Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 18, 2021 | Jun. 30, 2020 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity File Number | 001-33368 | ||
Entity Registrant Name | Glu Mobile Inc | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 91-2143667 | ||
Entity Address, Address Line One | 875 Howard Street, Suite 100 | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94103 | ||
City Area Code | 415 | ||
Local Phone Number | 800-6100 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | GLUU | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,364,594,790 | ||
Entity Common Stock, Shares Outstanding | 174,821,822 | ||
Entity Central Index Key | 0001366246 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 364,396 | $ 127,053 |
Accounts receivable, net | 34,571 | 29,304 |
Prepaid royalties | 12,831 | 15,347 |
Deferred royalties | 6,924 | 5,067 |
Deferred platform commission fees | 35,279 | 29,239 |
Prepaid expenses and other assets | 9,071 | 8,629 |
Total current assets | 463,072 | 214,639 |
Property and equipment, net | 15,654 | 17,643 |
Operating lease right of use assets | 31,461 | 35,170 |
Long-term prepaid royalties | 20,626 | 26,879 |
Other long-term assets | 5,315 | 2,733 |
Intangible assets, net | 1,500 | 4,758 |
Goodwill | 116,227 | 116,227 |
Total assets | 653,855 | 418,049 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 15,318 | 17,535 |
Accrued compensation | 27,246 | 11,260 |
Accrued royalties | 15,773 | 20,802 |
Short-term operating lease liabilities | 4,693 | 3,528 |
Deferred revenue | 117,672 | 97,629 |
Total current liabilities | 180,702 | 150,754 |
Long-term accrued royalties | 20,476 | 26,842 |
Long-term operating lease liabilities | 34,565 | 37,351 |
Other long-term liabilities | 1,018 | 15 |
Total liabilities | 236,761 | 214,962 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 5,000 shares authorized at December 31, 2020 and December 31, 2019; no shares issued and outstanding at December 31, 2020 and December 31, 2019 | ||
Common stock, $0.0001 par value; 250,000 shares authorized at December 31, 2020 and December 31, 2019; 173,743 and 147,778 shares issued and outstanding at December 31, 2020 and December 31, 2019 | 18 | 15 |
Additional paid-in capital | 828,302 | 634,721 |
Accumulated other comprehensive loss | (61) | (37) |
Accumulated deficit | (411,165) | (431,612) |
Total stockholders' equity | 417,094 | 203,087 |
Total liabilities and stockholders' equity | $ 653,855 | $ 418,049 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
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 | 173,743 | 147,778 |
Common stock, shares outstanding | 173,743 | 147,778 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Revenue | $ 540,522 | $ 411,381 | $ 366,561 |
Cost of revenue: | |||
Platform commissions, royalties and other | 188,295 | 141,112 | 129,156 |
Impairment and amortization of intangible assets | 3,258 | 4,387 | 9,119 |
Total cost of revenue | 191,553 | 145,499 | 138,275 |
Gross profit | 348,969 | 265,882 | 228,286 |
Operating expenses: | |||
Research and development | 119,718 | 95,127 | 95,174 |
Sales and marketing | 177,245 | 140,298 | 113,860 |
General and administrative | 31,491 | 23,216 | 31,667 |
Total operating expenses | 328,454 | 258,641 | 240,701 |
Income/(loss) from operations | 20,515 | 7,241 | (12,415) |
Interest and other income/(expense), net | 1,071 | 2,101 | (235) |
Income/(loss) before income taxes | 21,586 | 9,342 | (12,650) |
Income tax provision | (1,139) | (471) | (549) |
Net income/(loss) | $ 20,447 | $ 8,871 | $ (13,199) |
Net income/(loss) per common share - basic | $ 0.13 | $ 0.06 | $ (0.09) |
Net income/(loss) per common share - diluted | $ 0.12 | $ 0.06 | $ (0.09) |
Weighted average common shares outstanding: | |||
Basic | 162,521 | 145,838 | 141,402 |
Diluted | 173,167 | 157,383 | 141,402 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) | |||
Net income/(loss) | $ 20,447 | $ 8,871 | $ (13,199) |
Other comprehensive income/(loss): | |||
Foreign currency translation adjustments | (24) | (38) | 7 |
Other comprehensive income/(loss) | (24) | (38) | 7 |
Comprehensive income/(loss) | $ 20,423 | $ 8,833 | $ (13,192) |
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 DeficitCumulative effect adjustment from adoption of ASU 2014-09 | Accumulated Deficit | Cumulative effect adjustment from adoption of ASU 2014-09 | Total |
Beginning balance at Dec. 31, 2017 | $ 14 | $ 589,962 | $ (6) | $ 8,826 | $ (436,110) | $ 8,826 | $ 153,860 |
Beginning balances (in shares) at Dec. 31, 2017 | 138,745 | ||||||
Net income (loss) | (13,199) | (13,199) | |||||
Stock-based compensation expense | 24,592 | 24,592 | |||||
Issuance of common stock upon exercise of stock options | 6,922 | 6,922 | |||||
Issuance of common stock upon exercise of stock options (in shares) | 2,721 | ||||||
Taxes paid related to net share settlement of equity awards | (7,097) | (7,097) | |||||
Taxes paid related to net share settlement of equity awards (in shares) | 1,634 | ||||||
Issuance of common stock pursuant to Employee Stock Purchase Plan | 2,356 | 2,356 | |||||
Issuance of common stock pursuant to Employee Stock Purchase Plan (in shares) | 770 | ||||||
Non-cash warrant expense | 1,046 | 1,046 | |||||
Other comprehensive income (loss) | 7 | 7 | |||||
Ending balance at Dec. 31, 2018 | $ 14 | 617,781 | 1 | (440,483) | 177,313 | ||
Ending balances (in shares) at Dec. 31, 2018 | 143,870 | ||||||
Net income (loss) | 8,871 | 8,871 | |||||
Stock-based compensation expense | 17,383 | 17,383 | |||||
Issuance of common stock upon exercise of stock options | $ 1 | 4,553 | 4,554 | ||||
Issuance of common stock upon exercise of stock options (in shares) | 1,723 | ||||||
Taxes paid related to net share settlement of equity awards | (8,408) | (8,408) | |||||
Taxes paid related to net share settlement of equity awards (in shares) | 1,457 | ||||||
Issuance of common stock pursuant to Employee Stock Purchase Plan | 3,412 | 3,412 | |||||
Issuance of common stock pursuant to Employee Stock Purchase Plan (in shares) | 728 | ||||||
Other comprehensive income (loss) | (38) | (38) | |||||
Ending balance at Dec. 31, 2019 | $ 15 | 634,721 | (37) | (431,612) | 203,087 | ||
Ending balances (in shares) at Dec. 31, 2019 | 147,778 | ||||||
Net income (loss) | 20,447 | 20,447 | |||||
Stock-based compensation expense | 31,177 | 31,177 | |||||
Issuance of common stock upon exercise of stock options | $ 1 | 19,462 | 19,463 | ||||
Issuance of common stock upon exercise of stock options (in shares) | 5,928 | ||||||
Issuance of common stock upon exercise of warrants (in shares) | 115 | ||||||
Taxes paid related to net share settlement of equity awards | (12,674) | (12,674) | |||||
Taxes paid related to net share settlement of equity awards (in shares) | 1,888 | ||||||
Issuance of common stock pursuant to Employee Stock Purchase Plan | 3,845 | 3,845 | |||||
Issuance of common stock pursuant to Employee Stock Purchase Plan (in shares) | 784 | ||||||
Issuance of common stock upon follow-on public offering, net of issuance costs | $ 2 | 151,771 | 151,773 | ||||
Issuance of common stock upon follow-on public offering, net of issuance costs (in shares) | 17,250 | ||||||
Other comprehensive income (loss) | (24) | (24) | |||||
Ending balance at Dec. 31, 2020 | $ 18 | $ 828,302 | $ (61) | $ (411,165) | $ 417,094 | ||
Ending balances (in shares) at Dec. 31, 2020 | 173,743 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income/(loss) | $ 20,447 | $ 8,871 | $ (13,199) |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | |||
Stock-based compensation | 31,809 | 17,383 | 24,592 |
Depreciation | 5,421 | 4,225 | 3,855 |
Non-cash lease expense | 4,105 | 3,348 | |
Impairment and amortization of intangible assets | 3,258 | 4,387 | 9,119 |
Warrant expense | 1,046 | ||
Other non-cash adjustments | (212) | 613 | 1,806 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,891) | (1,975) | 7,028 |
Prepaid royalties | (2,759) | 389 | (947) |
Deferred royalties | (1,857) | (657) | (835) |
Deferred platform commission fees | (6,040) | (3,377) | (5,416) |
Prepaid expenses and other assets | (3,122) | (1,957) | 1,345 |
Accounts payable, accrued restructuring, and other accrued liabilities | 773 | 3,090 | (10,709) |
Accrued compensation | 10,045 | (6,636) | (2,707) |
Accrued royalties | (52) | (1,029) | (947) |
Deferred revenue | 20,043 | 11,893 | 17,947 |
Other long-term liabilities | 1,003 | (365) | 308 |
Operating lease liabilities | (1,919) | (3,022) | |
Net cash provided by operating activities | 76,052 | 35,181 | 32,286 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (7,064) | (5,283) | (3,362) |
Proceeds from divestiture of Moscow studio | 2,726 | ||
Other investing activities | (155) | ||
Net cash used in investing activities | (7,064) | (5,438) | (636) |
Cash flows from financing activities: | |||
Proceeds from follow-on public offering, net of issuance costs | 151,773 | ||
Proceeds from exercise of stock options and purchases under the ESPP | 23,308 | 7,965 | 9,278 |
Taxes paid related to net share settlement of equity awards | (6,733) | (8,408) | (7,097) |
Net cash provided by/(used in) financing activities | 168,348 | (443) | 2,181 |
Effect of exchange rate changes on cash | 7 | (191) | (253) |
Net increase in cash, cash equivalents and restricted cash | 237,343 | 29,109 | 33,578 |
Cash, cash equivalents and restricted cash at beginning of period | 127,053 | 97,944 | 64,366 |
Cash, cash equivalents and restricted cash at end of period | 364,396 | 127,053 | 97,944 |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | |||
Total cash, cash equivalents, and restricted cash | 364,396 | 97,944 | 97,944 |
Supplemental disclosures of cash flow information | |||
Purchases of property and equipment included in accounts payable and accrued liabilities and other current liabilities | 2 | 3,633 | 1,101 |
Income taxes paid | $ 657 | $ 723 | $ 382 |
THE COMPANY AND SUMMARY OF SIGN
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
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, 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 (“U.S. GAAP”). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated on consolidation. Use of Estimates The preparation of financial statements in conformity with 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. Estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, estimation of the average playing period of paying users associated with durable virtual items, 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, and realization of prepaid royalties and fair value of investments. Actual results may differ from these estimates due to risks and uncertainties, and these differences may be material, including uncertainty in the current economic environment due to the novel strain of coronavirus, SARS-CoV-2 (“COVID-19”) pandemic. Management will continue to actively monitor the impact of the COVID-19 pandemic on the Company’s assumptions and estimates. Revenue Recognition The Company generates revenue through in-application purchases (“in-app purchases”) within its games on smartphones and tablet devices, such as Apple’s iPhone and iPad, and mobile devices utilizing Google’s Android operating system. Users can download the Company’s free-to-play games The Company adopted Accounting Standard Codification Topic 606, Revenue from Contracts with Customers, (“ASC 606”) and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. ASC 606 requires an entity to disclose the revenue recognized in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods (for example, due to changes in transaction price). Revenue recognized relating to performance obligations satisfied in prior periods was $0 for the year ended December 31, 2020 and December 31, 2019, respectively. The Company elects to use the practical expedient under 606-10-50-14 which states an entity need not disclose the information in paragraph 606-10-50-13 for a performance obligation if the following criteria are met: 1. the performance obligation is part of a contract that has an original expected duration of one year or less; and 2. the entity recognizes revenue from the satisfaction of the performance obligation in accordance with paragraph 606-10-55-18 (right to invoice). Since all of the Company’s contracts have an original expected duration of one year or less, the Company elects to use this practical expedient and does not disclose the aggregate transaction price allocated to unsatisfied or partially satisfied performance obligations. In-App Purchases Users can download the Company’s free-to-play games within the Digital Storefronts and pay to acquire virtual currency, which can be redeemed in the game for virtual goods, or virtual goods directly (together, defined as “virtual items”) to enhance their game-playing experience. The Company sells both consumable and durable virtual items and receives reports from the Digital Storefronts, which breakdown the various purchases made from the Company’s 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 item or a durable virtual item. Consumable virtual items are items that are consumed at a predetermined time or otherwise have limitations on repeated use. Durable virtual items are items, such as furniture, clothes, etc. that are accessible to the player over an extended period of time and that remain in the game for as long as the player continues to play. The initial download of the mobile game from the Digital Storefront does not create a contract under ASC 606 because of the lack of commercial substance; however, the separate election by the player to make an in-application purchase satisfies the criterion thus creating a contract under ASC 606. The Company has identified the following performance obligations in these contracts: 1. Ongoing game related services such as hosting of game play, storage of customer content, when and if available content updates, maintaining the virtual currency management engine, tracking gameplay statistics, matchmaking as it relates to multiple player gameplay, etc. 2. Obligation to the paying player to continue displaying and providing access to the virtual items within the game. Neither of these obligations are considered distinct since the actual mobile game and the related ongoing services are both required to purchase and benefit from the related virtual items. As such, the Company’s performance obligations represent a single combined performance obligation which is to make the game and the ongoing game related services available to the players. The transaction price, which is the amount paid for the virtual items by the player, is allocated entirely to the single combined performance obligation. The Company recognizes revenue for durable virtual items over the estimated average playing period of paying users on a per title basis. The Company’s revenue from consumable virtual items has been insignificant over the previous three years. The Company has estimated the useful life of a paying user between four Advertisements and Offers The Company has relationships with certain advertising service providers for advertisements within its mobile games. Revenue from these advertising service providers is generated through impressions, clickthroughs, offers and banner ads. Offers are the type of advertisements where the players are rewarded with virtual currency for completing specified actions, such as downloading another application, watching a short video, subscribing to a service or completing a survey. The Company has determined the advertising buyer to be its customer and displaying the advertisements within the mobile games is identified as the single performance obligation. Revenue from advertisements and offers are recognized at the point-in-time the advertisements are displayed in the game or the offer has been completed by the user as the customer simultaneously receives and consumes the benefits provided from these services. Other Estimates and Judgments 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. The Company uses the “survival analysis” model to estimate the average playing period for paying users. This 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. It is a statistical model that analyzes time duration until one or more events happens and is commonly used 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 paying 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 is 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 is determined based on the average playing period of all other remaining existing titles. 