Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 01, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | LIMELIGHT NETWORKS, INC. | ||
Entity Central Index Key | 1,391,127 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 107,070,376 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 106.8 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 21,734 | $ 44,680 |
Marketable securities | 44,453 | 28,322 |
Accounts receivable, net | 27,418 | 26,795 |
Income taxes receivable | 125 | 170 |
Deferred income taxes | 88 | 89 |
Prepaid expenses and other current assets | 4,865 | 9,578 |
Total current assets | 98,683 | 109,634 |
Property and equipment, net | 30,352 | 36,143 |
Marketable securities, less current portion | 40 | 40 |
Deferred income taxes, less current portion | 1,017 | 1,252 |
Goodwill | 76,243 | 76,143 |
Other assets | 1,794 | 2,415 |
Total assets | 208,129 | 225,627 |
Current liabilities: | ||
Accounts payable | 8,790 | 9,137 |
Deferred revenue | 2,138 | 2,890 |
Capital lease obligations | 0 | 466 |
Income taxes payable | 188 | 204 |
Provision for litigation | 18,000 | 0 |
Other current liabilities | 12,836 | 10,857 |
Total current liabilities | 41,952 | 23,554 |
Capital lease obligations, less current portion | 0 | 1,436 |
Deferred income taxes | 152 | 137 |
Deferred revenue, less current portion | 22 | 92 |
Provision for litigation, less current portion | 27,000 | 0 |
Other long-term liabilities | 1,435 | 2,311 |
Total liabilities | 70,561 | 27,530 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Convertible preferred stock, $0.001 par value; 7,500 shares authorized; 0 shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 300,000 shares authorized; 107,059 and 102,299 shares issued and outstanding at December 31, 2016 and 2015, respectively | 107 | 102 |
Additional paid-in capital | 490,819 | 477,202 |
Accumulated other comprehensive loss | (11,038) | (10,812) |
Accumulated deficit | (342,320) | (268,395) |
Total stockholders’ equity | 137,568 | 198,097 |
Total liabilities and stockholders’ equity | $ 208,129 | $ 225,627 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Convertible Preferred Stock, Par Value (in dollars per share) | $ 0.001 | $ 0.001 |
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) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares Issued | 107,059,000 | 102,299,000 |
Common Stock, Shares Outstanding | 107,059,000 | 102,299,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Statement [Abstract] | ||||
Revenues | $ 168,234 | $ 170,912 | $ 162,259 | |
Cost of revenue: | ||||
Cost of services (1) | [1] | 78,857 | 84,818 | 82,176 |
Depreciation — network | 18,032 | 17,975 | 16,673 | |
Total cost of revenue | 96,889 | 102,793 | 98,849 | |
Gross profit | 71,345 | 68,119 | 63,410 | |
Operating expenses: | ||||
General and administrative | 30,042 | 25,027 | 28,176 | |
Sales and marketing | 32,945 | 37,868 | 37,458 | |
Research and development | 24,335 | 28,016 | 20,965 | |
Depreciation and amortization | 2,452 | 2,929 | 3,529 | |
Provision for litigation | 54,000 | 0 | 0 | |
Total operating expenses | 143,774 | 93,840 | 90,128 | |
Operating loss | (72,429) | (25,721) | (26,718) | |
Other income (expense): | ||||
Interest expense | (918) | (29) | (32) | |
Interest income | 123 | 317 | 276 | |
Other, net | (98) | 1,748 | 1,821 | |
Total other income (expense) | (893) | 2,036 | 2,065 | |
Loss from continuing operations before income taxes | (73,322) | (23,685) | (24,653) | |
Income tax provision | 603 | 267 | 203 | |
Loss from continuing operations | (73,925) | (23,952) | (24,856) | |
Discontinued operations: | ||||
Income from discontinued operations, net of income taxes | 0 | 0 | 265 | |
Net loss | $ (73,925) | $ (23,952) | $ (24,591) | |
Net loss per basic and diluted share: | ||||
Basic and diluted net loss per share, Continuing operations (in dollars per share) | $ (0.71) | $ (0.24) | $ (0.25) | |
Basic and diluted net loss per share, Discontinued operations (in dollars per share) | 0 | 0 | 0 | |
Total Basic and diluted net loss per share (in dollars per share) | $ (0.71) | $ (0.24) | $ (0.25) | |
Weighted average shares used in per share calculation | ||||
Basic and diluted weighted average outstanding shares of common stock (in shares) | 104,350 | 100,105 | 98,365 | |
[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 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (73,925) | $ (23,952) | $ (24,591) |
Other comprehensive loss, net of tax: | |||
Unrealized loss on investments | (84) | (1) | (68) |
Foreign exchange translation loss | (142) | (3,025) | (6,055) |
Other comprehensive loss, net of tax | (226) | (3,026) | (6,123) |
Comprehensive loss | $ (74,151) | $ (26,978) | $ (30,714) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance, Shares at Dec. 31, 2013 | 97,677 | ||||
Beginning balance at Dec. 31, 2013 | $ 237,331 | $ 98 | $ 458,748 | $ (1,663) | $ (219,852) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (24,591) | (24,591) | |||
Change in unrealized loss on available-for-sale investments, net of taxes | (68) | (68) | |||
Foreign currency translation adjustment, net of taxes | (6,055) | (6,055) | |||
Exercise of common stock options, Shares | 522 | ||||
Exercise of common stock options | 894 | $ 1 | 893 | ||
Vesting of restricted stock units, Shares | 2,385 | ||||
Vesting of restricted stock units | 0 | $ 2 | (2) | ||
Restricted stock units surrendered in lieu of withholding taxes, Shares | (725) | ||||
Restricted stock units surrendered in lieu of withholding taxes | (1,644) | $ (1) | (1,643) | ||
Issuance of common stock under employee stock purchase plan, Shares | 269 | ||||
Issuance of common stock under employee stock purchase plan | 488 | 488 | |||
Purchase of common stock, Shares | (1,719) | ||||
Purchases of common stock | (4,683) | $ (2) | (4,681) | ||
Share-based compensation - continuing operations | 10,491 | 10,491 | |||
Ending balance, Shares at Dec. 31, 2014 | 98,409 | ||||
Ending balance at Dec. 31, 2014 | 212,163 | $ 98 | 464,294 | (7,786) | (244,443) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (23,952) | (23,952) | |||
Change in unrealized loss on available-for-sale investments, net of taxes | (1) | (1) | |||
Foreign currency translation adjustment, net of taxes | (3,025) | (3,025) | |||
Exercise of common stock options, Shares | 607 | ||||
Exercise of common stock options | 1,053 | $ 1 | 1,052 | ||
Vesting of restricted stock units, Shares | 3,069 | ||||
Vesting of restricted stock units | 0 | $ 3 | (3) | ||
Restricted stock units surrendered in lieu of withholding taxes, Shares | (876) | ||||
Restricted stock units surrendered in lieu of withholding taxes | (2,628) | $ (1) | (2,627) | ||
Issuance of common stock under employee stock purchase plan, Shares | 1,383 | ||||
Issuance of common stock under employee stock purchase plan | 2,966 | $ 1 | 2,965 | ||
Purchase of common stock, Shares | (293) | ||||
Purchases of common stock | (817) | $ 0 | (817) | ||
Share-based compensation | $ 12,338 | 12,338 | |||
Ending balance, Shares at Dec. 31, 2015 | 102,299 | 102,299 | |||
Ending balance at Dec. 31, 2015 | $ 198,097 | $ 102 | 477,202 | (10,812) | (268,395) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (73,925) | (73,925) | |||
Change in unrealized loss on available-for-sale investments, net of taxes | (84) | (84) | |||
Foreign currency translation adjustment, net of taxes | (142) | (142) | |||
Exercise of common stock options, Shares | 850 | ||||
Exercise of common stock options | 1,243 | $ 0 | 1,243 | ||
Vesting of restricted stock units, Shares | 3,753 | ||||
Vesting of restricted stock units | 0 | $ 4 | (4) | ||
Restricted stock units surrendered in lieu of withholding taxes, Shares | (1,167) | ||||
Restricted stock units surrendered in lieu of withholding taxes | (1,979) | $ 0 | (1,979) | ||
Issuance of common stock under employee stock purchase plan, Shares | 1,324 | ||||
Issuance of common stock under employee stock purchase plan | 1,498 | $ 1 | 1,497 | ||
Share-based compensation | $ 12,860 | 12,860 | |||
Ending balance, Shares at Dec. 31, 2016 | 107,059 | 107,059 | |||
Ending balance at Dec. 31, 2016 | $ 137,568 | $ 107 | $ 490,819 | $ (11,038) | $ (342,320) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | |||
Net loss | $ (73,925) | $ (23,952) | $ (24,591) |
Income from discontinued operations | 0 | 0 | 265 |
Net loss from continuing operations | (73,925) | (23,952) | (24,856) |
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities of continuing operations: | |||
Depreciation and amortization | 20,484 | 20,904 | 20,202 |
Share-based compensation | 13,459 | 12,338 | 10,491 |
Accrual of provision for litigation | 54,000 | 0 | 0 |
Foreign currency remeasurement loss (gain) | 585 | (1,591) | (2,167) |
Deferred income taxes | 170 | 46 | (359) |
Gain on sale of property and equipment | (514) | 0 | 0 |
Accounts receivable charges | 137 | 1,037 | 408 |
Amortization of premium on marketable securities | 67 | 194 | 459 |
Realized loss on sale of marketable securities | 32 | 0 | 0 |
Non cash tax benefit associated with sale of discontinued operations | 0 | 0 | (59) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (760) | (5,210) | (1,600) |
Prepaid expenses and other current assets | 4,648 | (194) | (1,792) |
Income taxes receivable | 39 | 44 | 150 |
Other assets | 580 | 3,064 | 1,607 |
Accounts payable and other current liabilities | (1,757) | 85 | 122 |
Deferred revenue | (822) | (932) | (1,109) |
Income taxes payable | (8) | (80) | (233) |
Payments for provision for litigation | (9,000) | 0 | 0 |
Other long term liabilities | (857) | 688 | (796) |
Net cash provided by operating activities of continuing operations | 6,558 | 6,441 | 468 |
Investing activities | |||
Purchases of marketable securities | (45,629) | (16,821) | (25,482) |
Sale and maturities of marketable securities | 29,315 | 22,620 | 22,150 |
Purchases of property and equipment | (9,563) | (24,714) | (18,581) |
Proceeds from sale of property and equipment | 504 | 0 | 0 |
Proceeds from the sale of discontinued operations | 0 | 0 | 414 |
Net cash used in investing activities of continuing operations | (25,373) | (18,915) | (21,499) |
Financing activities | |||
Principal payments on capital lease obligations | (4,685) | (453) | (466) |
Payment of employee tax withholdings related to restricted stock vesting | (1,982) | (2,627) | (1,795) |
Cash paid for purchase of common stock | 0 | (957) | (4,542) |
Proceeds from employee stock plans | 2,743 | 4,018 | 1,381 |
Net cash used in financing activities of continuing operations | (3,924) | (19) | (5,422) |
Effect of exchange rate changes on cash and cash equivalents | (207) | (594) | (1,732) |
Discontinued operations | |||
Cash used in operating activities of discontinued operations | 0 | 0 | (4) |
Net decrease in cash and cash equivalents | (22,946) | (13,087) | (28,189) |
Cash and cash equivalents, beginning of year | 44,680 | 57,767 | 85,956 |
Cash and cash equivalents, end of year | 21,734 | 44,680 | 57,767 |
Supplement disclosure of cash flow information | |||
Cash paid during the year for interest | 720 | 29 | 32 |
Cash paid during the year for income taxes, net of refunds | 542 | 379 | 647 |
Property and equipment acquired through capital leases | $ 2,659 | $ 2,035 | $ 0 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Limelight operates a globally distributed, high-performance network and provides a suite of integrated services marketed under the Limelight Orchestrate Platform which include content delivery, video content management, website and web application acceleration, website and content security, and cloud storage services. We were incorporated in Delaware in 2003, and have operated in the Phoenix metropolitan area since 2001 and elsewhere throughout the United States since 2003. We began international operations in 2004. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The consolidated financial statements include accounts of Limelight and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. In addition, certain other reclassifications have been made to prior period amounts to conform to the current period presentation. All information is presented in thousands, except per share amounts and where specifically noted. 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 annual report on Form 10-K are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or for any future periods. Foreign Currency Translation We translate assets and liabilities of foreign subsidiaries, whose functional currency is their local currency, at exchange rates in effect at the balance sheet date. We translate revenue and expenses at the monthly average exchange rates. We include accumulated net translation adjustments in stockholders’ equity as a component of accumulated other comprehensive income (loss). The functional currency of our international subsidiaries is the local currency. Due to changes in exchange rates between reporting periods and changes in certain account balances, the foreign currency translation adjustment will change from period to period. During the years ended December 31, 2016, 2015, and 2014, we recorded foreign currency translation losses of $142 , $3,025 , and $6,055 , respectively, in our statements of comprehensive loss. During the years ended December 31, 2016, 2015, and 2014, we recorded a foreign currency re-measurement gain (loss) of approximately $(982) , $1,341 , and $1,489 , respectively, in other income (expense) in the consolidated statements of operations. Recent Accounting Standards Adopted Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 is effective for us in the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We adopted this guidance effective January 1, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements In November 2015, the FASB issued ASU 2015-17, which will require entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs) as noncurrent in a classified balance sheet. ASU 2015-17 simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current and noncurrent in a classified balance sheet. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We will adopt this guidance effective January 1, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. 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, allocating the transaction price to each separate performance obligation and accounting treatment of costs to obtain and fulfill contracts. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all entities by one year. Accordingly, public business entities should apply the guidance in ASU 2014-09 to annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. While we do not plan to early adopt this ASU, we currently believe once we do adopt this standard, we will use the modified retrospective approach. We are in the initial stages of our evaluation and are continuing to assess the potential impact on our accounting policies and internal control processes including system readiness. We have reviewed several contracts with our largest revenue generating customers and we currently believe the impact on our consolidated financial statements will not be significant as fees are generally earned on actual usage primarily on a month to month basis. We will continue to review additional customer contracts to assess the impact, including evaluating the treatment of upfront costs to obtain these contracts under the new guidance. We do not know and cannot reasonably estimate quantitative information related to the impact of the new standard on our financial statements at this time. In February 2016, the FASB issued ASU No. 2016-02, which establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for most leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted and should be applied using a modified retrospective approach. We are in the process of evaluating the potential impacts of this new guidance on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. We will adopt the standard effective January 1, 2017. Due to our current NOL and valuation allowance position, the new standard will not immediately cause volatility in our effective tax rates and earnings per share due to the tax effects related to share-based payments being recorded to the income statement. The volatility in future periods will depend on the valuation allowance, our stock price at the awards’ vest dates, and the number of awards that vest in each period. Further, we will not elect an accounting policy change to record forfeitures as they occur and will continue to estimate forfeitures at each period. In August 2016, the FASB issued ASU No. 2016-15, which amends ASC 230, to clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The FASB issued ASU 2016-15 with the intent of reducing diversity in practice with respect to eight types of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We are in the process of evaluating the adoption and potential impact of this new guidance on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, the amendments in this Update are an improvement to GAAP because they provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing the diversity currently in practice today. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. We do not plan to early adopt this ASU. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. Revenue Recognition We derive revenue primarily from the sale of services that comprise components of our Orchestrate Platform. Our customers generally execute contracts with terms of one year or longer, which are referred to as recurring revenue contracts or long-term contracts. These contracts may commit the customer to a minimum monthly level of usage with additional charges applicable for actual usage above the monthly minimum commitment, or are entirely usage based. We define usage as customer data sent or received using our content delivery service, or content that is hosted or cached by us at the request or direction of our customers. We recognize the monthly minimum as revenue each month provided that an enforceable contract has been signed by both parties, the service has been delivered to the customer, the fee for the service is fixed or determinable, and collection is reasonably assured. Should a customer’s usage of our services exceed the monthly minimum commitment, we recognize revenue for such excess in the period of the usage. For annual or other non-monthly period revenue commitments, we recognize revenue monthly based upon the customer’s actual usage each month of the commitment period and only recognize any remaining committed amount for the applicable period in the last month thereof. Certain of our revenue arrangements consist of multi-element arrangements. Revenue arrangements with multiple deliverables are divided into separate units of accounting if each deliverable has stand-alone value to the customer. Our multiple-element arrangements may include a combination of some or all of the following: content delivery services, video content management services, performance services for website and web application acceleration and security, professional services, cloud storage and sale of equipment. Each of these products has stand-alone value and is sold separately. In the absence of vendor specific objective evidence (VSOE) or third-party evidence of selling prices, consideration would be allocated based on management’s best estimate of such prices. The deliverables within multiple-element arrangements are provided over the same contract period, and therefore, revenue is recognized over the same period. We may charge the customer an installation fee when the services are first activated. We do not charge installation fees for contract renewals. Installation fees are recorded as deferred revenue and recognized as revenue ratably over the estimated life of the customer arrangement as installation fees do not have standalone value. We also derive revenue from services and events sold as discrete, non-recurring events or based solely on usage. For these services, we recognize revenue after an enforceable contract has been signed by both parties, the fee is fixed or determinable, the event or usage has occurred, and collection is reasonably assured. At the inception of a customer contract for service, we make an assessment as to that customer’s ability to pay for the services provided. If we subsequently determine that collection from the customer is not reasonably assured, we record an allowance for doubtful accounts and bad debt expense or deferred revenue for all of that customer’s unpaid invoices and cease recognizing revenue for continued services provided until cash is received. Cash received from customers related to sales tax is not included in revenue. Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of monthly billed service fees; prepayments made by customers for future periods and deferred installation fees. Cash and Cash Equivalents We hold our cash and cash equivalents in checking, money market, and highly-liquid investments. We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents are deposited in or managed by major financial institutions and at times exceed Federal Deposit Insurance Corporation insurance limits. Investments in Marketable Securities Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such classification as of each balance sheet date. We have classified our investments in marketable securities as available-for-sale and as current, as our marketable securities are available to fund current operations, and carry such investments at fair value. Available-for-sale investments are initially recorded at cost with changes in fair value recorded through comprehensive loss. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in the statements of operations. We periodically review our investments for other-than-temporary declines in fair value based on the specific identification method and would write down investments to their fair value if and when an other-than-temporary decline has occurred. Accounts Receivable Trade accounts receivable are recorded at the invoiced amounts and do not bear interest. We record reserves against our accounts receivable balance for service credits and for doubtful accounts. Estimates are used in determining both of these reserves. The allowance for doubtful accounts charges are included as a component of general and administrative expenses. The allowance for doubtful accounts is based upon a calculation that uses our aging of accounts receivable and applies a reserve percentage to the specific age of the receivable to estimate the allowance for doubtful accounts. The reserve percentages are determined based on our historical write-off experience. These estimates could change significantly if our customers’ financial condition changes or if the economy in general deteriorates. In the event such conditions become known, we specifically identify balances for necessary reserves. Our reserve for service credits relates to credits that are expected to be issued to customers during the ordinary course of business. These credits typically relate to customer disputes and billing adjustments and are estimated at the time the revenue is recognized and recorded as a reduction of revenues. Estimates for service credits are based on an analysis of credits issued in previous periods. Property and Equipment Property and equipment are carried at cost less accumulated depreciation or amortization. Depreciation and amortization are computed using the straight-line method over the assets’ estimated useful lives of the applicable asset. Network equipment 3-4 years Computer equipment and software 3 years Furniture and fixtures 3-5 years Other equipment 3-5 years Leasehold improvements are amortized over the shorter of the asset’s estimated useful life or the respective lease term. Repairs and maintenance are charged to expense as incurred. Goodwill and Other Intangible Assets Goodwill represents costs in excess of fair values assigned to the underlying net assets of the acquired company. Goodwill is not amortized but instead is tested for impairment annually or more frequently if events or changes in circumstances indicate goodwill might be impaired. We have concluded that we have one reporting unit and assigned the entire balance of goodwill to this reporting unit. The estimated fair value of the reporting unit is determined using a market approach. Our market capitalization is adjusted for a control premium based on the estimated average and median control premiums of transactions involving companies comparable to us. As of our annual impairment testing date of October 31, 2016, management determined that goodwill was not impaired. Management determined that the estimated fair value of its reporting unit exceeded carrying value by approximately $123,934 or 90% , using our market capitalization plus an estimated control premium of 40% on October 31, 2016. There were no indicators of impairment subsequent to the annual impairment testing date. Our other intangible assets represent existing technologies and customer relationship intangibles. Other intangible assets are amortized over their respective estimated lives, ranging from less than one year to six years . In the event that facts and circumstances indicate intangibles or other long-lived assets may be impaired, we evaluate the recoverability and estimated useful lives of such assets. Other intangible assets are included in other assets in the accompanying consolidated balance sheets. Amortization of other intangible assets is included in depreciation and amortization in the accompanying consolidated statements of operations. Contingencies We record contingent liabilities resulting from asserted and unasserted claims when it is probable that a loss has been incurred and the amount of the loss is reasonably estimable. We disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Additionally, estimating the loss, or range of loss, associated with a contingency requires analysis of multiple factors, and changes in law or other developments may ultimately cause our judgments to change. Therefore, actual losses in any future period are inherently uncertain and may be materially different from our estimate. Long-Lived Assets We review our long-lived assets for impairment annually, or whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. We recognize an impairment loss if the sum of the expected long-term undiscounted cash flows that the long-lived asset is expected to generate is less than the carrying amount of the long-lived asset being evaluated. We treat any write-downs as permanent reductions in the carrying amounts of the assets. We believe the carrying amounts of our long-lived assets at December 31, 2016 , and 2015 , are fully realizable and have not recorded any impairment losses. Deferred Rent and Lease Accounting We lease bandwidth, co-location and office space in various locations. At the inception of each lease, we evaluate the lease terms to determine whether the lease will be accounted for as an operating or a capital lease. The term of the lease used for this evaluation includes renewal option periods only in instances where the exercise of the renewal option can be reasonably assured and failure to exercise the option would result in an economic penalty. We record tenant improvement allowances granted under the lease agreements as leasehold improvements within property and equipment and within deferred rent. For leases that contain rent escalation provisions, we record the total rent payable during the lease term on a straight-line basis over the term of the lease (including any “rent free” period beginning upon possession of the premises), and record any difference between the actual rent paid and the straight-line rent expense recorded as increases or decreases in deferred rent. Cost of Revenue Cost of revenues consists primarily of fees paid to network providers for bandwidth and backbone, costs incurred for non-settlement free peering and connection to Internet service provider networks and fees paid to data center operators for housing network equipment in third party network data centers, also known as co-location costs. Cost of revenues also includes leased warehouse space and utilities, depreciation of network equipment used to deliver our content delivery services, payroll and related costs, and share-based compensation for our network operations and professional services personnel. We enter into contracts for bandwidth with third party network providers with terms typically ranging from several months to five years . These contracts generally commit us to pay minimum monthly fees plus additional fees for bandwidth usage above contracted minimums. A portion of the global computing platform traffic delivery is completed through direct connection to ISP networks, called peering. Research and Development Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing, operation, and enhancement of our services, and network. Costs incurred in the development of our services are expensed as incurred. Advertising Costs Costs associated with advertising are expensed as incurred. Advertising expenses, which are comprised of Internet, trade show, and publications advertising, were approximately $1,411 , $1,669 , and $1,409 for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance on a jurisdiction by jurisdiction basis. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. We recognize uncertain income tax positions in our financial statements when it is more-likely-than-not the position will be sustained upon examination. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents approximate fair value due to the nature and short maturity of those instruments. The respective fair values of marketable securities are determined based on quoted market prices or other readily available market information, which approximate fair values. The carrying amounts of accounts receivable, accounts payable, and accrued liabilities reported in the consolidated balance sheets approximate their respective fair values due to the immediate or short-term maturity of these financial instruments. Share-Based Compensation We measure all employee share-based compensation awards using the fair-value method. The grant date fair value was determined using the Black-Scholes-Merton pricing model. The Black-Scholes-Merton valuation calculation requires us to make key assumptions such as future stock price volatility, expected terms, risk-free rates, and dividend yield. Our expected volatility is derived from our own volatility rate as a publicly traded company. The expected term is based on our historical experience. The risk-free interest factor is based on the United States Treasury yield curve in effect at the time of the grant for zero coupon United States Treasury notes with maturities of approximately equal to each grant’s expected term. We have never paid cash dividends and do not currently intend to pay cash dividends, and therefore, have assumed a 0% dividend yield. We develop an estimate of the number of share-based awards that will be forfeited due to employee turnover. We will continue to use judgment in evaluating the expected term, volatility, and forfeiture rate related to our own share-based awards on a prospective basis, and in incorporating these factors into the model. We apply the straight-line attribution method to recognize compensation costs associated with awards that are not subject to graded vesting. For awards that are subject to graded vesting and performance based awards, we recognize compensation costs separately for each vesting tranche. We also estimate when and if performance-based awards will be earned. If an award is not considered probable of being earned, no amount of share-based compensation is recognized. If the award is deemed probable of being earned, related compensation expense is recorded over the estimated service period. To the extent our estimate of awards considered probable of being earned changes, the amount of share-based compensation recognized will also change. |
Investments in Marketable Secur
Investments in Marketable Securities | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2016 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Certificate of deposit $ 40 $ — $ — $ 40 Commercial paper 8,228 — 6 8,222 Corporate notes and bonds 36,353 — 122 36,231 Total marketable securities $ 44,621 $ — $ 128 $ 44,493 At December 31, 2016, we evaluated our marketable securities and determined unrealized losses were due to fluctuations in interest rates. We do not believe any of the unrealized losses represented an other-than-temporary impairment based on our evaluation of available evidence as of December 31, 2016. Our intent is to hold these investments to such time as these assets are no longer impaired. The amortized cost and estimated fair value of the marketable debt securities at December 31, 2016 , by maturity, are shown below: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities Due in one year or less $ 27,920 $ — $ 52 $ 27,868 Due after one year and through five years 16,701 — 76 16,625 $ 44,621 $ — $ 128 $ 44,493 The following is a summary of marketable securities (designated as available-for-sale) at December 31, 2015 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Certificate of deposit $ 12,480 $ 1 $ 17 $ 12,464 Corporate notes and bonds 15,940 2 44 15,898 Total marketable securities $ 28,420 $ 3 $ 61 $ 28,362 The amortized cost and estimated fair value of the marketable debt securities at December 31, 2015 , by maturity, are shown below: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities Due in one year or less $ 18,075 $ 2 $ 12 $ 18,065 Due after one year and through five years 10,345 1 49 10,297 $ 28,420 $ 3 $ 61 $ 28,362 |
Business Disposition
Business Disposition | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Business Disposition | Business Disposition On December 23, 2013, we sold 100% of the outstanding common stock of our Web Content Management (WCM) business. During the year ended December 31, 2014, we 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 year ended December 31, 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. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable include: December 31, 2016 2015 Accounts receivable $ 28,260 $ 28,599 Less: credit allowance (225 ) (460 ) Less: allowance for doubtful accounts (617 ) (1,344 ) Total accounts receivable, net $ 27,418 $ 26,795 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2016 | |
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: December 31, December 31, 2016 2015 Prepaid bandwidth and backbone $ 698 $ 2,417 VAT receivable 1,296 2,720 Prepaid expenses and insurance 2,321 3,641 Vendor deposits and other 550 800 Total prepaid expenses and other current assets 4,865 9,578 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill We have recorded goodwill as a result of past 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 our acquisitions, the objective of the acquisition was to expand our product offerings and customer base and to achieve synergies related to cross selling opportunities, all of which contributed to the recognition of goodwill. The changes in the carrying amount of goodwill for the years ended December 31, 2016 , and 2015, were as follows: Balance, December 31, 2014 $ 76,133 Foreign currency translation adjustment 10 Balance, December 31, 2015 76,143 Foreign currency translation adjustment 100 Balance, December 31, 2016 $ 76,243 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment include: December 31, 2016 2015 Network equipment $ 108,416 $ 129,172 Computer equipment and software 10,282 11,408 Furniture and fixtures 2,432 2,472 Leasehold improvements 5,127 4,976 Other equipment 182 166 126,439 148,194 Less: accumulated depreciation (96,087 ) (112,051 ) Total property and equipment, net $ 30,352 $ 36,143 During the year ended December 31, 2016, we removed property, plant, and equipment and the associated accumulated depreciation of approximately $31,273 to reflect the retirement of property, plant, and equipment that was fully depreciated and no longer in service. Cost of revenue depreciation expense related to property and equipment was approximately $18,032 , $17,975 , and $16,673 , respectively, for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Operating expense depreciation and amortization expense related to property and equipment was approximately $2,438 , $1,866 , and $2,391 , respectively, for the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit In October 2016, we entered into a Loan Modification Agreement (the Modification) to the Loan and Security Agreement (the Credit Agreement) with Silicon Valley Bank (SVB) originally entered into in November 2015. Under the Modification, we have reduced the maximum principal commitment amount from $25,000 to $5,000 . Our borrowing capacity is the lesser of the commitment amount or 80% of eligible accounts receivable. The Modification extends the Credit Agreement one year. All outstanding borrowings owed under the Credit Agreement become due and payable no later than the final maturity date of November 2, 2018. As of December 31, 2016, we had no outstanding borrowings, and we had availability under the Credit Agreement of approximately $5,000 . We had no outstanding borrowings at December 31, 2015, and had availability under the Credit Agreement of approximately $18,000 . As of December 31, 2016, borrowings under the Credit Agreement bear interest at our option of one, two, three or six-month LIBOR plus a margin of 2.75% or an Alternative Base Rate (ABR), which is defined as the higher of (a) Wall Street Journal prime rate or (b) Federal Funds Rate plus 0.50% , plus a margin of 0.50% or 1.50% depending on our minimum liquidity, as defined in the Credit Agreement. If we fall below a minimum liquidity of $17,500 , we are required to use the ABR interest rate. We incurred a commitment fee (issuance costs) of 0.45% upon entering into the Modification. In addition, there is an unused line fee of 0.375% under the Credit Agreement and 0.30% under the Modification. Commitment fees are included in prepaid expenses and other current assets and as amortized are charged to interest expense. During the year ended December 31, 2016, interest expense was $205 and commitment fees expense and amortization was $321 . For the year ended December 31, 2015, interest expense and commitment fees expense and amortization was not material. Any borrowings are secured by essentially all of our domestic personal property, with a negative pledge on intellectual property. SVB’s security interest in our foreign subsidiaries is limited to 65% of voting stock of each such foreign subsidiary. The Modification eliminated the financial covenants under the Credit Agreement. Under the Modification, we are required to maintain a minimum liquidity, defined as cash balance at SVB plus availability on the revolver, of $7,500 at all times, measured quarterly, with a minimum of $5,000 of the $7,500 in cash at SVB. We are also subject to certain customary limitations on our ability to, among other things, incur debt, grant liens, make acquisitions and other investments, make certain restricted payments such as dividends, dispose of assets or undergo a change in control. As of December 31, 2016, we were in compliance with all covenants under the Credit Agreement. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities, Current [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities include: December 31, 2016 2015 Accrued compensation and benefits $ 5,061 $ 4,786 Accrued cost of revenue 2,178 2,698 Accrued legal fees 262 143 Deferred rent 730 782 Other accrued expenses 4,605 2,448 Total other current liabilities $ 12,836 $ 10,857 |
