Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | GLU MOBILE INC | ||
Entity Central Index Key | 1,366,246 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | gluu | ||
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 | Accelerated Filer | ||
Entity Public Float | $ 259,821,215 | ||
Entity Common Stock, Shares Outstanding | 139,494,388 | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 63,764 | $ 102,102 |
Accounts receivable, net | 34,673 | 21,477 |
Prepaid royalties | 2,994 | 12,465 |
Restricted cash, current | 602 | |
Prepaid expenses and other assets | 35,543 | 18,986 |
Total current assets | 137,576 | 155,030 |
Property and equipment, net | 14,630 | 5,640 |
Restricted cash, noncurrent | 1,312 | |
Long-term prepaid royalties | 9,302 | 31,288 |
Other long-term assets | 3,299 | 3,506 |
Intangible assets, net | 18,264 | 25,896 |
Goodwill | 116,227 | 116,832 |
Total assets | 299,298 | 339,504 |
Current liabilities: | ||
Accounts payable | 21,203 | 16,298 |
Accrued liabilities | 1,154 | 1,788 |
Accrued compensation | 20,603 | 12,495 |
Accrued royalties | 11,782 | 8,623 |
Accrued restructuring | 759 | 271 |
Deferred revenue | 77,403 | 44,865 |
Total current liabilities | 132,904 | 84,340 |
Long-term accrued royalties | 7,300 | 20,836 |
Other long-term liabilities | 5,234 | 1,514 |
Total liabilities | 145,438 | 106,690 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 5,000 shares authorized at December 31, 2017 and December 31, 2016; no shares issued and outstanding at December 31, 2017 and December 31, 2016 | ||
Common stock, $0.0001 par value; 250,000 shares authorized at December 31, 2017 and December 31, 2016; 138,745 and 134,001 shares issued and outstanding at December 31, 2017 and December 31, 2016 | 14 | 13 |
Additional paid-in capital | 589,962 | 571,243 |
Accumulated other comprehensive (loss)/income | (6) | 246 |
Accumulated deficit | (436,110) | (338,688) |
Total stockholders' equity | 153,860 | 232,814 |
Total liabilities and stockholders' equity | $ 299,298 | $ 339,504 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, shares issued | 138,745 | 134,001 |
Common stock, shares outstanding | 138,745 | 134,001 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement | |||
Revenue | $ 286,827 | $ 200,581 | $ 249,900 |
Cost of revenue: | |||
Platform commissions, royalties and other | 103,499 | 75,239 | 95,682 |
Impairment of prepaid royalties and minimum guarantees (including impairment of prepaid royalties and minimum guarantees paid to a related party of $0, $9,866, and $0 for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively) | 27,323 | 30,107 | 2,502 |
Impairment and amortization of intangible assets (including impairment and amortization of intangible assets acquired from a related party of $0, $5,000, and $0 for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively) | 10,331 | 14,792 | 9,553 |
Total cost of revenue | 141,153 | 120,138 | 107,737 |
Gross profit | 145,674 | 80,443 | 142,163 |
Operating expenses: | |||
Research and development | 92,420 | 81,879 | 72,856 |
Sales and marketing | 104,356 | 48,050 | 48,240 |
General and administrative | 34,425 | 30,225 | 26,092 |
Amortization of intangible assets. | 0 | 0 | 201 |
Restructuring charge | 6,019 | 2,279 | 1,075 |
Total operating expenses | 237,220 | 162,433 | 148,464 |
Loss from operations | (91,546) | (81,990) | (6,301) |
Interest and other expense, net: | |||
Interest and other income (expense), net | (6,850) | (5,751) | (743) |
Loss before income taxes | (98,396) | (87,741) | (7,044) |
Income tax benefit/(expense) | 826 | 301 | (141) |
Net loss | $ (97,570) | $ (87,440) | $ (7,185) |
Net loss per common share - basic and diluted | |||
Net loss per common share - basic and diluted | $ (0.72) | $ (0.66) | $ (0.06) |
Weighted average common shares outstanding - basic and diluted: | |||
Basic | 135,715 | 131,804 | 118,775 |
Diluted | 135,715 | 131,804 | 118,775 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement | |||
Impairment of prepaid royalties and minimum guarantees paid to a related party | $ 0 | $ 9,866 | $ 0 |
Impairment and amortization of intangible assets acquired from a related party | $ 0 | $ 5,000 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (97,570) | $ (87,440) | $ (7,185) |
Other comprehensive (loss)/income: | |||
Foreign currency translation adjustments (1) | (252) | 331 | (77) |
Other comprehensive (loss)/income | (252) | 331 | (77) |
Comprehensive loss | $ (97,822) | $ (87,109) | $ (7,262) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2014 | $ 11 | $ 415,766 | $ (8) | $ (244,063) | $ 171,706 |
Beginning balances (in shares) at Dec. 31, 2014 | 107,174 | ||||
Net loss | (7,185) | (7,185) | |||
Stock-based compensation expense | 11,686 | 11,686 | |||
Issuance of common stock upon exercise of stock options | 3,794 | $ 3,794 | |||
Issuance of common stock upon exercise of stock options (in shares) | 1,440 | 1,440 | |||
Issuance of common stock upon exercise of warrants | 676 | $ 676 | |||
Issuance of common stock upon exercise of warrants (in shares) | 450 | ||||
Taxes paid related to net share settlement of equity awards | (3,018) | (3,018) | |||
Taxes paid related to net share settlement of equity awards (in shares) | 1,090 | ||||
Tax benefits of exercised stock options | 107 | 107 | |||
Issuance of common stock pursuant to Employee Stock Purchase Plan | 1,655 | 1,655 | |||
Issuance of common stock pursuant to Employee Stock Purchase Plan (in shares) | 426 | ||||
Issuance of common stock upon private offering, net of issuance costs | $ 2 | 125,154 | 125,156 | ||
Issuance of common stock upon private offering, net of issuance costs (in shares) | 21,000 | ||||
Non-cash warrant expense | 1,928 | 1,928 | |||
Other comprehensive income/(loss) | (77) | (77) | |||
Ending balance at Dec. 31, 2015 | $ 13 | 557,748 | (85) | (251,248) | 306,428 |
Ending balances (in shares) at Dec. 31, 2015 | 131,580 | ||||
Net loss | (87,440) | (87,440) | |||
Stock-based compensation expense | 13,263 | 13,263 | |||
Issuance of common stock upon exercise of stock options | 294 | $ 294 | |||
Issuance of common stock upon exercise of stock options (in shares) | 270 | 425 | |||
Taxes paid related to net share settlement of equity awards | (2,405) | $ (2,405) | |||
Taxes paid related to net share settlement of equity awards (in shares) | 1,401 | ||||
Issuance of common stock pursuant to Employee Stock Purchase Plan | 1,878 | 1,878 | |||
Issuance of common stock pursuant to Employee Stock Purchase Plan (in shares) | 750 | ||||
Non-cash warrant expense | 465 | 465 | |||
Other comprehensive income/(loss) | 331 | 331 | |||
Ending balance at Dec. 31, 2016 | $ 13 | 571,243 | 246 | (338,688) | 232,814 |
Ending balances (in shares) at Dec. 31, 2016 | 134,001 | ||||
Net loss | (97,570) | (97,570) | |||
Stock-based compensation expense | 14,845 | 14,845 | |||
Issuance of common stock upon exercise of stock options | 2,564 | $ 2,564 | |||
Issuance of common stock upon exercise of stock options (in shares) | 1,083 | 1,511 | |||
Issuance of common stock upon exercise of warrants | 3,000 | $ 3,000 | |||
Issuance of common stock upon exercise of warrants (in shares) | 1,000 | ||||
Taxes paid related to net share settlement of equity awards | $ 1 | (3,369) | (3,368) | ||
Taxes paid related to net share settlement of equity awards (in shares) | 1,767 | ||||
Issuance of common stock pursuant to Employee Stock Purchase Plan | 1,567 | 1,567 | |||
Issuance of common stock pursuant to Employee Stock Purchase Plan (in shares) | 894 | ||||
Non-cash warrant expense | 260 | 260 | |||
Cumulative effect adjustment from adoption of ASU 2016-09 | Accounting Standards Update 2016 - 09 | (148) | 148 | |||
Other comprehensive income/(loss) | (252) | (252) | |||
Ending balance at Dec. 31, 2017 | $ 14 | $ 589,962 | $ (6) | $ (436,110) | $ 153,860 |
Ending balances (in shares) at Dec. 31, 2017 | 138,745 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net loss | $ (97,570) | $ (87,440) | $ (7,185) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 3,195 | 2,947 | 2,861 |
Impairment and amortization of intangible assets (including impairment and amortization of intangible assets acquired from a related party of $0, $5,000, and $0 for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively) | 10,331 | 14,792 | 9,754 |
Change in fair value of investments | 1,900 | ||
Non-cash foreign currency translation loss | 20 | 999 | 792 |
Stock-based compensation | 15,063 | 13,263 | 11,686 |
Non-cash warrant (benefit) expense | 631 | (55) | 2,009 |
Impairment of investments | 2,600 | ||
Net loss from the sale of a foreign subsidiary | 6,468 | ||
Impairment of prepaid royalties and minimum guarantees (including impairment of prepaid royalties and minimum guarantees paid to a related party of $0, $9,866, and $0 for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively) | 27,323 | 30,107 | 2,502 |
Other non-cash adjustments | (1,597) | (120) | 418 |
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (13,061) | 402 | 13,408 |
Prepaid royalties | (18,868) | (16,675) | (31,776) |
Prepaid expenses and other assets | (14,115) | (2,336) | 2,049 |
Accounts payable and other accrued liabilities | 4,735 | 3,200 | (1,960) |
Accrued compensation | 8,094 | 4,577 | (3,639) |
Accrued royalties and license fees | 4,125 | 55 | (5,070) |
Deferred revenue | 32,539 | 12,251 | (6,208) |
Accrued restructuring | 488 | (70) | 342 |
Other long-term liabilities | 3,963 | (181) | (1,448) |
Net cash used in operating activities | (28,236) | (19,784) | (11,465) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (11,344) | (3,070) | (2,751) |
Net cash paid for acquisitions | (1,659) | (36,660) | (1,914) |
Decrease in restricted cash | 710 | 186 | 492 |
Investments in Plain Vanilla Corp and Dairy Free Games, Inc. (Note 7) | (9,500) | ||
Purchase of intangible assets (including purchase of intangible assets from a related party of $0, $2,500, and $0 for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively) | (2,500) | (2,500) | |
Other investing activities | (1,410) | (251) | |
Net cash used in investing activities | (13,703) | (51,544) | (6,924) |
Cash flows from financing activities: | |||
Crowdstar payments on acquired line of credit and term loan | (1,885) | ||
Proceeds from exercise of stock options and purchases under the ESPP | 4,131 | 2,172 | 5,449 |
Taxes paid related to net share settlement of equity awards | (3,368) | (2,405) | (3,018) |
Excess tax benefit from stock awards | 107 | ||
Cash paid to acquire non-controlling interest in Crowdstar | (4,667) | ||
Proceeds from exercise of stock warrants and issuance of common stock | 3,000 | 676 | |
Proceeds from private offering, net of issuance costs | 125,156 | ||
Net cash (used in)/ generated from financing activities | 3,763 | (6,785) | 128,370 |
Effect of exchange rate changes on cash | (162) | (327) | (351) |
Net decrease in cash and cash equivalents | (38,338) | (78,440) | 109,630 |
Cash and cash equivalents at beginning of period | 102,102 | 180,542 | 70,912 |
Cash and cash equivalents at end of period | 63,764 | 102,102 | 180,542 |
Supplemental disclosure of cash flow information | |||
Purchases of property and equipment included in accounts payable and accrued liabilities and other current liabilities | 1,350 | 11 | 146 |
Income taxes paid | $ 365 | $ 174 | $ 310 |
CONSOLIDATED STATEMENTS OF CAS9
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Financial Position [Abstract] | |||
Impairment and amortization of intangible assets acquired from a related party | $ 0 | $ 5,000 | $ 0 |
Impairment of prepaid royalties and minimum guarantees paid to a related party | 0 | 9,866 | 0 |
Purchase of intangible assets from a related party | $ 0 | $ 2,500 | $ 0 |
The Company And Summary of Sign
The Company And Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Glu Mobile Inc. (the “Company” or “Glu”) was incorporated in Nevada in May 2001 and reincorporated in the state of Delaware in March 2007. The Company develops, publishes, and markets a portfolio of games designed for users of smartphones and tablet devices who download and make purchases within its games through direct-to-consumer digital storefronts, such as the Apple App Store, Google Play Store, Amazon Appstore and others (“Digital Storefronts”). The Company creates games based on its own original brands, as well as third-party licensed brands, properties and other content. Basis of Presentation The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant estimates and assumptions reflected in the financial statements include, but are not limited to, the estimated lives that the Company uses for revenue recognition, the allowance for doubtful accounts, useful lives of property and equipment and intangible assets, valuation and realizability of deferred tax assets and uncertain tax positions, fair value of stock awards issued, fair value of warrants issued, accounting for business combinations, evaluating goodwill, long-lived assets for impairment, realization of prepaid royalties and fair value of investments. Actual results may differ from these estimates and these differences may be material. Variable Interest Entities The Company has interests in other entities that are variable interest entities (“VIEs”). Determining whether to consolidate a VIE requires judgment in assessing (i) whether an entity is a VIE and (ii) if the Company is the entity’s primary beneficiary and thus required to consolidate the entity. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company’s evaluation includes identification of significant activities and an assessment of its ability to direct those activities based on governance provisions and other applicable agreements and circumstances. The Company’s assessment of whether it is the primary beneficiary of its VIEs requires significant assumptions and judgment. Revenue Recognition The Company generates revenue through in-app purchases within its games on smartphones and tablets, such as Apple’s iPhone and iPad and mobile devices utilizing Google’s Android operating system. Smartphone and tablet games are distributed primarily through Digital Storefronts. Revenue The Company distributes its games for smartphones and tablets to the end customer through Digital Storefronts. Within these Digital Storefronts, users can download the Company’s free-to-play games and pay to acquire virtual currency which can be redeemed in the game for virtual goods. The Company recognizes revenue, when persuasive evidence of an arrangement exists, the service has been provided to the user, the price paid by the user is fixed or determinable, and collectability is reasonably assured. Determining whether and when some of these criteria have been satisfied requires judgments that may have a significant impact on the timing and amount of revenue the Company reports in each period. For the purposes of determining when the service has been provided to the player, the Company has determined that an implied obligation exists to the paying user to continue displaying the purchased virtual goods within the game over the estimated average playing period of paying players for the game, which represents the Company’s best estimate of the estimated average life of virtual goods. The Company sells both consumable and durable virtual goods and receives reports from the Digital Storefronts, which breakdown the various purchases made from their games over a given time period. The Company reviews these reports and determines on a per-item basis whether the purchase was a consumable virtual good or a durable virtual good. Consumable goods are items that can be purchased directly by the player through the Digital Storefront and are consumed at a predetermined time or otherwise have limitations on repeated use, while durable goods are items that remain in the game for as long as the player continues to play. The Company’s revenue from consumable virtual goods has been insignificant over the previous three years. The Company recognizes revenue from consumable virtual goods immediately, since it believes that the delivery obligation has been met and there are no further implicit or explicit performance obligations related to the purchase of that consumable virtual good. Revenue from durable virtual goods are generated through the purchase of virtual coins by users through a Digital Storefront. Players convert the virtual coins within the game to durable virtual goods such as weapons, armor or other accessories to enhance their game-playing experience. The Company believes this represents an implied service obligation, and accordingly, recognizes the revenue from the purchase of these durable virtual goods over the estimated average playing period of paying users. Based on the Company’s analysis, the estimated weighted average useful life of a paying user has been determined to range from three to eight months. The Company computes its estimated average playing period of paying users at least twice each year. It has examined the playing patterns of paying users across a representative sample of its games across various genres. At the start of the second quarter of 2017, the Company began using a new model to estimate the average playing period for paying users. As the Company continues to execute on its strategy in developing new content for its existing evergreen and growth titles, the Company re-evaluated its existing estimation methodology and concluded that the “survival analysis” model provides for a singular approach to estimating the average playing period of paying users on a title by title basis for the Company’s diverse portfolio of games. The new model is a statistical model that analyzes time duration until one or more events happens. It is a commonly used model in various industries for estimating lifespans. The Company believes this is an appropriate model to estimate the average playing period of paying users for its titles as this model statistically estimates the average playing period of each title by analyzing the historical behavior patterns of paying users. This model requires the stratification of user data into active and inactive monetizing users on a per title basis. Active users are those who are active in the game for the past 30 days as of the evaluation date. The remaining users are considered inactive and deemed to have churned from the game. These users are treated mathematically differently in the model than those who are still active. A distribution curve is then fit to the user data to estimate the average playing period of paying users on a per title basis. The Company has selected a threshold of 120 days from the commercial launch of a title as the minimum number of days of data required for this model. This threshold was deemed to be appropriate as the Company tested the model using lower thresholds which resulted in inconsistencies in the estimate of the average playing period of paying users. For new titles with less than 120 days of data that share similar attributes with an existing title and/or prequel titles, the average playing period will be determined based on the average playing period of that existing title or prequel title, as applicable. For all other titles with less than 120 days of data, the average playing period will be determined based on the average playing period of all other remaining existing titles. The selection of the new model was considered a change in accounting estimates which was implemented in the quarter ended June 30, 2017 and had no material impact on the estimated average playing period of paying users. While the Company believes its estimates to be reasonable based on available game player information, it may revise such estimates in the future if a titles’ user characteristics change. Any adjustments arising from changes in the estimates of the average playing period for paying users would be applied to the current quarter and prospectively on the basis that such changes are caused by new information that indicates a change in user behavior patterns compared to historical titles. Any changes in the Company’s estimates of the useful life of virtual goods in a certain title may result in revenue being recognized on a basis different from prior periods’ and may cause its operating results to fluctuate. The Company also has relationships with certain advertising service providers for advertisements within smartphone games and revenue from these advertising providers is generated through impressions, clickthroughs, banner ads and offers. Revenue is recognized as advertisements are delivered and reported to the Company, an executed contract exists, the price is fixed or determinable and collectability has been reasonably assured. Delivery generally occurs when the advertisement has been displayed or the offer has been completed by the user. The fee received for offer advertisements that result in the user receiving virtual currency for redemption within a game are deferred and recognized over the average playing period of paying users. Other Estimates and Judgments The Company estimates revenue from Digital Storefronts and advertising service providers in the current period when reasonable estimates of these amounts can be made. Certain Digital Storefronts and advertising service providers provide reliable interim preliminary reporting and others report sales data within a reasonable time frame following the end of each month, both of which allow the Company to make reasonable estimates of revenue and therefore to recognize revenue during the reporting period. Determination of the appropriate amount of revenue recognized involves judgments and estimates that the Company believes are reasonable, but it is possible that actual results may differ from the Company’s estimates. When the Company receives the final reports, to the extent not received within a reasonable time frame following the end of each month, the Company records any significant differences between estimated revenue and actual revenue in the reporting period when the Company determines the actual amounts. Historically, the revenue on a final revenue report has not differed significantly from the reported revenue for the period. Principal Agent Considerations In accordance with ASC 605-45, Revenue Recognition: Principal Agent Considerations, the Company evaluates its Digital Storefront and advertising service provider agreements in order to determine whether or not it is acting as the principal or as an agent when selling its games or when selling advertisements within its games, which it considers in determining if revenue should be reported on a gross or net basis. The Company primarily uses Digital Storefronts for distributing its smartphone games and advertising service providers for serving advertisements within its games. Key indicators that the Company evaluates to reach this determination include: · the terms and conditions of the Company’s contracts with the Digital Storefronts and advertising service providers; · the party responsible for billing and collecting fees from the end-users, including the resolution of billing disputes; · whether the Company is paid a fixed percentage of the arrangement’s consideration or a fixed fee for each game, transaction, or advertisement; · which party sets pricing with the end-user, has the credit risk and provides customer support; and · which party is responsible for the fulfillment of the game or serving of advertisements and that determines the specifications of the game or advertisement. Based on the evaluation of the above indicators, the Company has determined that it is generally acting as a principal and is the primary obligor to end-users for smartphone games distributed through Digital Storefronts and advertisements served through our advertising service providers. Therefore, the Company recognizes revenue related to these arrangements on a gross basis, when the necessary information about the gross amounts or platform fees charged, before any adjustments, are made available by the Digital Storefronts and advertising service providers. Deferred Platform Commissions and Royalties Digital Storefronts retain platform commissions and fees on each purchase made by the paying players through the Digital Storefront. The Company is also obligated to pay ongoing licensing fees in the form of royalties related to the games developed based on or significantly incorporating licensed brands, properties or other content, and the Company plans to incorporate additional licensed content in some of its own originally branded games. Additionally, certain games sold through Digital Storefronts require the revenue to be deferred due to an implied obligation to the paying player to continue displaying the purchased virtual goods within the game over the estimated average playing period of paying players for the game. As revenue from sales to paying players through Digital Storefronts are deferred, the related direct and incremental platform commissions and fees as well as third-party royalties are also deferred and reported in “Prepaid expenses and other” on the consolidated balance sheets. The deferred platform commissions and royalties are recognized in the consolidated statements of operations in “Cost of revenue” in the period in which the related sales are recognized as revenue. Cash and Cash Equivalents The Company considers all investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits cash and cash equivalents with financial institutions that management believes are of high credit quality. Deposits held with financial institutions often exceed the amount of insurance on these deposits. Restricted Cash Restricted cash primarily consists of deposits related to letters of credit to secure obligations under the Company’s operating lease agreements. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and accounts receivable. The Company derives its accounts receivable from revenue earned from customers or through Digital Storefronts located in the United States and other locations outside of the United States. The Company performs ongoing credit evaluations of its customers’ and the Digital Storefronts’ financial condition and, generally, requires no collateral from its customers or the Digital Storefronts. The Company bases its allowance for doubtful accounts on management’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company reviews past due balances over a specified amount individually for collectability on a monthly basis. It reviews all other balances quarterly. The Company charges off accounts receivable balances against the allowance when it determines that the amount will not be recovered. The following table summarizes the revenue from customers or aggregate purchases through Digital Storefronts in excess of 10% of the Company’s revenue: Year Ended December 31, 2017 2016 2015 Apple 54.2 % 52.7 % 51.7 % 30.3 % 27.6 % 27.4 % At December 31, 2017, Apple Inc. (“Apple”) accounted for 58.0% and Google Inc. (“Google”) accounted for 17.1%, of total accounts receivable. At December 31, 2016, Apple accounted for 43.9%, Google accounted for 22.3%, Jirbo accounted for 10.8%, and Fyber GmbH accounted for 10.5% of total accounts receivable. No other customer or Digital Storefront represented more than 10% of the Company’s total accounts receivable as of these dates. Fair Value The Company accounts for fair value in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). Fair value is defined under ASC 820 as the exch ange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a three-tier hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The first two levels in the hierarchy are considered observable inputs and the last is considered unobservable. The Company’s cash and cash equivalents and restricted cash, which were held in operating bank accounts, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The carrying value of accounts receivable and payables approximates fair value due to the short time to expected payment or receipt of cash. Please refer to Note 4 for further details. Prepaid or Guaranteed Licensor Royalties The Company’s royalty expenses consist of fees that it pays to content owners for the use of their brands, properties and other licensed content, including trademarks and copyrights, in the development of the Company’s games. Royalty-based obligations are either paid in advance and capitalized on the balance sheet as prepaid royalties or accrued as incurred and subsequently paid. These royalty-based obligations are expensed to cost of revenue at the greater of the revenue derived from the relevant game multiplied by the applicable contractual rate or an effective royalty rate based on expected net product sales. The Company’s contracts with some licensors include minimum guaranteed royalty payments, which are payable regardless of the ultimate revenue generated from end users. In accordance with ASC 440-10, Commitments (“ASC 440”), the Company recorded a minimum guaranteed royalty liability of $11,614 and $26,433 as of December 31, 2017 and 2016, respectively. When no significant performance remains with the licensor, the Company initially records each of these guarantees as an asset and as a liability at the contractual amount. When significant performance remains with the licensor, the Company records royalty payments as an asset when actually paid and as a liability when incurred, rather than upon execution of the contract. The classification of minimum royalty payment obligations between long-term and short-term is determined based on the expected timing of recoupment of earned royalties calculated on projected revenue for the licensed IP games. Each quarter, the Company evaluates the realization of its prepaid royalties as well as any recognized guarantees not yet paid to determine amounts that it deems unlikely to be realized through product sales. The Company uses estimates of revenue, cash flows and net margins to evaluate the future realization of prepaid royalties, license fees, and guarantees. This evaluation considers multiple factors such as the term of the agreement, forecasted demand, game life cycle status, game development plans, and current and anticipated sales levels, as well as other qualitative factors such as the success of similar games and similar genres on mobile devices published by the Company and its competitors and/or other game platforms (e.g., consoles and personal computers) utilizing the intellectual property. To the extent that this evaluation indicates that the remaining prepaid and guaranteed royalty payments are not recoverable, the Company records an impairment charge to cost of revenue in the period in which impairment is indicated. The Company recorded impairment charges to cost of revenue of $27,323, $30,107, and $2,502 related to prepaid guaranteed royalties related to certain of its celebrity license agreements, and certain other prepaid royalties during the years ended December 31, 2017, 2016, and 2015, respectively. The impairment charges recorded during the year ended December 31, 2016 also included impairment of prepaid royalties and license fees paid to an affiliate of Tencent Holdings Limited (“Tencent”), one of the Company’s principal stockholders related to the Company’s game, Rival Fire . Goodwill and Intangible Assets In accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company’s goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, the Company performs its annual impairment review of its goodwill balance as of September 30 or more frequently if triggering events occur. This impairment review involves a multiple-step process as follows: Step — 0 The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the two-step goodwill impairment test. Step — 1 The Company compares the fair value of each of its reporting units to the carrying value including goodwill of that unit. For each reporting unit where the carrying value, including goodwill, exceeds the unit’s fair value, the Company moves on to step 2. If a unit’s fair value exceeds the carrying value, no further work is performed and no impairment charge is necessary. Step — 2 The Company performs an allocation of the fair value of the reporting unit to its identifiable tangible and intangible assets (other than goodwill) and liabilities. This allows the Company to derive an implied fair value for the unit’s goodwill. The Company then compares the implied fair value of the reporting unit’s goodwill with the carrying value of the unit’s goodwill. If the carrying amount of the unit’s goodwill is greater than the implied fair value of its goodwill, an impairment charge would be recognized for the excess. In 2017, 2016 and 2015, the Company did not record any goodwill impairment charges as it was determined that it was more likely than not that the fair values of the reporting units exceeded their respective carrying values. Purchased intangible assets with finite lives are amortized using the straight-line method over their useful lives ranging from one to nine years and are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment (“ASC 360”). Long-Lived Assets The Company evaluates its long-lived assets, including property and equipment and intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable in accordance with ASC 360. Factors considered important that could result in an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of acquired assets, significant negative industry or economic trends, and a significant decline in the Company’s stock price for a sustained period of time. Impairment exists if the carrying amounts of such assets exceed the estimates of future undiscounted cash flows expected to be generated by such assets. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s estimated fair value. Fair value is generally measured based on either quoted market prices, if available, or a discounted cash flow analysis. Property and Equipment The Company states property and equipment at cost. The Company computes depreciation or amortization using the straight-line method over the estimated useful lives of the respective assets or, in the case of leasehold improvements, the lease term of the respective assets, whichever is shorter. The depreciation and amortization periods for the Company’s property and equipment are as follows: Computer equipment Three years Computer software Two to Three years Furniture and fixtures Three years Leasehold improvements Shorter of the estimated useful life or remaining term of lease Research and Development Costs The Company charges costs related to research, design and development of products to research and development expense as incurred. The types of costs included in research and development expenses include salaries, third party development cost, contractor fees and allocated facilities costs. Software Development Costs The Company applies the principles of ASC 985-20, Software-Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed (“ASC 985-20”). ASC 985-20 requires that software development costs incurred in conjunction with product development be charged to research and development expense until technological feasibility is established. Thereafter, until the product is released for sale, software development costs must be capitalized and reported at the lower of unamortized cost or net realizable value of the related product. The Company has adopted the “tested working model” approach to establishing technological feasibility for its games. Under this approach, the Company does not consider a game in development to have passed the technological feasibility milestone until the Company has completed a model of the game that contains essentially all the functionality and features of the final game and has tested the model to ensure that it works as expected. To date, the Company has not incurred significant costs between the establishment of technological feasibility and the release of a game for sale; thus, the Company has expensed all software development costs as incurred. The Company considers the following factors in determining whether costs can be capitalized: the uncertainty regarding a game’s revenue-generating potential and its historical practice of canceling games at any stage of the development process. Internal Use Software The Company recognizes internal use software development costs in accordance with ASC 350-40, Intangibles-Goodwill and Other-Internal Use Software (“ASC 350-40”) and ASU 2015-05, Cloud Computing Arrangements . The Company capitalizes software development costs, including costs incurred to purchase third-party software, beginning when it determines certain factors are present including, among others, that technology exists to achieve the performance requirements and/or buy versus internal development decisions, which the Company equates to the application development stage. The Company capitalized certain internal use software costs totaling approximately $924, $728 and $615 during the years ended December 31, 2017, 2016, and 2015, respectively. The estimated useful life of costs capitalized is generally three years. During the years ended December 31, 2017, 2016 and 2015, the amortization of capitalized software costs totaled approximately $1,031, $998 and $1,155, respectively. Capitalized internal use software development costs are included in property and equipment, net. Income Taxes In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This update requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. ASU 2015-17 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. This update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early application is permitted as of the beginning of the interim or annual reporting period. The Company adopted ASU 2015-17 on a prospective basis as of December 31, 2015. The adoption of ASU 2015-17 did not have a material impact on the Company’s consolidated financial statements. The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in its financial statements or tax returns. Under ASC 740, the Company determines deferred tax assets and liabilities based on the temporary difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which it expects the differences to reverse. The Company establishes valuation allowances when necessary to reduce deferred tax assets to the amount it expects to realize. The Company accounts for uncertain tax positions in accordance with ASC 740, which requires companies to adjust their financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. ASC 740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. Restructuring The Company accounts for costs associated with employee terminations and other exit activities in accordance with ASC 420, Exit or Disposal Cost Obligations (“ASC 420”). The Company records employee termination benefits as an operating expense when it communicates the benefit arrangement to the employee and it requires no significant future services, other than a minimum retention period, from the employee to earn the termination benefits. Stock-Based Compensation The Company applies the fair value provisions of ASC 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), and performance stock options (“PSOs”). The number of PSUs and PSOs earned and eligible to vest will be determined based on achievement of specified financial performance measures. ASC 718 requires companies to estimate the fair value of stock-option awards on the grant date using an option pricing model. The fair value of stock options and PSOs and stock purchase rights granted pursuant to the Company’s equity incentive plans and 2007 Employee Stock Purchase P |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Net Loss Per Share | |
Net Loss Per Share | NOTE 2 — NET LOSS PER SHARE The Company computes net loss per share by dividing its net loss for the period by the weighted average number of common shares outstanding during the period less the weighted average common shares subject to restrictions imposed by the Company. Year Ended December 31, 2017 2016 2015 Net loss $ (97,570) $ (87,440) $ (7,185) Shares used to compute net loss per share: Weighted average common shares outstanding 135,715 132,808 122,414 Weighted average common shares subject to restrictions — (1,004) (3,639) Weighted average shares used to compute basic and diluted net loss per share 135,715 131,804 118,775 Net loss per share - basic and diluted (0.72) (0.66) (0.06) The weighted average of the following options to purchase common stock, warrants to purchase common stock, unvested shares of common stock subject to restrictions and RSUs have been excluded from the computation of net loss per share of common stock for the periods presented because including them would have had an anti-dilutive effect: Year Ended December 31, 2017 2016 2015 Warrants to purchase common stock 4,173 4,267 3,832 Unvested common shares subject to restrictions — 1,004 3,639 Options to purchase common stock 16,462 8,490 6,804 RSUs 7,545 7,688 5,776 28,180 21,449 20,051 |
Business Combinations _ Divesti
Business Combinations / Divestiture | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations / Divestiture | |
BUSINESS COMBINATIONS / DIVESTITURE | NOTE 3 — BUSINESS COMBINATIONS / DIVESTITURE Divestiture of Moscow Studio On December 31, 2017 (the “Closing Date”), the Company entered into the following agreements related to the divestiture of its Moscow-based game development studio (the “Moscow Studio”) through the sale of its wholly-owned UK subsidiary Glu Mobile (Russia) Limited (“GMRL”): · Share Purchase Agreement (the “ SPA ”) between the Company and Saber Interactive (“ Saber ”); and · Transitional Services Agreement (the “ TSA ”) among the Company, Saber and MGL My.com (Cyprus) Limited (“ MGL ”). Pursuant to the SPA, Saber purchased all the issued and outstanding share capital of GMRL. Saber will assume all obligations under the office lease for the Moscow Studio. Under the TSA, Saber has agreed to transition certain legacy titles from the Moscow Studio to the Company’s Hyderabad studio. If the transition is successfully completed, then (i) Saber will be required to pay the employees of the Moscow Studio and GMRL bonus payments not to exceed $500 in the aggregate with Saber entitled to reduce the cash consideration payable to the Company by the amount of the bonus, and (ii) certain employees of the Moscow Studio and GMRL will have the vesting of an aggregate of up to approximately 150 shares subject to equity awards accelerated. In addition, on December 31, 2017, the Company entered into an Asset Purchase and License Agreement (the “APLA”) with MGL pursuant to which the Company sold four mobile games (and related intellectual property and other rights) developed by the Moscow Studio: (i) Last Day Alive , (ii) Heroes of Destiny , (iii) a game currently in development featuring a male celebrity (the “Celebrity Game”), and (iv) Furiosa , (collectively, the “Purchased Games”). The Company transferred all its rights and obligations under certain contracts related to the Celebrity Game (the “Celebrity Game Contracts”), including, but not limited to, the obligation to pay the remaining approximately $1,500 in minimum guarantee and other payments under the Celebrity Game Contracts. The Company also agreed to provide MGL with a non-exclusive, perpetual, worldwide, irrevocable, non-transferrable, royalty-free license to certain development tools and technology necessary to use, develop, publish, exploit and sell the Purchased Games and that MGL and/or its affiliates may use for the development of other of its products. The total cash consideration the Company is receiving under the SPA and APLA is $3, 226 of which $1,500 will become due and payable upon completion of the transition. As of December 31, 2017, the cash consideration is included in prepaid expenses and other current assets on the consolidated balance sheet. In connection with the divestiture, the Company recorded a loss of $6,459 in the fourth quarter of 2017, which is included in other expense on the consolidated statement of operations. This was primarily comprised of a $10,000 charge related to the assignment of one of the Celebrity Game Contracts, a $1,220 charge related to the write-off of goodwill associated with the Moscow Studio and a $479 charge related to the write-off of net assets associated with the Moscow Studio. These charges were partially offset by $3,226 in cash paid or payable by Saber and MGL, $1,500 related to the assumption of obligations by MGL under the Celebrity Game Contracts, and $514 related to the transition services to be provided by Saber. The Company’s divestiture of the Moscow Studio is part of the Company’s efforts to consolidate its studio locations, focusing on a new scaled creative center in San Francisco and a low cost, repeatable location in Hyderabad, India. This divestiture was not presented as discontinued operations in the consolidated statements of operations, because it did not represent a strategic shift in the Company's business and is not expected to have a significant effect on the Company’s operations or financial results, as the Company continued operating similar businesses after the divestiture. Dairy Free Games, Inc. On August 1, 2017 (the “Merger Date”), the Company completed the acquisition of Dairy Free Games, Inc (“Dairy Free”) by acquiring 100% of its equity pursuant to an Agreement and Plan of Merger (the “Dairy Free Merger Agreement”) by and among the Company, Winterfell Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company, and Dairy Free. Dairy Free, which is based in California, is building a mobile real-time strategy game. The Company acquired Dairy Free in order to expand its game offerings on smartphones and tablets. Pursuant to the terms of the Dairy Free Merger Agreement, the Company paid $2,000 in cash for the outstanding common stock of Dairy Free. The Company had previously acquired from Dairy Free shares of its series A preferred stock (“Series A Preferred Stock”), as further described below, for $2,000. The fair value of the Series A Preferred Stock as of the Merger Date was determined to be equal to the original investment amount of $2,000. The transaction was accounted for as a business combination under the acquisition method of accounting. The Company allocated the purchase price to the individually identifiable assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill. The determination of these fair values was based on estimates and assumptions requiring significant judgments. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition: Assets acquired: Cash and cash equivalents $ 341 Intangible assets: In-process research and development 2,700 Other current assets 32 Goodwill 573 Total assets 3,646 Liabilities assumed: Deferred tax liability (294) Other accrued liabilities (2) Total liabilities assumed (296) Net acquired assets $ 3,350 In-process research and development included in the above table is finite-lived upon completion, and will be amortized on a straight -line basis over its estimated life of three years, which approximates the pattern in which the economic benefits of the intangible asset are expected to be realized. As of the valuation date, Dairy Free was in the process of developing a game, which the Company estimates will be launched in 2018. Pursuant to ASC 805, the Company incurred and expensed a total of $611 in acquisition and transitional costs associated with the acquisition of Dairy Free during the year ended December 31, 2017. These costs consisted of $269 of research and development expense, and $342 of general and administrative expense. The Company allocated the residual value of $573 to goodwill. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Dairy Free. Goodwill will not be amortized but will be tested for impairment at least annually. Goodwill created as a result of the Dairy Free acquisition is not deductible for tax purposes. In January 2016, the Company acquired a minority equity stake and entered into a commercial agreement with Dairy Free. As part of the arrangement, the Company invested $2,000 in Dairy Free’s Series A Preferred Stock. The preferred stock investment was recorded at cost. The Company had also agreed to provide up to $1,000 of recoupable and non-refundable development funding for a mobile game under development by Dairy Free. The development funding was payable in installments upon Dairy Free achieving certain milestones. The development funding was fully recognized as research and development expense as the development activities were performed. The Company had recorded $650 in accrued research and development expenses. The accrued research and development expenses balance of $650 was also determined to be equal to the fair market value as of the date of the merger and was offset against the goodwill amount resulting from the acquisition of Dairy Free. Crowdstar Inc. On November 2, 2016, the Company, acquired shares representing approximately 80.6% of the issued and outstanding voting power of Crowdstar Inc., a Delaware corporation (“Crowdstar”), from Time Warner Inc., Intel Capital Corporation and certain other stockholders of Crowdstar (the “Participating Stockholders”). Crowdstar is a developer of fashion and home decor genre games for mobile devices based in Burlingame, California. The Company acquired Crowdstar to leverage its casual games expertise, assembled workforce and existing mobile games in order to expand the Company’s game offerings on smartphones and tablets. The Company paid approximately $40,794 in cash to the Participating Stockholders in exchange for the acquired shares. In addition, certain drag-along provisions specified in a voting agreement by and among Crowdstar and certain other stockholders of Crowdstar were triggered. Pursuant to the drag-along provisions, certain other stockholders of Crowdstar were required to tender their Crowdstar capital stock to the Company on the same terms as the Participating Stockholders. Upon acquiring over 90% of the issued and outstanding voting power of Crowdstar pursuant to the drag-along provisions, on December 6, 2016, the Company acquired the remaining issued and outstanding shares of Crowdstar in a short-form merger under the laws of the State of Delaware for an additional $4,667 for a total of $45,461 for 100% ownership of Crowdstar. The allocation of the purchase price is based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition: Assets acquired: Cash and cash equivalents $ 4,492 Accounts receivable 3,905 Prepaid expenses 521 Other current assets 34 Fixed assets 315 Intangible assets: Titles, content and technology 16,000 Goodwill 28,776 Total assets 54,043 Liabilities assumed: Accounts payable (584) Accrued liabilities (4,284) Deferred revenue (1,500) Note payable - current portion (1,279) Long term liabilities (935) Total liabilities assumed (8,582) Net acquired assets $ 45,461 Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives of three to five years, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized. Of the total purchase price, $16,000 was allocated to identifiable intangible assets. Pursuant to ASC 805, the Company incurred and expensed a total of $3,616 and $802 of transitional costs associated with the acquisition of Crowdstar during the year ended December 31, 2017 and December 31, 2016, respectively. These costs consisted of $2,936 of research and development expense, and $680 of general and administrative expense for the year ended December 31, 2017 and were primarily general and administrative related expenses for the year ended December 31, 2016. The Company allocated the residual value of $28,776 to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. In accordance with ASC 350, goodwill will not be amortized but will be tested for impairment at least annually. Goodwill created as a result of the Crowdstar acquisition is not deductible for tax purposes. Plain Vanilla, Corp. On December 19, 2016, the Company acquired substantially all of the intangible assets and certain other assets of Plain Vanilla Corp. (“Plain Vanilla”), the developer of the QuizUp interactive software application for mobile devices, based in Reykjavik, Iceland. The Company acquired these assets in order to expand the Company’s game offerings on smartphones and tablets. The Company forgave and canceled $7,500 in aggregate principal amount of convertible promissory notes of Plain Vanilla held by the Company, and all interest thereon, in exchange for acquiring the QuizUp assets and technology and other receivables. The deemed fair value of the consideration as of the acquisition date was determined to be $3,200. The acquired assets represent a business as defined in ASC 805, Business Combinations. The Company has integrated the acquired assets into the Company’s existing business. The asset purchase agreement also contains customary representations, warranties and covenants, including non-competition and indemnification provisions. The allocation of the purchase price is based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the Fair value of purchase consideration: $ Assets acquired: Cash $ Accounts receivable Intangible assets: Title, content and technology Total Assets acquired $ Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives of three years, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized. Of the total purchase price, $1,817 was allocated to identifiable intangible assets. No residual value was allocated to goodwill. Valuation Methodology The Company valued titles, content and technology primarily using the Multi-Period Excess Earnings (“MPEE”) method of the income approach and key assumptions used included: projected revenue, cost of goods sold, and operating expenses for Crowdstar's legacy titles, the future amortization tax benefit of the legacy titles, and a discount rate of between 20% and 35%. The fair value of the in-process research and development acquired from Dairy Free was determined using the replacement cost method under the cost approach. The replacement cost was estimated based on the historical research and development expenses incurred, adjusted for an estimated developer’s profit and rate of return in accordance with accepted valuation methodologies. The fair value of Crowdstar’s deferred revenue was determined to be $1,500 as of the valuation date. This was valued using the estimated costs including hosting fees and salaries and benefits to support the contractual obligations associated with these revenue, plus a market participant margin. The deferred revenue will be recognized on a straight-line basis over ni ne months from the valuation date. As of the valuation date, Crowdstar was in process of developing Design Home , which was launched in the fourth quarter of 2016. Pro Forma Financial Information The results of operations for Dairy Free, Crowdstar and Plain Vanilla and the estimated fair market values of the assets acquired and liabilities assumed have been included in the Company’s consolidated financial statements since their respective dates of acquisition. For the year ended December 31, 2017 and since the date of its acquisition, Dairy Free had no impact on the Company’s gross revenue and increased the Company’s net losses by $1, 081 . For the year ended December 31, 2016 and since the dates of their respective acquisitions, Crowdstar and Plain Vanilla contributed approximately $2,111 to the Company’s gross revenue and increased net losses by $9,194. The unaudited pro forma financial information in the table below summarizes the combined results of the Company’s operations and those of Dairy Free, Crowdstar and Plain Vanilla for the periods shown as if the acquisition of Dairy Free had occurred on January 1, 2016 and the acquisition of Crowdstar and Plain Vanilla had each occurred on January 1, 2015. The pro forma financial information includes the business combination accounting effects of the acquisition, including amortization charges from acquired intangible assets. The pro forma financial information presented below is for informational purposes only, and is subject to a number of estimates, assumptions and other uncertainties. Year ended December 31, (unaudited) 2017 2016 2015 Total pro forma revenue $ 286,827 $ 245,483 $ 287,828 Pro forma net loss (98,450) (100,018) (28,154) Pro forma net loss per share - basic (0.73) (0.76) (0.24) Pro forma net loss per share - diluted (0.73) (0.76) (0.24) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 4 — FAIR VALUE MEASUREMENTS Fair Value Measurements The Company accounts for fair value in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a three-tier hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of December 31, 2017, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 December 31, 2017 Financial Assets Cash and cash equivalents $ 63,764 $ — $ — $ 63,764 Restricted cash 602 — — 602 Other investments — — 1,410 1,410 Total Financial Assets $ 64,366 $ — $ 1,410 $ 65,776 As of December 31, 2016, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 December 31, 2016 Financial Assets Cash and cash equivalents $ 102,102 $ — $ — $ 102,102 Restricted cash 1,312 — — 1,312 Total Financial Assets $ 103,414 $ — $ — $ 103,414 The Company’s cash and cash equivalents, which were held in operating bank accounts, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. In addition, the Company’s restricted cash is classified within Level 1 of the fair value hierarchy. The carrying value of accounts receivable and payables approximates fair value due to the short time to expected payment or receipt of cash. The carrying value of other investments approximates fair value, as the Company purchased these investments in fiscal 2017 and there have been no events or changes in circumstances that would have had a significant effect on the fair value of these investments at December 31, 2017. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments | |
Investments | NOTE 5 — INVESTMENTS In January 2016, the Company announced an investment of up to $7,500 in promissory notes convertible into a minority equity stake in Plain Vanilla. $5,000 was paid in January 2016 and the remaining $2,500 was paid in May 2016. As part of the investment, the Company also received a call option to acquire all outstanding equity of Plain Vanilla for 15 months from the closing of the initial investment, unless earlier terminated by the Company, at a pre-agreed price. Plain Vanilla was the Icelandic developer of the mobile game QuizUp, and was financed primarily through equity investments prior to the Company’s acquisition of all of its intangible assets and certain other assets. On December 19, 2016, the Company acquired substantially all of the intangible assets and certain other assets of Plain Vanilla in exchange of forgiveness and cancellation of $7,500 in aggregate principal amount of convertible promissory notes and all interest thereon. The call option agreement was terminated as of that date. See “Note 3 – Business Combinations” for additional details. The Company elected the fair value option to account for its investment in the promissory notes. The call option was recorded at cost. As of the investment date, the fair value of the promissory note and the call option was determined to be $5,100 and $2,400, respectively. The Company computed the fair value of the promissory notes as of the business acquisition date of December 19, 2016 to be $3,200. Due to the decrease in the fair market value of the promissory notes from the initial investment date until the business acquisition date, the Company recorded a charge of $1,900 in other expense for the year ended December 31, 2016. Due to a decline in the forecasted revenue and future cash flow outlook of Plain Vanilla during the second and third quarters of 2016, the fair value of the call option was estimated to be nil as of September 30, 2016, which resulted in the Company recording an impairment charge of $2,400 in other expense. The following table presents the changes in fair value of the Plain Vanilla promissory notes and the call option: Year ended December 31, 2016 Fair value of Asset at the Impairment purchase consideration Asset at the beginning of of cost method Decrease in for business end of the period Additions investment fair value acquisition the period Convertible promissory note investment in Plain Vanilla Corp. $ — $ 5,100 $ — $ (1,900) $ (3,200) $ — Call option to acquire Plain Vanilla Corp. $ — $ 2,400 $ (2,400) — $ — $ — The Company engaged third party valuation experts to aid management in its analysis of the fair value of the promissory notes issued to the Company in each of January 2016 and May 2016 by, and the Company’s option to acquire all of the outstanding equity (“call option”) of, Plain Vanilla Corp. (“Plain Vanilla”). During the second and third quarters of 2016, the fair value of the promissory notes was estimated using a probability weighted assessment of the expected cash flows discounted to their present value. The fair value of the promissory notes as of the business acquisition date of December 19, 2016 was assessed using the expected revenue and applicable market multiples. The fair value of the call option prior to impairment in the third quarter was estimated using the Black-Scholes valuation model. The Black-Scholes valuation model requires inputs such as the expected term of the call option, expected volatility and risk-free interest rate. Certain of these inputs are subjective and require significant analysis and judgment to develop. The weighted average assumptions used by the Company are noted in the following table: Nine Months Ended September 30, 2016 Dividend yield — Risk-free interest rate 0.41 Expected volatility 63.88 Expected term (in years) 0.68 Plain Vanilla, prior to acquisition of its assets by the Company, was a VIE. However, the Company determined that it was not the primary beneficiary of this VIE since the Company did not have the power to direct the activities of this VIE that most significantly impacted its economic performance. This determination was based on the following factors: (i) the development stage of VIE products; (ii) the Company's inability to exercise control or decision making power over the VIE, as well as its lack of involvement in day-to-day operations and management decisions; and (iii) the fact that the call option to acquire Plain Vanilla, before the acquisition of its assets by the Company, was significantly out of the money. In January 2016, the Company acquired a minority equity stake and entered into a commercial agreement with Dairy Free. As part of the arrangement, the Company invested $2,000 in Dairy Free’s Series A Preferred Stock. The Company also agreed to provide up to $1,000 of recoupable and non-refundable development funding for a mobile game under development by Dairy Free. The development funding was payable in installments upon Dairy Free achieving certain milestones. The development funding was fully recognized as research and development expense during the year ended December 31, 2016 as the development activities were performed. On August 1, 2017, the Company acquired 100% of the outstanding equity of Dairy Free pursuant to the Dairy Free Merger Agreement. See “Note 3 – Business Combinations” for additional details. Prior to the acquisition by the Company, Dairy Free was a VIE. However, the Company determined that it was not the primary beneficiary of this VIE since the Company did not have the power to direct the activities of this VIE that most significantly impacted its economic performance. This determination was based on the following factors: (i) the development stage of Dairy Free’s products; and (ii) the Company's inability to exercise control or decision-making power over Dairy Free, based on the Company's ownership percentage and voting rights, as well as its lack of involvement in day-to-day operations and management decisions. The Company was not obligated to provide any explicit or implicit financial or other support to Dairy Free other than what was contractually agreed to in the investment agreement and the Company had no exposure to loss beyond its investment in Dairy Free prior to the acquisition. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Components | |
Balance Sheet Components | NOTE 6 — BALANCE SHEET COMPONENTS Accounts Receivable December 31, 2017 2016 Accounts receivable $ 35,510 $ 22,314 Less: Allowance for doubtful accounts (837) (837) $ 34,673 $ 21,477 Accounts receivable include amounts billed and unbilled as of the respective balance sheet dates, but net of platform commissions to the Company’s Digital Storefronts. The movement in the Company’s allowance for doubtful accounts is as follows: Balance at Balance at Beginning of End of Description Year Additions Deductions Year Year ended December 31, 2017 $ 837 $ - $ - $ 837 Year ended December 31, 2016 $ 716 $ 168 $ (47) $ 837 Year ended December 31, 2015 $ 297 $ 419 $ - $ 716 The Company had no significant write-offs or recoveries during the years ended December 31, 2017, 2016, and 2015. Prepaid expenses and other December 31, 2017 2016 Deferred platform commission fees 20,446 11,571 Deferred royalties 4,364 3,275 Deposits 5,464 960 Other 5,269 3,180 $ 35,543 $ 18,986 Property and Equipment December 31, 2017 2016 Computer equipment $ 6,051 $ 7,085 Furniture and fixtures 1,666 1,054 Software 3,294 8,180 Leasehold improvements 9,857 4,955 20,868 21,274 Less: Accumulated depreciation and amortization (6,238) $ 14,630 $ 5,640 Depreciation for the years ended December 31, 2017, 2016 and 2015 was $3,195, $2,947 and $2,861, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | NOTE 7 — GOODWILL AND INTANGIBLE ASSETS Intangible Assets The Company’s intangible assets were acquired primarily in various acquisitions as well as in connection with the purchase of certain trademarks, brand assets and licensed content. The carrying amounts and accumulated amortization expense of the acquired intangible assets, including the impact of foreign currency exchange translation , at December 31, 2017 and December 31, 2016 were as follows: December 31, 2017 December 31, 2016 Estimated Gross Accumulated Net Gross Accumulated Net Useful Carrying Amortization Carrying Carrying Amortization Carrying Life Value * Expense * Value * Value * Expense * Value * Intangible assets amortized to cost of revenue: Titles, content and technology 3 - 5 yrs $ 40,317 $ (27,248) $ 13,069 $ 40,942 $ (19,255) $ 21,687 Carrier contract and related relationships 5 yrs 5,000 (3,398) 1,602 14,029 (11,427) 2,602 Licensed content 2.5 - 5 yrs — — — 2,334 (2,334) — Service provider license 9 yrs — — — 212 (212) — Trademarks 7 yrs 5,000 (4,107) 893 5,117 (3,510) 1,607 In-process research and development N/A 2,700 — 2,700 — — — Total intangibles assets $ 53,017 $ (34,753) $ 18,264 $ 62,634 $ (36,738) $ 25,896 * Including impact of foreign exchange Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives, which approximate the pattern in which the economic benefits of the intangible assets are realized. The Company has included amortization of acquired intangible assets directly attributable to revenue-generating activities in cost of revenue. During the year ended December 31, 2017, the Company wrote-off fully amortized intangible assets with an aggregate gross book value and accumulated amortization value of $12,629 as these intangible assets were considered obsolete after the winding down of a foreign subsidiary. During the year ended December 31, 2016, the Company wrote-off fully amortized intangible assets with an aggregate gross book value and accumulated amortization value of $29,109 as these intangible assets were considered obsolete after the recent liquidation of a foreign subsidiary and the restructuring of the Company’s Washington studio. During the year ended December 31, 2016, the Company recorded an impairment of an intangible asset of $4,597 related to the license fee paid to an affiliate of Tencent for the Company’s Rival Fire game, which launched during the third quarter of 2016, due to underperformance of the title and the Company’s determination that the title would generate negligible cash flows during the remaining contractual life of the license. No impairment of intangible assets was recorded during the year ended December 31, 2017. During the years ended December 31, 2017, 2016 and 2015, the Company recorded amortization and impairment expense in the amounts of $10,331, $14,792 and $9,553, respectively, in cost of revenue. During the years ended December 31, 2017, 2016 and 2015, the Company recorded amortization expense in the amounts of $0, $0 and $201, respectively, in operating expenses. As of December 31, 2017, the total expected future amortization related to intangible assets was as follows: Amortization to Be Included in Cost of Year Ending December 31, Revenue 2018 $ 5,870 2019 4,936 2020 3,258 2021 1,500 Total intangible assets subject to amortization 15,564 In-process research and development* 2,700 Total intangible assets, net $ 18,264 * The in-process research and development intangible asset will be amortized on a straight-line basis over its estimated life of three years upon successful completion of the game under development. Goodwill In the valuation of the goodwill balance for the reporting unit, the Company gave consideration to the future economic benefits of other assets that were not individually identified or separately recognized. The acquired studio workforce for each of these acquisitions was estimated to have value, and since the acquired workforce is not individually identified or separately recognized, it was subsumed within the goodwill recognized as part of each business combination. The Company further planned to leverage its preexisting contractual relationships with Digital Storefronts to distribute new titles developed by the Griptonite, Blammo, PlayFirst, Cie Games, Crowdstar and Dairy Free studios and the expected synergies are reflected in the value of the goodwill recognized. The Company also used the GameSpy acquired workforce and expertise to help in its development efforts for its technology platform, and these synergies are reflected in the value of goodwill recognized. Goodwill for the periods indicated was as follows: December 31, 2017 December 31, 2016 Goodwill $ 189,943 $ 161,001 Accumulated impairment losses (73,111) (73,111) Balance as of January 1 116,832 87,890 Goodwill acquired during the year 573 29,029 Effects of foreign currency exchange 42 (87) Write off from the sale of a foreign subsidiary (1,220) — Balance as of period ended $ 116,227 $ 116,832 In accordance with ASC 350, the Company’s goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, the Company performs its annual impairment review of its goodwill balance as of September 30 or more frequently if triggering events occur. The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. ASC 350 requires a multiple-step approach to testing goodwill for impairment for each reporting unit annually, or whenever events or changes in circumstances indicate the fair value of a reporting unit is below its carrying amount. The first step measures for impairment by applying the fair value-based tests at the reporting unit level. The second step (if necessary) measures the amount of impairment by applying the fair value-based tests to individual assets and liabilities within each reporting unit. The fair value of the reporting units is estimated using a combination of the market approach, which utilizes comparable companies’ data, and/or the income approach, which uses discounted cash flows. During the third quarters of fiscal 2017 and 2015, the Company performed a “Step 0” qualitative assessment for its reporting unit. Based on the assessment, the Company concluded that it was more likely than not that the fair value of the reporting unit was greater than its carrying amount, and as a result, did not proceed to further impairment testing. Accordingly, the Company did not recognize an impairment of goodwill during the years ended December 31, 2017 and December 31, 2015. During the three months ended December 31, 2017, the Company recorded a prepaid royalty impairment charge of $26,067. However, the Company’s market capitalization remained well above its carrying value during that period. Based on the results of the interim goodwill impairment test, as of December 31, 2017, the Company concluded that its goodwill was not impaired. The Company performed its annual impairment assessment as of September 30, 2016 and determined a Step 1 analysis was necessary due to a significant decline in its market capitalization and the significant impairment of prepaid royalties recorded during the three months ended September 30, 2016. Based on the results of the Step 1 analysis, the Company concluded that the fair value of the reporting unit was greater than the carrying value of the reporting unit based on a methodology that utilized both an income approach and a market approach. The Company considered valuation factors including its market capitalization, future discounted cash flows and an estimated control premium based upon a review of comparable market transactions. Accordingly, the Company did not recognize an impairment of goodwill during the year ended December 31, 2016. Any material impairment of prepaid royalty and license fee assets in the future periods may require the Company to perform a goodwill impairment assessment. Such assessment could result in impairments to the Company’s goodwill, which could adversely impact the Company’s results of operations. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 8 — COMMITMENTS AND CONTINGENCIES Leases The Company leases office space under non-cancelable operating facility leases with various expiration dates through December 2027. Rent expense for the years ended December 31, 2017, 2016 and 2015 was $4,472, $4,827 and $4,639, respectively. The terms of the facility leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. The deferred rent balance was $4,9 40 and $820 at December 31, 2017 and 2016, respectively, of which $ 4,850 and $619 was included within other long-term liabilities at December 31, 2017 and 2016, respectively. In May 2017, the Company entered into a lease for approximately 57,000 square feet of office space for its new San Francisco headquarters (the “Lease”). The term of the Lease began on July 1, 2017 and the obligation to pay rent began on December 4, 2017 (the “Rent Commencement Date”). The term of the Lease will expire on the tenth anniversary of the Rent Commencement Date. The Company paid a security deposit of $1,542 in connection with the Lease which has been classified within other long term assets on the Company’s consolidated balance sheet as of December 31, 2017. The security deposit will be reduced to $1,000 on or after April 1, 2019, provided the Company has generated annual bookings of at least $250,000 for two consecutive fiscal years and is otherwise not in default under the Lease. The Company has provided deposits for lines of credit totaling $ 492 to secure its obligations under the leases, which have been classified as restricted cash on the Company’s consolidated balance sheet as of December 31, 2017. At December 31, 2017, future minimum lease payments under non-cancelable operating leases were as follows: Minimum Operating Lease Year Ending December 31, Payments 2018 $ 6,430 2019 5,975 2020 5,380 2021 4,617 2022 and thereafter 29,532 $ 51,934 Minimum Guaranteed Royalties and Developer Commitments The Company has entered into license and publishing agreements with various celebrities, Hollywood studios, athletes, sports organizations, and other well-known brands and properties to develop and publish games for mobile devices. Pursuant to some of these agreements, the Company is required to make minimum guaranteed royalty payments regardless of revenue generated by the applicable game, which may not be dependent on any deliverables. The significant majority of these minimum guaranteed royalty payments are recoupable against future royalty obligations that would otherwise become payable, or in certain circumstances, where not recoupable, are capitalized and amortized over the lesser of (1) the estimated life of the title incorporating licensed content or (2) the term of the license agreement. At December 31, 2017, future unpaid minimum guaranteed royalty commitments were as follows: Future Future Minimum Minimum Guarantee Developer Year Ending December 31, Commitments Commitments 2018 $ 4,714 $ 250 2019 4,600 — 2020 2,300 — $ 11,614 $ 250 The amounts represented in the table above reflect the Company’s minimum cash obligations for the respective calendar years, but do not necessarily represent the periods in which they will be expensed in the Company’s consolidated financial statements. Future developer commitments as of December 31, 2017 were $250. These developer commitments reflect the Company’s minimum cash obligations to external software developers (“third-party developers”) to design and develop its software applications but do not necessarily represent the periods in which they will be expensed. The Company advances funds to these third-party developers, in installments, payable upon the completion of specified development milestones, and expenses third-party developer commitments as services are provided. Licensor commitments include $ 9,610 of commitments due to licensors that have been recorded in current and long-term liabilities and a corresponding amount in current and long-term assets because payment is not contingent upon performance by the licensor. The classification of commitments between long-term and short-term is determined based on the timing of recoupment of earned royalties calculated on projected revenue for the licensed intellectual property games. Income Taxes As of December 31, 2017, unrecognized tax benefits have been netted against deferred tax assets and potential interest and penalties are classified within “other long-term liabilities” on the Company’s consolidated balance sheets . As of December 31, 2017, the settlement of the Company’s income tax liabilities could not be determined; however, the liabilities are not expected to become due within the next 12 months. Indemnification Arrangements The Company has entered into agreements under which it indemnifies each of its officers and directors during his or her lifetime for certain events or occurrences while the officer or director is or was serving at the Company’s request in that capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts paid. Accordingly, the Company had recorded no liabilities for these agreements as of December 31, 2017, 2016 and 2015. In the ordinary course of its business, the Company includes standard indemnification provisions in most of its commercial agreements with Digital Storefronts and licensors. Pursuant to these provisions, the Company generally indemnifies these parties for losses suffered or incurred in connection with its games, including as a result of intellectual property infringement, viruses, worms and other malicious software, and legal or regulatory violations. The term of these indemnity provisions is generally perpetual after execution of the corresponding license agreement, and the maximum potential amount of future payments the Company could be required to make under these provisions is often unlimited. To date, the Company has not incurred costs to defend lawsuits or settle indemnified claims of these types. As a result, the Company believes the estimated fair value of these indemnity provisions is minimal. Accordingly, the Company had recorded no liabilities for these provisions as of December 31, 2017 and 2016. Contingencies From time to time, the Company is subject to various claims, complaints and legal actions in the normal course of business. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using available information. The Company’s estimate of losses is developed in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. After taking all of the above factors into account, the Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed reasonably probable and the amount can be reasonably estimated. The Company further determines whether an estimated loss from a contingency should be disclosed by assessing whether a material loss is deemed reasonably possible. Such disclosure will include an estimate of the additional loss or range of loss or will state that an estimate cannot be made. The Company does not believe it is party to any currently pending litigation, the outcome of which is reasonably likely to have a material adverse effect on its operations, financial position or liquidity. However, the ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, potential negative publicity, diversion of management resources and other factors. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | NOTE 9 — STOCKHOLDERS’ EQUITY Common Stock At December 31, 2017, the Company was authorized to issue 250,000 shares of common stock. As of December 31, 2017, the Company had reserved 40,556 shares for future issuance under its stock plans and outstanding warrants. Preferred Stock At December 31, 2017, the Company was authorized to issue 5,000 shares of preferred stock. Tencent Investment On April 29, 2015, the Company entered into a Purchase Agreement with Tencent and Tencent’s controlled affiliate, Red River Investment Limited (“Red River”). Pursuant to the Purchase Agreement, the Company issued to Red River in a private placement an aggregate of 21,000 shares of the Company’s common stock (the “Shares”) at a purchase price of $6.00 per share, for aggregate net proceeds of $125,156, after offering expenses. The Company issued 12,500 of the Shares to Red River on April 29, 2015 and issued the remaining 8,500 Shares at a second closing on June 3, 2015. Warrants to Purchase Common Stock Celebrity Warrants During 2015, the Company issued warrants to celebrity licensors, and entities affiliated with one of the celebrity licensors, to purchase up to an aggregate of 1,100 shares of the Company’s common stock, subject to adjustments for dividends, reorganizations and other common stock events (collectively, the “Celebrity Warrants”). With respect to Celebrity Warrants covering 1,000 shares, such warrants vest with respect to 50% of the underlying shares upon public announcement of the related license agreement, with the remaining shares vesting in equal monthly installments over 24 months, subject to full acceleration in the event of (i) the Company’s full recoupment of the minimum guarantee payments under the related license agreement, (ii) the termination of the license agreement due to the Company’s material breach of the agreement or (iii) a change of control of the Company. With respect to the remaining Celebrity Warrants covering 100 shares issued in 2015, such warrants vest in equal monthly installments over 60 months, with up to 25% of the shares subject to accelerated vesting in the event the celebrity licensor approves game design documentation by a certain date and the related game commercially launches by a certain date. During the years ended December 31, 2017, and 2016, none of these vesting conditions were met. Each of the Celebrity Warrants may, at the election of the holder, be either exercised for cash or net exercised on a cashless basis. As of December 31, 2017, Celebrity Warrants covering 1,600 shares of the Company’s common stock were outstanding. The fair value of the outstanding Celebrity Warrants is estimated using the Black-Scholes valuation model. The Black-Scholes valuation model requires inputs such as the expected term of the Celebrity Warrants, expected volatility and risk-free interest rate. Certain of these inputs are subjective and require significant analysis and judgment to develop. During the year ended December 31, 2017, the Company recorded $569 of non-cash warrant related expense in cost of revenue as the mobile games featuring these celebrities licensors were not expected to generate meaningful revenue over their lifetime. The amount recognized as expense with respect to these Celebrity Warrants was immaterial for each of years ended December 31, 2016 and 2015. MGM Warrants In July 2013, the Company and MGM Interactive Inc. (“MGM”) entered into a warrant agreement that provided MGM the right to purchase up to 3,333 shares of the Company’s common stock subject to adjustments for dividends, reorganizations and other common stock events (the “MGM Warrant”). As of December 31, 2017, MGM Warrants covering 1,667 shares of the Company’s common stock were outstanding. These remaining shares vest and become exercisable based on conditions related to the Company releasing mobile games based on mutually agreed upon intellectual property licensed by MGM to the Company. During the year ended December 31, 2015, 1,000 shares underlying the MGM Warrants vested in conjunction with the commercial release of the Company’s game, James Bond: World of Espionage , which occurred on September 29, 2015. During the year ended December 31, 2015, the Company recorded $1,928 of non-cash warrant related expense in cost of revenue as the James Bond: World of Espionage game was not expected to generate meaningful revenue over its lifetime. The Company estimated the fair value of the warrants using the Black-Scholes valuation model and the weighted average assumptions noted in the following table: Year Ended December 31, 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 1.65 % 1.76 % 1.18 % Expected volatility 51.81 % 57.54 % 53.40 % Expected term (in years) 3.52 4.78 5.00 Warrants outstanding at December 31, 2017 were as follows: Number Weighted of Shares Average Outstanding Exercise Average Under Price per Contractual Warrant Share Term Warrants outstanding, December 31, 2015 4,267 $ 3.61 5.50 Granted - - Exercised - - Warrants outstanding, December 31, 2016 4,267 $ 3.61 4.78 Granted - - Exercised (1,000) 3.00 Warrants outstanding, December 31, 2017 3,267 $ 3.79 5.33 During the years ended December 31, 2017, 2016, and 2015, warrant holders exercised warrants to purchase 1,000, 0, and 450 shares of the Company’s common stock, respectively, and the Company received gross proceeds of $3,000, $0, and $675, respectively, in connection with these exercises. |
Stock Option and Other Benefit
Stock Option and Other Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Stock Option and Other Benefit Plans | |