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 items 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. Principal Agent Considerations The Company evaluated its Digital Storefront and advertising service provider agreements under ASC 606 in order to determine if it is acting as the principal or as an agent when selling virtual items or advertisements within its games. The Company primarily uses Digital Storefronts for distributing its smartphone games and for enabling players to purchase virtual items and advertising service providers to serve advertisements within its games. The Company evaluated the following factors to assess whether it controls each specified good or service before that good or service is transferred to the customer: ● the party responsible for the fulfillment of the virtual items, game related services, or serving of advertisements; ● the party having the discretion to set pricing with the end-users; and ● the party having inventory risk before the specified good or service have been transferred to a customer. Based on the evaluation of the above indicators, the Company determined that it has control of the services before they are transferred to the end-user. Thus, the Company is generally acting as a principal and is the primary obligor to end-users for games distributed through Digital Storefronts and advertisements served through its 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. In situations where the price paid by the end-user of the advertising service provider is not known, the Company accounts for these transactions on a net basis. 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. 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 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 consist of cash on hand and money market funds. The Company considers all investments purchased with original maturities of three months or less from 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. 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 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, 2020 2019 2018 Apple 56.2 % 54.4 % 54.7 % Google 32.9 % 33.5 % 31.3 % At December 31, 2020, Apple Inc. (“Apple”), Google Inc. (“Google”), and Tapjoy Inc. (“Tapjoy”) accounted for 42.7%, 28.8%, and 22.0%, respectively, of total accounts receivable. At December 31, 2019, Apple, Google and Tapjoy accounted for 47.2%, 28.5%, and 17.8%, respectively, of total accounts receivable. No other customer represented more than 10% of the Company’s total accounts receivable as of these dates. Fair Value Accounting Standard Codification 820 Fair Value Measurements and Disclosures Level 1 Level 2 Level 3 Foreign Currencies 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 income (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 from a local currency to the U.S. Dollar, any translation gains or losses arising after the date of change would be included in interest and other income/(expense), net within the Company’s consolidated statement of operations. 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 Accounting Standard Codification 440-10 Commitments accrued royalties on the Company’s consolidated balance sheet. 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 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. related to prepaid guaranteed royalties for certain of its celebrity license agreements, and certain other prepaid royalties Goodwill and Intangible Assets In accordance with Accounting Standard Codification 350 Intangibles-Goodwill and Other th Qualitative assessment Quantitative assessment When necessary, to determine the reporting unit’s fair value under the quantitative approach, the Company uses a combination of income and market approaches, such as estimated discounted future cash flows of that reporting unit, multiples of earnings or revenue, and an analysis of recent sales or offerings of comparable entities. The Company also considers its market capitalization on the date of the analysis to ensure the reasonableness of the reporting unit’s fair value. In 2020, 2019, and 2018, the Company did not Purchased intangible assets with finite lives are amortized using the straight-line method over their useful lives ranging from three 360, Property, Plant and Equipment Impairment of 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. 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 expected discounted future cash flows, or if applicable, the quoted market price from those assets. The Company has not recorded any such impairment charge during the years presented. Property and Equipment The Company states property and equipment at cost less accumulated depreciation and amortization. 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. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. The depreciation and amortization periods for the Company’s property and equipment are as follows: Computer equipment Three years Computer software Two Furniture and fixtures Three years Leasehold improvements Shorter of the estimated useful life or remaining term of lease Internal Use Software The Company capitalizes internal use software development costs in accordance with Accounting Standard Codification 350-40 Intangibles-Goodwill and Other-Internal Use Software Accounting Standards Update 2015-05 Cloud Computing Arrangements 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 personnel-related expenses such as salaries and benefits related to product development employees, third party development cost, contractor fees, and allocated facilities costs. Software Development Costs The Company applies the principles of Accounting Standard Codification 985-20 Software-Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed Stock-Based Compensation The Company applies the fair value provisions of Accounting Standard Codification 718 Compensation-Stock Compensation 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. Advertising Expenses The Company expenses the production costs of advertising, including direct response advertising, the first time the advertising takes place. Advertising expense was $146,207, $117,979, and $95,037 in the years ended December 31, 2020, 2019, and 2018, respectively. Income Taxes The Company accounts for income taxes in accordance with Accounting Standard Codification 740 Income Taxes 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. Comprehensive Income/(Loss) Comprehensive income/(loss) consists of two components, net income/(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 income/(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 income/(loss) from the write-off of cumulative translation adjustment. Operating Leases Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) and its related amendments. According to ASC 842, the Company determines if an arrangement is a lease at inception. Its operating lease agreements are primarily for real estate space and are included within operating lease right of use (“ROU”) assets and operating lease liabilities on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, determined as the rate it would have incurred to borrow based on its credit quality at the inception of the lease over a similar term and in the economic environment where the leased asset is located, to calculate the present value of lease payments. ROU assets also exclude lease incentives. Many of the Company’s lease agreements include options to extend the lease, which the Company does not include in the minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. Certain of the Company’s lease agreements contain lease components (for example, fixed payments such as rent) and non-lease components such as common-area maintenance costs. Both of these types of provisions are accounted for as a single lease component. For such arrangements, there may be a variability in future lease payments as the amount of the non-lease components is typically revised from one period to the next. These variable lease payments, which are primarily comprised of common-area maintenance, utilities, and real estate taxes that are passed on from the lessor in proportion to the space leased by the Company within the entire building or building complex, are recognized in the period in which the obligation for those payments is incurred For leases that have greater than 12-month lease term, ROU assets and lease liabilities are recognized on the consolidated balance sheet at commencement date based on the present value of remaining fixed lease payments. The Company considers only payments that are fixed and determinable at the time of commencement . Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company combines fixed lease and non-lease components and account for them as a single lease component. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in earlier recognition of credit losses. The ASU requires a cumulative-effect adjustment to retained earnings transition approach and is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. 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, limited to the amount of goodwill. 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. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This guidance adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, Fair Value Measurement. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) : Simplifying the Accounting for Income Taxes . In October 2020, the FASB issued ASU 2020-10, Codification Improvements |
NET INCOME_(LOSS) PER SHARE
NET INCOME/(LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
NET INCOME/(LOSS) PER SHARE | |
NET INCOME/(LOSS) PER SHARE | NOTE 2 — NET INCOME/(LOSS) PER SHARE The Company computes basic net income/(loss) per share by dividing its net income/(loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, including potential dilutive common stock instruments. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during each period, without consideration for common share equivalents as their effect would have been antidilutive. Year Ended December 31, 2020 2019 2018 Net income/(loss) $ 20,447 $ 8,871 $ (13,199) Shares used to compute net income/(loss) per share: Weighted average shares used to compute basic net income/(loss) per share 162,521 145,838 141,402 Dilutive potential common shares 10,646 11,545 — Weighted average shares used to compute diluted net income/(loss) per share 173,167 157,383 141,402 Basic net income/(loss) per share $ 0.13 $ 0.06 $ (0.09) Diluted net income/(loss) per share $ 0.12 $ 0.06 $ (0.09) The following equity awards outstanding at the end of each period presented have been excluded from the computation of net income/(loss) per share of common stock for the periods presented because including them would have had an anti-dilutive effect: Year Ended December 31, 2020 2019 2018 Warrants to purchase common stock — 1,292 1,600 Options to purchase common stock 592 2,303 18,491 Restricted stock units ("RSUs") 1,073 659 3,021 Performance stock options ("PSOs") — 2,369 3,512 Performance stock units ("PSUs") — 38 711 Employee stock purchase plan ("ESPP") — 369 283 Total 1,665 7,030 27,618 (1) Outstanding PSOs and PSUs for which performance conditions have not been met as of the relevant reporting dates, have not been included in the calculation of the weighted average number of shares used to compute diluted net income/(loss) per share or in the table above. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2020 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the year ended December 31, 2020: Year Ended December 31, 2020 2019 2018 In-App Purchases (over-time revenue recognition) $ 481,279 $ 360,598 $ 316,157 Advertisements and offers (point-in-time revenue recognition) 59,046 50,728 50,121 Other (point-in-time revenue recognition) 197 55 283 Total revenue $ 540,522 $ 411,381 $ 366,561 The Company operates in a single reportable segment. In the table above, revenue is disaggregated by type of revenue stream, indicating whether it is recognized over-time or at a point-in-time. Contract Balances The following table provides information about receivables, contracts assets, and contract liabilities from contracts with customers: December 31, 2020 December 31, 2019 Receivables, which are included in accounts receivable, net $ 34,571 $ 29,304 Contract liabilities, which are included in deferred revenue 117,672 97,629 The Company receives payments from customers based on billing terms established in the Company’s contracts. Contract asset relates to the Company’s right to consideration for its completed performance under the contract. At December 31, 2020 and December 31, 2019, there were no contract assets recorded in the Company’s consolidated balance sheet. Accounts receivable are recorded when the right to consideration becomes unconditional. Deferred revenue relates to payments received in advance of performance under the contract. Deferred revenue is recognized as revenue as the Company performs under the contract. The Company had $97,629 in deferred revenue as of December 31, 2019, which was all earned in the year ended December 31, 2020. The Company had $85,736 in deferred revenue as of December 31, 2018, which was all earned in the year ended December 31, 2019. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 4 — FAIR VALUE MEASUREMENTS Level 1 Level 2 Level 3 December 31, 2020 Financial Assets Cash and cash equivalents $ 364,396 $ — $ — $ 364,396 Other investments — — 1,565 1,565 Total financial assets $ 364,396 $ — $ 1,565 $ 365,961 As of December 31, 2019, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows: Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Cash and cash equivalents $ 127,053 $ — $ — $ 127,053 Other investments — — 1,565 1,565 Total financial assets $ 127,053 $ — $ 1,565 $ 128,618 The Company’s cash and cash equivalents, which were held in operating bank accounts and money market funds, 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. The carrying value of other investments approximates fair value, as 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, 2020. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2020 | |