Other Long Term Liabilities
Other Long Term Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long Term Liabilities | Other Long Term Liabilities Other long term liabilities include: December 31, 2016 2015 Deferred rent $ 1,186 $ 1,907 Income taxes payable 249 404 Total other long term liabilities $ 1,435 $ 2,311 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Contingencies | Contingencies Legal Matters Akamai ‘703 Litigation In June 2006, Akamai Technologies, Inc. (Akamai) and the Massachusetts Institute of Technology (MIT) filed a lawsuit against us in the United States District Court for the District of Massachusetts alleging that we were infringing multiple patents assigned to MIT and exclusively licensed by MIT to Akamai. In February 2008, a jury returned a verdict in this lawsuit, finding that we infringed four claims of U.S. Patent No. 6,108,703 (the ’703 patent) and awarded Akamai damages of approximately $45,500 , which included lost profits, reasonable royalties and price erosion damages for the period April 2005 through December 31, 2007. We litigated this matter vigorously for years, during which time the jury verdict was overturned in 2009, and then, after more than six years of appeals by both Akamai and us in the Federal Circuit and the Supreme Court of the United States, the jury verdict was ultimately reinstated. A series of motions and hearings followed the reinstatement, and on July 1, 2016, the District Court entered final judgment in the case. On August 1, 2016, we entered into a settlement and license agreement with Akamai with respect to the ‘703 and certain other related patents, which settled all asserted and unasserted claims with respect to the licensed patents. The terms of the agreement require us to pay $54,000 over twelve equal quarterly installments, which began on August 1, 2016. We took a charge in the quarter ended June 30, 2016 for the full, undiscounted amount of $54,000 . As of December 31, 2016, there remained $45,000 due to Akamai under the terms of the settlement and license agreement. Akamai and XO Litigation On November 30, 2015, we filed a lawsuit against Akamai and XO Communications in the District Court for the Eastern District of Virginia alleging the infringement of six of our patents covering a broad range of inventions that we believe are critical to the effective and efficient delivery of bytes by a content delivery network (the Akamai and XO Litigation). In April 2016, the District Court denied a request for transfer by Akamai and XO Communications. Akamai also filed counterclaims on April 29, 2016, alleging the infringement of five of its patents. We filed an answer to Akamai’s counterclaims, denying each of the allegations of infringement on May 23, 2016. The case is currently set for a two-week trial commencing on May 1, 2017. At this time, we believe a loss is neither probable nor reasonably possible, and as such, no provision for this lawsuit has been recorded in the consolidated financial statements. We intend to vigorously protect our intellectual property rights in this matter and vigorously defend against each of the counterclaims. 2016 Akamai Litigations On February 16, 2016, Akamai filed a complaint against us in the District Court for the District of Massachusetts alleging infringement of three of its patents. In April 2016, Akamai amended its complaint by withdrawing one of the asserted patents. We filed our answer to the complaint, denying each of the allegations of infringement, and asserting two counterclaims alleging infringement of two of our patents. On December 28, 2016, Akamai filed a second complaint against us in the District Court for the District of Massachusetts alleging infringement of three additional patents. We are currently evaluating the allegations in the complaint and intend to file a responsive pleading at the appropriate time. At this time, we believe a loss is neither probable nor reasonably possible in either pending matter in the District of Massachusetts, and as such, no provision for these lawsuits have been recorded in the consolidated financial statements. We intend to vigorously defend against Akamai’s claims and vigorously protect our intellectual property rights in these matters. Legal and other expenses associated with this case have been significant. We include these litigation expenses in general and administrative expenses as incurred, as reported in the consolidated statement of operations. Other Matters We are 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 our business, financial position, results of operations, or cash flows. Litigation relating to the content delivery services industry is not uncommon, and we are, and from time to time have been, subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future. Taxes We are 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 us conducting business online or providing Internet-related services. Increased regulation could negatively affect our business directly, as well as the businesses of our customers, which could reduce their demand for our services. For example, tax authorities in various states and abroad may impose taxes on the Internet-related revenue we generate 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, we may come under audit, which could result in changes to our tax estimates. We believe we maintain adequate tax reserves, that are not material in amount, to offset potential liabilities that may arise upon audit. Although we believe our 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 | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share We calculate basic and diluted loss per weighted average share based. We use 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 all potentially dilutive common stock, including awards granted under our equity incentive compensation plans 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: Years Ended December 31, 2016 2015 2014 Loss from continuing operations $ (73,925 ) $ (23,952 ) $ (24,856 ) Income from discontinued operations — — 265 Net loss $ (73,925 ) $ (23,952 ) $ (24,591 ) Basic and diluted weighted average outstanding shares of common stock 104,350 100,105 98,365 Basic and diluted loss per share: Continuing operations $ (0.71 ) $ (0.24 ) $ (0.25 ) Discontinued operations — — — Basic and diluted net loss per share $ (0.71 ) $ (0.24 ) $ (0.25 ) For the years ended December 31, 2016 , 2015 and 2014 , the following potentially dilutive common stock, including awards granted under our equity incentive compensation plans were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive. Years Ended December 31, 2016 2015 2014 Employee stock purchase plan 114 134 40 Stock options 71 1,245 664 Restricted stock units 1,122 2,420 1,764 1,307 3,799 2,468 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock On February 12, 2014, our board of directors authorized a $15,000 share repurchase program. Under this program, we may repurchase shares periodically in the open market or through privately negotiated transactions, in accordance with applicable securities rules regarding issuer repurchases. We did not purchase any shares during the year ended December 31, 2016. During the year ended December 31, 2015, we purchased and canceled 293 shares for $817 , including commissions and expenses. All repurchased shares were canceled and returned to authorized but unissued status. Amended and Restated Equity Incentive Plan We established the 2007 Equity Incentive Plan, or the 2007 Plan, which allows for the grant of equity, including stock options and restricted stock unit awards. In June 2016, our stockholders approved the Amended and Restated Equity Incentive Plan, or the Restated 2007 Plan, which amended and restated the 2007 Plan. Approval of the Restated 2007 Plan replaced the terms and conditions of the 2007 Plan with the terms and conditions of the Restated 2007 Plan and extended the term of the plan to April 2026. There was no increase in the aggregate amount of shares available for issuance. The total number of shares authorized for issuance under the Restated 2007 Plan as of December 31, 2016 was approximately 6,490 . Employee Stock Purchase Plan In June 2013, our stockholders approved our 2013 Employee Stock Purchase Plan (ESPP). The ESPP allows participants to purchase our 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 years ended December 31, 2016, 2015, and 2014, we issued 1,324 , 954 , and 269 shares, respectively, under the ESPP. Total cash proceeds from the purchase of shares under the ESPP were approximately $1,498 , $1,511 , and $487 , respectively for the years ended December 31, 2016, 2015, and 2014. As of December 31, 2016, shares reserved for issuance to employees under this plan totaled 1,318 and we held employee contributions of approximately $222 (included in other current liabilities) for future purchases under the ESPP. Preferred Stock Our board of directors have authorized the issuance of up to 7,500 shares of preferred stock at December 31, 2016. The preferred stock may be issued in one or more series pursuant to a resolution or resolutions providing for such issuance duly adopted by the board of directors. As of December 31, 2016, the Board had not adopted any resolutions for the issuance of preferred stock. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in the components of accumulated other comprehensive loss, net of tax, for the year ended December 31, 2016, was as follows: Unrealized Gains (Losses) on Foreign Available for Currency Sale Securities Total Balance, December 31, 2015 $ (10,768 ) $ (44 ) $ (10,812 ) Other comprehensive loss before reclassifications (142 ) (128 ) (270 ) Amounts reclassified from accumulated other comprehensive loss — 44 44 Net current period other comprehensive loss (142 ) (84 ) (226 ) Balance, December 31, 2016 $ (10,910 ) $ (128 ) $ (11,038 ) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | |
Share-Based Compensation | Share-Based Compensation Incentive Compensation Plans We maintain Incentive Compensation Plans (the Plans) to attract, motivate, retain, and reward high quality executives and other employees, officers, directors, and consultants by enabling such persons to acquire or increase a proprietary interest in the Company. The Plans are intended to be qualified plans under the Internal Revenue Code. The Plans allow us to award stock option grants and restricted stock units (RSUs) to employees, directors and consultants of the Company. During 2016, we granted awards to employees, directors and consultants. The exercise price of incentive stock options granted under the Plan may not be granted at less than 100% of the fair market value of our common stock on the date of the grant. Data pertaining to stock option activity under the Plans are as follows: Number of Shares Weighted Average Exercise Price (In thousands) Balance at December 31, 2013 15,982 $ 4.00 Granted 4,215 2.40 Exercised (522 ) 1.71 Cancelled (2,803 ) 4.15 Balance at December 31, 2014 16,872 3.66 Granted 3,649 2.64 Exercised (607 ) 1.73 Cancelled (5,247 ) 4.08 Balance at December 31, 2015 14,667 3.33 Granted 3,589 2.22 Exercised (850 ) 1.46 Cancelled (1,389 ) 3.38 Balance at December 31, 2016 16,017 3.18 The following table summarizes the information about stock options outstanding and exercisable at December 31, 2016 : Options Outstanding Options Exercisable Exercise Price Number of Options Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Options Exercisable Weighted Average Exercise Price (In thousands) (In thousands) $ 0.00 — $ 1.50 — — $ — — $ — $ 1.51 — $ 3.00 11,912 7.9 2.25 6,344 2.27 $ 3.01 — $ 4.50 1,964 5.8 3.72 1,541 3.75 $ 4.51 — $ 6.00 1,006 3.5 5.12 1,006 5.12 $ 6.01 — $ 7.50 380 1.4 6.37 380 6.37 $ 7.51 — $ 15.00 755 1.3 12.27 755 12.27 16,017 10,026 The weighted-average grant-date fair value of options granted during the years ended December 31, 2016 , 2015 , and 2014 on a per-share basis was approximately $1.22 , $1.38 , and $1.45 , respectively. The total intrinsic value of the options exercised during the years ended December 31, 2016 , 2015 , and 2014 was approximately $411 , $621 , and $449 , respectively. The aggregate intrinsic value of options outstanding at December 31, 2016 is approximately $3,457 . The weighted average remaining contractual term of options currently exercisable at December 31, 2016 was 5.5 years. The fair value of options awarded were estimated on the grant date using the following weighted average assumptions: Years Ended December 31, 2016 2015 2014 Expected volatility 58.30 % 54.53 % 66.05 % Expected term, years 5.99 5.99 5.99 Risk-free interest 1.76 % 1.80 % 1.83 % Expected dividends — % — % — % Unrecognized share-based compensation related to stock options totaled $7,110 at December 31, 2016 . We expect to amortize unvested stock compensation related to stock options over a weighted average period of approximately 2.4 years at December 31, 2016. The following table summarizes the RSUs outstanding (in thousands): Years Ended December 31, 2016 2015 2014 RSUs with service-based vesting conditions 6,673 6,265 6,820 Each RSU represents the right to receive one share of our common stock upon vesting. The fair value of these RSUs was calculated based upon our closing stock price on the date of grant. Data pertaining to RSUs activity under the Plans is as follows: Number of Units Weighted Average Fair Value (In thousands) Balance at December 31, 2013 5,286 $ 2.24 Granted 5,542 2.33 Vested (2,385 ) 2.28 Forfeitures (1,623 ) 2.22 Balance at December 31, 2014 6,820 2.30 Granted 4,156 3.00 Vested (3,069 ) 2.31 Forfeitures (1,642 ) 2.54 Balance at December 31, 2015 6,265 2.70 Granted 5,024 1.76 Vested (3,753 ) 2.49 Forfeitures (863 ) 2.29 Balance at December 31, 2016 6,673 2.16 The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2016 , 2015 , and 2014 was approximately $1.76 , $3.00 , and $2.33 , respectively. The total intrinsic value of the units vested during the years ended December 31, 2016 , 2015 , and 2014 was approximately $9,363 , $7,088 , and $5,469 , respectively. The aggregate intrinsic value of RSUs outstanding at December 31, 2016 is $16,816 . At December 31, 2016 there was approximately $12,244 of total unrecognized compensation costs related to RSUs. That cost is expected to be recognized over a weighted-average period of approximately 2.12 years as of December 31, 2016 . Total unrecognized aggregate share-based compensation expense totaled approximately $19,354 at December 31, 2016 , which is expected to be recognized over a weighted average period of approximately 2.22 years. The following table summarizes the components of share-based compensation expense included in our consolidated statement of operations: Years Ended December 31, 2016 2015 2014 Share-based compensation expense by type: Stock options $ 3,742 $ 4,131 $ 4,704 Restricted stock units 9,121 7,620 5,609 ESPP 596 587 178 Total share-based compensation expense $ 13,459 $ 12,338 $ 10,491 Share-based compensation expense included in the consolidated statements of operations: Cost of services $ 1,493 $ 2,047 $ 1,956 General and administrative expense 7,070 5,398 4,741 Sales and marketing expense 2,792 2,657 2,317 Research and development expense 2,104 2,236 1,477 Total share-based compensation expense $ 13,459 $ 12,338 $ 10,491 On September 18, 2015, the compensation committee of our board of directors approved a stock for salary program and a stock for bonus program, wherein eligible participants may elect to receive payment of his or her base salary and/or bonus in shares of our common stock beginning on January 1, 2016. The shares of common stock will be issued under our 2007 Equity Incentive Plan. Eligible program participants include our Chief Executive Officer and his direct reports. The stock for salary program permits eligible participants to receive 0 , 25 , 50 , 75 , or 100% of his or her 2016 salary (including any increases that may occur during the year) in shares of our common stock. On the last trading day of each calendar month, each participant will receive the number of shares of our common stock determined by dividing (i) 1/12th of his or her enrolled salary by (ii) the trailing 30-day closing average of our common stock, rounded up to the nearest whole share. Once an election is made, it runs for the full year 2016 and is irrevocable. Participation levels may not be changed after the close of the enrollment period. Once purchased, there is no vesting period for the shares. During 2016, our Chief Executive Officer and two of his direct reports participated in the program. Each of the three participants elected to receive 50% of their respective salary in stock. As a result of their participation in the program, we issued 335 shares of common stock and recorded $572 of stock based compensation expense. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In July 2006, an aggregate of 39,869,960 shares of Series B Preferred Stock was issued at a purchase price of $3.26 per share to certain accredited investors in a private placement transaction. As a result of this transaction, entities affiliated with Goldman, Sachs & Co., one of the lead underwriters of our initial public offering (IPO), became holders of more than 10% of our common stock. On June 14, 2007, upon the closing of our IPO, all outstanding shares of our Series B Preferred Stock automatically converted into shares of common stock on a 1-for-1 share basis . As of December 31, 2016 , Goldman, Sachs & Co. owned approximately 28% of our outstanding common stock. As of December 31, 2015 , and 2014 , respectively, Goldman, Sachs & Co. owned approximately 30% and 31% of our outstanding common stock. We sold services to entities owned, in whole or in part, by certain of our executive officers and previous directors. Revenue derived from related parties was less than 1% of total revenue for the year ended December 31, 2014. Total outstanding accounts receivable from all related parties as of December 31, 2014 were not material. We had no material related party transactions during the years ended December 31, 2016 and 2015. |
