Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'LIMELIGHT NETWORKS, INC. | ' |
Entity Central Index Key | '0001391127 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 98,685,122 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $67,028 | $85,956 |
Marketable securities | 34,228 | 32,506 |
Accounts receivable, net | 22,443 | 21,430 |
Income taxes receivable | 289 | 371 |
Deferred income taxes | 65 | 93 |
Prepaid expenses and other current assets | 9,040 | 8,192 |
Total current assets | 133,093 | 148,548 |
Property and equipment, net | 32,154 | 32,905 |
Marketable securities, less current portion | 40 | 46 |
Deferred income taxes, less current portion | 1,337 | 1,307 |
Goodwill | 76,583 | 77,035 |
Other intangible assets, net | 1,344 | 2,354 |
Other assets | 5,098 | 6,103 |
Total assets | 249,649 | 268,298 |
Current liabilities: | ' | ' |
Accounts payable | 9,314 | 5,473 |
Deferred revenue | 3,503 | 3,523 |
Capital lease obligations | 219 | 466 |
Income taxes payable | 634 | 799 |
Other current liabilities | 12,245 | 15,022 |
Total current liabilities | 25,915 | 25,283 |
Capital lease obligations, less current portion | 192 | 358 |
Deferred income taxes | 181 | 321 |
Deferred revenue, less current portion | 627 | 1,500 |
Other long-term liabilities | 2,955 | 3,505 |
Total liabilities | 29,870 | 30,967 |
Commitments and contingencies | ' | ' |
Stockholders’ equity: | ' | ' |
Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 300,000 shares authorized at September 30, 2014 and December 31, 2013; 98,655 and 97,677 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 99 | 98 |
Additional paid-in capital | 463,712 | 458,748 |
Accumulated other comprehensive loss | -4,596 | -1,663 |
Accumulated deficit | -239,436 | -219,852 |
Total stockholders’ equity | 219,779 | 237,331 |
Total liabilities and stockholders’ equity | $249,649 | $268,298 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Convertible Preferred Stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Convertible Preferred Stock, Shares Authorized | 7,500,000 | 7,500,000 |
Convertible Preferred Stock, Shares Issued | 0 | 0 |
Convertible Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares Issued | 98,655,000 | 97,677,000 |
Common Stock, Shares Outstanding | 98,655,000 | 97,677,000 |
Unaudited_Consolidated_Stateme
Unaudited Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Income Statement [Abstract] | ' | ' | ' | ' | ||||
Revenues | $39,020 | $42,656 | $121,533 | $131,232 | ||||
Cost of revenue: | ' | ' | ' | ' | ||||
Cost of services | 18,672 | [1] | 22,138 | [1] | 61,563 | [1] | 66,721 | [1] |
Depreciation — network | 4,207 | 5,278 | 12,688 | 18,078 | ||||
Total cost of revenue | 22,879 | 27,416 | 74,251 | 84,799 | ||||
Gross profit | 16,141 | 15,240 | 47,282 | 46,433 | ||||
Operating expenses: | ' | ' | ' | ' | ||||
General and administrative | 7,295 | 8,244 | 21,966 | 24,022 | ||||
Sales and marketing | 8,731 | 10,363 | 28,356 | 31,545 | ||||
Research and development | 5,514 | 5,423 | 14,951 | 16,814 | ||||
Depreciation and amortization | 825 | 1,433 | 2,868 | 4,325 | ||||
Total operating expenses | 22,365 | 25,463 | 68,141 | 76,706 | ||||
Operating loss | -6,224 | -10,223 | -20,859 | -30,273 | ||||
Other income (expense): | ' | ' | ' | ' | ||||
Interest expense | -7 | -15 | -26 | -64 | ||||
Interest income | 66 | 89 | 203 | 238 | ||||
Other, net | 1,192 | -557 | 1,014 | 154 | ||||
Total other income (expense) | 1,251 | -483 | 1,191 | 328 | ||||
Loss from continuing operations before income taxes | -4,973 | -10,706 | -19,668 | -29,945 | ||||
Income tax provision | 98 | 197 | 181 | 328 | ||||
Loss from continuing operations | -5,071 | -10,903 | -19,849 | -30,273 | ||||
Discontinued operations: | ' | ' | ' | ' | ||||
(Loss) income from discontinued operations, net of income taxes | -4 | -15 | 265 | -15 | ||||
Net loss | ($5,075) | ($10,918) | ($19,584) | ($30,288) | ||||
Basic and diluted | ' | ' | ' | ' | ||||
Continuing operations (in dollars per share) | ($0.05) | ($0.11) | ($0.20) | ($0.31) | ||||
Discontinued operations (in dollars per share) | $0 | $0 | $0 | $0 | ||||
Total net loss per share, Basic and Diluted (in dollars per share) | ($0.05) | ($0.11) | ($0.20) | ($0.31) | ||||
Weighted average shares used in per share calculation: | ' | ' | ' | ' | ||||
Basic and Diluted (shares) | 98,458 | 96,949 | 98,274 | 96,675 | ||||
[1] | Cost of services excludes amortization related to intangibles, including existing technologies, customer relationships, and trade names and trademarks, which are included in depreciation and amortization |
Unaudited_Consolidated_Stateme1
Unaudited Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net loss | ($5,075) | ($10,918) | ($19,584) | ($30,288) |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' |
Unrealized gain (loss) on investments | -37 | 55 | -30 | -36 |
Foreign exchange translation | -3,671 | 1,324 | -2,903 | -821 |
Other comprehensive income (loss), net of tax | -3,708 | 1,379 | -2,933 | -857 |
Comprehensive loss | ($8,783) | ($9,539) | ($22,517) | ($31,145) |
Unaudited_Consolidated_Stateme2
Unaudited Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities | ' | ' |
Net loss | ($19,584) | ($30,288) |
(Loss) income from discontinued operations | 265 | -15 |
Loss from continuing operations | -19,849 | -30,273 |
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities of continuing operations: | ' | ' |
Depreciation and amortization | 15,556 | 22,403 |
Share-based compensation | 7,800 | 9,800 |
Foreign currency remeasurement gain | -1,067 | -504 |
Deferred income taxes | -185 | -209 |
Accounts receivable charges | 483 | 758 |
Amortization of premium on marketable securities | 374 | 462 |
Loss on sale of property and equipment | 0 | 25 |
Non cash tax benefit associated with income from discontinued operations | -59 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -1,496 | 177 |
Prepaid expenses and other current assets | -1,045 | 1,930 |
Income taxes receivable | 55 | 131 |
Other assets | 991 | 908 |
Accounts payable | 4,762 | 1,102 |
Deferred revenue | -893 | 256 |
Other current liabilities | -3,663 | -436 |
Income taxes payable | -214 | 456 |
Other long term liabilities | -545 | -448 |
Net cash provided by operating activities | 1,005 | 6,538 |
Investing activities | ' | ' |
Purchases of marketable securities | -17,669 | -49,811 |
Maturities of marketable securities | 15,550 | 35,321 |
Purchases of property and equipment | -13,984 | -12,685 |
Proceeds from the sale of discontinued operations | 414 | 124 |
Net cash used in investing activities | -15,689 | -27,051 |
Financing activities | ' | ' |
Payments on capital lease obligations | -412 | -1,124 |
Payment of employee tax withholdings related to restricted stock | -1,455 | -2,309 |
Cash paid for purchase of common stock | -2,500 | -5,512 |
Proceeds from exercise of stock options and employee stock plans | 967 | 29 |
Net cash used in financing activities | -3,400 | -8,916 |
Effect of exchange rate changes on cash and cash equivalents | -840 | -256 |
Cash used in operating activities of discontinued operations | -4 | -8 |
Net decrease in cash and cash equivalents | -18,928 | -29,693 |
Cash and cash equivalents, beginning of period | 85,956 | 108,915 |
Cash and cash equivalents, end of period | 67,028 | 79,222 |
Supplemental disclosure of cash flow information | ' | ' |
Cash paid during the period for interest | 26 | 64 |
Cash paid during the period for income taxes, net of refunds | 581 | -35 |
Property and equipment expenditures remaining in accounts payable and other current liabilities | $2,119 | $1,028 |
Nature_of_Business
Nature of Business | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Nature of Business | ' |
Nature of Business | |
Limelight Networks, Inc. (the Company) operates a globally distributed, high-performance network (its global network) and provides a suite of integrated services including content delivery services, video content management services, performance services for website and web application acceleration, and cloud storage services. These four primary service groups work collectively to enable any organization to deliver digital content to any device, anywhere in the world. | |
The Company, incorporated in Delaware, has operated in the Phoenix metropolitan area since 2001 and elsewhere throughout the United States since 2003. The Company began international operations in 2004. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||
Summary of Significant Accounting Policies | ||||||||||||
Basis of Presentation | ||||||||||||
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. They do not include all of the information and footnotes required by U.S. generally accepted accounting principles (U.S. GAAP) for complete financial statements. Such interim financial information is unaudited but reflects all adjustments that, in the opinion of management, are necessary for the fair presentation of the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any future periods. This quarterly report on Form 10-Q should be read in conjunction with the Company’s audited financial statements and footnotes included in its annual report on Form 10-K for the fiscal year ended December 31, 2013. | ||||||||||||
The consolidated financial statements include accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. In addition, certain other reclassifications have been made to prior year amounts to conform to the current year presentation. | ||||||||||||
During the three months ended September 30, 2014, the Company recorded an immaterial error correction of approximately $1,100 relating to previous over billings by a co-location provider. This correction was recorded as a reduction of costs of revenues. | ||||||||||||
Revision of Previously Issued Financial Statements | ||||||||||||
As previously disclosed in our 2013 Form 10-K, the consolidated statement of operations was revised to reclassify certain amounts to cost of revenues that were previously reported in general and administrative expenses for the three and nine months ended September 30, 2013. | ||||||||||||
The following table summarizes the reclassifications by line item within the unaudited consolidated statement of operations for the three months ended September 30, 2013: | ||||||||||||
For the Three Months Ended September 30, 2013 | ||||||||||||
As | As | |||||||||||
Reported | Reclassifications | Revised | ||||||||||
Cost of services | $ | 21,773 | $ | 365 | $ | 22,138 | ||||||
Total cost of revenue | 27,051 | 365 | 27,416 | |||||||||
Gross profit | 15,605 | (365 | ) | 15,240 | ||||||||
General and administrative | 8,609 | (365 | ) | 8,244 | ||||||||
Total operating expenses | 25,828 | (365 | ) | 25,463 | ||||||||
The following table summarizes the reclassifications by line item within the unaudited consolidated statement of operations for the nine months ended September 30, 2013: | ||||||||||||
For the Nine Months Ended September 30, 2013 | ||||||||||||
As | As | |||||||||||
Reported | Reclassifications | Revised | ||||||||||
Cost of services | $ | 65,696 | $ | 1,025 | $ | 66,721 | ||||||
Total cost of revenue | 83,774 | 1,025 | 84,799 | |||||||||
Gross profit | 47,458 | (1,025 | ) | 46,433 | ||||||||
General and administrative | 25,047 | (1,025 | ) | 24,022 | ||||||||
Total operating expenses | 77,731 | (1,025 | ) | 76,706 | ||||||||
Use of Estimates | ||||||||||||
