Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 26, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TYPE | |
Entity Registrant Name | MONOTYPE IMAGING HOLDINGS INC. | |
Entity Central Index Key | 1,385,292 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 41,542,490 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 70,120 | $ 82,822 |
Restricted cash | 6,000 | 11,987 |
Accounts receivable, net of allowance for doubtful accounts of $520 at September 30, 2018 and $634 at December 31, 2017 | 38,571 | 34,461 |
Income tax refunds receivable | 2,107 | 1,204 |
Prepaid expenses and other current assets | 7,062 | 5,714 |
Total current assets | 123,860 | 136,188 |
Property and equipment, net | 14,830 | 16,763 |
Goodwill | 276,798 | 279,131 |
Intangible assets, net | 76,539 | 84,856 |
Restricted cash | 6,000 | |
Other assets | 7,374 | 3,112 |
Total assets | 499,401 | 526,050 |
Current liabilities: | ||
Accounts payable | 2,830 | 1,467 |
Accrued expenses and other current liabilities | 32,408 | 43,096 |
Accrued income taxes payable | 304 | 522 |
Deferred revenue | 11,766 | 15,102 |
Total current liabilities | 47,308 | 60,187 |
Revolving line of credit | 80,000 | 93,000 |
Other long-term liabilities | 3,014 | 6,428 |
Deferred income taxes | 29,958 | 28,004 |
Reserve for income taxes | 2,344 | 2,783 |
Accrued pension benefits | 6,201 | 6,280 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, Authorized shares: 10,000,000; Issued and outstanding: none | ||
Common stock, $0.001 par value, Authorized shares: 250,000,000; Shares issued: 45,773,708 at September 30, 2018 and 44,934,364 at December 31, 2017 | 44 | 44 |
Additional paid-in capital | 313,354 | 298,113 |
Treasury stock, at cost, 3,914,493 shares at September 30, 2018 and 3,215,644 shares at December 31, 2017 | (72,611) | (64,083) |
Retained earnings | 94,940 | 97,815 |
Accumulated other comprehensive loss | (5,151) | (2,521) |
Total stockholders' equity | 330,576 | 329,368 |
Total liabilities and stockholders' equity | $ 499,401 | $ 526,050 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 520 | $ 634 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 45,773,708 | 44,934,364 |
Treasury stock, shares | 3,914,493 | 3,215,644 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total revenue | $ 57,969 | $ 60,507 | $ 175,339 | $ 170,773 |
Cost of revenue-amortization of acquired technology | 859 | 885 | 2,583 | 2,644 |
Total cost of revenue | 10,254 | 10,604 | 34,370 | 31,282 |
Gross profit | 47,715 | 49,903 | 140,969 | 139,491 |
Operating expenses: | ||||
Marketing and selling | 18,212 | 22,453 | 58,382 | 66,417 |
Research and development | 7,680 | 8,997 | 25,432 | 27,778 |
General and administrative | 10,786 | 11,291 | 38,262 | 34,032 |
Restructuring | 244 | 6,814 | ||
Amortization of other intangible assets | 851 | 1,021 | 2,840 | 3,051 |
Total operating expenses | 37,773 | 43,762 | 131,730 | 131,278 |
Income from operations | 9,942 | 6,141 | 9,239 | 8,213 |
Other (income) expense: | ||||
Interest expense | 959 | 815 | 2,756 | 2,365 |
Interest income | (133) | (116) | (403) | (309) |
Loss (gain) on foreign exchange | 408 | 1,357 | (30) | 4,544 |
(Gain) loss on derivatives | (47) | 119 | (138) | 290 |
Other (income) expense, net | (32) | (6) | 24 | |
Total other expense | 1,187 | 2,143 | 2,179 | 6,914 |
Income before provision for income taxes | 8,755 | 3,998 | 7,060 | 1,299 |
Provision for income taxes | 5,434 | 2,737 | 4,243 | 1,609 |
Net income (loss) | 3,321 | 1,261 | 2,817 | (310) |
Net income (loss) available to common stockholders-basic | 3,143 | 1,196 | 2,226 | (310) |
Net income (loss) available to common stockholders-diluted | $ 3,143 | $ 1,195 | $ 2,226 | $ (310) |
Net income (loss) per common share- basic and diluted | ||||
Basic | $ 0.08 | $ 0.03 | $ 0.06 | $ (0.01) |
Diluted | $ 0.08 | $ 0.03 | $ 0.06 | $ (0.01) |
Weighted-average number of shares outstanding: | ||||
Basic | 40,512,837 | 39,594,130 | 40,314,169 | 39,576,312 |
Diluted | 40,609,643 | 39,798,779 | 40,454,518 | 39,576,312 |
Dividends declared per common share | $ 0.116 | $ 0.113 | $ 0.348 | $ 0.339 |
License [Member] | ||||
Total revenue | $ 45,831 | $ 49,913 | $ 139,791 | $ 141,083 |
Total cost of revenue | 6,947 | 6,782 | 23,841 | 20,745 |
Service [Member] | ||||
Total revenue | 12,138 | 10,594 | 35,548 | 29,690 |
Total cost of revenue | $ 2,448 | $ 2,937 | $ 7,946 | $ 7,893 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 3,321 | $ 1,261 | $ 2,817 | $ (310) |
Other comprehensive income (loss), net of tax: | ||||
Unrecognized actuarial gain, net of tax of $7, $8, $20 and $23, respectively | 23 | 16 | 64 | 45 |
Foreign currency translation adjustments, net of tax of $(106), $1,058, $(1,296) and $3,469, respectively | (512) | 2,191 | (2,694) | 6,820 |
Comprehensive income | $ 2,832 | $ 3,468 | $ 187 | $ 6,555 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrecognized actuarial gain, tax | $ 7 | $ 8 | $ 20 | $ 23 |
Foreign currency translation adjustments, tax | $ (106) | $ 1,058 | $ (1,296) | $ 3,469 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Beginning Balance at Dec. 31, 2016 | $ 313,978 | $ 43 | $ (56,232) | $ 274,946 | $ 105,718 | $ (10,497) |
Beginning Balance, shares at Dec. 31, 2016 | 43,771,600 | 2,493,174 | ||||
Net income (loss) | (310) | (310) | ||||
Issuance of capital shares | ||||||
Restricted share grants | $ 1 | |||||
Restricted share grants, Shares | 905,151 | |||||
Exercised options | 1,062 | 1,062 | ||||
Exercised options, Shares | 107,343 | |||||
Restricted units converted | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Restricted units converted, shares | 38,245 | |||||
Repurchase of unvested shares of restricted common stock | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Repurchase of unvested shares of restricted common stock, Shares | 167,054 | |||||
Purchase of treasury shares | (6,351) | $ (6,351) | ||||
Purchase of treasury shares, shares | 340,989 | |||||
Shares withheld | (776) | $ (776) | ||||
Shares withheld, shares | 39,552 | |||||
Stock based compensation | 15,392 | 15,392 | ||||
Dividends declared | (14,180) | (14,180) | ||||
Unrecognized actuarial loss, net of tax | 45 | 45 | ||||
Cumulative translation adjustment, net of tax | 6,820 | 6,820 | ||||
Ending Balance at Sep. 30, 2017 | 315,982 | $ 44 | $ (63,359) | 292,272 | 90,657 | (3,632) |
Ending Balance, Shares at Sep. 30, 2017 | 44,822,339 | 3,040,769 | ||||
Beginning Balance at Jun. 30, 2017 | 315,937 | $ 44 | $ (58,992) | 286,607 | 94,117 | (5,839) |
Beginning Balance, shares at Jun. 30, 2017 | 44,666,826 | 2,763,378 | ||||
Net income (loss) | 1,261 | 1,261 | ||||
Issuance of capital shares | ||||||
Restricted share grants, Shares | 84,055 | |||||
Exercised options | 350 | 350 | ||||
Exercised options, Shares | 46,481 | |||||
Restricted units converted | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Restricted units converted, shares | 24,977 | |||||
Repurchase of unvested shares of restricted common stock | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Repurchase of unvested shares of restricted common stock, Shares | 37,486 | |||||
Purchase of treasury shares | (4,233) | $ (4,233) | ||||
Purchase of treasury shares, shares | 232,989 | |||||
Shares withheld | (134) | $ (134) | ||||
Shares withheld, shares | 6,916 | |||||
Stock based compensation | 5,315 | 5,315 | ||||
Dividends declared | (4,721) | (4,721) | ||||
Unrecognized actuarial loss, net of tax | 16 | 16 | ||||
Cumulative translation adjustment, net of tax | 2,191 | 2,191 | ||||
Ending Balance at Sep. 30, 2017 | 315,982 | $ 44 | $ (63,359) | 292,272 | 90,657 | (3,632) |
Ending Balance, Shares at Sep. 30, 2017 | 44,822,339 | 3,040,769 | ||||
Issuance of capital shares | ||||||
Cumulative adjustment, ASC 606 adoption | 301 | 872 | (571) | |||
Beginning Balance at Dec. 31, 2017 | 329,368 | $ 44 | $ (64,083) | 298,113 | 97,815 | (2,521) |
Beginning Balance, shares at Dec. 31, 2017 | 44,934,364 | 3,215,644 | ||||
Net income (loss) | 2,817 | 2,817 | ||||
Issuance of capital shares | ||||||
Restricted share grants, Shares | 496,025 | |||||
Exercised options | 3,455 | 3,455 | ||||
Exercised options, Shares | 248,276 | |||||
Restricted units converted | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Restricted units converted, shares | 95,043 | |||||
Repurchase of unvested shares of restricted common stock | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Repurchase of unvested shares of restricted common stock, Shares | 291,676 | |||||
Purchase of treasury shares | (6,678) | $ (6,678) | ||||
Purchase of treasury shares, shares | 326,808 | |||||
Shares withheld | (1,850) | $ (1,850) | ||||
Shares withheld, shares | 80,365 | |||||
Stock based compensation | 11,786 | 11,786 | ||||
Dividends declared | (14,642) | (14,642) | ||||
Unrecognized actuarial loss, net of tax | 64 | 64 | ||||
Cumulative translation adjustment, net of tax | (2,694) | (2,694) | ||||
Ending Balance at Sep. 30, 2018 | 330,576 | $ 44 | $ (72,611) | 313,354 | 94,940 | (5,151) |
Ending Balance, Shares at Sep. 30, 2018 | 45,773,708 | 3,914,493 | ||||
Beginning Balance at Jun. 30, 2018 | 334,230 | $ 44 | $ (66,581) | 308,952 | 96,477 | (4,662) |
Beginning Balance, shares at Jun. 30, 2018 | 45,738,183 | 3,586,782 | ||||
Net income (loss) | 3,321 | 3,321 | ||||
Issuance of capital shares | ||||||
Restricted share grants, Shares | 19,150 | |||||
Exercised options | 73 | 73 | ||||
Exercised options, Shares | 6,197 | |||||
Restricted units converted | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Restricted units converted, shares | 10,178 | |||||
Repurchase of unvested shares of restricted common stock | 0 | $ 0 | $ 0 | 0 | 0 | 0 |
Repurchase of unvested shares of restricted common stock, Shares | 29,167 | |||||
Purchase of treasury shares | (5,697) | $ (5,697) | ||||
Purchase of treasury shares, shares | 282,208,000 | |||||
Shares withheld | (333) | $ (333) | ||||
Shares withheld, shares | 16,336 | |||||
Stock based compensation | 4,329 | 4,329 | ||||
Dividends declared | (4,858) | (4,858) | ||||
Unrecognized actuarial loss, net of tax | 23 | 23 | ||||
Cumulative translation adjustment, net of tax | (512) | (512) | ||||
Ending Balance at Sep. 30, 2018 | 330,576 | $ 44 | $ (72,611) | $ 313,354 | 94,940 | $ (5,151) |
Ending Balance, Shares at Sep. 30, 2018 | 45,773,708 | 3,914,493 | ||||
Issuance of capital shares | ||||||
Cumulative adjustment, ASC 606 adoption | $ 8,950 | $ 8,950 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Dividends declared, per share | $ 0.116 | $ 0.113 | $ 0.348 | $ 0.339 |
Retained Earnings [Member] | ||||
Dividends declared, per share | $ 0.116 | $ 0.113 | $ 0.348 | $ 0.339 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net income (loss) | $ 2,817 | $ (310) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 9,548 | 9,271 |
Loss on retirement of fixed assets | 11 | 90 |
Loss on abandonment of product line | 3,223 | |
Amortization of deferred financing costs and accreted interest | 165 | 165 |
Stock based compensation | 11,761 | 15,294 |
Provision for doubtful accounts | 555 | 734 |
Deferred income taxes | (790) | (2,982) |
Unrealized currency loss on foreign denominated intercompany transactions | 203 | 3,870 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,198 | (3,978) |
Prepaid expenses and other assets | (4,820) | (1,560) |
Accounts payable | 1,395 | (16) |
Accrued income taxes payable | (1,672) | (349) |
Accrued expenses and other liabilities | (12,219) | 162 |
Deferred revenue | (964) | 1,122 |
Net cash provided by operating activities | 11,411 | 21,513 |
Cash flows from investing activities | ||
Purchases of property and equipment | (2,676) | (5,272) |
Purchases of intangible assets | (160) | (54) |
Net cash used in investing activities | (2,836) | (5,326) |
Cash flows from financing activities | ||
Payments on revolving line of credit | (13,000) | (9,000) |
Common stock dividends paid | (14,494) | (14,030) |
Purchase of treasury stock | (6,651) | (6,446) |
Payments for employee taxes on shares withheld | (1,850) | (776) |
Proceeds from exercises of common stock options | 3,455 | 1,062 |
Net cash used in financing activities | (32,540) | (29,190) |
Effect of exchange rates on cash, cash equivalents and restricted cash | (724) | 1,107 |
Decrease in cash, cash equivalents and restricted cash | (24,689) | (11,896) |