Stock Option and Other Benefit Plans | NOTE 10 — STOCK OPTION AND OTHER BENEFIT PLANS 2007 Equity Incentive Plan In 2007, the Company’s Board of Directors adopted, and the Company’s stockholders approved, the 2007 Equity Incentive Plan (the “2007 Plan”). The 2007 Plan permits the Company to grant stock options, RSUs, PSUs, PSOs and other stock-based awards to employees, non-employee directors and consultants. In April 2015, the Company’s Board of Directors approved, and in June 2015, the Company’s stockholders approved, the Second Amended and Restated 2007 Equity Incentive Plan (the “Second Amended 2007 Plan”). The Second Amended 2007 Plan includes an increase of 13,000 shares in the aggregate number of shares of common stock authorized for issuance under the plan. It also includes a fungible share provision, pursuant to which each share that is subject to a stock-based award that is not a “full value award” (restricted stock, RSUs, or other stock-based awards where the price charged to the participant for the award is less than 100% of the fair market value) reduces the number of shares available for issuance by 1.32 shares (previously this fungible ratio was 1.39 shares under the Amended 2007 Plan). In April 2017, the Company’s Board of Directors approved, and in June 2017, the Company’s stockholders approved, the Third Amended and Restated 2007 Equity Incentive Plan (the “Third Amended 2007 Plan”). The Third Amended 2007 Plan includes an increase of 8,000 shares in the aggregate number of shares of common stock authorized for issuance under the plan. It also includes (i) a minimum vesting requirement, pursuant to which each share that is subject to a stock-based award may not vest prior to the first anniversary of the date of grant of such stock-based award (subject to a carve-out of 5% of the shares reserved for issuance under the plan) and (ii) a limitation on the value of stock-based awards that may be granted to any non-employee director in any calendar year. The Company may grant options under the 2007 Plan at prices no less than 85% of the estimated fair value of the shares on the date of grant as determined by its Board of Directors, provided, however, that (i) the exercise price of an incentive stock option (“ISO”) or non-qualified stock options (“NSO”) may not be less than 100% or 85%, respectively, of the estimated fair value of the underlying shares of common stock on the grant date, and (ii) the exercise price of an ISO or NSO granted to a 10% stockholder may not be less than 110% of the estimated fair value of the shares on the grant date. The fair value of the Company’s common stock is determined by the last sale price of such stock on the Nasdaq Global Select Market on the date of determination. The stock options granted to employees generally vest with respect to 25% of the underlying shares one year from the vesting commencement date and with respect to an additional 1/48 of the underlying shares per month thereafter. Stock options granted during 2007 before October 25, 2007 and after June 4, 2015 have a contractual term of ten years and stock options granted on or after October 25, 2007 and before June 4, 2015 have a contractual term of six years. In 2017, the Company revised its executive compensation program by (1) eliminating annual cash bonus plans for senior executives and vice presidents of departments (the “Executives”) and eliminating 50% of the annual cash bonus opportunity for creative leaders for 2018 and replacing the Executives’ respective annual cash bonus opportunity with PSOs and (2) having a significant portion of Executives annual equity award be comprised of either PSOs and PSUs in addition to standard time vesting stock options. The awards under these programs were granted under the 2007 Plan. Grant of Performance Options in Lieu of 2018 Cash Bonus The Compensation Committee of the Board of Directors, or (the “Committee”), determined that for 2018, instead of providing the Executives with a cash-based annual bonus plan, it would provide them with the opportunity to earn an equivalent value of PSOs to the extent that the Company achieves certain bookings and Adjusted EBITDA (defined as non-GAAP operating income excluding depreciation and royalty impairments) targets during 2018. The Committee similarly replaced 50% of the creative leaders’ annual bonus opportunity with an equivalent value of PSOs. The Executives and creative leaders will only earn the maximum amount of PSOs if the Company both (1) achieves a minimum Adjusted EBITDA goal for 2018 (the “Adjusted EBITDA Threshold”) and (2) generates bookings for 2018 that equal or exceed a specified maximum level of performance (the “Maximum Bookings Goal”). If the Company does not achieve the Maximum Bookings Goal, the Executives and creative leaders can earn (1) 50% of the maximum amount of PSOs if the Company achieves the Adjusted EBITDA Threshold in 2018 and generates 2018 bookings that are approximately 5% below the Maximum Bookings Goal (the “Target Bookings Goal”) and (2) 25% of the maximum amount of PSOs if the Company achieves the Adjusted EBITDA Threshold in 2018 and generates 2018 bookings that are approximately 11% below the Maximum Bookings Goal (the “Minimum Bookings Goal”). To the extent that the Company achieves the Adjusted EBITDA Threshold in 2018 and generates bookings between two of the goals, the number of PSOs earned will be calculated on a linear basis. Grant of PSOs and PSUs as Part of Annual Refresh Grants The Committee determined to award a significant portion of the value of annual equity grants to the Executives and creative leaders in PSOs and PSUs. These awards will be earned to the extent that the Company achieves certain bookings and Adjusted EBITDA (defined as non-GAAP operating income excluding depreciation and royalty impairments) targets during 2018, 2019 and 2020, with one-third of the maximum shares subject to the PSOs and PSUs earnable in each of those years. There are separate and increasing Adjusted EBITDA thresholds and bookings goals for 2018, 2019 and 2020. To the extent that the Company achieves the Adjusted EBITDA threshold for a given year and generates bookings between two of the goals, the number of PSOs or PSUs earned for such year will be calculated on a linear basis. If the Company does not achieve an Adjusted EBITDA threshold or bookings goals in any year and less than the full amount of shares are earned for such year, the Executive or creative leader cannot recapture those shares through overachievement of the maximum Adjusted EBITDA thresholds and bookings goals in subsequent years . As of December 31, 2017, 3, 569 shares were available for future grants under the Third Amended 2007 Plan. 2007 Employee Stock Purchase Plan In 2007, the Company’s Board of Directors adopted and the Company’s stockholders approved, the 2007 Employee Stock Purchase Plan (the “2007 Purchase Plan”). The Company initially reserved 667 shares of its common stock for issuance under the 2007 Purchase Plan. On each January 1 for the first eight calendar years after the first offering date, the aggregate number of shares of the Company’s common stock reserved for issuance under the 2007 Purchase Plan was increased automatically by the number of shares equal to 1% of the total number of outstanding shares of the Company’s common stock on the immediately preceding December 31, provided that the Board of Directors had the power to reduce the amount of the increase in any particular year and provided further that the aggregate number of shares issued over the term of this plan may not exceed 5,333. The 2007 Purchase Plan permits eligible employees, including employees of certain of the Company’s subsidiaries, to purchase common stock at a discount through payroll deductions during defined offering periods. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or after a purchase period ends. In January 2009, the 2007 Purchase Plan was amended to provide that the Compensation Committee of the Company’s Board of Directors may fix a maximum number of shares that may be purchased in the aggregate by all participants during any single offering period (the “Maximum Offering Period Share Amount”). The Compensation Committee may raise or lower the Maximum Offering Period Share Amount. The Compensation Committee established the Maximum Offering Period Share Amount of 500 shares for the offering period that commenced on February 15, 2009 and ended on August 14, 2009, and a Maximum Offering Period Share Amount of 200 shares for each offering period thereafter. In February 2016, the Committee increased the Maximum Offering Period Share Amount for the offering period that started on February 22, 2016 and for each subsequent offering period to 450 shares. In April 2017, the Company’s Board of Directors approved, and in June 2017, the Company’s stockholders approved the Amended and Restated 2007 Employee Stock Purchase Plan (the “Amended 2007 Purchase Plan”). The Amended 2007 Purchase Plan includes an increase of 4,000 shares in the aggregate number of shares of common stock authorized for issuance under the plan and removal of the expiration date of the plan. As of December 31, 2017, 4,285 shares were available for issuance under the 2007 Purchase Plan. 2008 Equity Inducement Plan In March 2008, the Company’s Board of Directors adopted the 2008 Equity Inducement Plan (the “Inducement Plan”) to augment the shares available under its existing 2007 Plan. The Company has not sought stockholder approval for the Inducement Plan. As such, awards under the Inducement Plan are granted in accordance with Nasdaq Listing Rule 5635(c)(4) and only to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company. The Inducement Plan initially permitted the Company to grant only nonqualified stock options, but in 2013, the Compensation Committee of the Company’s Board amended the Inducement Plan to permit the award of RSUs under the plan. The Company may grant NSOs under the Inducement Plan at prices less than 100% of the fair value of the shares on the date of grant, at the discretion of its Board of Directors. The fair value of the Company’s common stock is determined by the last sale price of such stock on the Nasdaq Global Select Market on the date of determination. In November 2016, the Company’s Compensation Committee approved an increase of 6,000 shares in the aggregate number of shares of common stock authorized under the plan. As of December 31, 2017, 1,861 shares were reserved for future grants under the Inducement Plan. RSU Activity A summary of the Company’s RSU activity for the year ended December 31, 2017 is as follows: Weighted Number of Average Aggregate Units Grant Date Intrinsic Outstanding Fair Value Value Awarded and unvested, December 31, 2014 4,919 $ 3.87 Granted 4,955 $ 4.87 Vested (1,687) $ 3.58 Forfeited (843) $ 4.48 Awarded and unvested, December 31, 2015 7,344 $ 4.40 Granted 5,094 $ 2.52 Vested (2,422) $ 4.51 Forfeited (1,792) $ 3.86 Awarded and unvested, December 31, 2016 8,224 $ 3.33 Granted 2,360 $ 2.31 Vested (2,863) $ 3.45 Forfeited (1,909) $ 3.01 Awarded and unvested, December 31, 2017 5,812 $ 2.96 RSUs vested and expected to vest at December 31, 2017 5,812 $ 2.96 $ 21,154 PSU Activity A summary of the Company’s PSU activity for the year ended December 31, 2017 is as follows: Weighted Number of Average Aggregate Units Grant Date Intrinsic Outstanding Fair Value Value Awarded and unvested, December 31, 2016 - $ - Granted $ Vested - $ - Forfeited - $ - Awarded and unvested, December 31, 2017 $ PSUs vested and expected to vest at December 31, 2017 $ $ PSO Activity A summary of the Company’s PSO activity for the year ended December 31, 2017 is as follows: Weighted Number of Average Aggregate Share Exercise Intrinsic Outstanding Price Value Balance as of December 31, 2016 - $ - Granted $ Vested - $ - Forfeited $ Balance as of December 31, 2017 $ Performance stock options vested and expected to vest at December 31, 2017 $ $ The PSOs granted in lieu of 2018 annual cash bonus opportunity were granted on October 10, 2017, have 10 year terms and have an exercise price equal to $3.59, the closing price of the Company’s common stock on such date. The Company will determine its 2018 Adjusted EBITDA and bookings in early 2019, and to the extent that the Executives and creative leaders earn any PSOs based on the Company’s 2018 bookings and Adjusted EBITDA, such PSOs will fully vest in February 2019 (consistent with the timing of when the Company historically paid cash bonuses to the Executives and creative leaders ). The PSOs granted as part of the 2017 annual refresh grants were granted on October 10, 2017, have 10 year terms and have an exercise price equal to $3.59, the closing price of the Company’s common stock on such date. Stock Option Activity The following table summarizes the Company’s stock option activity: Options Outstanding Weighted Number Average Average Aggregate of Exercise Contractual Intrinsic Shares Price Term (Years) Value Balances at December 31, 2014 7,370 $ 3.32 Options granted 1,659 $ 4.65 Options canceled (425) $ 4.00 Options exercised (1,440) $ 2.64 Balances at December 31, 2015 7,164 $ 3.73 Options granted 10,347 $ 2.16 Options canceled (1,273) $ 4.04 Options exercised (425) $ 1.55 Balances at December 31, 2016 15,813 $ 2.74 $ — Options granted 5,346 $ 3.10 Options canceled (2,716) $ 3.16 Options exercised (1,511) $ 2.73 Balances at December 31, 2017 16,932 $ 2.78 7.63 $ 16,046 Options vested and expected to vest at December 31, 2017 16,932 $ 2.78 7.63 $ 16,046 Options exercisable at December 31, 2017 5,886 $ 3.05 4.94 $ 4,789 At December 31, 2017, the options outstanding and currently exercisable by exercise price were as follows: Options Outstanding Options Exercisable Weighted Average Remaining Weighted Weighted Range of Contractual Average Average Exercise Number Life Exercise Number Exercise Prices Outstanding (in Years) Price Exercisable Price $ 2.00 - $ 2.03 852 9.01 $ 2.00 $ 2.00 $ 2.10 - $ 2.10 4,477 8.86 $ 2.10 $ 2.10 $ 2.13 - $ 2.13 2,700 8.78 $ 2.13 $ 2.13 $ 2.14 - $ 2.74 2,072 7.13 $ 2.48 $ 2.49 $ 2.83 - $ 3.29 2,065 3.08 $ 3.09 $ 3.11 $ 3.56 - $ 3.56 39 9.70 $ 3.56 - - $ 3.59 - $3.59 2,788 9.78 $ 3.59 - - $ 3.65 - $ 5.26 1,698 4.54 $ 4.14 $ 4.14 $ 5.52 - $ 6.54 41 4.75 $ 5.97 $ 5.99 $ 6.67- $ 6.67 200 7.42 $ 6.67 200 $ 6.67 $ 2.00 - $ 6.67 16,932 7.63 $ 2.78 5,886 $ 3.05 The Company has computed the aggregate intrinsic value amounts disclosed in the above table based on the difference between the original exercise price of the options and the fair value of the Company’s common stock of $3.64 per share at December 31, 2017. The total intrinsic value of awards exercised during the years ended December 31, 2017, 2016 and 2015 was $1,732, $444, and $4,960, respectively. Stock-Based Compensation The Company recognizes stock-based compensation expense in accordance with ASC 718, and has estimated the fair value of each option award on the grant date using the Black-Scholes option valuation model and the weighted average assumptions noted in the following tables. Performance Stock Options: Year Ended December 31, 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 2.07 % — % — % Expected volatility 63.3 % — % — % Expected term (years) 5.81 — — Stock Options: Year Ended December 31, 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 1.76 % 1.39 % 1.34 % Expected volatility 57.8 % 52.3 % 51.8 % Expected term (years) 4.00 4.00 4.00 The expected term of stock options gave consideration to early exercises, post-vesting cancellations and the options’ contractual term ranging from 6 to 10 years. The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for the PSOs as the Company has not granted such awards in the past. As a result, the Company used the simplified method to calculate the expected term estimate based on the vesting and contractual terms of the PSOs. Under the simplified method, the expected term is equal to the average of the stock-based awards vesting period and their contractual term. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury Constant Maturity Rate as of the date of grant. The Company based its expected volatility on its own historical volatility for the year ended December 31, 2017. For the the years ended December 31, 2016 and 2015, the Company based its e xpected volatility on its own historical volatility and the historical volatility of a peer group of publicly traded entities. The impact of the change in methodology was immaterial for the year ended December 31, 2017. The weighted-average fair value of stock options granted during the year ended December 31, 2017, 2016 and 2015 was $1.42, $0.90, and $1.88 per share, respectively. The weighted average fair value of the PSOs granted during the year ended December 31, 2017 was $2.09. The cost of RSUs and PSUs are determined using the fair value of the Company’s common stock based on the quoted closing price of the Company’s common stock on the date of grant. RSUs typically vest and are settled over approximately a four-year period with 25% of the shares vesting on or around the one-year anniversary of the grant date and the remaining shares vesting quarterly thereafter. Compensation cost is amortized on a straight-line basis over the requisite service period. Vesting of PSOs and PSUs requires continuous services by the Executives and creative leaders and achieving adjusted EBITDA threshold and booking goals which are solely related to the Company’s own operations. For the years ended December 31, 2016 and 2015, the Company calculated employee stock-based compensation expense based on awards ultimately expected to vest and reduced it for actual forfeitures. After the adoption of ASU 2016-09 on January 1, 2017 the Company accounted for forfeitures as they occured. The following table summarizes the consolidated stock-based compensation expense by line items in the consolidated statement of operations: Year Ended December 31, 2017 2016 2015 Research and development $ 6,460 $ 4,567 $ 3,563 Sales and marketing 1,289 1,091 1,082 General and administrative 7,314 7,605 7,041 Total stock-based compensation expense $ 15,063 $ 13,263 $ 11,686 The following table summarizes total compensation expense related to unvested awards not yet recognized as of December 31, 2017: Unrecognized Compensation Expense for Unvested Awards Stock options $ RSUs PSUs (1) PSOs (1) Total unrecognized compensation expense $ (1) The unrecognized compensation expense for PSOs and PSUs vesting in FY2020 and FY2021 is not included in the table above as the Company does not have a reasonable basis upon which to estimate the vesting probability of such awards in those future periods. The unrecognized compensation expense related to stock options and RSUs will be recognized over a weighted average period of 3.02 years and 2.49 years, respectively. The unrecognized stock compensation expense related to unvested PSOs and PSUs is expected to be recognized through February 2019. Stock-based compensation expense in the year ended December 31, 2017, was approximately $15,063 (comprising approximately $3,585 related to stock options, $10,127 related to RSUs, $790 related to performance-based awards and $561 related to the 2007 Purchase Plan). The stock based compensation expense amounts for stock options and RSUs excludes the reversal of restructuring related stock compensation expense of $219. Stock-based compensation expense in the year ended December 31, 2016, was approximately $13,263 (comprising approximately $2,275 related to stock options, $0 related to performance-based awards, $10,255 related to RSUs and $733 related to the 2007 Purchase Plan). Stock-based compensation expense in the year ended December 31, 2015, was approximately $11,686 (comprising approximately $3,082 related to stock options, $0 related to performance-based awards, $7,959 related to RSUs and $645 related to the 2007 Purchase Plan). Consolidated net cash proceeds from option exercises were $2,564, $294 and $3,794 for the year ended December 31, 2017, 2016 and 2015, respectively. The Company realized no significant income tax benefit from stock option exercises during the year ended December 31, 2017, 2016 and 2015. As permitted by ASC 718, the Company has deferred the recognition of its excess tax benefit from non-qualified stock option exercises. 401(k) Defined Contribution Plan The Company sponsors a 401(k) defined contribution plan covering all employees. The Company does not match the contributions made by its employees. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | NOTE 11 — INCOME TAXES The components of loss before income taxes by tax jurisdiction were as follows: Year Ended December 31, 2017 2016 2015 United States $ (97,503) $ (87,085) $ (7,819) Foreign (893) (656) 775 Loss before income taxes $ (98,396) $ (87,741) $ (7,044) The components of income tax benefit/(expense) were as follows: Year Ended December 31, Current: 2017 2016 2015 Federal $ 947 $ 127 $ (24) State (10) (6) (5) Foreign (521) (86) (183) 416 35 (212) Deferred: Federal 294 328 — Foreign 116 (62) 71 410 266 71 Total: Federal 1,241 455 (24) State (10) (6) (5) Foreign (405) (148) (112) $ 826 $ 301 $ (141) The difference between the actual rate and the federal statutory rate was as follows: Year Ended December 31, 2017 2016 2015 Tax at federal statutory rate 34.0 % 34.0 % 34.0 % State tax, net of federal benefit — — (0.1) Foreign rate differential (0.2) (0.1) 1.0 Research and development credit 2.5 0.9 15.9 Stock-based compensation (2.0) (2.9) (8.7) FIN 48 interest and release 0.2 (0.1) 1.8 Others 0.7 0.1 0.1 Deemed dividend from foreign liquidation (0.2) (1.4) — Valuation allowance (34.2) (30.2) (46.1) Effective tax rate 0.8 % 0.3 % (2.1) % During 2017, the Company recorded a net release of its valuation allowance of $294 as result of the acquisition of Dairy Free Games Inc. in August 2017. Deferred tax assets and liabilities consist of the following: December 31, 2017 December 31, 2016 US Foreign Total US Foreign Total Deferred tax assets: Fixed assets $ 46 $ 36 $ 82 $ 191 $ 40 $ 231 Net operating loss carryforwards 50,902 608 51,510 55,850 526 56,376 Accruals, reserves and other 14,838 101 14,939 12,006 97 12,103 Foreign tax credit 5,895 151 6,046 6,460 — 6,460 Stock-based compensation 2,476 — 2,476 3,830 — 3,830 Research and development credit 14,317 — 14,317 11,190 — 11,190 Other 2,646 — 2,646 2,011 — 2,011 Total deferred tax assets $ 91,120 $ 896 $ 92,016 $ 91,538 $ 663 $ 92,201 Deferred tax liabilities: Fixed assets $ — $ (16) $ (16) $ — $ (1) $ (1) Intangible assets (2,112) — (2,112) (4,441) (6) (4,447) Net deferred tax assets 89,008 880 89,888 87,097 656 87,753 Less valuation allowance (89,008) (503) (89,511) (87,097) (464) (87,561) Net deferred tax assets $ — $ 377 $ 377 $ — $ 192 $ 192 The Company has not provided deferred taxes on unremitted earnings attributable to foreign subsidiaries, excluding China, because their earnings are intended to be reinvested indefinitely. No deferred tax asset was recognized since the Company does not believe the deferred tax asset will be realized in the foreseeable future. The amount of accumulated foreign earnings of the Company’s foreign subsidiaries totaled $1,413 as of December 31, 2017. If the Company's foreign earnings were repatriated, additional tax expense might result. The Company determined that the calculation of the amount of unrecognized deferred tax liability related to these cumulative unremitted earnings attributable to foreign subsidiaries is not practicable. The Company recorded a release of its valuation allowance of $294, $328, and $0 during 2017, 2016, and 2015, respectively. The 2017 and 2016 releases were associated with the acquisitions of Dairy Free and Crowdstar in August 2017 and November 2016, respectively. Pursuant to ASC 805-740, changes in the Company’s valuation allowance that stem from a business combination should be recognized as an element of the Company’s deferred income tax expense or benefit. The Company previously recognized a valuation allowance against its net operating loss carryforwards and determined that it should be able to utilize the benefit of those net operating losses against the deferred tax liabilities of Dairy Free and Crowdstar, respectively; therefore, it has partially released its pre-existing valuation allowance. In accordance with ASC 740 and based on all available evidence on a jurisdictional basis, the Company believes that it is more likely than not that its deferred tax assets will not be utilized and has recorded a full valuation allowance against its net deferred tax assets in each of its jurisdictions except for entities in Canada, China and India. The Company assesses on a periodic basis the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income or losses, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. If it is not more likely than not that the Company expects to recover its deferred tax assets, the Company will increase its provision for taxes by recording a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable. The available negative evidence at December 31, 2017 and 2016 included historical and projected future operating losses. As a result, the Company concluded that an additional valuation allowance of $1,950 and $18,240 net of the described releases, was required to reflect the change in its deferred tax assets prior to valuation allowance during 2017 and 2016, respectively. As of December 31, 2017 and 2016, the Company considered it more likely than not that its deferred tax assets would not be realized within their respective carryforward periods. At December 31, 2017, the Company had net operating loss carryforwards of approximately $207,813 and $93,567 for federal and state tax purposes, respectively. These carryforwards will expire at various times between 2018 and 2037. In addition, the Company has research and development tax credit carryforwards of approximately $13,009 for federal income tax purposes and $15,817 for California tax purposes. The federal research and development tax credit carryforwards will begin to expire in 2023. The California state research credit will carry forward indefinitely. The Company has approximately $5,885 of foreign tax credits that will begin to expire in 2018. The Company’s ability to use its net operating loss carryforwards and federal and state tax credit carryforwards to offset future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that result in changes in ownership as defined by Internal Revenue Code Section 382. A reconciliation of the total amounts of unrecognized tax benefits was as follows: Year Ended December 31, 2017 2016 Beginning balance $ 11,011 $ 9,218 Reductions of tax positions taken during previous years (260) (806) Additions based on uncertain tax positions related to the current period 2,621 2,590 Additions based on uncertain tax positions related to prior periods — 43 Cumulative translation adjustment 19 (34) Ending balance $ 13,391 $ 11,011 The total unrecognized tax benefits as of December 31, 2017 and 2016 included approximately $13,152 and $10,590, respectively, of unrecognized tax benefits that have been netted against deferred tax assets. As of December 31, 2017, the Company does not expect the unrecognized tax benefits, if recognized, to have a material impact on its financial statements. At December 31, 2017, the Company does not anticipate that the liability for uncertain tax positions, excluding interest and penalties, that could decrease within the next twelve months due to the expiration of statutes of limitation in foreign jurisdictions in which the Company does business will have a material impact on its financial statements. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. The Company has accrued $131 of interest and penalties on uncertain tax positions as of December 31, 2017, as compared to $294 as of December 31, 2016. Approximately $96, $128 and $78 of accrued interest and penalty expense related to estimated obligations for unrecognized tax benefits was recognized during 2017, 2016 and 2015, respectively. During 2017, the Company released $273 of interest and penalties on uncertain tax positions due to the expiration of certain statutes of limitation in foreign jurisdictions in which the Company does business and in relation to winding down of a foreign subsidiary. The Company is subject to taxation in the United States and various foreign jurisdictions. The material jurisdictions subject to examination by tax authorities are primarily the State of California, the United States, Canada, China and India. The Company’s federal tax returns are open by statute for tax years 1998 and California tax returns are open by statute for tax years 2003 and forward and could be subject to examination by the tax authorities. The Company’s China income tax returns are open by statute for tax years 2015 and forward. On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) was enacted, which made significant changes to various areas of the U.S. federal income tax law, including lowering of the U.S. corporate tax rate from 35 percent to 21 percent. U.S. GAAP accounting for income taxes requires that the Company record the impacts of any tax law change on its deferred income taxes in the quarter that the tax law change is enacted. Due to the complexities involved in accounting for the enactment of the Act, in January 2018, SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) to provide guidance for companies that have not completed their accounting for the income tax effects of The Act in the period of enactment. Specifically, SAB 118 states that companies that have not completed accounting for the effects of The Act by financial reporting deadlines may report provisional amounts based on reasonable estimates for items for which the accounting is incomplete. Those provisional amounts will be subject to adjustment during a measurement period that begins in the reporting period that includes The Act’s enactment date and ends when a company has obtained, prepared and analyzed the information needed to complete the accounting requirements under ASC 740 Income Taxes . The measurement period should not extend beyond one year from the enactment date. Furthermore, SAB 118 states that if a company cannot make a reasonable estimate for an income tax effect, it should not account for that effect until it can make such an estimate. In accordance with SAB 118, the Company recorded a provisional amount of a one-time negative adjustment of $34.9 million for the re-measurement of deferred tax assets and liabilities, offset by a one-time positive adjustment of $34.9 million for the re-measurement of valuation allowance maintained on these items. These amounts have been estimated as provisional as the Company believes that additional analysis of its deferred tax assets and liabilities is necessary, as well as the evaluation of potential correlative adjustments. As the Company expects regulators to issue further guidance, among other things, its estimates may change during calendar year 2018. Any subsequent adjustment to these amounts will be recorded to current tax expense in the period the analysis is completed, not to exceed the fourth quarter of 2018. The Act also required companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries. Based on an analysis of its foreign subsidiaries and the current year financial statements, the Company does not expect to have a transition tax. Based on its initial review of The Act, the Company does not expect that the new legislation will have a material impact on its financial statements for the year ended December 31, 2017 or its future operational results as long as the Company maintains a full valuation allowance. It is the Company’s policy to record valuation allowances when necessary to reduce deferred tax assets to the amount that it expects to realize. Currently, the Company maintains a full valuation allowance for its deferred tax assets in the U.S., Hong Kong, and China. The Company will continue to analyze the impact of The Act on its financial statements and operations. Additional impacts, if any, will be recorded as they are identified during the measurement period as provided for in SAB 118. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting | |
Segment Reporting | NOTE 12 — SEGMENT REPORTING ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments. It defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer, who is also chief operating decision maker, makes decisions and manages the Company’s operations as one operating segment. The financial information reviewed by him is included within one operating segment for purposes of allocating resources and evaluating financial performance. Accordingly, the Company reports as a single reportable segment—mobile games. In the case of Digital Storefronts, revenue is attributed to the geographic location where the end-user makes the purchase. The Company generates its revenue in the following geographic regions: Year Ended December 31, 2017 2016 2015 United States of America $ 216,468 $ 149,031 $ 171,759 Americas, excluding the United States 15,976 9,127 11,538 EMEA 33,180 24,303 36,134 APAC 21,203 18,120 30,469 $ 286,827 $ 200,581 $ 249,900 The Company attributes its long-lived assets, which primarily consist of property and equipment, to a country primarily based on the physical location of the assets. Property and equipment, net of accumulated depreciation and amortization, summarized by geographic location was as follows: December 31, 2017 2016 United States of America $ 13,030 $ 3,768 Rest of the World 1,600 1,872 $ 14,630 $ 5,640 |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring. | |