The preparation of the consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results and outcomes may differ from those estimates. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any other future periods. | ||||||||||||
Recent Accounting Standards | ||||||||||||
Recently Issued Accounting Pronouncements | ||||||||||||
In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, which includes amendments that change the requirements for reporting discontinued operations and require additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations - that is, a major effect on the organization's operations and financial results - should be presented as discontinued operations. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, this ASU requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. This update is effective for the Company in the first quarter of 2015. The new guidance would only impact the Company upon the disposal of a business. | ||||||||||||
In May 2014, the FASB issued ASU 2014-09, which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This guidance will be effective for the Company in the first quarter of 2017. Early adoption is not permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. | ||||||||||||
In August 2014, the FASB issued ASU 2014-15, which provides guidance for disclosure of uncertainties about an entity’s ability to continue as a going concern. ASU 2014-15 defines management's responsibility to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. This guidance will be effective for the Company in the first annual period ending after December 15, 2016; however, early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |
Investments_in_Marketable_Secu
Investments in Marketable Securities | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||
Investments in Marketable Securities | ' | |||||||||||||||
Investments in Marketable Securities | ||||||||||||||||
The following is a summary of marketable securities (designated as available-for-sale) at September 30, 2014: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Certificate of deposit | $ | 7,680 | $ | 2 | $ | 12 | $ | 7,670 | ||||||||
Commercial paper | 3,399 | — | — | 3,399 | ||||||||||||
Corporate notes and bonds | 23,207 | 18 | 26 | 23,199 | ||||||||||||
Total marketable securities | 34,286 | 20 | 38 | 34,268 | ||||||||||||
At September 30, 2014, the Company evaluated its marketable securities and determined unrealized losses were due primarily to fluctuations in interest rates. Management does not believe any of the unrealized losses represented an other-than-temporary impairment based on its evaluation of available evidence as of September 30, 2014. The Company’s intent is to hold these investments to such time as these assets are no longer impaired. The Company views its available-for-sale securities as available for current operations. | ||||||||||||||||
The amortized cost and estimated fair value of the marketable debt securities at September 30, 2014, by maturity, are shown below: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Available-for-sale securities | ||||||||||||||||
Due in one year or less | $ | 20,417 | $ | 9 | $ | 4 | $ | 20,422 | ||||||||
Due after one year and through five years | 13,869 | 11 | 34 | 13,846 | ||||||||||||
$ | 34,286 | $ | 20 | $ | 38 | $ | 34,268 | |||||||||
The following is a summary of marketable securities (designated as available-for-sale) at December 31, 2013: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Government agency bonds | $ | 261 | $ | — | $ | — | $ | 261 | ||||||||
Certificate of deposit | 4,080 | — | 4 | 4,076 | ||||||||||||
Commercial paper | 2,200 | — | — | 2,200 | ||||||||||||
Corporate notes and bonds | 26,001 | 15 | 7 | 26,009 | ||||||||||||
32,542 | 15 | 11 | 32,546 | |||||||||||||
Publicly traded common stock | 12 | — | 6 | 6 | ||||||||||||
Total marketable securities | $ | 32,554 | $ | 15 | $ | 17 | $ | 32,552 | ||||||||
The amortized cost and estimated fair value of the marketable debt securities at December 31, 2013, by maturity, are shown below: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Available-for-sale securities | ||||||||||||||||
Due in one year or less | $ | 17,031 | $ | 2 | $ | 5 | $ | 17,028 | ||||||||
Due after one year and through five years | 15,511 | 13 | 6 | 15,518 | ||||||||||||
$ | 32,542 | $ | 15 | $ | 11 | $ | 32,546 | |||||||||
Business_Disposition
Business Disposition | 9 Months Ended |
Sep. 30, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ' |
Business Disposition | ' |
Business Disposition | |
On December 23, 2013, the Company sold 100% of the outstanding common stock of its Web Content Management (WCM) business for $12,341 in cash, net of preliminary working capital adjustments. After allocating goodwill of $3,799 to WCM, the sale resulted in a gain of $3,836, which was included in Other, net in the consolidated statement of operations for the year ended December 31, 2013. During the three months ended March 31, 2014, the Company recorded a working capital adjustment of $(62) (expense), related to new information subsequent to the closing of the acquisition, which is included in Other, net in the consolidated statement of operations for the nine months ended September 30, 2014. This sale was not treated as a discontinued operation because the operations and cash flows of the WCM business cannot be clearly distinguished, operationally or for financial reporting purposes, from the rest of the Company. |
Discontinued_Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ' |
Discontinued Operations | ' |
Discontinued Operations | |
On September 1, 2011, the Company completed the sale of its EyeWonder and chors rich media advertising services to DG FastChannel, Inc. (DG) for net proceeds of $61,000 plus an estimated $10,854 receivable from DG pursuant to the purchase agreement. | |
The $10,854 receivable from DG was determined by the Company based on estimated future cash payments equal to the excess of certain current assets over certain current liabilities as of August 30, 2011. During 2013, the Company wrote-off the remaining receivable balance of $412 from DG as it believed the balance was no longer collectible. | |
During the three months ended June 30, 2014, the Company received $414 from DG as final settlement for the previously written-off receivable. The Company recorded $269, ($414 cash received, net of tax of $145), as income from discontinued operations during the second quarter of 2014. | |
During the three months ended September 30, 2014, the Company incurred $4 (net of tax) in expense related to discontinued operations which is recorded in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2014. |
Accounts_Receivable_net
Accounts Receivable, net | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Accounts Receivable, net | ' | |||||||
Accounts Receivable, net | ||||||||
Accounts receivable, net include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accounts receivable | $ | 15,982 | $ | 17,497 | ||||
Unbilled accounts receivable | 8,386 | 5,943 | ||||||
24,368 | 23,440 | |||||||
Less: credit allowance | (380 | ) | (610 | ) | ||||
Less: allowance for doubtful accounts | (1,545 | ) | (1,400 | ) | ||||
Total accounts receivable, net | $ | 22,443 | $ | 21,430 | ||||
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Prepaid Expenses and Other Current Assets | ' | |||||||
Prepaid Expenses and Other Current Assets | ||||||||
Prepaid expenses and other current assets include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Prepaid expenses and insurance | $ | 3,806 | $ | 3,371 | ||||
Prepaid bandwidth and backbone services | 1,943 | 2,045 | ||||||
VAT receivable | 1,853 | 1,588 | ||||||
Vendor deposits and other | 1,438 | 1,188 | ||||||
Total prepaid expenses and other current assets | $ | 9,040 | $ | 8,192 | ||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||
Goodwill and Other Intangible Assets | ' | |||||||||||
Goodwill and Other Intangible Assets | ||||||||||||
The Company has recorded goodwill and other intangible assets as a result of its business acquisitions. Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. In each of the Company’s acquisitions, the objective of the acquisition was to expand the Company’s product offerings and customer base and to achieve synergies related to cross selling opportunities, all of which contributed to the recognition of goodwill. | ||||||||||||
The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company concluded that it has one reporting unit and assigned the entire balance of goodwill to that reporting unit. The fair value of the reporting unit is determined using the Company’s market capitalization as of its annual impairment assessment date or each reporting date if circumstances indicate the goodwill might be impaired. Items that could reasonably be expected to negatively affect key assumptions used in estimating fair value include but are not limited to: | ||||||||||||
• | sustained decline in the Company’s stock price due to a decline in its financial performance due to the loss of key customers, loss of key personnel, emergence of new technologies or new competitors; | |||||||||||
• | decline in overall market or economic conditions leading to a decline in its stock price; and | |||||||||||
• | decline in observed control premiums paid in business combinations involving comparable companies. | |||||||||||
The estimated fair value of the reporting unit is determined using a market capitalization approach. The Company’s market capitalization is adjusted for a control premium based on the estimated average and median control premiums of transactions involving companies comparable to the Company. As of the annual impairment testing date of October 31, 2013 and as of December 31, 2013, the Company determined that goodwill was not impaired. As of September 30, 2014, the Company determined that the estimated fair value of its reporting unit exceeded carrying value by approximately $103,500 or 47%, using the market capitalization of the Company plus an estimated control premium of 40%. Based on this analysis, management believes goodwill is not impaired as of September 30, 2014; however, adverse changes to certain key assumptions as described above could result in a future charge to earnings. | ||||||||||||
Foreign currency translation adjustments decreased the carrying amount of goodwill for the three and nine months ended September 30, 2014 by $581 and $452, respectively. | ||||||||||||
Other intangible assets that are subject to amortization consisted of the following: | ||||||||||||
30-Sep-14 | ||||||||||||
Gross | Accumulated | Net | ||||||||||
Carrying | Amortization | Carrying | ||||||||||
Amount | Amount | |||||||||||
Existing technologies | $ | 4,100 | $ | (2,802 | ) | $ | 1,298 | |||||
Customer relationships | 150 | (104 | ) | 46 | ||||||||
Total other intangible assets | $ | 4,250 | $ | (2,906 | ) | $ | 1,344 | |||||
31-Dec-13 | ||||||||||||
Gross | Accumulated | Net | ||||||||||
Carrying | Amortization | Carrying | ||||||||||
Amount | Amount | |||||||||||
Existing technologies | $ | 6,164 | $ | (3,875 | ) | $ | 2,289 | |||||
Customer relationships | 150 | (85 | ) | 65 | ||||||||
Total other intangible assets | $ | 6,314 | $ | (3,960 | ) | $ | 2,354 | |||||
