Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 05, 2014 | |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'PROS HOLDINGS, INC. | ' |
Entity Central Index Key | '0001392972 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 28,983,698 |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $30,034 | $44,688 |
Accounts and unbilled receivables, net of allowance of $720 and $760, respectively | 62,047 | 46,566 |
Prepaid and other current assets | 10,866 | 6,157 |
Restricted Cash and Cash Equivalents, Current | 2,501 | 39,718 |
Total current assets | 105,448 | 137,129 |
Restricted cash | 100 | 100 |
Property and equipment, net | 16,761 | 15,587 |
Other long term assets, net | 1,334 | 1,251 |
Total assets | 181,727 | 179,828 |
Current liabilities: | ' | ' |
Accounts payable | 12,249 | 7,839 |
Accrued liabilities | 8,653 | 5,210 |
Accrued payroll and other employee benefits | 10,398 | 9,679 |
Deferred revenue | 46,347 | 42,274 |
Total current liabilities | 77,647 | 65,002 |
Long-term deferred revenue | 3,437 | 2,977 |
Other Liabilities, Noncurrent | 3,316 | 546 |
Total liabilities | 84,400 | 68,525 |
Commitments and contingencies (Note 7) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.001 par value, 5,000,000 shares authorized none issued | 0 | 0 |
Common stock, $0.001 par value, 75,000,000 shares authorized; 33,385,511 and 32,606,228 shares issued, respectively; 28,967,926 and 28,188,643 shares outstanding, respectively | 34 | 33 |
Additional paid-in capital | 106,044 | 106,880 |
Treasury stock, 4,417,585 common shares, at cost | -13,938 | -13,938 |
Retained earnings | 2,879 | 18,328 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 157 | 0 |
Stockholders' Equity Attributable to Noncontrolling Interest | 2,151 | 0 |
Total stockholders' equity | 97,327 | 111,303 |
Total liabilities and stockholders' equity | 181,727 | 179,828 |
Intangible Assets, Net (Excluding Goodwill) | 24,227 | 8,232 |
Goodwill | 23,352 | 7,024 |
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | $10,505 | $10,505 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for bad debts | $816 | $1,060 |
Preferred stock - par value | $0.00 | $0.00 |
Preferred stock - shares authorized | 5,000,000 | 5,000,000 |
Preferred stock - shares issued | 0 | 0 |
Common stock - par value | $0.00 | $0.00 |
Common stock - shares authorized | 75,000,000 | 75,000,000 |
Common stock - shares issued | 33,385,511 | 32,606,228 |
Common stock - shares outstanding | 28,967,926 | 28,188,643 |
Treasury stock - shares | 4,417,585 | 4,417,585 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenue: | ' | ' | ' | ' |
License and implementation | $12,332 | $9,725 | $24,195 | $19,114 |
Sales Revenue, Services, Net | 13,079 | 12,509 | 25,195 | 23,744 |
Subscription and Circulation Revenue | 5,813 | 1,936 | 10,126 | 3,904 |
Total license, service and maintenance revenue | 31,224 | 24,170 | 59,516 | 46,762 |
Maintenance and support | 13,144 | 11,357 | 25,765 | 22,391 |
Total revenue | 44,368 | 35,527 | 85,281 | 69,153 |
Cost of revenue: | ' | ' | ' | ' |
License and implementation | 51 | 192 | 106 | 233 |
Maintenance and support | 2,361 | 1,978 | 4,937 | 4,061 |
Total cost of revenue | 10,167 | 8,227 | 20,620 | 16,160 |
Cost of Goods Sold, Subscription | 1,592 | 389 | 2,517 | 885 |
Cost of license, service and subscription | 11,810 | 8,808 | 23,243 | 17,278 |
Cost of Revenue | 14,171 | 10,786 | 28,180 | 21,339 |
Gross profit | 30,197 | 24,741 | 57,101 | 47,814 |
Operating Expenses | ' | ' | ' | ' |
Selling, marketing, general and administrative | 24,267 | 15,935 | 46,722 | 30,223 |
Research and development | 11,092 | 8,026 | 22,651 | 16,121 |
Business Combination, Acquisition Related Costs | 579 | 0 | 1,969 | 0 |
Tangible Asset Impairment Charges | 2,130 | 0 | 2,130 | 0 |
Income from operations | -7,871 | 780 | -16,371 | 1,470 |
Other income: | ' | ' | ' | ' |
Other Nonoperating Income (Expense) | -571 | -129 | -1,543 | -234 |
Income before income tax provision | -8,442 | 651 | -17,914 | 1,236 |
Income tax provision | -1,240 | 71 | -1,800 | -1,078 |
Net income | -6,996 | 580 | -15,451 | 2,314 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | -7,202 | 580 | -16,114 | 2,314 |
Net Income (Loss) Attributable to Noncontrolling Interest | -206 | 0 | -663 | 0 |
Business Acquisition, Pro Forma Net Income (Loss) | -6,996 | -990 | -15,583 | -999 |
Net earnings per share: | ' | ' | ' | ' |
Basic | ($0.24) | $0.02 | ($0.54) | $0.08 |
Diluted | ($0.24) | $0.02 | ($0.54) | $0.08 |
Weighted average number of shares: | ' | ' | ' | ' |
Basic | 28,958,233 | 28,006,517 | 28,813,008 | 27,881,957 |
Diluted | 28,958,233 | 29,958,580 | 28,813,008 | 29,710,202 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 203 | 177 | 0 | ' |
Other comprehensive income | 203 | 0 | 177 | 2,314 |
Comprehensive (Income) Loss, Net of Tax, Attributable to Noncontrolling Interest | -186 | 0 | -643 | 0 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | -6,999 | 580 | -15,937 | 2,314 |
Comprehensive income | ($6,813) | $580 | ($15,294) | $2,314 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating activities: | ' | ' |
Net income | ($15,451) | $2,314 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | -16,114 | 2,314 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation, Depletion and Amortization | 5,416 | 1,999 |
Share-based compensation | 10,396 | 7,559 |
Tax Benefit from Stock Options Exercised | 0 | -10 |
Provision for doubtful accounts | -244 | -70 |
Tangible Asset Impairment Charges | 2,130 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts and unbilled receivables | -4,771 | 1,317 |
Prepaid expenses and other assets | -3,780 | -821 |
Accounts payable | 122 | 715 |
Accrued liabilities | 371 | 391 |
Accrued payroll and other employee benefits | -1,753 | -2,841 |
Deferred revenue | -859 | -2,619 |
Net cash provided by operating activities | -9,086 | 7,934 |
Investing activities: | ' | ' |
Purchases of property and equipment | -4,520 | -2,172 |
Payments to Acquire Businesses, Net of Cash Acquired | 22,048 | 0 |
Internal-use software development costs capitalized | -1,623 | -1,534 |
Increase (Decrease) in Restricted Cash | 37,218 | 0 |
Net cash used in investing activities | 9,027 | -3,706 |
Financing activities: | ' | ' |
Exercise of stock options | 1,091 | 2,771 |
Tax withholding related to net share settlement of restricted stock units | -12,319 | -2,330 |
Noncontrolling Interest, Increase from Business Combination | -3,410 | 0 |
Net cash (used in) provided by financing activities | -14,638 | 441 |
Effect of Exchange Rate on Cash and Cash Equivalents | 43 | 0 |
Net increase in cash and cash equivalents | -14,654 | 4,669 |
Cash and cash equivalents: | ' | ' |
Beginning of period | 44,688 | 83,558 |
End of period | $30,034 | $88,227 |
Organization_and_Nature_of_Ope
Organization and Nature of Operations | 6 Months Ended |
Jun. 30, 2014 | |
Organization and Nature of Operations [Abstract] | ' |
Organization and nature of operations | ' |
Organization and Nature of Operations | |
PROS Holdings, Inc., a Delaware corporation, through its operating subsidiaries ("PROS" or the “Company”), provides big data software applications designed to help companies outperform in their markets by using big data to sell more effectively. The Company applies data science to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. The Company offers big data software applications to analyze, execute, and optimize sales, pricing, quoting, rebates and revenue management. The Company also provides professional services to implement its software applications as well as business consulting. In addition, the Company provides product maintenance and support to its customers, including unspecified upgrades, maintenance releases and bug fixes during the term of the support period on a when-and-if-available basis. The Company provides its big data software applications to enterprises across a range of industries, including manufacturing, distribution, services and travel. | |
In December 2013, the Company acquired SignalDemand, Inc. ("SignalDemand"), an optimization software company headquartered in San Francisco, California, with approximately 40 professionals, for total cash consideration of $13.5 million. This acquisition broadened the Company's offerings to companies in resource-based and commodity-driven industries, with products designed to help our clients better serve their customers in volatile markets with greater confidence and agility. Through SignalDemand's SaaS-based solutions and PROS big data software applications, PROS processes thousands of variables to deliver real-time recommendations, helping companies make price and mix decisions across products, customers and channels. | |
On January 8, 2014, the Company acquired approximately 81.7% of the common stock of Cameleon Software SA ("Cameleon"), a publicly traded French société anonyme headquartered in Toulouse, France, in an all-cash tender offer for approximately $29.1 million. The Company has continued to purchase shares of Cameleon in the open market. Since the initial tender offer the Company has acquired an additional 9.8% of Cameleon's common stock in the market for approximately $3.4 million. As of June 30, 2014, the Company owned 91.5% of the common stock of Cameleon. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies (Notes) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Accounting Policies [Abstract] | ' | ||||||
Significant Accounting Policies [Text Block] | ' | ||||||
2. Summary of Significant Accounting Policies | |||||||
The accompanying unaudited condensed consolidated financial statements reflect the application of significant accounting policies as described below and elsewhere in these notes to the condensed consolidated financial statements. | |||||||
Basis of presentation | |||||||
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of June 30, 2014, the results of operations for the three and six months ended June 30, 2014 and cash flows for the six months ended June 30, 2014. | |||||||
Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (“Annual Report”) filed with the SEC. The condensed consolidated balance sheet as of December 31, 2013 was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. | |||||||
Certain prior year amounts have been reclassified to conform to the current period financial statement presentation. These changes and reclassifications did not impact net or comprehensive income. | |||||||
Basis of consolidation | |||||||
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |||||||
Dollar amounts | |||||||
The dollar amounts presented in the tabular data within these footnote disclosures are stated in thousands of dollars, except per unit amounts, or as noted within the context of each footnote disclosure. | |||||||
Use of estimates | |||||||