BALANCE SHEET COMPONENTS | |
BALANCE SHEET COMPONENTS | NOTE 5 — BALANCE SHEET COMPONENTS Accounts Receivable, Net December 31, 2020 2019 Accounts receivable $ 34,571 $ 29,304 Less: Allowance for doubtful accounts — — Accounts receivable, net $ 34,571 $ 29,304 Accounts receivable include amounts billed and unbilled as of the respective balance sheet dates, but net of platform commissions to the Digital Storefronts. The Company had no bad debts as of the years ended December 31, 2020, 2019, and 2018. Property and Equipment, Net December 31, 2020 2019 Computer equipment $ 10,559 $ 9,079 Furniture and fixtures 3,303 2,201 Software 3,847 3,612 Leasehold improvements 16,498 16,121 Total 34,207 31,013 Less: Accumulated depreciation and amortization (18,553) (13,370) Property and equipment, net $ 15,654 $ 17,643 Depreciation for the years ended December 31, 2020, 2019, and 2018 was $5,421, $4,225, and $3,855, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 — GOODWILL AND INTANGIBLE ASSETS Intangible Assets The following table sets forth carrying amounts and accumulated amortization expense of acquired intangible assets that are not already fully amortized : December 31, 2020 December 31, 2019 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. $ 21,117 $ (19,617) $ 1,500 $ 21,117 $ (16,359) $ 4,758 $ 21,117 $ (19,617) $ 1,500 $ 21,117 $ (16,359) $ 4,758 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 years ended December 31, 2020 and 2019, the Company recorded amortization expense in cost of revenue of $3,258 and $4,387, respectively. During the year ended December 31, 2018, the Company recorded amortization and impairment expense in cost of revenue of $9,119. As of December 31, 2020, the Company expects to fully amortize its intangible assets in 2021. Goodwill The Company had $116,227 in goodwill as of December 31, 2020 and December 31, 2019, respectively. During the third quarters of fiscal 2020 and 2019, the Company performed the qualitative impairment 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, it did not proceed with the quantitative impairment assessment. Accordingly, the Company did not recognize an impairment of goodwill during the years ended December 31, 2020 and December 31, 2019. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
LEASES | NOTE 7 — LEASES The Company currently leases real estate space under non-cancelable operating lease agreements for its corporate headquarters in San Francisco, California and its operations in Toronto, Canada, Hyderabad, India, Foster City, California, Burlingame, California and Orlando, Florida. These operating leases have remaining lease terms ranging from 4 months to 6.92 years, some of which include the option to extend the lease, with the longest extension option being 6 years . The Company does not include any of its renewal options when calculating its lease liability as the Company is not reasonably certain whether it will exercise these renewal options at this time. Rent expense for the year ended December 31, 2020, 2019, and 2018 was $6,307 , $5,311 , and $5,759 , respectively The future minimum lease payments to be paid under noncancelable leases in effect at December 31, 2020, are as follows: Operating Year Ending December 31, Leases 2021 7,129 2022 7,026 2023 6,980 2024 5,332 2025 and thereafter 22,335 Total lease payments $ 48,802 Less: imputed interest (9,544) Total $ 39,258 Supplemental information related to the Company’s leases for the year ended December 31, 2020 is as follows: December 31, 2020 Weighted average remaining lease term 6.61 yrs. Weighted average discount rate 6.7 % Year Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 4,751 Year Ended December 31, 2020 Right of use assets obtained in exchange for new lease obligations: Operating leases $ 407 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 — COMMITMENTS AND CONTINGENCIES Minimum Guaranteed Royalties and Developer Commitments The Company has entered into license and publishing agreements with various celebrities, athletes, sports and entertainment organizations, and other well-known brands and properties At December 31, 2020, future unpaid minimum guaranteed royalty commitments were as follows: Future Minimum Guarantee Year Ending December 31, Commitments 2021 9,060 2022 6,881 2023 6,716 2024 6,150 Total $ 28,807 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. Licensor commitments include $28,807 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, 2020, 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. 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. 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. 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. On December 17, 2020, the Company filed a lawsuit in the United States District Court for the Western District of Texas, Waco Division, against Reworks Oy (“Reworks”). The complaint alleges that Reworks infringes at least one claim of U.S. Patent No. 10,504,297, the Company’s patent relating to systems and methods for providing competitive scene completion in a mobile gaming application. The Company is pursuing a judgment finding that Reworks has infringed the Company’s patent and is seeking injunctive relief, as well as monetary damages for past and ongoing infringement. The Company does not believe it is party to any currently pending litigation, the outcome of which is reasonably possible 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, 2020 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 9— STOCKHOLDERS’ EQUITY Common Stock At December 31, 2020, the Company was authorized to issue 250,000 shares of common stock. As of December 31, 2020, the Company had reserved 34,468 shares for future issuance under its stock plans and outstanding warrants. Follow-on Public Offering In June 2020, the Company completed a follow-on public offering of 17,250 shares of its common stock, which included an over-allotment option to purchase an additional 2,250 shares, at a public offering price of $9.25 per share (the “Offering”). The aggregate gross proceeds from the Offering, including the exercise of the over-allotment, were approximately $159,563, and net proceeds received after underwriting fees and offering expenses totaled approximately $151,773. The Company does not have specific uses of the net proceeds from the Offering but intends to use the net proceeds for working capital and other general corporate purposes, which may include potential acquisitions and strategic transactions. Warrants to Purchase Common Stock Warrants outstanding at December 31, 2020 were as follows: Number Weighted of Shares Average Outstanding Exercise Average Under Price per Contractual Warrant Share Term (Years) Warrants outstanding, December 31, 2019 1,600 $ 4.61 5.44 Exercised (475) $ 4.99 5.00 Expired (25) $ 4.99 5.00 Warrants outstanding, December 31, 2020 1,100 $ 4.44 5.66 No expenses with respect to these warrants were recognized during the During the year ended December 31, 2018, the Company recorded $1,046 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 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, 2020 2019 2018 Dividend yield — % — % — % Risk-free interest rate — % — % 2.53 % Expected volatility — % — % 56.73 % Expected term (in years) — — 3.51 Preferred Stock At December 31, 2020, the Company was authorized to issue 5,000 shares of preferred stock. |
STOCK INCENTIVE AND OTHER BENEF
STOCK INCENTIVE AND OTHER BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
STOCK INCENTIVE AND OTHER BENEFIT PLANS | |
STOCK INCENTIVE AND OTHER BENEFIT PLANS | NOTE 10 — STOCK INCENTIVE 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 2020, the Company’s Board of Directors approved, and in June 2020, the Company’s stockholders approved, the Sixth Amended and Restated 2007 Equity Incentive Plan (the “Sixth Amended 2007 Plan”). The Sixth Amended 2007 Plan included an increase of 7,000 shares in the aggregate number of shares of common stock authorized for issuance under the plan. As of December 31, 2020, 7,459 shares were available for future grants under the Sixth Amended 2007 Plan. Performance-based equity awards The Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) has awarded PSOs and/or PSUs to the Company’s executives and certain other employees. These performance-based awards are subject to the achievement of specified annual performance goals. They become eligible to vest only if the applicable performance goals are achieved and will vest only if the grantee remains employed with the Company through each applicable vesting date. The number of shares that may vest depend on the extent to which the Company achieves the specified annual performance goals. The fair value of these awards is estimated on the date of grant. The PSOs have a contractual term of 10 years. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized, and any previously recognized expense is reversed. The expected cost is based on the awards that are probable to vest and is recognized over the service period. 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. 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 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, 2020, 2,003 shares were available for issuance under the 2007 Purchase Plan. 2018 Equity Inducement Plan In April 2018, the Compensation Committee of the Company’s Board of Directors adopted the 2018 Equity Inducement Plan (the “2018 Plan”). The 2018 Plan replaced the Company’s 2008 Equity Inducement Plan that expired by its terms in March 2018, and is intended to augment the shares available for issuance under the Sixth Amended 2007 Plan. The Company did not seek stockholder approval for the 2018 Plan. As such, awards under the 2018 Plan will be granted in accordance with Nasdaq Listing Rule 5635(c)(4) and only to persons not previously considered 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 Company initially reserved 400 shares of common stock for issuance under the 2018 Plan. As of December 31, 2020, 194 shares were reserved for future grants under the 2018 Plan. RSU Activity A summary of the Company’s RSU activity is as follows: Weighted Weighted Number of Average Average Remaining Aggregate Units Grant Date Contractual Intrinsic Outstanding Fair Value Term (Years) Value Awarded and unvested, December 31, 2017 5,812 $ 2.96 Granted 278 $ 5.90 Vested (2,648) $ 3.24 Forfeited (421) $ 2.71 Awarded and unvested, December 31, 2018 3,021 $ 3.01 Granted 2,936 $ 6.84 Vested (1,688) $ 3.27 Forfeited (318) $ 4.17 Awarded and unvested, December 31, 2019 3,951 $ 5.66 Granted (1) 4,635 $ 7.29 Vested (1,832) $ 4.92 Forfeited (486) $ 6.15 Awarded and unvested, December 31, 2020 6,268 $ 7.04 1.62 $ 56,478 (1) As of December 31, 2020, granted awards included 293 unvested RSUs with an intrinsic value of $2,638, for which the Company and certain employees reached mutual understanding of the awards key terms and conditions in February 2021. Such awards were legally granted in November 2020. PSU Activity The following table summarizes the Company’s PSU activity: Weighted Weighted Number of Average Average Remaining Aggregate Units Grant Date Contractual Intrinsic Outstanding Fair Value Term (Years) Value Awarded and unvested, December 31, 2017 661 $ 3.59 Granted 2,909 $ 5.85 Forfeited (40) $ 4.03 Awarded and unvested, December 31, 2018 3,530 $ 5.45 Granted 2,780 $ 6.46 Vested (700) $ 4.59 Forfeited (193) $ 6.14 Awarded and unvested, December 31, 2019 5,417 $ 6.06 Granted (1) 1,432 $ 9.53 Vested (1,509) $ 5.64 Forfeited (1,436) $ 6.78 Awarded and unvested, December 31, 2020 3,904 $ 7.22 1.38 $ 35,178 PSUs expected to vest as of December 31, 2020 749 $ 6.37 0.79 $ 6,748 (1) As of December 31, 2020, granted awards included 444 unvested PSUs with an intrinsic value of $3,997, for which the Company and certain employees reached mutual understanding of the awards key terms and conditions in February 2021. Such awards were legally granted in November 2020. PSO Activity The following table summarizes the Company’s PSO activity: Weighted Weighted Number of Average Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (Years) Value Balance as of December 31, 2017 4,170 $ 3.59 Granted 2,737 $ 5.87 Forfeited (151) $ 3.59 Balance as of December 31, 2018 6,756 $ 4.51 Exercised (173) $ 3.59 Balance as of December 31, 2019 6,583 $ 4.54 Canceled (1,377) $ 6.18 Exercised (1,133) $ 3.61 Balance as of December 31, 2020 4,073 $ 4.24 7.04 $ 19,422 PSOs expected to vest as of December 31, 2020 992 $ 4.93 7.30 $ 4,054 PSOs exercisable at December 31, 2020 2,615 $ 3.59 6.80 $ 14,162 Stock Option Activity The following table summarizes the Company’s stock option activity: Options Outstanding Weighted Weighted Number Average Average Remaining Aggregate of Exercise Contractual Intrinsic Shares Price Term (Years) Value Balances at December 31, 2017 16,932 $ 2.78 Options granted 6,092 $ 4.82 Options canceled (1,213) $ 3.54 Options exercised (3,320) $ 2.88 Balances at December 31, 2018 18,491 $ 3.39 Options granted 815 $ 7.58 Options canceled (1,219) $ 4.73 Options exercised (1,799) $ 2.81 Balances at December 31, 2019 16,288 $ 3.56 Options granted 210 $ 9.00 Options canceled (489) $ 4.77 Options exercised (4,818) $ 3.23 Balances at December 31, 2020 11,191 $ 3.75 6.51 $ 58,842 Options exercisable at December 31, 2020 8,897 $ 3.35 6.28 $ 50,343 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 $9.01 per share at December 31, 2020. The total intrinsic value of awards exercised during the years ended December 31, 2020, 2019, and 2018 was $23,991, $7,806, and $10,957, 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, 2020 2019 2018 Dividend yield — % — % — % Risk-free interest rate — % — % 2.89 % Expected volatility — % — % 60.2 % Expected term (years) — — 5.98 Stock Options Year Ended December 31, 2020 2019 2018 Dividend yield — % — % — % Risk-free interest rate 0.28 % 1.88 % 2.63 % Expected volatility 69.3 % 57.2 % 57.9 % 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 PSOs have a contractual term of 10 years. 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, 2020, 2019, and 2018, respectively. The weighted-average fair value of stock options granted during the year ended December 31, 2020, 2019, and 2018 was $4.63, $3.44, and $2.25 per share, respectively. The Company did not grant any PSOs in the year ended December 31, 2020 and 2019, respectively. The weighted average fair value of the PSOs granted during the year ended December 31, 2018 was $3.38. 