Aggregate expense related to amortization of other intangible assets included in operating expenses for the three months ended September 30, 2014 and 2013 was approximately $259 and $711, respectively. For the nine months ended September 30, 2014 and 2013 aggregate expense related to the amortization of other intangible assets was approximately $934 and $2,161, respectively. Based on the Company’s other intangible assets as of September 30, 2014, aggregate expense related to the amortization of other intangible assets is expected to be $211 for the remainder of 2014, and $845, $288, and $0 for fiscal years 2015, 2016, and 2017, respectively. |
Property_and_Equipment_net
Property and Equipment, net | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property and Equipment, net | ' | |||||||
Property and Equipment, net | ||||||||
Property and equipment, net include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Network equipment | $ | 190,949 | $ | 180,896 | ||||
Computer equipment | 11,381 | 11,073 | ||||||
Furniture and fixtures | 2,733 | 2,723 | ||||||
Leasehold improvements | 7,353 | 7,162 | ||||||
Other equipment | 590 | 570 | ||||||
Total property and equipment | 213,006 | 202,424 | ||||||
Less: accumulated depreciation and amortization | (180,852 | ) | (169,519 | ) | ||||
Total property and equipment, net | $ | 32,154 | $ | 32,905 | ||||
Depreciation and amortization expense related to property and equipment (classified in operating expenses) was $566 and $722 for the three months ended September 30, 2014 and 2013, respectively, and was $1,934 and $2,164 for the nine months ended September 30, 2014 and 2013, respectively. |
Other_Assets
Other Assets | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Other Assets | ' | |||||||
Other Assets | ||||||||
Other assets include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Prepaid bandwidth and backbone services | $ | 3,102 | $ | 4,268 | ||||
Vendor deposits and other | 1,996 | 1,835 | ||||||
Total other assets | $ | 5,098 | $ | 6,103 | ||||
The Company enters into multi-year arrangements with telecommunications providers for bandwidth and backbone capacity. The agreements sometimes require the Company to make advanced payments for future services to be received. |
Other_Current_Liabilities
Other Current Liabilities | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Other Current Liabilities | ' | |||||||
Other Current Liabilities | ||||||||
Other current liabilities include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued compensation and benefits | $ | 4,526 | $ | 6,682 | ||||
Accrued cost of revenue | 1,680 | 1,833 | ||||||
Accrued legal fees | 1,717 | 1,769 | ||||||
Deferred rent | 1,277 | 1,074 | ||||||
Indirect taxes payable | 746 | 639 | ||||||
Customer deposits | 181 | 635 | ||||||
Other accrued expenses | 2,118 | 2,390 | ||||||
Total other current liabilities | $ | 12,245 | $ | 15,022 | ||||
Other_Long_Term_Liabilities
Other Long Term Liabilities | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Other Long Term Liabilities | ' | |||||||
Other Long Term Liabilities | ||||||||
Other long term liabilities include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Deferred rent | $ | 2,832 | $ | 3,384 | ||||
Income taxes payable | 123 | 121 | ||||||
Total other long term liabilities | $ | 2,955 | $ | 3,505 | ||||
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Contingencies | ' |
Contingencies | |
Akamai Litigation | |
In June 2006, Akamai Technologies, Inc., or Akamai, and the Massachusetts Institute of Technology, or MIT, filed a lawsuit against the Company in the United States District Court for the District of Massachusetts alleging that the Company was infringing two patents assigned to MIT and exclusively licensed by MIT to Akamai, United States Patent No. 6,553,413 (the ’413 patent) and United States Patent No. 6,108,703 (the ’703 patent). In September 2006, Akamai and MIT expanded their claims to assert infringement of a third patent United States Patent No. 7,103,645 (the ’645 patent). Before trial, Akamai waived by stipulation its claims of indirect or induced infringement and proceeded to trial only on the theory of direct infringement. In February 2008, a jury returned a verdict in this lawsuit, finding that the Company infringed four claims of the ’703 patent at issue and rejecting the Company’s invalidity defenses. The jury awarded an aggregate of approximately $45,500 which includes lost profits, reasonable royalties and price erosion damages for the period April 2005 through December 31, 2007. In addition, the jury awarded prejudgment interest which the Company estimated to be $2,600 at December 31, 2007. The Company recorded an aggregate $48,100 as a provision for litigation as of December 31, 2007. During 2008, the Company recorded a potential additional provision of approximately $17,500 for potential additional infringement damages and interest. The total provision for litigation at December 31, 2008 was $65,600. | |
On July 1, 2008, the court denied the Company’s Motions for Judgment as a Matter of Law (JMOL), Obviousness, and a New Trial. The court also denied Akamai’s Motion for Permanent Injunction as premature and its Motions for Summary Judgment regarding the Company’s equitable defenses. The court conducted a bench trial in November 2008 regarding the Company’s equitable defenses. The Company also filed a motion for reconsideration of the court’s earlier denial of the Company’s motion for JMOL. The Company’s motion for JMOL was based largely upon a clarification in the standard for a finding of joint infringement articulated by the Federal Circuit in the case of Muniauction, Inc. v. Thomson Corp., released after the court denied the Company’s initial motion for JMOL. On April 24, 2009, the court issued its order and memorandum setting aside the adverse jury verdict and ruling that the Company did not infringe Akamai’s ’703 patent and that the Company was entitled to JMOL. Based upon the court’s April 24, 2009 order, the Company reversed the $65,600 provision for litigation previously recorded for this lawsuit as the Company no longer believed that payment of any amounts represented by the litigation provision was probable. The court entered final judgment in favor of the Company on May 22, 2009, and Akamai filed its notice of appeal of the court’s decision on May 26, 2009. On December 20, 2010, the Court of Appeals for the Federal Circuit issued its opinion affirming the trial court’s entry of judgment in the Company’s favor. On February 18, 2011, Akamai filed a motion with the Court of Appeals for the Federal Circuit seeking a rehearing and rehearing en banc. On April 21, 2011, the Court of Appeals for the Federal Circuit issued an order denying the petition for rehearing, granting the petition for rehearing en banc, vacating the December 20, 2010 opinion affirming the trial court’s entry of judgment in the Company’s favor, and reinstated the appeal. | |
On August 31, 2012, the Court of Appeals for the Federal Circuit issued its opinion in the case. The Court of Appeals stated that the trial court correctly determined that the Company did not directly infringe Akamai’s ’703 patent and upheld the trial court’s decision to vacate the original jury’s damages award. The Court of Appeals also held that the Company did not infringe Akamai’s ’413 or ’645 patents. A slim majority in this three-way divided opinion also announced a revised legal theory of induced infringement, remanded the case to the trial court, and gave Akamai an opportunity for a new trial to attempt to prove that the Company induced its customers to infringe Akamai’s patent under the Court of Appeals’ new legal standard. On December 28, 2012, the Company filed a petition for writ of certiorari to the United States Supreme Court to appeal this sharply divided Court of Appeals decision. Akamai then filed a cross petition for consideration of the Court of Appeals standard for direct infringement followed by an opposition to the Company’s petition. On January 10, 2014, the Supreme Court granted our petition for writ of certiorari and did not act on Akamai's cross petition. On April 30, 2014, the Supreme Court heard oral argument in our case. On June 2, 2014, the Supreme Court issued its decision and reversed the Federal Circuit's decision, remanding the case back to that court. On July 24, 2014, the Federal Circuit issued an order vacating its prior judgment, reinstating the appeals, dissolving its en banc status, and referring the case back to the original Court of Appeals panel for further proceedings. The Federal Circuit heard arguments on September 11, 2014. The Company does not believe an ultimate loss is probable; therefore, no provision for this lawsuit is recorded in the consolidated financial statements. | |
In light of the status of the litigation, the Company believes that there is a reasonable possibility that it has incurred a loss related to the Akamai litigation. While the Company believes that there is a reasonable possibility that a loss has been incurred, the Company is not able to estimate a range of the loss due to the complexity and procedural status of the case. The Company will continue to vigorously defend against the allegation. | |
Legal and other expenses associated with this case have been significant. The Company includes these litigation expenses in general and administrative expenses as incurred, as reported in the consolidated statement of operations. | |
Other Litigation | |
The Company is subject to various other legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters will have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. Litigation relating to the content delivery services industry is not uncommon, and the Company is, and from time to time has been, subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future. | |
Other Matters | |
The Company is subject to indirect taxation in various states and foreign jurisdictions. Laws and regulations that apply to communications and commerce conducted over the Internet are becoming more prevalent, both in the United States and internationally, and may impose additional burdens on the Company conducting business online or providing Internet-related services. Increased regulation could negatively affect the Company’s business directly, as well as the businesses of its customers, which could reduce their demand for the Company’s services. For example, tax authorities in various states and abroad may impose taxes on the Internet-related revenue the Company generates based on regulations currently being applied to similar but not directly comparable industries. | |
There are many transactions and calculations where the ultimate tax determination is uncertain. In addition, domestic and international taxation laws are subject to change. In the future, the Company may come under audit, which could result in changes to its tax estimates. The Company believes it maintains adequate tax reserves to offset potential liabilities that may arise upon audit. Although the Company believes its tax estimates and associated reserves are reasonable, the final determination of tax audits and any related litigation could be materially different than the amounts established for tax contingencies. To the extent these estimates ultimately prove to be inaccurate, the associated reserves would be adjusted, resulting in the recording of a benefit or expense in the period in which a change in estimate or a final determination is made. |
Net_Loss_per_Share
Net Loss per Share | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Net Loss per Share | ' | |||||||||||||||
Net Loss per Share | ||||||||||||||||