The Company’s management prepares the unaudited condensed consolidated financial statements in accordance with GAAP. The Company makes estimates and assumptions in the preparation of its unaudited condensed consolidated financial statements, and its estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The complexity and judgment required in the Company’s estimation process, as well as issues related to the assumptions, risks and uncertainties inherent in the application of the percentage-of-completion method of accounting, affect the amounts of revenue, expenses, unbilled receivables and deferred revenue. Estimates are also used for, but not limited to, receivables, allowance for doubtful accounts, useful lives of assets, depreciation, income taxes and deferred tax asset valuation, valuation of stock options, other current liabilities and accrued liabilities. Numerous internal and external factors can affect estimates. The critical accounting policies related to the estimates and judgments are discussed in the Company’s Annual Report under management’s discussion and analysis of financial condition and results of operations. There have been no significant changes to the Company’s critical accounting policies as described in the Company’s Annual Report. | |||||||
Revenue recognition | |||||||
The Company derives its revenue from the licensing and implementation of software solutions and associated software maintenance and support. To a lesser extent, the Company’s revenue includes nonsoftware related cloud-based services. The Company’s arrangements with customers typically include: (a) license fees for the use of our solutions either in perpetuity or over a specified term, (b) professional services fees for configuration, implementation and training services, and (c) maintenance and support fees related to technical support and software updates. If there is significant uncertainty about contract completion or collectability is not reasonably assured, revenue is deferred until the uncertainty is sufficiently resolved or collectability is reasonably assured. In addition, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and fees are fixed or determinable. | |||||||
License revenue includes perpetual license revenue recognized upon software delivery and an allocation of revenue from solution sales that are recognized using the percentage of completion method. The allocation represents management’s estimate of the relative fair value of the perpetual licenses included in the solution sale arrangement. | |||||||
Subscription revenues include revenue from our SaaS, cloud-based and term license offerings. | |||||||
Services revenues consist of fees associated with the implementation and configuration of our software and subscription contracts, on-site support, training and other consulting services. | |||||||
Maintenance and support revenue includes post-implementation customer support and the right to unspecified software updates and enhancements on a when and if available basis. The Company generally invoices for maintenance and support services on a monthly, quarterly or on an annual basis during the maintenance and support period. The Company recognizes revenue from maintenance arrangements ratably over the period in which the services are provided. | |||||||
In determining whether professional services revenue should be accounted for separately from license revenue, the Company evaluates whether the professional services are considered essential to the functionality of the software using factors such as: the nature of its software products; whether they are ready for use by the customer upon receipt; the nature of professional services; the availability of services from other vendors; whether the timing of payments for license revenue coincides with performance of services; and whether milestones or acceptance criteria exist that affect the realizability of the software license fee. | |||||||
If the Company determines that professional services revenue should not be accounted for separately from license revenue, the license revenue is recognized together with the professional services revenue using the percentage-of-completion method or completed contract method. The completed contract method is also used for contracts where there is a risk over final acceptance by the customer or for contracts that are short-term in nature. | |||||||
The percentage-of-completion computation is measured by the percentage of man-days incurred during the reporting period as compared to the estimated total man-days necessary for each contract for implementation of the software solutions. The Company measures performance under the percentage-of-completion method using the total man-day method based on current estimates of man-days to complete the project. The Company believes that for each such project, man-days expended in proportion to total estimated man-days at completion represents the most reliable and meaningful measure for determining a project’s progress toward completion. Under our fixed-fee arrangements, should a loss be anticipated on a contract, the full amount is recorded when the loss is determinable. | |||||||
The Company also licenses software solutions under term license agreements that typically include maintenance during the license term. When maintenance is included for the entire term of the license, there is no renewal rate and the Company has not established vendor specific objective evidence (“VSOE”) of fair value for the maintenance on term licenses. For term license agreements, revenue and the associated costs are deferred until the delivery of the solution and recognized ratably over the remaining license term. | |||||||
Our cloud-based services are designed to be options for our customers to deploy our solutions without any significant investment in hardware as we integrate our software in a cloud-based IT environments that we deploy, support and manage on the customers’ behalf. | |||||||
For arrangements that include cloud-based services, the Company allocates the arrangement consideration between the service and other elements and recognizes the cloud-based services fee ratably beginning on the date the customer commences use of the Company's services and continuing through the end of the customer term. | |||||||
The Company’s customer arrangements typically contain multiple elements that include software license, implementation services and post-implementation maintenance and support. For multiple element arrangements involving our nonsoftware services, the Company must (1) determine whether and when each element has been delivered; (2) determine the fair value of each element using the selling price hierarchy of VSOE of fair value, third party evidence (“TPE”), or best estimated selling price ("BESP"), as applicable, and (3) allocate the total price among the various elements based on the selling price method. | |||||||
For multiple-element arrangements that include software and nonsoftware elements such as the Company's cloud-based service offerings, the Company allocates revenue between the software and software-related elements as a group and any nonsoftware elements based on a relative fair value allocation. The Company determines fair value for each deliverable using this hierarchy and utilizes VSOE of fair value if it exists. | |||||||
In certain instances, the Company may not be able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to the Company's limited experience selling each element separately, not pricing solutions or services within a narrow range, or only having a limited sales history. In addition, TPE may not be available. When the Company is unable to establish selling prices using VSOE or TPE, it uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. For transactions that only include software and software-related elements, the Company continues to account for such arrangements under the software revenue recognition standards which require it to establish VSOE of fair value to allocate arrangement consideration among multiple deliverables. | |||||||
Software license and implementation revenue that has been recognized, but for which the Company has not invoiced the customer, is recorded as unbilled receivables. Invoices that have been issued before software license, implementation and maintenance and support revenue has been recognized are recorded as deferred revenue in the accompanying consolidated balance sheets. | |||||||
Business Combinations | |||||||
We record tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for each acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. | |||||||
Significant management judgments and assumptions are required in determining the fair value of acquired assets and liabilities, particularly acquired intangible assets. The valuation of purchased intangible assets is based upon estimates of the future performance and cash flows from the acquired business. Each asset is measured at fair value from the perspective of a market participant. | |||||||
The Company uses its best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year or more from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill, provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s condensed consolidated statements of operations. | |||||||
Internal-use software | |||||||
Costs incurred to develop internal-use software during the development stage are capitalized, stated at cost, and depreciated using the straight-line method over the estimated useful lives of the assets. Development stage costs generally include salaries and personnel costs and third party contractor expenses associated with internal-use software configuration, coding, installation and testing. Capitalized internal-use software development costs related to the Company's cloud-based offerings were $0.9 million and $0.8 million for the three months ended June 30, 2014 and 2013, respectively, and $1.6 million for each of the six months ended June 30, 2014 and 2013. Capitalized internal-use software development costs related to our cloud-based offerings are amortized using the straight-line method over the useful life of the asset. For the three and six months ended June 30, 2014, the Company amortized $0.2 million and $0.3 million, respectively, of capitalized internal-use software development costs related to its cloud-based offerings as compared to $0.1 million and $0.2 million, respectively, for the three and six months ended June 30, 2013. Capitalized software for internal use is included in property and equipment, net in the unaudited condensed consolidated balance sheets. Amortization of capitalized internal-use software development costs related to the Company's cloud-based offerings is included in cost of license and implementation revenues in the accompanying unaudited condensed consolidated statements of comprehensive income. | |||||||
Impairment of long-lived assets | |||||||
Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes comparison of future cash flows expected to be generated by the asset or group of assets with the associated assets’ carrying value. If the carrying value of the asset or group of assets exceeds its expected future cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent that the carrying amount of the asset exceeds its fair value. During the quarter ended June 30, 2014 the Company recorded $2.1 million impairment charge related to certain capitalized development cost associated with the expected future cash flows. | |||||||
Noncash share-based compensation | |||||||