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 for RSUs is amortized on a straight-line basis over the requisite service period. Compensation cost for PSUs is amortized on an accelerated attribution basis over the requisite service period of the award. The following table summarizes the consolidated stock-based compensation expense by line items in the consolidated statement of operations: Year Ended December 31, 2020 2019 2018 Research and development $ 19,942 $ 10,466 $ 12,807 Sales and marketing 3,904 1,700 2,795 General and administrative 7,963 5,217 8,990 Total stock-based compensation expense $ 31,809 $ 17,383 $ 24,592 (1) For the year ended December 31, 2020, stock-based compensation expense recorded in research and development includes $739 from PSUs classified as liabilities. (2) Stock-based compensation expense for the year ended December 31, 2019 included a reversal of previously accrued expense of $2,455 due to a decrease in the vesting probability of certain performance-based equity awards. The following table summarizes total compensation expense related to unvested awards not yet recognized as of December 31, 2020: Unrecognized Compensation Expense for Unvested Awards Stock options $ 5,050 RSUs 36,789 PSUs 3,677 PSOs 325 Total unrecognized compensation expense $ 45,841 (1) The unrecognized compensation expense for PSUs vesting in FY2023 and FY2024 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 1.26 years and 3.20 years, respectively. The unrecognized stock compensation expense related to unvested PSUs and PSOs will be recognized over a weighted average period of 0.52 and 0.13 years, respectively. Stock-based compensation expense in the year ended December 31, 2020, was approximately $31,809 (comprising approximately $6,068 related to stock options, $12,732 related to performance-based awards, $11,177 related to RSUs and $1,832 related to the 2007 Purchase Plan). Stock-based compensation expense in the year ended December 31, 2019, was approximately $17,383 (comprising approximately $7,043 related to stock options, $2,421 related to performance-based awards, $6,559 related to RSUs and $1,360 related to the 2007 Purchase Plan). Stock-based compensation expense in the year ended December 31, 2018, was approximately $24,592 (comprising approximately $6,386 related to stock options, $9,195 related to performance-based awards, $8,084 related to RSUs and $927 related to the 2007 Purchase Plan). Cash proceeds, net of taxes, from option exercises were $19,463, $3,305, and $5,643 for the years ended December 31, 2020, 2019, and 2018, respectively. The Company realized no significant income tax benefit from stock option exercises during the year ended December 31, 2020, 2019, and 2018. 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 certain eligible employees. In 2019, the Company started matching a portion of the contribution made by participants who met certain employment criteria. For the years ended December 31, 2020 and 2019, t he matching contributions made by the Company were not material. The Company did not match the contributions made by its employees for the year ended December 31, 2018. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 11 — INCOME TAXES The components of income (loss) before income taxes by tax jurisdiction were as follows: Year Ended December 31, 2020 2019 2018 United States $ 19,279 $ 7,047 $ (12,396) Foreign 2,307 2,295 (254) Income (loss) before income taxes $ 21,586 $ 9,342 $ (12,650) The components of income tax benefit/(provision) were as follows: Year Ended December 31, Current: 2020 2019 2018 Federal $ (122) $ 373 $ (96) State (161) (10) (8) Foreign (1,105) (590) (500) (1,388) (227) (604) Deferred: Federal — — — Foreign 249 (244) 55 249 (244) 55 Total: Federal (122) 373 (96) State (161) (10) (8) Foreign (856) (834) (445) $ (1,139) $ (471) $ (549) The difference between the actual rate and the federal statutory rate was as follows: Year Ended December 31, 2020 2019 2018 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % Meals and entertainment 0.3 3.1 (2.0) Research and development credit (24.4) (41.0) 21.3 Stock-based compensation (24.4) (29.0) 17.9 Revenue from contracts with customers — — (14.6) Others 3.1 (0.6) (3.1) Global intangible low-taxed income 0.8 4.2 (1.7) Valuation allowance 10.2 17.5 (35.3) Executive compensation 8.6 6.1 — Foreign tax credit 8.2 23.7 (7.8) Other non-deductible expenses 1.9 — — Effective tax rate 5.3 % 5.0 % (4.3) % Deferred tax assets and liabilities consist of the following: December 31, 2020 December 31, 2019 US Foreign Total US Foreign Total Deferred tax assets: Fixed assets $ 654 $ 71 $ 725 $ 209 $ 71 $ 280 Net operating loss carryforwards 42,822 7 42,829 48,968 25 48,993 Accruals, reserves and other 7,460 401 7,861 3,939 121 4,060 Foreign tax credit 1,138 — 1,138 2,905 — 2,905 Stock-based compensation 5,494 — 5,494 5,882 — 5,882 Research and development credit 27,899 — 27,899 22,630 — 22,630 Capitalized research and development 7,784 — 7,784 7,189 — 7,189 Intangible assets 988 — 988 355 — 355 Operating lease liabilities 8,708 155 8,863 8,926 117 9,043 Other 2,773 — 2,773 2,951 — 2,951 Total deferred tax assets $ 105,720 $ 634 $ 106,354 $ 103,954 $ 334 $ 104,288 Deferred tax liabilities: Fixed assets $ — $ (68) $ (68) $ — $ (40) $ (40) Operating lease right of use assets (6,961) (144) (7,105) (7,663) (104) (7,767) Net deferred tax assets 98,759 422 99,181 96,291 190 96,481 Less valuation allowance (98,759) (7) (98,766) (96,291) (25) (96,316) Net deferred tax assets $ — $ 415 $ 415 $ — $ 165 $ 165 The Company has not provided deferred taxes on unremitted earnings attributable to foreign subsidiaries, because their earnings are intended to be reinvested indefinitely. The amount of accumulated foreign earnings of the Company’s foreign subsidiaries totaled $3,734 as of December 31, 2020. 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. After considering all available positive and negative evidence, the Company has determined it is more likely than not that deferred tax assets in the U.S. and a certain foreign entity will not be realized as a result of cumulative losses incurred in these jurisdictions, except for Canada and India. Therefore, the Company maintains a full valuation allowance against the net deferred tax assets in these jurisdictions. As of December 31, 2020 and 2019, the Company concluded that an additional valuation allowance of $2,450 and $2,334 was required to reflect the change in its deferred tax assets prior to valuation allowance during 2020 and 2019, respectively. It is reasonably possible that within the next 12 months, there may be sufficient positive evidence to release a portion or all of the valuation allowance. Release of the valuation allowance would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment and prospective earnings. At December 31, 2020, the Company had net operating loss carryforwards of approximately $182,400 and $90,547 for federal and state tax purposes, respectively. If not utilized, these carryforwards will expire at various times between 2026 and 2040. In addition, the Company has research and development tax credit carryforwards of approximately of foreign tax credits that will begin to expire in 2021. 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, 2020 2019 Beginning balance $ 15,084 $ 20,718 Reductions of tax positions taken during previous years — (8,226) Additions based on uncertain tax positions related to the current period 3,940 2,598 Additions based on uncertain tax positions related to prior periods 61 — Cumulative translation adjustment — (6) Ending balance $ 19,085 $ 15,084 The total unrecognized tax benefits as of December 31, 2020 and 2019 included approximately $19,035 and $15,084, respectively, of unrecognized tax benefits that have been netted against deferred tax assets. As of December 31, 2020, the Company does not expect the unrecognized tax benefits, if recognized, to 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 current and accumulated accrual of interest and penalties on uncertain tax positions is immaterial. 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 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. On March 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief and Economic Security ("CARES") Act, which contains several income tax provisions, as well as other measures, aimed at assisting businesses impacted by the economic effects of the COVID-19 pandemic. Among other provisions, the CARES Act removes certain limitations on utilization of net operating losses ("NOLs") and allows for carrybacks of certain past and future NOLs. The Company does not anticipate the income tax provisions of the CARES Act to have a material impact on its financial statements. |
SEGMENT INFORMATION AND OPERATI
SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA | |
SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA | NOTE 12 — SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its Chief Executive Officer as the CODM. The Company operates in a single operating segment. The financial information reviewed by the CODM is included within one operating segment for purposes of allocating resources and evaluating financial performance The following tables set forth revenue and long-lived assets based on geography: Revenue Revenue by geography is primarily based on the geographic location of the Company’s payers. International revenue is revenue generated from distributors and advertising service providers whose principal operations are located outside the United States or, in the case of the Digital Storefronts, the revenue generated from end-user purchases made outside of the United States. Year Ended December 31, 2020 2019 2018 United States of America $ 424,865 $ 320,343 $ 280,264 Americas, excluding the United States 32,003 25,240 21,903 EMEA 57,353 45,700 41,585 APAC 26,301 20,098 22,809 Total revenue $ 540,522 $ 411,381 $ 366,561 Long-Lived Assets 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, 2020 2019 United States of America $ 14,868 $ 16,738 Rest of the World 786 905 Total $ 15,654 $ 17,643 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENTS. | |
SUBSEQUENT EVENTS | NOTE 13 — SUBSEQUENT EVENTS |
QUARTERLY FINANCIAL DATA (unaud
QUARTERLY FINANCIAL DATA (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY FINANCIAL DATA (unaudited) | |
QUARTERLY FINANCIAL DATA (unaudited) | NOTE 14 – QUARTERLY FINANCIAL DATA (unaudited) The following table sets forth unaudited quarterly consolidated statements of operations data for 2020 and 2019. The Company derived this information from its unaudited condensed consolidated financial statements, which it prepared on the same basis as its audited consolidated financial statements contained in this report. These unaudited statements include all adjustments, consisting only of normal recurring adjustments that the Company considers necessary for a fair statement of that information for the periods presented. For the Three Months Ended 2020 2019 March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, Revenue $ 107,274 $ 133,316 $ 158,531 $ 141,401 $ 95,885 $ 95,540 $ 107,077 $ 112,879 Cost of revenue: Platform commissions, royalties and other 36,974 46,727 56,390 48,204 33,270 32,806 36,758 38,278 Impairment and amortization of intangible assets 888 887 888 595 1,252 1,056 1,040 1,039 Total cost of revenue 37,862 47,614 57,278 48,799 34,522 33,862 37,798 39,317 Gross profit 69,412 85,702 101,253 92,602 61,363 61,678 69,279 73,562 Operating expenses: Research and development 29,531 28,420 30,778 30,989 26,546 19,736 22,968 25,877 Sales and marketing 42,743 65,203 42,222 27,077 28,105 35,040 46,140 31,013 General and administrative 6,667 7,266 7,870 9,688 6,635 4,951 5,879 5,751 Total operating expenses 78,941 100,889 80,870 67,754 61,286 59,727 74,987 62,641 Income/(loss) from operations (9,529) (15,187) 20,383 24,848 77 1,951 (5,708) 10,921 Interest and other income/(expense), net (65) 434 413 289 764 556 271 510 Income/(loss) before income taxes (9,594) (14,753) 20,796 25,137 841 2,507 (5,437) 11,431 Income tax (provision)/benefit 1,321 6,187 (7,391) (1,256) (178) — 348 (641) Net income/(loss) $ (8,273) $ (8,566) $ 13,405 $ 23,881 $ 663 $ 2,507 $ (5,089) $ 10,790 Net income/(loss) per share Basic $ (0.06) $ (0.05) $ 0.08 $ 0.14 $ 0.00 $ 0.02 $ (0.03) $ 0.07 Diluted $ (0.06) $ (0.05) $ 0.07 $ 0.13 $ 0.00 $ 0.02 $ (0.03) $ 0.07 |
THE COMPANY AND SUMMARY OF SI_2
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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 (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated on consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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. Estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, estimation of the average playing period of paying users associated with durable virtual items, 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, and realization of prepaid royalties and fair value of investments. Actual results may differ from these estimates due to risks and uncertainties, and these differences may be material, including uncertainty in the current economic environment due to the novel strain of coronavirus, SARS-CoV-2 (“COVID-19”) pandemic. Management will continue to actively monitor the impact of the COVID-19 pandemic on the Company’s assumptions and estimates. |