Leases and Purchase Commitments
Leases and Purchase Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Leases and Purchase Commitments | Leases and Purchase Commitments Operating Leases We are committed to various non-cancellable operating leases for office space and office equipment which expire through 2022. 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 December 31, 2016 are as follows: 2017 $ 3,265 2018 2,905 2019 1,350 2020 505 2021 359 Thereafter 54 Total minimum payments $ 8,438 Purchase Commitments We have non-cancellable 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 December 31, 2016 : 2017 $ 26,237 2018 13,685 2019 3,486 2020 133 2021 9 Thereafter — Total minimum payments $ 43,550 Rent and operating expense relating to these operating lease agreements and bandwidth and co-location agreements was approximately $59,415 , $61,571 , and $58,228 , respectively, for the years ended December 31, 2016 , 2015 , and 2014 . Capital Leases We leased equipment under capital lease agreements which extend through 2020. The outstanding balance for capital leases was approximately $1,902 as of December 31, 2015. As of December 31, 2016, we had no outstanding capital lease obligations. The assets acquired under capital leases and related accumulated amortization are included in property and equipment, net in the consolidated balance sheets. The related amortization is included in depreciation - network (cost of revenue) and depreciation and amortization expense (operating expenses), depending on the nature of the asset, in the consolidated statements of operations. Interest expense related to capital leases was approximately $339 , $14 , and $32 , respectively, for the years ended December 31, 2016 , 2015 , and 2014 . |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations During the years ended December 31, 2016, 2015, and 2014, we had no customer who represented 10% or more of total revenue. Revenue from customers located within the United States, our country of domicile, was approximately $94,105 , $96,469 , and $93,678 , respectively, for the years ended December 31, 2016 , 2015 , and 2014 . During the years ended December 31, 2016 , 2015, and 2014, we had two countries, Japan and the United States, which accounted for 10% or more of our total revenues. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our loss from continuing operations before income taxes consists of the following: Years Ended December 31, 2016 2015 2014 Loss from continuing operations before income taxes: United States $ (74,130 ) $ (24,105 ) $ (25,025 ) Foreign 808 420 372 $ (73,322 ) $ (23,685 ) $ (24,653 ) The components of the provision for income taxes are as follows: Years Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ (143 ) State 103 103 26 Foreign 330 210 680 Total current 433 313 563 Deferred: Federal 15 17 15 State — — — Foreign 155 (63 ) (375 ) Total deferred 170 (46 ) (360 ) Total provision $ 603 $ 267 $ 203 A reconciliation of the U.S. federal statutory rate to our effective income tax rate is shown in the table below: Years Ended December 31, 2016 2015 2014 Amount Percent Amount Percent Amount Percent U.S. federal statutory tax rate $ (25,663 ) 35.0 % $ (8,290 ) 35.0 % $ (8,629 ) 35.0 % Valuation allowance 23,184 (31.6 )% 3,821 (16.0 )% 7,424 (30.0 )% Foreign income taxes 338 (0.5 )% 86 (0.5 )% (26 ) — % State income taxes 100 (0.2 )% 92 (0.5 )% 26 — % Non-deductible expenses 323 (0.4 )% 552 (2.0 )% 1,335 (6.0 )% Uncertain tax positions (136 ) 0.2 % (86 ) — % 201 (1.0 )% Share-based compensation 2,439 (3.3 )% 4,064 (17.0 )% — — % Other 18 — % 28 — % (128 ) 1.0 % Provision for income taxes $ 603 (0.8 )% $ 267 (1.0 )% $ 203 (1.0 )% Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purpose. Significant components of our deferred tax assets and liabilities are as follows: December 31, 2016 2015 Deferred tax assets: Share-based compensation $ 10,463 $ 11,090 Net operating loss and tax credit carry-forwards 52,798 43,600 Legal settlement 17,151 — Deferred revenue 878 1,306 Accounts receivable reserves 235 518 Fixed assets 3,317 3,172 Other 771 1,041 Total deferred tax assets 85,613 60,727 Deferred tax liabilities: Prepaid expenses (112 ) (128 ) Other (323 ) (154 ) Total deferred tax liabilities (435 ) (282 ) Valuation allowance (84,226 ) (59,241 ) Net deferred tax assets $ 952 $ 1,204 In addition to the deferred tax assets listed in the table above, we have unrecorded tax benefits of $13,860 and $13,660 at December 31, 2016 and December 31, 2015 , respectively, primarily attributable to the difference between the amount of the financial statement expense and the allowable tax deduction associated with employee stock options and RSUs, which, if subsequently realized will be recorded to contributed capital. As a result of net operating loss (NOL) carryforwards, we were not able to recognize the excess tax benefits of stock option deductions because the deductions did not reduce income tax payable. Although not recognized for financial reporting purposes, this unrecorded tax benefit is available to reduce future income and is incorporated into the disclosed amounts of our federal and state NOL carryforwards, discussed below. The federal and state NOL carryforwards relate to prior years’ NOLs, which may be used to reduce tax liabilities in future years. At December 31, 2016 , we had $152,100 federal and $98,300 state NOL carryforwards, including the NOLs discussed in the preceding paragraph. Our federal NOL will begin to expire in 2027 and the state NOL carryforwards will begin to expire in 2017. Pursuant to Sections 382 and 383 of the Internal Revenue Code, the utilization of NOLs and other tax attributes may be subject to substantial limitations if certain ownership changes occur during a three-year testing period (as defined by the Internal Revenue Code). We did not have any state tax credit carryforwards as of December 31, 2016 . We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the evidence available, it is more-likely-than-not that such assets will not be realized. In making the assessment under the more-likely-than-not standard, appropriate consideration must be given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods by jurisdiction, unitary versus stand-alone state tax filings, our experience with loss carryforwards not expiring unutilized, and all tax planning alternatives that may be available. A valuation allowance has been recorded against our deferred tax assets, with the exception of deferred tax assets at certain foreign subsidiaries as management cannot conclude that it is more-likely-than-not that these assets will be realized. As of December 31, 2016, no valuation allowance was provided on $ 1,600 of deferred tax assets associated with certain NOLs because it was believed that they will be used to offset our liabilities relating to our uncertain tax positions. Estimated liabilities for unrecognized tax benefits are included in “other liabilities” on the consolidated balance sheet. These contingent liabilities relate to various tax matters that result from uncertainties in the application of complex income tax regulations in the numerous jurisdictions in which we operate. As of December 31, 2016, unrecognized tax benefits were $1,830 , of which approximately $233 , if recognized, would favorably impact the effective tax rate and the remaining balance would be substantially offset by valuation allowances. A summary of the activities associated with our reserve for unrecognized tax benefits, interest and penalties follow: Unrecognized Tax Benefits Balance at January 1, 2015 $ 2,043 Additions for tax positions related to current year — Additions for tax positions related to prior years — Settlements (26 ) Adjustment related to foreign currency translation (18 ) Reductions related to the lapse of applicable statute of limitations (31 ) Reduction for tax positions of prior years — Balance at December 31, 2015 1,968 Additions for tax positions related to current year — Additions for tax positions related to prior years — Settlements — Adjustment related to foreign currency translation (7 ) Reductions related to the lapse of applicable statute of limitations (131 ) Reduction for tax positions of prior years — Balance at December 31, 2016 $ 1,830 We recognize interest and penalties related to unrecognized tax benefits in our tax provision. As of December 31, 2016 , we had an interest and penalties accrual related to unrecognized tax benefits of $16 , which decreased during 2016 by $7 . We anticipate our unrecognized tax benefits may increase or decrease within twelve months of the reporting date, as audits or reviews are initiated or settled and as a result of settled potential tax liabilities in certain foreign jurisdictions. It is not currently reasonably possible to estimate the range of change. We file income tax returns in jurisdictions with varying statues of limitations. Tax years 2013 through 2015 remain subject to examination by federal tax authorities. Tax years 2012 through 2015 generally remain subject to examination by state tax authorities. As of December 31, 2016 , we are not under any federal or state income tax examinations. Income taxes have not been provided on a portion of the undistributed earnings of our foreign subsidiaries over which we have sufficient influence to control the distribution of such earnings and have determined that substantially all of such earnings were reinvested indefinitely. The undistributed earnings of our foreign subsidiaries were approximately $1,600 at December 31, 2016 . These earnings could become subject to either or both federal income tax and foreign withholding tax if they are remitted as dividends, if foreign earnings are loaned to any of our domestic subsidiaries, or if we sell our investment in such subsidiaries. A hypothetical calculation of the deferred tax liability, assuming those earnings were remitted, is not practicable. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2016 | |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |
401(k) Plan | 401(k) Plan We manage the Limelight Networks 401(k) Plan covering effectively all of our employees. The plan is a 401(k) profit sharing plan in which participating employees are fully vested in any contributions they make. We will match employee deferrals as follows: a dollar-for-dollar match on eligible employee’s deferral that does not exceed 3% of compensation for the year and a 50% match on the next 2% of the employee deferrals. Our employees may elect to reduce their current compensation up to the statutory limit. We made matching contributions of approximately $1,345 , $1,434 , and $1,225 during the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting and Geographic Information | Segment Reporting and Geographic Information Our chief operating decision maker (whom is our Chief Executive Officer) reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. We operate in one industry segment — content delivery and related services and we operate 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: Years Ended December 31, 2016 2015 2014 Americas $ 100,421 59.7 % $ 102,505 60.0 % $ 101,302 62.5 % EMEA 31,326 18.6 % 32,505 19.0 % 33,630 20.7 % Asia Pacific 36,487 21.7 % 35,902 21.0 % 27,327 16.8 % Total revenue $ 168,234 100.0 % $ 170,912 100.0 % $ 162,259 100.0 % The following table sets forth long-lived assets by geographic area: Years Ended December 31, 2016 2015 2014 Long-lived Assets Americas $ 18,665 $ 19,692 $ 22,505 International 11,687 16,466 11,202 Total long-lived assets $ 30,352 $ 36,158 $ 33,707 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Fair Value Measurements | Fair Value Measurements We evaluate our financial instruments within the three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1 - defined as observable inputs such as quoted prices in active markets; Level 2 - defined as other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of December 31, 2016, and 2015, we held certain assets and liabilities that were required to be measured at fair value on a recurring basis. The following is a summary of fair value measurements at December 31, 2016 : Fair Value Measurements at Reporting Date Using Description Total Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (2) $ 301 $ 301 $ — $ — Certificate of deposit (1) 40 — 40 — Commercial paper (1) 8,222 — 8,222 — Corporate notes and bonds (1) 36,231 — 36,231 — Total assets measured at fair value $ 44,794 $ 301 $ 44,493 $ — ___________ (1) Classified in marketable securities (2) Classified in cash and cash equivalents The following is a summary of fair value measurements at December 31, 2015 : Fair Value Measurements at Reporting Date Using Description Total Quoted Prices In Active Markets for Identical Assets Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (2) $ 725 $ 725 $ — $ — Corporate notes and bonds (1) 15,898 — 15,898 — Certificate of deposit (1) 12,464 — 12,464 — Total assets measured at fair value $ 29,087 $ 725 $ 28,362 $ — ____________ (1) Classified in marketable securities (2) Classified in cash and cash equivalents During the year ended December 31, 2015, a $1,000 convertible debt security, classified as Level 3 in the fair value hierarchy as of December 31, 2014, was converted into preferred shares of the issuing entity. As a result of the conversion, we recognized a gain of $275 , related to a beneficial conversion feature, which is included in other income (expense) in our statement of operations for the year ended December 31, 2015. After conversion, the cost basis investment transferred out of a Level 3 marketable security to other assets in our consolidated balance sheet. At December 31, 2015 and 2016, the investment is carried at cost of $1,275 and is evaluated for impairment quarterly or when events or changes in circumstances indicate the carrying value of the investment may exceed its fair value. As of December 31, 2016, no indicators of impairment were identified. 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. |
Quarterly Financial Results (un
Quarterly Financial Results (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Results (unaudited) | Quarterly Financial Results (unaudited) The following tables sets forth certain unaudited quarterly results of operations for the years ended December 31, 2016 and 2015 . Amounts may not foot due to rounding. In the opinion of management, this information has been prepared on the same basis as the audited consolidated financial statements and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts below for a fair statement of the quarterly information when read in conjunction with the audited consolidated financial statements and related notes included elsewhere in this annual report on Form 10-K: For the Three Months Ended March 31, 2016 June 30, 2016 (a) Sept. 30, 2016 Dec. 31, 2016 Revenues $ 41,422 $ 43,560 $ 39,473 $ 43,778 Gross profit $ 16,644 $ 18,800 $ 16,238 $ 19,662 Loss from continuing operations $ (5,946 ) $ (57,938 ) $ (6,122 ) $ (3,919 ) Net loss $ (5,946 ) $ (57,938 ) $ (6,122 ) $ (3,919 ) Basic and diluted net loss per share from continuing operations $ (0.06 ) $ (0.56 ) $ (0.06 ) $ (0.04 ) Basic and diluted net loss per share $ (0.06 ) $ (0.56 ) $ (0.06 ) $ (0.04 ) Basic and diluted weighted average common shares outstanding 102,693 103,904 104,860 105,942 (a) During the quarter ended June 30, 2016, we recorded a $54,000 provision for litigation related to the Akamai settlement and license agreement. For the Three Months Ended March 31, 2015 June 30, 2015 Sept. 30, 2015 Dec. 31, 2015 Revenues $ 42,329 $ 43,795 $ 42,049 $ 42,739 Gross profit $ 16,519 $ 18,148 $ 15,911 $ 17,540 Loss from continuing operations $ (5,683 ) $ (6,362 ) $ (7,762 ) $ (4,145 ) Net loss $ (5,683 ) $ (6,362 ) $ (7,762 ) $ (4,145 ) Basic and diluted net loss per share from continuing operations $ (0.06 ) $ (0.06 ) $ (0.08 ) $ (0.04 ) Basic and diluted net loss per share $ (0.06 ) $ (0.06 ) $ (0.08 ) $ (0.04 ) Basic and diluted weighted average common shares outstanding 98,636 99,841 100,552 101,391 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (In thousands) Additions Deductions Description Balance at Charged to Charged Write-Offs Balance at Year ended December 31, 2014: Allowances deducted from asset accounts: Reserves for accounts receivable $ 2,010 408 (230 ) 354 $ 1,834 Deferred tax asset valuation allowance $ 47,166 7,488 — — $ 54,654 Year ended December 31, 2015: Allowances deducted from asset accounts: Reserves for accounts receivable $ 1,834 1,037 81 1,148 $ 1,804 Deferred tax asset valuation allowance $ 54,654 4,587 — — $ 59,241 Year ended December 31, 2016: Allowances deducted from asset accounts: Reserves for accounts receivable $ 1,804 137 (234 ) 864 $ 843 Deferred tax asset valuation allowance $ 59,241 24,985 — — $ 84,226 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The consolidated financial statements include accounts of Limelight and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. In addition, certain other reclassifications have been made to prior period amounts to conform to the current period presentation. All information is presented in thousands, except per share amounts and where specifically noted. |
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 annual report on Form 10-K are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or for any future periods. |
Foreign Currency Translation | Foreign Currency Translation We translate assets and liabilities of foreign subsidiaries, whose functional currency is their local currency, at exchange rates in effect at the balance sheet date. We translate revenue and expenses at the monthly average exchange rates. We include accumulated net translation adjustments in stockholders’ equity as a component of accumulated other comprehensive income (loss). The functional currency of our international subsidiaries is the local currency. Due to changes in exchange rates between reporting periods and changes in certain account balances, the foreign currency translation adjustment will change from period to period. |