The Company measures all share-based payments to its employees based on the grant date fair value of the awards and recognizes expense in the Company’s unaudited consolidated statement of comprehensive income on a straight-line basis over the period during which the recipient is required to perform service (generally over the vesting period of the awards). To date, the Company has granted stock options, Restricted Stock Units (“RSUs”), Stock Appreciation Rights (“SARs”), and Market Stock Units (“MSUs”). RSUs include both time-based awards as well as performance-based awards in which the number of shares that vest are based upon the revenue expected to be earned by the Company from binding customer agreements for the provision of configure, price, and quote ("CPQ") solutions. MSUs are performance-based awards in which the number of shares that vest are based upon the Company’s relative stockholder return. | |||||||
The following table presents the number of shares or units outstanding for each award type as of June 30, 2014 and December 31, 2013, respectively. | |||||||
Award type | June 30, 2014 | December 31, 2013 | |||||
Stock options | 979,277 | 1,160,464 | |||||
Restricted stock units (time based) | 1,842,619 | 1,542,990 | |||||
Restricted stock units (performance based) | 34,000 | — | |||||
Stock appreciation rights | 705,736 | 721,028 | |||||
Market stock units | 431,900 | 469,000 | |||||
Stock options, time based RSUs and SARs vest ratably between two and four years. The actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Russell 2000 Index (“Index”) over their respective performance periods, as defined by each award's plan documents. The Company did not grant any stock options, SARs or MSUs during the three month period ended June 30, 2014. | |||||||
The fair value of the RSUs is based on the closing price of the Company’s stock on the date of grant. | |||||||
The Company estimates the fair value of MSUs on the date of grant using a Monte Carlo simulation model. The determination of fair value of the MSUs is affected by the Company’s stock price and a number of assumptions including the expected volatilities of the Company’s stock and the Index, its risk-free interest rate and expected dividends. The Company’s expected volatility at the date of grant was based on the historical volatilities of the Company and the Index over the performance period. | |||||||
The assumptions used to value the MSUs granted during the three and six months ended June 30, 2014 were as follows: | |||||||
Grant Date | |||||||
24-Feb-14 | 11-Feb-14 | ||||||
Volatility | 51.13% | 50.74% | |||||
Risk-free interest rate | 0.66% | 0.67% | |||||
Expected option life in years | 2.85 | 2.89 | |||||
Dividend yield | — | — | |||||
Earnings per share | |||||||
The Company computes basic earnings per share by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares and dilutive potential common shares then outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and SARs or the vesting of RSUs and MSUs. Diluted earnings per share reflect the assumed conversion of all dilutive share-based awards using the treasury stock method. | |||||||
Fair value measurement | |||||||
The Company’s financial assets that are measured at fair value on a recurring basis consisted of $14.7 million and $21.0 million invested in treasury money market funds at June 30, 2014 and December 31, 2013, respectively. The fair value of these accounts is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by Accounting Standard Codification ("ASC") 820, “Fair Value Measurement and Disclosure.” | |||||||
Deferred revenue and unbilled receivables | |||||||
Software license and implementation services that have been performed, but for which the Company has not invoiced the customer, are recorded as unbilled receivables, and invoices that have been issued before the software license and implementation services have been performed are recorded as deferred revenue in the accompanying unaudited condensed consolidated balance sheets. The Company generally invoices for maintenance and support services on a monthly, quarterly or annual basis through the maintenance and support period. | |||||||
Credit Facility | |||||||
As of June 30, 2014, the Company had no outstanding borrowings under the Company's $50 million revolving credit facility ("Revolver"), and $0.2 million of unamortized debt issuance costs related to the Revolver is included in other long term assets in the unaudited condensed consolidated balance sheets. For each of the three and six months ended June 30, 2014 and 2013, $12,500 and $25,000, respectively, of debt issuance cost amortization is included in Other Expense (Income), net in the unaudited condensed consolidated statements of comprehensive income. | |||||||
Income taxes | |||||||
At the end of each interim reporting period, the Company estimates its annual effective tax rate to calculate its income tax provision. The estimated effective tax rate includes U.S. federal, state and foreign income taxes and is based on the application of an estimated annual income tax rate applied to the current quarter’s year-to-date pre-tax income. This estimated effective tax rate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim reporting periods. | |||||||
The effective tax rate for the three months ended June 30, 2014 and 2013 was 15% and 11%, respectively. The effective tax rate for the six months ended June 30, 2014 and 2013 was 10% and (87)%, respectively. The difference between the effective tax rate and the federal statutory rate of 34% for the three and six months ended June 30, 2014 was due primarily to the limitation on the deductibility of certain officers’ compensation and valuation allowances related to foreign losses. | |||||||
The tax (benefit) provision recorded for the three months ended June 30, 2014 and 2013 was $(1.2) million and $0.1 million, respectively. The tax benefit for the six months ended June 30, 2014 and 2013 was $1.8 million and $1.1 million, respectively. The change in the tax benefit was related to the Company's net loss in the quarter ended June 30, 2014 as compared to a net income in the quarter ended June 30, 2013. In addition, the change between the three months ended June 30, 2014 and 2013 is primarily attributed to a projected decrease in federal taxes partially offset by higher foreign taxes. The difference between the tax benefit for the six months ended June 30, 2014 compared to the six months ended June 30, 2013 is primarily due to the expiration of the research and experimentation credit as well as a one-time benefit related to the 2012 R&E credit recorded in the first quarter of 2013. The loss of benefits related to R&E credits for the period ending June 30, 2014 was partially offset by a reduced rate impact for nondeductible officers’ compensation. | |||||||
The Internal Revenue Service is currently examining the Company’s 2009 R&D credit. The Company is not aware of any other audits at the present time. | |||||||
Recent Accounting Pronouncements | |||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. Early adoption is not permitted. The new accounting standards update becomes effective for the Company on January 1, 2017. The Company is currently evaluating the impact that this guidance will have on its financial statements. | |||||||
With the exception of the new revenue standard discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2014, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2013, that are of significance or potential significance to the Company. |
Business_Combination
Business Combination | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Business Combinations [Abstract] | ' | |||||||||||||||
Business Combination Disclosure [Text Block] | ' | |||||||||||||||
Business Combination | ||||||||||||||||
Cameleon Software, SA | ||||||||||||||||
On October 24, 2013, the Company entered into a tender offer agreement with Cameleon, indicating the Company's intent to acquire Cameleon through the tender offer for all of the outstanding share capital of Cameleon. As part of the tender offer, the Company placed approximately $40 million in escrow to fund the acquisition, which was included in current restricted cash as of December 31, 2013. On January 8, 2014, the Company announced that this tender offer for Cameleon was successful. As of the completion of the tender offer, the Company controlled 81.7% of Cameleon’s common stock and 94.0% of Cameleon’s outstanding warrants, inclusive of the commitments from Cameleon's management regarding their Cameleon free shares. As a result of shares purchased by the Company in the market following the completion of the tender, as of June 30, 2014, the Company controlled 91.5% of Cameleon. All amounts pertaining to the approximate 8.5% of Cameleon that the Company does not own are reported as non-controlling interest in the Company’s condensed consolidated financial statements. | ||||||||||||||||
During the three and six months ended June 30, 2014, the Company incurred acquisition-related costs of $0.3 million and $1.0 million, respectively, consisting primarily of retention of key employees, advisory and legal fees. | ||||||||||||||||
All of the assets acquired and the liabilities assumed in the transaction have been recognized at their acquisition date fair values at January 8, 2014. | ||||||||||||||||
The preliminary allocation of the purchase price for Cameleon is as follows (in thousands): | ||||||||||||||||
Cash and cash equivalents | $ | 7,086 | ||||||||||||||
Accounts receivables | 10,444 | |||||||||||||||
Prepaid and other assets | 1,329 | |||||||||||||||
Intangible assets | 18,653 | |||||||||||||||
Goodwill | 16,227 | |||||||||||||||
Accounts payable and accrued liabilities | (13,009 | ) | ||||||||||||||
Deferred revenue | (5,392 | ) | ||||||||||||||
Non-controlling interest | (6,204 | ) | ||||||||||||||
Net assets acquired | $ | 29,134 | ||||||||||||||
The following are the identifiable intangible assets acquired and their respective useful lives (in thousands): | ||||||||||||||||
Useful Life | ||||||||||||||||
Amount | (years) | |||||||||||||||
Trade Name | $ | 1,020 | 8 | |||||||||||||
Customer Relationships | 1,455 | 5-Feb | ||||||||||||||
Maintenance Relationships | 3,808 | 8 | ||||||||||||||
Developed Technology | 11,147 | 7 | ||||||||||||||
Other | 1,223 | 2 | ||||||||||||||
Total | $ | 18,653 | ||||||||||||||
In performing the preliminary purchase price allocation, the Company considered, among other factors, its anticipated future use of the acquired assets, analysis of historical financial performance, and estimates of future cash flows from Cameleon's products and services. The allocation resulted in acquired intangible assets of $18.7 million. The acquired intangible assets consisted of developed technology, customer and maintenance relationships, trade name and other and were valued using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital. Additionally, the Company assumed certain liabilities in the acquisition, including deferred revenue to which a fair value of $5.4 million was ascribed using a cost-plus profit approach. | ||||||||||||||||