Restructuring | NOTE 13 — RESTRUCTURING During each of 2015, 2016 and 2017, the Company’s management approved restructuring plans to improve the effectiveness and efficiency of its operating model and reduce operating expenses around the world. During the year ended December 31, 2015, the Company recorded $1,07 5 of restructuring charges relating to employee termination costs in the Company’s Beijing, China and Bellevue, Washington offices. During the year ended December 31, 2016 , the Company recorded $2,279 of restructuring charges related to employee termination costs in the Company’s Long Beach, California; San Francisco, California; Bellevue, Washington; and Beijing, China offices, and lease termination costs for the Company’s Bellevue, Washington and Beijing, China offices. During the year ended December 31, 2017, the Company recorded $6,019 of restructuring charge related to employee and lease termination costs in the Company’s Bellevue, Washington; Long Beach, California; San Francisco, California; Portland, Oregon; and Beijing, China offices. Restructuring Restructuring Restructuring Restructuring Workforce Facility Other Total Balance as of December 31, 2014 $ — $ — $ — $ — Charges to operations 1,044 — 31 1,075 Non-cash charges/adjustments — — — — Charges settled in cash (734) — — (734) Balance as of December 31, 2015 $ 310 $ — $ 31 $ 341 Charges to operations 1,491 740 48 2,279 Non-cash charges/adjustments — 122 — 122 Charges settled in cash (1,801) (591) (79) (2,471) Balance as of December 31, 2016 $ — $ 271 $ — $ 271 Charges to operations 4,319 1,700 — 6,019 Non-cash charges/adjustments 146 44 — 190 Charges settled in cash (4,322) (1,399) — (5,721) Balance as of December 31, 2017 $ 143 $ 616 $ — $ 759 |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Text Block] | NOTE 14 – QUARTERLY FINANCIAL DATA (unaudited, in thousands) The following table sets forth unaudited quarterly consolidated statements of operations data for 2017 and 2016. The Company derived this information from its unaudited consolidated financial statements, which it prepared on the same basis as its audited consolidated financial statements contained in this report. In its opinion, these unaudited statements include all adjustments, consisting only of normal recurring adjustments that the Company considers necessary for a fair statement of that information when read in conjunction with the consolidated financial statements and related notes included elsewhere in this report. The operating results for any quarter should not be considered indicative of results for any future period. For the Three Months Ended 2017 2016 March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, (In thousands) Revenue $ 56,788 $ 68,679 $ 81,148 $ 80,212 $ 54,528 $ 48,363 $ 51,381 $ 46,309 Cost of revenue: Platform commissions, royalties and other 20,860 24,761 28,898 28,980 20,320 18,534 18,918 17,467 Impairment of prepaid royalties and minimum guarantees 792 (d) — 464 (d) 26,067 (d) 43 105 29,836 123 Impairment and amortization of intangible assets 3,262 3,171 2,363 1,535 2,324 2,336 7,320 2,812 Total cost of revenue 24,914 27,932 31,725 56,582 22,687 20,975 56,074 20,402 Gross profit 31,874 40,747 49,423 23,630 31,841 27,388 (4,693) 25,907 Operating expenses: Research and development 25,032 23,989 22,004 21,395 20,312 20,721 20,080 20,766 Sales and marketing 17,287 30,952 29,776 26,341 12,624 10,935 10,104 14,387 General and administrative 8,497 8,678 8,698 8,552 7,984 7,096 7,011 8,134 Restructuring charge 3,712 (a) 926 (b) 1,402 (c) (21) 106 2,116 57 — Total operating expenses 54,528 64,545 61,880 56,267 41,026 40,868 37,252 43,287 Income/(loss) from operations (22,654) (23,798) (12,457) (32,637) (9,185) (13,480) (41,945) (17,380) Interest and other income/(expense), net (122) 53 (271) (6,510) (e) 469 (4,453) (1,653) (114) Income/(loss) before income taxes (22,776) (23,745) (12,728) (39,147) (8,716) (17,933) (43,598) (17,494) Income tax benefit/(provision) 12 177 1,057 (420) 166 (16) (129) 280 Net income /(loss) $ (22,764) $ (23,568) $ (11,671) $ (39,567) $ (8,550) $ (17,949) $ (43,727) $ (17,214) Net income/(loss) per share Basic $ (0.17) $ (0.17) $ (0.09) $ (0.29) $ $ (0.14) $ (0.33) $ (0.13) Diluted $ (0.17) $ (0.17) $ (0.09) $ (0.29) $ $ (0.14) $ (0.33) $ (0.13) (a) Includes $2,678 of restructuring charges relating to employee termination costs in the Company’s Long Beach, San Francisco, Portland, Bellevue, and APAC offices, and $1,034 of restructuring charges relating to facility costs in the Company’s Portland and Bellevue offices. (b) Includes $780 of restructuring charges relating to employee termination costs in the Company’s APAC, Portland, Long Beach and Bellevue offices, and $146 of restructuring charges relating to facility costs in the Company’s Portland and China offices. (c) Includes $909 of restructuring charges relating to employee termination costs in the Company’s San Francisco and Long Beach offices, and $493 of restructuring charges relating to facility costs in the Company’s Long Beach office. (d) These charges are related to impairment of prepaid guaranteed royalties for certain celebrity license agreements, and certain other prepaid royalties. (e) Mainly related to $6,459 loss on sale of a foreign subsidiary. . |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions | NOTE 15 – RELATED PARTY TRANSACTIONS The Company and an affiliate of Tencent, one of the Company’s principal stockholders, entered into an agreement in November 2015 pursuant to which, the Company agreed, subject to certain conditions, to pay in the aggregate, up to $15,000 in recoupable advanced royalties and non-recoupable license fees related to the Company’s Rival Fire title, which amounts were fully paid by December 31, 2016. During the year ended December 31, 2016, the Company recorded an impairment of $14,463 for un-recouped advanced royalties and non-recoupable license fees that were paid to an affiliate of Tencent, due to the underperformance of the Company’s Rival Fire title which launched during the third quarter of 2016 and the negligible cash flows anticipated for the remaining contractual life of these assets. |
The Company And Summary of Si25
The Company And Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant estimates and assumptions reflected in the financial statements include, but are not limited to, the estimated lives that the Company uses for revenue recognition, the allowance for doubtful accounts, useful lives of property and equipment and intangible assets, valuation and realizability of deferred tax assets and uncertain tax positions, fair value of stock awards issued, fair value of warrants issued, accounting for business combinations, evaluating goodwill, long-lived assets for impairment, realization of prepaid royalties and fair value of investments. Actual results may differ from these estimates and these differences may be material. |
Variable Interest Entities | Variable Interest Entities The Company has interests in other entities that are variable interest entities (“VIEs”). Determining whether to consolidate a VIE requires judgment in assessing (i) whether an entity is a VIE and (ii) if the Company is the entity’s primary beneficiary and thus required to consolidate the entity. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company’s evaluation includes identification of significant activities and an assessment of its ability to direct those activities based on governance provisions and other applicable agreements and circumstances. The Company’s assessment of whether it is the primary beneficiary of its VIEs requires significant assumptions and judgment. |
Revenue Recognition | Revenue Recognition The Company generates revenue through in-app purchases within its games on smartphones and tablets, such as Apple’s iPhone and iPad and mobile devices utilizing Google’s Android operating system. Smartphone and tablet games are distributed primarily through Digital Storefronts. Revenue The Company distributes its games for smartphones and tablets to the end customer through Digital Storefronts. Within these Digital Storefronts, users can download the Company’s free-to-play games and pay to acquire virtual currency which can be redeemed in the game for virtual goods. The Company recognizes revenue, when persuasive evidence of an arrangement exists, the service has been provided to the user, the price paid by the user is fixed or determinable, and collectability is reasonably assured. Determining whether and when some of these criteria have been satisfied requires judgments that may have a significant impact on the timing and amount of revenue the Company reports in each period. For the purposes of determining when the service has been provided to the player, the Company has determined that an implied obligation exists to the paying user to continue displaying the purchased virtual goods within the game over the estimated average playing period of paying players for the game, which represents the Company’s best estimate of the estimated average life of virtual goods. The Company sells both consumable and durable virtual goods and receives reports from the Digital Storefronts, which breakdown the various purchases made from their games over a given time period. The Company reviews these reports and determines on a per-item basis whether the purchase was a consumable virtual good or a durable virtual good. Consumable goods are items that can be purchased directly by the player through the Digital Storefront and are consumed at a predetermined time or otherwise have limitations on repeated use, while durable goods are items that remain in the game for as long as the player continues to play. The Company’s revenue from consumable virtual goods has been insignificant over the previous three years. The Company recognizes revenue from consumable virtual goods immediately, since it believes that the delivery obligation has been met and there are no further implicit or explicit performance obligations related to the purchase of that consumable virtual good. Revenue from durable virtual goods are generated through the purchase of virtual coins by users through a Digital Storefront. Players convert the virtual coins within the game to durable virtual goods such as weapons, armor or other accessories to enhance their game-playing experience. The Company believes this represents an implied service obligation, and accordingly, recognizes the revenue from the purchase of these durable virtual goods over the estimated average playing period of paying users. Based on the Company’s analysis, the estimated weighted average useful life of a paying user has been determined to range from three to eight months. The Company computes its estimated average playing period of paying users at least twice each year. It has examined the playing patterns of paying users across a representative sample of its games across various genres. At the start of the second quarter of 2017, the Company began using a new model to estimate the average playing period for paying users. As the Company continues to execute on its strategy in developing new content for its existing evergreen and growth titles, the Company re-evaluated its existing estimation methodology and concluded that the “survival analysis” model provides for a singular approach to estimating the average playing period of paying users on a title by title basis for the Company’s diverse portfolio of games. The new model is a statistical model that analyzes time duration until one or more events happens. It is a commonly used model in various industries for estimating lifespans. The Company believes this is an appropriate model to estimate the average playing period of paying users for its titles as this model statistically estimates the average playing period of each title by analyzing the historical behavior patterns of paying users. This model requires the stratification of user data into active and inactive monetizing users on a per title basis. Active users are those who are active in the game for the past 30 days as of the evaluation date. The remaining users are considered inactive and deemed to have churned from the game. These users are treated mathematically differently in the model than those who are still active. A distribution curve is then fit to the user data to estimate the average playing period of paying users on a per title basis. The Company has selected a threshold of 120 days from the commercial launch of a title as the minimum number of days of data required for this model. This threshold was deemed to be appropriate as the Company tested the model using lower thresholds which resulted in inconsistencies in the estimate of the average playing period of paying users. For new titles with less than 120 days of data that share similar attributes with an existing title and/or prequel titles, the average playing period will be determined based on the average playing period of that existing title or prequel title, as applicable. For all other titles with less than 120 days of data, the average playing period will be determined based on the average playing period of all other remaining existing titles. The selection of the new model was considered a change in accounting estimates which was implemented in the quarter ended June 30, 2017 and had no material impact on the estimated average playing period of paying users. While the Company believes its estimates to be reasonable based on available game player information, it may revise such estimates in the future if a titles’ user characteristics change. Any adjustments arising from changes in the estimates of the average playing period for paying users would be applied to the current quarter and prospectively on the basis that such changes are caused by new information that indicates a change in user behavior patterns compared to historical titles. Any changes in the Company’s estimates of the useful life of virtual goods in a certain title may result in revenue being recognized on a basis different from prior periods’ and may cause its operating results to fluctuate. The Company also has relationships with certain advertising service providers for advertisements within smartphone games and revenue from these advertising providers is generated through impressions, clickthroughs, banner ads and offers. Revenue is recognized as advertisements are delivered and reported to the Company, an executed contract exists, the price is fixed or determinable and collectability has been reasonably assured. Delivery generally occurs when the advertisement has been displayed or the offer has been completed by the user. The fee received for offer advertisements that result in the user receiving virtual currency for redemption within a game are deferred and recognized over the average playing period of paying users. Other Estimates and Judgments The Company estimates revenue from Digital Storefronts and advertising service providers in the current period when reasonable estimates of these amounts can be made. Certain Digital Storefronts and advertising service providers provide reliable interim preliminary reporting and others report sales data within a reasonable time frame following the end of each month, both of which allow the Company to make reasonable estimates of revenue and therefore to recognize revenue during the reporting period. Determination of the appropriate amount of revenue recognized involves judgments and estimates that the Company believes are reasonable, but it is possible that actual results may differ from the Company’s estimates. When the Company receives the final reports, to the extent not received within a reasonable time frame following the end of each month, the Company records any significant differences between estimated revenue and actual revenue in the reporting period when the Company determines the actual amounts. Historically, the revenue on a final revenue report has not differed significantly from the reported revenue for the period. Principal Agent Considerations In accordance with ASC 605-45, Revenue Recognition: Principal Agent Considerations, the Company evaluates its Digital Storefront and advertising service provider agreements in order to determine whether or not it is acting as the principal or as an agent when selling its games or when selling advertisements within its games, which it considers in determining if revenue should be reported on a gross or net basis. The Company primarily uses Digital Storefronts for distributing its smartphone games and advertising service providers for serving advertisements within its games. Key indicators that the Company evaluates to reach this determination include: · the terms and conditions of the Company’s contracts with the Digital Storefronts and advertising service providers; · the party responsible for billing and collecting fees from the end-users, including the resolution of billing disputes; · whether the Company is paid a fixed percentage of the arrangement’s consideration or a fixed fee for each game, transaction, or advertisement; · which party sets pricing with the end-user, has the credit risk and provides customer support; and · which party is responsible for the fulfillment of the game or serving of advertisements and that determines the specifications of the game or advertisement. Based on the evaluation of the above indicators, the Company has determined that it is generally acting as a principal and is the primary obligor to end-users for smartphone games distributed through Digital Storefronts and advertisements served through our advertising service providers. Therefore, the Company recognizes revenue related to these arrangements on a gross basis, when the necessary information about the gross amounts or platform fees charged, before any adjustments, are made available by the Digital Storefronts and advertising service providers. |
Deferred Platform Commissions and Royalties | Deferred Platform Commissions and Royalties Digital Storefronts retain platform commissions and fees on each purchase made by the paying players through the Digital Storefront. The Company is also obligated to pay ongoing licensing fees in the form of royalties related to the games developed based on or significantly incorporating licensed brands, properties or other content, and the Company plans to incorporate additional licensed content in some of its own originally branded games. Additionally, certain games sold through Digital Storefronts require the revenue to be deferred due to an implied obligation to the paying player to continue displaying the purchased virtual goods within the game over the estimated average playing period of paying players for the game. As revenue from sales to paying players through Digital Storefronts are deferred, the related direct and incremental platform commissions and fees as well as third-party royalties are also deferred and reported in “Prepaid expenses and other” on the consolidated balance sheets. The deferred platform commissions and royalties are recognized in the consolidated statements of operations in “Cost of revenue” in the period in which the related sales are recognized as revenue. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits cash and cash equivalents with financial institutions that management believes are of high credit quality. Deposits held with financial institutions often exceed the amount of insurance on these deposits. |
Restricted Cash | Restricted Cash Restricted cash primarily consists of deposits related to letters of credit to secure obligations under the Company’s operating lease agreements. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and accounts receivable. The Company derives its accounts receivable from revenue earned from customers or through Digital Storefronts located in the United States and other locations outside of the United States. The Company performs ongoing credit evaluations of its customers’ and the Digital Storefronts’ financial condition and, generally, requires no collateral from its customers or the Digital Storefronts. The Company bases its allowance for doubtful accounts on management’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company reviews past due balances over a specified amount individually for collectability on a monthly basis. It reviews all other balances quarterly. The Company charges off accounts receivable balances against the allowance when it determines that the amount will not be recovered. The following table summarizes the revenue from customers or aggregate purchases through Digital Storefronts in excess of 10% of the Company’s revenue: Year Ended December 31, 2017 2016 2015 Apple 54.2 % 52.7 % 51.7 % 30.3 % 27.6 % 27.4 % At December 31, 2017, Apple Inc. (“Apple”) accounted for 58.0% and Google Inc. (“Google”) accounted for 17.1%, of total accounts receivable. At December 31, 2016, Apple accounted for 43.9%, Google accounted for 22.3%, Jirbo accounted for 10.8%, and Fyber GmbH accounted for 10.5% of total accounts receivable. No other customer or Digital Storefront represented more than 10% of the Company’s total accounts receivable as of these dates. |
Fair Value | Fair Value The Company accounts for fair value in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). Fair value is defined under ASC 820 as the exch ange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a three-tier hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The first two levels in the hierarchy are considered observable inputs and the last is considered unobservable. The Company’s cash and cash equivalents and restricted cash, which were held in operating bank accounts, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The carrying value of accounts receivable and payables approximates fair value due to the short time to expected payment or receipt of cash. Please refer to Note 4 for further details. |
Prepaid or Guaranteed Licensor Royalties | Prepaid or Guaranteed Licensor Royalties The Company’s royalty expenses consist of fees that it pays to content owners for the use of their brands, properties and other licensed content, including trademarks and copyrights, in the development of the Company’s games. Royalty-based obligations are either paid in advance and capitalized on the balance sheet as prepaid royalties or accrued as incurred and subsequently paid. These royalty-based obligations are expensed to cost of revenue at the greater of the revenue derived from the relevant game multiplied by the applicable contractual rate or an effective royalty rate based on expected net product sales. The Company’s contracts with some licensors include minimum guaranteed royalty payments, which are payable regardless of the ultimate revenue generated from end users. In accordance with ASC 440-10, Commitments (“ASC 440”), the Company recorded a minimum guaranteed royalty liability of $11,614 and $26,433 as of December 31, 2017 and 2016, respectively. When no significant performance remains with the licensor, the Company initially records each of these guarantees as an asset and as a liability at the contractual amount. When significant performance remains with the licensor, the Company records royalty payments as an asset when actually paid and as a liability when incurred, rather than upon execution of the contract. The classification of minimum royalty payment obligations between long-term and short-term is determined based on the expected timing of recoupment of earned royalties calculated on projected revenue for the licensed IP games. Each quarter, the Company evaluates the realization of its prepaid royalties as well as any recognized guarantees not yet paid to determine amounts that it deems unlikely to be realized through product sales. The Company uses estimates of revenue, cash flows and net margins to evaluate the future realization of prepaid royalties, license fees, and guarantees. This evaluation considers multiple factors such as the term of the agreement, forecasted demand, game life cycle status, game development plans, and current and anticipated sales levels, as well as other qualitative factors such as the success of similar games and similar genres on mobile devices published by the Company and its competitors and/or other game platforms (e.g., consoles and personal computers) utilizing the intellectual property. To the extent that this evaluation indicates that the remaining prepaid and guaranteed royalty payments are not recoverable, the Company records an impairment charge to cost of revenue in the period in which impairment is indicated. The Company recorded impairment charges to cost of revenue of $27,323, $30,107, and $2,502 related to prepaid guaranteed royalties related to certain of its celebrity license agreements, and certain other prepaid royalties during the years ended December 31, 2017, 2016, and 2015, respectively. The impairment charges recorded during the year ended December 31, 2016 also included impairment of prepaid royalties and license fees paid to an affiliate of Tencent Holdings Limited (“Tencent”), one of the Company’s principal stockholders related to the Company’s game, Rival Fire . |
Goodwill and Intangible Assets | Goodwill and Intangible Assets In accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company’s goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, the Company performs its annual impairment review of its goodwill balance as of September 30 or more frequently if triggering events occur. This impairment review involves a multiple-step process as follows: Step — 0 The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the two-step goodwill impairment test. Step — 1 The Company compares the fair value of each of its reporting units to the carrying value including goodwill of that unit. For each reporting unit where the carrying value, including goodwill, exceeds the unit’s fair value, the Company moves on to step 2. If a unit’s fair value exceeds the carrying value, no further work is performed and no impairment charge is necessary. Step — 2 The Company performs an allocation of the fair value of the reporting unit to its identifiable tangible and intangible assets (other than goodwill) and liabilities. This allows the Company to derive an implied fair value for the unit’s goodwill. The Company then compares the implied fair value of the reporting unit’s goodwill with the carrying value of the unit’s goodwill. If the carrying amount of the unit’s goodwill is greater than the implied fair value of its goodwill, an impairment charge would be recognized for the excess. In 2017, 2016 and 2015, the Company did not record any goodwill impairment charges as it was determined that it was more likely than not that the fair values of the reporting units exceeded their respective carrying values. Purchased intangible assets with finite lives are amortized using the straight-line method over their useful lives ranging from one to nine years and are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment (“ASC 360”). |
Long-Lived Assets | Long-Lived Assets The Company evaluates its long-lived assets, including property and equipment and intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable in accordance with ASC 360. Factors considered important that could result in an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of acquired assets, significant negative industry or economic trends, and a significant decline in the Company’s stock price for a sustained period of time. Impairment exists if the carrying amounts of such assets exceed the estimates of future undiscounted cash flows expected to be generated by such assets. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s estimated fair value. Fair value is generally measured based on either quoted market prices, if available, or a discounted cash flow analysis. |
Property and Equipment | Property and Equipment The Company states property and equipment at cost. The Company computes depreciation or amortization using the straight-line method over the estimated useful lives of the respective assets or, in the case of leasehold improvements, the lease term of the respective assets, whichever is shorter. The depreciation and amortization periods for the Company’s property and equipment are as follows: Computer equipment Three years Computer software Two to Three years Furniture and fixtures Three years Leasehold improvements Shorter of the estimated useful life or remaining term of lease |
Research and Development Costs | Research and Development Costs The Company charges costs related to research, design and development of products to research and development expense as incurred. The types of costs included in research and development expenses include salaries, third party development cost, contractor fees and allocated facilities costs. |
Software Development Costs | Software Development Costs The Company applies the principles of ASC 985-20, Software-Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed (“ASC 985-20”). ASC 985-20 requires that software development costs incurred in conjunction with product development be charged to research and development expense until technological feasibility is established. Thereafter, until the product is released for sale, software development costs must be capitalized and reported at the lower of unamortized cost or net realizable value of the related product. The Company has adopted the “tested working model” approach to establishing technological feasibility for its games. Under this approach, the Company does not consider a game in development to have passed the technological feasibility milestone until the Company has completed a model of the game that contains essentially all the functionality and features of the final game and has tested the model to ensure that it works as expected. To date, the Company has not incurred significant costs between the establishment of technological feasibility and the release of a game for sale; thus, the Company has expensed all software development costs as incurred. The Company considers the following factors in determining whether costs can be capitalized: the uncertainty regarding a game’s revenue-generating potential and its historical practice of canceling games at any stage of the development process. |
Internal Use Software | Internal Use Software The Company recognizes internal use software development costs in accordance with ASC 350-40, Intangibles-Goodwill and Other-Internal Use Software (“ASC 350-40”) and ASU 2015-05, Cloud Computing Arrangements . The Company capitalizes software development costs, including costs incurred to purchase third-party software, beginning when it determines certain factors are present including, among others, that technology exists to achieve the performance requirements and/or buy versus internal development decisions, which the Company equates to the application development stage. The Company capitalized certain internal use software costs totaling approximately $924, $728 and $615 during the years ended December 31, 2017, 2016, and 2015, respectively. The estimated useful life of costs capitalized is generally three years. During the years ended December 31, 2017, 2016 and 2015, the amortization of capitalized software costs totaled approximately $1,031, $998 and $1,155, respectively. Capitalized internal use software development costs are included in property and equipment, net. |