Revenue Recognition | Revenue Recognition The Company generates revenue through in-application purchases (“in-app purchases”) within its games on smartphones and tablet devices, such as Apple’s iPhone and iPad, and mobile devices utilizing Google’s Android operating system. Users can download the Company’s free-to-play games The Company adopted Accounting Standard Codification Topic 606, Revenue from Contracts with Customers, (“ASC 606”) and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. ASC 606 requires an entity to disclose the revenue recognized in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods (for example, due to changes in transaction price). Revenue recognized relating to performance obligations satisfied in prior periods was $0 for the year ended December 31, 2020 and December 31, 2019, respectively. The Company elects to use the practical expedient under 606-10-50-14 which states an entity need not disclose the information in paragraph 606-10-50-13 for a performance obligation if the following criteria are met: 1. the performance obligation is part of a contract that has an original expected duration of one year or less; and 2. the entity recognizes revenue from the satisfaction of the performance obligation in accordance with paragraph 606-10-55-18 (right to invoice). Since all of the Company’s contracts have an original expected duration of one year or less, the Company elects to use this practical expedient and does not disclose the aggregate transaction price allocated to unsatisfied or partially satisfied performance obligations. In-App Purchases Users can download the Company’s free-to-play games within the Digital Storefronts and pay to acquire virtual currency, which can be redeemed in the game for virtual goods, or virtual goods directly (together, defined as “virtual items”) to enhance their game-playing experience. The Company sells both consumable and durable virtual items and receives reports from the Digital Storefronts, which breakdown the various purchases made from the Company’s 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 item or a durable virtual item. Consumable virtual items are items that are consumed at a predetermined time or otherwise have limitations on repeated use. Durable virtual items are items, such as furniture, clothes, etc. that are accessible to the player over an extended period of time and that remain in the game for as long as the player continues to play. The initial download of the mobile game from the Digital Storefront does not create a contract under ASC 606 because of the lack of commercial substance; however, the separate election by the player to make an in-application purchase satisfies the criterion thus creating a contract under ASC 606. The Company has identified the following performance obligations in these contracts: 1. Ongoing game related services such as hosting of game play, storage of customer content, when and if available content updates, maintaining the virtual currency management engine, tracking gameplay statistics, matchmaking as it relates to multiple player gameplay, etc. 2. Obligation to the paying player to continue displaying and providing access to the virtual items within the game. Neither of these obligations are considered distinct since the actual mobile game and the related ongoing services are both required to purchase and benefit from the related virtual items. As such, the Company’s performance obligations represent a single combined performance obligation which is to make the game and the ongoing game related services available to the players. The transaction price, which is the amount paid for the virtual items by the player, is allocated entirely to the single combined performance obligation. The Company recognizes revenue for durable virtual items over the estimated average playing period of paying users on a per title basis. The Company’s revenue from consumable virtual items has been insignificant over the previous three years. The Company has estimated the useful life of a paying user between four Advertisements and Offers The Company has relationships with certain advertising service providers for advertisements within its mobile games. Revenue from these advertising service providers is generated through impressions, clickthroughs, offers and banner ads. Offers are the type of advertisements where the players are rewarded with virtual currency for completing specified actions, such as downloading another application, watching a short video, subscribing to a service or completing a survey. The Company has determined the advertising buyer to be its customer and displaying the advertisements within the mobile games is identified as the single performance obligation. Revenue from advertisements and offers are recognized at the point-in-time the advertisements are displayed in the game or the offer has been completed by the user as the customer simultaneously receives and consumes the benefits provided from these services. Other Estimates and Judgments 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. The Company uses the “survival analysis” model to estimate the average playing period for paying users. This 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. It is a statistical model that analyzes time duration until one or more events happens and is commonly used 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 paying 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 is 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 is determined based on the average playing period of all other remaining existing titles. 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 items 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. Principal Agent Considerations The Company evaluated its Digital Storefront and advertising service provider agreements under ASC 606 in order to determine if it is acting as the principal or as an agent when selling virtual items or advertisements within its games. The Company primarily uses Digital Storefronts for distributing its smartphone games and for enabling players to purchase virtual items and advertising service providers to serve advertisements within its games. The Company evaluated the following factors to assess whether it controls each specified good or service before that good or service is transferred to the customer: ● the party responsible for the fulfillment of the virtual items, game related services, or serving of advertisements; ● the party having the discretion to set pricing with the end-users; and ● the party having inventory risk before the specified good or service have been transferred to a customer. Based on the evaluation of the above indicators, the Company determined that it has control of the services before they are transferred to the end-user. Thus, the Company is generally acting as a principal and is the primary obligor to end-users for games distributed through Digital Storefronts and advertisements served through its 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. In situations where the price paid by the end-user of the advertising service provider is not known, the Company accounts for these transactions on a net basis. 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. 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 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 Cash and cash equivalents consist of cash on hand and money market funds. The Company considers all investments purchased with original maturities of three months or less from 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. |
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 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, 2020 2019 2018 Apple 56.2 % 54.4 % 54.7 % Google 32.9 % 33.5 % 31.3 % At December 31, 2020, Apple Inc. (“Apple”), Google Inc. (“Google”), and Tapjoy Inc. (“Tapjoy”) accounted for 42.7%, 28.8%, and 22.0%, respectively, of total accounts receivable. At December 31, 2019, Apple, Google and Tapjoy accounted for 47.2%, 28.5%, and 17.8%, respectively, of total accounts receivable. No other customer represented more than 10% of the Company’s total accounts receivable as of these dates. |
Fair Value | Fair Value Accounting Standard Codification 820 Fair Value Measurements and Disclosures Level 1 Level 2 Level 3 |
Foreign Currencies | Foreign Currencies 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 income (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 from a local currency to the U.S. Dollar, any translation gains or losses arising after the date of change would be included in interest and other income/(expense), net within the Company’s consolidated statement of operations. |
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 Accounting Standard Codification 440-10 Commitments accrued royalties on the Company’s consolidated balance sheet. 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 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. related to prepaid guaranteed royalties for certain of its celebrity license agreements, and certain other prepaid royalties |
Goodwill and Intangible Assets | Goodwill and Intangible Assets In accordance with Accounting Standard Codification 350 Intangibles-Goodwill and Other th Qualitative assessment Quantitative assessment When necessary, to determine the reporting unit’s fair value under the quantitative approach, the Company uses a combination of income and market approaches, such as estimated discounted future cash flows of that reporting unit, multiples of earnings or revenue, and an analysis of recent sales or offerings of comparable entities. The Company also considers its market capitalization on the date of the analysis to ensure the reasonableness of the reporting unit’s fair value. In 2020, 2019, and 2018, the Company did not Purchased intangible assets with finite lives are amortized using the straight-line method over their useful lives ranging from three 360, Property, Plant and Equipment |
Impairment of Long-Lived Assets | Impairment of 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. 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 expected discounted future cash flows, or if applicable, the quoted market price from those assets. The Company has not recorded any such impairment charge during the years presented. |
Property and Equipment | Property and Equipment The Company states property and equipment at cost less accumulated depreciation and amortization. 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. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. The depreciation and amortization periods for the Company’s property and equipment are as follows: Computer equipment Three years Computer software Two Furniture and fixtures Three years Leasehold improvements Shorter of the estimated useful life or remaining term of lease |
Internal Use Software | Internal Use Software The Company capitalizes internal use software development costs in accordance with Accounting Standard Codification 350-40 Intangibles-Goodwill and Other-Internal Use Software Accounting Standards Update 2015-05 Cloud Computing Arrangements |
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 personnel-related expenses such as salaries and benefits related to product development employees, third party development cost, contractor fees, and allocated facilities costs. |
Software Development Costs | Software Development Costs The Company applies the principles of Accounting Standard Codification 985-20 Software-Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed |
Stock-Based Compensation | Stock-Based Compensation The Company applies the fair value provisions of Accounting Standard Codification 718 Compensation-Stock Compensation 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. |
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 $146,207, $117,979, and $95,037 in the years ended December 31, 2020, 2019, and 2018, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with Accounting Standard Codification 740 Income Taxes 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. |
Comprehensive Income/(Loss) | Comprehensive Income/(Loss) Comprehensive income/(loss) consists of two components, net income/(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 income/(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 income/(loss) from the write-off of cumulative translation adjustment. |
Operating Leases | Operating Leases Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) and its related amendments. According to ASC 842, the Company determines if an arrangement is a lease at inception. Its operating lease agreements are primarily for real estate space and are included within operating lease right of use (“ROU”) assets and operating lease liabilities on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, determined as the rate it would have incurred to borrow based on its credit quality at the inception of the lease over a similar term and in the economic environment where the leased asset is located, to calculate the present value of lease payments. ROU assets also exclude lease incentives. Many of the Company’s lease agreements include options to extend the lease, which the Company does not include in the minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. Certain of the Company’s lease agreements contain lease components (for example, fixed payments such as rent) and non-lease components such as common-area maintenance costs. Both of these types of provisions are accounted for as a single lease component. For such arrangements, there may be a variability in future lease payments as the amount of the non-lease components is typically revised from one period to the next. These variable lease payments, which are primarily comprised of common-area maintenance, utilities, and real estate taxes that are passed on from the lessor in proportion to the space leased by the Company within the entire building or building complex, are recognized in the period in which the obligation for those payments is incurred For leases that have greater than 12-month lease term, ROU assets and lease liabilities are recognized on the consolidated balance sheet at commencement date based on the present value of remaining fixed lease payments. The Company considers only payments that are fixed and determinable at the time of commencement . Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company combines fixed lease and non-lease components and account for them as a single lease component. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in earlier recognition of credit losses. The ASU requires a cumulative-effect adjustment to retained earnings transition approach and is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. 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, limited to the amount of goodwill. 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. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This guidance adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, Fair Value Measurement. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) : Simplifying the Accounting for Income Taxes . In October 2020, the FASB issued ASU 2020-10, Codification Improvements |
THE COMPANY AND SUMMARY OF SI_3
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Revenue Concentration | Year Ended December 31, 2020 2019 2018 Apple 56.2 % 54.4 % 54.7 % Google 32.9 % 33.5 % 31.3 % |
Schedule of Depreciation And Amortization Periods for Property and Equipment | Computer equipment Three years Computer software Two Furniture and fixtures Three years Leasehold improvements Shorter of the estimated useful life or remaining term of lease |
NET INCOME_(LOSS) PER SHARE (Ta
NET INCOME/(LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
NET INCOME/(LOSS) PER SHARE | |
Computation of Net Income/(Loss) Per Share | Year Ended December 31, 2020 2019 2018 Net income/(loss) $ 20,447 $ 8,871 $ (13,199) Shares used to compute net income/(loss) per share: Weighted average shares used to compute basic net income/(loss) per share 162,521 145,838 141,402 Dilutive potential common shares 10,646 11,545 — Weighted average shares used to compute diluted net income/(loss) per share 173,167 157,383 141,402 Basic net income/(loss) per share $ 0.13 $ 0.06 $ (0.09) Diluted net income/(loss) per share $ 0.12 $ 0.06 $ (0.09) |