Liabilities assumed include $2.7 million related to the Company's offer to pay an additional €0.15 per share cash premium to the Cameleon stockholders tendering their shares and warrants if the Company succeeds acquiring at least 95% of the share capital and voting rights of Cameleon on a fully diluted basis on or before December 31, 2014. The Company has recorded this liability at fair value based on its determination that it expects to meet this threshold prior to December 31, 2014. In addition, the net assets acquired include contingent consideration of $1.4 million related to the committed purchase of free shares owned by Cameleon management. | ||||||||||||||||
Goodwill of $16.2 million represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets, and represents the expected synergistic benefits of the transaction, the knowledge and experience of Cameleon's workforce in place, and the expectation that the combined company’s complementary products will significantly broaden the Company’s CPQ solution offering. The Company believes the combined company will benefit from a broader global presence and, with the Company’s direct sales force and larger channel coverage, significant cross selling opportunities. None of the goodwill is expected to be currently deductible for tax purposes. In accordance with applicable accounting standards, goodwill will not be amortized but instead will be tested for impairment at least annually, or, more frequently if certain indicators are present. In accordance with applicable accounting standards, goodwill is be amortized but instead will be tested for impairment at least annually, or, more frequently if certain indicators are present. In the event that the management of the combined company determines that the value of goodwill has become impaired, the combined company will incur an accounting charge for the amount of the impairment during the fiscal quarter in which the determination is made. | ||||||||||||||||
SignalDemand, Inc. | ||||||||||||||||
In December 2013, the Company acquired SignalDemand, Inc. for total cash consideration of $13.5 million. | ||||||||||||||||
During the three and six months ended June 30, 2014, the Company incurred acquisition-related costs of $0.3 million and $1.0 million, respectively, consisting primarily of retention of key employees, advisory, and legal fees. | ||||||||||||||||
All of the assets acquired and the liabilities assumed in the transaction have been recognized at their acquisition date fair values at December 16, 2013. | ||||||||||||||||
The preliminary allocation of the total purchase price for SignalDemand is as follows (in thousands): | ||||||||||||||||
Current assets | $ | 881 | ||||||||||||||
Deferred tax asset - current | 2,752 | |||||||||||||||
Noncurrent assets | 193 | |||||||||||||||
Intangibles | 8,300 | |||||||||||||||
Goodwill | 7,076 | |||||||||||||||
Deferred tax asset - noncurrent | 2,572 | |||||||||||||||
Accounts payable and accrued liabilities | (1,586 | ) | ||||||||||||||
Deferred revenue | (6,688 | ) | ||||||||||||||
Net assets acquired | $ | 13,500 | ||||||||||||||
The following are the identifiable intangible assets acquired and their respective useful lives (in thousands): | ||||||||||||||||
Useful Life | ||||||||||||||||
Amount | (years) | |||||||||||||||
Developed technology | $ | 4,600 | 7 | |||||||||||||
Internally developed technology | 160 | 2 | ||||||||||||||
Customer relationships | 3,500 | 8 | ||||||||||||||
Trade name | 40 | 2 | ||||||||||||||
Total | $ | 8,300 | ||||||||||||||
In performing the preliminary purchase price allocation, the Company considered, among other factors, its anticipated future use of the acquired assets, analyses of historical financial performance, and estimates of future cash flows from SignalDemand's products and services. The allocation resulted in acquired intangible assets of $8.3 million. The acquired intangible assets consisted of developed technology, customer relationships and trade name and were valued using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital. Additionally, the Company assumed certain liabilities in the acquisition, including deferred revenue to which a fair value of $6.7 million was ascribed using a cost-plus profit approach. | ||||||||||||||||
The Company has made a preliminary determination that $5.3 million of net deferred tax assets were assumed on the acquisition date. The deferred tax assets primarily relate to net operating losses and other expenses accrued but not expensed for tax purposes. | ||||||||||||||||
The excess of the purchase price over the estimated amounts of net assets as of the effective date of the acquisition was allocated to goodwill. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the SignalDemand acquisition. These benefits include the expectation that the combined company’s complementary products will significantly broaden the Company’s offerings in sales optimization solutions. The Company believes the combined company will benefit from a broader global presence and, with the Company’s direct sales force and larger channel coverage, significant cross selling opportunities. None of the goodwill is expected to be currently deductible for tax purposes. In accordance with applicable accounting standards, goodwill will not be amortized but instead will be tested for impairment at least annually, or, more frequently if certain indicators are present. In the event that the management of the combined company determines that the value of goodwill has become impaired, the combined company will incur an accounting charge for the amount of the impairment during the fiscal quarter in which the determination is made. | ||||||||||||||||
Pro Forma Financial Information | ||||||||||||||||
The unaudited financial information in the table below summarizes the combined results of operations of the Company, Cameleon and SignalDemand, on a pro forma basis, as though the Company had acquired Cameleon and SignalDemand on January 1, 2013. The pro forma information for all periods presented also includes the effect of business combination accounting resulting from the acquisition, including amortization charges from acquired intangible assets. | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in thousands, except earnings per share) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Total revenue | $ | 44,368 | $ | 41,655 | $ | 85,533 | $ | 80,381 | ||||||||
Net loss attributable to PROS Holdings, Inc. | (6,996 | ) | (990 | ) | (15,583 | ) | (999 | ) | ||||||||
Earnings per share - basic and diluted | $ | (0.24 | ) | $ | (0.04 | ) | $ | (0.54 | ) | $ | (0.04 | ) |
Noncontrolling_Interest_Notes
Non-controlling Interest (Notes) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Non controlling interest roll forward [Abstract] | ' | ||||
Noncontrolling Interest Disclosure [Text Block] | ' | ||||
Non-controlling interest | |||||
The following table presents a roll forward of the non-controlling interest from the date of acquisition of Cameleon on January 8, 2014 through June 30, 2014 (in thousands): | |||||
Beginning balance as of January 8, 2014 | $ | 6,204 | |||
Change in Parent's ownership in the subsidiary | (3,410 | ) | |||
Net loss allocated to non-controlling interest | (663 | ) | |||
Foreign currency translation adjustment | 20 | ||||
Ending balance as of June 30, 2014 | $ | 2,151 | |||
Earnings_per_Share_Note
Earnings per Share (Note) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Earnings per Share | ' | |||||||||||||||
Earnings per Share | ||||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2014 and 2013: | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
(in thousands, except share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Numerator: | ||||||||||||||||
Net (loss) income attributable to PROS Holdings, Inc. | $ | (6,996 | ) | $ | 580 | $ | (15,451 | ) | $ | 2,314 | ||||||
Denominator: | ||||||||||||||||
Weighted average shares (basic) | 28,958,233 | 28,006,517 | 28,813,008 | 27,881,957 | ||||||||||||
Dilutive effect of potential common shares | — | 1,952,063 | — | 1,828,245 | ||||||||||||
Weighted average shares (diluted) | 28,958,233 | 29,958,580 | 28,813,008 | 29,710,202 | ||||||||||||
Basic earnings per share | $ | (0.24 | ) | $ | 0.02 | $ | (0.54 | ) | $ | 0.08 | ||||||
Diluted earnings per share | $ | (0.24 | ) | $ | 0.02 | $ | (0.54 | ) | $ | 0.08 | ||||||
Dilutive potential common shares consist of shares issuable upon the exercise of stock options, settlement of SARs, and the vesting of RSUs and MSUs. Potential common shares determined to be antidilutive and excluded from diluted weighted average shares outstanding were approximately 3,400 and 2,300 for the three and six months ended June 30, 2013, respectively. Basic shares were used to calculate loss per share for the three and six months ended June 30, 2014. |
Noncash_Sharebased_Compensatio
Noncash Share-based Compensation (Note) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Noncash Share-based Compensation [Abstract] | ' | |||||||||||||||
Noncash Share-based Compensation | ' | |||||||||||||||
Noncash Share-based Compensation | ||||||||||||||||
During the three months ended June 30, 2014, the Company granted 108,942 shares of RSUs with a weighted average grant-date fair value of $25.50 per share. The Company did not grant any stock options, SARs or MSUs during the three months ended June 30, 2014. | ||||||||||||||||
During the six months ended June 30, 2014, the Company granted 902,012 shares of RSUs with a weighted average grant-date fair value of $31.97 per share. The Company granted 185,600 MSUs with a weighted average grant-date fair value of $49.50 to certain executive officers and non-executive employees during the six months ended June 30, 2014. These MSUs vest on January 1, 2017 and the actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Index over the Performance Period, as defined by each award's plan documents or individual award agreements. The Company did not grant any stock options or SARs during the six months ended June 30, 2014. | ||||||||||||||||
Share-based compensation expense is allocated to expense categories on the unaudited condensed consolidated statements of comprehensive income. The following table summarizes share-based compensation expense included in the Company’s unaudited condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2014 and 2013: | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Share-based compensation: | ||||||||||||||||
Cost of revenue: | ||||||||||||||||
License and implementation | $ | 959 | $ | 534 | $ | 1,681 | $ | 996 | ||||||||
Total included in cost of revenue | 959 | 534 | 1,681 | 996 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, marketing, general and administrative | 3,770 | 2,838 | 6,442 | 5,059 | ||||||||||||
Research and development | 1,216 | 767 | 2,181 | 1,504 | ||||||||||||
Total included in operating expenses | 4,986 | 3,605 | 8,623 | 6,563 | ||||||||||||
Total share-based compensation expense | $ | 5,945 | $ | 4,139 | $ | 10,304 | $ | 7,559 | ||||||||