Income Taxes | Income Taxes In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This update requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. ASU 2015-17 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. This update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early application is permitted as of the beginning of the interim or annual reporting period. The Company adopted ASU 2015-17 on a prospective basis as of December 31, 2015. The adoption of ASU 2015-17 did not have a material impact on the Company’s consolidated financial statements. The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in its financial statements or tax returns. Under ASC 740, the Company determines deferred tax assets and liabilities based on the temporary difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which it expects the differences to reverse. The Company establishes valuation allowances when necessary to reduce deferred tax assets to the amount it expects to realize. The Company accounts for uncertain tax positions in accordance with ASC 740, which requires companies to adjust their financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. ASC 740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. |
Restructuring | Restructuring The Company accounts for costs associated with employee terminations and other exit activities in accordance with ASC 420, Exit or Disposal Cost Obligations (“ASC 420”). The Company records employee termination benefits as an operating expense when it communicates the benefit arrangement to the employee and it requires no significant future services, other than a minimum retention period, from the employee to earn the termination benefits. |
Stock-Based Compensation | Stock-Based Compensation The Company applies the fair value provisions of ASC 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), and performance stock options (“PSOs”). The number of PSUs and PSOs earned and eligible to vest will be determined based on achievement of specified financial performance measures. ASC 718 requires companies to estimate the fair value of stock-option awards on the grant date using an option pricing model. The fair value of stock options and PSOs and stock purchase rights granted pursuant to the Company’s equity incentive plans and 2007 Employee Stock Purchase Plan (“ESPP”), respectively, is determined using the Black-Scholes valuation model. The determination of fair value is affected by the stock price, as well as assumptions regarding subjective variables such as expected employee exercise behavior and expected stock price volatility over the expected term of the award. Generally, these assumptions are based on historical information and judgment is required to determine if historical trends may be indicators of future outcomes. Effective January 1, 2017, the Company no longer estimates forfeitures but accounts for them as and when they occur. Changes to the assumptions used in the Black-Scholes option valuation calculation, as well as future equity granted or assumed through acquisitions could significantly impact the compensation expense the Company recognizes. The cost of RSUs and PSUs is determined using the fair value of the Company’s common stock based on the quoted closing price of the Company’s common stock on the date of grant. Compensation cost for stock options, RSUs and performance based awards with a single vesting date is amortized ratably over the requisite service period. For performance-based awards that have multiple vesting dates, the compensation cost is recognized ratably over the requisite service period for each tranche, whereby each vesting tranche is treated as a separate award for determining the requisite service period. The compensation cost for performance based awards may be adjusted over the vesting period based on interim estimates of performance against the pre-set financial performance measures. The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC 718 and ASC 505-50. |
Advertising Expenses | Advertising Expenses The Company expenses the production costs of advertising, including direct response advertising, the first time the advertising takes place. Advertising expense was $88,775, $37,408 and $38,481 in the years ended December 31, 2017, 2016 and 2015, respectively. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of two components, net loss and other comprehensive income/(loss). Other comprehensive income/(loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of stockholders’ equity but are excluded from net loss. The Company’s other comprehensive income/(loss) included foreign currency translation adjustments from those subsidiaries not using the U.S. Dollar as their functional currency, and a reclassification to net loss from the write-off of cumulative translation adjustment. |
Foreign Currency Translation | Foreign Currency Translation In preparing its consolidated financial statements, the Company translates the financial statements of its foreign subsidiaries from their functional currencies, the local currency, into U.S. Dollars. This process resulted in unrealized exchange gains and losses, which are included as a component of accumulated other comprehensive income/(loss) within stockholders’ deficit. However, if the functional currency is deemed to be the U.S. Dollar, any gain or loss associated with the translation of these financial statements would be included in other expense within the Company’s consolidated statements of operations. Cumulative foreign currency translation adjustments include any gain or loss associated with the translation of a subsidiary’s financial statements when the functional currency of a subsidiary is the local currency. If the Company disposes of any of its subsidiaries, any cumulative translation gains or losses would be realized and recorded in other expense within the Company’s consolidated statement of operations in the period during which the disposal occurs. If the Company determines that there has been a change in the functional currency of a subsidiary relative to the U.S. Dollar, any translation gains or losses arising after the date of change would be included in other expense within the Company’s consolidated statement of operations. |
Business Combination | Business Combination The Company applies the accounting standard related to business combinations, ASC 805, Business Combinations (“ASC 805’). The standard requires recognition of assets acquired, liabilities assumed, and contingent consideration at their fair value on the acquisition date with subsequent changes recognized in earnings; requires acquisition-related expenses and restructuring costs to be recognized separately from the business combination and expensed as incurred; requires in-process research and development to be capitalized at fair value as an indefinite-lived intangible asset until completion or abandonment; and requires that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period be recognized as a component of provision for taxes. The Company accounts for acquisitions of entities or assets that include inputs and processes and have the ability to create outputs as business combinations. The purchase price of the acquisition is allocated to tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs are expensed as incurred. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, these estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the preliminary purchase price allocation period, the Company records adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period in its operating results in the period in which the adjustments were determined. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The new guidance, which simplifies the accounting and presentation for share-based payments, provides for a number of amendments which impact the accounting for income taxes and the accounting for forfeitures. ASU 2016-09 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016 and requires varied adoption methods for each respective amendment. The Company adopted this guidance in the first quarter of 2017 and elected to change its policy on accounting for forfeitures and recognize them as they occur using the modified retrospective transition method. This resulted in a cumulative-effect adjustment of $148 between opening accumulated deficit and additional paid in capital balance as of January 1, 2017. In addition, the other amendments related to accounting for income taxes and statutory tax withholding requirements were adopted using a prospective transition method and did not have a material impact on the Company’s consolidated financial statements. In December 2016, the FASB issued ASU No. 2016-19, Technical Corrections and Improvements . The amendments in ASU No. 2016-19 represent changes to clarify the accounting standard codification, correct unintended application of guidance, or make minor improvements to the accounting standards codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. For public companies, the standard is effective immediately for amendments that do not have transition guidance. Amendments that are subject to transition guidance, the effective date is interim and annual reporting periods beginning after December 15, 2016. The Company adopted the standard immediately upon issuance for amendments that do not have transition guidance and effective January 1, 2017 for amendments that are subject to transition guidance. The adoption of the standard did not have an impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. It is effective prospectively for the annual period ending December 31, 2018 and interim periods within that annual period. Early adoption is permitted. The impact of the new standard on the Company's consolidated financial statements subsequent to adoption will be dependent on the terms and conditions of any modifications made to share-based awards after fiscal 2017. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350) : Simplifying the Test for Goodwill Impairment . This new accounting standard update simplifies the measurement of goodwill by eliminating the Step 2 impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance requires an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new guidance becomes effective for goodwill impairment tests in fiscal years beginning after December 15, 2019, though early adoption is permitted. The Company is currently assessing the impact of this new guidance . In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) , which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for interim and annual periods beginning after December 15, 2017, and will be applied on a prospective basis. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. The standard will be effective in the first quarter of fiscal 2018. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . ASU No. 2016-16 requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU No. 2016-15 addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements . In February 2016, the FASB issued ASU No. 2016-02, Leases . The guidance requires lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual and interim periods beginning after December 31, 2018. The updated standard mandates a modified retrospective transition method with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall - Recognition and Measurement of Financial Assets and Financial Liabilities . The guidance requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for a practicability exception. The updated standard is effective for interim and annual reporting periods beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements . In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Under the standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted for annual reporting periods beginning after December 15, 2016. The Company will adopt the new standard in the first quarter of 2018. The FASB recently issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. The standard permits the use of either a full retrospective or modified retrospective transition method. The Company will apply the modified retrospective approach when it adopts the standard in the first quarter of 2018. The Company has completed the evaluation of the impact of the new standard in relation to the revenue recognition of all of its material revenue arrangements. Based on this evaluation, the Company has determined that under the new standard the Company will no longer defer revenue earned from offer advertisements. Fees received from offer advertisements that result in users receiving virtual currency for redemption within a game will now be recognized at the time such advertisements are delivered and reported to the Company as the performance obligations are satisfied when the advertisement has been displayed. This change will result in a cumulative transition adjustment of approximately $8,826 which will reduce the Company’s accumulated deficit, deferred revenue and deferred royalties in the first quarter of 2018. The adoption of the new standard is not expected to have any other material impact on the Company’s financial statements. Further, the Company will continue to be considered the principal in its transactions and as the primary obligor to end-users for smartphone games distributed through Digital Storefronts and advertisements served through its advertising service providers. Therefore, revenue related to these arrangements will continue to be recognized on a gross basis if the necessary information about the gross amounts or platform fees charged, before any adjustments, is made available to the Company by the Digital Storefronts and advertising service providers. The Company does not anticipate that its internal control framework will materially change, but rather existing internal controls will be modified and augmented as necessary to implement the new revenue standard. The Company is currently in the process of evaluating the required financial statement disclosures to allow users of its financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with its customers. . |
The Company And Summary of Si26
The Company And Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Revenue Concentration | Year Ended December 31, 2017 2016 2015 Apple 54.2 % 52.7 % 51.7 % 30.3 % 27.6 % 27.4 % |
Schedule of Depreciation And Amortization Periods for Property and Equipment | Computer equipment Three years Computer software Two to Three years Furniture and fixtures Three years Leasehold improvements Shorter of the estimated useful life or remaining term of lease |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net Loss Per Share | |
Computation of Net Loss Per Share | Year Ended December 31, 2017 2016 2015 Net loss $ (97,570) $ (87,440) $ (7,185) Shares used to compute net loss per share: Weighted average common shares outstanding 135,715 132,808 122,414 Weighted average common shares subject to restrictions — (1,004) (3,639) Weighted average shares used to compute basic and diluted net loss per share 135,715 131,804 118,775 Net loss per share - basic and diluted (0.72) (0.66) (0.06) |
Schedule of Anti-Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share | Year Ended December 31, 2017 2016 2015 Warrants to purchase common stock 4,173 4,267 3,832 Unvested common shares subject to restrictions — 1,004 3,639 Options to purchase common stock 16,462 8,490 6,804 RSUs 7,545 7,688 5,776 28,180 21,449 20,051 |
Business Combinations _ Dives28
Business Combinations / Divestiture (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Dairy Free, Inc. | |
Business Acquisition [Line Items] | |
Fair Values of Assets Acquired and Liabilities Assumed | Assets acquired: Cash and cash equivalents $ 341 Intangible assets: In-process research and development 2,700 Other current assets 32 Goodwill 573 Total assets 3,646 Liabilities assumed: Deferred tax liability (294) Other accrued liabilities (2) Total liabilities assumed (296) Net acquired assets $ 3,350 |
CrowdStar | |
Business Acquisition [Line Items] | |
Fair Values of Assets Acquired and Liabilities Assumed | Assets acquired: Cash and cash equivalents $ 4,492 Accounts receivable 3,905 Prepaid expenses 521 Other current assets 34 Fixed assets 315 Intangible assets: Titles, content and technology 16,000 Goodwill 28,776 Total assets 54,043 Liabilities assumed: Accounts payable (584) Accrued liabilities (4,284) Deferred revenue (1,500) Note payable - current portion (1,279) Long term liabilities (935) Total liabilities assumed (8,582) Net acquired assets $ 45,461 |
Plain Vanilla Corp. | |
Business Acquisition [Line Items] | |
Fair Values of Assets Acquired and Liabilities Assumed | Fair value of purchase consideration: $ Assets acquired: Cash $ Accounts receivable Intangible assets: Title, content and technology Total Assets acquired $ |
CrowdStar Inc and Plain Vanilla | |
Business Acquisition [Line Items] | |
Pro Forma Financial Information | Year ended December 31, (unaudited) 2017 2016 2015 Total pro forma revenue $ 286,827 $ 245,483 $ 287,828 Pro forma net loss (98,450) (100,018) (28,154) Pro forma net loss per share - basic (0.73) (0.76) (0.24) Pro forma net loss per share - diluted (0.73) (0.76) (0.24) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Schedule of Assets and Liabilities Presented at Fair Value | As of December 31, 2017, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 December 31, 2017 Financial Assets Cash and cash equivalents $ 63,764 $ — $ — $ 63,764 Restricted cash 602 — — 602 Other investments — — 1,410 1,410 Total Financial Assets $ 64,366 $ — $ 1,410 $ 65,776 As of December 31, 2016, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 December 31, 2016 Financial Assets Cash and cash equivalents $ 102,102 $ — $ — $ 102,102 Restricted cash 1,312 — — 1,312 Total Financial Assets $ 103,414 $ — $ — $ 103,414 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments | |
Schedule of Changes in Fair Value | Year ended December 31, 2016 Fair value of Asset at the Impairment purchase consideration Asset at the beginning of of cost method Decrease in for business end of the period Additions investment fair value acquisition the period Convertible promissory note investment in Plain Vanilla Corp. $ — $ 5,100 $ — $ (1,900) $ (3,200) $ — Call option to acquire Plain Vanilla Corp. $ — $ 2,400 $ (2,400) — $ — $ — |
Schedule of Fair Value Assumptions | Nine Months Ended September 30, 2016 Dividend yield — Risk-free interest rate 0.41 Expected volatility 63.88 Expected term (in years) 0.68 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Components | |
Schedule of Components of Accounts Receivable | December 31, 2017 2016 Accounts receivable $ 35,510 $ 22,314 Less: Allowance for doubtful accounts (837) (837) $ 34,673 $ 21,477 |
Schedule of Movement in Allowance for Doubtful Accounts | Balance at Balance at Beginning of End of Description Year Additions Deductions Year Year ended December 31, 2017 $ 837 $ - $ - $ 837 Year ended December 31, 2016 $ 716 $ 168 $ (47) $ 837 Year ended December 31, 2015 $ 297 $ 419 $ - $ 716 |
Schedule of Components of Prepaid Expenses and Other Assets | December 31, 2017 2016 Deferred platform commission fees 20,446 11,571 Deferred royalties 4,364 3,275 Deposits 5,464 960 Other 5,269 3,180 $ 35,543 $ 18,986 |
Schedule of Components of Property and Equipment | December 31, 2017 2016 Computer equipment $ 6,051 $ 7,085 Furniture and fixtures 1,666 1,054 Software 3,294 8,180 Leasehold improvements 9,857 4,955 20,868 21,274 Less: Accumulated depreciation and amortization (6,238) $ 14,630 $ 5,640 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets | |
Schedule of Carrying Amounts and Accumulated Amortization of Acquired Intangible Assets | December 31, 2017 December 31, 2016 Estimated Gross Accumulated Net Gross Accumulated Net Useful Carrying Amortization Carrying Carrying Amortization Carrying Life Value * Expense * Value * Value * Expense * Value * Intangible assets amortized to cost of revenue: Titles, content and technology 3 - 5 yrs $ 40,317 $ (27,248) $ 13,069 $ 40,942 $ (19,255) $ 21,687 Carrier contract and related relationships 5 yrs 5,000 (3,398) 1,602 14,029 (11,427) 2,602 Licensed content 2.5 - 5 yrs — — — 2,334 (2,334) — Service provider license 9 yrs — — — 212 (212) — Trademarks 7 yrs 5,000 (4,107) 893 5,117 (3,510) 1,607 In-process research and development N/A 2,700 — 2,700 — — — Total intangibles assets $ 53,017 $ (34,753) $ 18,264 $ 62,634 $ (36,738) $ 25,896 * Including impact of foreign exchange |
Schedule of Expected Amortization Related to Intangible Assets | Amortization to Be Included in Cost of Year Ending December 31, Revenue 2018 $ 5,870 2019 4,936 2020 3,258 2021 1,500 Total intangible assets subject to amortization 15,564 In-process research and development* 2,700 Total intangible assets, net $ 18,264 * The in-process research and development intangible asset will be amortized on a straight-line basis over its estimated life of three years upon successful completion of the game under development. |
Schedule of Goodwill | December 31, 2017 December 31, 2016 Goodwill $ 189,943 $ 161,001 Accumulated impairment losses (73,111) (73,111) Balance as of January 1 116,832 87,890 Goodwill acquired during the year 573 29,029 Effects of foreign currency exchange 42 (87) Write off from the sale of a foreign subsidiary (1,220) — Balance as of period ended $ 116,227 $ 116,832 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of Future Minimum Lease Payments under Non-Cancelable Operating Leases | Minimum Operating Lease Year Ending December 31, Payments 2018 $ 6,430 2019 5,975 2020 5,380 2021 4,617 2022 and thereafter 29,532 $ 51,934 |
Schedule of Future Minimum Guaranteed Royalty Commitments | Future Future Minimum Minimum Guarantee Developer Year Ending December 31, Commitments Commitments 2018 $ 4,714 $ 250 2019 4,600 — 2020 2,300 — $ 11,614 $ 250 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Schedule of Assumptions Used to Estimate Fair Value of Warrants | Year Ended December 31, 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 1.65 % 1.76 % 1.18 % Expected volatility 51.81 % 57.54 % 53.40 % Expected term (in years) 3.52 4.78 5.00 |
Schedule of Warrants Outstanding | Number Weighted of Shares Average Outstanding Exercise Average Under Price per Contractual Warrant Share Term Warrants outstanding, December 31, 2015 4,267 $ 3.61 5.50 Granted - - Exercised - - Warrants outstanding, December 31, 2016 4,267 $ 3.61 4.78 Granted - - Exercised (1,000) 3.00 Warrants outstanding, December 31, 2017 3,267 $ 3.79 5.33 |
Stock Option and Other Benefi35
Stock Option and Other Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Company's RSU Activity | Weighted Number of Average Aggregate Units Grant Date Intrinsic Outstanding Fair Value Value Awarded and unvested, December 31, 2014 4,919 $ 3.87 Granted 4,955 $ 4.87 Vested (1,687) $ 3.58 Forfeited (843) $ 4.48 Awarded and unvested, December 31, 2015 7,344 $ 4.40 Granted 5,094 $ 2.52 Vested (2,422) $ 4.51 Forfeited (1,792) $ 3.86 Awarded and unvested, December 31, 2016 8,224 $ 3.33 Granted 2,360 $ 2.31 Vested (2,863) $ 3.45 Forfeited (1,909) $ 3.01 Awarded and unvested, December 31, 2017 5,812 $ 2.96 RSUs vested and expected to vest at December 31, 2017 5,812 $ 2.96 $ 21,154 |
Summary of Stock Option Activity | Options Outstanding Weighted Number Average Average Aggregate of Exercise Contractual Intrinsic Shares Price Term (Years) Value Balances at December 31, 2014 7,370 $ 3.32 Options granted 1,659 $ 4.65 Options canceled (425) $ 4.00 Options exercised (1,440) $ 2.64 Balances at December 31, 2015 7,164 $ 3.73 Options granted 10,347 $ 2.16 Options canceled (1,273) $ 4.04 Options exercised (425) $ 1.55 Balances at December 31, 2016 15,813 $ 2.74 $ — Options granted 5,346 $ 3.10 Options canceled (2,716) $ 3.16 Options exercised (1,511) $ 2.73 Balances at December 31, 2017 16,932 $ 2.78 7.63 $ 16,046 Options vested and expected to vest at December 31, 2017 16,932 $ 2.78 7.63 $ 16,046 Options exercisable at December 31, 2017 5,886 $ 3.05 4.94 $ 4,789 |
Schedule of Options Outstanding and Exercisable by Exercise Price | Options Outstanding Options Exercisable Weighted Average Remaining Weighted Weighted Range of Contractual Average Average Exercise Number Life Exercise Number Exercise Prices Outstanding (in Years) Price Exercisable Price $ 2.00 - $ 2.03 852 9.01 $ 2.00 $ 2.00 $ 2.10 - $ 2.10 4,477 8.86 $ 2.10 $ 2.10 $ 2.13 - $ 2.13 2,700 8.78 $ 2.13 $ 2.13 $ 2.14 - $ 2.74 2,072 7.13 $ 2.48 $ 2.49 $ 2.83 - $ 3.29 2,065 3.08 $ 3.09 $ 3.11 $ 3.56 - $ 3.56 39 9.70 $ 3.56 - - $ 3.59 - $3.59 2,788 9.78 $ 3.59 - - $ 3.65 - $ 5.26 1,698 4.54 $ 4.14 $ 4.14 $ 5.52 - $ 6.54 41 4.75 $ 5.97 $ 5.99 $ 6.67- $ 6.67 200 7.42 $ 6.67 200 $ 6.67 $ 2.00 - $ 6.67 16,932 7.63 $ 2.78 5,886 $ 3.05 |
Schedule of Assumptions Used to Estimate Fair Value of Options | Performance Stock Options: Year Ended December 31, 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 2.07 % — % — % Expected volatility 63.3 % — % — % Expected term (years) 5.81 — — Stock Options: Year Ended December 31, 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 1.76 % 1.39 % 1.34 % Expected volatility 57.8 % 52.3 % 51.8 % Expected term (years) 4.00 4.00 4.00 |
Schedule of Stock-Based Compensation Expense by Line Item | Year Ended December 31, 2017 2016 2015 Research and development $ 6,460 $ 4,567 $ 3,563 Sales and marketing 1,289 1,091 1,082 General and administrative 7,314 7,605 7,041 Total stock-based compensation expense $ 15,063 $ 13,263 $ 11,686 |
Schedule of compensation expense related to unvested awards | The following table summarizes total compensation expense related to unvested awards not yet recognized as of December 31, 2017: Unrecognized Compensation Expense for Unvested Awards Stock options $ RSUs PSUs (1) PSOs (1) Total unrecognized compensation expense $ (1) The unrecognized compensation expense for PSOs and PSUs vesting in FY2020 and FY2021 is not included in the table above as the Company does not have a reasonable basis upon which to estimate the vesting probability of such awards in those future periods. |
PSUs | |
Summary of Company's RSU Activity | Weighted Number of Average Aggregate Units Grant Date Intrinsic Outstanding Fair Value Value Awarded and unvested, December 31, 2016 - $ - Granted $ Vested - $ - Forfeited - $ - Awarded and unvested, December 31, 2017 $ PSUs vested and expected to vest at December 31, 2017 $ $ |
Performance Stock Options | |
Summary of Stock Option Activity | Weighted Number of Average Aggregate Share Exercise Intrinsic Outstanding Price Value Balance as of December 31, 2016 - $ - Granted $ Vested - $ - Forfeited $ Balance as of December 31, 2017 $ Performance stock options vested and expected to vest at December 31, 2017 $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Component of Loss Before Income Taxes By Tax Jurisdiction | Year Ended December 31, 2017 2016 2015 United States $ (97,503) $ (87,085) $ (7,819) Foreign (893) (656) 775 Loss before income taxes $ (98,396) $ (87,741) $ (7,044) |
Components of Income Tax Provision | The components of income tax benefit/(expense) were as follows: Year Ended December 31, Current: 2017 2016 2015 Federal $ 947 $ 127 $ (24) State (10) (6) (5) Foreign (521) (86) (183) 416 35 (212) Deferred: Federal 294 328 — Foreign 116 (62) 71 410 266 71 Total: Federal 1,241 455 (24) State (10) (6) (5) Foreign (405) (148) (112) $ 826 $ 301 $ (141) |
Difference Between Actual Rate and Federal Statutory Rate | The difference between the actual rate and the federal statutory rate was as follows: Year Ended December 31, 2017 2016 2015 Tax at federal statutory rate 34.0 % 34.0 % 34.0 % State tax, net of federal benefit — — (0.1) Foreign rate differential (0.2) (0.1) 1.0 Research and development credit 2.5 0.9 15.9 Stock-based compensation (2.0) (2.9) (8.7) FIN 48 interest and release 0.2 (0.1) 1.8 Others 0.7 0.1 0.1 Deemed dividend from foreign liquidation (0.2) (1.4) — Valuation allowance (34.2) (30.2) (46.1) Effective tax rate 0.8 % 0.3 % (2.1) % |
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following: December 31, 2017 December 31, 2016 US Foreign Total US Foreign Total Deferred tax assets: Fixed assets $ 46 $ 36 $ 82 $ 191 $ 40 $ 231 Net operating loss carryforwards 50,902 608 51,510 55,850 526 56,376 Accruals, reserves and other 14,838 101 14,939 12,006 97 12,103 Foreign tax credit 5,895 151 6,046 6,460 — 6,460 Stock-based compensation 2,476 — 2,476 3,830 — 3,830 Research and development credit 14,317 — 14,317 11,190 — 11,190 Other 2,646 — 2,646 2,011 — 2,011 Total deferred tax assets $ 91,120 $ 896 $ 92,016 $ 91,538 $ 663 $ 92,201 Deferred tax liabilities: Fixed assets $ — $ (16) $ (16) $ — $ (1) $ (1) Intangible assets (2,112) — (2,112) (4,441) (6) (4,447) Net deferred tax assets 89,008 880 89,888 87,097 656 87,753 Less valuation allowance (89,008) (503) (89,511) (87,097) (464) (87,561) Net deferred tax assets $ — $ 377 $ 377 $ — $ 192 $ 192 |
Reconciliation of Total Amounts of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits was as follows: Year Ended December 31, 2017 2016 Beginning balance $ 11,011 $ 9,218 Reductions of tax positions taken during previous years (260) (806) Additions based on uncertain tax positions related to the current period 2,621 2,590 Additions based on uncertain tax positions related to prior periods — 43 Cumulative translation adjustment 19 (34) Ending balance $ 13,391 $ 11,011 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting | |
Schedule of Revenues by Geographic Region | Year Ended December 31, 2017 2016 2015 United States of America $ 216,468 $ 149,031 $ 171,759 Americas, excluding the United States 15,976 9,127 11,538 EMEA 33,180 24,303 36,134 APAC 21,203 18,120 30,469 $ 286,827 $ 200,581 $ 249,900 |
Schedule of Long-Lived Assets by Geographic Location | December 31, 2017 2016 United States of America $ 13,030 $ 3,768 Rest of the World 1,600 1,872 $ 14,630 $ 5,640 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring. | |