Schedule of Anti-Dilutive Securities Excluded from Computation of Net Income/(Loss) Per Share | Year Ended December 31, 2020 2019 2018 Warrants to purchase common stock — 1,292 1,600 Options to purchase common stock 592 2,303 18,491 Restricted stock units ("RSUs") 1,073 659 3,021 Performance stock options ("PSOs") — 2,369 3,512 Performance stock units ("PSUs") — 38 711 Employee stock purchase plan ("ESPP") — 369 283 Total 1,665 7,030 27,618 (1) Outstanding PSOs and PSUs for which performance conditions have not been met as of the relevant reporting dates, have not been included in the calculation of the weighted average number of shares used to compute diluted net income/(loss) per share or in the table above. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Summary of Revenue from Contracts with Customers | Year Ended December 31, 2020 2019 2018 In-App Purchases (over-time revenue recognition) $ 481,279 $ 360,598 $ 316,157 Advertisements and offers (point-in-time revenue recognition) 59,046 50,728 50,121 Other (point-in-time revenue recognition) 197 55 283 Total revenue $ 540,522 $ 411,381 $ 366,561 |
Information on Receivables, contract assets and contract liabilities | December 31, 2020 December 31, 2019 Receivables, which are included in accounts receivable, net $ 34,571 $ 29,304 Contract liabilities, which are included in deferred revenue 117,672 97,629 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |
Schedule of Assets and Liabilities Presented at Fair Value | Level 1 Level 2 Level 3 December 31, 2020 Financial Assets Cash and cash equivalents $ 364,396 $ — $ — $ 364,396 Other investments — — 1,565 1,565 Total financial assets $ 364,396 $ — $ 1,565 $ 365,961 Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Cash and cash equivalents $ 127,053 $ — $ — $ 127,053 Other investments — — 1,565 1,565 Total financial assets $ 127,053 $ — $ 1,565 $ 128,618 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
BALANCE SHEET COMPONENTS | |
Schedule of Components of Accounts Receivable, net | December 31, 2020 2019 Accounts receivable $ 34,571 $ 29,304 Less: Allowance for doubtful accounts — — Accounts receivable, net $ 34,571 $ 29,304 |
Schedule of Components of Property and Equipment | December 31, 2020 2019 Computer equipment $ 10,559 $ 9,079 Furniture and fixtures 3,303 2,201 Software 3,847 3,612 Leasehold improvements 16,498 16,121 Total 34,207 31,013 Less: Accumulated depreciation and amortization (18,553) (13,370) Property and equipment, net $ 15,654 $ 17,643 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of Carrying Amounts and Accumulated Amortization of Acquired Intangible Assets | December 31, 2020 December 31, 2019 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. $ 21,117 $ (19,617) $ 1,500 $ 21,117 $ (16,359) $ 4,758 $ 21,117 $ (19,617) $ 1,500 $ 21,117 $ (16,359) $ 4,758 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
Schedule of future minimum lease payments | Operating Year Ending December 31, Leases 2021 7,129 2022 7,026 2023 6,980 2024 5,332 2025 and thereafter 22,335 Total lease payments $ 48,802 Less: imputed interest (9,544) Total $ 39,258 |
Supplemental Information Operating Cash Flows from Operating Leases | December 31, 2020 Weighted average remaining lease term 6.61 yrs. Weighted average discount rate 6.7 % Year Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 4,751 Year Ended December 31, 2020 Right of use assets obtained in exchange for new lease obligations: Operating leases $ 407 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of Future Unpaid Minimum Guaranteed Royalty Commitments | Future Minimum Guarantee Year Ending December 31, Commitments 2021 9,060 2022 6,881 2023 6,716 2024 6,150 Total $ 28,807 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
Schedule of Warrants Outstanding | Warrants outstanding at December 31, 2020 were as follows: Number Weighted of Shares Average Outstanding Exercise Average Under Price per Contractual Warrant Share Term (Years) Warrants outstanding, December 31, 2019 1,600 $ 4.61 5.44 Exercised (475) $ 4.99 5.00 Expired (25) $ 4.99 5.00 Warrants outstanding, December 31, 2020 1,100 $ 4.44 5.66 |
Schedule of estimated the fair value of the warrants | Year Ended December 31, 2020 2019 2018 Dividend yield — % — % — % Risk-free interest rate — % — % 2.53 % Expected volatility — % — % 56.73 % Expected term (in years) — — 3.51 |
STOCK INCENTIVE AND OTHER BEN_2
STOCK INCENTIVE AND OTHER BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Stock Option Activity | Options Outstanding Weighted Weighted Number Average Average Remaining Aggregate of Exercise Contractual Intrinsic Shares Price Term (Years) Value Balances at December 31, 2017 16,932 $ 2.78 Options granted 6,092 $ 4.82 Options canceled (1,213) $ 3.54 Options exercised (3,320) $ 2.88 Balances at December 31, 2018 18,491 $ 3.39 Options granted 815 $ 7.58 Options canceled (1,219) $ 4.73 Options exercised (1,799) $ 2.81 Balances at December 31, 2019 16,288 $ 3.56 Options granted 210 $ 9.00 Options canceled (489) $ 4.77 Options exercised (4,818) $ 3.23 Balances at December 31, 2020 11,191 $ 3.75 6.51 $ 58,842 Options exercisable at December 31, 2020 8,897 $ 3.35 6.28 $ 50,343 |
Schedule of Assumptions Used to Estimate Fair Value of Options | Performance Stock Options Year Ended December 31, 2020 2019 2018 Dividend yield — % — % — % Risk-free interest rate — % — % 2.89 % Expected volatility — % — % 60.2 % Expected term (years) — — 5.98 Stock Options Year Ended December 31, 2020 2019 2018 Dividend yield — % — % — % Risk-free interest rate 0.28 % 1.88 % 2.63 % Expected volatility 69.3 % 57.2 % 57.9 % Expected term (years) 4.00 4.00 4.00 |
Schedule of Stock-Based Compensation Expense by Line Item | Year Ended December 31, 2020 2019 2018 Research and development $ 19,942 $ 10,466 $ 12,807 Sales and marketing 3,904 1,700 2,795 General and administrative 7,963 5,217 8,990 Total stock-based compensation expense $ 31,809 $ 17,383 $ 24,592 |
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, 2020: Unrecognized Compensation Expense for Unvested Awards Stock options $ 5,050 RSUs 36,789 PSUs 3,677 PSOs 325 Total unrecognized compensation expense $ 45,841 (1) The unrecognized compensation expense for PSUs vesting in FY2023 and FY2024 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. |
Restricted stock units ("RSUs") | |
Summary of Company's Performance-based Awards | Weighted Weighted Number of Average Average Remaining Aggregate Units Grant Date Contractual Intrinsic Outstanding Fair Value Term (Years) Value Awarded and unvested, December 31, 2017 5,812 $ 2.96 Granted 278 $ 5.90 Vested (2,648) $ 3.24 Forfeited (421) $ 2.71 Awarded and unvested, December 31, 2018 3,021 $ 3.01 Granted 2,936 $ 6.84 Vested (1,688) $ 3.27 Forfeited (318) $ 4.17 Awarded and unvested, December 31, 2019 3,951 $ 5.66 Granted (1) 4,635 $ 7.29 Vested (1,832) $ 4.92 Forfeited (486) $ 6.15 Awarded and unvested, December 31, 2020 6,268 $ 7.04 1.62 $ 56,478 |
Performance stock units ("PSUs") | |
Summary of Stock Option Activity | Weighted Weighted Number of Average Average Remaining Aggregate Units Grant Date Contractual Intrinsic Outstanding Fair Value Term (Years) Value Awarded and unvested, December 31, 2017 661 $ 3.59 Granted 2,909 $ 5.85 Forfeited (40) $ 4.03 Awarded and unvested, December 31, 2018 3,530 $ 5.45 Granted 2,780 $ 6.46 Vested (700) $ 4.59 Forfeited (193) $ 6.14 Awarded and unvested, December 31, 2019 5,417 $ 6.06 Granted (1) 1,432 $ 9.53 Vested (1,509) $ 5.64 Forfeited (1,436) $ 6.78 Awarded and unvested, December 31, 2020 3,904 $ 7.22 1.38 $ 35,178 PSUs expected to vest as of December 31, 2020 749 $ 6.37 0.79 $ 6,748 |
Performance stock options ("PSOs") | |
Summary of Stock Option Activity | Weighted Weighted Number of Average Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (Years) Value Balance as of December 31, 2017 4,170 $ 3.59 Granted 2,737 $ 5.87 Forfeited (151) $ 3.59 Balance as of December 31, 2018 6,756 $ 4.51 Exercised (173) $ 3.59 Balance as of December 31, 2019 6,583 $ 4.54 Canceled (1,377) $ 6.18 Exercised (1,133) $ 3.61 Balance as of December 31, 2020 4,073 $ 4.24 7.04 $ 19,422 PSOs expected to vest as of December 31, 2020 992 $ 4.93 7.30 $ 4,054 PSOs exercisable at December 31, 2020 2,615 $ 3.59 6.80 $ 14,162 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Component of Income (Loss) Before Income Taxes By Tax Jurisdiction | Year Ended December 31, 2020 2019 2018 United States $ 19,279 $ 7,047 $ (12,396) Foreign 2,307 2,295 (254) Income (loss) before income taxes $ 21,586 $ 9,342 $ (12,650) |
Components of Income Tax Benefit/(Provision) | Year Ended December 31, Current: 2020 2019 2018 Federal $ (122) $ 373 $ (96) State (161) (10) (8) Foreign (1,105) (590) (500) (1,388) (227) (604) Deferred: Federal — — — Foreign 249 (244) 55 249 (244) 55 Total: Federal (122) 373 (96) State (161) (10) (8) Foreign (856) (834) (445) $ (1,139) $ (471) $ (549) |
Difference Between Actual Rate and Federal Statutory Rate | Year Ended December 31, 2020 2019 2018 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % Meals and entertainment 0.3 3.1 (2.0) Research and development credit (24.4) (41.0) 21.3 Stock-based compensation (24.4) (29.0) 17.9 Revenue from contracts with customers — — (14.6) Others 3.1 (0.6) (3.1) Global intangible low-taxed income 0.8 4.2 (1.7) Valuation allowance 10.2 17.5 (35.3) Executive compensation 8.6 6.1 — Foreign tax credit 8.2 23.7 (7.8) Other non-deductible expenses 1.9 — — Effective tax rate 5.3 % 5.0 % (4.3) % |
Deferred Tax Assets and Liabilities | December 31, 2020 December 31, 2019 US Foreign Total US Foreign Total Deferred tax assets: Fixed assets $ 654 $ 71 $ 725 $ 209 $ 71 $ 280 Net operating loss carryforwards 42,822 7 42,829 48,968 25 48,993 Accruals, reserves and other 7,460 401 7,861 3,939 121 4,060 Foreign tax credit 1,138 — 1,138 2,905 — 2,905 Stock-based compensation 5,494 — 5,494 5,882 — 5,882 Research and development credit 27,899 — 27,899 22,630 — 22,630 Capitalized research and development 7,784 — 7,784 7,189 — 7,189 Intangible assets 988 — 988 355 — 355 Operating lease liabilities 8,708 155 8,863 8,926 117 9,043 Other 2,773 — 2,773 2,951 — 2,951 Total deferred tax assets $ 105,720 $ 634 $ 106,354 $ 103,954 $ 334 $ 104,288 Deferred tax liabilities: Fixed assets $ — $ (68) $ (68) $ — $ (40) $ (40) Operating lease right of use assets (6,961) (144) (7,105) (7,663) (104) (7,767) Net deferred tax assets 98,759 422 99,181 96,291 190 96,481 Less valuation allowance (98,759) (7) (98,766) (96,291) (25) (96,316) Net deferred tax assets $ — $ 415 $ 415 $ — $ 165 $ 165 |
Reconciliation of Total Amounts of Unrecognized Tax Benefits | Year Ended December 31, 2020 2019 Beginning balance $ 15,084 $ 20,718 Reductions of tax positions taken during previous years — (8,226) Additions based on uncertain tax positions related to the current period 3,940 2,598 Additions based on uncertain tax positions related to prior periods 61 — Cumulative translation adjustment — (6) Ending balance $ 19,085 $ 15,084 |
SEGMENT INFORMATION AND OPERA_2
SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA | |
Schedule of Revenues by Geographic Region | Year Ended December 31, 2020 2019 2018 United States of America $ 424,865 $ 320,343 $ 280,264 Americas, excluding the United States 32,003 25,240 21,903 EMEA 57,353 45,700 41,585 APAC 26,301 20,098 22,809 Total revenue $ 540,522 $ 411,381 $ 366,561 |
Schedule of Long-Lived Assets by Geographic Location | December 31, 2020 2019 United States of America $ 14,868 $ 16,738 Rest of the World 786 905 Total $ 15,654 $ 17,643 |
QUARTERLY FINANCIAL DATA (una_2
QUARTERLY FINANCIAL DATA (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY FINANCIAL DATA (unaudited) | |
Unaudited Quarterly Consolidated Statements of Operations Data | For the Three Months Ended 2020 2019 March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, Revenue $ 107,274 $ 133,316 $ 158,531 $ 141,401 $ 95,885 $ 95,540 $ 107,077 $ 112,879 Cost of revenue: Platform commissions, royalties and other 36,974 46,727 56,390 48,204 33,270 32,806 36,758 38,278 Impairment and amortization of intangible assets 888 887 888 595 1,252 1,056 1,040 1,039 Total cost of revenue 37,862 47,614 57,278 48,799 34,522 33,862 37,798 39,317 Gross profit 69,412 85,702 101,253 92,602 61,363 61,678 69,279 73,562 Operating expenses: Research and development 29,531 28,420 30,778 30,989 26,546 19,736 22,968 25,877 Sales and marketing 42,743 65,203 42,222 27,077 28,105 35,040 46,140 31,013 General and administrative 6,667 7,266 7,870 9,688 6,635 4,951 5,879 5,751 Total operating expenses 78,941 100,889 80,870 67,754 61,286 59,727 74,987 62,641 Income/(loss) from operations (9,529) (15,187) 20,383 24,848 77 1,951 (5,708) 10,921 Interest and other income/(expense), net (65) 434 413 289 764 556 271 510 Income/(loss) before income taxes (9,594) (14,753) 20,796 25,137 841 2,507 (5,437) 11,431 Income tax (provision)/benefit 1,321 6,187 (7,391) (1,256) (178) — 348 (641) Net income/(loss) $ (8,273) $ (8,566) $ 13,405 $ 23,881 $ 663 $ 2,507 $ (5,089) $ 10,790 Net income/(loss) per share Basic $ (0.06) $ (0.05) $ 0.08 $ 0.14 $ 0.00 $ 0.02 $ (0.03) $ 0.07 Diluted $ (0.06) $ (0.05) $ 0.07 $ 0.13 $ 0.00 $ 0.02 $ (0.03) $ 0.07 |
THE COMPANY AND SUMMARY OF SI_4
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cumulative impact to retained earnings (ASC 606) | $ 417,094 | $ 203,087 | $ 177,313 | $ 153,860 |
Revenue recognized relating to performance obligations satisfied in prior periods | $ 0 | $ 0 | ||
Revenue, Remaining Performance Obligation, Optional Exemption, Performance Obligation [true false] | true | |||
Number of years revenue from consumable virtual items has been insignificant | 3 years | |||
Minimum | ||||
Estimated useful life of a paying user | 4 months | |||
Maximum | ||||
Estimated useful life of a paying user | 8 months | |||
Cumulative effect adjustment from adoption of ASU 2014-09 | ||||
Cumulative impact to retained earnings (ASC 606) | $ 8,826 |
THE COMPANY AND SUMMARY OF SI_5
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Estimates and Judgments (Details) | 12 Months Ended |
Dec. 31, 2020 | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Number of days required to be considered an active user | 30 days |
Revenue, minimum number of days of data required | 120 days |
THE COMPANY AND SUMMARY OF SI_6
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration Risks (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from customers | Apple | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage from customers | 56.2 | 54.4 | 54.7 |
Revenues from customers | Google | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage from customers | 32.9 | 33.5 | 31.3 |
Accounts Receivable | Customer Concentration Risk | Apple | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage from customers | 42.7 | 47.2 | |
Accounts Receivable | Customer Concentration Risk | Google | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage from customers | 28.8 | 28.5 | |
Accounts Receivable | Customer Concentration Risk | Tapjoy | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage from customers | 22 | 17.8 |
THE COMPANY AND SUMMARY OF SI_7
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Licensor Royalties, Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Future minimum royalty payments | $ 28,807 | $ 40,150 | $ 28,807 | |
Impairment charges to cost of revenues | 186 | 457 | $ 711 | |
Goodwill impairment charges | $ 0 | $ 0 | $ 0 | |
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets estimated useful life | 3 years | |||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets estimated useful life | 5 years |