Recent Accounting Standards | Recent Accounting Standards Adopted Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 is effective for us in the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We adopted this guidance effective January 1, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements In November 2015, the FASB issued ASU 2015-17, which will require entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs) as noncurrent in a classified balance sheet. ASU 2015-17 simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current and noncurrent in a classified balance sheet. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We will adopt this guidance effective January 1, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. 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, allocating the transaction price to each separate performance obligation and accounting treatment of costs to obtain and fulfill contracts. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all entities by one year. Accordingly, public business entities should apply the guidance in ASU 2014-09 to annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. While we do not plan to early adopt this ASU, we currently believe once we do adopt this standard, we will use the modified retrospective approach. We are in the initial stages of our evaluation and are continuing to assess the potential impact on our accounting policies and internal control processes including system readiness. We have reviewed several contracts with our largest revenue generating customers and we currently believe the impact on our consolidated financial statements will not be significant as fees are generally earned on actual usage primarily on a month to month basis. We will continue to review additional customer contracts to assess the impact, including evaluating the treatment of upfront costs to obtain these contracts under the new guidance. We do not know and cannot reasonably estimate quantitative information related to the impact of the new standard on our financial statements at this time. In February 2016, the FASB issued ASU No. 2016-02, which establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for most leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted and should be applied using a modified retrospective approach. We are in the process of evaluating the potential impacts of this new guidance on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. We will adopt the standard effective January 1, 2017. Due to our current NOL and valuation allowance position, the new standard will not immediately cause volatility in our effective tax rates and earnings per share due to the tax effects related to share-based payments being recorded to the income statement. The volatility in future periods will depend on the valuation allowance, our stock price at the awards’ vest dates, and the number of awards that vest in each period. Further, we will not elect an accounting policy change to record forfeitures as they occur and will continue to estimate forfeitures at each period. In August 2016, the FASB issued ASU No. 2016-15, which amends ASC 230, to clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The FASB issued ASU 2016-15 with the intent of reducing diversity in practice with respect to eight types of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We are in the process of evaluating the adoption and potential impact of this new guidance on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, the amendments in this Update are an improvement to GAAP because they provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing the diversity currently in practice today. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. We do not plan to early adopt this ASU. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Revenue Recognition | Revenue Recognition We derive revenue primarily from the sale of services that comprise components of our Orchestrate Platform. Our customers generally execute contracts with terms of one year or longer, which are referred to as recurring revenue contracts or long-term contracts. These contracts may commit the customer to a minimum monthly level of usage with additional charges applicable for actual usage above the monthly minimum commitment, or are entirely usage based. We define usage as customer data sent or received using our content delivery service, or content that is hosted or cached by us at the request or direction of our customers. We recognize the monthly minimum as revenue each month provided that an enforceable contract has been signed by both parties, the service has been delivered to the customer, the fee for the service is fixed or determinable, and collection is reasonably assured. Should a customer’s usage of our services exceed the monthly minimum commitment, we recognize revenue for such excess in the period of the usage. For annual or other non-monthly period revenue commitments, we recognize revenue monthly based upon the customer’s actual usage each month of the commitment period and only recognize any remaining committed amount for the applicable period in the last month thereof. Certain of our revenue arrangements consist of multi-element arrangements. Revenue arrangements with multiple deliverables are divided into separate units of accounting if each deliverable has stand-alone value to the customer. Our multiple-element arrangements may include a combination of some or all of the following: content delivery services, video content management services, performance services for website and web application acceleration and security, professional services, cloud storage and sale of equipment. Each of these products has stand-alone value and is sold separately. In the absence of vendor specific objective evidence (VSOE) or third-party evidence of selling prices, consideration would be allocated based on management’s best estimate of such prices. The deliverables within multiple-element arrangements are provided over the same contract period, and therefore, revenue is recognized over the same period. We may charge the customer an installation fee when the services are first activated. We do not charge installation fees for contract renewals. Installation fees are recorded as deferred revenue and recognized as revenue ratably over the estimated life of the customer arrangement as installation fees do not have standalone value. We also derive revenue from services and events sold as discrete, non-recurring events or based solely on usage. For these services, we recognize revenue after an enforceable contract has been signed by both parties, the fee is fixed or determinable, the event or usage has occurred, and collection is reasonably assured. At the inception of a customer contract for service, we make an assessment as to that customer’s ability to pay for the services provided. If we subsequently determine that collection from the customer is not reasonably assured, we record an allowance for doubtful accounts and bad debt expense or deferred revenue for all of that customer’s unpaid invoices and cease recognizing revenue for continued services provided until cash is received. Cash received from customers related to sales tax is not included in revenue. Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of monthly billed service fees; prepayments made by customers for future periods and deferred installation fees. |
Cash and Cash Equivalents | Cash and Cash Equivalents We hold our cash and cash equivalents in checking, money market, and highly-liquid investments. We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. |
Investments in Marketable Securities | Investments in Marketable Securities Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such classification as of each balance sheet date. We have classified our investments in marketable securities as available-for-sale and as current, as our marketable securities are available to fund current operations, and carry such investments at fair value. Available-for-sale investments are initially recorded at cost with changes in fair value recorded through comprehensive loss. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in the statements of operations. We periodically review our investments for other-than-temporary declines in fair value based on the specific identification method and would write down investments to their fair value if and when an other-than-temporary decline has occurred. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amounts and do not bear interest. We record reserves against our accounts receivable balance for service credits and for doubtful accounts. Estimates are used in determining both of these reserves. The allowance for doubtful accounts charges are included as a component of general and administrative expenses. The allowance for doubtful accounts is based upon a calculation that uses our aging of accounts receivable and applies a reserve percentage to the specific age of the receivable to estimate the allowance for doubtful accounts. The reserve percentages are determined based on our historical write-off experience. These estimates could change significantly if our customers’ financial condition changes or if the economy in general deteriorates. In the event such conditions become known, we specifically identify balances for necessary reserves. Our reserve for service credits relates to credits that are expected to be issued to customers during the ordinary course of business. These credits typically relate to customer disputes and billing adjustments and are estimated at the time the revenue is recognized and recorded as a reduction of revenues. Estimates for service credits are based on an analysis of credits issued in previous periods. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation or amortization. Depreciation and amortization are computed using the straight-line method over the assets’ estimated useful lives of the applicable asset. Network equipment 3-4 years Computer equipment and software 3 years Furniture and fixtures 3-5 years Other equipment 3-5 years Leasehold improvements are amortized over the shorter of the asset’s estimated useful life or the respective lease term. Repairs and maintenance are charged to expense as incurred. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents costs in excess of fair values assigned to the underlying net assets of the acquired company. Goodwill is not amortized but instead is tested for impairment annually or more frequently if events or changes in circumstances indicate goodwill might be impaired. We have concluded that we have one reporting unit and assigned the entire balance of goodwill to this reporting unit. The estimated fair value of the reporting unit is determined using a market approach. Our market capitalization is adjusted for a control premium based on the estimated average and median control premiums of transactions involving companies comparable to us. As of our annual impairment testing date of October 31, 2016, management determined that goodwill was not impaired. Management determined that the estimated fair value of its reporting unit exceeded carrying value by approximately $123,934 or 90% , using our market capitalization plus an estimated control premium of 40% on October 31, 2016. There were no indicators of impairment subsequent to the annual impairment testing date. Our other intangible assets represent existing technologies and customer relationship intangibles. Other intangible assets are amortized over their respective estimated lives, ranging from less than one year to six years . In the event that facts and circumstances indicate intangibles or other long-lived assets may be impaired, we evaluate the recoverability and estimated useful lives of such assets. Other intangible assets are included in other assets in the accompanying consolidated balance sheets. Amortization of other intangible assets is included in depreciation and amortization in the accompanying consolidated statements of operations. |
Contingencies | Contingencies We record contingent liabilities resulting from asserted and unasserted claims when it is probable that a loss has been incurred and the amount of the loss is reasonably estimable. We disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Additionally, estimating the loss, or range of loss, associated with a contingency requires analysis of multiple factors, and changes in law or other developments may ultimately cause our judgments to change. Therefore, actual losses in any future period are inherently uncertain and may be materially different from our estimate. |
Long-Lived Assets | Long-Lived Assets We review our long-lived assets for impairment annually, or whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. We recognize an impairment loss if the sum of the expected long-term undiscounted cash flows that the long-lived asset is expected to generate is less than the carrying amount of the long-lived asset being evaluated. We treat any write-downs as permanent reductions in the carrying amounts of the assets. We believe the carrying amounts of our long-lived assets at December 31, 2016 , and 2015 , are fully realizable and have not recorded any impairment losses. |
Deferred Rent and Lease Accounting | Deferred Rent and Lease Accounting We lease bandwidth, co-location and office space in various locations. At the inception of each lease, we evaluate the lease terms to determine whether the lease will be accounted for as an operating or a capital lease. The term of the lease used for this evaluation includes renewal option periods only in instances where the exercise of the renewal option can be reasonably assured and failure to exercise the option would result in an economic penalty. We record tenant improvement allowances granted under the lease agreements as leasehold improvements within property and equipment and within deferred rent. For leases that contain rent escalation provisions, we record the total rent payable during the lease term on a straight-line basis over the term of the lease (including any “rent free” period beginning upon possession of the premises), and record any difference between the actual rent paid and the straight-line rent expense recorded as increases or decreases in deferred rent. |
Cost of Revenue | Cost of Revenue Cost of revenues consists primarily of fees paid to network providers for bandwidth and backbone, costs incurred for non-settlement free peering and connection to Internet service provider networks and fees paid to data center operators for housing network equipment in third party network data centers, also known as co-location costs. Cost of revenues also includes leased warehouse space and utilities, depreciation of network equipment used to deliver our content delivery services, payroll and related costs, and share-based compensation for our network operations and professional services personnel. We enter into contracts for bandwidth with third party network providers with terms typically ranging from several months to five years . These contracts generally commit us to pay minimum monthly fees plus additional fees for bandwidth usage above contracted minimums. A portion of the global computing platform traffic delivery is completed through direct connection to ISP networks, called peering. |
Research and Development | Research and Development Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing, operation, and enhancement of our services, and network. Costs incurred in the development of our services are expensed as incurred. |
Advertising Costs | Advertising Costs Costs associated with advertising are expensed as incurred. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance on a jurisdiction by jurisdiction basis. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. We recognize uncertain income tax positions in our financial statements when it is more-likely-than-not the position will be sustained upon examination. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents approximate fair value due to the nature and short maturity of those instruments. The respective fair values of marketable securities are determined based on quoted market prices or other readily available market information, which approximate fair values. The carrying amounts of accounts receivable, accounts payable, and accrued liabilities reported in the consolidated balance sheets approximate their respective fair values due to the immediate or short-term maturity of these financial instruments. |
Share-Based Compensation | Share-Based Compensation We measure all employee share-based compensation awards using the fair-value method. The grant date fair value was determined using the Black-Scholes-Merton pricing model. The Black-Scholes-Merton valuation calculation requires us to make key assumptions such as future stock price volatility, expected terms, risk-free rates, and dividend yield. Our expected volatility is derived from our own volatility rate as a publicly traded company. The expected term is based on our historical experience. The risk-free interest factor is based on the United States Treasury yield curve in effect at the time of the grant for zero coupon United States Treasury notes with maturities of approximately equal to each grant’s expected term. We have never paid cash dividends and do not currently intend to pay cash dividends, and therefore, have assumed a 0% dividend yield. We develop an estimate of the number of share-based awards that will be forfeited due to employee turnover. We will continue to use judgment in evaluating the expected term, volatility, and forfeiture rate related to our own share-based awards on a prospective basis, and in incorporating these factors into the model. We apply the straight-line attribution method to recognize compensation costs associated with awards that are not subject to graded vesting. For awards that are subject to graded vesting and performance based awards, we recognize compensation costs separately for each vesting tranche. We also estimate when and if performance-based awards will be earned. If an award is not considered probable of being earned, no amount of share-based compensation is recognized. If the award is deemed probable of being earned, related compensation expense is recorded over the estimated service period. To the extent our estimate of awards considered probable of being earned changes, the amount of share-based compensation recognized will also change. |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Estimated useful lives of assets | Depreciation and amortization are computed using the straight-line method over the assets’ estimated useful lives of the applicable asset. Network equipment 3-4 years Computer equipment and software 3 years Furniture and fixtures 3-5 years Other equipment 3-5 years |