Summary of Restructuring Reserve Activity | Restructuring Restructuring Restructuring Restructuring Workforce Facility Other Total Balance as of December 31, 2014 $ — $ — $ — $ — Charges to operations 1,044 — 31 1,075 Non-cash charges/adjustments — — — — Charges settled in cash (734) — — (734) Balance as of December 31, 2015 $ 310 $ — $ 31 $ 341 Charges to operations 1,491 740 48 2,279 Non-cash charges/adjustments — 122 — 122 Charges settled in cash (1,801) (591) (79) (2,471) Balance as of December 31, 2016 $ — $ 271 $ — $ 271 Charges to operations 4,319 1,700 — 6,019 Non-cash charges/adjustments 146 44 — 190 Charges settled in cash (4,322) (1,399) — (5,721) Balance as of December 31, 2017 $ 143 $ 616 $ — $ 759 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Consolidated Statement of Operations Data | For the Three Months Ended 2017 2016 March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, (In thousands) Revenue $ 56,788 $ 68,679 $ 81,148 $ 80,212 $ 54,528 $ 48,363 $ 51,381 $ 46,309 Cost of revenue: Platform commissions, royalties and other 20,860 24,761 28,898 28,980 20,320 18,534 18,918 17,467 Impairment of prepaid royalties and minimum guarantees 792 (d) — 464 (d) 26,067 (d) 43 105 29,836 123 Impairment and amortization of intangible assets 3,262 3,171 2,363 1,535 2,324 2,336 7,320 2,812 Total cost of revenue 24,914 27,932 31,725 56,582 22,687 20,975 56,074 20,402 Gross profit 31,874 40,747 49,423 23,630 31,841 27,388 (4,693) 25,907 Operating expenses: Research and development 25,032 23,989 22,004 21,395 20,312 20,721 20,080 20,766 Sales and marketing 17,287 30,952 29,776 26,341 12,624 10,935 10,104 14,387 General and administrative 8,497 8,678 8,698 8,552 7,984 7,096 7,011 8,134 Restructuring charge 3,712 (a) 926 (b) 1,402 (c) (21) 106 2,116 57 — Total operating expenses 54,528 64,545 61,880 56,267 41,026 40,868 37,252 43,287 Income/(loss) from operations (22,654) (23,798) (12,457) (32,637) (9,185) (13,480) (41,945) (17,380) Interest and other income/(expense), net (122) 53 (271) (6,510) (e) 469 (4,453) (1,653) (114) Income/(loss) before income taxes (22,776) (23,745) (12,728) (39,147) (8,716) (17,933) (43,598) (17,494) Income tax benefit/(provision) 12 177 1,057 (420) 166 (16) (129) 280 Net income /(loss) $ (22,764) $ (23,568) $ (11,671) $ (39,567) $ (8,550) $ (17,949) $ (43,727) $ (17,214) Net income/(loss) per share Basic $ (0.17) $ (0.17) $ (0.09) $ (0.29) $ $ (0.14) $ (0.33) $ (0.13) Diluted $ (0.17) $ (0.17) $ (0.09) $ (0.29) $ $ (0.14) $ (0.33) $ (0.13) (a) Includes $2,678 of restructuring charges relating to employee termination costs in the Company’s Long Beach, San Francisco, Portland, Bellevue, and APAC offices, and $1,034 of restructuring charges relating to facility costs in the Company’s Portland and Bellevue offices. (b) Includes $780 of restructuring charges relating to employee termination costs in the Company’s APAC, Portland, Long Beach and Bellevue offices, and $146 of restructuring charges relating to facility costs in the Company’s Portland and China offices. (c) Includes $909 of restructuring charges relating to employee termination costs in the Company’s San Francisco and Long Beach offices, and $493 of restructuring charges relating to facility costs in the Company’s Long Beach office. (d) These charges are related to impairment of prepaid guaranteed royalties for certain celebrity license agreements, and certain other prepaid royalties. (e) Mainly related to $6,459 loss on sale of a foreign subsidiary. |
The Company And Summary of Si40
The Company And Summary of Significant Accounting Policies - Concentration Risks (Details) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | ||||
Consumable virtual goods, period of insignificant revenue | 3 years | |||
Active User, Activity Period | 30 days | |||
Post-launch period for inclusion in revenue recognition model | 120 days | |||
Maximum | ||||
Concentration Risk [Line Items] | ||||
Durable virtual goods, estimated useful life | 8 months | |||
Minimum | ||||
Concentration Risk [Line Items] | ||||
Durable virtual goods, estimated useful life | 3 months | |||
Revenues from customers | Customer Concentration Risk | Apple | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage from customers | 54.20% | 52.70% | 51.70% | |
Revenues from customers | Customer Concentration Risk | Google | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage from customers | 30.30% | 27.60% | 27.40% | |
Accounts Receivable | Customer Concentration Risk | Apple | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage from customers | 58.00% | 43.90% | ||
Accounts Receivable | Customer Concentration Risk | Google | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage from customers | 17.10% | 22.30% | ||
Accounts Receivable | Customer Concentration Risk | Jirbo | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage from customers | 10.80% | |||
Accounts Receivable | Customer Concentration Risk | Fyber | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage from customers | 10.50% |
The Company And Summary of Si41
The Company And Summary of Significant Accounting Policies - Licensor Royalties, Goodwill and Intangible Assets (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)individual | Dec. 31, 2016USD ($)individual | Dec. 31, 2015USD ($)individual | Dec. 31, 2014USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||
Future minimum royalty payments | $ 11,614 | $ 26,433 | ||
Impairment charges to cost of revenues | $ 27,323 | $ 30,107 | $ 2,502 | |
Number of principal stockholders related to impairment charges | individual | 1 | 1 | 1 | |
Goodwill impairment charges | $ 0 | $ 0 | $ 0 | $ 0 |
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets estimated useful life | 1 year | 1 year | ||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets estimated useful life | 9 years | 9 years |
The Company And Summary of Si42
The Company And Summary of Significant Accounting Policies - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Property plant and Equipment useful life | 3 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property plant and Equipment useful life | 2 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property plant and Equipment useful life | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property plant and Equipment useful life | 3 years |
The Company And Summary of Si43
The Company And Summary of Significant Accounting Policies - Internal Use Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Internal Use Software [Abstract] | |||
Capitalized internal use software costs | $ 924 | $ 728 | $ 615 |
Amortization of capitalized software costs | $ 1,031 | $ 998 | $ 1,155 |
Capitalized software costs | |||
Internal Use Software [Abstract] | |||
Intangible assets estimated useful life | 3 years | ||
Minimum | |||
Internal Use Software [Abstract] | |||
Intangible assets estimated useful life | 1 year | 1 year | |
Maximum | |||
Internal Use Software [Abstract] | |||
Intangible assets estimated useful life | 9 years | 9 years |
The Company And Summary of Si44
The Company And Summary of Significant Accounting Policies - Advertising Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Advertising Expenses [Abstract] | |||
Advertising expense | $ 88,775 | $ 37,408 | $ 38,481 |
The Company And Summary of Si45
The Company And Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained Earnings (Accumulated Deficit) | $ (436,110) | $ (338,688) | ||
Accounting Standards Update 2016 - 09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment | $ (148) | |||
Retained Earnings (Accumulated Deficit) | $ 8,826 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||
Net loss | $ (39,567) | $ (11,671) | $ (23,568) | $ (22,764) | $ (17,214) | $ (43,727) | $ (17,949) | $ (8,550) | $ (97,570) | $ (87,440) | $ (7,185) |
Shares used to compute net loss per share: | |||||||||||
Weighted average common shares outstanding | 135,715 | 132,808 | 122,414 | ||||||||
Weighted average common shares subject to restrictions | (1,004) | (3,639) | |||||||||
Weighted average shares used to compute basic and diluted net loss per share | 135,715 | 131,804 | 118,775 | ||||||||
Net loss per common share - basic and diluted | $ (0.72) | $ (0.66) | $ (0.06) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 28,180 | 21,449 | 20,051 |
Warrants to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 4,173 | 4,267 | 3,832 |
Common shares subject to restrictions | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 1,004 | 3,639 | |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 16,462 | 8,490 | 6,804 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 7,545 | 7,688 | 5,776 |
Business Combinations _ Dives48
Business Combinations / Divestiture - Moscow Studio (Details) shares in Thousands, $ in Thousands | Dec. 31, 2017USD ($)itemshares | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Goodwill write-off | $ 1,220 | ||
Disposed by sale | Moscow Studio and GMRL | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss on divestiture | $ (6,459) | ||
Assignment of contract | $ 10,000 | ||
Goodwill write-off | 1,220 | ||
Net assets written-off | 479 | ||
Disposed by sale | Moscow Studio and GMRL | Saber and MGL | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total cash consideration | 3,226 | 3,226 | 3,226 |
Disposed by sale | Moscow Studio and GMRL | TSA | Saber | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total cash consideration | 514 | 514 | 514 |
Disposed by sale | Moscow Studio and GMRL | TSA | Saber | Maximum | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Bonus payment | $ 500 | ||
Accelerated vesting | shares | 150 | ||
Disposed by sale | Moscow Studio and GMRL | APLA | MGL | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of mobile games sold | item | 4 | ||
Disposed by sale | Moscow Studio and GMRL | Celebrity Game | MGL | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Minimum guarantee and other payments obligation | $ 1,500 | 1,500 | 1,500 |
Disposed by sale | Moscow Studio and GMRL | SPA and APLA | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total cash consideration | 3,226 | 3,226 | 3,226 |
Cash consideration due and payable upon completion of transition | $ 1,500 | $ 1,500 | $ 1,500 |
Business Combinations _ Dives49
Business Combinations / Divestiture - Dairy Free Games, Inc. (Details) - USD ($) $ in Thousands | Aug. 01, 2017 | Jan. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible assets: | |||||
Goodwill | $ 116,227 | $ 116,832 | $ 87,890 | ||
Research and development | |||||
Liabilities assumed: | |||||
Business acquisition, transitional costs | $ 2,936 | ||||
General and administrative | |||||
Liabilities assumed: | |||||
Business acquisition, transitional costs | $ 680 | ||||
Maximum | |||||
Liabilities assumed: | |||||
Intangible assets estimated useful life | 9 years | 9 years | |||
Dairy Free, Inc. | |||||
Business Acquisition, Date of Acquisition [Abstract] | |||||
Voting power percent acquired | 100.00% | ||||
Cash paid | $ 2,000 | $ 2,000 | |||
Investment amount | 2,000 | ||||
Fair value of shares previously acquired | 2,000 | ||||
Assets acquired: | |||||
Cash and cash equivalents | 341 | ||||
Intangible assets: | |||||
Other current assets | 32 | ||||
Goodwill | 573 | ||||
Total assets acquired | 3,646 | ||||
Liabilities assumed: | |||||
Deferred tax liability | (294) | ||||
Other accrued liabilities | (2) | ||||
Total liabilities assumed | (296) | ||||
Net acquired assets | 3,350 | ||||
Business acquisition, transitional costs | $ 611 | ||||
Development funding offset against goodwill | 650 | ||||
Dairy Free, Inc. | Research and development | |||||
Liabilities assumed: | |||||
Business acquisition, transitional costs | 269 | ||||
Dairy Free, Inc. | General and administrative | |||||
Liabilities assumed: | |||||
Business acquisition, transitional costs | 342 | ||||
Dairy Free, Inc. | Maximum | |||||
Liabilities assumed: | |||||
Development funding commitment | $ 1,000 | ||||
In-process research and development | |||||
Liabilities assumed: | |||||
Intangible assets estimated useful life | 3 years | ||||
In-process research and development | Dairy Free, Inc. | |||||
Intangible assets: | |||||
Acquired intangible assets | $ 2,700 | ||||
Liabilities assumed: | |||||
Intangible assets estimated useful life | 3 years |
Business Combinations _ Dives50
Business Combinations / Divestiture - CrowdStar, Inc. (Details) - USD ($) $ in Thousands | Dec. 06, 2016 | Nov. 02, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition, Date of Acquisition [Abstract] | |||||
Cash paid to acquire non-controlling interest in Crowdstar | $ 4,667 | ||||
Intangible assets: | |||||
Goodwill | $ 116,227 | $ 116,832 | $ 87,890 | ||
Minimum | |||||
Liabilities assumed: | |||||
Intangible assets estimated useful life | 1 year | 1 year | |||
Maximum | |||||
Liabilities assumed: | |||||
Intangible assets estimated useful life | 9 years | 9 years | |||
CrowdStar | |||||
Business Acquisition, Date of Acquisition [Abstract] | |||||
Voting power percent acquired | 100.00% | 80.60% | |||
Cash paid | $ 45,461 | $ 40,794 | |||
Cash paid to acquire non-controlling interest in Crowdstar | 4,667 | ||||
Assets acquired: | |||||
Cash and cash equivalents | 4,492 | ||||
Accounts receivable | 3,905 | ||||
Prepaid expenses | 521 | ||||
Other current assets | 34 | ||||
Fixed assets | 315 | ||||
Intangible assets: | |||||
Acquired intangible assets | 16,000 | ||||
Goodwill | 28,776 | ||||
Total assets acquired | 54,043 | ||||
Liabilities assumed: | |||||
Accounts payable | (584) | ||||
Accrued liabilities | (4,284) | ||||
Deferred revenue | (1,500) | ||||
Note payable - current portion | (1,279) | ||||
Long term liabilities | (935) | ||||
Total liabilities assumed | (8,582) | ||||
Net acquired assets | $ 45,461 | ||||
Business acquisition, transitional costs | $ 3,616 | $ 802 | |||
CrowdStar | Minimum | |||||
Business Acquisition, Date of Acquisition [Abstract] | |||||
Voting power percent acquired | 90.00% | ||||
Titles, content and technology | CrowdStar | |||||
Intangible assets: | |||||
Acquired intangible assets | $ 16,000 | ||||
Titles, content and technology | CrowdStar | Minimum | |||||
Liabilities assumed: | |||||
Intangible assets estimated useful life | 3 years | ||||
Titles, content and technology | CrowdStar | Maximum | |||||
Liabilities assumed: | |||||
Intangible assets estimated useful life | 5 years | ||||
Research and development | |||||
Liabilities assumed: | |||||
Business acquisition, transitional costs | $ 2,936 | ||||
General and administrative | |||||
Liabilities assumed: | |||||
Business acquisition, transitional costs | $ 680 |
Business Combinations _ Dives51
Business Combinations / Divestiture - Plain Vanilla, Inc. (Details) - USD ($) $ in Thousands | Dec. 19, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets acquired: | ||||
Goodwill | $ 116,227 | $ 116,832 | $ 87,890 | |
Plain Vanilla Corp. | ||||
Business Acquisition [Line Items] | ||||
Forgiveness and cancellation of promissory notes | $ 7,500 | |||
Fair value of investment | 3,200 | |||
Assets acquired: | ||||
Cash | 1,200 | |||
Accounts receivable | 183 | |||
Acquired intangible assets | 1,817 | |||
Total assets acquired | $ 3,200 | |||
Intangible assets estimated useful life | 3 years | |||
Goodwill | $ 0 | |||
Titles, content and technology | Plain Vanilla Corp. | ||||
Assets acquired: | ||||
Acquired intangible assets | $ 1,817 |
Business Combinations _ Dives52
Business Combinations / Divestiture - Valuation Methodology (Details) - USD ($) $ in Thousands | Dec. 06, 2016 | Dec. 31, 2017 |
Minimum | ||
Fair Value Inputs [Abstract] | ||
Fair value assumptions income approach discount rate | 20.00% | |
Maximum | ||
Fair Value Inputs [Abstract] | ||
Fair value assumptions income approach discount rate | 35.00% | |
CrowdStar | ||
Fair Value Inputs [Abstract] | ||
Deferred revenue | $ 1,500 | |
Deferred revenue recognition period | 9 months |
Business Combinations _ Dives53
Business Combinations / Divestiture - Pro forma (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||
Total pro forma revenues | $ 286,827 | $ 245,483 | |
Pro forma net loss | $ (98,450) | $ (100,018) | |
Pro forma net loss per share - basic | $ (0.73) | $ (0.76) | |
Pro forma net loss per share - diluted | $ (0.73) | $ (0.76) | |
CrowdStar Inc and Plain Vanilla | |||
Business Acquisition [Line Items] | |||
Acquisition related entities contribution to the company's gross revenue | $ 2,111 | ||
Acquisition related entities contribution to the company's net losses | 9,194 | ||
Total pro forma revenues | $ 287,828 | ||
Pro forma net loss | $ (28,154) | ||
Pro forma net loss per share - basic | $ (0.24) | ||
Pro forma net loss per share - diluted | $ (0.24) | ||
Dairy Free, Inc. | |||
Business Acquisition [Line Items] | |||
Acquisition related entities contribution to the company's net losses | $ 1,081 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 63,764 | $ 102,102 |
Restricted cash | 602 | 1,312 |
Other Investments | 1,410 | |
Total Financial Assets | 65,776 | 103,414 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 63,764 | 102,102 |
Restricted cash | 602 | 1,312 |
Total Financial Assets | 64,366 | $ 103,414 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Investments | 1,410 | |
Total Financial Assets | $ 1,410 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Dec. 19, 2016 | May 31, 2016 | Jan. 31, 2016 | Dec. 31, 2016 |
Schedule of Cost-method Investments [Line Items] | ||||
Payment for investment | $ 9,500 | |||
Impairment charge | 2,600 | |||
Plain Vanilla Corp. | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Forgiveness and cancellation of promissory notes | $ 7,500 | |||
Plain Vanilla Corp. | Convertible promissory notes | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Investment amount | $ 7,500 | |||
Payment for investment | $ 2,500 | 5,000 | ||
Fair value of investment | $ 3,200 | $ 5,100 | ||
Increase/(decrease) in fair value | (1,900) | |||
Plain Vanilla Corp. | Call Option | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Call option, term from closing of initial investment | 15 months | |||
Fair value of investment | $ 2,400 | |||
Impairment charge | $ 2,400 |
Investments - Changes in Fair V
Investments - Changes in Fair Value (Details) - Plain Vanilla Corp. $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Convertible promissory notes | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Additions | $ (5,100) |
Decrease in fair value included in earnings | (1,900) |
Fair value of purchase price consideration for business acquisition | (3,200) |
Call Option | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Additions | (2,400) |
Decrease in fair value included in earnings | $ (2,400) |
Investments - Fair Value Assump
Investments - Fair Value Assumptions (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Aug. 01, 2017 | Jan. 31, 2016 | |
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract] | |||
Risk-free interest rate (as a percent) | 0.41% | ||
Expected volatility (as a percent) | 63.88% | ||
Expected term (in years) | 8 months 5 days | ||
Dairy Free, Inc. | |||
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract] | |||
Development funding commitment | $ 1,000 | ||
Voting power percent acquired | 100.00% | ||
Dairy Free, Inc. | Preferred stock | |||
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract] | |||
Investment amount | $ 2,000 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Components | ||
Accounts receivable | $ 35,510 | $ 22,314 |
Less: Allowance for doubtful accounts | (837) | (837) |
Accounts receivable, net | $ 34,673 | $ 21,477 |
Balance Sheet Components - Allo
Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Beginning Balance | $ 716 | $ 297 |
Additions | 168 | 419 |
Deductions | (47) | |
Ending Balance | $ 837 | $ 716 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid expenses and Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Deferred platform commission fees | $ 20,446 | $ 11,571 |
Deferred royalties | 4,364 | 3,275 |
Deposits | 5,464 | 960 |
Other | 5,269 | 3,180 |
Prepaid expenses and other assets | $ 35,543 | $ 18,986 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 20,868 | $ 21,274 | |
Less: Accumulated depreciation and amortization | (6,238) | (15,634) | |
Property and equipment, net | 14,630 | 5,640 | |
Depreciation [Abstract] | |||
Depreciation | 3,195 | 2,947 | $ 2,861 |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 6,051 | 7,085 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,666 | 1,054 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,294 | 8,180 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 9,857 | $ 4,955 |
Goodwill And Intangible Asset62
Goodwill And Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 53,017 | $ 62,634 | |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (34,753) | (36,738) | |
Total intangible assets | 18,264 | 25,896 | |
Gross book value of intangible assets written-off | 12,629 | 29,109 | |
Impairment of prepaid royalties and minimum guarantees paid to a related party | $ 0 | $ 9,866 | $ 0 |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 1 year | 1 year | |
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 9 years | 9 years | |
Tencent, a principal stockholder | License fee for Rival Fire | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of prepaid royalties and minimum guarantees paid to a related party | $ 0 | $ 4,597 | |
In-process research and development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 3 years | ||
Intangible assets amortized to cost of revenues | Titles, content and technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 40,317 | 40,942 | |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (27,248) | (19,255) | |
Total intangible assets | $ 13,069 | 21,687 | |
Intangible assets amortized to cost of revenues | Titles, content and technology | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 3 years | ||
Intangible assets amortized to cost of revenues | Titles, content and technology | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 5 years | ||
Intangible assets amortized to cost of revenues | Carrier contract and related relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 5 years | ||
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 5,000 | 14,029 | |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (3,398) | (11,427) | |
Total intangible assets | $ 1,602 | 2,602 | |
Intangible assets amortized to cost of revenues | Licensed content | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value (Including Impact of Foreign Exchange) | 2,334 | ||
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (2,334) | ||
Intangible assets amortized to cost of revenues | Licensed content | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 2 years 6 months | ||
Intangible assets amortized to cost of revenues | Licensed content | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 5 years | ||
Intangible assets amortized to cost of revenues | Service provider license | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 9 years | ||
Gross Carrying Value (Including Impact of Foreign Exchange) | 212 | ||
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (212) | ||
Intangible assets amortized to cost of revenues | Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Estimated Useful Life | 7 years | ||
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 5,000 | 5,117 | |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (4,107) | (3,510) | |
Total intangible assets | 893 | $ 1,607 | |
Intangible assets amortized to cost of revenues | In-process research and development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value (Including Impact of Foreign Exchange) | 2,700 | ||
Total intangible assets | $ 2,700 |
Goodwill And Intangible Asset63
Goodwill And Intangible Assets - Future Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cost of Goods and Services Sold, Depreciation and Amortization [Abstract] | |||||||||||
Amortization of intangible assets | $ 1,535 | $ 2,363 | $ 3,171 | $ 3,262 | $ 2,812 | $ 7,320 | $ 2,336 | $ 2,324 | $ 10,331 | $ 14,792 | $ 9,553 |
Amortization expense, operating | 0 | $ 0 | $ 201 | ||||||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||||||
Total intangible assets | 18,264 | 18,264 | |||||||||
Finite Lived Intangible Assets Excluding Those Under Development [Member] | |||||||||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||||||
2,018 | 5,870 | 5,870 | |||||||||
2,019 | 4,936 | 4,936 | |||||||||
2,020 | 3,258 | 3,258 | |||||||||
2,021 | 1,500 | 1,500 | |||||||||
Total intangible assets | 15,564 | 15,564 | |||||||||
In-process research and development | |||||||||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||||||
Total intangible assets | $ 2,700 | $ 2,700 | |||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years |
Goodwill And Intangible Asset64
Goodwill And Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | |||||||
Goodwill, Gross | $ 189,943 | $ 161,001 | |||||
Accumulated impairment losses | (73,111) | (73,111) | |||||
Goodwill, Net, Beginning Balance | $ 116,227 | $ 116,227 | $ 116,832 | $ 87,890 | $ 116,832 | $ 87,890 | |
Goodwill acquired during the year | 573 | 29,029 | |||||
Effects of foreign currency exchange | 42 | (87) | |||||
Write off from the sale of a foreign subsidiary | (1,220) | ||||||
Goodwill, Net, Ending Balance | 116,227 | 116,227 | 116,832 | 87,890 | |||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |||
Impairment charges | $ 26,067 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) ft² in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2017USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Commitments and Contingencies | ||||
Rent expense | $ 4,472 | $ 4,827 | $ 4,639 | |
Deferred rent balance | 4,940 | 820 | ||
Deferred rent, included in other long-term liabilities | 4,850 | $ 619 | ||
Area of Office | ft² | 57 | |||
Security deposit | $ 1,542 | |||
Contingent security deposit | 1,000 | |||
Contingent security deposit, bookings amount | $ 250,000 | |||
Contingent security deposit, bookings period | 2 years | |||
Deposits for lines of credit to secure obligations under the leases | 492 | |||
Minimum Operating Lease Payments | ||||
2,018 | 6,430 | |||
2,019 | 5,975 | |||
2,020 | 5,380 | |||
2,021 | 4,617 | |||
2022 and thereafter | 29,532 | |||
Total | $ 51,934 |
Commitments and Contingencies66
Commitments and Contingencies - Minimum Guaranteed Royalties (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Current and long-term liabilities | |
Future Minimum Guarantee Commitments | |
Other commitments | $ 9,610 |
Current and long-term assets | |
Future Minimum Guarantee Commitments | |
Other commitments | 9,610 |
Guaranteed royalty commitments | |
Future Minimum Guarantee Commitments | |
2,018 | 4,714 |
2,019 | 4,600 |
2,020 | 2,300 |
Other commitments | 11,614 |
Developer Commitments | |
Future Minimum Guarantee Commitments | |
2,018 | 250 |
Other commitments | $ 250 |
Commitments and Contingencies67
Commitments and Contingencies - Other Commitments (Details) - Indemnification Agreement - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Officers And Directors | |||
Indemnification Agreements [Abstract] | |||
Indemnification liability recorded | $ 0 | $ 0 | $ 0 |
Digital Storefronts | |||
Indemnification Agreements [Abstract] | |||
Indemnification liability recorded | $ 0 | $ 0 | $ 0 |
Stockholders' Equity - Common a
Stockholders' Equity - Common and Preferred Stock (Details) - shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Common Stock [Abstract] | ||
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, reserved for future issuance | 40,556 | |
Preferred Stock [Abstract] | ||
Preferred stock, shares authorized | 5,000 | 5,000 |
Stockholders' Equity - Investme
Stockholders' Equity - Investment (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jun. 03, 2015 | Apr. 29, 2015 | Dec. 31, 2015 |
Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued | 21,000 | ||
Private placement | Red River Investment Limited | |||
Class of Stock [Line Items] | |||
Shares issued | 21,000 | ||
Shares Issued, Price Per Share | $ 6 | ||
Proceeds from Issuance of Common Stock | $ 125,156 | ||
Initial Closing | Red River Investment Limited | |||
Class of Stock [Line Items] | |||
Shares issued | 12,500 | ||
Second Closing | Red River Investment Limited | |||
Class of Stock [Line Items] | |||
Shares issued | 8,500 |
Stockholders' Equity - Celebrit
Stockholders' Equity - Celebrity Warrants (Details) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)itemshares | |
Warrants and Rights Note Disclosure [Abstract] | |||
Non-cash warrant (benefit) expense | $ | $ 631 | $ (55) | $ 2,009 |
Celebrity Warrants | |||
Warrants and Rights Note Disclosure [Abstract] | |||
Number of other entities | item | 1 | ||
Number of shares, if warrants exercised | 1,100 | ||
Non-cash warrant (benefit) expense | $ | $ 569 | ||
Celebrity Warrants August 2015 | |||
Warrants and Rights Note Disclosure [Abstract] | |||
Number of shares, if warrants exercised | 1,000 | ||
Percent of shares that vest upon public announcement of license agreement | 50.00% | ||
Warrant vesting period | 24 months | ||
Celebrity Warrants September 2015 | |||
Warrants and Rights Note Disclosure [Abstract] | |||
Number of shares, if warrants exercised | 100 | ||
Warrant vesting period | 60 months | ||
Percent of shares subject to accelerated vesting | 25.00% | ||
Common Stock | Celebrity Warrants | |||
Warrants and Rights Note Disclosure [Abstract] | |||
Number of shares outstanding under warrant | 1,600 |
Stockholders' Equity - MGM Warr
Stockholders' Equity - MGM Warrant (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2013 | |
Warrants and Rights Note Disclosure [Abstract] | ||||
Noncash Warrant (Benefit) Expense | $ 631 | $ (55) | $ 2,009 | |
Non-cash warrant (benefit) expense | $ 631 | $ (55) | 2,009 | |
MGM Warrant | ||||
Warrants and Rights Note Disclosure [Abstract] | ||||
Number of shares, if warrants exercised | 3,333 | |||
Number of shares outstanding under warrant | 1,667 | |||
James Bond Related Warrants | ||||
Warrants and Rights Note Disclosure [Abstract] | ||||
Noncash Warrant (Benefit) Expense | 1,928 | |||