The Company calculates basic and diluted earnings per weighted average share based on net income (loss). The Company uses the weighted-average number of shares of common stock outstanding during the period for the computation of basic earnings per share. Diluted earnings per share include the dilutive effect of convertible stock options and restricted stock units in the weighted-average number of shares of common stock outstanding. | ||||||||||||||||
The following table sets forth the components used in the computation of basic and diluted net loss per share for the periods indicated: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Loss from continuing operations | $ | (5,071 | ) | $ | (10,903 | ) | $ | (19,849 | ) | $ | (30,273 | ) | ||||
(Loss) income from discontinued operations | (4 | ) | (15 | ) | 265 | (15 | ) | |||||||||
Net loss | $ | (5,075 | ) | $ | (10,918 | ) | $ | (19,584 | ) | $ | (30,288 | ) | ||||
Basic and diluted weighted average outstanding shares of | 98,458 | 96,949 | 98,274 | 96,675 | ||||||||||||
common stock | ||||||||||||||||
Basic and diluted loss per share: | ||||||||||||||||
Continuing operations | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.20 | ) | $ | (0.31 | ) | ||||
Discontinued operations | — | — | — | — | ||||||||||||
Basic and diluted net loss per share | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.20 | ) | $ | (0.31 | ) | ||||
For the three months ended September 30, 2014 and 2013, outstanding options and restricted stock units of 2,593 and 1,415, respectively, were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive. | ||||||||||||||||
For the nine months ended September 30, 2014 and 2013, outstanding options and restricted stock units of 2,323 and 1,689, respectively, were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Stockholders' Equity | ' |
Stockholders’ Equity | |
Common Stock | |
On February 12, 2014, the Company's board of directors authorized a $15,000 share repurchase program. Under the current authorization, the Company may repurchase shares periodically in the open market or through privately negotiated transactions, in accordance with applicable securities rules regarding issuer repurchases. During the three and nine months ended September 30, 2014, the Company purchased and canceled 447 and 947 shares, respectively, for $1,267 and $2,500, respectively, including commissions and expenses. All repurchased shares were canceled and returned to authorized but unissued status. | |
During the nine months ended September 30, 2013, the Company purchased and canceled approximately 2,300 shares for approximately $5,512, including commissions and expenses under a previously authorized share repurchase program. All repurchased shares were canceled and returned to authorized but unissued status. | |
In June 2013, the Company’s stockholders approved the Company’s 2013 Employee Stock Purchase Plan (ESPP). The ESPP allows participants to purchase the Company’s common stock at a 15% discount of the lower of the beginning or end of the offering period using the closing price on that day. During the nine months ended September 30, 2014, the Company issued 141 shares under the ESPP. Total cash proceeds from the purchase of shares under the ESPP were approximately $235. As of September 30, 2014, shares reserved for issuance to employees under this plan totaled 4,000 and the Company held employee contributions of $210, (included in other current liabilities) for future purchases under the ESPP. The ESPP is considered compensatory. The Company recorded compensation expense of $41 and $128 during the three and nine months ended September 30, 2014, respectively, related to the ESPP. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
Accumulated Other Comprehensive Loss | ' | |||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||
Changes in the components of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2014 was as follows: | ||||||||||||
Unrealized | ||||||||||||
Gains (Losses) on | ||||||||||||
Foreign | Available for | |||||||||||
Currency | Sale Securities | Total | ||||||||||
Balance, December 31, 2013 | $ | (1,688 | ) | $ | 25 | $ | (1,663 | ) | ||||
Other comprehensive loss before reclassifications | (2,903 | ) | (30 | ) | (2,933 | ) | ||||||
Amounts reclassified from accumulated other comprehensive | — | — | — | |||||||||
income (loss) | ||||||||||||
Net current period other comprehensive loss | (2,903 | ) | (30 | ) | (2,933 | ) | ||||||
Balance, September 30, 2014 | $ | (4,591 | ) | $ | (5 | ) | $ | (4,596 | ) | |||
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Share-Based Compensation | ' | |||||||||||||||
Share-Based Compensation | ||||||||||||||||
The following table summarizes the components of share-based compensation expense included in the Company’s consolidated statement of operations for the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Share-based compensation expense by type: | ||||||||||||||||
Stock options | $ | 1,120 | $ | 1,614 | $ | 3,545 | $ | 5,214 | ||||||||
Restricted stock units | 1,426 | 1,609 | 4,127 | 4,586 | ||||||||||||
ESPP | 41 | — | 128 | — | ||||||||||||
Total share-based compensation expense | $ | 2,587 | $ | 3,223 | $ | 7,800 | $ | 9,800 | ||||||||
Share-based compensation expense included in our consolidated statements of operations: | ||||||||||||||||
Cost of services | $ | 464 | $ | 499 | $ | 1,466 | $ | 1,518 | ||||||||
General and administrative expense | 1,174 | 1,591 | 3,539 | 4,817 | ||||||||||||
Sales and marketing expense | 567 | 638 | 1,693 | 1,896 | ||||||||||||
Research and development expense | 382 | 495 | 1,102 | 1,569 | ||||||||||||
Total share-based compensation expense | $ | 2,587 | $ | 3,223 | $ | 7,800 | $ | 9,800 | ||||||||
Unrecognized share-based compensation expense totaled approximately $19,380 at September 30, 2014, of which $7,470 related to stock options and $11,910 related to restricted stock awards. The Company currently expects to recognize share-based compensation expense of $2,568 during the remainder of 2014, $8,161 in 2015 and the remainder thereafter based on scheduled vesting of the stock options and restricted stock units outstanding at September 30, 2014. |
Leases_and_Commitments
Leases and Commitments | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Leases and Commitments [Abstract] | ' | |||
Leases and Commitments | ' | |||
Leases and Commitments | ||||
Operating Leases | ||||
The Company is committed to various non-cancellable operating leases for office space and office equipment which expire through 2023. Certain leases contain provisions for renewal options and rent escalations upon expiration of the initial lease terms. Approximate future minimum lease payments over the remaining lease periods as of September 30, 2014 are as follows: | ||||
Remainder of 2014 | $ | 1,045 | ||
2015 | 3,394 | |||
2016 | 2,746 | |||
2017 | 2,343 | |||
2018 and thereafter | 4,096 | |||
Total minimum payments | $ | 13,624 | ||
Purchase Commitments | ||||
The Company has long-term commitments for bandwidth usage and co-location with various networks and Internet service providers, or ISPs. | ||||
The following summarizes minimum commitments as of September 30, 2014: | ||||
Remainder of 2014 | $ | 11,470 | ||
2015 | 26,155 | |||
2016 | 5,648 | |||
2017 | 974 | |||
2018 and thereafter | 449 | |||
Total minimum payments | $ | 44,696 | ||
Capital Leases | ||||
The Company leases equipment under capital lease agreements which extend through 2017. The outstanding balance for capital leases was $411 and $824 as of September 30, 2014 and December 31, 2013, respectively. The Company recorded assets under capital lease obligations of $2,267 and $2,312 as of September 30, 2014 and December 31, 2013, respectively. Related accumulated amortization totaled $2,224 and $1,878 as of September 30, 2014 and December 31, 2013, respectively. The assets acquired under capital leases and related accumulated amortization is included in property and equipment, net in the consolidated balance sheets. The related amortization is included in depreciation and amortization expense in the consolidated statements of operations. Interest expense related to capital leases was $7 and $15 for the three months ended September 30, 2014 and 2013, respectively. Interest expense related to capital leases was $26 and $64 for the nine months ended September 30, 2014 and 2013, respectively. | ||||
Future minimum capital lease payments at September 30, 2014 were as follows: | ||||
Remainder of 2014 | $ | 59 | ||
2015 | 238 | |||
2016 | 134 | |||
2017 | 4 | |||
2018 and thereafter | — | |||
Total | 435 | |||
Amounts representing interest | (24 | ) | ||
Present value of minimum lease payments | $ | 411 | ||
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Concentrations | ' |
Concentrations | |
For the three months ended September 30, 2014 and 2013, and the nine months ended September 30, 2014, the Company had no customer who represented 10% or more of its total revenue. For the nine months ended September 30, 2013, Netflix, Inc. represented approximately 12% of the Company's total revenue. | |
Revenue from sources outside America totaled approximately $15,467 and $14,069 for the three months ended September 30, 2014 and 2013, respectively. Revenue from sources outside of America totaled approximately $44,776 and $41,769 for the nine months ended September 30, 2014 and 2013, respectively. | |
During the three and nine months ended September 30, 2014, and the three months ended September 30, 2013, the Company had two countries, the United States and Japan, that accounted for 10% or more of the Company's total revenues. During the nine months ended September 30, 2013, the Company had no single country outside of the United States that accounted for 10% or more of the Company's total revenues. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income taxes | ' |
Income Taxes | |
Income taxes for the interim periods presented have been included in the accompanying consolidated financial statements on the basis of an estimated annual effective tax rate. Based on an estimated annual effective tax rate and discrete items, the income tax expense for the three and nine months ended September 30, 2014 was $98 and $181, respectively. Income tax expense on the loss from continuing operations before taxes was different than the statutory income tax rate primarily due to the Company providing for a valuation allowance on deferred tax assets in certain jurisdictions, and the recording of state and foreign tax expense for the three and nine month periods. | |
The Company files income tax returns in jurisdictions with varying statues of limitations. Tax years 2010 through 2013 generally remain subject to examination by federal and most state tax authorities. As of September 30, 2014, the Company is not under any federal or state examination. | |
On September 13, 2013, the Internal Revenue Service released final tangible property regulations under Sections 162(a) and 263(a) of the Internal Revenue Code of 1986 (Code), regarding the deduction and capitalization of expenditures related to tangible property. The final regulations replace temporary regulations that were issued in December 2011. Also released were proposed regulations under Section 168 of the Code regarding dispositions of tangible property. Early adoption was available; however, the Company did not elect to early adopt the regulations. The Company adopted the regulations on January 1, 2014, and does not believe there has been or will be a material impact on its consolidated financial statements. |