In February 2014, the number of shares available for issuance increased by 900,000 to 8,168,000 under an evergreen provision in the Company's 2007 Equity Incentive Plan ("2007 Stock Plan"). As of June 30, 2014, 890,446 shares remained available for issuance under the 2007 Stock Plan. Also in February 2014, the Company granted inducement awards in an aggregate amount of up to 308,250 shares in accordance with NYSE Rule 303A.08. These inducement awards were in the form of RSUs and MSUs granted to our recently appointed Chief Operating Officer and RSUs granted to certain new employees in connection with our acquisitions of Cameleon and SignalDemand. At June 30, 2014, the Company had an estimated $56.3 million of total unrecognized compensation costs related to share-based compensation arrangements. These costs will be recognized over a weighted average period of 2.7 years. | ||||||||||||||||
In June 2013, the Board of Directors authorized an Employee Stock Purchase Plan (“ESPP”) which provides for eligible employees to purchase shares on an after-tax basis in an amount between 1% and 10% of their annual pay: (i) on June 30 of each year at a 5% discount of the fair market value of our common stock on January 1 or June 30, whichever is lower, and (ii) on December 31 of each year at a 5% discount of the fair market value of our common stock on July 1 or December 31, whichever is lower. An employee may not purchase more than $5,000 in either of the six-month measurement periods described above or more than $10,000 annually. As of June 30, 2014, there were 500,000 shares authorized for issuance under the ESPP plan, and approximately $0.3 million was held on behalf of employees for future purchases under the ESPP and was recorded in accrued expenses and other current liabilities in the Company's balance sheet. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | |||||
Litigation | |||||
In the ordinary course of business, the Company regularly becomes involved in contract and other negotiations and, in more limited circumstances, becomes involved in legal proceedings, claims and litigation. The outcomes of these matters are inherently unpredictable. The Company is not currently involved in any outstanding litigation that it believes, individually or in the aggregate, will have a material adverse effect on its business, financial condition, results of operations or cash flows. | |||||
Lease commitments | |||||
As a result of the Cameleon acquisition in January 2014, the Company assumed several operating leases for office space and office equipment that expire at various dates. As of June 30, 2014, the future minimum lease commitments related to these agreements were as follows: | |||||
Fiscal year | Amount | ||||
Second half of 2014 | $ | 559 | |||
2015 | 682 | ||||
2016 | 624 | ||||
2017 | 571 | ||||
2018 and thereafter | 86 | ||||
Total minimum lease payments | $ | 2,522 | |||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Accounting Policies [Abstract] | ' | ||||||
Deferred Revenue and Unbilled Receivables [Policy Text Block] | ' | ||||||
Deferred revenue and unbilled receivables | |||||||
Software license and implementation services that have been performed, but for which the Company has not invoiced the customer, are recorded as unbilled receivables, and invoices that have been issued before the software license and implementation services have been performed are recorded as deferred revenue in the accompanying unaudited condensed consolidated balance sheets. The Company generally invoices for maintenance and support services on a monthly, quarterly or annual basis through the maintenance and support period | |||||||
Basis of presentation | ' | ||||||
Basis of presentation | |||||||
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of June 30, 2014, the results of operations for the three and six months ended June 30, 2014 and cash flows for the six months ended June 30, 2014. | |||||||
Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (“Annual Report”) filed with the SEC. The condensed consolidated balance sheet as of December 31, 2013 was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. | |||||||
Certain prior year amounts have been reclassified to conform to the current period financial statement presentation. These changes and reclassifications did not impact net or comprehensive income. | |||||||
Basis of consolidation | ' | ||||||
Basis of consolidation | |||||||
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |||||||
Dollar amounts | ' | ||||||
Dollar amounts | |||||||
The dollar amounts presented in the tabular data within these footnote disclosures are stated in thousands of dollars, except per unit amounts, or as noted within the context of each footnote disclosure. | |||||||
Use of estimates | ' | ||||||
Use of estimates | |||||||
The Company’s management prepares the unaudited condensed consolidated financial statements in accordance with GAAP. The Company makes estimates and assumptions in the preparation of its unaudited condensed consolidated financial statements, and its estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The complexity and judgment required in the Company’s estimation process, as well as issues related to the assumptions, risks and uncertainties inherent in the application of the percentage-of-completion method of accounting, affect the amounts of revenue, expenses, unbilled receivables and deferred revenue. Estimates are also used for, but not limited to, receivables, allowance for doubtful accounts, useful lives of assets, depreciation, income taxes and deferred tax asset valuation, valuation of stock options, other current liabilities and accrued liabilities. Numerous internal and external factors can affect estimates. The critical accounting policies related to the estimates and judgments are discussed in the Company’s Annual Report under management’s discussion and analysis of financial condition and results of operations. There have been no significant changes to the Company’s critical accounting policies as described in the Company’s Annual Report. | |||||||
Revenue recognition | ' | ||||||
Revenue recognition | |||||||
The Company derives its revenue from the licensing and implementation of software solutions and associated software maintenance and support. To a lesser extent, the Company’s revenue includes nonsoftware related cloud-based services. The Company’s arrangements with customers typically include: (a) license fees for the use of our solutions either in perpetuity or over a specified term, (b) professional services fees for configuration, implementation and training services, and (c) maintenance and support fees related to technical support and software updates. If there is significant uncertainty about contract completion or collectability is not reasonably assured, revenue is deferred until the uncertainty is sufficiently resolved or collectability is reasonably assured. In addition, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and fees are fixed or determinable. | |||||||
License revenue includes perpetual license revenue recognized upon software delivery and an allocation of revenue from solution sales that are recognized using the percentage of completion method. The allocation represents management’s estimate of the relative fair value of the perpetual licenses included in the solution sale arrangement. | |||||||
Subscription revenues include revenue from our SaaS, cloud-based and term license offerings. | |||||||
Services revenues consist of fees associated with the implementation and configuration of our software and subscription contracts, on-site support, training and other consulting services. | |||||||
Maintenance and support revenue includes post-implementation customer support and the right to unspecified software updates and enhancements on a when and if available basis. The Company generally invoices for maintenance and support services on a monthly, quarterly or on an annual basis during the maintenance and support period. The Company recognizes revenue from maintenance arrangements ratably over the period in which the services are provided. | |||||||
In determining whether professional services revenue should be accounted for separately from license revenue, the Company evaluates whether the professional services are considered essential to the functionality of the software using factors such as: the nature of its software products; whether they are ready for use by the customer upon receipt; the nature of professional services; the availability of services from other vendors; whether the timing of payments for license revenue coincides with performance of services; and whether milestones or acceptance criteria exist that affect the realizability of the software license fee. | |||||||
If the Company determines that professional services revenue should not be accounted for separately from license revenue, the license revenue is recognized together with the professional services revenue using the percentage-of-completion method or completed contract method. The completed contract method is also used for contracts where there is a risk over final acceptance by the customer or for contracts that are short-term in nature. | |||||||
The percentage-of-completion computation is measured by the percentage of man-days incurred during the reporting period as compared to the estimated total man-days necessary for each contract for implementation of the software solutions. The Company measures performance under the percentage-of-completion method using the total man-day method based on current estimates of man-days to complete the project. The Company believes that for each such project, man-days expended in proportion to total estimated man-days at completion represents the most reliable and meaningful measure for determining a project’s progress toward completion. Under our fixed-fee arrangements, should a loss be anticipated on a contract, the full amount is recorded when the loss is determinable. | |||||||
The Company also licenses software solutions under term license agreements that typically include maintenance during the license term. When maintenance is included for the entire term of the license, there is no renewal rate and the Company has not established vendor specific objective evidence (“VSOE”) of fair value for the maintenance on term licenses. For term license agreements, revenue and the associated costs are deferred until the delivery of the solution and recognized ratably over the remaining license term. | |||||||
Our cloud-based services are designed to be options for our customers to deploy our solutions without any significant investment in hardware as we integrate our software in a cloud-based IT environments that we deploy, support and manage on the customers’ behalf. | |||||||
For arrangements that include cloud-based services, the Company allocates the arrangement consideration between the service and other elements and recognizes the cloud-based services fee ratably beginning on the date the customer commences use of the Company's services and continuing through the end of the customer term. | |||||||
The Company’s customer arrangements typically contain multiple elements that include software license, implementation services and post-implementation maintenance and support. For multiple element arrangements involving our nonsoftware services, the Company must (1) determine whether and when each element has been delivered; (2) determine the fair value of each element using the selling price hierarchy of VSOE of fair value, third party evidence (“TPE”), or best estimated selling price ("BESP"), as applicable, and (3) allocate the total price among the various elements based on the selling price method. | |||||||
