | 104 | ||||||||
Due to employees | 0 | ||||||||
Deferred tax liability | 0 | ||||||||
Total liabilities assumed | 2,697 | ||||||||
Net assets acquired | 26,292 | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||||||||
Adjustment to net assets acquired | $ (1,366) | ||||||||
2014 Acquisitions | GGA | As Originally Reported [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | $ 0 | ||||||||
Trade receivables and other current assets | 5,157 | ||||||||
Property and equipment and other long-term assets | 444 | ||||||||
Deferred tax asset | 4,463 | ||||||||
Acquired intangible assets | 10,959 | ||||||||
Goodwill | 6,496 | ||||||||
Total assets acquired | 27,519 | ||||||||
Accounts payable and accrued expenses | 2,593 | ||||||||
Deferred revenue | 0 | ||||||||
Due to employees | 0 | ||||||||
Deferred tax liability | 0 | ||||||||
Total liabilities assumed | 2,593 | ||||||||
Net assets acquired | $ 24,926 | ||||||||
2014 Acquisitions | Great Fridays Limited | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | 259 | ||||||||
Trade receivables and other current assets | 1,825 | ||||||||
Property and equipment and other long-term assets | 262 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 200 | ||||||||
Goodwill | 11,327 | ||||||||
Total assets acquired | 13,873 | ||||||||
Accounts payable and accrued expenses | 872 | ||||||||
Deferred revenue | 317 | ||||||||
Due to employees | 624 | ||||||||
Deferred tax liability | 110 | ||||||||
Total liabilities assumed | 1,923 | ||||||||
Net assets acquired | 11,950 | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||||||||
Adjustment to net assets acquired | (77) | ||||||||
2014 Acquisitions | Great Fridays Limited | As Originally Reported [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | $ 259 | ||||||||
Trade receivables and other current assets | 1,825 | ||||||||
Property and equipment and other long-term assets | 262 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 5,747 | ||||||||
Goodwill | 6,947 | ||||||||
Total assets acquired | 15,040 | ||||||||
Accounts payable and accrued expenses | 872 | ||||||||
Deferred revenue | 317 | ||||||||
Due to employees | 624 | ||||||||
Deferred tax liability | 1,200 | ||||||||
Total liabilities assumed | 3,013 | ||||||||
Net assets acquired | $ 12,027 | ||||||||
2014 Acquisitions | Total | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | 1,130 | ||||||||
Trade receivables and other current assets | 8,774 | ||||||||
Property and equipment and other long-term assets | 958 | ||||||||
Deferred tax asset | 0 | ||||||||
Acquired intangible assets | 33,212 | ||||||||
Goodwill | 45,170 | ||||||||
Total assets acquired | 89,244 | ||||||||
Accounts payable and accrued expenses | 4,262 | ||||||||
Deferred revenue | 421 | ||||||||
Due to employees | 1,878 | ||||||||
Deferred tax liability | 2,403 | ||||||||
Total liabilities assumed | 8,964 | ||||||||
Net assets acquired | 80,280 | ||||||||
2014 Acquisitions | Total | As Originally Reported [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash and cash equivalents | 1,130 | ||||||||
Trade receivables and other current assets | 8,554 | ||||||||
Property and equipment and other long-term assets | 1,096 | ||||||||
Deferred tax asset | 4,814 | ||||||||
Acquired intangible assets | 44,150 | ||||||||
Goodwill | 27,252 | ||||||||
Total assets acquired | 86,996 | ||||||||
Accounts payable and accrued expenses | 4,262 | ||||||||
Deferred revenue | 317 | ||||||||
Due to employees | 1,878 | ||||||||
Deferred tax liability | 1,200 | ||||||||
Total liabilities assumed | 7,657 | ||||||||
Net assets acquired | $ 79,339 |
ACQUISITIONS (Details 3)
ACQUISITIONS (Details 3) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
2015 Acquisitions | NavigationArts | Customer Relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Useful Life (in years) | 3 years |
Amount | $ 1,500 |
2014 Acquisitions | Netsoft | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 1,700 |
2014 Acquisitions | Netsoft | Customer Relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Useful Life (in years) | 10 years |
Amount | $ 1,700 |
2014 Acquisitions | Netsoft | Trade Names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | 0 |
2014 Acquisitions | Jointech | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 15,312 |
2014 Acquisitions | Jointech | Customer Relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Useful Life (in years) | 10 years |
Amount | $ 15,000 |
2014 Acquisitions | Jointech | Trade Names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Useful Life (in years) | 2 years |