Segment_Reporting
Segment Reporting | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||||||
Segment Reporting | ' | |||||||||||||||||||||||
Segment Reporting | ||||||||||||||||||||||||
The Company operates in one industry segment — content delivery and related services. The Company operates in three geographic areas — Americas, Europe, Middle East and Africa (EMEA) and Asia Pacific. | ||||||||||||||||||||||||
Revenue by geography is based on the location of the customer from which the revenue is earned. The following table sets forth revenue by geographic area: | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Americas | $ | 23,553 | 60.4 | % | $ | 28,587 | 67 | % | $ | 76,757 | 63.2 | % | $ | 89,463 | 68.2 | % | ||||||||
EMEA | 8,368 | 21.4 | % | 7,960 | 18.7 | % | 25,732 | 21.2 | % | 24,569 | 18.7 | % | ||||||||||||
Asia Pacific | 7,099 | 18.2 | % | 6,109 | 14.3 | % | 19,044 | 15.7 | % | 17,200 | 13.1 | % | ||||||||||||
Total revenue | $ | 39,020 | 100 | % | $ | 42,656 | 100 | % | $ | 121,533 | 100 | % | $ | 131,232 | 100 | % | ||||||||
The following table sets forth long-lived assets by geographic area: | ||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Americas | $ | 22,055 | $ | 26,502 | ||||||||||||||||||||
International | 11,443 | 8,757 | ||||||||||||||||||||||
Total long-lived assets | $ | 33,498 | $ | 35,259 | ||||||||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Fair Value Measurements | ||||||||||||||||
As of September 30, 2014 and December 31, 2013, the Company held certain assets and liabilities that were required to be measured at fair value on a recurring basis. These include money market funds, commercial paper, corporate notes and bonds, U.S. government agency bonds, and publicly traded stocks, which are classified as either cash and cash equivalents or marketable securities. | ||||||||||||||||
The Company’s financial assets are valued using market prices on both active markets (level 1) and less active markets (level 2). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments or identical instruments in less active markets. Level 3 inputs are valued using models that take into account the terms of the arrangement as well as multiple inputs where applicable, such as estimated units sold and other customer utilization metrics. | ||||||||||||||||
The following is a summary of fair value measurements at September 30, 2014: | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Description | Total | Quoted Prices In Active Markets for Identical Assets | Significant | Significant | ||||||||||||
(Level 1) | Other | Unobservable | ||||||||||||||
Observable | Inputs | |||||||||||||||
Inputs | (Level 3) | |||||||||||||||
(Level 2) | ||||||||||||||||
Assets: | ||||||||||||||||
Money market funds (2) | $ | 174 | $ | 174 | $ | — | $ | — | ||||||||
Corporate notes and bonds (1) | 23,199 | — | 23,199 | — | ||||||||||||
Commercial paper (1) | 3,399 | 3,399 | ||||||||||||||
Certificate of deposit (1) | 7,670 | — | 7,670 | — | ||||||||||||
Total assets measured at fair value | $ | 34,442 | $ | 174 | $ | 34,268 | $ | — | ||||||||
____________ | ||||||||||||||||
-1 | Classified in marketable securities | |||||||||||||||
-2 | Classified in cash and cash equivalents | |||||||||||||||
The following is a summary of fair value measurements at December 31, 2013: | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Description | Total | Quoted Prices In Active Markets for Identical Assets | Significant | Significant | ||||||||||||
(Level 1) | Other | Unobservable | ||||||||||||||
Observable | Inputs | |||||||||||||||
Inputs | (Level 3) | |||||||||||||||
(Level 2) | ||||||||||||||||
Assets: | ||||||||||||||||
Government agency bonds (1) | $ | 261 | $ | — | $ | 261 | $ | — | ||||||||
Money market funds (2) | 9,740 | 9,740 | — | — | ||||||||||||
Corporate notes and bonds (1) | 26,009 | — | 26,009 | — | ||||||||||||
Commercial paper (1) | 2,200 | — | 2,200 | — | ||||||||||||
Certificate of deposit (1) | 4,076 | — | 4,076 | — | ||||||||||||
Publicly traded common stock (1) | 6 | 6 | — | — | ||||||||||||
Total assets measured at fair value | $ | 42,292 | $ | 9,746 | $ | 32,546 | $ | — | ||||||||
____________ | ||||||||||||||||
-1 | Classified in marketable securities | |||||||||||||||
-2 | Classified in cash and cash equivalents | |||||||||||||||
The carrying amount of cash equivalents approximates fair value because their maturity is less than three months. The carrying amount of short-term and long-term marketable securities approximates fair value as the securities are marked to market as of each balance sheet date with any unrealized gains and losses reported in stockholders’ equity. The carrying amount of accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short-term maturity of the amounts. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. They do not include all of the information and footnotes required by U.S. generally accepted accounting principles (U.S. GAAP) for complete financial statements. Such interim financial information is unaudited but reflects all adjustments that, in the opinion of management, are necessary for the fair presentation of the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any future periods. This quarterly report on Form 10-Q should be read in conjunction with the Company’s audited financial statements and footnotes included in its annual report on Form 10-K for the fiscal year ended December 31, 2013. | |
The consolidated financial statements include accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. In addition, certain other reclassifications have been made to prior year amounts to conform to the current year presentation. | |
During the three months ended September 30, 2014, the Company recorded an immaterial error correction of approximately $1,100 relating to previous over billings by a co-location provider. This correction was recorded as a reduction of costs of revenues. | |
Revision of Previously Issued Financial Statements | ' |
Revision of Previously Issued Financial Statements | |
As previously disclosed in our 2013 Form 10-K, the consolidated statement of operations was revised to reclassify certain amounts to cost of revenues that were previously reported in general and administrative expenses for the three and nine months ended September 30, 2013. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of the consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results and outcomes may differ from those estimates. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any other future periods. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Standards | |
Recently Issued Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, which includes amendments that change the requirements for reporting discontinued operations and require additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations - that is, a major effect on the organization's operations and financial results - should be presented as discontinued operations. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, this ASU requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. This update is effective for the Company in the first quarter of 2015. The new guidance would only impact the Company upon the disposal of a business. | |
In May 2014, the FASB issued ASU 2014-09, which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This guidance will be effective for the Company in the first quarter of 2017. Early adoption is not permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. | |
In August 2014, the FASB issued ASU 2014-15, which provides guidance for disclosure of uncertainties about an entity’s ability to continue as a going concern. ASU 2014-15 defines management's responsibility to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. This guidance will be effective for the Company in the first annual period ending after December 15, 2016; however, early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||
Schedule of reclassifications within statement of operations | ' | |||||||||||
The following table summarizes the reclassifications by line item within the unaudited consolidated statement of operations for the three months ended September 30, 2013: | ||||||||||||
For the Three Months Ended September 30, 2013 | ||||||||||||
As | As | |||||||||||
Reported | Reclassifications | Revised | ||||||||||
Cost of services | $ | 21,773 | $ | 365 | $ | 22,138 | ||||||
Total cost of revenue | 27,051 | 365 | 27,416 | |||||||||
Gross profit | 15,605 | (365 | ) | 15,240 | ||||||||
General and administrative | 8,609 | (365 | ) | 8,244 | ||||||||
Total operating expenses | 25,828 | (365 | ) | 25,463 | ||||||||
The following table summarizes the reclassifications by line item within the unaudited consolidated statement of operations for the nine months ended September 30, 2013: | ||||||||||||
For the Nine Months Ended September 30, 2013 | ||||||||||||
As | As | |||||||||||
Reported | Reclassifications | Revised | ||||||||||
Cost of services | $ | 65,696 | $ | 1,025 | $ | 66,721 | ||||||
Total cost of revenue | 83,774 | 1,025 | 84,799 | |||||||||
Gross profit | 47,458 | (1,025 | ) | 46,433 | ||||||||
General and administrative | 25,047 | (1,025 | ) | 24,022 | ||||||||
Total operating expenses | 77,731 | (1,025 | ) | 76,706 | ||||||||
Investments_in_Marketable_Secu1
Investments in Marketable Securities (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||
Summary of marketable securities (designated as available-for-sale) | ' | |||||||||||||||
The following is a summary of marketable securities (designated as available-for-sale) at September 30, 2014: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Certificate of deposit | $ | 7,680 | $ | 2 | $ | 12 | $ | 7,670 | ||||||||
Commercial paper | 3,399 | — | — | 3,399 | ||||||||||||
Corporate notes and bonds | 23,207 | 18 | 26 | 23,199 | ||||||||||||
Total marketable securities | 34,286 | 20 | 38 | 34,268 | ||||||||||||
The following is a summary of marketable securities (designated as available-for-sale) at December 31, 2013: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Government agency bonds | $ | 261 | $ | — | $ | — | $ | 261 | ||||||||
Certificate of deposit | 4,080 | — | 4 | 4,076 | ||||||||||||
Commercial paper | 2,200 | — | — | 2,200 | ||||||||||||
Corporate notes and bonds | 26,001 | 15 | 7 | 26,009 | ||||||||||||
32,542 | 15 | 11 | 32,546 | |||||||||||||
Publicly traded common stock | 12 | — | 6 | 6 | ||||||||||||
Total marketable securities | $ | 32,554 | $ | 15 | $ | 17 | $ | 32,552 | ||||||||
Amortized cost and estimated fair value of marketable securities (designated as available-for-sale) by maturity | ' | |||||||||||||||
The amortized cost and estimated fair value of the marketable debt securities at September 30, 2014, by maturity, are shown below: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Available-for-sale securities | ||||||||||||||||
Due in one year or less | $ | 20,417 | $ | 9 | $ | 4 | $ | 20,422 | ||||||||
Due after one year and through five years | 13,869 | 11 | 34 | 13,846 | ||||||||||||
$ | 34,286 | $ | 20 | $ | 38 | $ | 34,268 | |||||||||
The amortized cost and estimated fair value of the marketable debt securities at December 31, 2013, by maturity, are shown below: | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
Available-for-sale securities | ||||||||||||||||
Due in one year or less | $ | 17,031 | $ | 2 | $ | 5 | $ | 17,028 | ||||||||
Due after one year and through five years | 15,511 | 13 | 6 | 15,518 | ||||||||||||