Investments in Marketable Sec35
Investments in Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2015 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Certificate of deposit $ 12,480 $ 1 $ 17 $ 12,464 Corporate notes and bonds 15,940 2 44 15,898 Total marketable securities $ 28,420 $ 3 $ 61 $ 28,362 The following is a summary of marketable securities (designated as available-for-sale) at December 31, 2016 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Certificate of deposit $ 40 $ — $ — $ 40 Commercial paper 8,228 — 6 8,222 Corporate notes and bonds 36,353 — 122 36,231 Total marketable securities $ 44,621 $ — $ 128 $ 44,493 |
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 December 31, 2015 , by maturity, are shown below: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities Due in one year or less $ 18,075 $ 2 $ 12 $ 18,065 Due after one year and through five years 10,345 1 49 10,297 $ 28,420 $ 3 $ 61 $ 28,362 The amortized cost and estimated fair value of the marketable debt securities at December 31, 2016 , by maturity, are shown below: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities Due in one year or less $ 27,920 $ — $ 52 $ 27,868 Due after one year and through five years 16,701 — 76 16,625 $ 44,621 $ — $ 128 $ 44,493 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Summary of accounts receivable, net | Accounts receivable include: December 31, 2016 2015 Accounts receivable $ 28,260 $ 28,599 Less: credit allowance (225 ) (460 ) Less: allowance for doubtful accounts (617 ) (1,344 ) Total accounts receivable, net $ 27,418 $ 26,795 |
Prepaid Expenses and Other Cu37
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets include: December 31, December 31, 2016 2015 Prepaid bandwidth and backbone $ 698 $ 2,417 VAT receivable 1,296 2,720 Prepaid expenses and insurance 2,321 3,641 Vendor deposits and other 550 800 Total prepaid expenses and other current assets 4,865 9,578 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2016 , and 2015, were as follows: Balance, December 31, 2014 $ 76,133 Foreign currency translation adjustment 10 Balance, December 31, 2015 76,143 Foreign currency translation adjustment 100 Balance, December 31, 2016 $ 76,243 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and equipment include: December 31, 2016 2015 Network equipment $ 108,416 $ 129,172 Computer equipment and software 10,282 11,408 Furniture and fixtures 2,432 2,472 Leasehold improvements 5,127 4,976 Other equipment 182 166 126,439 148,194 Less: accumulated depreciation (96,087 ) (112,051 ) Total property and equipment, net $ 30,352 $ 36,143 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities, Current [Abstract] | |
Other current liabilities | Other current liabilities include: December 31, 2016 2015 Accrued compensation and benefits $ 5,061 $ 4,786 Accrued cost of revenue 2,178 2,698 Accrued legal fees 262 143 Deferred rent 730 782 Other accrued expenses 4,605 2,448 Total other current liabilities $ 12,836 $ 10,857 |
Other Long Term Liabilities (Ta
Other Long Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities, Noncurrent [Abstract] | |
Other long term liabilities | Other long term liabilities include: December 31, 2016 2015 Deferred rent $ 1,186 $ 1,907 Income taxes payable 249 404 Total other long term liabilities $ 1,435 $ 2,311 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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: Years Ended December 31, 2016 2015 2014 Loss from continuing operations $ (73,925 ) $ (23,952 ) $ (24,856 ) Income from discontinued operations — — 265 Net loss $ (73,925 ) $ (23,952 ) $ (24,591 ) Basic and diluted weighted average outstanding shares of common stock 104,350 100,105 98,365 Basic and diluted loss per share: Continuing operations $ (0.71 ) $ (0.24 ) $ (0.25 ) Discontinued operations — — — Basic and diluted net loss per share $ (0.71 ) $ (0.24 ) $ (0.25 ) |
Schedule of antidilutive securities excluded from computation of earnings per share | For the years ended December 31, 2016 , 2015 and 2014 , the following potentially dilutive common stock, including awards granted under our equity incentive compensation plans were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive. Years Ended December 31, 2016 2015 2014 Employee stock purchase plan 114 134 40 Stock options 71 1,245 664 Restricted stock units 1,122 2,420 1,764 1,307 3,799 2,468 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive loss | Changes in the components of accumulated other comprehensive loss, net of tax, for the year ended December 31, 2016, was as follows: Unrealized Gains (Losses) on Foreign Available for Currency Sale Securities Total Balance, December 31, 2015 $ (10,768 ) $ (44 ) $ (10,812 ) Other comprehensive loss before reclassifications (142 ) (128 ) (270 ) Amounts reclassified from accumulated other comprehensive loss — 44 44 Net current period other comprehensive loss (142 ) (84 ) (226 ) Balance, December 31, 2016 $ (10,910 ) $ (128 ) $ (11,038 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | |
Stock option activity | Data pertaining to stock option activity under the Plans are as follows: Number of Shares Weighted Average Exercise Price (In thousands) Balance at December 31, 2013 15,982 $ 4.00 Granted 4,215 2.40 Exercised (522 ) 1.71 Cancelled (2,803 ) 4.15 Balance at December 31, 2014 16,872 3.66 Granted 3,649 2.64 Exercised (607 ) 1.73 Cancelled (5,247 ) 4.08 Balance at December 31, 2015 14,667 3.33 Granted 3,589 2.22 Exercised (850 ) 1.46 Cancelled (1,389 ) 3.38 Balance at December 31, 2016 16,017 3.18 |
Outstanding stock options | The following table summarizes the information about stock options outstanding and exercisable at December 31, 2016 : Options Outstanding Options Exercisable Exercise Price Number of Options Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Options Exercisable Weighted Average Exercise Price (In thousands) (In thousands) $ 0.00 — $ 1.50 — — $ — — $ — $ 1.51 — $ 3.00 11,912 7.9 2.25 6,344 2.27 $ 3.01 — $ 4.50 1,964 5.8 3.72 1,541 3.75 $ 4.51 — $ 6.00 1,006 3.5 5.12 1,006 5.12 $ 6.01 — $ 7.50 380 1.4 6.37 380 6.37 $ 7.51 — $ 15.00 755 1.3 12.27 755 12.27 16,017 10,026 |
Grant date fair value of option | The fair value of options awarded were estimated on the grant date using the following weighted average assumptions: Years Ended December 31, 2016 2015 2014 Expected volatility 58.30 % 54.53 % 66.05 % Expected term, years 5.99 5.99 5.99 Risk-free interest 1.76 % 1.80 % 1.83 % Expected dividends — % — % — % |
Different types of restricted stock units (RSUs) outstanding | The following table summarizes the RSUs outstanding (in thousands): Years Ended December 31, 2016 2015 2014 RSUs with service-based vesting conditions 6,673 6,265 6,820 |
Restricted stock units activity | Data pertaining to RSUs activity under the Plans is as follows: Number of Units Weighted Average Fair Value (In thousands) Balance at December 31, 2013 5,286 $ 2.24 Granted 5,542 2.33 Vested (2,385 ) 2.28 Forfeitures (1,623 ) 2.22 Balance at December 31, 2014 6,820 2.30 Granted 4,156 3.00 Vested (3,069 ) 2.31 Forfeitures (1,642 ) 2.54 Balance at December 31, 2015 6,265 2.70 Granted 5,024 1.76 Vested (3,753 ) 2.49 Forfeitures (863 ) 2.29 Balance at December 31, 2016 6,673 2.16 |
Components of share-based compensation expense | The following table summarizes the components of share-based compensation expense included in our consolidated statement of operations: Years Ended December 31, 2016 2015 2014 Share-based compensation expense by type: Stock options $ 3,742 $ 4,131 $ 4,704 Restricted stock units 9,121 7,620 5,609 ESPP 596 587 178 Total share-based compensation expense $ 13,459 $ 12,338 $ 10,491 Share-based compensation expense included in the consolidated statements of operations: Cost of services $ 1,493 $ 2,047 $ 1,956 General and administrative expense 7,070 5,398 4,741 Sales and marketing expense 2,792 2,657 2,317 Research and development expense 2,104 2,236 1,477 Total share-based compensation expense $ 13,459 $ 12,338 $ 10,491 |
Leases and Purchase Commitmen45
Leases and Purchase Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments over remaining lease periods | Approximate future minimum lease payments over the remaining lease periods as of December 31, 2016 are as follows: 2017 $ 3,265 2018 2,905 2019 1,350 2020 505 2021 359 Thereafter 54 Total minimum payments $ 8,438 |
Minimum purchase commitments | The following summarizes minimum commitments as of December 31, 2016 : 2017 $ 26,237 2018 13,685 2019 3,486 2020 133 2021 9 Thereafter — Total minimum payments $ 43,550 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
(Loss) income before taxes | Our loss from continuing operations before income taxes consists of the following: Years Ended December 31, 2016 2015 2014 Loss from continuing operations before income taxes: United States $ (74,130 ) $ (24,105 ) $ (25,025 ) Foreign 808 420 372 $ (73,322 ) $ (23,685 ) $ (24,653 ) |
Components of provision (benefit) for income taxes | The components of the provision for income taxes are as follows: Years Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ (143 ) State 103 103 26 Foreign 330 210 680 Total current 433 313 563 Deferred: Federal 15 17 15 State — — — Foreign 155 (63 ) (375 ) Total deferred 170 (46 ) (360 ) Total provision $ 603 $ 267 $ 203 |
Reconciliation of the U.S. federal statutory rate to the Company's effective income tax rate | A reconciliation of the U.S. federal statutory rate to our effective income tax rate is shown in the table below: Years Ended December 31, 2016 2015 2014 Amount Percent Amount Percent Amount Percent U.S. federal statutory tax rate $ (25,663 ) 35.0 % $ (8,290 ) 35.0 % $ (8,629 ) 35.0 % Valuation allowance 23,184 (31.6 )% 3,821 (16.0 )% 7,424 (30.0 )% Foreign income taxes 338 (0.5 )% 86 (0.5 )% (26 ) — % State income taxes 100 (0.2 )% 92 (0.5 )% 26 — % Non-deductible expenses 323 (0.4 )% 552 (2.0 )% 1,335 (6.0 )% Uncertain tax positions (136 ) 0.2 % (86 ) — % 201 (1.0 )% Share-based compensation 2,439 (3.3 )% 4,064 (17.0 )% — — % Other 18 — % 28 — % (128 ) 1.0 % Provision for income taxes $ 603 (0.8 )% $ 267 (1.0 )% $ 203 (1.0 )% |
Components of Company's deferred tax assets and liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purpose. Significant components of our deferred tax assets and liabilities are as follows: December 31, 2016 2015 Deferred tax assets: Share-based compensation $ 10,463 $ 11,090 Net operating loss and tax credit carry-forwards 52,798 43,600 Legal settlement 17,151 — Deferred revenue 878 1,306 Accounts receivable reserves 235 518 Fixed assets 3,317 3,172 Other 771 1,041 Total deferred tax assets 85,613 60,727 Deferred tax liabilities: Prepaid expenses (112 ) (128 ) Other (323 ) (154 ) Total deferred tax liabilities (435 ) (282 ) Valuation allowance (84,226 ) (59,241 ) Net deferred tax assets $ 952 $ 1,204 |
Summary of activities associated with Company's reserve for unrecognized tax benefits interest and penalties | A summary of the activities associated with our reserve for unrecognized tax benefits, interest and penalties follow: Unrecognized Tax Benefits Balance at January 1, 2015 $ 2,043 Additions for tax positions related to current year — Additions for tax positions related to prior years — Settlements (26 ) Adjustment related to foreign currency translation (18 ) Reductions related to the lapse of applicable statute of limitations (31 ) Reduction for tax positions of prior years — Balance at December 31, 2015 1,968 Additions for tax positions related to current year — Additions for tax positions related to prior years — Settlements — Adjustment related to foreign currency translation (7 ) Reductions related to the lapse of applicable statute of limitations (131 ) Reduction for tax positions of prior years — Balance at December 31, 2016 $ 1,830 |
Segment Reporting and Geograp47
Segment Reporting and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenue by geography | 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: Years Ended December 31, 2016 2015 2014 Americas $ 100,421 59.7 % $ 102,505 60.0 % $ 101,302 62.5 % EMEA 31,326 18.6 % 32,505 19.0 % 33,630 20.7 % Asia Pacific 36,487 21.7 % 35,902 21.0 % 27,327 16.8 % Total revenue $ 168,234 100.0 % $ 170,912 100.0 % $ 162,259 100.0 % |
Long-lived assets by geography | The following table sets forth long-lived assets by geographic area: Years Ended December 31, 2016 2015 2014 Long-lived Assets Americas $ 18,665 $ 19,692 $ 22,505 International 11,687 16,466 11,202 Total long-lived assets $ 30,352 $ 36,158 $ 33,707 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [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 December 31, 2016 : Fair Value Measurements at Reporting Date Using Description Total Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (2) $ 301 $ 301 $ — $ — Certificate of deposit (1) 40 — 40 — Commercial paper (1) 8,222 — 8,222 — Corporate notes and bonds (1) 36,231 — 36,231 — Total assets measured at fair value $ 44,794 $ 301 $ 44,493 $ — ___________ (1) Classified in marketable securities (2) Classified in cash and cash equivalents The following is a summary of fair value measurements at December 31, 2015 : Fair Value Measurements at Reporting Date Using Description Total Quoted Prices In Active Markets for Identical Assets Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (2) $ 725 $ 725 $ — $ — Corporate notes and bonds (1) 15,898 — 15,898 — Certificate of deposit (1) 12,464 — 12,464 — Total assets measured at fair value $ 29,087 $ 725 $ 28,362 $ — ____________ (1) Classified in marketable securities (2) Classified in cash and cash equivalents |
Quarterly Financial Results (49
Quarterly Financial Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly results of operations (unaudited) | The following tables sets forth certain unaudited quarterly results of operations for the years ended December 31, 2016 and 2015 . Amounts may not foot due to rounding. In the opinion of management, this information has been prepared on the same basis as the audited consolidated financial statements and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts below for a fair statement of the quarterly information when read in conjunction with the audited consolidated financial statements and related notes included elsewhere in this annual report on Form 10-K: For the Three Months Ended March 31, 2016 June 30, 2016 (a) Sept. 30, 2016 Dec. 31, 2016 Revenues $ 41,422 $ 43,560 $ 39,473 $ 43,778 Gross profit $ 16,644 $ 18,800 $ 16,238 $ 19,662 Loss from continuing operations $ (5,946 ) $ (57,938 ) $ (6,122 ) $ (3,919 ) Net loss $ (5,946 ) $ (57,938 ) $ (6,122 ) $ (3,919 ) Basic and diluted net loss per share from continuing operations $ (0.06 ) $ (0.56 ) $ (0.06 ) $ (0.04 ) Basic and diluted net loss per share $ (0.06 ) $ (0.56 ) $ (0.06 ) $ (0.04 ) Basic and diluted weighted average common shares outstanding 102,693 103,904 104,860 105,942 (a) During the quarter ended June 30, 2016, we recorded a $54,000 provision for litigation related to the Akamai settlement and license agreement. For the Three Months Ended March 31, 2015 June 30, 2015 Sept. 30, 2015 Dec. 31, 2015 Revenues $ 42,329 $ 43,795 $ 42,049 $ 42,739 Gross profit $ 16,519 $ 18,148 $ 15,911 $ 17,540 Loss from continuing operations $ (5,683 ) $ (6,362 ) $ (7,762 ) $ (4,145 ) Net loss $ (5,683 ) $ (6,362 ) $ (7,762 ) $ (4,145 ) Basic and diluted net loss per share from continuing operations $ (0.06 ) $ (0.06 ) $ (0.08 ) $ (0.04 ) Basic and diluted net loss per share $ (0.06 ) $ (0.06 ) $ (0.08 ) $ (0.04 ) Basic and diluted weighted average common shares outstanding 98,636 99,841 100,552 101,391 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | Oct. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of Significant Accounting Policies (Textual) [Abstract] | ||||
Foreign exchange translation gain (loss) | $ 142 | $ 3,025 | $ 6,055 | |
Foreign currency re-measurement gain (loss) | (982) | 1,341 | 1,489 | |
Advertising expenses | $ 1,411 | $ 1,669 | $ 1,409 | |
Expected dividend rate | 0.00% | 0.00% | 0.00% | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Estimated fair value in excess of carrying value of goodwill | $ 123,934 | |||
Percentage of estimated fair value of goodwill exceeding carrying value | 90.00% | |||
Control premium used to determine fair value of goodwill | 40.00% | |||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated lives of other intangible assets | six years |
Summary of Significant Accoun51
Summary of Significant Accounting Policies (Details2) | 12 Months Ended |
Dec. 31, 2016 | |
Network equipment | Minimum | |
Estimated useful lives of assets | |
Estimated useful lives of assets | 3 years |
Network equipment | Maximum | |
Estimated useful lives of assets | |
Estimated useful lives of assets | 4 years |
Computer equipment and software | |
Estimated useful lives of assets | |
Estimated useful lives of assets | 3 years |
Furniture and fixtures | Minimum | |
Estimated useful lives of assets | |
Estimated useful lives of assets | 3 years |
Furniture and fixtures | Maximum | |
Estimated useful lives of assets | |
Estimated useful lives of assets | 5 years |
Other equipment | Minimum | |
Estimated useful lives of assets | |
Estimated useful lives of assets | 3 years |
Other equipment | Maximum | |
Estimated useful lives of assets | |
Estimated useful lives of assets | 5 years |
Summary of Significant Accoun52
Summary of Significant Accounting Policies 4 (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Maximum | |
Deferred Revenue Arrangement [Line Items] | |
Term of contract with third party | 5 years |
Investments in Marketable Sec53
Investments in Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of marketable securities (designated as available-for-sale) | ||
Amortized Cost | $ 44,621 | $ 28,420 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | 128 | 61 |
Estimated Fair Value | 44,493 | 28,362 |
Certificate of deposit | ||
Summary of marketable securities (designated as available-for-sale) | ||
Amortized Cost | 40 | 12,480 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 0 | 17 |
Estimated Fair Value | 40 | 12,464 |
Commercial paper | ||
Summary of marketable securities (designated as available-for-sale) | ||
Amortized Cost | 8,228 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 6 | |
Estimated Fair Value | 8,222 | |
Corporate notes and bonds | ||
Summary of marketable securities (designated as available-for-sale) | ||
Amortized Cost | 36,353 | 15,940 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | 122 | 44 |
Estimated Fair Value | $ 36,231 | $ 15,898 |
Investments in Marketable Sec54
Investments in Marketable Securities (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Amortized cost and estimated fair value of marketable securities (designated as available-for-sale) by maturity | ||