Amount | $ 312 |
2014 Acquisitions | GGA | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 16,000 |
2014 Acquisitions | GGA | Customer Relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Useful Life (in years) | 10 years |
Amount | $ 16,000 |
2014 Acquisitions | GGA | Trade Names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | 0 |
2014 Acquisitions | Great Fridays Limited | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 200 |
2014 Acquisitions | Great Fridays Limited | Customer Relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Useful Life (in years) | 3 years |
Amount | $ 200 |
2014 Acquisitions | Great Fridays Limited | Trade Names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 0 |
GOODWILL (Details)
GOODWILL (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Balance as of January 1, 2015 | $ 57,417 |
Effect of net foreign currency exchange rate changes | (2,695) |
Balance as of September 30, 2015 | 84,229 |
North America | |
Goodwill [Roll Forward] | |
Balance as of January 1, 2015 | 31,078 |
Effect of net foreign currency exchange rate changes | (341) |
Balance as of September 30, 2015 | 49,782 |
Europe | |
Goodwill [Roll Forward] | |
Balance as of January 1, 2015 | 26,339 |
Effect of net foreign currency exchange rate changes | (2,354) |
Balance as of September 30, 2015 | 34,447 |
Netsoft | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 30 |
Netsoft | North America | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 30 |
Netsoft | Europe | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 0 |
Jointech | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 6,181 |
Jointech | North America | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 0 |
Jointech | Europe | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 6,181 |
GGA | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | (4,807) |
GGA | North America | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | (4,807) |
GGA | Europe | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 0 |
Great Fridays Limited | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 4,281 |
Great Fridays Limited | North America | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 0 |
Great Fridays Limited | Europe | |
Goodwill [Roll Forward] | |
Purchase accounting adjustments | 4,281 |
NavigationArts | |
Goodwill [Roll Forward] | |
Goodwill, Acquired During Period | 23,822 |
NavigationArts | North America | |
Goodwill [Roll Forward] | |
Goodwill, Acquired During Period | 23,822 |
NavigationArts | Europe | |
Goodwill [Roll Forward] | |
Goodwill, Acquired During Period | $ 0 |
GOODWILL (Details 2)
GOODWILL (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | ||
Goodwill | $ 84,229 | $ 57,417 |
North America | ||
Goodwill [Line Items] | ||
Goodwill | 49,782 | 31,078 |
Accumulated impairment loss | 0 | 0 |
Europe | ||
Goodwill [Line Items] | ||
Goodwill | 34,447 | 26,339 |
Accumulated impairment loss | 0 | 0 |
Russia | ||
Goodwill [Line Items] | ||
Goodwill | 0 | 0 |
Accumulated impairment loss | 2,241 | 2,241 |
Other | ||
Goodwill [Line Items] | ||
Accumulated impairment loss | $ 1,697 | $ 1,697 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value on a recurring basis | $ 110 | $ 0 |
Contingent consideration | 0 | 37,400 |
Performance-based equity awards | 2,979 | 3,223 |
Total liabilities measured at fair value on a recurring basis | 3,203 | 40,623 |
Foreign Currency Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 110 | 0 |
Derivative liability | 224 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value on a recurring basis | 110 | 0 |
Contingent consideration | 0 | 0 |
Performance-based equity awards | 0 | 0 |
Total liabilities measured at fair value on a recurring basis | 224 | 0 |
Level 2 | Foreign Currency Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 110 | 0 |
Derivative liability | 224 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value on a recurring basis | 0 | 0 |
Contingent consideration | 0 | 37,400 |
Performance-based equity awards | 2,979 | 3,223 |
Total liabilities measured at fair value on a recurring basis | 2,979 | 40,623 |
Level 3 | Foreign Currency Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liability | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Deta32
FAIR VALUE MEASUREMENTS (Details 2) - Level 3 $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Contractual contingent liabilities at January 1, 2015 | $ 40,623 |