THE COMPANY AND SUMMARY OF SI_8
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Property plant and Equipment useful life | 3 years |
Computer software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property plant and Equipment useful life | 2 years |
Computer 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 SI_9
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Internal Use Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Internal Use Software [Abstract] | |||
Capitalized internal use software costs | $ 247 | $ 1,216 | $ 65 |
Amortization of capitalized software costs | $ 690 | $ 809 | $ 896 |
Capitalized software costs | |||
Internal Use Software [Abstract] | |||
Intangible assets estimated useful life | 3 years |
THE COMPANY AND SUMMARY OF S_10
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Advertising Expenses [Abstract] | |||
Advertising expense | $ 146,207 | $ 117,979 | $ 95,037 |
NET INCOME_(LOSS) PER SHARE- Ba
NET INCOME/(LOSS) PER SHARE- Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||
Net income/(loss) | $ 23,881 | $ 13,405 | $ (8,566) | $ (8,273) | $ 10,790 | $ (5,089) | $ 2,507 | $ 663 | $ 20,447 | $ 8,871 | $ (13,199) |
Shares used to compute net income/(loss) per share: | |||||||||||
Weighted average shares used to compute basic net income/(loss) per share | 162,521 | 145,838 | 141,402 | ||||||||
Dilutive potential common shares | 10,646 | 11,545 | |||||||||
Weighted average shares used to compute diluted net income/(loss) per share | 173,167 | 157,383 | 141,402 | ||||||||
Basic net income/(loss) per share | $ 0.14 | $ 0.08 | $ (0.05) | $ (0.06) | $ 0.07 | $ (0.03) | $ 0.02 | $ 0 | $ 0.13 | $ 0.06 | $ (0.09) |
Diluted net income/(loss) per share | $ 0.13 | $ 0.07 | $ (0.05) | $ (0.06) | $ 0.07 | $ (0.03) | $ 0.02 | $ 0 | $ 0.12 | $ 0.06 | $ (0.09) |
NET INCOME_(LOSS) PER SHARE - A
NET INCOME/(LOSS) PER SHARE - Antidilutive Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 1,665 | 7,030 | 27,618 |
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 | 1,292 | 1,600 | |
Options 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 | 592 | 2,303 | 18,491 |
Restricted stock units ("RSUs") | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 1,073 | 659 | 3,021 |
Performance stock options ("PSOs") | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 2,369 | 3,512 | |
Performance stock units ("PSUs") | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 38 | 711 | |
Employee stock purchase plan ("ESPP") | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti dilutive securities excluded from computation of diluted net loss per share | 369 | 283 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total Revenue | $ 141,401 | $ 158,531 | $ 133,316 | $ 107,274 | $ 112,879 | $ 107,077 | $ 95,540 | $ 95,885 | $ 540,522 | $ 411,381 | $ 366,561 |
In-App Purchases | Over-time revenue recognition | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 481,279 | 360,598 | 316,157 | ||||||||
Advertisements and offers | Point-in-time revenue recognition | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 59,046 | 50,728 | 50,121 | ||||||||
Other | Point-in-time revenue recognition | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Revenue | $ 197 | $ 55 | $ 283 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Contract Balances | |||
Receivables, which are included in accounts receivable, net | $ 34,571 | $ 29,304 | |
Contract assets | 0 | 0 | |
Contract liabilities, which are included in deferred revenue | $ 117,672 | $ 97,629 | $ 85,736 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 364,396 | $ 127,053 |
Other Investments | 1,565 | 1,565 |
Total financial assets | 365,961 | 128,618 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 364,396 | 127,053 |
Total financial assets | 364,396 | 127,053 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Investments | 1,565 | 1,565 |
Total financial assets | $ 1,565 | $ 1,565 |
BALANCE SHEET COMPONENTS - Acco
BALANCE SHEET COMPONENTS - Accounts Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
BALANCE SHEET COMPONENTS | |||
Accounts receivable | $ 34,571,000 | $ 29,304,000 | |
Accounts receivable, net | 34,571,000 | 29,304,000 | |
Bad debts | $ 0 | $ 0 | $ 0 |
BALANCE SHEET COMPONENTS - Prop
BALANCE SHEET COMPONENTS - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 34,207 | $ 31,013 | |
Less: Accumulated depreciation and amortization | (18,553) | (13,370) | |
Property and equipment, net | 15,654 | 17,643 | |
Depreciation [Abstract] | |||
Depreciation | 5,421 | 4,225 | $ 3,855 |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 10,559 | 9,079 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,303 | 2,201 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,847 | 3,612 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 16,498 | $ 16,121 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets | ||||||||||||
Gross Carrying Value | $ 21,117 | $ 21,117 | $ 21,117 | $ 21,117 | $ 21,117 | |||||||
Accumulated Amortization Expense | (19,617) | (16,359) | (19,617) | (16,359) | (19,617) | |||||||
Total intangible assets | 1,500 | 4,758 | 1,500 | 4,758 | 1,500 | |||||||
Impairment and amortization of intangible assets | 595 | $ 888 | $ 887 | $ 888 | 1,039 | $ 1,040 | $ 1,056 | $ 1,252 | 3,258 | 4,387 | $ 9,119 | |
Impairment and amortization of intangible assets | $ 9,119 | |||||||||||
Beginning Balance | $ 116,227 | 116,227 | ||||||||||
Impairment | 0 | 0 | 0 | |||||||||
Ending Balance | 116,227 | 116,227 | $ 116,227 | 116,227 | 116,227 | |||||||
Minimum | ||||||||||||
Finite-Lived Intangible Assets | ||||||||||||
Estimated Useful Life | 3 years | |||||||||||
Maximum | ||||||||||||
Finite-Lived Intangible Assets | ||||||||||||
Estimated Useful Life | 5 years | |||||||||||
Titles, content and technology | ||||||||||||
Finite-Lived Intangible Assets | ||||||||||||
Gross Carrying Value | 21,117 | 21,117 | $ 21,117 | 21,117 | 21,117 | |||||||
Accumulated Amortization Expense | (19,617) | (16,359) | (19,617) | (16,359) | (19,617) | |||||||
Total intangible assets | $ 1,500 | $ 4,758 | $ 1,500 | $ 4,758 | $ 1,500 | |||||||
Titles, content and technology | Minimum | ||||||||||||
Finite-Lived Intangible Assets | ||||||||||||
Estimated Useful Life | 3 years | |||||||||||
Titles, content and technology | Maximum | ||||||||||||
Finite-Lived Intangible Assets | ||||||||||||
Estimated Useful Life | 5 years |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lease terms | |||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Longest extension option | 6 years | ||
Rent expense | $ 6,307 | $ 5,311 | $ 5,759 |
Restricted cash | $ 110 | ||
ROU asset adjustment | $ 407 | ||
Minimum | |||
Lease terms | |||
Operating leases, remaining lease terms | 4 months | ||
Maximum | |||
Lease terms | |||
Operating leases, remaining lease terms | 6 years 11 months 1 day |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments under Noncancelable Leases (Details) $ in Thousands | Dec. 31, 2020USD ($) |
LEASES | |
2021 | $ 7,129 |
2022 | 7,026 |
2023 | 6,980 |
2024 | 5,332 |
2025 and thereafter | 22,335 |
Total lease payments | 48,802 |
Less imputed interest | (9,544) |
Total | $ 39,258 |
LEASES - Supplemental Informati
LEASES - Supplemental Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
LEASES | |
Weighted-average remaining non-cancelable lease term | 6 years 7 months 9 days |
Weighted-average discount rate | 6.70% |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash outflow from operating leases | $ 4,751 |
Right of use assets obtained in exchange for new lease obligations: | |
Operating leases | $ 407 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Future Unpaid Minimum Guaranteed Royalty Commitments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Future unpaid minimum guaranteed royalty commitments | |
2021 | $ 9,060 |
2022 | 6,881 |
2023 | 6,716 |
2024 | 6,150 |
Total future unpaid minimum guaranteed royalty commitments | $ 28,807 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Indemnification Agreement | Officers And Directors | ||
Indemnification Agreements [Abstract] | ||
Indemnification liability recorded | $ 0 | $ 0 |
Indemnification Agreement | Digital Storefronts | ||
Indemnification Agreements [Abstract] | ||
Indemnification liability recorded | 0 | $ 0 |
Current and long-term liabilities | Agreements With Various Licensors | ||
Other agreements with commitments | ||
Other Commitment | $ 28,807 |
STOCKHOLDERS' EQUITY - Follow-o
STOCKHOLDERS' EQUITY - Follow-on Public Offering (Details) $ / shares in Units, $ in Thousands | 1 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Follow-on Public Offering | |
Subsidiary, Sale of Stock [Line Items] | |
Shares issued | shares | 17,250 |
Offering price per share | $ / shares | $ 9.25 |
Aggregate gross proceeds | $ | $ 159,563 |
Net proceeds after underwriting fees and offering expenses | $ | $ 151,773 |
Follow-on Public Offering, over-allotment option | |
Subsidiary, Sale of Stock [Line Items] | |
Shares issued | shares | 2,250 |
STOCKHOLDERS' EQUITY - Warrants
STOCKHOLDERS' EQUITY - Warrants to Purchase Common Stock (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares Outstanding Under Warrants | |||
Warrants outstanding, beginning balance | $ 1,600 | ||
Number of Shares Outstanding Under Warrant, Exercised | (475) | ||
Number of Shares Outstanding Under Warrant, Expired | (25) | ||
Warrants outstanding, ending balance | $ 1,100 | $ 1,600 | |
Weighted Average Exercise Price Per Share | |||
Weighted average exercise price, beginning balance | $ 4.61 | ||
Weighted average exercise price, Exercised | 4.99 | ||
Weighted average exercise price, Expired | 4.99 | ||
Weighted average exercise price, ending balance | $ 4.44 | $ 4.61 | |
Average Contractual Term (Years) | |||
Warrants outstanding, Average Contractual term (Years) | 5 years 7 months 28 days | 5 years 5 months 8 days | |
Average contractual term, Exercised | 5 years | ||
Average contractual term, Expired | 5 years | ||
Warrants to purchase common stock | |||
Average Contractual Term (Years) | |||
Recognized expense with respect to warrants | $ 0 | $ 0 | $ 1,046,000 |
STOCKHOLDERS' EQUITY - Weighted
STOCKHOLDERS' EQUITY - Weighted Average Assumptions (Details) - Warrants to purchase common stock | 12 Months Ended |
Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |
Risk-free interest rate | 2.53% |
Expected volatility | 56.73% |
Expected term (years) | 3 years 6 months 3 days |
STOCK INCENTIVE AND OTHER BEN_3
STOCK INCENTIVE AND OTHER BENEFIT PLANS (Details) - shares | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2017 | Dec. 31, 2020 | Dec. 31, 2007 | Apr. 30, 2020 | Apr. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual term | 10 years | ||||
Common stock, reserved for future issuance | 34,468,000 | ||||
Options to purchase common stock | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual term | 6 years | ||||
Options to purchase common stock | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual term | 10 years | ||||
Performance stock options ("PSOs") | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual term | 10 years | ||||
Sixth Amendment 2007 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, reserved for future issuance | 7,000 | ||||
Number of shares available for grant | 7,459,000 | ||||
2007 Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock authorized for issuance, increased | 4,000,000 | ||||
Purchase price equal to fair market value, percent | 85.00% | ||||
Common stock, reserved for future issuance | 667,000 | ||||
Number of shares available for grant | 2,003,000 | ||||
2018 Equity Inducement Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, reserved for future issuance | 194,000 | 400 |
STOCK INCENTIVE AND OTHER BEN_4
STOCK INCENTIVE AND OTHER BENEFIT PLANS - RSU and PSU Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted stock units ("RSUs") | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awarded and unvested, Number of Units Outstanding, beginning balance | 3,951 | 3,021 | 5,812 | |
Granted, Number of Units Outstanding | 293 | 4,635 | 2,936 | 278 |
Vested, Number of Units Outstanding | (1,832) | (1,688) | (2,648) | |
Forfeited, Number of Units Outstanding | (486) | (318) | (421) | |
Awarded and unvested, Number of Units Outstanding, ending balance | 6,268 | 3,951 | 3,021 | |
Awarded and unvested, Weighted Average Grant Date Fair Value, beginning balance | $ 5.66 | $ 3.01 | $ 2.96 | |
Granted, Weighted Average Grant Date Fair Value | 7.29 | 6.84 | 5.90 | |
Vested, Weighted Average Grant Date Fair Value | 4.92 | 3.27 | 3.24 | |
Forfeited, Weighted Average Grant Date Fair Value | 6.15 | 4.17 | 2.71 | |
Awarded and unvested, Weighted Average Grant Date Fair Value, ending balance | $ 7.04 | $ 5.66 | $ 3.01 | |
Awarded and unvested, Weighted Average Remaining Contractual Term (Years) | 1 year 7 months 13 days | |||
Aggregate Intrinsic Value | $ 2,638 | $ 56,478 | ||
Performance stock units ("PSUs") | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awarded and unvested, Number of Units Outstanding, beginning balance | 5,417 | 3,530 | 661 | |
Granted, Number of Units Outstanding | 444 | 1,432 | 2,780 | 2,909 |
Vested, Number of Units Outstanding | (1,509) | (700) | ||
Forfeited, Number of Units Outstanding | (1,436) | (193) | (40) | |
Awarded and unvested, Number of Units Outstanding, ending balance | 3,904 | 5,417 | 3,530 | |
Expected to vest, Number of Units Outstanding | 749 | |||
Awarded and unvested, Weighted Average Grant Date Fair Value, beginning balance | $ 6.06 | $ 5.45 | $ 3.59 | |
Granted, Weighted Average Grant Date Fair Value | 9.53 | 6.46 | 5.85 | |
Vested, Weighted Average Grant Date Fair Value | 5.64 | 4.59 | ||
Forfeited, Weighted Average Grant Date Fair Value | 6.78 | 6.14 | 4.03 | |
Awarded and unvested, Weighted Average Grant Date Fair Value, ending balance | 7.22 | $ 6.06 | $ 5.45 | |
Expected to vest, Weighted Average Grant Date Fair Value | $ 6.37 | |||
Awarded and unvested, Weighted Average Remaining Contractual Term (Years) | 1 year 4 months 17 days | |||
Expected to vest, Weighted Average Remaining Contractual Term (Years) | 9 months 14 days | |||
Aggregate Intrinsic Value | $ 3,997 | $ 35,178 | ||
Expected to vest, Aggregate Intrinsic Value | $ 6,748 |
STOCK INCENTIVE AND OTHER BEN_5
STOCK INCENTIVE AND OTHER BENEFIT PLANS - PSO and Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Performance stock options ("PSOs") | |||
Number of Shares Outstanding, beginning balances | 6,583,000 | 6,756,000 | 4,170,000 |
Options granted, number of shares | 0 | 0 | 2,737,000 |
Number of Shares Outstanding, Canceled | (1,377,000) | (151,000) | |
Number of Shares Outstanding, Exercised | (1,133,000) | (173,000) | |
Number of Shares Outstanding, ending balances | 4,073,000 | 6,583,000 | 6,756,000 |
Number of Shares Outstanding, expected to vest | 992,000 | ||
Number of Shares Outstanding, exercisable | 2,615,000 | ||
Weighted Average Exercise Price, beginning balance | $ 4.54 | $ 4.51 | $ 3.59 |