Amortized Cost | $ 44,621 | $ 28,420 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | 128 | 61 |
Estimated Fair Value | 44,493 | 28,362 |
Debt securities | ||
Amortized cost and estimated fair value of marketable securities (designated as available-for-sale) by maturity | ||
Amortized Cost, Due in one year or less | 27,920 | 18,075 |
Amortized Cost, Due after one year and through five years | 16,701 | 10,345 |
Amortized Cost | 44,621 | 28,420 |
Gross Unrealized Gains, Due in one year or less | 0 | 2 |
Gross Unrealized Gains, Due after one year and through five years | 0 | 1 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses, Due in one year or less | 52 | 12 |
Gross Unrealized Losses, Due after one year and through five years | 76 | 49 |
Gross Unrealized Losses | 128 | 61 |
Estimated Fair Value, Due in one year or less | 27,868 | 18,065 |
Estimated Fair Value, Due after one year and through five years | 16,625 | 10,297 |
Estimated Fair Value | $ 44,493 | $ 28,362 |
Business Disposition (Details)
Business Disposition (Details) - Clickability, Inc. - USD ($) $ in Thousands | Dec. 23, 2013 | Dec. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Percentage of stock sold | 100.00% | |
Other, net | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gain (loss) on sale of business | $ (62) |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of Accounts receivable, net | ||
Accounts receivable | $ 28,260 | $ 28,599 |
Less: credit allowance | (225) | (460) |
Less: allowance for doubtful accounts | (617) | (1,344) |
Total accounts receivable, net | $ 27,418 | $ 26,795 |
Prepaid Expenses and Other Cu57
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid bandwidth and backbone | $ 698 | $ 2,417 |
VAT receivable | 1,296 | 2,720 |
Prepaid expenses and insurance | 2,321 | 3,641 |
Vendor deposits and other | 550 | 800 |
Total prepaid expenses and other current assets | $ 4,865 | $ 9,578 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of changes in the carrying amount of goodwill | ||
Beginning Balance | $ 76,143 | $ 76,133 |
Foreign currency translation adjustment | 100 | 10 |
Ending Balance | $ 76,243 | $ 76,143 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property and equipment, net | ||
Property and equipment, gross | $ 126,439 | $ 148,194 |
Less: accumulated depreciation | (96,087) | (112,051) |
Total property and equipment, net | 30,352 | 36,143 |
Network equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 108,416 | 129,172 |
Computer equipment and software | ||
Property and equipment, net | ||
Property and equipment, gross | 10,282 | 11,408 |
Furniture and fixtures | ||
Property and equipment, net | ||
Property and equipment, gross | 2,432 | 2,472 |
Leasehold improvements | ||
Property and equipment, net | ||
Property and equipment, gross | 5,127 | 4,976 |
Other equipment | ||
Property and equipment, net | ||
Property and equipment, gross | $ 182 | $ 166 |
Property and Equipment (Detai60
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Accumulated depreciation, retirement of assets | $ 31,273 | ||
Cost of services depreciation | 18,032 | $ 17,975 | $ 16,673 |
Operating expense depreciation | $ 2,438 | $ 1,866 | $ 2,391 |
Line of Credit Line of Credit (
Line of Credit Line of Credit (Details) - Revolving Credit Facility - Credit Agreement - USD ($) | Nov. 02, 2015 | Oct. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | ||||
Maximum borrowing amount | $ 25,000,000 | $ 5,000,000 | ||
Borrowing capacity limit, percent of accounts receivable | 80.00% | |||
Proceeds from line of credit | $ 0 | $ 0 | ||
Current borrowing capacity | 5,000,000 | $ 18,000,000 | ||
Minimum liquidity benchmark | $ 17,500,000 | |||
Commitment fee percentage paid at closing | 0.45% | |||
Unused line fee percentage | 0.375% | 0.30% | ||
Interest expense, line of credit | 205,000 | |||
Commitment fees amortization | $ 321,000 | |||
Voting stock percentage in foreign subsidiaries | 65.00% | |||
Line of credit facility, covenant compliance, minimum sash and revolver availability | $ 7,500,000 | |||
Line of credit facility, covenant compliance, minimum cash at lender | $ 5,000,000 | |||
LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate | 2.75% | |||
Alternative Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate | 0.50% | |||
Variable rate minimum | 0.50% | |||
Variable rate maximum | 1.50% |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other current liabilities | ||
Accrued compensation and benefits | $ 5,061 | $ 4,786 |
Accrued cost of revenue | 2,178 | 2,698 |
Accrued legal fees | 262 | 143 |
Deferred rent | 730 | 782 |
Other accrued expenses | 4,605 | 2,448 |
Total other current liabilities | $ 12,836 | $ 10,857 |
Other Long Term Liabilities (De
Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other long term liabilities | ||
Deferred rent | $ 1,186 | $ 1,907 |
Income taxes payable | 249 | 404 |
Total other long term liabilities | $ 1,435 | $ 2,311 |
Contingencies (Details)
Contingencies (Details) $ in Thousands | Aug. 01, 2016USD ($)installment_payment | Aug. 13, 2015 | Apr. 30, 2016Patentcounterclaim | Feb. 29, 2008USD ($)Claim | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 28, 2016Patent | Apr. 29, 2016Patent | Feb. 16, 2016Patent | Nov. 30, 2015Patent |
Loss Contingencies [Line Items] | ||||||||||||
Accrual of provision for litigation | $ | $ 54,000 | $ 0 | $ 0 | |||||||||
Pending Litigation | Akamai '703 Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of claims Company infringed | Claim | 4 | |||||||||||
Aggregate of lost profits, reasonable royalties and price erosion damages | $ | $ 45,500 | |||||||||||
Duration of appeals in the courts | 6 years | |||||||||||
Pending Litigation | Akamai And XO Communications Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of company patents infringed | 6 | |||||||||||
Pending Litigation | Akamai Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of patents Company was infringing | 5 | |||||||||||
Pending Litigation | 2016 Akamai Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of company patents infringed | 2 | |||||||||||
Number of patents Company was infringing | 3 | |||||||||||
Number of patents Company infringed, withdrawn | 1 | |||||||||||
Number of counterclaims | counterclaim | 2 | |||||||||||
Additional number of patents Company infringed | 3 | |||||||||||
Settled Litigation | Akamai '703 Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Accrual of provision for litigation | $ | $ 54,000 | $ 54,000 | ||||||||||
Number of quarterly installment payments for litigation settlement | installment_payment | 12 | |||||||||||
Litigation reserve, remaining amount due | $ | $ 45,000 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | [1] | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Computation of basic and diluted net income (loss) per share | ||||||||||||
Net loss from continuing operations | $ (3,919) | $ (6,122) | $ (57,938) | $ (5,946) | $ (4,145) | $ (7,762) | $ (6,362) | $ (5,683) | $ (73,925) | $ (23,952) | $ (24,856) | |
Income from discontinued operations | 0 | 0 | 265 | |||||||||
Net loss | $ (3,919) | $ (6,122) | $ (57,938) | $ (5,946) | $ (4,145) | $ (7,762) | $ (6,362) | $ (5,683) | $ (73,925) | $ (23,952) | $ (24,591) | |
Basic and diluted weighted average outstanding shares of common stock (in shares) | 105,942 | 104,860 | 103,904 | 102,693 | 101,391 | 100,552 | 99,841 | 98,636 | 104,350 | 100,105 | 98,365 | |
Basic and diluted loss per share: | ||||||||||||
Basic and diluted net loss per share, Continuing operations (in dollars per share) | $ (0.04) | $ (0.06) | $ (0.56) | $ (0.06) | $ (0.04) | $ (0.08) | $ (0.06) | $ (0.06) | $ (0.71) | $ (0.24) | $ (0.25) | |
Basic and diluted net loss per share, Discontinued operations (in dollars per share) | 0 | 0 | 0 | |||||||||
Total Basic and diluted net loss per share (in dollars per share) | $ (0.04) | $ (0.06) | $ (0.56) | $ (0.06) | $ (0.04) | $ (0.08) | $ (0.06) | $ (0.06) | $ (0.71) | $ (0.24) | $ (0.25) | |
[1] | During the quarter ended June 30, 2016, we recorded a $54,000 provision for litigation related to the Akamai settlement and license agreement. For the Three Months Ended March 31,2015 June 30,2015 Sept. 30,2015 Dec. 31,2015Revenues$42,329 $43,795 $42,049 $42,739Gross profit $16,519 $18,148 $15,911 $17,540Loss from continuing operations$(5,683) $(6,362) $(7,762) $(4,145)Net loss$(5,683) $(6,362) $(7,762) $(4,145)Basic and diluted net loss per share from continuing operations$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted net loss per share$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted weighted average common shares outstanding98,636 99,841 100,552 101,391 |
Dilutive Common Stock (Details)
Dilutive Common Stock (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Excluded outstanding options and restricted stock units | 1,307 | 3,799 | 2,468 |
Employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Excluded outstanding options and restricted stock units | 114 | 134 | 40 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Excluded outstanding options and restricted stock units | 71 | 1,245 | 664 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Excluded outstanding options and restricted stock units | 1,122 | 2,420 | 1,764 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2016 | Feb. 12, 2014 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Payments for repurchase of common stock | $ 0 | $ 957,000 | $ 4,542,000 | ||
Issuance of preferred stock authorized (shares) | 7,500,000 | 7,500,000 | 7,500,000 | ||
Employee stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Discount from market price for employees (percent) | 15.00% | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 1,324,000 | 954,000 | 269,000 | ||
Proceeds received for stock issued | $ 1,498,000 | $ 1,511,000 | $ 487,000 | ||
Common Stock reserved for future options and restricted stock awards (shares) | 1,318,000 | ||||
Employee funds held by Company for future purchase of shares | $ 222,000 | ||||
2007 Equity Incentive Plan | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Shares authorized for issuance under Restated 2007 Plan (in shares) | 6,490,000 | ||||
Share repurchase program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program authorized amount | $ 15,000,000 | ||||
Stock repurchased and retired during period (shares) | 293,000 | ||||
Payments for repurchase of common stock | $ 817,000 |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Income (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | $ 198,097 |
Ending balance | 137,568 |
Foreign Currency | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | (10,768) |
Other comprehensive loss before reclassifications | (142) |
Amounts reclassified from accumulated other comprehensive loss | 0 |
Net current period other comprehensive loss | (142) |
Ending balance | (10,910) |
Unrealized Gains (Losses) on Available for Sale Securities | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | (44) |
Other comprehensive loss before reclassifications | (128) |
Amounts reclassified from accumulated other comprehensive loss | 44 |
Net current period other comprehensive loss | (84) |
Ending balance | (128) |
AOCI Attributable to Parent | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | (10,812) |
Other comprehensive loss before reclassifications | (270) |
Amounts reclassified from accumulated other comprehensive loss | 44 |
Net current period other comprehensive loss | (226) |
Ending balance | $ (11,038) |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock option activity | |||
Number of shares, beginning balance | 14,667 | 16,872 | 15,982 |
Number of shares, granted | 3,589 | 3,649 | 4,215 |
Number of shares, exercised | (850) | (607) | (522) |
Number of shares, cancelled | (1,389) | (5,247) | (2,803) |
Number of shares, ending balance | 16,017 | 14,667 | 16,872 |
Weighted Average Exercise Price | |||
Weighted average exercise price, beginning balance (in dollars per share) | $ 3.33 | $ 3.66 | $ 4 |
Weighted average exercise price, granted (in dollars per share) | 2.22 | 2.64 | 2.40 |
Weighted average exercise price, exercised (in dollars per share) | 1.46 | 1.73 | 1.71 |
Weighted average exercise price, canceled (in dollars per share) | 3.38 | 4.08 | 4.15 |
Weighted average exercise price, ending balance (in dollars per share) | $ 3.18 | $ 3.33 | $ 3.66 |
Share-Based Compensation (Det70
Share-Based Compensation (Details 1) shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Outstanding stock options | |
Options outstanding, number of options outstanding | shares | 16,017 |
Options exercisable, number of options exercisable | shares | 10,026 |
Stock Options | $ 0.00 — $ 1.50 | |
Outstanding stock options | |
Exercise price range, lower range limit (in dollars per share) | $ 0 |
Exercise price range, upper range limit (in dollars per share) | $ 1.50 |
Options outstanding, number of options outstanding | shares | 0 |
Options outstanding, weighted average remaining contractual life | 0 years |
Options outstanding, weighted average exercise price (in dollars per share) | $ 0 |
Options exercisable, number of options exercisable | shares | 0 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 0 |
Stock Options | $ 1.51 — $ 3.00 | |
Outstanding stock options | |
Exercise price range, lower range limit (in dollars per share) | 1.51 |
Exercise price range, upper range limit (in dollars per share) | $ 3 |
Options outstanding, number of options outstanding | shares | 11,912 |
Options outstanding, weighted average remaining contractual life | 7 years 10 months 24 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 2.25 |
Options exercisable, number of options exercisable | shares | 6,344 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 2.27 |
Stock Options | $ 3.01 — $ 4.50 | |
Outstanding stock options | |
Exercise price range, lower range limit (in dollars per share) | 3.01 |
Exercise price range, upper range limit (in dollars per share) | $ 4.50 |
Options outstanding, number of options outstanding | shares | 1,964 |
Options outstanding, weighted average remaining contractual life | 5 years 9 months 18 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 3.72 |
Options exercisable, number of options exercisable | shares | 1,541 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 3.75 |
Stock Options | $ 4.51 — $ 6.00 | |
Outstanding stock options | |
Exercise price range, lower range limit (in dollars per share) | 4.51 |
Exercise price range, upper range limit (in dollars per share) | $ 6 |
Options outstanding, number of options outstanding | shares | 1,006 |
Options outstanding, weighted average remaining contractual life | 3 years 6 months |
Options outstanding, weighted average exercise price (in dollars per share) | $ 5.12 |
Options exercisable, number of options exercisable | shares | 1,006 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 5.12 |
Stock Options | $ 6.01 — $ 7.50 | |
Outstanding stock options | |
Exercise price range, lower range limit (in dollars per share) | 6.01 |
Exercise price range, upper range limit (in dollars per share) | $ 7.50 |
Options outstanding, number of options outstanding | shares | 380 |
Options outstanding, weighted average remaining contractual life | 1 year 4 months 24 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 6.37 |
Options exercisable, number of options exercisable | shares | 380 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 6.37 |
Stock Options | $ 7.51 — $ 15.00 | |
Outstanding stock options | |
Exercise price range, lower range limit (in dollars per share) | 7.51 |
Exercise price range, upper range limit (in dollars per share) | $ 15 |
Options outstanding, number of options outstanding | shares | 755 |
Options outstanding, weighted average remaining contractual life | 1 year 3 months 18 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 12.27 |
Options exercisable, number of options exercisable | shares | 755 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 12.27 |
Share-Based Compensation (Det71
Share-Based Compensation (Details 2) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Grant date fair value of option | |||
Expected volatility | 58.30% | 54.53% | 66.05% |
Expected term, years | 5 years 11 months 27 days | 5 years 11 months 27 days | 5 years 11 months 27 days |
Risk-free interest | 1.76% | 1.80% | 1.83% |
Expected dividends | 0.00% | 0.00% | 0.00% |
Share-Based Compensation (Det72
Share-Based Compensation (Details 3) - shares shares in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
RSUs with service-based vesting conditions | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units outstanding | 6,673 | 6,265 | 6,820 |
Share-Based Compensation (Det73
Share-Based Compensation (Details 4) - Restricted stock units - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted stock units (RSUs) outstanding | |||
Number of units, beginning balance | 6,265 | 6,820 | 5,286 |
Number of units, granted | 5,024 | 4,156 | 5,542 |
Number of units, vested | (3,753) | (3,069) | (2,385) |
Number of units, forfeitures | (863) | (1,642) | (1,623) |
Number of units, ending balance | 6,673 | 6,265 | 6,820 |
Weighted Average Fair Value | |||
Weighted average fair value, beginning balance (in dollars per share) | $ 2.70 | $ 2.30 | $ 2.24 |
Weighted average fair value, granted (in dollars per share) | 1.76 | 3 | 2.33 |
Weighted average fair value, vested (in dollars per share) | 2.49 | 2.31 | 2.28 |
Weighted average fair value, canceled (in dollars per share) | 2.29 | 2.54 | 2.22 |
Weighted average fair value, ending balance (in dollars per share) | $ 2.16 | $ 2.70 | $ 2.30 |
Share-Based Compensation (Det74
Share-Based Compensation (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of share-based compensation expense | |||
Share-based compensation | $ 13,459 | $ 12,338 | $ 10,491 |
Cost of services | |||
Components of share-based compensation expense | |||
Share-based compensation | 1,493 | 2,047 | 1,956 |
General and administrative expense | |||
Components of share-based compensation expense | |||
Share-based compensation | 7,070 | 5,398 | 4,741 |
Sales and marketing expense | |||
Components of share-based compensation expense | |||
Share-based compensation | 2,792 | 2,657 | 2,317 |
Research and development expense | |||
Components of share-based compensation expense | |||
Share-based compensation | 2,104 | 2,236 | 1,477 |
Stock options | |||
Components of share-based compensation expense | |||
Share-based compensation | 3,742 | 4,131 | 4,704 |
Restricted stock units | |||
Components of share-based compensation expense | |||
Share-based compensation | 9,121 | 7,620 | 5,609 |
ESPP | |||
Components of share-based compensation expense | |||
Share-based compensation | $ 596 | $ 587 | $ 178 |
Share-Based Compensation (Det75
Share-Based Compensation (Details Textual) $ / shares in Units, shares in Thousands, $ in Thousands | Sep. 18, 2015 | Dec. 31, 2016USD ($)Participant$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Exercise price of incentive stock options granted under the Plan may not be granted | 100.00% | |||