Liability-classified stock-based awards | 3,861 |
Changes in fair value of contractual contingent liabilities included in earnings | 3,257 |
Effect of net foreign currency exchange rate changes | 246 |
Settlements of contractual contingent liabilities - cash and stock | (45,008) |
Contractual contingent liabilities at September 30, 2015 | $ 2,979 |
FAIR VALUE MEASUREMENTS (Deta33
FAIR VALUE MEASUREMENTS (Details 3) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net [Abstract] | |||
Transfers Into Level 3 | $ 0 | $ 0 | |
Transfers out of Level 3 | 0 | $ 0 | |
Foreign Currency Contract [Member] | Not Designated as Hedging Instrument [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Aggregated notional amount of derivative contracts | $ 25,200 | $ 0 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - 2014 Credit Facility - Revolving Credit Facility - USD ($) $ in Thousands | Sep. 12, 2014 | Sep. 30, 2015 | Sep. 30, 2015 |
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 200,000 | ||
Line of credit, collateralized borrowing capacity | 100,000 | ||
Line of credit, maximum borrowing capacity in foreign currency | $ 50,000 | ||
Percentage of foreign subsidiaries outstanding shares of capital stock serves as collateral | 65.00% | ||
Amount borrowed | $ 15,000 | ||
Outstanding debt | $ 15,000 | $ 15,000 | |
LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate spread | 1.00% | ||
Federal Funds Open Rate | |||
Debt Instrument [Line Items] | |||
Variable rate spread | 0.50% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 20.20% | 14.90% | 20.40% | 17.90% |
Effective Income Tax Rate Reconciliation, Deduction, Other, Amount | $ 1,200 |
STOCK-BASED COMPENSATION, Costs
STOCK-BASED COMPENSATION, Costs Related To Stock Compensation Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 11,963 | $ 7,425 | $ 33,350 | $ 16,524 |
Cost of revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 3,622 | 2,463 | 9,871 | 6,391 |
Organic growth | Selling, general and administrative expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 3,799 | 2,057 | 9,494 | 5,005 |
Business acquisitions | Selling, general and administrative expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 4,542 | $ 2,905 | $ 13,985 | $ 5,128 |
STOCK-BASED COMPENSATION, Stock
STOCK-BASED COMPENSATION, Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | Jan. 11, 2012 | May. 31, 2006 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Options granted | 2,189,424 | ||||
Underlying options, in shares | 5,015 | 5,015 | |||
Options expected to vest | 4,634,538 | 4,634,538 | |||
Restricted Stock | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Stock options issued (in shares) | 100,391 | ||||
Underlying service-based awards, unvested and outstanding (in shares) | 576,830 | 576,830 | 633,442 | ||
Performance-Based Awards | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $ 14,384 | $ 14,384 | |||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 1 year 5 months 4 days | ||||
Stock options issued (in shares) | 14,000 | ||||
Underlying service-based awards, unvested and outstanding (in shares) | 250,940 | 250,940 | 371,510 | ||
2015 Plan | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Common stock shares available for issuance (in shares) | 6,669,713 | 6,669,713 | |||
2015 Plan | Stock Options | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Options granted | 105,724 | ||||
Aggregate grant-date fair value of stock options | $ 2,789 | ||||
Unrecognized compensation cost, net of forfeitures | $ 2,677 | $ 2,677 | |||
Weighted average remaining contractual term, outstanding | 9 years 10 months 7 days | ||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 2 years 4 months 19 days | ||||
Options expected to vest | 0 | 0 | |||
Vesting percentage | 25.00% | ||||
2015 Plan | Service-Based Awards | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $ 836 | $ 836 | |||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 1 year 11 months | ||||
Underlying service-based awards, unvested and outstanding (in shares) | 12,096 | 12,096 | |||
Underlying options, value at grant date | $ 905 | ||||
2015 Plan | Restricted Stock Units (RSUs) | Service Period | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $ 1,771 | $ 1,771 | |||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 2 years 4 months 13 days | ||||
Deferred compensation, shares issued | 25,000 | 25,000 | |||
Deferred compensation arrangement, fair value of shares issued | $ 1,853 | ||||
Vesting percentage | 25.00% | ||||