Non-cash warrant (benefit) expense | $ 1,928 | |||
Shares vested | 1,000 | |||
Warrants to purchase common stock | ||||
Warrants and Rights Note Disclosure [Abstract] | ||||
Number of shares outstanding under warrant | 3,267 | 4,267 | 4,267 | |
Risk-free interest rate | 1.65% | 1.76% | 1.18% | |
Expected volatility | 51.81% | 57.54% | 53.40% | |
Expected term (years) | 3 years 6 months 7 days | 4 years 9 months 11 days | 5 years |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants Outstanding Roll Forward (Details) - Warrants to purchase common stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares Outstanding Under Warrants | |||
Warrants outstanding, beginning balance | 4,267 | 4,267 | |
Granted | 0 | ||
Exercised | (1,000) | 0 | (450) |
Warrants outstanding, ending balance | 3,267 | 4,267 | 4,267 |
Weighted Average Exercise Price | |||
Weighted average exercise price, beginning balance | $ 3.61 | $ 3.61 | |
Granted | 0 | ||
Exercised | 3 | ||
Weighted average exercise price, ending balance | $ 3.79 | $ 3.61 | $ 3.61 |
Average Contractual Term | |||
Average contractual term | 5 years 3 months 29 days | 4 years 9 months 11 days | 5 years 6 months |
Proceeds from exercise of warrants | $ 3,000 | $ 0 | $ 675 |
Stock Option And Other Benefi73
Stock Option And Other Benefit Plans (Details) shares in Thousands | Feb. 22, 2016shares | Aug. 15, 2009shares | Apr. 30, 2017shares | Nov. 30, 2016shares | Jun. 30, 2015shares | Aug. 14, 2009shares | Dec. 31, 2015 | Dec. 31, 2017shares | Dec. 31, 2016shares | Dec. 31, 2015shares | Dec. 31, 2013 | Dec. 31, 2008 | Jun. 03, 2015 | Dec. 31, 2007shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, number of shares | 5,346 | (10,347) | 1,659 | |||||||||||
Common stock, reserved for future issuance | 40,556 | |||||||||||||
Stock Options | Minimum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Contractual term | 6 years | |||||||||||||
Stock Options | Maximum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Contractual term | 10 years | |||||||||||||
Performance Stock Options | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, number of shares | 4,246 | |||||||||||||
2007 Equity Incentive Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock authorized for issuance, increased | 8,000 | 13,000 | ||||||||||||
Carve-out percentage | 5.00% | |||||||||||||
Pool share reduced for each share granted | 1.32 | 1.39 | ||||||||||||
Exercise price, percentage of fair market value of common stock on grant date | 100.00% | |||||||||||||
Number of shares available for grant | 3,569 | |||||||||||||
2007 Equity Incentive Plan | Tranche 1 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Vesting percentage | 33.33% | |||||||||||||
2007 Equity Incentive Plan | Tranche 2 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Vesting percentage | 33.33% | |||||||||||||
2007 Equity Incentive Plan | Tranche 3 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Vesting percentage | 33.33% | |||||||||||||
2007 Equity Incentive Plan | Stock Options | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Employee options, vesting percentage, after first year | 25.00% | |||||||||||||
Employee options, vesting percentage, monthly after first year | 0.02083% | |||||||||||||
Contractual term | 10 years | 6 years | ||||||||||||
2007 Equity Incentive Plan | Stock Options | Minimum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exercise price, percentage of fair market value of common stock on grant date | 85.00% | |||||||||||||
2007 Equity Incentive Plan | Incentive Stock Option [Member] | Minimum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exercise price, percentage of fair market value of common stock on grant date | 100.00% | |||||||||||||
2007 Equity Incentive Plan | Non Qualified Stock Option [Member] | Minimum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exercise price, percentage of fair market value of common stock on grant date | 85.00% | |||||||||||||
2007 Equity Incentive Plan | Non Qualified Stock Option [Member] | Minimum | 10% Stockholder [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exercise price, percentage of fair market value of common stock on grant date | 110.00% | |||||||||||||
2007 Equity Incentive Plan | Performance Stock Options | Creative leaders | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Percentage of annual bonus opportunity replaced | 50.00% | |||||||||||||
2007 Equity Incentive Plan | Performance Stock Options | Executives and creative leaders | Achievement of adjusted EBITDA threshold and 5% below maximum booking goal in 2018 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Percentage of maximum amount of PSO | 50.00% | |||||||||||||
Percentage below maximum booking goal | 5.00% | |||||||||||||
2007 Equity Incentive Plan | Performance Stock Options | Executives and creative leaders | Achievement of adjusted EBITDA threshold and 11% below maximum booking goal in 2018 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Percentage of maximum amount of PSO | 25.00% | |||||||||||||
Percentage below maximum booking goal | 11.00% | |||||||||||||
2007 Employee Stock Purchase Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock authorized for issuance, increased | 4,000 | |||||||||||||
Percentage of outstanding shares reserved for grant increase during each January 1 for the first eight calendar years | 1.00% | |||||||||||||
Maximum shares issued over a plan period | 5,333 | |||||||||||||
Common stock, reserved for future issuance | 667 | |||||||||||||
Number of shares available for grant | 4,285 | |||||||||||||
Maximum offering period share amount | 450 | 200 | 500 | |||||||||||
2007 Equity Incentive and 2008 Equity Inducement Plans | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock authorized for issuance, increased | 6,000 | |||||||||||||
Exercise price, percentage of fair market value of common stock on grant date | 100.00% | |||||||||||||
Common stock, reserved for future issuance | 1,861 |
Stock Option And Other Benefi74
Stock Option And Other Benefit Plans - Share-Based Awards Available for Grant (Details) - shares shares in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2017 | Nov. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based awards granted | (5,346) | 10,347 | (1,659) | |||
Share-based awards canceled | 2,716 | 1,273 | 425 | |||
2007 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Increase in authorized shares | 8,000 | 13,000 | ||||
Shares available, ending balances | 3,569 | |||||
2007 Equity Incentive and 2008 Equity Inducement Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Increase in authorized shares | 6,000 |
Stock Option And Other Benefi75
Stock Option And Other Benefit Plans - RSU Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awarded and unvested, Number of Units Outstanding, beginning balance | 8,224 | 7,344 | 4,919 |
Granted, Number of Units Outstanding | 2,360 | 5,094 | 4,955 |
Vested, Number of Units Outstanding | (2,863) | (2,422) | (1,687) |
Forfeited, Number of Units Outstanding | (1,909) | (1,792) | (843) |
Awarded and unvested, Number of Units Outstanding, ending balance | 5,812 | 8,224 | 7,344 |
Vested and expected to vest, number of units | 5,812 | ||
Awarded and unvested, Weighted Average Grant Date Fair Value, beginning balance | $ 3.33 | $ 4.40 | $ 3.87 |
Granted, Weighted Average Grant Date Fair Value | 2.31 | 2.52 | 4.87 |
Vested, Weighted Average Grant Date Fair Value | 3.45 | 4.51 | 3.58 |
Forfeited, Weighted Average Grant Date Fair Value | 3.01 | 3.86 | 4.48 |
Awarded and unvested, Weighted Average Grant Date Fair Value, ending balance | 2.96 | $ 3.33 | $ 4.40 |
Vested and expected to vest, Weighted Average Grant Date Fair Value | $ 2.96 | ||
Vested and expected to vest, Aggregate Intrinsic Value | $ 21,154 | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, Number of Units Outstanding | 661 | ||
Awarded and unvested, Number of Units Outstanding, ending balance | 661 | ||
Vested and expected to vest, number of units | 661 | ||
Granted, Weighted Average Grant Date Fair Value | $ 3.59 | ||
Awarded and unvested, Weighted Average Grant Date Fair Value, ending balance | 3.59 | ||
Vested and expected to vest, Weighted Average Grant Date Fair Value | $ 3.59 | ||
Vested and expected to vest, Aggregate Intrinsic Value | $ 2,404 |
Stock Option And Other Benefi76
Stock Option And Other Benefit Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Oct. 10, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Number of shares, beginning balances | 15,813 | 7,164 | 7,370 | |
Options granted, number of shares | 5,346 | (10,347) | 1,659 | |
Options canceled, number of shares | (2,716) | (1,273) | (425) | |
Options exercised, number of shares | (1,511) | (425) | (1,440) | |
Number of shares, ending balances | 16,932 | 15,813 | 7,164 | |
Options vested and expected to vest, number of shares | 16,932 | |||
Options exercisable, number of shares | 5,886 | |||
Weighted average exercise price, beginning balances | $ 2.74 | $ 3.73 | $ 3.32 | |
Options granted, weighted average exercise price | 3.10 | 2.16 | 4.65 | |
Options canceled, weighted average exercise price | 3.16 | 4.04 | 4 | |
Options exercised, weighted average exercise price | 2.73 | 1.55 | 2.64 | |
Weighted average exercise price, ending balances | 2.78 | $ 2.74 | $ 3.73 | |
Options vested and expected to vest, weighted average exercise price | 2.78 | |||
Options exercisable, weighted average exercise price | $ 3.05 | |||
Weighted average contractual term, options outstanding | 7 years 7 months 17 days | 7 years 4 months 17 days | ||
Weighted average contractual term, options vested and expected | 7 years 7 months 17 days | |||
Weighted average contractual term, Options exercisable | 4 years 11 months 9 days | |||
Aggregate intrinsic value, options outstanding | $ 16,046 | |||
Aggregate intrinsic value, Options vested and expected to vest | 16,046 | |||
Aggregate intrinsic value, options exercisable | $ 4,789 | |||
Quoted closing price of Company's common stock | $ 3.64 | |||
Cash proceed from option exercise, net | $ 2,564 | $ 294 | $ 3,794 | |
$2.00 - $2.03 | ||||
Range of Exercise Prices, Lower Limit | $ 2 | |||
Range of Exercise Prices, Upper Limit | $ 2.03 | |||
Number of shares, ending balances | 852 | |||
Options exercisable, number of shares | 230 | |||
Weighted average exercise price, ending balances | $ 2 | |||
Options exercisable, weighted average exercise price | $ 2 | |||
Weighted average contractual term, options outstanding | 9 years 4 days | |||
$2.10 - $2.10 | ||||
Range of Exercise Prices, Lower Limit | $ 2.10 | |||
Range of Exercise Prices, Upper Limit | $ 2.10 | |||
Number of shares, ending balances | 4,477 | |||
Options exercisable, number of shares | 942 | |||
Weighted average exercise price, ending balances | $ 2.10 | |||
Options exercisable, weighted average exercise price | $ 2.10 | |||
Weighted average contractual term, options outstanding | 8 years 10 months 10 days | |||
$2.13 - $2.13 | ||||
Range of Exercise Prices, Lower Limit | $ 2.13 | |||
Range of Exercise Prices, Upper Limit | $ 2.13 | |||
Number of shares, ending balances | 2,700 | |||
Options exercisable, number of shares | 787 | |||
Weighted average exercise price, ending balances | $ 2.13 | |||
Options exercisable, weighted average exercise price | $ 2.13 | |||
Weighted average contractual term, options outstanding | 8 years 9 months 11 days | |||
$2.14 - $2.74 | ||||
Range of Exercise Prices, Lower Limit | $ 2.14 | |||
Range of Exercise Prices, Upper Limit | $ 2.74 | |||
Number of shares, ending balances | 2,072 | |||
Options exercisable, number of shares | 719 | |||
Weighted average exercise price, ending balances | $ 2.48 | |||
Options exercisable, weighted average exercise price | $ 2.49 | |||
Weighted average contractual term, options outstanding | 7 years 1 month 17 days | |||
$2.83 - $3.29 | ||||
Range of Exercise Prices, Lower Limit | $ 2.83 | |||
Range of Exercise Prices, Upper Limit | $ 3.29 | |||
Number of shares, ending balances | 2,065 | |||
Options exercisable, number of shares | 1,771 | |||
Weighted average exercise price, ending balances | $ 3.09 | |||
Options exercisable, weighted average exercise price | $ 3.11 | |||
Weighted average contractual term, options outstanding | 3 years 29 days | |||
$3.56 - $3.56 | ||||
Range of Exercise Prices, Lower Limit | $ 3.56 | |||
Range of Exercise Prices, Upper Limit | $ 3.56 | |||
Number of shares, ending balances | 39 | |||
Weighted average exercise price, ending balances | $ 3.56 | |||
Weighted average contractual term, options outstanding | 9 years 8 months 12 days | |||
$3.59 - $3.59 | ||||
Range of Exercise Prices, Lower Limit | $ 3.59 | |||
Range of Exercise Prices, Upper Limit | $ 3.59 | |||
Number of shares, ending balances | 2,788 | |||
Weighted average exercise price, ending balances | $ 3.59 | |||
Weighted average contractual term, options outstanding | 9 years 9 months 11 days | |||
$3.65 - $5.26 | ||||
Range of Exercise Prices, Lower Limit | $ 3.65 | |||
Range of Exercise Prices, Upper Limit | $ 5.26 | |||
Number of shares, ending balances | 1,698 | |||
Options exercisable, number of shares | 1,202 | |||
Weighted average exercise price, ending balances | $ 4.14 | |||
Options exercisable, weighted average exercise price | $ 4.14 | |||
Weighted average contractual term, options outstanding | 4 years 6 months 15 days | |||
$5.52 - $6.54 | ||||
Range of Exercise Prices, Lower Limit | $ 5.52 | |||
Range of Exercise Prices, Upper Limit | $ 6.54 | |||
Number of shares, ending balances | 41 | |||
Options exercisable, number of shares | 35 | |||
Weighted average exercise price, ending balances | $ 5.97 | |||
Options exercisable, weighted average exercise price | $ 5.99 | |||
Weighted average contractual term, options outstanding | 4 years 9 months | |||
$6.67- $6.67 | ||||
Range of Exercise Prices, Lower Limit | $ 6.67 | |||
Range of Exercise Prices, Upper Limit | $ 6.67 | |||
Number of shares, ending balances | 200 | |||
Options exercisable, number of shares | 200 | |||
Weighted average exercise price, ending balances | $ 6.67 | |||
Options exercisable, weighted average exercise price | $ 6.67 | |||
Weighted average contractual term, options outstanding | 7 years 5 months 1 day | |||
$2.00 - $6.67 | ||||
Range of Exercise Prices, Lower Limit | $ 2 | |||
Range of Exercise Prices, Upper Limit | $ 6.67 | |||
Number of shares, ending balances | 16,932 | |||
Options exercisable, number of shares | 5,886 | |||
Weighted average exercise price, ending balances | $ 2.78 | |||
Options exercisable, weighted average exercise price | $ 3.05 | |||
Weighted average contractual term, options outstanding | 7 years 7 months 17 days | |||
Performance Stock Options | ||||
Options granted, number of shares | 4,246 | |||
Options vested, number of shares | 4,170 | |||
Options canceled, number of shares | (76) | |||
Options vested and expected to vest, number of shares | 4,170 | |||
Options granted, weighted average exercise price | $ 3.60 | |||
Options canceled, weighted average exercise price | 3.97 | |||
Weighted average exercise price, ending balances | $ 3.59 | 3.59 | ||
Options vested and expected to vest, weighted average exercise price | $ 3.59 | |||
Weighted average contractual term, options outstanding | 10 years | |||
Aggregate intrinsic value, Options vested and expected to vest | $ 208 |
Stock Option And Other Benefi77
Stock Option And Other Benefit Plans - Weighted Average Assumptions (Details) - $ / shares | 7 Months Ended | 12 Months Ended | 91 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 03, 2015 | |
Performance Stock Options | |||||
Black-Sholes Valuation Assumptions | |||||
Risk-free interest rate | 2.07% | ||||
Expected volatility | 63.30% | ||||
Expected term (years) | 5 years 9 months 22 days | 0 years | 0 years | ||
Stock Based Compensation Additional Details | |||||
Weighted-average fair value of stock options granted | $ 2.09 | ||||
Stock Options | |||||
Black-Sholes Valuation Assumptions | |||||
Risk-free interest rate | 1.76% | 1.39% | 1.34% | ||
Expected volatility | 57.80% | 52.30% | 51.80% | ||
Expected term (years) | 4 years | 4 years | 4 years | ||
Stock Based Compensation Additional Details | |||||
Weighted-average fair value of stock options granted | $ 1.42 | $ 0.90 | $ 1.88 | ||
Stock Options | Minimum | |||||
Stock Based Compensation Additional Details | |||||
Contractual term | 6 years | ||||
Stock Options | Maximum | |||||
Stock Based Compensation Additional Details | |||||
Contractual term | 10 years | ||||
Stock Options | 2007 Equity Incentive Plan | |||||
Stock Based Compensation Additional Details | |||||
Contractual term | 10 years | 6 years |
Stock Option And Other Benefi78
Stock Option And Other Benefit Plans - Stock-Based Compensation (Details) - RSUs - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Vesting percentage | 25.00% | ||
Number of shares granted | 2,360 | 5,094 | 4,955 |
Stock Option And Other Benefi79
Stock Option And Other Benefit Plans - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 15,063 | $ 13,263 | $ 11,686 |
Reversal of stock based compensation expense | 219 | ||
Unrecognized compensation expense for unvested awards | 32,087 | ||
2007 Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 561 | 733 | 645 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 6,460 | 4,567 | 3,563 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 1,289 | 1,091 | 1,082 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 7,314 | 7,605 | 7,041 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 3,585 | 3,082 | |
Unrecognized compensation expense for unvested awards | $ 12,053 | ||
Unrecognized compensation expense recognized over weighted average period | 3 years 7 days | ||
Total intrinsic value exercised | $ 1,732 | 444 | 4,960 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 10,127 | 10,255 | 7,959 |
Unrecognized compensation expense for unvested awards | $ 15,515 | ||
Unrecognized compensation expense recognized over weighted average period | 2 years 5 months 27 days | ||
Incentive Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 2,275 | ||
Performance Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 790 | $ 0 | $ 0 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Unrecognized compensation expense for unvested awards | 338 | ||
Performance Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Unrecognized compensation expense for unvested awards | $ 4,181 |
Income Taxes - Components by Ju
Income Taxes - Components by Jurisdiction (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||||||||||
United States | $ (97,503) | $ (87,085) | $ (7,819) | ||||||||
Foreign | (893) | (656) | 775 | ||||||||
Loss before income taxes | $ (39,147) | $ (12,728) | $ (23,745) | $ (22,776) | $ (17,494) | $ (43,598) | $ (17,933) | $ (8,716) | $ (98,396) | $ (87,741) | $ (7,044) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Benefit/(Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||||||||||
Federal | $ 947 | $ 127 | $ (24) | ||||||||
State | (10) | (6) | (5) | ||||||||
Foreign | (521) | (86) | (183) | ||||||||
Current Income Tax Expense (Benefit), Total | 416 | 35 | (212) | ||||||||
Deferred: | |||||||||||
Federal | 294 | 328 | |||||||||
Foreign | 116 | (62) | 71 | ||||||||
Deferred Income Tax Expense (Benefit), Total | 410 | 266 | 71 | ||||||||
Total: | |||||||||||
Federal | 1,241 | 455 | (24) | ||||||||
State | (10) | (6) | (5) | ||||||||
Foreign | (405) | (148) | (112) | ||||||||
Income tax benefit/(provision) | $ (420) | $ 1,057 | $ 177 | $ 12 | $ 280 | $ (129) | $ (16) | $ 166 | $ 826 | $ 301 | $ (141) |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax at federal statutory rate | 34.00% | 34.00% | 34.00% |
State tax, net of federal benefit | (0.10%) | ||
Foreign rate differential | (0.20%) | (0.10%) | 1.00% |
Research and development credit | 2.50% | 0.90% | 15.90% |
Stock-based compensation | (2.00%) | (2.90%) | (8.70%) |
FIN 48 interest and release | 0.20% | (0.10%) | 1.80% |
Other | 0.70% | 0.10% | 0.10% |
Deemed dividend from foreign liquidation | (0.20%) | (1.40%) | |
Valuation allowance | (34.20%) | (30.20%) | (46.10%) |
Effective tax rate | 0.80% | 0.30% | (2.10%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Fixed assets | $ 82 | $ 231 |
Net operating loss carryforwards | 51,510 | 56,376 |
Accruals, reserves and other | 14,939 | 12,103 |
Foreign tax credit | 6,046 | 6,460 |
Stock-based compensation | 2,476 | 3,830 |
Research and development credit | 14,317 | 11,190 |
Other | 2,646 | 2,011 |
Total deferred tax assets | 92,016 | 92,201 |
Deferred tax liabilities: | ||
Fixed assets | (16) | (1) |
Intangible assets | (2,112) | (4,447) |
Net deferred tax assets | 89,888 | 87,753 |
Less valuation allowance | (89,511) | (87,561) |
Net deferred tax liability | 377 | 192 |
US | ||
Deferred tax assets: | ||
Fixed assets | 46 | 191 |
Net operating loss carryforwards | 50,902 | 55,850 |
Accruals, reserves and other | 14,838 | 12,006 |
Foreign tax credit | 5,895 | 6,460 |
Stock-based compensation | 2,476 | 3,830 |
Research and development credit | 14,317 | 11,190 |
Other | 2,646 | 2,011 |
Total deferred tax assets | 91,120 | 91,538 |
Deferred tax liabilities: | ||
Intangible assets | (2,112) | (4,441) |
Net deferred tax assets | 89,008 | 87,097 |
Less valuation allowance | (89,008) | (87,097) |
Foreign Tax Authority | ||
Deferred tax assets: | ||
Fixed assets | 36 | 40 |
Net operating loss carryforwards | 608 | 526 |
Accruals, reserves and other | 101 | 97 |
Foreign tax credit | 151 | |
Total deferred tax assets | 896 | 663 |
Deferred tax liabilities: | ||
Fixed assets | (16) | (1) |
Intangible assets | (6) | |
Net deferred tax assets | 880 | 656 |
Less valuation allowance | (503) | (464) |
Net deferred tax liability | $ 377 | $ 192 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Contingency [Line Items] | |||
Accumulated earnings of foreign subsidiaries | $ 1,413 | ||
Valuation allowance released as a result of acquisition to recognize income tax benefit | 294 | $ 328 | $ 0 |
Valuation allowance movements | 1,950 | $ 18,240 | |
Federal Tax | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | 207,813 | ||
U S State | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | 93,567 | ||
Federal Research And Development Credits | Research and Development Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward amount | 13,009 | ||
California Research And Development Tax Credit | Research and Development Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward amount | 15,817 | ||
Foreign Tax Authority | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward amount | $ 5,885 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of total amounts of unrecognized tax benefits | |||
Unrecognized Tax Benefits, Beginning Balance | $ 11,011 | $ 9,218 | |
Reductions of tax positions taken during previous years | (260) | (806) | |
Additions based on uncertain tax positions related to the current period | 2,621 | 2,590 | |
Additions based on uncertain tax positions related to prior periods | 43 | ||
Cumulative translation adjustment | (34) | ||
Cumulative translation adjustment | 19 | ||
Unrecognized Tax Benefits, Ending Balance | 13,391 | 11,011 | $ 9,218 |
Unrecognized tax benefit netted against deferred tax assets | 13,152 | 10,590 | |
Accrued interest and penalty expense related to estimated obligations for unrecognized tax benefits | 131 | 294 | |
Accrued interest and penalty expense related to estimated obligations for unrecognized tax benefits, amount recognized | 96 | $ 128 | $ 78 |
Release of provision on uncertain tax positions due to the expiration of certain statutes of limitation in foreign jurisdictions | $ 273 |
Income Taxes - Tax reform act (
Income Taxes - Tax reform act (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Corporate tax rate | 34.00% | 34.00% | 34.00% | |
One-time adjustment for remeasurement of deferred tax assets and liabilities | $ 34.9 | |||
Valuation allowance adjustment for remeasurement of deferred tax assets and liabilities | $ 34.9 | |||
Maximum | ||||
Corporate tax rate | 35.00% | |||
Forecast | ||||
Corporate tax rate | 21.00% |
Segment Reporting - Revenues (D
Segment Reporting - Revenues (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Number of Operating Segments | segment | 1 | ||||||||||
Revenue | $ 80,212 | $ 81,148 | $ 68,679 | $ 56,788 | $ 46,309 | $ 51,381 | $ 48,363 | $ 54,528 | $ 286,827 | $ 200,581 | $ 249,900 |
United States of America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 216,468 | 149,031 | 171,759 | ||||||||
Americas, excluding the United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 15,976 | 9,127 | 11,538 | ||||||||
EMEA | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 33,180 | 24,303 | 36,134 | ||||||||
APAC | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 21,203 | $ 18,120 | $ 30,469 |
Segment Reporting - PPE (Detail
Segment Reporting - PPE (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net of accumulated depreciation and amortization | $ 14,630 | $ 5,640 |
Americas | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net of accumulated depreciation and amortization | 13,030 | 3,768 |
EMEA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net of accumulated depreciation and amortization | $ 1,600 | $ 1,872 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | ||||||||||
Beginning Balance | $ 271 | $ 341 | $ 271 | $ 341 | ||||||
Charges to operations | $ (21) | $ 1,402 | $ 926 | 3,712 | $ 57 | $ 2,116 | 106 | 6,019 | 2,279 | $ 1,075 |
Non-cash charges/adjustments | 190 | |||||||||
Non-cash charges/adjustments | 122 | |||||||||
Charges settled in cash | (5,721) | (2,471) | (734) | |||||||
Ending Balance | 759 | 759 | 271 | 341 | ||||||
Workforce | ||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||
Beginning Balance | 310 | 310 | ||||||||
Charges to operations | 909 | 780 | 2,678 | 4,319 | 1,491 | 1,044 | ||||
Non-cash charges/adjustments | 146 | |||||||||
Charges settled in cash | (4,322) | (1,801) | (734) | |||||||
Ending Balance | 143 | 143 | 310 | |||||||
Facility | ||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||
Beginning Balance | 271 | 271 | ||||||||
Charges to operations | $ 493 | $ 146 | $ 1,034 | 1,700 | 740 | |||||
Non-cash charges/adjustments | 44 | |||||||||
Non-cash charges/adjustments | 122 | |||||||||
Charges settled in cash | (1,399) | (591) | ||||||||
Ending Balance | $ 616 | $ 616 | 271 | |||||||
Other | ||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||
Beginning Balance | $ 31 | 31 | ||||||||
Charges to operations | 48 | 31 | ||||||||
Charges settled in cash | $ (79) | |||||||||
Ending Balance | $ 31 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Data [Line Items] | |||||||||||
Revenue | $ 80,212 | $ 81,148 | $ 68,679 | $ 56,788 | $ 46,309 | $ 51,381 | $ 48,363 | $ 54,528 | $ 286,827 | $ 200,581 | $ 249,900 |
Cost of revenue: | |||||||||||
Platform commissions, royalties and other | 28,980 | 28,898 | 24,761 | 20,860 | 17,467 | 18,918 | 18,534 | 20,320 | 103,499 | 75,239 | 95,682 |
Impairment of prepaid royalties and minimum guarantees | 26,067 | 464 | 792 | 123 | 29,836 | 105 | 43 | 27,323 | 30,107 | 2,502 | |
Impairment and amortization of intangible assets (including impairment and amortization of intangible assets acquired from a related party of $0, $5,000, and $0 for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively) | 1,535 | 2,363 | 3,171 | 3,262 | 2,812 | 7,320 | 2,336 | 2,324 | 10,331 | 14,792 | 9,553 |
Total cost of revenues | 56,582 | 31,725 | 27,932 | 24,914 | 20,402 | 56,074 | 20,975 | 22,687 | 141,153 | 120,138 | 107,737 |
Gross profit | 23,630 | 49,423 | 40,747 | 31,874 | 25,907 | (4,693) | 27,388 | 31,841 | 145,674 | 80,443 | 142,163 |
Operating expenses: | |||||||||||
Research and development | 21,395 | 22,004 | 23,989 | 25,032 | 20,766 | 20,080 | 20,721 | 20,312 | 92,420 | 81,879 | 72,856 |
Sales and marketing | 26,341 | 29,776 | 30,952 | 17,287 | 14,387 | 10,104 | 10,935 | 12,624 | 104,356 | 48,050 | 48,240 |
General and administrative | 8,552 | 8,698 | 8,678 | 8,497 | 8,134 | 7,011 | 7,096 | 7,984 | 34,425 | 30,225 | 26,092 |
Restructuring charge | (21) | 1,402 | 926 | 3,712 | 57 | 2,116 | 106 | 6,019 | 2,279 | 1,075 | |
Total operating expenses | 56,267 | 61,880 | 64,545 | 54,528 | 43,287 | 37,252 | 40,868 | 41,026 | 237,220 | 162,433 | 148,464 |
Income (loss) from operations | (32,637) | (12,457) | (23,798) | (22,654) | (17,380) | (41,945) | (13,480) | (9,185) | (91,546) | (81,990) | (6,301) |
Interest and other income (expense), net | (6,510) | (271) | 53 | (122) | (114) | (1,653) | (4,453) | 469 | (6,850) | (5,751) | (743) |
Income/(loss) before income taxes | (39,147) | (12,728) | (23,745) | (22,776) | (17,494) | (43,598) | (17,933) | (8,716) | (98,396) | (87,741) | (7,044) |
Income tax benefit/(provision) | (420) | 1,057 | 177 | 12 | 280 | (129) | (16) | 166 | 826 | 301 | (141) |
Net income /(loss) | $ (39,567) | $ (11,671) | $ (23,568) | $ (22,764) | $ (17,214) | $ (43,727) | $ (17,949) | $ (8,550) | (97,570) | (87,440) | (7,185) |
Net income/(loss) per share | |||||||||||
Basic | $ (0.29) | $ (0.09) | $ (0.17) | $ (0.17) | $ (0.13) | $ (0.33) | $ (0.14) | $ 0.07 | |||
Diluted | $ (0.29) | $ (0.09) | $ (0.17) | $ (0.17) | $ (0.13) | $ (0.33) | $ (0.14) | $ 0.07 | |||
Quarterly Financial Data [Abstract] | |||||||||||
Restructuring charge | $ (21) | $ 1,402 | $ 926 | $ 3,712 | $ 57 | $ 2,116 | $ 106 | 6,019 | 2,279 | 1,075 | |
Loss on sale of foreign subsidiary | $ 6,459 | ||||||||||
Facility | |||||||||||
Operating expenses: | |||||||||||
Restructuring charge | 493 | 146 | 1,034 | 1,700 | 740 | ||||||
Quarterly Financial Data [Abstract] | |||||||||||
Restructuring charge | 493 | 146 | 1,034 | 1,700 | 740 | ||||||
Workforce | |||||||||||
Operating expenses: | |||||||||||
Restructuring charge | 909 | 780 | 2,678 | 4,319 | 1,491 | 1,044 | |||||
Quarterly Financial Data [Abstract] | |||||||||||
Restructuring charge | $ 909 | $ 780 | $ 2,678 | $ 4,319 | $ 1,491 | $ 1,044 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||
Impairment of un-recouped advanced royalties and non-recoupable license fees | $ 14,463 | |
Tencent, a principal stockholder | Recoupable Advanced Royalties And Non-recoupable License Fees Agreement | ||
Related Party Transaction [Line Items] | ||
Related party transaction amount | $ 15,000 |