Weighted average period of unvested stock compensation | 2 years 2 months 20 days | |||
Unrecognized share-based compensation expense total | $ 19,354 | |||
Number of shares issued to program participants | shares | 3,589 | 3,649 | 4,215 | |
Stock for Compensation Program | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock for compensation program, percentage of compensation, election option one | 0.00% | |||
Stock for compensation program, percentage of compensation, election option two | 25.00% | |||
Stock for compensation program, percentage of compensation, election option three | 50.00% | 50.00% | ||
Stock for compensation program, percentage of compensation, election option four | 75.00% | |||
Stock for compensation program, percentage of compensation, election option five | 100.00% | |||
Stock Options | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ / shares | $ 1.22 | $ 1.38 | $ 1.45 | |
Total intrinsic value of the options exercised | $ 411 | $ 621 | $ 449 | |
Aggregate intrinsic value of options outstanding | $ 3,457 | |||
Weighted average remaining contractual options period exercisable | 5 years 6 months | |||
Unrecognized share-based compensation expense related to stock options | $ 7,110 | |||
Weighted average period of unvested stock compensation | 2 years 4 months 18 days | |||
Restricted Stock Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Weighted average period of unvested stock compensation | 2 years 1 month 15 days | |||
Weighted-average grant-date fair value of RSUs granted | $ / shares | $ 1.76 | $ 3 | $ 2.33 | |
Total intrinsic value of the units vested | $ 9,363 | $ 7,088 | $ 5,469 | |
Aggregate intrinsic value of restricted stock units outstanding | 16,816 | |||
Unrecognized share-based compensation expense related to restricted stock awards | $ 12,244 | |||
Chief Executive Officer And Direct Reports | Stock for Compensation Program | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock for compensation program, number of participants | Participant | 3 | |||
Number of shares issued to program participants | shares | 335 | |||
Stock issued during period, share-based compensation | $ 572 |
Related Party Transactions (Det
Related Party Transactions (Details) | Jun. 14, 2007 | Jul. 31, 2006$ / sharesshares | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | |||||
Preferred Stock conversion ratio | 1 | ||||
Ownership percentage | 28.00% | 31.00% | 30.00% | ||
Maximum | |||||
Related Party Transaction [Line Items] | |||||
Percentage of revenue derived from related parties | 1.00% | ||||
Series B Preferred Stock | |||||
Related Party Transaction [Line Items] | |||||
Aggregate issuance of Series B Preferred Stock (in shares) | shares | 39,869,960 | ||||
Aggregate issuance of Series B Preferred Stock, purchase price (in dollars per share) | $ / shares | $ 3.26 | ||||
Basis of conversion of Series B Convertible Preferred Stock into shares of common stock | on a 1-for-1 share basis |
Leases and Purchase Commitmen77
Leases and Purchase Commitments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Future minimum lease payments over remaining lease periods | |
2,017 | $ 3,265 |
2,018 | 2,905 |
2,019 | 1,350 |
2,020 | 505 |
2,021 | 359 |
Thereafter | 54 |
Total minimum payments | $ 8,438 |
Leases and Purchase Commitmen78
Leases and Purchase Commitments (Details 1) $ in Thousands | Dec. 31, 2016USD ($) |
Minimum purchase commitments | |
2,017 | $ 26,237 |
2,018 | 13,685 |
2,019 | 3,486 |
2,020 | 133 |
2,021 | 9 |
Thereafter | 0 |
Total minimum payments | $ 43,550 |
Leases and Purchase Commitmen79
Leases and Purchase Commitments (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases and Commitments (Textual) [Abstract] | |||
Rent and operating expense relating to operating lease agreements and bandwidth and co-location agreements | $ 59,415,000 | $ 61,571,000 | $ 58,228,000 |
Outstanding balance for capital leases | 0 | 1,902,000 | |
Interest expense related to capital leases | $ 339,000 | $ 14,000 | $ 32,000 |
Concentrations (Details)
Concentrations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | [1] | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)countrycustomer | Dec. 31, 2015USD ($)countrycustomer | Dec. 31, 2014USD ($)countrycustomer | |
Concentration Risk [Line Items] | ||||||||||||
Number of customers who represented 10% or more of total revenue | customer | 0 | 0 | 0 | |||||||||
Revenues | $ 43,778 | $ 39,473 | $ 43,560 | $ 41,422 | $ 42,739 | $ 42,049 | $ 43,795 | $ 42,329 | $ 168,234 | $ 170,912 | $ 162,259 | |
Geographic concentration | Total revenue | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Number of countries accounting for 10% or more of revenue | country | 2 | 2 | 2 | |||||||||
United States | Geographic concentration | Total revenue | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Revenues | $ 94,105 | $ 96,469 | $ 93,678 | |||||||||
[1] | During the quarter ended June 30, 2016, we recorded a $54,000 provision for litigation related to the Akamai settlement and license agreement. For the Three Months Ended March 31,2015 June 30,2015 Sept. 30,2015 Dec. 31,2015Revenues$42,329 $43,795 $42,049 $42,739Gross profit $16,519 $18,148 $15,911 $17,540Loss from continuing operations$(5,683) $(6,362) $(7,762) $(4,145)Net loss$(5,683) $(6,362) $(7,762) $(4,145)Basic and diluted net loss per share from continuing operations$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted net loss per share$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted weighted average common shares outstanding98,636 99,841 100,552 101,391 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loss from continuing operations before income taxes: | |||
United States | $ (74,130) | $ (24,105) | $ (25,025) |
Foreign | 808 | 420 | 372 |
Loss from continuing operations before income taxes | $ (73,322) | $ (23,685) | $ (24,653) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 0 | $ 0 | $ (143) |
State | 103 | 103 | 26 |
Foreign | 330 | 210 | 680 |
Total current | 433 | 313 | 563 |
Deferred: | |||
Federal | 15 | 17 | 15 |
State | 0 | 0 | 0 |
Foreign | 155 | (63) | (375) |
Total deferred | 170 | (46) | (360) |
Total provision | $ 603 | $ 267 | $ 203 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
U.S. federal statutory tax rate | $ (25,663) | $ (8,290) | $ (8,629) |
Valuation allowance | 23,184 | 3,821 | 7,424 |
Foreign income taxes | 338 | 86 | (26) |
State income taxes | 100 | 92 | 26 |
Non-deductible expenses | 323 | 552 | 1,335 |
Uncertain tax positions | (136) | (86) | 201 |
Share-based compensation | 2,439 | 4,064 | 0 |
Other | 18 | 28 | (128) |
Total provision | $ 603 | $ 267 | $ 203 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
U.S. federal statutory tax rate | 35.00% | 35.00% | 35.00% |
Valuation allowance rate | (31.60%) | (16.00%) | (30.00%) |
Foreign income taxes rate | (0.50%) | (0.50%) | (0.00%) |
State income taxes rate | (0.20%) | (0.50%) | (0.00%) |
Non-deductible expenses rate | (0.40%) | (2.00%) | (6.00%) |
Uncertain tax positions rate | 0.20% | (0.00%) | (1.00%) |
Share-based compensation rate | (3.30%) | (17.00%) | (0.00%) |
Other rate | (0.00%) | (0.00%) | 1.00% |
Provision for income taxes rate | (0.80%) | (1.00%) | (1.00%) |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Share-based compensation | $ 10,463 | $ 11,090 |
Net operating loss and tax credit carry-forwards | 52,798 | 43,600 |
Legal settlement | 17,151 | 0 |
Deferred revenue | 878 | 1,306 |
Accounts receivable reserves | 235 | 518 |
Fixed assets | 3,317 | 3,172 |
Other | 771 | 1,041 |
Total deferred tax assets | 85,613 | 60,727 |
Deferred tax liabilities: | ||
Prepaid expenses | (112) | (128) |
Other | (323) | (154) |
Total deferred tax liabilities | (435) | (282) |
Valuation allowance | (84,226) | (59,241) |
Net deferred tax assets | $ 952 | $ 1,204 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 1,968 | $ 2,043 |
Additions for tax positions related to current year | 0 | 0 |
Additions for tax positions related to prior years | 0 | 0 |
Settlements | 0 | (26) |
Adjustment related to foreign currency translation | (7) | (18) |
Reductions related to the lapse of applicable statute of limitations | (131) | (31) |
Reduction for tax positions of prior years | 0 | 0 |
Ending balance | $ 1,830 | $ 1,968 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance of deferred tax assets | $ 1,600,000 | ||
Unrecognized tax benefits | $ 1,830,000 | 1,968,000 | $ 2,043,000 |
Unrecognized tax benefits that would impact effective tax rate | 233,000 | ||
Interest and penalties accrual related to unrecognized tax benefits | 16,000 | ||
Decrease in unrecognized tax benefits | 7,000 | ||
Undistributed earnings | 1,600,000 | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 152,100,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 98,300,000 | ||
State tax credit carryforward | 0 | ||
Unrecorded Tax Benefits | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 13,860,000 | $ 13,660,000 |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
401(k) Plan (Textual) [Abstract] | |||
Percentage of compensation for dollar-for-dollar match on eligible employee's deferral | 3.00% | ||
Percentage of match on next 2% of employee deferrals | 50.00% | ||
Percentage of employee compensation for 50% match on employees deferral | 2.00% | ||
Matching contributions | $ 1,345 | $ 1,434 | $ 1,225 |
Segment Reporting and Geograp88
Segment Reporting and Geographic Information (Details Textual) | 12 Months Ended |
Dec. 31, 2016SegmentLocation | |
Segment Reporting [Abstract] | |
Number of industry segment | Segment | 1 |
Number of geographic areas | Location | 3 |
Segment Reporting and Geograp89
Segment Reporting and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | [1] | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue earned by geographic area | ||||||||||||
Revenues | $ 43,778 | $ 39,473 | $ 43,560 | $ 41,422 | $ 42,739 | $ 42,049 | $ 43,795 | $ 42,329 | $ 168,234 | $ 170,912 | $ 162,259 | |
Americas | ||||||||||||
Revenue earned by geographic area | ||||||||||||
Revenues | 100,421 | 102,505 | 101,302 | |||||||||
EMEA | ||||||||||||
Revenue earned by geographic area | ||||||||||||
Revenues | 31,326 | 32,505 | 33,630 | |||||||||
Asia Pacific | ||||||||||||
Revenue earned by geographic area | ||||||||||||
Revenues | $ 36,487 | $ 35,902 | $ 27,327 | |||||||||
Sales Revenue, Net | Geographic Concentration Risk | ||||||||||||
Revenue earned by geographic area | ||||||||||||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | |||||||||
Sales Revenue, Net | Geographic Concentration Risk | Americas | ||||||||||||
Revenue earned by geographic area | ||||||||||||
Concentration risk, percentage | 59.70% | 60.00% | 62.50% | |||||||||
Sales Revenue, Net | Geographic Concentration Risk | EMEA | ||||||||||||
Revenue earned by geographic area | ||||||||||||
Concentration risk, percentage | 18.60% | 19.00% | 20.70% | |||||||||
Sales Revenue, Net | Geographic Concentration Risk | Asia Pacific | ||||||||||||
Revenue earned by geographic area | ||||||||||||
Concentration risk, percentage | 21.70% | 21.00% | 16.80% | |||||||||
[1] | During the quarter ended June 30, 2016, we recorded a $54,000 provision for litigation related to the Akamai settlement and license agreement. For the Three Months Ended March 31,2015 June 30,2015 Sept. 30,2015 Dec. 31,2015Revenues$42,329 $43,795 $42,049 $42,739Gross profit $16,519 $18,148 $15,911 $17,540Loss from continuing operations$(5,683) $(6,362) $(7,762) $(4,145)Net loss$(5,683) $(6,362) $(7,762) $(4,145)Basic and diluted net loss per share from continuing operations$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted net loss per share$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted weighted average common shares outstanding98,636 99,841 100,552 101,391 |
Segment Reporting and Geograp90
Segment Reporting and Geographic Information (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Long-lived assets by geographical area | |||
Long-lived Assets | $ 30,352 | $ 36,158 | $ 33,707 |
Americas | |||
Long-lived assets by geographical area | |||
Long-lived Assets | 18,665 | 19,692 | 22,505 |
International | |||
Long-lived assets by geographical area | |||
Long-lived Assets | $ 11,687 | $ 16,466 | $ 11,202 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | ||
Assets: | ||||
Total assets measured at fair value | $ 44,794 | $ 29,087 | ||
Quoted Prices In Active Markets for Identical Assets (Level 1) | ||||
Assets: | ||||
Total assets measured at fair value | 301 | 725 | ||
Significant Other Observable Inputs (Level 2) | ||||
Assets: | ||||
Total assets measured at fair value | 44,493 | 28,362 | ||
Significant Unobservable Inputs (Level 3) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | 0 | ||
Money market funds | ||||
Assets: | ||||
Total assets measured at fair value | 301 | [1] | 725 | [2] |
Money market funds | Quoted Prices In Active Markets for Identical Assets (Level 1) | ||||
Assets: | ||||
Total assets measured at fair value | 301 | [1] | 725 | [2] |
Money market funds | Significant Other Observable Inputs (Level 2) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | [1] | 0 | [2] |
Money market funds | Significant Unobservable Inputs (Level 3) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | [1] | 0 | [2] |
Certificate of deposit | ||||
Assets: | ||||
Total assets measured at fair value | 40 | 12,464 | [3] | |
Certificate of deposit | Quoted Prices In Active Markets for Identical Assets (Level 1) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | 0 | [3] | |
Certificate of deposit | Significant Other Observable Inputs (Level 2) | ||||
Assets: | ||||
Total assets measured at fair value | 40 | 12,464 | [3] | |
Certificate of deposit | Significant Unobservable Inputs (Level 3) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | 0 | [3] | |
Commercial paper | ||||
Assets: | ||||
Total assets measured at fair value | 8,222 | |||
Commercial paper | Quoted Prices In Active Markets for Identical Assets (Level 1) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | |||
Commercial paper | Significant Other Observable Inputs (Level 2) | ||||
Assets: | ||||
Total assets measured at fair value | 8,222 | |||
Commercial paper | Significant Unobservable Inputs (Level 3) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | |||
Corporate notes and bonds | ||||
Assets: | ||||
Total assets measured at fair value | 36,231 | [4] | 15,898 | [3] |
Corporate notes and bonds | Quoted Prices In Active Markets for Identical Assets (Level 1) | ||||
Assets: | ||||
Total assets measured at fair value | 0 | [4] | 0 | [3] |
Corporate notes and bonds | Significant Other Observable Inputs (Level 2) | ||||
Assets: | ||||
Total assets measured at fair value | 36,231 | [4] | 15,898 | [3] |
Corporate notes and bonds | Significant Unobservable Inputs (Level 3) | ||||
Assets: | ||||
Total assets measured at fair value | $ 0 | [4] | $ 0 | [3] |
[1] | Classified in cash and cash equivalents | |||
[2] | Classified in cash and cash equivalents | |||
[3] | Classified in marketable securities | |||
[4] | Classified in marketable securities |
Fair Value Measurements (Deta92
Fair Value Measurements (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments fair value | $ 44,794 | $ 29,087 |
Cost method investments | $ 44,453 | 28,322 |
Cash equivalent maturity date | 3 months | |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments fair value | $ 0 | 0 |
Convertible Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gain related from beneficial conversion feature | 275 | |
Cost method investments | 1,275 | $ 1,275 |
Convertible Debt Securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments fair value | $ 1,000 |
Quarterly Financial Results (93
Quarterly Financial Results (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Aug. 01, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly results of operations | |||||||||||||
Revenues | $ 43,778 | $ 39,473 | $ 43,560 | [1] | $ 41,422 | $ 42,739 | $ 42,049 | $ 43,795 | $ 42,329 | $ 168,234 | $ 170,912 | $ 162,259 | |
Gross profit | 19,662 | 16,238 | 18,800 | [1] | 16,644 | 17,540 | 15,911 | 18,148 | 16,519 | 71,345 | 68,119 | 63,410 | |
Net loss from continuing operations | (3,919) | (6,122) | (57,938) | [1] | (5,946) | (4,145) | (7,762) | (6,362) | (5,683) | (73,925) | (23,952) | (24,856) | |
Net loss | $ (3,919) | $ (6,122) | $ (57,938) | [1] | $ (5,946) | $ (4,145) | $ (7,762) | $ (6,362) | $ (5,683) | $ (73,925) | $ (23,952) | $ (24,591) | |
Basic and diluted net loss per share, Continuing operations (in dollars per share) | $ (0.04) | $ (0.06) | $ (0.56) | [1] | $ (0.06) | $ (0.04) | $ (0.08) | $ (0.06) | $ (0.06) | $ (0.71) | $ (0.24) | $ (0.25) | |
Total Basic and diluted net loss per share (in dollars per share) | $ (0.04) | $ (0.06) | $ (0.56) | [1] | $ (0.06) | $ (0.04) | $ (0.08) | $ (0.06) | $ (0.06) | $ (0.71) | $ (0.24) | $ (0.25) | |
Basic and diluted weighted average outstanding shares of common stock (in shares) | 105,942 | 104,860 | 103,904 | [1] | 102,693 | 101,391 | 100,552 | 99,841 | 98,636 | 104,350 | 100,105 | 98,365 | |
Loss Contingencies [Line Items] | |||||||||||||
Accrual of provision for litigation | $ 54,000 | $ 0 | $ 0 | ||||||||||
Settled Litigation | Akamai '703 Litigation | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Accrual of provision for litigation | $ 54,000 | $ 54,000 | |||||||||||
[1] | During the quarter ended June 30, 2016, we recorded a $54,000 provision for litigation related to the Akamai settlement and license agreement. For the Three Months Ended March 31,2015 June 30,2015 Sept. 30,2015 Dec. 31,2015Revenues$42,329 $43,795 $42,049 $42,739Gross profit $16,519 $18,148 $15,911 $17,540Loss from continuing operations$(5,683) $(6,362) $(7,762) $(4,145)Net loss$(5,683) $(6,362) $(7,762) $(4,145)Basic and diluted net loss per share from continuing operations$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted net loss per share$(0.06) $(0.06) $(0.08) $(0.04)Basic and diluted weighted average common shares outstanding98,636 99,841 100,552 101,391 |
Schedule II - Valuation and Q94
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reserves for accounts receivable | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 1,804 | $ 1,834 | $ 2,010 |
Additions, Charged to Costs and Expenses | 137 | 1,037 | 408 |
Additions, Charged Against Revenue | 234 | (81) | 230 |
Deductions, Write-Offs Net of Recoveries | 864 | 1,148 | 354 |
Balance at End of Period | 843 | 1,804 | 1,834 |
Deferred tax asset valuation allowance | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 59,241 | 54,654 | 47,166 |
Additions, Charged to Costs and Expenses | 24,985 | 4,587 | 7,488 |
Additions, Charged Against Revenue | 0 | 0 | 0 |
Deductions, Write-Offs Net of Recoveries | 0 | 0 | 0 |
Balance at End of Period | $ 84,226 | $ 59,241 | $ 54,654 |