For multiple-element arrangements that include software and nonsoftware elements such as the Company's cloud-based service offerings, the Company allocates revenue between the software and software-related elements as a group and any nonsoftware elements based on a relative fair value allocation. The Company determines fair value for each deliverable using this hierarchy and utilizes VSOE of fair value if it exists. | |||||||
In certain instances, the Company may not be able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to the Company's limited experience selling each element separately, not pricing solutions or services within a narrow range, or only having a limited sales history. In addition, TPE may not be available. When the Company is unable to establish selling prices using VSOE or TPE, it uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. For transactions that only include software and software-related elements, the Company continues to account for such arrangements under the software revenue recognition standards which require it to establish VSOE of fair value to allocate arrangement consideration among multiple deliverables. | |||||||
Software license and implementation revenue that has been recognized, but for which the Company has not invoiced the customer, is recorded as unbilled receivables. Invoices that have been issued before software license, implementation and maintenance and support revenue has been recognized are recorded as deferred revenue in the accompanying consolidated balance sheets. | |||||||
Business Combinations Policy [Policy Text Block] | ' | ||||||
Business Combinations | |||||||
We record tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for each acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. | |||||||
Significant management judgments and assumptions are required in determining the fair value of acquired assets and liabilities, particularly acquired intangible assets. The valuation of purchased intangible assets is based upon estimates of the future performance and cash flows from the acquired business. Each asset is measured at fair value from the perspective of a market participant. | |||||||
The Company uses its best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year or more from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill, provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s condensed consolidated statements of operations. | |||||||
Internal-use software | ' | ||||||
Internal-use software | |||||||
Costs incurred to develop internal-use software during the development stage are capitalized, stated at cost, and depreciated using the straight-line method over the estimated useful lives of the assets. Development stage costs generally include salaries and personnel costs and third party contractor expenses associated with internal-use software configuration, coding, installation and testing. Capitalized internal-use software development costs related to the Company's cloud-based offerings were $0.9 million and $0.8 million for the three months ended June 30, 2014 and 2013, respectively, and $1.6 million for each of the six months ended June 30, 2014 and 2013. Capitalized internal-use software development costs related to our cloud-based offerings are amortized using the straight-line method over the useful life of the asset. For the three and six months ended June 30, 2014, the Company amortized $0.2 million and $0.3 million, respectively, of capitalized internal-use software development costs related to its cloud-based offerings as compared to $0.1 million and $0.2 million, respectively, for the three and six months ended June 30, 2013. Capitalized software for internal use is included in property and equipment, net in the unaudited condensed consolidated balance sheets. Amortization of capitalized internal-use software development costs related to the Company's cloud-based offerings is included in cost of license and implementation revenues in the accompanying unaudited condensed consolidated statements of comprehensive income. | |||||||
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | ' | ||||||
Impairment of long-lived assets | |||||||
Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes comparison of future cash flows expected to be generated by the asset or group of assets with the associated assets’ carrying value. If the carrying value of the asset or group of assets exceeds its expected future cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent that the carrying amount of the asset exceeds its fair value. During the quarter ended June 30, 2014 the Company recorded $2.1 million impairment charge related to certain capitalized development cost associated with the expected future cash flows. | |||||||
Noncash share-based compensation | ' | ||||||
Noncash share-based compensation | |||||||
The Company measures all share-based payments to its employees based on the grant date fair value of the awards and recognizes expense in the Company’s unaudited consolidated statement of comprehensive income on a straight-line basis over the period during which the recipient is required to perform service (generally over the vesting period of the awards). To date, the Company has granted stock options, Restricted Stock Units (“RSUs”), Stock Appreciation Rights (“SARs”), and Market Stock Units (“MSUs”). RSUs include both time-based awards as well as performance-based awards in which the number of shares that vest are based upon the revenue expected to be earned by the Company from binding customer agreements for the provision of configure, price, and quote ("CPQ") solutions. MSUs are performance-based awards in which the number of shares that vest are based upon the Company’s relative stockholder return. | |||||||
The following table presents the number of shares or units outstanding for each award type as of June 30, 2014 and December 31, 2013, respectively. | |||||||
Award type | June 30, 2014 | December 31, 2013 | |||||
Stock options | 979,277 | 1,160,464 | |||||
Restricted stock units (time based) | 1,842,619 | 1,542,990 | |||||
Restricted stock units (performance based) | 34,000 | — | |||||
Stock appreciation rights | 705,736 | 721,028 | |||||
Market stock units | 431,900 | 469,000 | |||||
Stock options, time based RSUs and SARs vest ratably between two and four years. The actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Russell 2000 Index (“Index”) over their respective performance periods, as defined by each award's plan documents. The Company did not grant any stock options, SARs or MSUs during the three month period ended June 30, 2014. | |||||||
The fair value of the RSUs is based on the closing price of the Company’s stock on the date of grant. | |||||||
The Company estimates the fair value of MSUs on the date of grant using a Monte Carlo simulation model. The determination of fair value of the MSUs is affected by the Company’s stock price and a number of assumptions including the expected volatilities of the Company’s stock and the Index, its risk-free interest rate and expected dividends. The Company’s expected volatility at the date of grant was based on the historical volatilities of the Company and the Index over the performance period. | |||||||
The assumptions used to value the MSUs granted during the three and six months ended June 30, 2014 were as follows: | |||||||
Grant Date | |||||||
24-Feb-14 | 11-Feb-14 | ||||||
Volatility | 51.13% | 50.74% | |||||
Risk-free interest rate | 0.66% | 0.67% | |||||
Expected option life in years | 2.85 | 2.89 | |||||
Dividend yield | — | — | |||||
Earnings per share | ' | ||||||
Earnings per share | |||||||
The Company computes basic earnings per share by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares and dilutive potential common shares then outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and SARs or the vesting of RSUs and MSUs. Diluted earnings per share reflect the assumed conversion of all dilutive share-based awards using the treasury stock method. | |||||||
Fair value measurement | ' | ||||||
. | |||||||
Fair value measurement | |||||||
The Company’s financial assets that are measured at fair value on a recurring basis consisted of $14.7 million and $21.0 million invested in treasury money market funds at June 30, 2014 and December 31, 2013, respectively. The fair value of these accounts is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by Accounting Standard Codification ("ASC") 820, “Fair Value Measurement and Disclosure. | |||||||
Credit Facility | ' | ||||||
Credit Facility | |||||||
As of June 30, 2014, the Company had no outstanding borrowings under the Company's $50 million revolving credit facility ("Revolver"), and $0.2 million of unamortized debt issuance costs related to the Revolver is included in other long term assets in the unaudited condensed consolidated balance sheets. For each of the three and six months ended June 30, 2014 and 2013, $12,500 and $25,000, respectively, of debt issuance cost amortization is included in Other Expense (Income), net in the unaudited condensed consolidated statements of comprehensive income. | |||||||
Income taxes | ' | ||||||
Income taxes | |||||||
At the end of each interim reporting period, the Company estimates its annual effective tax rate to calculate its income tax provision. The estimated effective tax rate includes U.S. federal, state and foreign income taxes and is based on the application of an estimated annual income tax rate applied to the current quarter’s year-to-date pre-tax income. This estimated effective tax rate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim reporting periods. | |||||||
The effective tax rate for the three months ended June 30, 2014 and 2013 was 15% and 11%, respectively. The effective tax rate for the six months ended June 30, 2014 and 2013 was 10% and (87)%, respectively. The difference between the effective tax rate and the federal statutory rate of 34% for the three and six months ended June 30, 2014 was due primarily to the limitation on the deductibility of certain officers’ compensation and valuation allowances related to foreign losses. | |||||||
The tax (benefit) provision recorded for the three months ended June 30, 2014 and 2013 was $(1.2) million and $0.1 million, respectively. The tax benefit for the six months ended June 30, 2014 and 2013 was $1.8 million and $1.1 million, respectively. The change in the tax benefit was related to the Company's net loss in the quarter ended June 30, 2014 as compared to a net income in the quarter ended June 30, 2013. In addition, the change between the three months ended June 30, 2014 and 2013 is primarily attributed to a projected decrease in federal taxes partially offset by higher foreign taxes. The difference between the tax benefit for the six months ended June 30, 2014 compared to the six months ended June 30, 2013 is primarily due to the expiration of the research and experimentation credit as well as a one-time benefit related to the 2012 R&E credit recorded in the first quarter of 2013. The loss of benefits related to R&E credits for the period ending June 30, 2014 was partially offset by a reduced rate impact for nondeductible officers’ compensation. | |||||||