Cash, cash equivalents and restricted cash at beginning of period | 100,809 | 109,426 |
Cash, cash equivalents and restricted cash at end of period | $ 76,120 | $ 97,530 |
Nature of the Business
Nature of the Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | 1. Nature of the Business Monotype Imaging Holdings Inc. (the “Company” or “we”) is a leading provider of branded and design assets, technology and expertise for creative professionals and consumer device manufacturers. We provide high-quality, branded or personalized content across multiple devices and mediums. Our solutions, which include type, branded mobile content, visual content marketing solutions, custom design services, and tools and technologies that enable the creative process are licensed through our direct sales channel, e-commerce We are headquartered in Woburn, Massachusetts and we operate in one business segment: the development, marketing and licensing of design assets and technology. We also maintain various offices worldwide for selling and marketing, research and development and administration. As of September 30, 2018, we conduct our operations through four domestic operating subsidiaries, Monotype Imaging Inc., Monotype ITC Inc. (“ITC”), MyFonts Inc. (“MyFonts”), and Olapic, Inc., and six foreign operating subsidiaries, Olapic Argentina S.A., Monotype Ltd. (“Monotype UK”), Monotype GmbH (“Monotype Germany”), Monotype Solutions India Pvt. Ltd. (“Monotype India”), Monotype Hong Kong Ltd. (“Monotype Hong Kong”) and Monotype KK (“Monotype Japan”). |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements as of September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017 include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q S-X. S-X, 8-03(a)(5) 10-01(a)(7) These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2017, as reported in the Company’s Annual Report on Form 10-K. Statement of Operations For the three and nine months ended September 30, 2018, we have changed our presentation of revenue to disclose service revenue and cost of service revenue separately from license revenue and cost of license revenue, as service revenue now exceeds the materiality threshold for an individual line item. Prior year amounts were historically reported on a combined basis and have been restated to conform to current presentation. We classify cloud-based subscriptions and other services, such as font related services, custom font design and post contract support as service revenue on our condensed consolidated statements of operations. All other revenue is classified as license revenue. Highly Inflationary Economy At September 30, 2018, our wholly-owned Olapic Argentina S.A. subsidiary employs approximately 99 people whose functions mainly include development, sales support and administration. The monthly operations average between $0.4 million and $0.5 million. The Argentinian economy was recently determined to be highly inflationary. A highly inflationary economy is one where the cumulative inflation rate for the three years preceding the beginning of the reporting period, including interim reporting periods, is in excess of 100 percent. Argentina’s inflation rate reached this threshold with the quarterly period ended June 30, 2018. For interim periods ended prior to July 1, 2018, the functional currency for our subsidiary is the Argentinian peso, the foreign entity’s local currency. For a highly inflationary economy, we followed the guidance in ASC Topic 830, Foreign Currency Matters, (Subtopic ASC 830-10-45) |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | 3. Recently Issued Accounting Pronouncements Adopted Revenue Recognition In May 2014, the Financial Accounting Standards Board, or FASB, and the International Accounting Standards Board jointly issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , 2014-09 Other Assets and Deferred Costs Contracts with Customers (Subtopic 340-40) catch-up We adopted the standard on January 1, 2018, and applied the modified retrospective method of adoption and have elected to apply the new standard only to contracts not completed at January 1, 2018, which represents contracts for which all (or substantially all) of the revenues have not been recognized under existing guidance as of the date of adoption. The cumulative effect of the adoption on our condensed consolidated balance sheet, by applying the modified retrospective method as of January 1, 2018, is as follows (in thousands): As Reported Cumulative Adjustments As Adjusted December 31, 2017 January 1, 2018 Assets: Accounts receivable, net (1) $ 34,461 $ 7,052 $ 41,513 Prepaid expenses and other current assets (2) 5,714 427 6,141 Other assets (3) 3,112 650 3,762 Liabilities: Deferred revenue 15,102 (2,923 ) 12,179 Other long-term liabilities (4) 6,428 (825 ) 5,603 Deferred income taxes 28,004 2,927 30,931 Stockholders’ equity: Retained earnings 97,815 8,950 106,765 (1) Contract assets, short term are included in the accounts receivables, net of allowance for doubtful accounts in our condensed consolidated balance sheet. (2) Capitalized contract costs, short term are included in the prepaid expenses and other current assets in our condensed consolidated balance sheet. (3) Capitalized contract costs, long term are included in other assets in our condensed consolidated balance sheet. (4) Deferred revenue, long term is included in other long-term liabilities in our condensed consolidated balance sheet. In addition, we recognized additional royalty expenses totaling approximately $2.2 million, or $0.05 per share, upon the adoption of ASC 606, as an indirect effect of a change in accounting principle. These amounts are included in cost of revenue – license in the accompanying condensed consolidated statement of operations for the nine months ended September 30, 2018. The following reflects the Company’s condensed consolidated balance sheet and condensed consolidated statement of operations on an as reported basis and as if we had continued to recognize revenue under the guidance of ASC 985-605, Software Revenue Recognition September 30, 2018 As Reported Balances without adoption of ASC 606 Increase (Decrease) Assets: Accounts receivable, net $ 38,571 $ 25,334 $ (13,237 ) Prepaid expenses and other current assets 7,062 6,448 (614 ) Other assets 7,374 2,648 (4,726 ) Liabilities: Accrued expenses and other current liabilities 32,408 30,139 (2,269 ) Deferred revenue 11,766 18,827 7,061 Other long-term liabilities 3,014 4,042 1,028 Deferred income taxes 29,958 24,130 (5,828 ) Stockholders’ equity: Retained earnings 94,940 76,371 (18,569 ) For the three months ended September 30, 2018 As Reported Balances without adoption of ASC 606 Increase (Decrease) License revenue $ 45,831 $ 38,954 $ (6,877 ) Cost of revenue—license 6,947 6,877 (70 ) Marketing and selling 18,212 18,712 500 Provision for income taxes 5,434 3,801 (1,633 ) Net income (loss) 3,321 (2,353 ) (5,674 ) Net income (loss)—basic and diluted $ 0.08 $ (0.06 ) $ (0.14 ) For the nine months ended September 30, 2018 As Reported Balances without adoption of ASC 606 Increase (Decrease) License revenue $ 139,791 $ 126,666 $ (13,125 ) Service revenue 35,548 35,350 (198 ) Cost of revenue—license 23,841 21,572 (2,269 ) Marketing and selling 58,382 59,848 1,466 Provision for income taxes 4,243 1,342 (2,901 ) Net income (loss) 2,817 (6,802 ) (9,619 ) Net income (loss)—basic and diluted $ 0.06 $ (0.18) $ (0.24) The following summarizes the significant changes under ASC 606 as compared to legacy GAAP: • Under legacy GAAP, revenue related to our term licenses that were bundled with service-related performance obligations when vendor-specific objective evidence (“VSOE”) did not exist was required to be recognized ratably over the term of the agreement. Under ASC 606, the Company allocates revenue to each performance obligation in the contract and each performance obligation is accounted for separately; the license revenue is recognized at the time of delivery and the service revenue is recognized over time based on their relative standalone selling prices. The application of this provision is particularly impactful to our new Mosaic product offering which was launched in the first quarter of 2018. This new offering bundles our traditional font licenses with a SaaS based portal, which under legacy GAAP would have been recognized ratably. This provision also has resulted in some revenue from contracts signed prior to 2018 being accelerated and recorded to retained earnings instead of in our operating results in 2018 and beyond. • We have a limited number of contracts in which we offered extended payment terms for term licenses to our customers, including cases in which the license is delivered in full at the beginning of the contract. Under legacy GAAP, revenue was recognized when the payments became due, based upon the requirement that the fee be fixed or determinable. However, under the new guidance, revenue related to such arrangements is accelerated, with revenue related to the license recognized at the time of delivery, less a financing component (interest income) to be recognized over time based on the payment terms. The application of this provision has resulted in revenue from certain contracts signed prior to 2018 being accelerated and recorded to retained earnings instead of in our operating results in 2018 and beyond. This also impacts new contracts that we sign in 2018. • Under legacy GAAP, we recognized royalty revenue when the licensee reported it to us, typically one quarter after royalty-bearing units were shipped, at which time the fee is fixed or determinable. Under ASC 606, we now estimate royalty revenue from our royalty-based licenses in the period that the royalty-bearing event occurs. Thus, revenue from royalties reported to us in the first quarter of 2018 were recorded to retained earnings upon adoption of ASC 606, rather than being recognized as revenue as it would have been under legacy GAAP. This was partially offset by the recognition of revenue in the first quarter of 2018 for estimated royalties that were reported to us in the second quarter of 2018. • ASC 606 requires certain incremental costs related to contract acquisition, such as sales commissions, and contract fulfillment costs to be capitalized and amortized over the expected period of benefit whereas the Company had previously recognized such expenses as incurred. Please see Note 4 for the Company’s policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract. Statement of Cash Flows In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash beginning-of-period end-of-period 2016-18 beginning-of-period end-of-period beginning-of-period end-of-period Stock Compensation In May 2017, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. 2016-09 Pension Benefits In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715)-Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. 2017-07 Pending Internal Use Software In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use 350-40): 2015-05. 2018-15; Defined Benefit Pension Plan In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. 2018-14; Derivatives In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. 2017-12; Goodwill In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment 2017-04; Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification, 2016-02 2016-02, right-of-use 2016-02 The Company will adopt this ASU on January 1, 2019 and has begun planning for adoption by implementing new lease accounting software, and by working to establish additional changes to our processes and internal controls to ensure all requirements are met upon adoption. The standard allows for a modified retrospective approach or a modified retrospective approach with comparatives under 840 option, where entities would recognize a cumulative effect to retained earnings at the date of adoption without restating prior periods’ balances or disclosures. The Company plans to use the modified retrospective approach with comparatives under 840 option that will not require revising comparative period information or disclosure. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. In addition, we are electing the hindsight practical expedient to determine the lease term for existing leases. We will also elect the practical expedient that allows an accounting policy election to exclude right of use assets and lease obligations from the balance sheet for all leases with an initial term of 12 months or less. Management is continuing to assess the impact of this standard on the Company’s condensed consolidated balance sheet, condensed consolidated statement of operations, condensed consolidated statements of cash flows or disclosures in the notes to the condensed consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 4. Revenue Recognition We recognize revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects consideration that we expect to be entitled to receive in exchange for these services, and excludes any sales incentives and taxes collected from customers that are subsequently remitted to governmental authorities. We adopted ASC 606 on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under legacy GAAP. The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of our products and services and will provide financial statement readers with enhanced disclosures. Nature of Licenses and Services & Timing of Revenue Recognition Creative Professional Revenue Our Creative Professional revenue is primarily derived from rights to use font licenses, custom font design services and hosted software as a service, or SaaS, offerings. We license fonts directly to end-users e-commerce Revenue from font licenses is recognized upfront when the font software is delivered or made available to the customer. Custom font design services are generally not a separate distinct performance obligation and are sold with a license for the custom font, in which case revenue is recognized upon completion of the services and when the font is delivered and accepted by the customer. In limited cases, the Company has an enforceable right to payment prior to final delivery and acceptance of custom font design work. In these cases, the Company has determined that the proper treatment is a single over-time performance obligation using input methods (incurred hours towards completion) to measure progress towards completion to determine the pattern of satisfaction of the performance obligation. For our hosted offerings where we provide our customers the right to access our software without taking possession, revenue is recognized over the contract period on a time-elapsed basis, which is consistent with the transfer of service to the customer. Payment terms and conditions for Creative Professional contracts generally require payment within thirty to sixty days of contract inception. An exception exists for certain contracts for our SaaS offerings or a limited number of multi-year term license agreements which have periodic payment terms, generally quarterly or annually, over the term of the contract. In instances where the timing of revenue recognition differs from the respective payment terms, we have considered whether such contracts include a significant financing component, subject to the applicable practical expedient. The purpose of these payment structures is to align with industry and market standards, not to provide customers with financing. We have determined our contracts generally do not include a significant financing component; however, the Company will continue to assess (1) the length of time between when the goods or services are delivered and expected payment, and (2) prevailing interest rates in the market to re-evaluate OEM Revenue Our OEM revenue is derived substantially from printer imaging, printer driver and display imaging products. OEM revenue primarily relates to licenses providing our customers the right to embed our fonts and technology in their products over a certain term. Under our OEM licensing arrangements, we either receive a fixed fee as specified under the license arrangement or a royalty for each product unit incorporating our fonts and technology that is shipped by our OEM customers. Although significantly less than royalties from per-unit per-unit per-unit Disaggregated Revenue The following table presents our revenue disaggregated by the timing of revenue recognition as well as by type of product or services offered (See Note 12 for further information regarding revenue by major markets and revenue by geography): For the Three Months Ended September 30, 2018 For the Nine Months Ended September 30, 2018 Creative Professional OEM Total Creative Professional OEM Total License revenue: License transferred in point in time $ 25,068 $ 20,763 $ 45,831 $ 77,817 $ 61,974 $ 139,791 Service revenue: Service transferred in point in time 319 238 557 1,509 1,943 3,452 Service transferred over time 10,727 854 11,581 30,203 1,893 32,096 Total $ 36,114 $ 21,855 $ 57,969 $ 109,529 $ 65,810 $ 175,339 Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once we determine the performance obligations, the Company determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. We then allocate the transaction price to each performance obligation in the contract based on a relative stand-alone selling price method. The corresponding revenue is recognized as the related performance obligations are satisfied as discussed in the revenue categories above. Judgment is required to determine the standalone selling price for each distinct performance obligation. We determine standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. With the exception of OEM royalty licenses, our contracts do not generally include a variable component to the transaction price. If royalties are not yet reported to us for the period in which the subsequent sale is expected to occur, we are required to estimate such royalties. When a new contract is signed for the licensing of IP on a per-unit per-unit per-unit As discussed above, certain of our Creative Professional contracts have payment terms that differ from the timing of revenue recognition which requires us to assess whether the transaction price for those contracts include a significant financing component. We have elected the practical expedient that permits an entity to not adjust for the effects of a significant financing component if we expect that at the contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. For those contracts in which the period exceeds the one year threshold, this assessment, as well as the quantitative estimate of the financing component and its relative significance, requires judgment. We estimate the significant financing component provided to our customers with extended payment terms by determining the present value of the future payments by applying a discount rate that reflects the customer’s creditworthiness. Transaction Price Allocated to Future Performance Obligations The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or are partially satisfied as of September 30, 2018 is $21.9 million. This amount consists principally of amounts billed for undelivered services that are included in deferred revenue totaling approximately $13.2 million, as well as unbilled backlog, which is the amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations, for enforceable contracts when there is not a present unconditional right to invoice (a receivable), totaling approximately $8.7 million. Of these amounts, approximately $18.4 million is expected to be recognized as revenue within the next 12 months, with substantially all of the remainder expected to be recognized as revenue within the following 24 month period, as shown in the table below (in thousands): Current Long-term Total Deferred revenue $ 11,766 $ 1,427 $ 13,193 Unbilled backlog 6,688 2,055 8,743 Total $ 18,454 $ 3,482 $ 21,936 Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record an unbilled receivable, or contract asset, when revenue is recognized prior to invoicing when we have an enforceable right to payment. When invoicing occurs prior to revenue recognition, we have unearned revenue, or contract liabilities, presented on our condensed consolidated balance sheet as “deferred revenue” within deferred revenue and other long-term liabilities, as appropriate. When invoicing occurs after revenue recognition, we have earned revenue, or contract assets, presented on our condensed consolidated balance sheet as “unbilled receivables” within accounts receivable and other assets, as appropriate. Revenue recognized during the three and nine months ended September 30, 2018 from amounts included in deferred revenue at the beginning of the period were approximately $7.2 million and $21.6 million, respectively. Revenue recognized during both the three and nine months ended September 30, 2018 from performance obligations satisfied or partially satisfied in previous periods, mainly due to changes in the estimate of royalty revenues, was $7.9 million. During the nine months ended September 30, 2018, the change in contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was not material. The contract modifications entered into during the nine months ended September 30, 2018 did not have a significant impact on the Company’s contract assets or deferred revenue. Costs to Obtain and Fulfill a Contract We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain commissions paid under our sales incentive programs meet the requirements to be capitalized. The amount capitalized for incremental costs to obtain contracts as of September 30, 2018 was $2.5 million, of which $0.6 million was short-term and has been included in prepaid expenses and other current assets and $1.9 million was long term and has been included in other assets in our condensed consolidated balance sheet. Costs to obtain a contract are amortized as sales and marketing expense over the expected period of benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract and the estimate of the amortization period, which ranges between three and ten years depending on the nature of the performance obligations within the contract. These costs are periodically reviewed for impairment. The amount of capitalized costs related to contracts which were terminated on or before September 30, 2018, due to the customer exercising an opt-out We have elected to apply the practical expedient and recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. We capitalize incremental costs incurred to fulfill our contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the contract, and (iii) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs primarily relate to font license fees that we pay on certain fonts that are owned by third parties. These fees are related to license revenue that is satisfied at a point in time and payable again upon license renewal, and as a result are incurred immediately upon contract execution. Accordingly, there are no capitalized costs related to costs to fulfill a contract as of September 30, 2018. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements The following table presents our financial assets and liabilities that are carried at fair value (in thousands): Fair Value Measurement at September 30, 2018 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 28,788 $ 28,788 $ — $ — Restricted cash equivalents—money market fund 6,000 6,000 — — Total assets $ 34,788 $ 34,788 $ — $ — Fair Value Measurement at December 31, 2017 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 2,014 $ 2,014 $ — $ — Cash equivalents—commercial paper 16,477 — 16,477 — Cash equivalents—corporate bonds 1,457 — 1,457 — Cash equivalents—U.S. government and agency securities 10,488 10,488 — — Restricted cash equivalents—money market fund 3,000 3,000 — — Restricted cash equivalents—U.S. government and agency security fund 8,987 8,987 — — Total current assets 42,423 24,489 17,934 — Restricted cash equivalents—money market fund 6,000 6,000 — — Total long term assets 6,000 6,000 — — Total assets $ 48,423 $ 30,489 $ 17,934 $ — The Company’s recurring fair value measures relate to short-term investments, which are classified as cash equivalents, derivative instruments and from time to time contingent consideration. The fair value of our cash equivalents is based on quoted prices (unadjusted) for identical assets. The fair value of our derivatives is based on quoted market prices from various banking institutions or an independent third-party provider for similar instruments. In determining the fair value, we consider our non-performance 30-day 30-day The Company’s non-financial non-financial non-recurring |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets During the quarter ended June 30, 2018, the Company decided to cease sales of certain service offerings that were principally acquired as part of the Company’s acquisition of Swyft Media in January 2015. The decision was made in connection with other restructuring actions to re-align The Company has determined that disposal of the Swyft Media component did not qualify for reporting as a discontinued operation under ASC 205-20, Discontinued Operations, The Company evaluated whether the disposal group represented a business under ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, Goodwill The changes in the carrying value of goodwill are as follows (in thousands): Balance at December 31, 2017 $ 279,131 Foreign currency exchange rate changes (1,733 ) Impairment (600 ) Balance at September 30, 2018 $ 276,798 Intangible Assets Intangible assets as of September 30, 2018 and December 31, 2017 were as follows (dollar amounts in thousands): September 30, 2018 December 31, 2017 Weighted- Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance Customer relationships 10 $ 64,895 $ (54,732 ) $ 10,163 $ 68,296 $ (54,213 ) $ 14,083 Acquired technology 11 68,921 (51,807 ) 17,114 69,200 (48,945 ) 20,255 Non-compete 4 13,654 (13,004 ) 650 14,632 (13,470 ) 1,162 Indefinite-lived intangible assets: Trademarks 44,212 — 44,212 44,956 — 44,956 Domain names 4,400 — 4,400 4,400 — 4,400 Total $ 196,082 $ (119,543 ) $ 76,539 $ 201,484 $ (116,628 ) $ 84,856 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt On September 15, 2015, the Company entered into a new credit agreement (the “ New Credit Agreement Credit Facility Borrowings under the Credit Facility bear a variable rate not less than zero based upon, at the Company’s option, either LIBOR or the higher of (i) the prime rate as published in the Wall Street Journal, and (ii) 0.5% plus the overnight federal funds rate, plus in each case, an applicable margin. The applicable margin for LIBOR loans, based on the applicable leverage ratio, is 1.25%, 1.50% or 1.75% per annum, and the applicable margin for base rate loans, based on the applicable leverage ratio, is either 0.25%, 0.50% or 0.75% per annum. At September 30, 2018, our rate, inclusive of applicable margins, was 3.8% for LIBOR, and at December 31, 2017, our rate, inclusive of applicable margins, was 3.1% for LIBOR. As of September 30, 2018, the maximum leverage ratio permitted was 3.00:1.00 and our leverage ratio was 1.75:1.00 and the minimum fixed charge coverage ratio was 1.25:1.00 and our fixed charge ratio was 3.62:1.00. Failure to comply with these covenants, or the occurrence of an event of default, could permit the Lenders under the New Credit Agreement to declare all amounts borrowed under the New Credit Agreement, together with accrued interest and fees, to be immediately due and payable. In addition, the Credit Facility is secured by a lien on substantially all of the Company’s and its domestic subsidiaries’ tangible and intangible property by a pledge of all of the equity interests of the Company’s direct and indirect domestic subsidiaries and by a pledge by the Company’s domestic subsidiaries of 65% of the equity of their direct foreign subsidiaries, subject to limited exceptions. In addition to other covenants, the New Credit Agreement places limits on the Company and its subsidiaries’ ability to incur debt or liens and engage in sale-leaseback transactions, make loans and investments, incur additional indebtedness, engage in mergers, acquisitions and asset sales, transact with affiliates and alter its business. The Company was in compliance with the covenants under the Credit Facility as of September 30, 2018. |
Defined Benefit Pension Plan
Defined Benefit Pension Plan | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Defined Benefit Pension Plan | 8. Defined Benefit Pension Plan Our German subsidiary maintains an unfunded defined benefit pension plan which covers substantially all employees who joined the company prior to the plan’s closure to new participants in 2006. Participants are entitled to benefits in the form of retirement, disability and surviving dependent pensions. Benefits generally depend on years of service and the salary of the employees. The components of net periodic benefit cost included in the accompanying condensed consolidated statements of operations were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Service cost $ 27 $ 25 $ 81 $ 71 Interest cost 25 29 78 81 Amortization 22 24 69 68 Net periodic benefit cost $ 74 $ 78 $ 228 $ 220 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes A reconciliation of income taxes computed at federal statutory rates to income tax expense is as follows (dollar amounts in thousands): Three Months Ended September 30, 2018 2017 Provision for income taxes at statutory rate $ 1,839 21.0 % $ 1,399 35.0 % State and local income taxes, net of federal tax benefit (4 ) 0.0 % (173 ) (4.3 )% Stock based compensation 89 1.0 % 141 3.5 % Foreign rate differential 2,662 30.4 % (109 ) (2.7 )% Research credits (70 ) (0.8 )% (381 ) (9.5 )% Permanent non-deductible 1,302 14.9 % 1,629 40.7 % Net shortfall on stock based compensation 76 0.8 % 257 6.4 % Reversal of reserve for income taxes (370 ) (4.2 )% (66 ) (1.6 )% Other, net (90 ) (1.0 )% 40 1.0 % Reported income tax provision $ 5,434 62.1 % $ 2,737 68.5 % Nine Months Ended September 30, 2018 2017 Provision for income taxes at statutory rate $ 1,483 21.0 % $ 455 35.0 % State and local income taxes, net of federal tax benefit (55 ) (0.8 )% (234 ) (18.0 )% Stock based compensation 73 1.0 % 64 5.0 % Foreign rate differential 2,214 31.4 % (47 ) (3.6 )% Research credits (57 ) (0.8 )% (170 ) (13.1 )% Permanent non-deductible 1,061 15.0 % 727 55.9 % Net (windfall) shortfall on stock based compensation (80 ) (1.1 )% 799 61.5 % Reversal of reserve for income taxes (370 ) (5.2 )% (66 ) (5.1 )% Other, net (26 ) (0.4 )% 81 6.3 % Reported income tax provision $ 4,243 60.1 % $ 1,609 123.9 % At September 30, 2018, the reserve for uncertain tax positions was approximately $7.0 million. Of this amount, $4.7 million is recorded as a reduction of deferred tax assets and $2.3 million is classified as long-term liabilities. During the quarter, the Company recorded a benefit of $0.4 million related to reserves no longer required due to the lapses of statutes of limitations. As disclosed in the Company’s 2017 Form 10-K, |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 10. Net Income (Loss) Per Share For the three and nine months ended September 30, 2018 and 2017, the net income (loss) available to common shareholders is divided by the weighted average number of common shares outstanding during the period to calculate diluted earnings per share. The assumed exercise of stock options and assumed vesting of restricted stock and restricted stock units were included in the computation of net income per share for the three and nine months ended September 30, 2018 and for the three months ended September 30, 2017, but were excluded in the computation of net (loss) per share for the nine months ended September 30, 2017, as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2018 and for the three months ended September 30, 2017, the two-class The following presents a reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per share and, a reconciliation of the numerator and denominator used in the calculation of diluted net income (loss) per share (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income (loss), as reported $ 3,321 $ 1,261 $ 2,817 $ (310 ) Less: net income (loss) attributable to participating securities (178 ) (65 ) (591 ) — Net income (loss) available to common shareholders—basic $ 3,143 $ 1,196 $ 2,226 $ (310 ) Denominator: Basic: Weighted-average shares of common stock outstanding 42,040,716 41,750,884 42,026,047 41,700,355 Less: weighted-average shares of unvested restricted common stock outstanding (1,527,879 ) (2,156,754 ) (1,711,878 ) (2,124,043 ) Weighted-average number of common shares used in computing basic net income (loss) per common share 40,512,837 39,594,130 40,314,169 39,576,312 Net income (loss) per share applicable to common shareholders—basic $ 0.08 $ 0.03 $ 0.06 $ (0.01 ) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income (loss) available to common shareholders—basic $ 3,143 $ 1,196 $ 2,226 $ (310 ) Add-back: — (179 ) — — Less: undistributed earnings reallocated to unvested shareholders — 178 — — Net income (loss) available to common shareholders—diluted $ 3,143 $ 1,195 $ 2,226 $ (310 ) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Denominator: Diluted: Weighted-average shares of common stock outstanding 42,040,716 41,750,884 42,026,047 41,700,355 Less: weighted-average shares of unvested restricted common stock outstanding (1,527,879 ) (2,156,754 ) (1,711,878 ) (2,124,043 ) Weighted-average number of common shares issuable upon exercise of outstanding stock options 96,806 204,649 140,349 — Weighted-average number of common shares used in computing diluted net income (loss) per common share 40,609,643 39,798,779 40,454,518 39,576,312 Net income (loss) per share applicable to common shareholders—diluted $ 0.08 $ 0.03 $ 0.06 $ (0.01 ) The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Options 506,003 633,858 488,471 824,536 Unvested restricted stock 535,558 566,934 420,908 652,741 Unvested restricted stock units 17,248 32,971 26,645 58,674 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 11. Stockholders’ Equity Stock purchases On May 3, 2018, the Company’s Board of Directors approved a share purchase program permitting repurchases of up to $25.0 million of the Company’s outstanding shares of common stock through June 7, 2019. During the quarter ended September 30, 2018, the Company repurchased a total of 282,208 shares of its common stock for an aggregate purchase price of $5.7 million, including brokers’ fees. Intended to offset shareholder dilution, the Company expects to make repurchases periodically, either on the open market or in privately negotiated transactions, subject to availability, as business and market conditions warrant. The share repurchase program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or discontinued at the discretion of management and/or the Company’s Board of Directors. Stock Based Compensation We account for stock based compensation in accordance with ASC Topic No. 718, Compensation—Stock Compensation Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Marketing and selling $ 2,031 $ 2,455 $ 4,515 $ 7,348 Research and development 900 1,131 2,781 3,227 General and administrative 1,395 1,685 4,465 4,719 Total expensed $ 4,326 $ 5,271 $ 11,761 $ 15,294 Property and equipment 3 44 24 97 Total stock based compensation $ 4,329 $ 5,315 $ 11,785 $ 15,391 In the three months ended September 30, 2018 and 2017, $3 thousand and $44 thousand, respectively, of stock based compensation was capitalized as part of internal software projects, and this amount is included in property and equipment, net in our condensed consolidated balance sheet. In the nine months ended September 30, 2018 and 2017, $24 thousand and $97 thousand, respectively, of stock based compensation was capitalized as part of internal software projects, and this amount is included in property and equipment, net in our condensed consolidated balance sheet. For the nine months ended September 30, 2018, $1.4 million of stock based compensation expense was reversed as a result of forfeitures of awards by employees included in the restructuring plan. This non-recurring As of September 30, 2018, the Company had $29.0 million of unrecognized compensation expense related to employees and directors’ unvested restricted stock awards, restricted stock units and stock option awards that are expected to be recognized over a weighted-average period of 2.2 years. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | 12. Segment Reporting We view our operations and manage our business as one segment: the development, marketing and licensing of technologies and fonts. Factors used to identify our single segment include the financial information available for evaluation by our chief operating decision maker in making decisions about how to allocate resources and assess performance. While our technologies and services are sold into two principal markets, Creative Professional and OEM, expenses and assets are not formally allocated to these market segments, and operating results are assessed on an aggregate basis to make decisions about the allocation of resources. The following table presents revenue for these two principle markets (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Creative Professional $ 36,114 $ 34,521 $ 109,529 $ 92,234 OEM 21,855 25,986 65,810 78,539 Total $ 57,969 $ 60,507 $ 175,339 $ 170,773 Geographic segment information We market our products and services principally through offices in the United States, United Kingdom, Germany, China, Republic of Korea and Japan. We report revenue based on the geographic location of our customers. For example, licenses may be sold to large international companies, which may be headquartered in the Republic of Korea, such revenues would be included in the revenue defined as Rest of World. The following table summarizes revenue by customer location (in thousands of dollars, except percentages): Three Months Ended September 30, 2018 2017 Sales % of Total Sales % of Total (In thousands, except percentages) United States $ 26,389 45.5 % $ 27,951 46.2 % Japan 12,847 22.2 14,963 24.7 Europe, Middle East and Africa (EMEA) 12,809 22.1 13,952 23.1 Rest of World 5,924 10.2 3,641 6.0 Total $ 57,969 100.0 % $ 60,507 100.0 % Nine Months Ended September 30, 2018 2017 Sales % of Total Sales % of Total (In thousands, except percentages) United States $ 78,360 44.7 % $ 74,631 43.7 % Japan 36,217 20.7 44,278 25.9 Europe, Middle East and Africa (EMEA) 42,873 24.4 37,392 21.9 Rest of World 17,889 10.2 14,472 8.5 Total $ 175,339 100.0 % $ 170,773 100.0 % Long-lived assets, which include property and equipment, goodwill and intangible assets, but exclude other assets and deferred tax assets, are attributed to geographic areas in which Company assets reside and is shown below (in thousands): September 30, 2018 December 31, 2017 Long-lived assets: United States $ 305,562 $ 314,930 United Kingdom 3,628 4,004 Germany 55,310 58,319 Asia (including Japan) 3,667 3,497 Total $ 368,167 $ 380,750 |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 13. Restructuring On June 6, 2018, the Company implemented a restructuring plan, under which the Company will reduce headcount in certain areas of the Company, made the decision to cease sales and marketing of the Swyft product and service line and to close a regional office, all in an effort to improve operational efficiencies. The plan provided for the elimination of approximately 50 positions worldwide across a variety of functions, with a concentration within engineering, as well as sales and marketing. The Company recorded net charges totaling $0.2 million and $6.8 million in the three and nine months ended September 30, 2018, respectively, related to severance and termination benefits, net of stock based compensation reversal, the write off of goodwill and intangible assets attributable to Swyft, the acceleration of the final deferred compensation payment to the founders of Swyft, and charges associated with the office closure. The following presents the details of the restructuring expense line item within our consolidated statements of operations (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Severance and termination benefits $ 177 $ 4,403 Reversal of stock based compensation expense — (1,402 ) Accelerated deferred compensation — 523 Office closure 67 67 Intangible assets impairment — 2,623 Write off of allocated goodwill — 600 Total restructuring $ 244 $ 6,814 We reversed $1.4 million of stock based compensation expense as a result of forfeitures of awards by employees included in the restructuring plan. See Note 6 for further details regarding the intangible asset disposal and write off of goodwill. The following presents a roll forward of the restructuring reserves and provision activity (in thousands): Personnel related Facilities related Total Restructuring reserve at January 1, 2018 $ 1,333 $ — $ 1,333 Restructuring charges 194 — 194 Cash payments (985 ) — (985 ) Restructuring reserve at March 31, 2018 542 — 542 Restructuring charges 4,031 — 4,031 Cash payments (479 ) — (479 ) Foreign currency exchange rate changes (5 ) — (5 ) Restructuring reserve at June 30, 2018 $ 4,089 $ — $ 4,089 Restructuring charges 177 67 244 Cash payments (1,295 ) — (1,295 ) Foreign currency exchange rate changes (24 ) — (24 ) Restructuring reserve at September 30, 2018 $ 2,947 $ 67 $ 3,014 Future cash expenditures related to the restructuring are expected to be approximately $2.3 million, net of tax savings. We expect the restructuring plan to be completed by the end of 2018, other than the payment of deferred termination benefits to certain terminated employees. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies Legal Proceedings From time to time, we may be a party to various claims, suits and complaints. We do not believe that there are claims or legal proceedings that, if determined adversely to us, would have a material adverse effect on our business, results of operations or financial condition. Licensing Warranty Under our standard license agreement with our OEM customers, we warrant that the licensed technologies are free of infringement claims of intellectual property rights and will meet the specifications as defined in the licensing agreement for a specified period, typically one year. Under the licensing agreements, liability for such indemnity obligations is limited, generally to the total arrangement fee; however, exceptions have been made on a case-by-case |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Stock Purchase Program Subsequent to September 30, 2018, the Company purchased 315,000 shares of common stock for $6.3 million, at an average price per share of $19.80 through October 26, 2018. The Company purchased these shares on the open market at prevailing market prices and in accordance with its previously announced share purchase program. At October 26, 2018, $12.0 million remains for future purchase under the Plan. Dividend Declaration On October 25, 2018, the Company’s Board of Directors declared a $0.116 per share quarterly cash dividend on our outstanding common stock. The record date is set for January 2, 2019 and the dividend is payable to shareholders of record on January 22, 2019. Dividends are declared at the discretion of the Company’s Board of Directors and depend on actual cash from operations, the Company’s financial condition and capital requirements and any other factors the Company’s Board of Directors may consider relevant. Future dividend declarations, as well as the record and payment dates for such dividends, will be determined by the Company’s Board of Directors on a quarterly basis. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Standards Update 2014-09 [Member] | |
Summary of Impact of Adoption of Accounting Standards | The cumulative effect of the adoption on our condensed consolidated balance sheet, by applying the modified retrospective method as of January 1, 2018, is as follows (in thousands): As Reported Cumulative Adjustments As Adjusted December 31, 2017 January 1, 2018 Assets: Accounts receivable, net (1) $ 34,461 $ 7,052 $ 41,513 Prepaid expenses and other current assets (2) 5,714 427 6,141 Other assets (3) 3,112 650 3,762 Liabilities: Deferred revenue 15,102 (2,923 ) 12,179 Other long-term liabilities (4) 6,428 (825 ) 5,603 Deferred income taxes 28,004 2,927 30,931 Stockholders’ equity: Retained earnings 97,815 8,950 106,765 (1) Contract assets, short term are included in the accounts receivables, net of allowance for doubtful accounts in our condensed consolidated balance sheet. (2) Capitalized contract costs, short term are included in the prepaid expenses and other current assets in our condensed consolidated balance sheet. (3) Capitalized contract costs, long term are included in other assets in our condensed consolidated balance sheet. (4) Deferred revenue, long term is included in other long-term liabilities in our condensed consolidated balance sheet. The following reflects the Company’s condensed consolidated balance sheet and condensed consolidated statement of operations on an as reported basis and as if we had continued to recognize revenue under the guidance of ASC 985-605, Software Revenue Recognition September 30, 2018 As Reported Balances without adoption of ASC 606 Increase (Decrease) Assets: Accounts receivable, net $ 38,571 $ 25,334 $ (13,237 ) Prepaid expenses and other current assets 7,062 6,448 (614 ) Other assets 7,374 2,648 (4,726 ) Liabilities: Accrued expenses and other current liabilities 32,408 30,139 (2,269 ) Deferred revenue 11,766 18,827 7,061 Other long-term liabilities 3,014 4,042 1,028 Deferred income taxes 29,958 24,130 (5,828 ) Stockholders’ equity: Retained earnings 94,940 76,371 (18,569 ) For the three months ended September 30, 2018 As Reported Balances without adoption of ASC 606 Increase (Decrease) License revenue $ 45,831 $ 38,954 $ (6,877 ) Cost of revenue—license 6,947 6,877 (70 ) Marketing and selling 18,212 18,712 500 Provision for income taxes 5,434 3,801 (1,633 ) Net income (loss) 3,321 (2,353 ) (5,674 ) Net income (loss)—basic and diluted $ 0.08 $ (0.06 ) $ (0.14 ) For the nine months ended September 30, 2018 As Reported Balances without adoption of ASC 606 Increase (Decrease) License revenue $ 139,791 $ 126,666 $ (13,125 ) Service revenue 35,548 35,350 (198 ) Cost of revenue—license 23,841 21,572 (2,269 ) Marketing and selling 58,382 59,848 1,466 Provision for income taxes 4,243 1,342 (2,901 ) Net income (loss) 2,817 (6,802 ) (9,619 ) Net income (loss)—basic and diluted $ 0.06 $ (0.18) $ (0.24) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue Disaggregated by Timing of Revenue Recognition and Reportable Segments as well as by Type of Product or Services Offered | The following table presents our revenue disaggregated by the timing of revenue recognition as well as by type of product or services offered (See Note 12 for further information regarding revenue by major markets and revenue by geography): For the Three Months Ended September 30, 2018 For the Nine Months Ended September 30, 2018 Creative Professional OEM Total Creative Professional OEM Total License revenue: License transferred in point in time $ 25,068 $ 20,763 $ 45,831 $ 77,817 $ 61,974 $ 139,791 Service revenue: Service transferred in point in time 319 238 557 1,509 1,943 3,452 Service transferred over time 10,727 854 11,581 30,203 1,893 32,096 Total $ 36,114 $ 21,855 $ 57,969 $ 109,529 $ 65,810 $ 175,339 |
Summary of Transaction Price Allocated to Future Performance Obligations | Of these amounts, approximately $18.4 million is expected to be recognized as revenue within the next 12 months, with substantially all of the remainder expected to be recognized as revenue within the following 24 month period, as shown in the table below (in thousands): Current Long-term Total Deferred revenue $ 11,766 $ 1,427 $ 13,193 Unbilled backlog 6,688 2,055 8,743 Total $ 18,454 $ 3,482 $ 21,936 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value | The following table presents our financial assets and liabilities that are carried at fair value (in thousands): Fair Value Measurement at September 30, 2018 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 28,788 $ 28,788 $ — $ — Restricted cash equivalents—money market fund 6,000 6,000 — — Total assets $ 34,788 $ 34,788 $ — $ — Fair Value Measurement at December 31, 2017 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 2,014 $ 2,014 $ — $ — Cash equivalents—commercial paper 16,477 — 16,477 — Cash equivalents—corporate bonds 1,457 — 1,457 — Cash equivalents—U.S. government and agency securities 10,488 10,488 — — Restricted cash equivalents—money market fund 3,000 3,000 — — Restricted cash equivalents—U.S. government and agency security fund 8,987 8,987 — — Total current assets 42,423 24,489 17,934 — Restricted cash equivalents—money market fund 6,000 6,000 — — Total long term assets 6,000 6,000 — — Total assets $ 48,423 $ 30,489 $ 17,934 $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The changes in the carrying value of goodwill are as follows (in thousands): Balance at December 31, 2017 $ 279,131 Foreign currency exchange rate changes (1,733 ) Impairment (600 ) Balance at September 30, 2018 $ 276,798 |