$ | 32,542 | $ | 15 | $ | 11 | $ | 32,546 | |||||||||
Accounts_Receivable_net_Tables
Accounts Receivable, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Summary of accounts receivable, net | ' | |||||||
Accounts receivable, net include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accounts receivable | $ | 15,982 | $ | 17,497 | ||||
Unbilled accounts receivable | 8,386 | 5,943 | ||||||
24,368 | 23,440 | |||||||
Less: credit allowance | (380 | ) | (610 | ) | ||||
Less: allowance for doubtful accounts | (1,545 | ) | (1,400 | ) | ||||
Total accounts receivable, net | $ | 22,443 | $ | 21,430 | ||||
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Summary of Prepaid expenses and other current assets | ' | |||||||
Prepaid expenses and other current assets include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Prepaid expenses and insurance | $ | 3,806 | $ | 3,371 | ||||
Prepaid bandwidth and backbone services | 1,943 | 2,045 | ||||||
VAT receivable | 1,853 | 1,588 | ||||||
Vendor deposits and other | 1,438 | 1,188 | ||||||
Total prepaid expenses and other current assets | $ | 9,040 | $ | 8,192 | ||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||
Schedule of other intangible assets subject to amortization | ' | |||||||||||
Other intangible assets that are subject to amortization consisted of the following: | ||||||||||||
30-Sep-14 | ||||||||||||
Gross | Accumulated | Net | ||||||||||
Carrying | Amortization | Carrying | ||||||||||
Amount | Amount | |||||||||||
Existing technologies | $ | 4,100 | $ | (2,802 | ) | $ | 1,298 | |||||
Customer relationships | 150 | (104 | ) | 46 | ||||||||
Total other intangible assets | $ | 4,250 | $ | (2,906 | ) | $ | 1,344 | |||||
31-Dec-13 | ||||||||||||
Gross | Accumulated | Net | ||||||||||
Carrying | Amortization | Carrying | ||||||||||
Amount | Amount | |||||||||||
Existing technologies | $ | 6,164 | $ | (3,875 | ) | $ | 2,289 | |||||
Customer relationships | 150 | (85 | ) | 65 | ||||||||
Total other intangible assets | $ | 6,314 | $ | (3,960 | ) | $ | 2,354 | |||||
Property_and_Equipment_net_Tab
Property and Equipment, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property and equipment, net | ' | |||||||
Property and equipment, net include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Network equipment | $ | 190,949 | $ | 180,896 | ||||
Computer equipment | 11,381 | 11,073 | ||||||
Furniture and fixtures | 2,733 | 2,723 | ||||||
Leasehold improvements | 7,353 | 7,162 | ||||||
Other equipment | 590 | 570 | ||||||
Total property and equipment | 213,006 | 202,424 | ||||||
Less: accumulated depreciation and amortization | (180,852 | ) | (169,519 | ) | ||||
Total property and equipment, net | $ | 32,154 | $ | 32,905 | ||||
Other_Assets_Tables
Other Assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Other assets | ' | |||||||
Other assets include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Prepaid bandwidth and backbone services | $ | 3,102 | $ | 4,268 | ||||
Vendor deposits and other | 1,996 | 1,835 | ||||||
Total other assets | $ | 5,098 | $ | 6,103 | ||||
Other_Current_Liabilities_Tabl
Other Current Liabilities (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Other current liabilities | ' | |||||||
Other current liabilities include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued compensation and benefits | $ | 4,526 | $ | 6,682 | ||||
Accrued cost of revenue | 1,680 | 1,833 | ||||||
Accrued legal fees | 1,717 | 1,769 | ||||||
Deferred rent | 1,277 | 1,074 | ||||||
Indirect taxes payable | 746 | 639 | ||||||
Customer deposits | 181 | 635 | ||||||
Other accrued expenses | 2,118 | 2,390 | ||||||
Total other current liabilities | $ | 12,245 | $ | 15,022 | ||||
Other_Long_Term_Liabilities_Ta
Other Long Term Liabilities (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Other long term liabilities | ' | |||||||
Other long term liabilities include: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Deferred rent | $ | 2,832 | $ | 3,384 | ||||
Income taxes payable | 123 | 121 | ||||||
Total other long term liabilities | $ | 2,955 | $ | 3,505 | ||||
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation of basic and diluted net income (loss) per share | ' | |||||||||||||||
The following table sets forth the components used in the computation of basic and diluted net loss per share for the periods indicated: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Loss from continuing operations | $ | (5,071 | ) | $ | (10,903 | ) | $ | (19,849 | ) | $ | (30,273 | ) | ||||
(Loss) income from discontinued operations | (4 | ) | (15 | ) | 265 | (15 | ) | |||||||||
Net loss | $ | (5,075 | ) | $ | (10,918 | ) | $ | (19,584 | ) | $ | (30,288 | ) | ||||
Basic and diluted weighted average outstanding shares of | 98,458 | 96,949 | 98,274 | 96,675 | ||||||||||||
common stock | ||||||||||||||||
Basic and diluted loss per share: | ||||||||||||||||
Continuing operations | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.20 | ) | $ | (0.31 | ) | ||||
Discontinued operations | — | — | — | — | ||||||||||||
Basic and diluted net loss per share | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.20 | ) | $ | (0.31 | ) |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
Schedule of accumulated other comprehensive loss | ' | |||||||||||
Changes in the components of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2014 was as follows: | ||||||||||||
Unrealized | ||||||||||||
Gains (Losses) on | ||||||||||||
Foreign | Available for | |||||||||||
Currency | Sale Securities | Total | ||||||||||
Balance, December 31, 2013 | $ | (1,688 | ) | $ | 25 | $ | (1,663 | ) | ||||
Other comprehensive loss before reclassifications | (2,903 | ) | (30 | ) | (2,933 | ) | ||||||
Amounts reclassified from accumulated other comprehensive | — | — | — | |||||||||
income (loss) | ||||||||||||
Net current period other comprehensive loss | (2,903 | ) | (30 | ) | (2,933 | ) | ||||||
Balance, September 30, 2014 | $ | (4,591 | ) | $ | (5 | ) | $ | (4,596 | ) | |||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Components of share-based compensation expense | ' | |||||||||||||||
The following table summarizes the components of share-based compensation expense included in the Company’s consolidated statement of operations for the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Share-based compensation expense by type: | ||||||||||||||||
Stock options | $ | 1,120 | $ | 1,614 | $ | 3,545 | $ | 5,214 | ||||||||
Restricted stock units | 1,426 | 1,609 | 4,127 | 4,586 | ||||||||||||
ESPP | 41 | — | 128 | — | ||||||||||||
Total share-based compensation expense | $ | 2,587 | $ | 3,223 | $ | 7,800 | $ | 9,800 | ||||||||
Share-based compensation expense included in our consolidated statements of operations: | ||||||||||||||||
Cost of services | $ | 464 | $ | 499 | $ | 1,466 | $ | 1,518 | ||||||||
General and administrative expense | 1,174 | 1,591 | 3,539 | 4,817 | ||||||||||||
Sales and marketing expense | 567 | 638 | 1,693 | 1,896 | ||||||||||||
Research and development expense | 382 | 495 | 1,102 | 1,569 | ||||||||||||
Total share-based compensation expense | $ | 2,587 | $ | 3,223 | $ | 7,800 | $ | 9,800 | ||||||||
Leases_and_Commitments_Tables
Leases and Commitments (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Leases and Commitments [Abstract] | ' | |||
Future minimum lease payments over remaining lease periods | ' | |||
Approximate future minimum lease payments over the remaining lease periods as of September 30, 2014 are as follows: | ||||
Remainder of 2014 | $ | 1,045 | ||
2015 | 3,394 | |||
2016 | 2,746 | |||
2017 | 2,343 | |||
2018 and thereafter | 4,096 | |||
Total minimum payments | $ | 13,624 | ||
Minimum Purchase commitments | ' | |||
The following summarizes minimum commitments as of September 30, 2014: | ||||
Remainder of 2014 | $ | 11,470 | ||
2015 | 26,155 | |||
2016 | 5,648 | |||
2017 | 974 | |||
2018 and thereafter | 449 | |||
Total minimum payments | $ | 44,696 | ||
Future minimum capital lease payments | ' | |||
Future minimum capital lease payments at September 30, 2014 were as follows: | ||||
Remainder of 2014 | $ | 59 | ||
2015 | 238 | |||
2016 | 134 | |||
2017 | 4 | |||
2018 and thereafter | — | |||
Total | 435 | |||
Amounts representing interest | (24 | ) | ||
Present value of minimum lease payments | $ | 411 | ||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||||||
Revenue earned by geographic area | ' | |||||||||||||||||||||||
Revenue by geography is based on the location of the customer from which the revenue is earned. The following table sets forth revenue by geographic area: | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Americas | $ | 23,553 | 60.4 | % | $ | 28,587 | 67 | % | $ | 76,757 | 63.2 | % | $ | 89,463 | 68.2 | % | ||||||||
EMEA | 8,368 | 21.4 | % | 7,960 | 18.7 | % | 25,732 | 21.2 | % | 24,569 | 18.7 | % | ||||||||||||
Asia Pacific | 7,099 | 18.2 | % | 6,109 | 14.3 | % | 19,044 | 15.7 | % | 17,200 | 13.1 | % | ||||||||||||
Total revenue | $ | 39,020 | 100 | % | $ | 42,656 | 100 | % | $ | 121,533 | 100 | % | $ | 131,232 | 100 | % | ||||||||
Long-lived assets by geographical area | ' | |||||||||||||||||||||||
The following table sets forth long-lived assets by geographic area: | ||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Americas | $ | 22,055 | $ | 26,502 | ||||||||||||||||||||
International | 11,443 | 8,757 | ||||||||||||||||||||||
Total long-lived assets | $ | 33,498 | $ | 35,259 | ||||||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Summary of money market funds, marketable securities, other investment-related assets and current liabilities | ' | |||||||||||||||
The following is a summary of fair value measurements at September 30, 2014: | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Description | Total | Quoted Prices In Active Markets for Identical Assets | Significant | Significant | ||||||||||||
(Level 1) | Other | Unobservable | ||||||||||||||
Observable | Inputs | |||||||||||||||
Inputs | (Level 3) | |||||||||||||||
(Level 2) | ||||||||||||||||
Assets: | ||||||||||||||||
Money market funds (2) | $ | 174 | $ | 174 | $ | — | $ | — | ||||||||
Corporate notes and bonds (1) | 23,199 | — | 23,199 | — | ||||||||||||
Commercial paper (1) | 3,399 | 3,399 | ||||||||||||||
Certificate of deposit (1) | 7,670 | — | 7,670 | — | ||||||||||||
Total assets measured at fair value | $ | 34,442 | $ | 174 | $ | 34,268 | $ | — | ||||||||
____________ | ||||||||||||||||
-1 | Classified in marketable securities | |||||||||||||||
-2 | Classified in cash and cash equivalents | |||||||||||||||
The following is a summary of fair value measurements at December 31, 2013: | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Description | Total | Quoted Prices In Active Markets for Identical Assets | Significant | Significant | ||||||||||||
(Level 1) | Other | Unobservable | ||||||||||||||
Observable | Inputs | |||||||||||||||
Inputs | (Level 3) | |||||||||||||||
(Level 2) | ||||||||||||||||
Assets: | ||||||||||||||||
Government agency bonds (1) | $ | 261 | $ | — | $ | 261 | $ | — | ||||||||
Money market funds (2) | 9,740 | 9,740 | — | — | ||||||||||||
Corporate notes and bonds (1) | 26,009 | — | 26,009 | — | ||||||||||||
Commercial paper (1) | 2,200 | — | 2,200 | — | ||||||||||||
Certificate of deposit (1) | 4,076 | — | 4,076 | — | ||||||||||||
Publicly traded common stock (1) | 6 | 6 | — | — | ||||||||||||
Total assets measured at fair value | $ | 42,292 | $ | 9,746 | $ | 32,546 | $ | — | ||||||||