The Internal Revenue Service is currently examining the Company’s 2009 R&D credit. The Company is not aware of any other audits at the present time. | |||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||||||
Recent Accounting Pronouncements | |||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. Early adoption is not permitted. The new accounting standards update becomes effective for the Company on January 1, 2017. The Company is currently evaluating the impact that this guidance will have on its financial statements. | |||||||
With the exception of the new revenue standard discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2014, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2013, that are of significance or potential significance to the Company. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Accounting Policies [Abstract] | ' | ||||||
Awards outstanding [Table Text Block] | ' | ||||||
The following table presents the number of shares or units outstanding for each award type as of June 30, 2014 and December 31, 2013, respectively. | |||||||
Award type | June 30, 2014 | December 31, 2013 | |||||
Stock options | 979,277 | 1,160,464 | |||||
Restricted stock units (time based) | 1,842,619 | 1,542,990 | |||||
Restricted stock units (performance based) | 34,000 | — | |||||
Stock appreciation rights | 705,736 | 721,028 | |||||
Market stock units | 431,900 | 469,000 | |||||
Market Stock Units Valuation Assumptions [Table Text Block] | ' | ||||||
The assumptions used to value the MSUs granted during the three and six months ended June 30, 2014 were as follows: | |||||||
Grant Date | |||||||
24-Feb-14 | 11-Feb-14 | ||||||
Volatility | 51.13% | 50.74% | |||||
Risk-free interest rate | 0.66% | 0.67% | |||||
Expected option life in years | 2.85 | 2.89 | |||||
Dividend yield | — | — |
Business_Combination_Tables
Business Combination (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | |||||||||||||||
Pro Forma Financial Information | ||||||||||||||||
The unaudited financial information in the table below summarizes the combined results of operations of the Company, Cameleon and SignalDemand, on a pro forma basis, as though the Company had acquired Cameleon and SignalDemand on January 1, 2013. The pro forma information for all periods presented also includes the effect of business combination accounting resulting from the acquisition, including amortization charges from acquired intangible assets. | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in thousands, except earnings per share) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Total revenue | $ | 44,368 | $ | 41,655 | $ | 85,533 | $ | 80,381 | ||||||||
Net loss attributable to PROS Holdings, Inc. | (6,996 | ) | (990 | ) | (15,583 | ) | (999 | ) | ||||||||
Earnings per share - basic and diluted | $ | (0.24 | ) | $ | (0.04 | ) | $ | (0.54 | ) | $ | (0.04 | ) | ||||
Cameleon Acquisition [Member] | ' | |||||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||||
Schedule of Purchase Price Allocation [Table Text Block] | ' | |||||||||||||||
The preliminary allocation of the purchase price for Cameleon is as follows (in thousands): | ||||||||||||||||
Cash and cash equivalents | $ | 7,086 | ||||||||||||||
Accounts receivables | 10,444 | |||||||||||||||
Prepaid and other assets | 1,329 | |||||||||||||||
Intangible assets | 18,653 | |||||||||||||||
Goodwill | 16,227 | |||||||||||||||
Accounts payable and accrued liabilities | (13,009 | ) | ||||||||||||||
Deferred revenue | (5,392 | ) | ||||||||||||||
Non-controlling interest | (6,204 | ) | ||||||||||||||
Net assets acquired | $ | 29,134 | ||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | ' | |||||||||||||||
The following are the identifiable intangible assets acquired and their respective useful lives (in thousands): | ||||||||||||||||
Useful Life | ||||||||||||||||
Amount | (years) | |||||||||||||||
Trade Name | $ | 1,020 | 8 | |||||||||||||
Customer Relationships | 1,455 | 5-Feb | ||||||||||||||
Maintenance Relationships | 3,808 | 8 | ||||||||||||||
Developed Technology | 11,147 | 7 | ||||||||||||||
Other | 1,223 | 2 | ||||||||||||||
Total | $ | 18,653 | ||||||||||||||
SignalDemand [Member] | ' | |||||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||||
Schedule of Purchase Price Allocation [Table Text Block] | ' | |||||||||||||||
The preliminary allocation of the total purchase price for SignalDemand is as follows (in thousands): | ||||||||||||||||
Current assets | $ | 881 | ||||||||||||||
Deferred tax asset - current | 2,752 | |||||||||||||||
Noncurrent assets | 193 | |||||||||||||||
Intangibles | 8,300 | |||||||||||||||
Goodwill | 7,076 | |||||||||||||||
Deferred tax asset - noncurrent | 2,572 | |||||||||||||||
Accounts payable and accrued liabilities | (1,586 | ) | ||||||||||||||
Deferred revenue | (6,688 | ) | ||||||||||||||
Net assets acquired | $ | 13,500 | ||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | ' | |||||||||||||||
The following are the identifiable intangible assets acquired and their respective useful lives (in thousands): | ||||||||||||||||
Useful Life | ||||||||||||||||
Amount | (years) | |||||||||||||||
Developed technology | $ | 4,600 | 7 | |||||||||||||
Internally developed technology | 160 | 2 | ||||||||||||||
Customer relationships | 3,500 | 8 | ||||||||||||||
Trade name | 40 | 2 | ||||||||||||||
Total | $ | 8,300 | ||||||||||||||
Noncontrolling_Interest_Tables
Non-controlling Interest (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ' | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Table Text Block] | ' | ||||
The following table presents a roll forward of the non-controlling interest from the date of acquisition of Cameleon on January 8, 2014 through June 30, 2014 (in thousands): | |||||
Beginning balance as of January 8, 2014 | $ | 6,204 | |||
Change in Parent's ownership in the subsidiary | (3,410 | ) | |||
Net loss allocated to non-controlling interest | (663 | ) | |||
Foreign currency translation adjustment | 20 | ||||
Ending balance as of June 30, 2014 | $ | 2,151 | |||
Earnings_per_Share_Table
Earnings per Share (Table) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | |||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2014 and 2013: | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
(in thousands, except share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Numerator: | ||||||||||||||||
Net (loss) income attributable to PROS Holdings, Inc. | $ | (6,996 | ) | $ | 580 | $ | (15,451 | ) | $ | 2,314 | ||||||
Denominator: | ||||||||||||||||
Weighted average shares (basic) | 28,958,233 | 28,006,517 | 28,813,008 | 27,881,957 | ||||||||||||
Dilutive effect of potential common shares | — | 1,952,063 | — | 1,828,245 | ||||||||||||
Weighted average shares (diluted) | 28,958,233 | 29,958,580 | 28,813,008 | 29,710,202 | ||||||||||||
Basic earnings per share | $ | (0.24 | ) | $ | 0.02 | $ | (0.54 | ) | $ | 0.08 | ||||||
Diluted earnings per share | $ | (0.24 | ) | $ | 0.02 | $ | (0.54 | ) | $ | 0.08 | ||||||
Noncash_Sharebased_Compensatio1
Noncash Share-based Compensation (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Noncash Share-based Compensation [Abstract] | ' | |||||||||||||||
Schedule of Share-based Compensation Expense | ' | |||||||||||||||
The following table summarizes share-based compensation expense included in the Company’s unaudited condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2014 and 2013: | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Share-based compensation: | ||||||||||||||||
Cost of revenue: | ||||||||||||||||
License and implementation | $ | 959 | $ | 534 | $ | 1,681 | $ | 996 | ||||||||
Total included in cost of revenue | 959 | 534 | 1,681 | 996 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, marketing, general and administrative | 3,770 | 2,838 | 6,442 | 5,059 | ||||||||||||
Research and development | 1,216 | 767 | 2,181 | 1,504 | ||||||||||||
Total included in operating expenses | 4,986 | 3,605 | 8,623 | 6,563 | ||||||||||||
Total share-based compensation expense | $ | 5,945 | $ | 4,139 | $ | 10,304 | $ | 7,559 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Leases [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||
s of June 30, 2014, the future minimum lease commitments related to these agreements were as follows: | |||||
Fiscal year | Amount | ||||
Second half of 2014 | $ | 559 | |||
2015 | 682 | ||||
2016 | 624 | ||||
2017 | 571 | ||||
2018 and thereafter | 86 | ||||
Total minimum lease payments | $ | 2,522 | |||
Organization_and_Nature_of_Ope1
Organization and Nature of Operations Organization and Nature of Operations (Details) (USD $) | 6 Months Ended | 0 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 16, 2013 | Jan. 08, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
SignalDemand [Member] | Cameleon Acquisition [Member] | Cameleon Acquisition [Member] | Cameleon Acquisition [Member] | |||
employee | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Entity Number of Employees | ' | ' | 40 | ' | ' | ' |
Business Combination, Consideration Transferred | ' | ' | $13,500 | $29,134 | ' | ' |
Additional Percentage Ownership acquired | ' | ' | ' | ' | '0.098 | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | 81.70% | ' | ' |
Noncontrolling Interest, Increase from Business Combination | $3,410 | $0 | ' | ' | $3,410 | ' |
Noncontrolling interest percentage at the end of the period | ' | ' | ' | ' | ' | 91.50% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Tangible Asset Impairment Charges | $2,130,000 | $0 | $2,130,000 | $0 | ' |
Unamortized Debt Issuance Expense | 200,000 | ' | 200,000 | ' | ' |
Treasury money market funds, at fair value | 14,700,000 | ' | 14,700,000 | ' | 21,000,000 |
Internal-use software development costs capitalized | ' | ' | 1,623,000 | 1,534,000 | ' |
Effective income tax rate | 15.00% | 11.00% | 10.00% | -87.00% | ' |
Federal statutory income tax rate | 34.00% | ' | ' | ' | ' |
Income Tax Expense (Benefit) | -1,240,000 | 71,000 | -1,800,000 | -1,078,000 | ' |
Amortization of Financing Costs | 12,500 | ' | 25,000 | ' | ' |
Line of Credit Facility, Amount Outstanding | 0 | ' | 0 | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | 50,000,000 | ' | 50,000,000 | ' | ' |
Cloud-based product offerings [Member] | ' | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Internal-use software development costs capitalized | 900,000 | 800,000 | 1,600,000 | ' | ' |
Capitalized Computer Software, Amortization | $200,000 | $100,000 | $300,000 | $200,000 | ' |
Maximum [Member] | ' | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | '4 years | ' | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies Awards Outstanding (Details) | Jun. 30, 2014 | Dec. 31, 2013 |
Stock options | ' | ' |
Awards outstanding [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 979,277 | 1,160,464 |
Restricted Stock Units (RSUs) [Member] | ' | ' |
Awards outstanding [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,842,619 | 1,542,990 |