Intangible Assets | Intangible assets as of September 30, 2018 and December 31, 2017 were as follows (dollar amounts in thousands): September 30, 2018 December 31, 2017 Weighted- Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance Customer relationships 10 $ 64,895 $ (54,732 ) $ 10,163 $ 68,296 $ (54,213 ) $ 14,083 Acquired technology 11 68,921 (51,807 ) 17,114 69,200 (48,945 ) 20,255 Non-compete 4 13,654 (13,004 ) 650 14,632 (13,470 ) 1,162 Indefinite-lived intangible assets: Trademarks 44,212 — 44,212 44,956 — 44,956 Domain names 4,400 — 4,400 4,400 — 4,400 Total $ 196,082 $ (119,543 ) $ 76,539 $ 201,484 $ (116,628 ) $ 84,856 |
Defined Benefit Pension Plan (T
Defined Benefit Pension Plan (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost included in the accompanying condensed consolidated statements of operations were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Service cost $ 27 $ 25 $ 81 $ 71 Interest cost 25 29 78 81 Amortization 22 24 69 68 Net periodic benefit cost $ 74 $ 78 $ 228 $ 220 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Reconciliation Computed at Federal Statutory Rates to Income Tax Expense | A reconciliation of income taxes computed at federal statutory rates to income tax expense is as follows (dollar amounts in thousands): Three Months Ended September 30, 2018 2017 Provision for income taxes at statutory rate $ 1,839 21.0 % $ 1,399 35.0 % State and local income taxes, net of federal tax benefit (4 ) 0.0 % (173 ) (4.3 )% Stock based compensation 89 1.0 % 141 3.5 % Foreign rate differential 2,662 30.4 % (109 ) (2.7 )% Research credits (70 ) (0.8 )% (381 ) (9.5 )% Permanent non-deductible 1,302 14.9 % 1,629 40.7 % Net shortfall on stock based compensation 76 0.8 % 257 6.4 % Reversal of reserve for income taxes (370 ) (4.2 )% (66 ) (1.6 )% Other, net (90 ) (1.0 )% 40 1.0 % Reported income tax provision $ 5,434 62.1 % $ 2,737 68.5 % Nine Months Ended September 30, 2018 2017 Provision for income taxes at statutory rate $ 1,483 21.0 % $ 455 35.0 % State and local income taxes, net of federal tax benefit (55 ) (0.8 )% (234 ) (18.0 )% Stock based compensation 73 1.0 % 64 5.0 % Foreign rate differential 2,214 31.4 % (47 ) (3.6 )% Research credits (57 ) (0.8 )% (170 ) (13.1 )% Permanent non-deductible 1,061 15.0 % 727 55.9 % Net (windfall) shortfall on stock based compensation (80 ) (1.1 )% 799 61.5 % Reversal of reserve for income taxes (370 ) (5.2 )% (66 ) (5.1 )% Other, net (26 ) (0.4 )% 81 6.3 % Reported income tax provision $ 4,243 60.1 % $ 1,609 123.9 % |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following presents a reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per share and, a reconciliation of the numerator and denominator used in the calculation of diluted net income (loss) per share (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income (loss), as reported $ 3,321 $ 1,261 $ 2,817 $ (310 ) Less: net income (loss) attributable to participating securities (178 ) (65 ) (591 ) — Net income (loss) available to common shareholders—basic $ 3,143 $ 1,196 $ 2,226 $ (310 ) Denominator: Basic: Weighted-average shares of common stock outstanding 42,040,716 41,750,884 42,026,047 41,700,355 Less: weighted-average shares of unvested restricted common stock outstanding (1,527,879 ) (2,156,754 ) (1,711,878 ) (2,124,043 ) Weighted-average number of common shares used in computing basic net income (loss) per common share 40,512,837 39,594,130 40,314,169 39,576,312 Net income (loss) per share applicable to common shareholders—basic $ 0.08 $ 0.03 $ 0.06 $ (0.01 ) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income (loss) available to common shareholders—basic $ 3,143 $ 1,196 $ 2,226 $ (310 ) Add-back: — (179 ) — — Less: undistributed earnings reallocated to unvested shareholders — 178 — — Net income (loss) available to common shareholders—diluted $ 3,143 $ 1,195 $ 2,226 $ (310 ) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Denominator: Diluted: Weighted-average shares of common stock outstanding 42,040,716 41,750,884 42,026,047 41,700,355 Less: weighted-average shares of unvested restricted common stock outstanding (1,527,879 ) (2,156,754 ) (1,711,878 ) (2,124,043 ) Weighted-average number of common shares issuable upon exercise of outstanding stock options 96,806 204,649 140,349 — Weighted-average number of common shares used in computing diluted net income (loss) per common share 40,609,643 39,798,779 40,454,518 39,576,312 Net income (loss) per share applicable to common shareholders—diluted $ 0.08 $ 0.03 $ 0.06 $ (0.01 ) |
Schedule of Anti-Dilutive Securities Excluded from Computation of Earnings Per Share | The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Options 506,003 633,858 488,471 824,536 Unvested restricted stock 535,558 566,934 420,908 652,741 Unvested restricted stock units 17,248 32,971 26,645 58,674 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Stock Based Compensation Expense | The following presents the impact of stock based compensation expense on our condensed consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Marketing and selling $ 2,031 $ 2,455 $ 4,515 $ 7,348 Research and development 900 1,131 2,781 3,227 General and administrative 1,395 1,685 4,465 4,719 Total expensed $ 4,326 $ 5,271 $ 11,761 $ 15,294 Property and equipment 3 44 24 97 Total stock based compensation $ 4,329 $ 5,315 $ 11,785 $ 15,391 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue for Principle Markets | The following table presents revenue for these two principle markets (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Creative Professional $ 36,114 $ 34,521 $ 109,529 $ 92,234 OEM 21,855 25,986 65,810 78,539 Total $ 57,969 $ 60,507 $ 175,339 $ 170,773 |
Schedule of Revenue by Geographic Segments | The following table summarizes revenue by customer location (in thousands of dollars, except percentages): Three Months Ended September 30, 2018 2017 Sales % of Total Sales % of Total (In thousands, except percentages) United States $ 26,389 45.5 % $ 27,951 46.2 % Japan 12,847 22.2 14,963 24.7 Europe, Middle East and Africa (EMEA) 12,809 22.1 13,952 23.1 Rest of World 5,924 10.2 3,641 6.0 Total $ 57,969 100.0 % $ 60,507 100.0 % Nine Months Ended September 30, 2018 2017 Sales % of Total Sales % of Total (In thousands, except percentages) United States $ 78,360 44.7 % $ 74,631 43.7 % Japan 36,217 20.7 44,278 25.9 Europe, Middle East and Africa (EMEA) 42,873 24.4 37,392 21.9 Rest of World 17,889 10.2 14,472 8.5 Total $ 175,339 100.0 % $ 170,773 100.0 % |
Schedule of Assets by Geographic Segments | Long-lived assets, which include property and equipment, goodwill and intangible assets, but exclude other assets and deferred tax assets, are attributed to geographic areas in which Company assets reside and is shown below (in thousands): September 30, 2018 December 31, 2017 Long-lived assets: United States $ 305,562 $ 314,930 United Kingdom 3,628 4,004 Germany 55,310 58,319 Asia (including Japan) 3,667 3,497 Total $ 368,167 $ 380,750 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Details of Restructuring Expense | The following presents the details of the restructuring expense line item within our consolidated statements of operations (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Severance and termination benefits $ 177 $ 4,403 Reversal of stock based compensation expense — (1,402 ) Accelerated deferred compensation — 523 Office closure 67 67 Intangible assets impairment — 2,623 Write off of allocated goodwill — 600 Total restructuring $ 244 $ 6,814 |
Summary of Restructuring Reserves and Provision Activity | The following presents a roll forward of the restructuring reserves and provision activity (in thousands): Personnel related Facilities related Total Restructuring reserve at January 1, 2018 $ 1,333 $ — $ 1,333 Restructuring charges 194 — 194 Cash payments (985 ) — (985 ) Restructuring reserve at March 31, 2018 542 — 542 Restructuring charges 4,031 — 4,031 Cash payments (479 ) — (479 ) Foreign currency exchange rate changes (5 ) — (5 ) Restructuring reserve at June 30, 2018 $ 4,089 $ — $ 4,089 Restructuring charges 177 67 244 Cash payments (1,295 ) — (1,295 ) Foreign currency exchange rate changes (24 ) — (24 ) Restructuring reserve at September 30, 2018 $ 2,947 $ 67 $ 3,014 |
Nature of Business - Additional
Nature of Business - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018SegmentSubsidiary | |
Nature Of Business [Abstract] | |
Number of business segments | Segment | 1 |
Number of subsidiaries, domestic | 4 |
Number of subsidiaries, foreign | 6 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - Olapic Argentina S.A [Member] | 9 Months Ended |
Sep. 30, 2018USD ($)Employee | |
Basis Of Presentation [Line Items] | |
Number of employees | Employee | 99 |
Cumulative inflationary period | 3 years |
Cumulative inflation percentage | 100.00% |
Monthly operation average amount, Low | $ 400,000 |
Monthly operation average amount, High | $ 500,000 |
Recently Issued Accounting Pr_3
Recently Issued Accounting Pronouncements - Summary of Impact of Adoption of Accounting Standards on Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets: | |||
Accounts receivable, net | $ 38,571 | $ 34,461 | |
Prepaid expenses and other current assets | 7,062 | 5,714 | |
Other assets | 7,374 | 3,112 | |
Liabilities: | |||
Accrued expenses and other current liabilities | 32,408 | 43,096 | |
Deferred revenue | 15,102 | ||
Deferred revenue | 11,766 | 15,102 | |
Other long-term liabilities | 3,014 | 6,428 | |
Deferred income taxes | 29,958 | 28,004 | |
Stockholders' equity: | |||
Retained earnings | 94,940 | $ 97,815 | |
Accounting Standards Update 2014-09 [Member] | |||
Assets: | |||
Accounts receivable, net | $ 41,513 | ||
Prepaid expenses and other current assets | 6,141 | ||
Other assets | 3,762 | ||
Liabilities: | |||
Deferred revenue | 12,179 | ||
Other long-term liabilities | 5,603 | ||
Deferred income taxes | 30,931 | ||
Stockholders' equity: | |||
Retained earnings | 106,765 | ||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||
Assets: | |||
Accounts receivable, net | (13,237) | 7,052 | |
Prepaid expenses and other current assets | (614) | 427 | |
Other assets | (4,726) | 650 | |
Liabilities: | |||
Accrued expenses and other current liabilities | (2,269) | ||
Deferred revenue | (2,923) | ||
Deferred revenue | 7,061 | ||
Other long-term liabilities | 1,028 | (825) | |
Deferred income taxes | (5,828) | 2,927 | |
Stockholders' equity: | |||
Retained earnings | (18,569) | $ 8,950 | |
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||
Assets: | |||
Accounts receivable, net | 25,334 | ||
Prepaid expenses and other current assets | 6,448 | ||
Other assets | 2,648 | ||
Liabilities: | |||
Accrued expenses and other current liabilities | 30,139 | ||
Deferred revenue | 18,827 | ||
Other long-term liabilities | 4,042 | ||
Deferred income taxes | 24,130 | ||
Stockholders' equity: | |||
Retained earnings | $ 76,371 |
Recently Issued Accounting Pr_4
Recently Issued Accounting Pronouncements - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase (decrease) in cash, cash equivalents and restricted cash | $ (24,689) | $ (11,896) | |
Increase in cash | 70,120 | $ 82,822 | |
Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Additional royalty expenses | $ 2,200 | ||
Per share effect of increase in royalty expenses | $ 0.05 | ||
Accounting Standards Update 2016-18 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase (decrease) in cash, cash equivalents and restricted cash | $ 18,000 | 18,000 | |
Increase in cash | $ 6,000 | $ 18,000 |
Recently Issued Accounting Pr_5
Recently Issued Accounting Pronouncements - Summary of Impact of Adoption on Consolidated Statement of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 57,969 | $ 60,507 | $ 175,339 | $ 170,773 |
Total cost of revenue | 10,254 | 10,604 | 34,370 | 31,282 |
Marketing and selling | 18,212 | 22,453 | 58,382 | 66,417 |
Provision for income taxes | 5,434 | 2,737 | 4,243 | 1,609 |
Net income (loss) | $ 3,321 | 1,261 | $ 2,817 | (310) |
Net income (loss)-basic and diluted | $ 0.08 | $ 0.06 | ||
License [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 45,831 | 49,913 | $ 139,791 | 141,083 |
Total cost of revenue | 6,947 | 6,782 | 23,841 | 20,745 |
Service [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 12,138 | 10,594 | 35,548 | 29,690 |
Total cost of revenue | 2,448 | $ 2,937 | 7,946 | $ 7,893 |