____________ | ||||||||||||||||
-1 | Classified in marketable securities | |||||||||||||||
-2 | Classified in cash and cash equivalents |
Nature_of_Business_Details
Nature of Business (Details) | 9 Months Ended |
Sep. 30, 2014 | |
service_unit | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Number of services | 4 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Cost of services | $18,672 | [1] | $22,138 | [1] | $61,563 | [1] | $66,721 | [1] |
Total cost of revenue | 22,879 | 27,416 | 74,251 | 84,799 | ||||
Gross profit | 16,141 | 15,240 | 47,282 | 46,433 | ||||
General and administrative | 7,295 | 8,244 | 21,966 | 24,022 | ||||
Total operating expenses | 22,365 | 25,463 | 68,141 | 76,706 | ||||
As Reported [Member] | ' | ' | ' | ' | ||||
Cost of services | ' | 21,773 | ' | 65,696 | ||||
Total cost of revenue | ' | 27,051 | ' | 83,774 | ||||
Gross profit | ' | 15,605 | ' | 47,458 | ||||
General and administrative | ' | 8,609 | ' | 25,047 | ||||
Total operating expenses | ' | 25,828 | ' | 77,731 | ||||
Reclassifications [Member] | ' | ' | ' | ' | ||||
Cost of services | ' | 365 | ' | 1,025 | ||||
Total cost of revenue | -1,100 | 365 | ' | 1,025 | ||||
Gross profit | ' | -365 | ' | -1,025 | ||||
General and administrative | ' | -365 | ' | -1,025 | ||||
Total operating expenses | ' | ($365) | ' | ($1,025) | ||||
[1] | Cost of services excludes amortization related to intangibles, including existing technologies, customer relationships, and trade names and trademarks, which are included in depreciation and amortization |
Investments_in_Marketable_Secu2
Investments in Marketable Securities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Summary of marketable securities (designated as available-for-sale) | ' | ' |
Amortized Cost | $34,286 | $32,554 |
Gross Unrealized Gains | 20 | 15 |
Gross Unrealized Losses | 38 | 17 |
Estimated Fair Value | 34,268 | 32,552 |
Certificate of deposit [Member] | ' | ' |
Summary of marketable securities (designated as available-for-sale) | ' | ' |
Amortized Cost | 7,680 | 4,080 |
Gross Unrealized Gains | 2 | 0 |
Gross Unrealized Losses | 12 | 4 |
Estimated Fair Value | 7,670 | 4,076 |
Commercial paper [Member] | ' | ' |
Summary of marketable securities (designated as available-for-sale) | ' | ' |
Amortized Cost | 3,399 | 2,200 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 3,399 | 2,200 |
Corporate notes and bonds [Member] | ' | ' |
Summary of marketable securities (designated as available-for-sale) | ' | ' |
Amortized Cost | 23,207 | 26,001 |
Gross Unrealized Gains | 18 | 15 |
Gross Unrealized Losses | 26 | 7 |
Estimated Fair Value | 23,199 | 26,009 |
Government agency bonds [Member] | ' | ' |
Summary of marketable securities (designated as available-for-sale) | ' | ' |
Amortized Cost | ' | 261 |
Gross Unrealized Gains | ' | 0 |
Gross Unrealized Losses | ' | 0 |
Estimated Fair Value | ' | 261 |
Debt securities [Member] | ' | ' |
Summary of marketable securities (designated as available-for-sale) | ' | ' |
Amortized Cost | 34,286 | 32,542 |
Gross Unrealized Gains | 20 | 15 |
Gross Unrealized Losses | 38 | 11 |
Estimated Fair Value | 34,268 | 32,546 |
Publicly traded common stock [Member] | ' | ' |
Summary of marketable securities (designated as available-for-sale) | ' | ' |
Amortized Cost | ' | 12 |
Gross Unrealized Gains | ' | 0 |
Gross Unrealized Losses | ' | 6 |
Estimated Fair Value | ' | $6 |
Investments_in_Marketable_Secu3
Investments in Marketable Securities (Details 1) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Amortized cost and estimated fair value of marketable securities (designated as available-for-sale) by maturity | ' | ' |
Amortized Cost | $34,286 | $32,554 |
Gross Unrealized Gains | 20 | 15 |
Gross Unrealized Losses | 38 | 17 |
Estimated Fair Value | 34,268 | 32,552 |
Debt Securities [Member] | ' | ' |
Amortized cost and estimated fair value of marketable securities (designated as available-for-sale) by maturity | ' | ' |
Amortized Cost, Due in one year or less | 20,417 | 17,031 |
Amortized Cost, Due after one year and through five years | 13,869 | 15,511 |
Amortized Cost | 34,286 | 32,542 |
Gross Unrealized Gains, Due in one year or less | 9 | 2 |
Gross Unrealized Gains, Due after one year and through five years | 11 | 13 |
Gross Unrealized Gains | 20 | 15 |
Gross Unrealized Losses, Due in one year or less | 4 | 5 |
Gross Unrealized Losses, Due after one year and through five years | 34 | 6 |
Gross Unrealized Losses | 38 | 11 |
Estimated Fair Value, Due in one year or less | 20,422 | 17,028 |
Estimated Fair Value, Due after one year and through five years | 13,846 | 15,518 |
Estimated Fair Value | $34,268 | $32,546 |
Business_Disposition_Details
Business Disposition (Details) (Clickability, Inc. [Member], USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 23, 2013 | Dec. 31, 2013 | Mar. 31, 2014 |
Other Nonoperating Income (Expense) [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' |
Percentage of stock sold | 100.00% | ' | ' |
Proceeds from sale of business | $12,341 | ' | ' |
Goodwill | 3,799 | ' | ' |
Gain (loss) on disposal | ' | $3,836 | ($62) |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 01, 2011 |
DG FastChannel Inc. [Member] | DG FastChannel Inc. [Member] | DG FastChannel Inc. [Member] | |||||
Entity Information [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Amount of net proceeds from sale | ' | ' | ' | ' | $269 | ' | $61,000 |
Receivable due | ' | ' | ' | ' | ' | ' | 10,854 |
Write-off of receivable due | ' | ' | ' | ' | ' | 412 | ' |
Proceeds from sale of business | ' | ' | ' | ' | 414 | ' | ' |
Income taxes paid | ' | ' | ' | ' | 145 | ' | ' |
Loss from discontinued operations | $4 | $15 | ($265) | $15 | ' | ' | ' |
Accounts_Receivable_net_Detail
Accounts Receivable, net (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Summary of Accounts receivable, net | ' | ' |
Accounts receivable | $15,982 | $17,497 |
Unbilled accounts receivable | 8,386 | 5,943 |
Total accounts receivable, gross | 24,368 | 23,440 |
Less: credit allowance | -380 | -610 |
Less: allowance for doubtful accounts | -1,545 | -1,400 |
Total accounts receivable, net | $22,443 | $21,430 |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ' |
Prepaid expenses and insurance | $3,806 | $3,371 |
Prepaid bandwidth and backbone services | 1,943 | 2,045 |
VAT receivable | 1,853 | 1,588 |
Vendor deposits and other | 1,438 | 1,188 |
Total prepaid expenses and other current assets | $9,040 | $8,192 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' | ' |
Estimated fair value of goodwill | $103,500,000 | ' | $103,500,000 | ' |
Percentage of estimated fair value of goodwill exceeding carrying value | ' | ' | 47.00% | ' |
Control premium used to determine fair value of goodwill | ' | ' | 40.00% | ' |
Foreign currency translation adjustment | -581,000 | ' | -452,000 | ' |
Aggregate expense related to amortization of other intangible assets | 259,000 | 711,000 | 934,000 | 2,161,000 |
Remainder of 2014 | 211,000 | ' | 211,000 | ' |
2015 | 845,000 | ' | 845,000 | ' |
2016 | 288,000 | ' | 288,000 | ' |
2017 | $0 | ' | $0 | ' |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details 1) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of other intangible assets subject to amortization | ' | ' |
Gross Carrying Amount | $4,250 | $6,314 |
Accumulated Amortization | -2,906 | -3,960 |
Net Carrying Amount | 1,344 | 2,354 |
Existing technologies [Member] | ' | ' |
Schedule of other intangible assets subject to amortization | ' | ' |
Gross Carrying Amount | 4,100 | 6,164 |
Accumulated Amortization | -2,802 | -3,875 |
Net Carrying Amount | 1,298 | 2,289 |
Customer relationships [Member] | ' | ' |
Schedule of other intangible assets subject to amortization | ' | ' |
Gross Carrying Amount | 150 | 150 |
Accumulated Amortization | -104 | -85 |
Net Carrying Amount | $46 | $65 |
Property_and_Equipment_net_Det
Property and Equipment, net (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property and equipment, net | ' | ' |
Property and equipment, gross | $213,006 | $202,424 |
Less: accumulated depreciation | -180,852 | -169,519 |
Total property and equipment, net | 32,154 | 32,905 |
Network equipment [Member] | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 190,949 | 180,896 |
Computer equipment [Member] | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 11,381 | 11,073 |
Furniture and fixtures [Member] | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 2,733 | 2,723 |
Leasehold improvements [Member] | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 7,353 | 7,162 |
Other equipment [Member] | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | $590 | $570 |
Property_and_Equipment_net_Det1
Property and Equipment, net (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Property and Equipment (Textual) [Abstract] | ' | ' | ' | ' |
Operating expense depreciation | $566 | $722 | $1,934 | $2,164 |
Other_Assets_Details
Other Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ' |
Prepaid bandwidth and backbone services | $3,102 | $4,268 |
Vendor deposits and other | 1,996 | 1,835 |
Total other assets | $5,098 | $6,103 |
Other_Current_Liabilities_Deta
Other Current Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Liabilities Disclosure [Abstract] | ' | ' |
Accrued compensation and benefits | $4,526 | $6,682 |
Accrued cost of revenue | 1,680 | 1,833 |
Accrued legal fees | 1,717 | 1,769 |
Deferred rent | 1,277 | 1,074 |
Indirect taxes payable | 746 | 639 |
Customer deposits | 181 | 635 |
Other accrued expenses | 2,118 | 2,390 |
Total other current liabilities | $12,245 | $15,022 |
Other_Long_Term_Liabilities_De
Other Long Term Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Liabilities Disclosure [Abstract] | ' | ' |
Deferred rent | $2,832 | $3,384 |
Income taxes payable | 123 | 121 |
Total other long term liabilities | $2,955 | $3,505 |
Contingencies_Details
Contingencies (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||||
Apr. 24, 2009 | Feb. 29, 2008 | Dec. 31, 2008 | Sep. 30, 2014 | Dec. 31, 2007 | Sep. 30, 2006 | Jun. 30, 2006 | |
Claim | Patent | Patent | |||||
Loss Contingency [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Number of patents Company was infringing | ' | ' | ' | ' | ' | 3 | 2 |
Number of claims Company infringed | ' | 4 | ' | ' | ' | ' | ' |
Aggregate of lost profits, reasonable royalties and price erosion damages | ' | $45,500,000 | ' | ' | ' | ' | ' |
Prejudgment interest | ' | ' | ' | ' | 2,600,000 | ' | ' |
Provision for litigation | ' | ' | 65,600,000 | 0 | 48,100,000 | ' | ' |
Additional provision | ' | ' | 17,500,000 | ' | ' | ' | ' |
Period increase (decrease) in loss contingency accrual | ($65,600,000) | ' | ' | ' | ' | ' | ' |
Net_Loss_per_Share_Details
Net Loss per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Computation of basic and diluted net income (loss) per share | ' | ' | ' | ' |
Loss from continuing operations | ($5,071) | ($10,903) | ($19,849) | ($30,273) |
(Loss) income from discontinued operations | -4 | -15 | 265 | -15 |
Net loss | ($5,075) | ($10,918) | ($19,584) | ($30,288) |
Basic weighted average shares of common stock (shares) | 98,458 | 96,949 | 98,274 | 96,675 |
Basic and diluted loss per share: | ' | ' | ' | ' |
Continuing operations (in dollars per share) | ($0.05) | ($0.11) | ($0.20) | ($0.31) |
Discontinued operations (in dollars per share) | $0 | $0 | $0 | $0 |
Total net loss per share, Basic and Diluted (in dollars per share) | ($0.05) | ($0.11) | ($0.20) | ($0.31) |