Options granted, weighted average exercise price | 5.87 | ||
Weighted Average Exercise Price, Canceled | 6.18 | 3.59 | |
Weighted Average Exercise Price, Exercised | 3.61 | 3.59 | |
Weighted Average Exercise Price, ending balance | 4.24 | $ 4.54 | $ 4.51 |
Weighted Average Exercise Price, expected to vest | 4.93 | ||
Weighted Average Exercise Price, exercisable | $ 3.59 | ||
Weighted Average Remaining Contractual Term, ending balance | 7 years 14 days | ||
Weighted Average Remaining Contractual Term, expected to vest | 7 years 3 months 18 days | ||
Weighted Average Remaining Contractual Term, exercisable | 6 years 9 months 18 days | ||
Aggregate Intrinsic Value, ending balance | $ 19,422 | ||
Aggregate Intrinsic Value, expected to vest | 4,054 | ||
Aggregate Intrinsic Value, exercisable | $ 14,162 | ||
Options to purchase common stock | |||
Number of Shares Outstanding, beginning balances | 16,288,000 | 18,491,000 | 16,932,000 |
Options granted, number of shares | 210,000 | (815,000) | 6,092,000 |
Number of Shares Outstanding, Canceled | (489,000) | (1,219,000) | (1,213,000) |
Number of Shares Outstanding, Exercised | (4,818,000) | (1,799,000) | (3,320,000) |
Number of Shares Outstanding, ending balances | 11,191,000 | 16,288,000 | 18,491,000 |
Number of Shares Outstanding, exercisable | 8,897,000 | ||
Weighted Average Exercise Price, beginning balance | $ 3.56 | $ 3.39 | $ 2.78 |
Options granted, weighted average exercise price | 9 | 7.58 | 4.82 |
Weighted Average Exercise Price, Canceled | 4.77 | 4.73 | 3.54 |
Weighted Average Exercise Price, Exercised | 3.23 | 2.81 | 2.88 |
Weighted Average Exercise Price, ending balance | 3.75 | $ 3.56 | $ 3.39 |
Weighted Average Exercise Price, exercisable | $ 3.35 | ||
Weighted Average Remaining Contractual Term, ending balance | 6 years 6 months 3 days | ||
Weighted Average Remaining Contractual Term, exercisable | 6 years 3 months 10 days | ||
Aggregate Intrinsic Value, ending balance | $ 58,842 | ||
Aggregate Intrinsic Value, exercisable | $ 50,343 |
STOCK INCENTIVE AND OTHER BEN_6
STOCK INCENTIVE AND OTHER BENEFIT PLANS - Weighted Average Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Based Compensation Additional Details | |||
Contractual term | 10 years | ||
Performance stock options ("PSOs") | |||
Black-Sholes Valuation Assumptions | |||
Risk-free interest rate | 2.89% | ||
Expected volatility | 60.20% | ||
Expected term (years) | 5 years 11 months 23 days | ||
Stock Based Compensation Additional Details | |||
Contractual term | 10 years | ||
Weighted-average fair value of stock options granted | $ 3.38 | ||
Granted (in shares) | 0 | 0 | 2,737,000 |
Options to purchase common stock | |||
Black-Sholes Valuation Assumptions | |||
Risk-free interest rate | 0.28% | 1.88% | 2.63% |
Expected volatility | 69.30% | 57.20% | 57.90% |
Expected term (years) | 4 years | 4 years | 4 years |
Stock Based Compensation Additional Details | |||
Weighted-average fair value of stock options granted | $ 4.63 | $ 3.44 | $ 2.25 |
Granted (in shares) | 210,000 | (815,000) | 6,092,000 |
Options to purchase common stock | Minimum | |||
Stock Based Compensation Additional Details | |||
Contractual term | 6 years | ||
Options to purchase common stock | Maximum | |||
Stock Based Compensation Additional Details | |||
Contractual term | 10 years |
STOCK INCENTIVE AND OTHER BEN_7
STOCK INCENTIVE AND OTHER BENEFIT PLANS - Stock-Based Compensation Expense (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 31,809,000 | $ 17,383,000 | $ 24,592,000 |
Reversal of stock based compensation expense | 2,455,000 | ||
Total compensation expense related to unvested awards not yet recognized | $ 45,841,000 | ||
Quoted closing price of Company's common stock | $ 9.01 | ||
Cash proceeds, net of taxes from option exercises | $ 19,463,000 | 3,305,000 | 5,643,000 |
2007 Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 1,832,000 | 1,360,000 | 927,000 |
Number of shares available for grant | 2,003 | ||
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 19,942,000 | 10,466,000 | 12,807,000 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 3,904,000 | 1,700,000 | 2,795,000 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 7,963,000 | 5,217,000 | 8,990,000 |
Options to purchase common stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 6,068,000 | 7,043,000 | 6,386,000 |
Total compensation expense related to unvested awards not yet recognized | $ 5,050,000 | ||
Unrecognized compensation expense recognized over weighted average period | 1 year 3 months 3 days | ||
Total intrinsic value exercised | $ 23,991,000 | 7,806,000 | 10,957,000 |
Significant income tax benefit from stock option exercises | $ 0 | 0 | 0 |
Restricted stock units ("RSUs") | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Vesting period | 4 years | ||
Vesting percentage on or around the one-year anniversary | 25.00% | ||
Total stock-based compensation expense | $ 11,177,000 | 6,559,000 | 8,084,000 |
Total compensation expense related to unvested awards not yet recognized | $ 36,789,000 | ||
Unrecognized compensation expense recognized over weighted average period | 3 years 2 months 12 days | ||
Performance stock options ("PSOs") | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 12,732,000 | $ 2,421,000 | $ 9,195,000 |
Total compensation expense related to unvested awards not yet recognized | $ 325,000 | ||
Unrecognized compensation expense recognized over weighted average period | 1 month 17 days | ||
Performance stock units ("PSUs") | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 739,000 | ||
Total compensation expense related to unvested awards not yet recognized | $ 3,677,000 | ||
Unrecognized compensation expense recognized over weighted average period | 6 months 7 days |
INCOME TAXES - Components by Ju
INCOME TAXES - Components by Jurisdiction (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||||||||||
United States | $ 19,279 | $ 7,047 | $ (12,396) | ||||||||
Foreign | 2,307 | 2,295 | (254) | ||||||||
Income/(loss) before income taxes | $ 25,137 | $ 20,796 | $ (14,753) | $ (9,594) | $ 11,431 | $ (5,437) | $ 2,507 | $ 841 | $ 21,586 | $ 9,342 | $ (12,650) |
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, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||||||||||
Federal | $ (122) | $ 373 | $ (96) | |||||||
State | (161) | (10) | (8) | |||||||
Foreign | (1,105) | (590) | (500) | |||||||
Current Income Tax Expense (Benefit), Total | (1,388) | (227) | (604) | |||||||
Deferred: | ||||||||||
Foreign | 249 | (244) | 55 | |||||||
Deferred Income Tax Expense (Benefit), Total | 249 | (244) | 55 | |||||||
Total: | ||||||||||
Federal | (122) | 373 | (96) | |||||||
State | (161) | (10) | (8) | |||||||
Foreign | (856) | (834) | (445) | |||||||
Income tax benefit/(provision) | $ (1,256) | $ (7,391) | $ 6,187 | $ 1,321 | $ (641) | $ 348 | $ (178) | $ (1,139) | $ (471) | $ (549) |
INCOME TAXES - Income Tax Rate
INCOME TAXES - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax at federal statutory rate | 21.00% | 21.00% | 21.00% |
Meals and entertainment | 0.30% | 3.10% | (2.00%) |
Research and development credit | (24.40%) | (41.00%) | 21.30% |
Stock-based compensation | (24.40%) | (29.00%) | 17.90% |
Revenue from contracts with customers | (14.60%) | ||
Others | 3.10% | (0.60%) | (3.10%) |
Global intangible low-taxed income | 0.80% | 4.20% | (1.70%) |
Valuation allowance | 10.20% | 17.50% | (35.30%) |
Executive compensation | 8.60% | 6.10% | |
Foreign tax credit | 8.20% | 23.70% | (7.80%) |
Other non-deductible expenses | 1.90% | ||
Effective tax rate | 5.30% | 5.00% | (4.30%) |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Fixed assets | $ 725 | $ 280 |
Net operating loss carryforwards | 42,829 | 48,993 |
Accruals, reserves and other | 7,861 | 4,060 |
Foreign tax credit | 1,138 | 2,905 |
Stock-based compensation | 5,494 | 5,882 |
Research and development credit | 27,899 | 22,630 |
Capitalized research and development | 7,784 | 7,189 |
Intangible assets | 988 | 355 |
Operating lease liabilities | 8,863 | 9,043 |
Other | 2,773 | 2,951 |
Total deferred tax assets | 106,354 | 104,288 |
Deferred tax liabilities: | ||
Fixed assets | (68) | (40) |
Operating lease right of use assets | (7,105) | (7,767) |
Net deferred tax assets | 99,181 | 96,481 |
Less valuation allowance | (98,766) | (96,316) |
Net deferred tax assets | 415 | 165 |
US | ||
Deferred tax assets: | ||
Fixed assets | 654 | 209 |
Net operating loss carryforwards | 42,822 | 48,968 |
Accruals, reserves and other | 7,460 | 3,939 |
Foreign tax credit | 1,138 | 2,905 |
Stock-based compensation | 5,494 | 5,882 |
Research and development credit | 27,899 | 22,630 |
Capitalized research and development | 7,784 | 7,189 |
Intangible assets | 988 | 355 |
Operating lease liabilities | 8,708 | 8,926 |
Other | 2,773 | 2,951 |
Total deferred tax assets | 105,720 | 103,954 |
Deferred tax liabilities: | ||
Operating lease right of use assets | (6,961) | (7,663) |
Net deferred tax assets | 98,759 | 96,291 |
Less valuation allowance | (98,759) | (96,291) |
Foreign Tax Authority | ||
Deferred tax assets: | ||
Fixed assets | 71 | 71 |
Net operating loss carryforwards | 7 | 25 |
Accruals, reserves and other | 401 | 121 |
Operating lease liabilities | 155 | 117 |
Total deferred tax assets | 634 | 334 |
Deferred tax liabilities: | ||
Fixed assets | (68) | (40) |
Operating lease right of use assets | (144) | (104) |
Net deferred tax assets | 422 | 190 |
Less valuation allowance | (7) | (25) |
Net deferred tax assets | $ 415 | $ 165 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | ||
Accumulated earnings of foreign subsidiaries | $ 3,734 | |
Valuation allowance movements | 2,450 | $ 2,334 |
Federal Tax | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 182,400 | |
U S State | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 90,547 | |
Federal Research And Development Credits | Research and Development Tax Credit Carryforward | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforward amount | 19,515 | |
California Research And Development Tax Credit | Research and Development Tax Credit Carryforward | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforward amount | 28,010 | |
Foreign Tax Authority | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforward amount | $ 1,128 |
INCOME TAXES - Unrecognized tax
INCOME TAXES - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of total amounts of unrecognized tax benefits | ||
Unrecognized Tax Benefits, Beginning Balance | $ 15,084 | $ 20,718 |
Reductions of tax positions taken during previous years | (8,226) | |
Additions based on uncertain tax positions related to the current period | 3,940 | 2,598 |
Additions based on uncertain tax positions related to prior periods | 61 | |
Cumulative translation adjustment | (6) | |
Unrecognized Tax Benefits, Ending Balance | 19,085 | 15,084 |
Unrecognized tax benefit netted against deferred tax assets | $ 19,035 | $ 15,084 |
SEGMENT INFORMATION AND OPERA_3
SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA - Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Long-lived assets (primarily consist of property and equipment) | |||||||||||
Number of Operating Segments | segment | 1 | ||||||||||
Revenues | $ 141,401 | $ 158,531 | $ 133,316 | $ 107,274 | $ 112,879 | $ 107,077 | $ 95,540 | $ 95,885 | $ 540,522 | $ 411,381 | $ 366,561 |
United States of America | |||||||||||
Long-lived assets (primarily consist of property and equipment) | |||||||||||
Revenues | 424,865 | 320,343 | 280,264 | ||||||||
Americas, excluding the United States | |||||||||||
Long-lived assets (primarily consist of property and equipment) | |||||||||||
Revenues | 32,003 | 25,240 | 21,903 | ||||||||
EMEA | |||||||||||
Long-lived assets (primarily consist of property and equipment) | |||||||||||
Revenues | 57,353 | 45,700 | 41,585 | ||||||||
APAC | |||||||||||
Long-lived assets (primarily consist of property and equipment) | |||||||||||
Revenues | $ 26,301 | $ 20,098 | $ 22,809 |
SEGMENT INFORMATION AND OPERA_4
SEGMENT INFORMATION AND OPERATIONS BY GEOGRAPHIC AREA - Long-Lived Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Long-lived assets (primarily consist of property and equipment) | ||
Long-Lived Assets | $ 15,654 | $ 17,643 |
United States of America | ||
Long-lived assets (primarily consist of property and equipment) | ||
Long-Lived Assets | 14,868 | 16,738 |
Rest of the World | ||
Long-lived assets (primarily consist of property and equipment) | ||
Long-Lived Assets | $ 786 | $ 905 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event | Feb. 08, 2021USD ($)$ / shares |
Subsequent Event [Line Items] | |
Cash for each share of Company's stock issued and outstanding, Merger Agreement | $ / shares | $ 12.50 |
Enterprise value, Merger Agreement | $ | $ 2,100,000 |
QUARTERLY FINANCIAL DATA (una_3
QUARTERLY FINANCIAL DATA (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
QUARTERLY FINANCIAL DATA (unaudited) | |||||||||||
Revenues | $ 141,401 | $ 158,531 | $ 133,316 | $ 107,274 | $ 112,879 | $ 107,077 | $ 95,540 | $ 95,885 | $ 540,522 | $ 411,381 | $ 366,561 |
Cost of revenue: | |||||||||||
Platform commissions, royalties and other | 48,204 | 56,390 | 46,727 | 36,974 | 38,278 | 36,758 | 32,806 | 33,270 | 188,295 | 141,112 | 129,156 |
Impairment and amortization of intangible assets | 595 | 888 | 887 | 888 | 1,039 | 1,040 | 1,056 | 1,252 | 3,258 | 4,387 | 9,119 |
Total cost of revenue | 48,799 | 57,278 | 47,614 | 37,862 | 39,317 | 37,798 | 33,862 | 34,522 | 191,553 | 145,499 | 138,275 |
Gross profit | 92,602 | 101,253 | 85,702 | 69,412 | 73,562 | 69,279 | 61,678 | 61,363 | 348,969 | 265,882 | 228,286 |
Operating expenses: | |||||||||||
Research and development | 30,989 | 30,778 | 28,420 | 29,531 | 25,877 | 22,968 | 19,736 | 26,546 | 119,718 | 95,127 | 95,174 |
Sales and marketing | 27,077 | 42,222 | 65,203 | 42,743 | 31,013 | 46,140 | 35,040 | 28,105 | 177,245 | 140,298 | 113,860 |
General and administrative | 9,688 | 7,870 | 7,266 | 6,667 | 5,751 | 5,879 | 4,951 | 6,635 | 31,491 | 23,216 | 31,667 |
Total operating expenses | 67,754 | 80,870 | 100,889 | 78,941 | 62,641 | 74,987 | 59,727 | 61,286 | 328,454 | 258,641 | 240,701 |
Income/(loss) from operations | 24,848 | 20,383 | (15,187) | (9,529) | 10,921 | (5,708) | 1,951 | 77 | 20,515 | 7,241 | (12,415) |
Interest and other income/(expense), net | 289 | 413 | 434 | (65) | 510 | 271 | 556 | 764 | 1,071 | 2,101 | (235) |
Income/(loss) before income taxes | 25,137 | 20,796 | (14,753) | (9,594) | 11,431 | (5,437) | 2,507 | 841 | 21,586 | 9,342 | (12,650) |
Income tax (provision)/benefit | (1,256) | (7,391) | 6,187 | 1,321 | (641) | 348 | (178) | (1,139) | (471) | (549) | |
Net income/(loss) | $ 23,881 | $ 13,405 | $ (8,566) | $ (8,273) | $ 10,790 | $ (5,089) | $ 2,507 | $ 663 | $ 20,447 | $ 8,871 | $ (13,199) |
Net income/(loss) per share | |||||||||||
Basic net income/(loss) per share | $ 0.14 | $ 0.08 | $ (0.05) | $ (0.06) | $ 0.07 | $ (0.03) | $ 0.02 | $ 0 | $ 0.13 | $ 0.06 | $ (0.09) |
Diluted net income/(loss) per share | $ 0.13 | $ 0.07 | $ (0.05) | $ (0.06) | $ 0.07 | $ (0.03) | $ 0.02 | $ 0 | $ 0.12 | $ 0.06 | $ (0.09) |