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Marketing and selling | 18,712 | 59,848 | ||
Provision for income taxes | 3,801 | 1,342 | ||
Net income (loss) | $ (2,353) | $ (6,802) | ||
Net income (loss)-basic and diluted | $ (0.06) | $ (0.18) | ||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Marketing and selling | $ 500 | $ 1,466 | ||
Provision for income taxes | (1,633) | (2,901) | ||
Net income (loss) | $ (5,674) | $ (9,619) | ||
Net income (loss)-basic and diluted | $ (0.14) | $ (0.24) | ||
Accounting Standards Update 2014-09 [Member] | License [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 38,954 | $ 126,666 | ||
Total cost of revenue | 6,877 | 21,572 | ||
Accounting Standards Update 2014-09 [Member] | License [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | (6,877) | (13,125) | ||
Total cost of revenue | $ (70) | (2,269) | ||
Accounting Standards Update 2014-09 [Member] | Service [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 35,350 | |||
Accounting Standards Update 2014-09 [Member] | Service [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ (198) |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenue Disaggregated by Timing of Revenue Recognition and Reportable Segments as well as by Type of Product or Services Offered (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 57,969 | $ 60,507 | $ 175,339 | $ 170,773 |
Creative Professional [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 36,114 | 109,529 | ||
OEM [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 21,855 | 65,810 | ||
License Transferred in Point in Time [Member] | License Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 45,831 | 139,791 | ||
License Transferred in Point in Time [Member] | Service Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 557 | 3,452 | ||
License Transferred in Point in Time [Member] | Creative Professional [Member] | License Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 25,068 | 77,817 | ||
License Transferred in Point in Time [Member] | Creative Professional [Member] | Service Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 319 | 1,509 | ||
License Transferred in Point in Time [Member] | OEM [Member] | License Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 20,763 | 61,974 | ||
License Transferred in Point in Time [Member] | OEM [Member] | Service Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 238 | 1,943 | ||
License Transferred Over Time [Member] | Service Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 11,581 | 32,096 | ||
License Transferred Over Time [Member] | Creative Professional [Member] | Service Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 10,727 | 30,203 | ||
License Transferred Over Time [Member] | OEM [Member] | Service Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 854 | $ 1,893 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue related to the estimation of per-unit royalties | $ 57,969 | $ 60,507 | $ 175,339 | $ 170,773 |
Revenue expected to be recognized | 21,936 | 21,936 | ||
Current [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue expected to be recognized | 18,454 | 18,454 | ||
Deferred Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue expected to be recognized | 13,193 | 13,193 | ||
Deferred Revenue [Member] | Current [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue expected to be recognized | 11,766 | 11,766 | ||
Unbilled Backlog [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue expected to be recognized | 8,743 | 8,743 | ||
Unbilled Backlog [Member] | Current [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue expected to be recognized | 6,688 | 6,688 | ||
Accounting Standards Update 2014-09 [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Deferred revenue expected to be recognized in future | 7,200 | 21,600 | ||
Revenue recognition performance obligation settled | 7,900 | 7,900 | ||
Capitalized incremental costs to obtain contracts | 2,500 | 2,500 | ||
Accounting Standards Update 2014-09 [Member] | Royalty [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue related to the estimation of per-unit royalties | 7,900 | 7,900 | ||
Accounting Standards Update 2014-09 [Member] | Prepaid Expenses and Other Current Assets [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Capitalized short-term incremental costs to obtain contracts | 600 | 600 | ||
Accounting Standards Update 2014-09 [Member] | Other Assets [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Capitalized long-term incremental costs to obtain contracts | $ 1,900 | $ 1,900 | ||
Accounting Standards Update 2014-09 [Member] | Minimum [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Estimated amortization period | 3 years | 3 years | ||
Accounting Standards Update 2014-09 [Member] | Maximum [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Estimated amortization period | 10 years | 10 years |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Transaction Price Allocated to Future Performance Obligations (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | $ 21,936 |
Deferred Revenue [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | 13,193 |
Unbilled Backlog [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | 8,743 |
Current [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | 18,454 |
Current [Member] | Deferred Revenue [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | 11,766 |
Current [Member] | Unbilled Backlog [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | 6,688 |
Long-term [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | 3,482 |
Long-term [Member] | Deferred Revenue [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | 1,427 |
Long-term [Member] | Unbilled Backlog [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total | $ 2,055 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 34,788 | $ 48,423 |
Current Asset [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 42,423 | |
Current Asset [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 28,788 | 2,014 |
Restricted cash equivalents | 6,000 | 3,000 |
Current Asset [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 16,477 | |
Current Asset [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,457 | |
Current Asset [Member] | U.S. Government and Agency Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 10,488 | |
Restricted cash equivalents | 8,987 | |
Non Current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,000 | |
Non Current Assets [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 6,000 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 34,788 | 30,489 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Current Asset [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 24,489 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Current Asset [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 28,788 | 2,014 |
Restricted cash equivalents | $ 6,000 | 3,000 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Current Asset [Member] | U.S. Government and Agency Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 10,488 | |
Restricted cash equivalents | 8,987 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Non Current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,000 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Non Current Assets [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 6,000 | |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 17,934 | |
Significant Other Observable Inputs (Level 2) [Member] | Current Asset [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 17,934 | |
Significant Other Observable Inputs (Level 2) [Member] | Current Asset [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 16,477 | |
Significant Other Observable Inputs (Level 2) [Member] | Current Asset [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 1,457 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | 9 Months Ended | |||
Sep. 30, 2018USD ($)Contract | Sep. 30, 2018GBP (£)Contract | Dec. 31, 2017USD ($)Contract | Dec. 31, 2017GBP (£)Contract | |
Forward Contract to Sell [Member] | ||||
Derivative [Line Items] | ||||
Number of forward contract outstanding | 1 | 1 | 1 | 1 |
Forward contract outstanding | £ | £ 2,600,000 | £ 2,500,000 | ||
Forward Contract to Purchase [Member] | ||||
Derivative [Line Items] | ||||
Number of forward contract outstanding | Contract | 1 | 1 | 1 | 1 |
Forward contract outstanding | $ | $ 3,400,000 | $ 3,400,000 | ||
Forward Contracts [Member] | ||||
Derivative [Line Items] | ||||
Forward contract terms | One 30-day forward contract |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2018 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment charge of intangible assets | $ (600,000) | |
Goodwill to disposal group | 600,000 | |
Swyft Media Inc [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets | 0 | |
Ongoing expected future cash flows related to long-lived assets | 0 | |
Residual value of acquired intangible assets | $ 0 | |
Impairment charge of intangible assets | $ 2,600,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 279,131 |
Foreign currency exchange rate changes | (1,733) |
Impairment | (600) |
Goodwill, Ending Balance | $ 276,798 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Customer relationships, Gross Carrying Amount | $ 64,895 | $ 68,296 |
Acquired technology, Gross Carrying Amount | 68,921 | 69,200 |
Non-compete agreements, Gross Carrying Amount | 13,654 | 14,632 |
Indefinite-lived intangible assets: | ||
Gross Carrying Amount | 196,082 | 201,484 |
Accumulated Amortization | (119,543) | (116,628) |
Net Balance | 76,539 | 84,856 |
Trademarks [Member] | ||
Indefinite-lived intangible assets: | ||
Net Balance, Indefinite-Lived Intangible Assets | 44,212 | 44,956 |
Domain Names [Member] | ||
Indefinite-lived intangible assets: | ||
Net Balance, Indefinite-Lived Intangible Assets | $ 4,400 | 4,400 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 10 years | |
Indefinite-lived intangible assets: | ||
Accumulated Amortization | $ (54,732) | (54,213) |
Net Balance, Finite-Lived Intangible Assets | $ 10,163 | 14,083 |
Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 11 years | |
Indefinite-lived intangible assets: | ||
Accumulated Amortization | $ (51,807) | (48,945) |
Net Balance, Finite-Lived Intangible Assets | $ 17,114 | 20,255 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 4 years | |
Indefinite-lived intangible assets: | ||
Accumulated Amortization | $ (13,004) | (13,470) |
Net Balance, Finite-Lived Intangible Assets | $ 650 | $ 1,162 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Sep. 15, 2015 | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Revolving line of credit | $ 80,000,000 | $ 93,000,000 | |
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
New credit agreement entering date | Sep. 15, 2015 | ||
Maximum increase in secured credit facility | $ 200,000,000 | ||
Interest rate on outstanding borrowings | Borrowings under the Credit Facility bear a variable rate not less than zero based upon, at the Company’s option, either LIBOR or the higher of (i) the prime rate as published in the Wall Street Journal, and (ii) 0.5% plus the overnight federal funds rate, plus in each case, an applicable margin. The applicable margin for LIBOR loans, based on the applicable leverage ratio, is 1.25%, 1.50% or 1.75% per annum, and the applicable margin for base rate loans, based on the applicable leverage ratio, is either 0.25%, 0.50% or 0.75% per annum. At September 30, 2018, our rate, inclusive of applicable margins, was 3.8% for LIBOR, and at December 31, 2017, our rate, inclusive of applicable margins, was 3.1% for LIBOR. | ||
Secured revolving credit facility, expiration date | Sep. 15, 2020 | ||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | LIBOR Rate [Member] | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 3.80% | 3.10% | |
Credit facility basis spread on variable rate LIBOR | 0.50% | ||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | New Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Secured revolving credit facility term, years | 5 years | ||
Secured revolving credit facility, current borrowing capacity | $ 150,000,000 | ||
Revolving line of credit | $ 80,000,000 | $ 93,000,000 | |
Secured revolving credit facility, available borrowing capacity | $ 69,500,000 | 56,500,000 | |