Net_Loss_per_Share_Details_Tex
Net Loss per Share (Details Textual) (Stock options and restricted stock (RSUs) [Member]) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Stock options and restricted stock (RSUs) [Member] | ' | ' | ' | ' |
Net Loss per Share (Textual) [Abstract] | ' | ' | ' | ' |
Excluded outstanding options and restricted stock units | 2,593 | 1,415 | 2,323 | 1,689 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Share data in Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Feb. 12, 2014 |
Employee Stock Purchase Plan [Member] | Employee Stock Purchase Plan [Member] | Employee Stock Purchase Plan [Member] | Employee Stock Purchase Plan [Member] | Share Repurchase Program [Member] | Share Repurchase Program [Member] | Share Repurchase Program [Member] | Share Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock repurchase amount authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $15,000,000 |
Stock repurchased and retired during period (shares) | ' | ' | ' | ' | ' | ' | ' | ' | 447 | 947 | 2,300 | ' |
Cash paid for common stock including commissions | ' | ' | 2,500,000 | 5,512,000 | ' | ' | ' | ' | 1,267,000 | 2,500,000 | 5,512,000 | ' |
Discount from market price for employees | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' |
Stock issued during period (shares) | ' | ' | ' | ' | ' | ' | 141 | ' | ' | ' | ' | ' |
Proceeds from issuance of shares | ' | ' | ' | ' | ' | ' | 235,000 | ' | ' | ' | ' | ' |
Number of shares authorized under plan | ' | ' | ' | ' | 4,000 | ' | 4,000 | ' | ' | ' | ' | ' |
Employee funds held by company for future purchase of shares | ' | ' | ' | ' | 210,000 | ' | 210,000 | ' | ' | ' | ' | ' |
Share-based compensation | $2,587,000 | $3,223,000 | $7,800,000 | $9,800,000 | $41,000 | $0 | $128,000 | $0 | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Decrease in Accumulated Other Comprehensive Income [Roll Forward] | ' | ' | ' | ' |
Beginning balance | ' | ' | ($1,663) | ' |
Other comprehensive loss before reclassifications | ' | ' | -2,933 | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 0 | ' |
Other comprehensive income (loss), net of tax | -3,708 | 1,379 | -2,933 | -857 |
Ending balance | -4,596 | ' | -4,596 | ' |
Foreign Currency [Member] | ' | ' | ' | ' |
Decrease in Accumulated Other Comprehensive Income [Roll Forward] | ' | ' | ' | ' |
Beginning balance | ' | ' | -1,688 | ' |
Other comprehensive loss before reclassifications | ' | ' | -2,903 | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 0 | ' |
Other comprehensive income (loss), net of tax | ' | ' | -2,903 | ' |
Ending balance | -4,591 | ' | -4,591 | ' |
Unrealized Gains (Losses) on Available for Sale Securities [Member] | ' | ' | ' | ' |
Decrease in Accumulated Other Comprehensive Income [Roll Forward] | ' | ' | ' | ' |
Beginning balance | ' | ' | 25 | ' |
Other comprehensive loss before reclassifications | ' | ' | -30 | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 0 | ' |
Other comprehensive income (loss), net of tax | ' | ' | -30 | ' |
Ending balance | ($5) | ' | ($5) | ' |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | $2,587 | $3,223 | $7,800 | $9,800 |
Cost of services [Member] | ' | ' | ' | ' |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | 464 | 499 | 1,466 | 1,518 |
General and administrative expense [Member] | ' | ' | ' | ' |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | 1,174 | 1,591 | 3,539 | 4,817 |
Sales and marketing expense [Member] | ' | ' | ' | ' |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | 567 | 638 | 1,693 | 1,896 |
Research and development expense [Member] | ' | ' | ' | ' |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | 382 | 495 | 1,102 | 1,569 |
Stock options [Member] | ' | ' | ' | ' |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | 1,120 | 1,614 | 3,545 | 5,214 |
Restricted stock units [Member] | ' | ' | ' | ' |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | 1,426 | 1,609 | 4,127 | 4,586 |
2013 ESPP [Member] | ' | ' | ' | ' |
Components of share-based compensation expense | ' | ' | ' | ' |
Share-based compensation | $41 | $0 | $128 | $0 |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details Textual) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' |
Unrecognized share-based compensation expense total | $19,380 |
Share-based compensation expense, remainder of 2014 | 2,568 |
Share-based compensation expense, 2015 | 8,161 |
Stock options [Member] | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' |
Unrecognized share-based compensation expense total | 7,470 |
Restricted stock awards [Member] | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' |
Unrecognized share-based compensation expense total | $11,910 |
Leases_and_Commitments_Details
Leases and Commitments (Details) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Future minimum lease payments over remaining lease periods | ' |
Remainder of 2014 | $1,045 |
2015 | 3,394 |
2016 | 2,746 |
2017 | 2,343 |
2018 and thereafter | 4,096 |
Total minimum payments | $13,624 |
Leases_and_Commitments_Details1
Leases and Commitments (Details 1) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Minimum purchase commitments | ' |
Remainder of 2014 | $11,470 |
2015 | 26,155 |
2016 | 5,648 |
2017 | 974 |
2018 and thereafter | 449 |
Total minimum payments | $44,696 |
Leases_and_Commitments_Details2
Leases and Commitments (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Leases Capital [Abstract] | ' | ' | ' | ' | ' |
Outstanding balance for capital leases | $411 | ' | $411 | ' | $824 |
Recorded assets under capital lease obligations | 2,267 | ' | 2,267 | ' | 2,312 |
Capital lease accumulated amortization | 2,224 | ' | 2,224 | ' | 1,878 |
Interest expense related to capital leases | $7 | $15 | $26 | $64 | ' |
Leases_and_Commitments_Details3
Leases and Commitments (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Future minimum capital lease payments | ' | ' |
Remainder of 2014 | $59 | ' |
2015 | 238 | ' |
2016 | 134 | ' |
2017 | 4 | ' |
2018 and thereafter | 0 | ' |
Total | 435 | ' |
Amounts representing interest | -24 | ' |
Present value of minimum lease payments | $411 | $824 |
Concentrations_Details
Concentrations (Details) (Total Revenue [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
customer | customer | customer | customer | |
Customer Concentration Risk [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Number of customers accounting for more than 10% of revenue | 0 | 0 | 0 | 1 |
Customer Concentration Risk [Member] | Netflix, Inc. [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Concentration percentage | ' | ' | ' | 12.00% |
Geographic Concentration Risk [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Revenue from foreign sources | 15,467 | 14,069 | 44,776 | 41,769 |
Number of countries accounting for more than 10% of revenue | 2 | 2 | 2 | 0 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Income tax expense | $98 | $197 | $181 | $328 |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 9 Months Ended |
Sep. 30, 2014 | |
Location | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of industry segment | 1 |
Number of geographic areas | 3 |
Segment_Revenues_Details
Segment Revenues (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenue earned by geographic area | ' | ' | ' | ' |
Revenues | $39,020 | $42,656 | $121,533 | $131,232 |
Percent of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Americas [Member] | ' | ' | ' | ' |
Revenue earned by geographic area | ' | ' | ' | ' |
Revenues | 23,553 | 28,587 | 76,757 | 89,463 |
Percent of revenue | 60.40% | 67.00% | 63.20% | 68.20% |
EMEA [Member] | ' | ' | ' | ' |
Revenue earned by geographic area | ' | ' | ' | ' |
Revenues | 8,368 | 7,960 | 25,732 | 24,569 |
Percent of revenue | 21.40% | 18.70% | 21.20% | 18.70% |
Asia Pacific [Member] | ' | ' | ' | ' |
Revenue earned by geographic area | ' | ' | ' | ' |
Revenues | $7,099 | $6,109 | $19,044 | $17,200 |
Percent of revenue | 18.20% | 14.30% | 15.70% | 13.10% |
Segment_Assets_Details_1
Segment Assets (Details 1) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Long-lived assets by geographical area | ' | ' |
Long-lived Assets | $33,498 | $35,259 |
Americas [Member] | ' | ' |
Long-lived assets by geographical area | ' | ' |
Long-lived Assets | 22,055 | 26,502 |
International [Member] | ' | ' |
Long-lived assets by geographical area | ' | ' |
Long-lived Assets | $11,443 | $8,757 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Assets: | ' | ' | ||
Total assets measured at fair value | $34,442 | $42,292 | ||
Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 174 | 9,746 | ||
Significant Other Observable Inputs (Level 2) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 34,268 | 32,546 | ||
Significant Unobservable Inputs (Level 3) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 0 | 0 | ||
Government agency bonds [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 261 | [1] | |
Government agency bonds [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 0 | [1] | |
Government agency bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 261 | [1] | |
Government agency bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 0 | [1] | |
Money market funds [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 174 | [2] | 9,740 | [2] |
Money market funds [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 174 | [2] | 9,740 | [2] |
Money market funds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 0 | [2] | 0 | [2] |
Money market funds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 0 | [2] | 0 | [2] |
Corporate notes and bonds [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 23,199 | [1] | 26,009 | [1] |
Corporate notes and bonds [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 0 | [1] | 0 | [1] |
Corporate notes and bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 23,199 | [1] | 26,009 | [1] |
Corporate notes and bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 0 | [1] | 0 | [1] |
Commercial paper [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 3,399 | [1] | 2,200 | [1] |
Commercial paper [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 0 | [1] | |
Commercial paper [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 3,399 | [1] | 2,200 | [1] |
Commercial paper [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 0 | [1] | |
Certificate of deposit [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 7,670 | [1] | 4,076 | [1] |
Certificate of deposit [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 0 | [1] | 0 | [1] |
Certificate of deposit [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 7,670 | [1] | 4,076 | [1] |
Certificate of deposit [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | 0 | [1] | 0 | [1] |
Publicly traded common stock [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 6 | [1] | |
Publicly traded common stock [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 6 | [1] | |
Publicly traded common stock [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | 0 | [1] | |
Publicly traded common stock [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' | ||
Assets: | ' | ' | ||
Total assets measured at fair value | ' | $0 | [1] | |
[1] | Classified in marketable securities | |||
[2] | Classified in cash and cash equivalents |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details Textual) | 9 Months Ended |
Sep. 30, 2014 | |
Fair Value Disclosures [Abstract] | ' |
Cash equivalent maturity date | '3 months |