2012 Directors Plan | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Shares authorized for issuance (in shares) | 600,000 | ||||
2012 Directors Plan expiration period | 10 years | ||||
Common stock shares available for issuance (in shares) | 554,070 | 554,070 | |||
2012 Directors Plan | Restricted Stock | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $ 377 | $ 377 | |||
Non-vested common stock shares issued (in shares) | 5,295 | 5,295 | |||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 1 year 2 months 16 days | ||||
2012 Plan | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Common stock shares subject to outstanding awards that expire or terminate that are available for awards to be granted (in shares) | 6,390,069 | 6,390,069 | |||
2012 Plan | Stock Options | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Options granted | 2,083,700 | ||||
Options issued expiration period | 10 years | ||||
Aggregate grant-date fair value of stock options | $ 44,394 | ||||
Unrecognized compensation cost, net of forfeitures | $ 67,998 | $ 67,998 | |||
Weighted average remaining contractual term, outstanding | 8 years 7 months 13 days | ||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 2 years 2 days | ||||
Weighted average remaining contractual term, exercisable | 7 years 4 months 29 days | ||||
2012 Plan | Service-Based Awards | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $ 11,542 | $ 11,542 | |||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 1 year 5 months 3 days | ||||
Underlying service-based awards, unvested and outstanding (in shares) | 427,293 | 427,293 | |||
Underlying options, value at grant date | $ 16,137 | ||||
2012 Plan | Restricted Stock Units (RSUs) | Performance Targets | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Restricted stock units vesting term | 3 years | ||||
Deferred compensation, shares issued | 14,000 | ||||
Deferred compensation arrangement, fair value of shares issued | $ 983 | ||||
2012 Plan | Restricted Stock Units (RSUs) | Service Period | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $ 4,305 | $ 4,305 | |||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 2 years 1 month 25 days | ||||
Deferred compensation, shares issued | 0 | 58,000 | |||
Deferred compensation arrangement, fair value of shares issued | $ 3,560 | ||||
Vesting percentage | 25.00% | ||||
2006 Plan | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Common stock shares subject to outstanding awards that expire or terminate that are available for awards to be granted (in shares) | 1,275,089 | 1,275,089 | |||
2006 Plan | Stock Options | |||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||
Options issued expiration period | 10 years | ||||
Options expected to vest | 0 | 0 | |||
Weighted average remaining contractual term, exercisable | 5 years 2 months 9 days |
STOCK-BASED COMPENSATION, Sto38
STOCK-BASED COMPENSATION, Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Number of Options | |
Options outstanding at January 1, 2015 | 6,838,746 |
Options granted | 2,189,424 |
Options exercised | (1,086,066) |
Options forfeited/cancelled | (171,222) |
Options outstanding at September 30, 2015 | 7,770,882 |
Options vested and exercisable at September 30, 2015 | 2,753,236 |
Options expected to vest | 4,634,538 |
Weighted Average Exercise Price | |
Options outstanding at January 1, 2015 | $ / shares | $ 20.98 |
Options granted | $ / shares | 62.03 |
Options exercised | $ / shares | 16.28 |
Options forfeited/cancelled | $ / shares | 33.32 |
Options outstanding at September 30, 2015 | $ / shares | 32.93 |
Options vested and exercisable at September 30, 2015 | $ / shares | 15.08 |
Options expected to vest | $ / shares | $ 42.26 |
Aggregate Intrinsic Value | |
Options outstanding at January 1, 2015 | $ | $ 183,073 |
Options granted | $ | 27,346 |
Options exercised | $ | (63,252) |
Options forfeited/cancelled | $ | (7,054) |
Options outstanding at September 30, 2015 | $ | 323,191 |
Options vested and exercisable at September 30, 2015 | $ | 163,652 |
Options expected to vest | $ | $ 149,510 |
STOCK-BASED COMPENSATION, Sto39
STOCK-BASED COMPENSATION, Stock Compensation Plans (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Service-Based Awards | |
Number of Shares | |
Unvested awards outstanding at January 1, 2015 | 633,442 |
Awards granted | 100,391 |
Awards vested | (145,631) |
Awards forfeited/cancelled | (11,372) |
Unvested awards outstanding at September 30, 2015 | 576,830 |
Weighted Average Grant Date Fair Value Per Share | |