Applicable leverage ratio, lower end | 3.00% | ||
Applicable leverage ratio | 1.25% | ||
Leverage ratio | 1.75% | ||
Fixed charge ratio | 3.62% | ||
Percentage of equity interest in direct foreign subsidiaries pledged | 65.00% | ||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | New Credit Agreement [Member] | LIBOR Rate [Member] | |||
Debt Instrument [Line Items] | |||
Applicable leverage ratio, lower end | 1.25% | ||
Applicable leverage ratio | 1.50% | ||
Applicable leverage ratio, higher end | 1.75% | ||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | New Credit Agreement [Member] | Base Rate [Member] | |||
Debt Instrument [Line Items] | |||
Applicable leverage ratio, lower end | 0.25% | ||
Applicable leverage ratio | 0.50% | ||
Applicable leverage ratio, higher end | 0.75% | ||
Silicon Valley Bank [Member] | Stand-by letter of credit [Member] | New Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, current restriction on borrowing capacity | $ 500,000 | $ 500,000 |
Defined Benefit Pension Plan -
Defined Benefit Pension Plan - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Postemployment Benefits [Abstract] | ||||
Service cost | $ 27 | $ 25 | $ 81 | $ 71 |
Interest cost | 25 | 29 | 78 | 81 |
Amortization | 22 | 24 | 69 | 68 |
Net periodic benefit cost | $ 74 | $ 78 | $ 228 | $ 220 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation Computed at Federal Statutory Rates to Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes at statutory rate | $ 1,839 | $ 1,399 | $ 1,483 | $ 455 |
State and local income taxes, net of federal tax benefit | (4) | (173) | (55) | (234) |
Stock based compensation | 89 | 141 | 73 | 64 |
Foreign rate differential | 2,662 | (109) | 2,214 | (47) |
Research credits | (70) | (381) | (57) | (170) |
Permanent non-deductible acquisition-related expense | 1,302 | 1,629 | 1,061 | 727 |
Net (windfall) shortfall on stock based compensation | 76 | 257 | (80) | 799 |
Reversal of reserve for income taxes | (370) | (66) | (370) | (66) |
Other, net | (90) | 40 | (26) | 81 |
Reported income tax provision | $ 5,434 | $ 2,737 | $ 4,243 | $ 1,609 |
Provision for income taxes at statutory rate | 21.00% | 35.00% | 21.00% | 35.00% |
State and local income taxes, net of federal tax benefit, tax rate | 0.00% | (4.30%) | (0.80%) | (18.00%) |
Stock based compensation, tax rate | 1.00% | 3.50% | 1.00% | 5.00% |
Foreign rate differential, tax rate | 30.40% | (2.70%) | 31.40% | (3.60%) |
Research credits, tax rate | (0.80%) | (9.50%) | (0.80%) | (13.10%) |
Permanent non-deductible acquisition-related expense, tax rate | 14.90% | 40.70% | 15.00% | 55.90% |
Net (windfall) shortfall on stock based compensation, tax rate | 0.80% | 6.40% | (1.10%) | 61.50% |
Reversal of reserve for income taxes, tax rate | (4.20%) | (1.60%) | (5.20%) | (5.10%) |
Other, net, tax rate | (1.00%) | 1.00% | (0.40%) | 6.30% |
Reported income tax provision | 62.10% | 68.50% | 60.10% | 123.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Income Tax Disclosure [Abstract] | ||
Reserve for uncertain tax positions | $ 7 | $ 7 |
Uncertain tax position reduction in deferred tax assets | 4.7 | 4.7 |
Uncertain tax positions long term liabilities | 2.3 | 2.3 |
Income tax benefit from expiration of statutes of limitations | $ 0.4 | |
Tax cuts and jobs act, incomplete accounting, transition tax for accumulated foreign earnings, provisional income tax expense | 0.2 | |
Deemed repatriation of foreign earnings | $ 0 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income (loss), as reported | $ 3,321 | $ 1,261 | $ 2,817 | $ (310) |
Less: net income (loss) attributable to participating securities | (178) | (65) | (591) | |
Net income (loss) available to common shareholders-basic | 3,143 | 1,196 | 2,226 | (310) |
Add-back: undistributed earnings allocated to unvested shareholders | (179) | |||
Less: undistributed earnings reallocated to unvested shareholders | 178 | |||
Net income (loss) available to common shareholders-diluted | $ 3,143 | $ 1,195 | $ 2,226 | $ (310) |
Basic: | ||||
Weighted-average shares of common stock outstanding | 42,040,716 | 41,750,884 | 42,026,047 | 41,700,355 |
Less: weighted-average shares of unvested restricted common stock outstanding | (1,527,879) | (2,156,754) | (1,711,878) | (2,124,043) |
Weighted-average number of common shares used in computing basic net income (loss) per common share | 40,512,837 | 39,594,130 | 40,314,169 | 39,576,312 |
Net income (loss) per share applicable to common shareholders-basic | $ 0.08 | $ 0.03 | $ 0.06 | $ (0.01) |
Net income (loss) available to common shareholders-basic | $ 3,143 | $ 1,196 | $ 2,226 | $ (310) |
Weighted-average shares of common stock outstanding | 42,040,716 | 41,750,884 | 42,026,047 | 41,700,355 |
Less: weighted-average shares of unvested restricted common stock outstanding | (1,527,879) | (2,156,754) | (1,711,878) | (2,124,043) |
Weighted-average number of common shares used in computing diluted net income (loss) per common share | 40,609,643 | 39,798,779 | 40,454,518 | 39,576,312 |
Net income (loss) per share applicable to common shareholders-diluted | $ 0.08 | $ 0.03 | $ 0.06 | $ (0.01) |
Weighted Average [Member] | ||||
Basic: | ||||
Weighted-average number of common shares issuable upon exercise of outstanding stock options | 96,806 | 204,649 | 140,349 |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Anti-Dilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 506,003 | 633,858 | 488,471 | 824,536 |
Unvested Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 535,558 | 566,934 | 420,908 | 652,741 |
Unvested Restricted Stock Units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 17,248 | 32,971 | 26,645 | 58,674 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | May 03, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Stock based compensation, capitalized | $ 3,000 | $ 44,000 | $ 24,000 | $ 97,000 | |
Revised stock based compensation expense | 1,400,000 | ||||
Unrecognized compensation expense | $ 29,000,000 | $ 29,000,000 | |||
Weighted-average period, years | 2 years 2 months 12 days | ||||
Stock Repurchase Program [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total amount authorized under repurchase program | $ 25,000,000 | ||||
Stock repurchase program expiration date | Jun. 7, 2019 | ||||
Number of shares repurchased under stock repurchase program | 282,208 | ||||
Total common stock aggregate purchase price | $ 5,700,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock based compensation, Total expensed | $ 4,326 | $ 5,271 | $ 11,761 | $ 15,294 |
Property and equipment | 3 | 44 | 24 | 97 |
Total stock based compensation | 4,329 | 5,315 | 11,785 | 15,391 |
Marketing and Selling [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock based compensation, Total expensed | 2,031 | 2,455 | 4,515 | 7,348 |
Research and Development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock based compensation, Total expensed | 900 | 1,131 | 2,781 | 3,227 |
General and Administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock based compensation, Total expensed | $ 1,395 | $ 1,685 | $ 4,465 | $ 4,719 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018SegmentMarkets | |
Segment Reporting [Abstract] | |
Number of operating segment | Segment | 1 |
Number of principal markets, segment reporting | Markets | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Revenue for Major Markets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total | $ 57,969 | $ 60,507 | $ 175,339 | $ 170,773 |
Creative Professional [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 36,114 | 34,521 | 109,529 | 92,234 |
OEM [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | $ 21,855 | $ 25,986 | $ 65,810 | $ 78,539 |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Revenue by Geographic Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total | $ 57,969 | $ 60,507 | $ 175,339 | $ 170,773 |
% of Total | 100.00% | 100.00% | 100.00% | 100.00% |
United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | $ 26,389 | $ 27,951 | $ 78,360 | $ 74,631 |
% of Total | 45.50% | 46.20% | 44.70% | 43.70% |
Japan [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | $ 12,847 | $ 14,963 | $ 36,217 | $ 44,278 |
% of Total | 22.20% | 24.70% | 20.70% | 25.90% |
Europe Middle East Africa [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | $ 12,809 | $ 13,952 | $ 42,873 | $ 37,392 |
% of Total | 22.10% | 23.10% | 24.40% | 21.90% |
Rest of the World [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | $ 5,924 | $ 3,641 | $ 17,889 | $ 14,472 |
% of Total | 10.20% | 6.00% | 10.20% | 8.50% |
Segment Reporting - Schedule _3
Segment Reporting - Schedule of Assets by Geographic Segments (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Long-lived assets: | ||
Total | $ 368,167 | $ 380,750 |
United States [Member] | ||
Long-lived assets: | ||
Total | 305,562 | 314,930 |
United Kingdom [Member] | ||
Long-lived assets: | ||
Total | 3,628 | 4,004 |
Germany [Member] | ||
Long-lived assets: | ||
Total | 55,310 | 58,319 |
Asia (Including Japan) [Member] | ||
Long-lived assets: | ||
Total | $ 3,667 | $ 3,497 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Position | Sep. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring plan implemented date | Jun. 6, 2018 | |||||
Number of Eliminated positions | Position | 50 | |||||
Restructuring charges | $ 244 | $ 4,031 | $ 194 | $ 6,814 | ||
Revised stock based compensation expense | 4,326 | $ 5,271 | 11,761 | $ 15,294 | ||
Future cash expenditures | 2,300 | 2,300 | ||||
Severance and Termination Benefits [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 200 | 6,800 | ||||
Restructuring Charges [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Revised stock based compensation expense | $ 1,400 |
Restructuring - Schedule of Det
Restructuring - Schedule of Details of Restructuring Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring | $ 244 | $ 4,031 | $ 194 | $ 6,814 |
Severance And Termination Benefits [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring | 177 | 4,403 | ||
Reversal of Stock Based Compensation Expense [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring | (1,402) | |||
Accelerated Deferred Compensation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring | 523 | |||
Intangible Assets Impairment [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring | 2,623 | |||
Write-off of Allocated Goodwill [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring | 600 | |||
Office Closure [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring | $ 67 | $ 67 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Reserves and Provision Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve, beginning balance | $ 4,089 | $ 542 | $ 1,333 | $ 1,333 |
Restructuring charges | 244 | 4,031 | 194 | 6,814 |
Cash payments | (1,295) | (479) | (985) | |
Foreign currency exchange rate changes | (24) | (5) | ||
Restructuring reserve, ending balance | 3,014 | 4,089 | 542 | 3,014 |
Personnel Related [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve, beginning balance | 4,089 | 542 | 1,333 | 1,333 |
Restructuring charges | 177 | 4,031 | 194 | |
Cash payments | (1,295) | (479) | (985) | |
Foreign currency exchange rate changes | (24) | (5) | ||
Restructuring reserve, ending balance | 2,947 | $ 4,089 | $ 542 | 2,947 |
Facilities Related [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 67 | |||
Restructuring reserve, ending balance | $ 67 | $ 67 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Period of licensing agreement term | 1 year | |
Warranty liabilities | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 26, 2018 | Oct. 25, 2018 | |
Subsequent Event [Line Items] | |||
Dividend payable, date declared | Oct. 25, 2018 | ||
Dividend payable, date of record | Jan. 2, 2019 | ||
Dividend payable, date to be paid | Jan. 22, 2019 | ||
Stock Repurchase Program [Member] | |||
Subsequent Event [Line Items] | |||
Number of shares repurchased under stock repurchase program | 315,000 | ||
Total common stock aggregate purchase price | $ 6.3 | ||
Purchase of common stock, average price per share | $ 19.80 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividend approved, amount per share | $ 0.116 | ||
Subsequent Event [Member] | Stock Repurchase Program [Member] | |||
Subsequent Event [Line Items] | |||
Stock repurchase program, remaining repurchase amount | $ 12 |