Performance Shares [Member] | ' | ' |
Awards outstanding [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 34,000 | 0 |
Stock appreciation rights | ' | ' |
Awards outstanding [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 705,736 | 721,028 |
Market share units | ' | ' |
Awards outstanding [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 431,900 | 469,000 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies Fair Value Calculation Assumptions (Details) (Market share units) | 0 Months Ended | |
Feb. 24, 2014 | Feb. 11, 2014 | |
Market share units | ' | ' |
Valuation Assumptions for MSUs [Line Items] | ' | ' |
Volatility | 51.13% | 50.74% |
Risk-free interest rate | 0.66% | 0.67% |
Expected life, in years | '2 years 10 months 7 days | '2 years 10 months 19 days |
Dividend yield | 0.00% | 0.00% |
Business_Combination_Cameleon_
Business Combination Cameleon (Details) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jan. 08, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jan. 08, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | Jan. 08, 2014 | Jan. 08, 2014 | |
EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | Cameleon Acquisition [Member] | Cameleon Acquisition [Member] | Cameleon Acquisition [Member] | Cameleon Acquisition [Member] | Premium on shares [Member] | Free shares [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | 81.70% | ' | ' | ' | ' | ' |
Percentage owned of outstanding warrants | ' | ' | ' | ' | ' | 94.00% | ' | ' | ' | ' | ' |
Noncontrolling interest percentage at the end of the period | ' | ' | ' | ' | ' | ' | ' | 91.50% | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | ' | 8.50% | 8.50% | ' | ' | ' |
Business Combination, Acquisition Related Costs | ' | $579,000 | $0 | $1,969,000 | $0 | ' | $300,000 | $1,000,000 | ' | ' | ' |
Business Combination, Contingent Consideration, Liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,700,000 | 1,400,000 |
Premium to be paid per share | € 0.15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage ownership that triggers premium payment | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | ' | ' | ' | ' | ' | 7,086,000 | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | ' | ' | ' | ' | ' | 10,444,000 | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | ' | ' | ' | ' | ' | 1,329,000 | ' | ' | ' | ' | ' |
Finite-lived Intangible Assets Acquired | ' | ' | ' | ' | ' | 18,653,000 | ' | ' | ' | ' | ' |
Goodwill, Acquired During Period | ' | ' | ' | ' | ' | 16,227,000 | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | ' | ' | ' | ' | ' | -13,009,000 | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | ' | ' | ' | ' | ' | -5,392,000 | -2,151,000 | -2,151,000 | ' | ' | ' |
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | ' | ' | ' | ' | ' | -6,204,000 | ' | ' | ' | ' | ' |
Business Combination, Consideration Transferred | ' | ' | ' | ' | ' | $29,134,000 | ' | ' | ' | ' | ' |
Business_Combination_Signal_De
Business Combination Signal Demand (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 16, 2013 | Jun. 30, 2014 | Jun. 30, 2014 |
SignalDemand [Member] | SignalDemand [Member] | SignalDemand [Member] | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Acquisition Related Costs | $579 | $0 | $1,969 | $0 | ' | $300 | $1,000 |
Finite-lived Intangible Assets Acquired | ' | ' | 8,300 | ' | ' | ' | 8,300 |
Deferred Tax Assets Acquired | ' | ' | ' | ' | ' | 5,324 | 5,324 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | ' | ' | ' | ' | ' | 881 | 881 |
Business Acquisition, Purchase Price Allocation, Other Assets | ' | ' | ' | ' | ' | 2,752 | 2,752 |
Business Acquisition, Purchase Price Allocation, Other Noncurrent Assets | ' | ' | ' | ' | ' | 193 | 193 |
Finite-lived Intangible Assets Acquired | ' | ' | ' | ' | ' | 8,300 | 8,300 |
Goodwill, Acquired During Period | ' | ' | ' | ' | ' | ' | 7,076 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets Noncurrent | ' | ' | ' | ' | ' | 2,572 | 2,572 |
Business Acquisition, Purchase Price Allocation, Current Liabilities | ' | ' | ' | ' | ' | 1,586 | 1,586 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | ' | ' | ' | ' | ' | 6,688 | 6,688 |
Business Combination, Consideration Transferred | ' | ' | ' | ' | $13,500 | ' | ' |
Business_Combination_Schedule_
Business Combination Schedule of Intangible Assets Acquired (Details) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | $8,300 |
SignalDemand [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 8,300 |
Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 18,653 |
Developed Technology Rights [Member] | SignalDemand [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 4,600 |
Finite-Lived Intangible Asset, Useful Life | '7 years |
Developed Technology Rights [Member] | Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 11,147 |
Finite-Lived Intangible Asset, Useful Life | '7 years |
Software and Software Development Costs [Member] | SignalDemand [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 160 |
Finite-Lived Intangible Asset, Useful Life | '2 years |
Customer Relationships [Member] | SignalDemand [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 3,500 |
Finite-Lived Intangible Asset, Useful Life | '8 years |
Customer Relationships [Member] | Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 1,455 |
Maintenance relationship [Member] | Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 3,808 |
Finite-Lived Intangible Asset, Useful Life | '8 years |
Trade Names [Member] | SignalDemand [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 40 |
Finite-Lived Intangible Asset, Useful Life | '2 years |
Trade Names [Member] | Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | 1,020 |
Finite-Lived Intangible Asset, Useful Life | '8 years |
Other Intangible Assets [Member] | Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-lived Intangible Assets Acquired | $1,223 |
Finite-Lived Intangible Asset, Useful Life | '2 years |
Minimum [Member] | Customer Relationships [Member] | Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-Lived Intangible Asset, Useful Life | '2 years |
Maximum [Member] | Customer Relationships [Member] | Cameleon Acquisition [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Finite-Lived Intangible Asset, Useful Life | '5 years |
Business_Combination_Pro_Forma
Business Combination Pro Forma (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Business Combinations [Abstract] | ' | ' | ' | ' |
Business Acquisition, Pro Forma Revenue | $44,368 | $41,655 | $85,533 | $80,381 |
Net income | -6,996 | 580 | -15,451 | 2,314 |
Business Acquisition, Pro Forma Net Income (Loss) | ($6,996) | ($990) | ($15,583) | ($999) |
Business Acquisition, Pro Forma Earnings Per Share, Basic | ($0.24) | ($0.04) | ($0.54) | ($0.04) |
Noncontrolling_Interest_Detail
Non-controlling Interest (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jan. 08, 2014 |
Cameleon Acquisition [Member] | Cameleon Acquisition [Member] | |||||
Noncontrolling Interest [Line Items] | ' | ' | ' | ' | ' | ' |
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | ' | ' | ' | ' | ' | $6,204 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | ' | ' | ' | ' | -2,151 | -5,392 |
Noncontrolling Interest, Increase from Business Combination | ' | ' | 3,410 | 0 | 3,410 | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | ' | ' | ' | ' | 2,151 | 5,392 |
Net Income (Loss) Attributable to Noncontrolling Interest | -206 | 0 | -663 | 0 | -663 | ' |
Comprehensive (Income) Loss, Net of Tax, Attributable to Noncontrolling Interest | ($186) | $0 | ($643) | $0 | $20 | ' |
Earnings_per_Share_Details
Earnings per Share (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2013 | Jun. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive potential common shares excluded from computation of earnings per share | 3,400 | 2,300 |
Earnings_per_Share_Basis_and_D
Earnings per Share Basis and Diluted (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Numerator | ' | ' | ' | ' |
Net income | ($6,996) | $580 | ($15,451) | $2,314 |
Denominator | ' | ' | ' | ' |
Weighted average shares (basic) | 28,958,233 | 28,006,517 | 28,813,008 | 27,881,957 |
Dilutive effect of potential common shares | 0 | 1,952,063 | 0 | 1,828,245 |
Weighted average shares (diluted) | 28,958,233 | 29,958,580 | 28,813,008 | 29,710,202 |
Basic earnings per share | ($0.24) | $0.02 | ($0.54) | $0.08 |
Diluted earnings per share | ($0.24) | $0.02 | ($0.54) | $0.08 |
Noncash_Sharebased_Compensatio2
Noncash Share-based Compensation (Details) (USD $) | 1 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
RSUs | RSUs | MSUs | Employee Stock [Member] | |||
Noncash Share-based Compensation (Narrative) [Line Items] | ' | ' | ' | ' | ' | ' |
Awards, other than options, granted in period | ' | ' | 108,942 | 902,012 | 185,600 | ' |
Weighted average grant date fair value, per share, of awards granted in period | ' | ' | $25.50 | $31.97 | $49.50 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | ' | 900,000 | ' | ' | ' | ' |
Shares reserved for issuance under Plan | ' | 8,168,000 | ' | ' | ' | 500,000 |
Shares available for future grants | ' | 890,446 | ' | ' | ' | ' |
Inducement grants - Feb 2014 | 308,250 | ' | ' | ' | ' | ' |
Unrecognized compensation cost related to share-based compensation | ' | $56,300,000 | ' | ' | ' | ' |
Weighted average period to recognize cost, in years | ' | '2 years 8 months 30 days | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment, Minimum Employee Subscription rate | ' | 1.00% | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate | ' | 10.00% | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date | ' | 5.00% | ' | ' | ' | ' |
Maximum Amount Contributable by employees under ESPP- Half yearly | ' | 5,000 | ' | ' | ' | ' |
Maximum Amount Contributable By Employees Under ESPP- Annually | ' | 10,000 | ' | ' | ' | ' |
ESPP contributions by Employees | ' | $300,000 | ' | ' | ' | ' |
Noncash_Sharebased_Compensatio3
Noncash Share-based Compensation Expense (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | $5,945 | $4,139 | $10,304 | $7,559 |
License and implementation | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 959 | 534 | 1,681 | 996 |
Cost of revenue | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 959 | 534 | 1,681 | 996 |
Selling, marketing, general and administrative | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 3,770 | 2,838 | 6,442 | 5,059 |
Research and development | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 1,216 | 767 | 2,181 | 1,504 |
Operating expenses | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | $4,986 | $3,605 | $8,623 | $6,563 |
Commitments_and_Contingencies_1
Commitments and Contingencies Lease commitments (Details) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | ' |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $559 |
Operating Leases, Future Minimum Payments, Due in Two Years | 682 |
Operating Leases, Future Minimum Payments, Due in Three Years | 624 |
Operating Leases, Future Minimum Payments, Due in Four Years | 571 |
Operating Leases, Future Minimum Payments, Due Thereafter | 86 |
Operating Leases, Future Minimum Payments Due | $2,522 |