Unvested awards outstanding at January 1, 2015 | $ / shares | $ 36.88 |
Awards granted | $ / shares | 39.20 |
Awards vested | $ / shares | 39.45 |
Awards forfeited/cancelled | $ / shares | 32.13 |
Unvested awards outstanding at September 30, 2015 | $ / shares | $ 36.73 |
Performance-Based Awards | |
Number of Shares | |
Unvested awards outstanding at January 1, 2015 | 371,510 |
Awards granted | 14,000 |
Awards vested | (114,105) |
Awards forfeited/cancelled | (1,360) |
Changes in the number of awards expected to be delivered | (19,105) |
Unvested awards outstanding at September 30, 2015 | 250,940 |
Weighted Average Grant Date Fair Value Per Share | |
Unvested awards outstanding at January 1, 2015 | $ / shares | $ 39.34 |
Awards granted | $ / shares | 70.22 |
Awards vested | $ / shares | 40.15 |
Awards forfeited/cancelled | $ / shares | 36.57 |
Changes in the number of awards expected to be delivered | $ / shares | 31.70 |
Unvested awards outstanding at September 30, 2015 | $ / shares | $ 41.29 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator for common earnings per share: | ||||
Net income | $ 22,873 | $ 19,040 | $ 56,818 | $ 51,218 |
Numerator for basic and diluted earnings per share | $ 22,873 | $ 19,040 | $ 56,818 | $ 51,218 |
Denominator for basic earnings per share: | ||||
Weighted average common shares outstanding (in shares) | 49,043 | 47,315 | 48,506 | 47,058 |
Effect of dilutive securities (in shares): | ||||
Stock options, RSUs and performance-based awards (in shares) | 3,301 | 2,514 | 3,249 | 2,472 |
Denominator for diluted earnings per share (in shares) | 52,344 | 49,829 | 51,755 | 49,530 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.40 | $ 1.17 | $ 1.09 |
Diluted (in dollars per share) | $ 0.44 | $ 0.38 | $ 1.10 | $ 1.03 |
Anti-dilutive options not included in the calculation (in shares) | 2,143 | 2,691 | 1,456 | 2,152 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Construction in Progress | |
Commitments and Contingencies [Line Items] | |
Capitalized construction costs | $ 22,714 |
Breach of Contract Against IDEAB | |
Commitments and Contingencies [Line Items] | |
Legal settlement amount | $ 1,000 |
OPERATING SEGMENTS, Revenues fr
OPERATING SEGMENTS, Revenues from External Customers and Segment Operating Profit Before Unallocated Expenses (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 236,049 | $ 192,764 | $ 653,875 | $ 527,843 |
Operating profit | 27,776 | 21,835 | 74,202 | 62,168 |
Russia | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9,469 | 14,351 | 26,526 | 37,513 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 236,174 | 192,759 | 654,437 | 527,439 |
Operating profit | 47,721 | 37,028 | 130,834 | 99,449 |
Operating Segments | North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 121,746 | 99,393 | 330,228 | 267,866 |
Operating profit | 28,906 | 22,557 | 78,720 | 62,283 |
Operating Segments | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 103,514 | 78,074 | 292,826 | 217,247 |
Operating profit | 17,021 | 12,200 | 49,031 | 36,049 |
Operating Segments | Russia | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9,707 | 14,762 | 27,432 | 38,881 |
Operating profit | 1,626 | 3,779 | 3,095 | 4,843 |
Operating Segments | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,207 | 530 | 3,951 | 3,445 |
Operating profit | $ 168 | $ (1,508) | $ (12) | $ (3,726) |
Accounts Receivable | Customer Concentration Risk | Unbilled | UBS AG | ||||
Segment Reporting Information [Line Items] | ||||
Number of customers | 1 | |||
Percentage of total revenues | 16.50% | |||
Accounts Receivable | Customer Concentration Risk | Billed | UBS AG | ||||
Segment Reporting Information [Line Items] | ||||
Number of customers | 0 | |||
Segment Revenues | Customer Concentration Risk | UBS AG | ||||
Segment Reporting Information [Line Items] | ||||
Number of customers | 1 | 1 | 1 | 1 |
Segment Revenues | Customer Concentration Risk | Operating Segments | UBS AG | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 32,960 | $ 27,012 | $ 95,826 | $ 70,259 |
OPERATING SEGMENTS, Reconciliat
OPERATING SEGMENTS, Reconciliation of Segment Revenues and Operating Profit to Consolidated Income From Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 236,049 | $ 192,764 | $ 653,875 | $ 527,843 |
Segment Reporting Information [Line Items] | ||||
Income from operations | 27,776 | 21,835 | 74,202 | 62,168 |
Stock-based compensation expense | (11,963) | (7,425) | (33,350) | (16,524) |
Depreciation and amortization | (4,393) | (5,510) | (12,496) | (14,650) |
One Time Charges | 0 | 0 | 0 | (2,000) |
Interest and other income, net | 865 | 1,261 | 3,322 | 3,401 |
Foreign exchange gain/ (loss) | 32 | (718) | (6,187) | (3,198) |
Income before provision for income taxes | 28,673 | 22,378 | 71,337 | 62,371 |
Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 236,174 | 192,759 | 654,437 | 527,439 |
Segment Reporting Information [Line Items] | ||||
Income from operations | 47,721 | 37,028 | 130,834 | 99,449 |
Unallocated Amounts | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | (125) | 5 | (562) | 404 |
Segment Reporting Information [Line Items] | ||||
Other unallocated revenues/ (discounts) | (125) | 5 | (562) | 404 |
Stock-based compensation expense | (11,963) | (7,425) | (33,350) | (16,524) |
Non-corporate taxes | (1,120) | (789) | (2,858) | (1,944) |
Professional fees | (1,572) | (839) | (5,423) | (3,380) |
Depreciation and amortization | (1,312) | (2,589) | (3,919) | (5,470) |
Bank charges | (340) | (708) | (1,021) | (1,211) |
Other corporate expenses | $ (3,513) | $ (2,848) | $ (9,499) | $ (7,156) |
OPERATING SEGMENTS, Geographica
OPERATING SEGMENTS, Geographical Information of Long-Lived Assets Based on Physical Location (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Long-Lived Assets by Geographical Areas [Line Items] | ||
Long-lived assets | $ 60,552 | $ 55,134 |
Belarus | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Long-lived assets | 46,844 | 41,652 |
Ukraine | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Long-lived assets | 4,482 | 4,392 |
Hungary | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Long-lived assets | 2,406 | 2,773 |
United States | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Long-lived assets | 2,072 | 2,001 |
Russia | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Long-lived assets | 2,043 | 2,196 |
Other | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Long-lived assets | $ 2,705 | $ 2,120 |
OPERATING SEGMENTS, Revenues by
OPERATING SEGMENTS, Revenues by Client Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 236,049 | $ 192,764 | $ 653,875 | $ 527,843 |
Reimbursable expenses and other revenues | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 2,877 | 2,463 | 6,976 | 6,102 |
United States | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 110,191 | 84,276 | 299,606 | 228,504 |
United Kingdom | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 41,324 | 35,222 | 121,312 | 102,642 |
Switzerland | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 28,370 | 22,508 | 81,654 | 63,873 |
Canada | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 14,695 | 13,518 | 40,394 | 34,973 |
Russia | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 9,469 | 14,351 | 26,526 | 37,513 |
Germany | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 10,378 | 6,459 | 26,216 | 18,951 |
Hong Kong | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 5,758 | 5,058 | 17,030 | 8,268 |
Netherlands | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 2,630 | 2,174 | 6,984 | 6,636 |
Sweden | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 3,020 | 1,734 | 7,479 | 6,213 |
Belgium | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 2,154 | 1,079 | 5,307 | 2,619 |
Kazakhstan | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 1,208 | 525 | 3,951 | 3,141 |
Ireland | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 1,554 | 1,448 | 4,374 | 2,430 |
Other locations | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 2,421 | $ 1,949 | $ 6,066 | $ 5,978 |
OPERATING SEGMENTS, Revenues 46
OPERATING SEGMENTS, Revenues by Service Offering (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue from External Customer [Line Items] | ||||
Revenues | $ 236,049 | $ 192,764 | $ 653,875 | $ 527,843 |
Software development | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 165,438 | 134,000 | 457,216 | 364,539 |
Application testing services | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 46,275 | 37,155 | 125,615 | 103,121 |
Application maintenance and support | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 17,976 | 14,824 | 53,078 | 40,715 |
Infrastructure services | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 2,689 | 3,502 | 8,609 | 10,740 |
Licensing | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 794 | 820 | 2,381 | 2,626 |
Reimbursable expenses and other revenues | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | $ 2,877 | $ 2,463 | $ 6,976 | $ 6,102 |